Sunoco Partners Marketing & Terminals L.P. v. Powder Springs Logistics, LLC et al
Filing
547
MEMORANDUM ORDER resolving all pending motions and objections to each Report and Recommendation. A Telephone Conference is set for 6/12/2020 at 11:30 AM. Participants (and any observers) shall dial in to 877-336-1829 and use the access code 1408971. Signed by Judge Leonard P. Stark on 6/9/20. (ntl)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
______________________________________________________________________________
SUNOCO PARTNERS MARKETING &
TERMINALS L.P.,
Plaintiff,
v.
POWDER SPRINGS LOGISTICS, LLC, and
MAGELLAN MIDSTREAM PARTNERS, L.P.,
Defendants.
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C.A. No. 17-1390-LPS-CJB
MEMORANDUM ORDER
WHEREAS, on January 16, 2020, Magistrate Judge Burke issued a Report and
Recommendation (“January Report” or “Jan. Rep.”) (D.I. 447), recommending that the Court
grant-in-part and deny-in-part Plaintiff Sunoco Partners Marketing & Terminals L.P.’s
(“Sunoco”) motion for partial summary judgment (D.I. 372);
WHEREAS, on January 28, 2020, Sunoco filed objections to the January Report
(“Sunoco January Objections”) (D.I. 461), specifically objecting that Judge Burke erred
in recommending denying summary judgment that Defendants Powder Stream
Logistics, LLC (“Powder Stream”) and Magellan Midstream Partners, L.P.’s
(“Magellan” and, together with Powder Stream, “Defendants”) accused systems infringe
claims 3 and 8 of United States Patent No. 9,606,548 (the “’548 patent”);
WHEREAS, on February 10, 2020, Defendants filed a response to Sunoco’s
January Objections (“Defendants January Response”) (“D.I. 484”);
1
WHEREAS, on January 28, 2020, Magellan filed objections to the Jan. 16 Report
(“Magellan January Objections”) (D.I. 460), specifically objecting that Judge Burke
erred in recommending granting Sunoco’s motion for partial summary judgment that
accused Magellan systems infringe claim 3 of United States Patent No. 6,679,302 (the
“’302 patent”);
WHEREAS, on February 10, 2020, Sunoco filed a response to Magellan’s
January Objections (“Sunoco January Response”);
WHEREAS, on February 6, 2020, Judge Burke issued a Report &
Recommendation (“February Report” or “Feb. Rep.”) (D.I. 477), recommending that the
Court grant-in-part and deny-in-part Sunoco’s motion for summary judgment that
certain references do not qualify as prior art (D.I. 377);
WHEREAS, on February 20, 2020, Defendants filed objections to the February
Report (“Defendants February Objections”) (D.I. 499), specifically objecting that a fact
dispute existed as to whether the TransMontaigne system (“TransMontaigne”) was
publicly accessible;
WHEREAS, on March 5, 2020, Sunoco filed a response to Defendants February
Objections (“Sunoco February Response”) (D.I. 511);
WHEREAS, on February 20, 2020, Sunoco filed objections to the February
Report (“Sunoco February Objections”) (D.I. 500), specifically objecting that there was
no evidence that Williams took steps to make the automated system publicly known;
WHEREAS, on March 5, 2020, Defendants filed a response to Sunoco’s
February Objections (“Defendants February Response”) (D.I. 510);
2
WHEREAS, on February 19, 2020, Judge Burke issued a Report and
Recommendation (“February Report II” or “Feb. Rep. II”) (D.I. 495), recommending
that the Court deny Defendants’ motion for summary judgment of noninfringement
(D.I. 381);
WHEREAS, on March 4, 2020, Defendants filed objections to February Report II
(“Defendants Objections to February Report II”) (D.I. 509), specifically objecting that
that Defendants’ systems could not infringe the asserted claims as a matter of law;
WHEREAS, on March 18, 2020, Sunoco filed a response to Defendants
Objections to February Report II (“Sunoco Response to February Report II Objections”)
(D.I. 518);
WHEREAS, on February 27, 2020, Judge Burke issued a Report and
Recommendation (“February Report III” or “Feb. Rep. III”) (D.I. 506), recommending
that the Court deny Defendants’ motion for summary judgment (D.I. 381) that certain
patent claims asserted by Sunoco are invalid as anticipated and/or obvious;
WHEREAS, on March 12, 2020, Defendants filed objections to February Report
III (“Defendants Objections to February Report III”) (D.I. 516), specifically objecting
that certain of Judge Burke’s conclusions were incorrect under the proper construction
of certain claim terms;
WHEREAS, on March 26, 2020, Sunoco filed a response to Defendants
Objections to February Report III (“Sunoco Response to February Report III
Objections”) (D.I. 521);
WHEREAS, on March 13, 2020, Judge Burke issued a Report and
Recommendation (“March Report” or “Mar. Rep.”) (D.I. 517), recommending that the
3
Court deny Defendants’ motion for summary judgment that certain Sunoco patents are
not entitled to the priority date of the ’302 patent (D.I. 381);
WHEREAS, on March 27, 2020, Defendants filed objections to the March
Report (“Defendants March Objections”) (D.I. 522), specifically objecting that Judge
Burke applied the wrong legal test and ignored the ’302 patent’s disclosures;
WHEREAS, on April 10, 2020, Sunoco filed a response to Defendants March
Objections (“Sunoco March Response”) (D.I. 527);
WHEREAS, on January 3, 2020, Judge Burke issued a memorandum order
granting Defendants’ motion to exclude the damages opinions of Dr. Keith R. Ugone
with leave to file a supplemental report (D.I. 442) (“January Ugone Order” or “Jan
Ord.”);
WHEREAS, on January 17, 2020, Sunoco filed objections to the January Ugone
Order (“Sunoco Ugone Objections”) (D.I. 448), specifically objecting that Judge Burke
applied the wrong legal standard;
WHEREAS, on January 30, 2020, Defendants filed a response to Sunoco’s
Ugone Objections (“Defendants Ugone Response”) (D.I. 465);
WHEREAS, on January 17, 2020, Defendants filed objections to the January
Ugone Order (“Defendants Ugone Objections”) (D.I. 449), specifically objecting that
Judge Burke erred in granting Sunoco leave to file a supplemental report;
WHEREAS, on January 30, 2020, Sunoco filed a response to Defendants Ugone
Objections (“Sunoco Ugone Response”);
4
WHEREAS, on January 27, 2020, Defendants filed a motion to exclude Dr.
Ugone’s supplemental damages report (“Motion to Exclude”) (D.I. 459), which has
been fully briefed (see, e.g., D.I. 459 Ex. 2; D.I. 476; D.I. 478);
WHEREAS, on January 24, 2020, Sunoco filed a motion to strike certain of
Defendants’ pretrial disclosures (“Motion to Strike”) (D.I. 457), which has been fully
briefed (see, e.g., D.I. 458, 464, 471);
WHEREAS, on April 17, 2020, Defendants filed a motion to stay the litigation
with respect to U.S. Patent Nos. 9,494,948 (the “’948 patent”) and 9,606,548 (the “’548 patent”)
(“Motion to Stay”) (D.I. 530), which has been fully briefed (see, e.g., D.I. 531, 534, 540);
WHEREAS, on May 13, 2020, the Court held a hearing by teleconference to hear oral
argument on the many motions and matters addressed in this Memorandum Order (see Transcript
(“Tr.”) (D.I. 545));
WHEREAS, the Court has reviewed de novo the portions of Judge Burke’s Reports
addressing dispositive issues, 1 see Brown v. Astrue, 649 F.3d 193, 195 (3d Cir. 2011); 28 U.S.C.
§ 636(b)(1); Fed. R. Civ. P. 72(b)(3);
WHEREAS, the Court has reviewed Judge Burke’s January Ugone Order, which resolves
a nondispositive issue, under a “clearly erroneous and contrary to law” standard of review, see
28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(a); see also Magnetar Techs. Corp. v. Six Flags Theme
Parks, Inc., 61 F. Supp. 3d 437, 441 (D. Del. 2014);
1
January Report, February Report, February Report II, February Report III, and March Report.
The Court adopts by reference the legal standards applicable to summary judgment motions
articulated in Wasica Fin. GmbH v. Schrader Int’l, Inc., 2020 WL 1150135, at *1 n.1 (D. Del.
Jan. 14, 2020).
5
WHEREAS, expert testimony is admissible only if “the testimony is based on sufficient
facts or data,” “the testimony is the product of reliable principles and methods,” and “the expert
has reliably applied the principles and methods to the facts of the case,” Fed. R. Evid. 702(b)(d); 2
NOW, THEREFORE, IT IS HEREBY ORDERED that, as more fully described
below, (i) the January Report (D.I. 447) is ADOPTED in part and REJECTED in part;
(ii) the February Report (D.I. 477) is ADOPTED in part and REJECTED in part;
(iii) February Report II (D.I. 495) is ADOPTED; (iv) February Report III (D.I. 506) is
ADOPTED; (v) the March Report (D.I. 517) is ADOPTED; (vi) Sunoco’s motion for
summary judgment of patent infringement (D.I. 372) is DENIED; (vii) Sunoco’s motion
for summary judgment regarding certain prior art (D.I. 377) is DENIED;
(viii) Magellan’s motion for summary judgment of non-infringement and invalidity
(D.I. 381) is DENIED; (ix) Defendants’ original motion to exclude Dr. Ugone (D.I.
375) remains GRANTED, as does leave to Sunoco to have filed a supplemental report –
the Sunoco Ugone Objections and Defendants Ugone Objections are DISMISSED AS
MOOT; (x) Defendants’ Motion to Exclude (D.I. 459) is GRANTED and Dr. Ugone’s
supplemental report is STRICKEN; (xi) Defendants’ Motion to Strike (D.I. 457) is
DENIED; and (xii) Defendants’ Motion to Stay (D.I. 530) is DENIED.
January Report
The Sunoco January Objections are OVERRULED.
2
The Court adopts by reference the legal standards applicable to motions to exclude expert
testimony articulated in Wasica, 2020 WL 1150135, at *1 n.2.
6
Sunoco argues there is no genuine dispute of fact that Defendants’ accused
systems practice the “processor” limitation of the ’548 patent, as the accused systems
use “PLCs” that perform every limitation of the claimed “processor.” (D.I. 461 at 2)
Like Judge Burke, however, the Court concludes that a reasonable juror could find that
the accused systems’ PLCs do not practice at least one of these limitations:
“output[ting] a signal representative of the adjustment to the injection device.” ’548
pat. at 17:19-28, 48-56. Sunoco’s expert, Dr. Kytomaa, stated multiple opinions that a
reasonable jury could find to be inconsistent and noncredible, resulting in a record that
does not justify a grant of summary judgment of infringement. (See D.I. 400 at 12; D.I.
447 at 16; see also Jan. Rep. at 17 (citing D.I. 401 Ex. 3 at ¶¶ 765, 770, 779)) Also,
Defendants’ expert, Dr. Nikolaou, provided opinions a jury could credit and, from them,
find noninfringement. (See, e.g., D.I. 402 Ex. A at ¶¶ 224, 248-49) Thus, the Court
denies Sunoco’s motion for summary judgment that the accused systems infringe claims
3 and 8 of the ’548 patent.
The Magellan January Objections are SUSTAINED.
Defendants’ expert, Dr. Nikolaou, did not improperly reconstrue the claim term
“fluid connection.” Instead, he permissibly applied the Court’s construction of this
term. There is a genuine dispute of material fact as to whether the accused systems
practice the “dispensing unit . . . in fluid connection with blending unit” and “rack”
limitations of claim 3 of the ’302 patent, given the existence of a tank between the
blending system and the rack. (See D.I. 460 at 2-4; see also D.I. 402 Ex. A at ¶¶ 38-43)
Thus, the Court denies Sunoco’s motion for summary judgment that the accused systems infringe
claim 3 of the ’302 patent.
7
February Report
Defendants February Objections are SUSTAINED.
The opinions of Defendants’ experts Dr. Nikolaou – that a person of ordinary skill in the
art (“POSA”) who viewed the publicly-accessible TransMontaigne equipment would “have
understood how the blending system operated at the level required by the claims of the asserted
patents” – and Dr. Mongold – that “most people in the industry would be able to tell” how the
system worked – are sufficient, if credited by the jury (as it will be free reasonably to do), to
create a genuine dispute of material fact. (See D.I. 499 at 4-6 (citing D.I. 399 Ex. B at ¶ 106;
D.I. 398 Ex. 36 at 250); see also Kennametal, Inc. v. Ingersoll Cutting Tool Co., 780 F.3d 1376,
1381 (Fed. Cir. 2015) (“[A] reference can anticipate a claim even if it d[oes] not expressly spell
out all the limitations arranged or combined as in the claim, if a person of skill in the art, reading
the reference, would at once envisage the claimed arrangement or combination.”) (internal
quotation marks omitted)) Thus, the Court denies Sunoco’s motion for summary judgment that
TransMontaigne is not prior art.
Sunoco’s February Objections are OVERRULED.
The record reveals a genuine dispute of material fact as to whether Defendants
suppressed or concealed the OKC-Reno system. A reasonable juror could find that the inventors
of OKC-Reno did not intentionally suppress or conceal OKC-Reno, based on evidence including
that (1) the inventor of the Sunoco patents sent his contractor to visit the Tulsa system, that was
similar in all material respects to OKC-Reno; (2) Magellan’s predecessor allowed the contractor
to tour the Tulsa facility; and (3) the contractor’s visit led to the creation of Sunoco’s rack
system. (D.I. 510 at 3-4) (citing D.I. 397 at 22; D.I. 398 Ex. 28 at 136-42, 144-45, 150-52; D.I.
398 Ex. 26 at 429-30; D.I. 398 Ex. 29 at 47-48) Viewed in the light most favorable to
8
Defendants, a reasonable juror could find from this evidence that Magellan’s predecessor did not
conceal the Tulsa system’s blending system and, therefore, likewise did not conceal the
materially-similar OKC-Reno blending system. This same evidence, viewed in the same most
favorable light to Defendants, could likewise lead a reasonable juror to find that Magellan’s
predecessor made the OKC-Reno blending system publicly accessible. Thus, the Court denies
Sunoco’s motion for summary judgment that OKC-Reno is not prior art.
February Report II
Defendants Objections to February Report II are OVERRULED.
Defendants argue their systems are configured in either a “non-blending” or “blending”
mode and that neither mode practices all of the asserted claim limitations. (D.I. 509 at 7) But a
reasonable juror, taking the evidence in the light most favorable to Sunoco, could find there is
only one configuration for Defendants’ accused systems: a “normal operation mode” that
practices all the limitations of the asserted claims. (D.I. 518 at 2-3) (citing D.I. 382 at 8-9)
Further, while Defendants fault February Report II for “constru[ing] the claim language to
determine the claim scope” (D.I. 509 at 9), they do not identify any claim terms that Judge Burke
purportedly construed (nor persuade the Court that he did so incorrectly). Thus, the Court denies
Defendants’ motion for summary judgment of noninfringement.
February Report III
Defendants Objections to February Report III are OVERRULED.
The record reveals a genuine dispute of material fact as to whether Haas anticipates
claims 3 and 8 of the ’548 patent under the construction of “gasoline” adopted by the Court.
(See D.I. 539 at 7-8) The Court agrees with Judge Burke’s explanation as to how a reasonable
juror, taking the evidence in the light most favorable to Sunoco, could fail to agree with
9
Defendants that Haas satisfies the claim limitation “a volatility measurement device in
communication with the gasoline stream.” (Feb. Rep. III at 8) Defendants’ expert, Dr.
Nikolaou, opined (in the context of a related patent) that (1) the term “gasoline stream” referred
to “unblended gasoline” and (2) Haas’s “vapor-liquid analyzer . . . does not receive or use a
measurement of the vapor pressure of the gasoline to be blended.” (D.I. 406 Ex. B at ¶ 617)
(emphasis added) While Defendants argue these opinions do not apply to the ’548 patent claims,
the law permits the type of reasoning proffered by Sunoco, because “where multiple patents
derive from the same parent application and share many common terms, we must interpret the
claims consistently across all asserted patents.” Trustees of Columbia Univ. in City of New York
v. Symantec Corp., 811 F.3d 1359, 1369 (Fed. Cir. 2016). Moreover, Defendants’ obviousness
contentions regarding claims 3 and 7 of the ’948 patent and claim 3 of the ’302 patent depend on
a construction of “vapor pressure” which the Court has rejected. (See D.I. 539 at 6-7) Thus, the
Court denies Defendants’ motion for summary judgment of invalidity.
March Report
Defendants March Objections are OVERRULED.
Defendants contend that Judge Burke applied the “wrong test” for determining the
priority date of the continuation-in-part patents (“CIP patents”) by “focus[ing] on whether the
’302 patent excludes pipeline blending.” (D.I. 522 at 5) The Court disagrees. Judge Burke cited
sections of the ’302 patent specification from which a reasonable juror could find that the ’302
patent explicitly discloses pipeline blending. (Mar. Rep. at 5) (citing ’302 pat. at 2:10-12, 5:3538) While Defendants argue that the ’302 patent does not disclose what they call “feedback
blending” – “where the blending is controlled by a downstream analyzer” (D.I. 522 at 8) – a
reasonable juror could find that the ’302 patent provides a “system” that “can be modified to
10
periodically sample the RVP of the resultant blend for quality control.” ’302 pat. at 7:11-14
(emphasis added). Defendants insist this language does not show that the system “use[s] that
measurement to adjust the blend ratio or control blending” (D.I. 422 at 9), but a reasonable juror,
relying on the testimony of Sunoco expert Dr. Kytomaa, could reasonably find otherwise (see
Mar. Rep. at 10). Thus, the Court denies Defendants’ motion for summary judgment.
Dr. Ugone’s Damages Opinions
The Court will strike Dr. Ugone’s damages opinions. 3
The entire market value analysis in Dr. Ugone’s supplemental report is unreliable
because he does not identify reliable evidence to allow Sunoco to “meet its burden to show that
the patented feature was the sole driver of consumer demand, i.e., that it alone motivated
consumers to buy the accused the products or substantially creates the value of the component
parts.” Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc., 904 F.3d 965, 979 (Fed.
Cir. 2018) (emphasis added). Rather, Dr. Ugone simply speculates that, for instance, Sunoco’s
patents led Magellan and Philips 66 to become Sunoco customers. (See D.I. 476 at 13-16) This
is insufficient. See generally LaserDynamics, Inc. v. Quanta Computer, Inc., 694 F.3d 51, 67
(Fed. Cir. 2012) (“[T]he patentee . . . must in every case give evidence tending to separate or
apportion the defendant’s profits and the patentee’s damages between the patented feature and
the unpatented features, and such evidence must be reliable and tangible, and not conjectural
or speculative.”) (internal quotation marks omitted; emphasis added). The Court agrees with the
following characterization by Defendants:
3
In doing so, the Court adopts and incorporates by reference Judge Burke’s analysis in his
January Ugone Order. The Court also finds persuasive the analysis in Sunoco Partnership
Marketing & Terminals L.P. v. U.S. Venture, Inc. et al., No. 15 C 8178 (N.D. Ill. Jan. 29, 2020),
a case in which Judge Pallmeyer criticized a similar damages analysis offered by Sunoco through
the same Dr. Ugone. (See D.I. 482 Ex. 1 at 35-38)
11
Despite conceding that the non-patented services enable Sunoco’s
licensees to not only operate the system at all, but to maximize
blending, Dr. Ugone ascribes the entire value of the Butane Supply
Agreements to only one of the many components – the royalty-free
patent license. And while he opines, based on hearsay and
speculation, that the patents were a factor for some customers, he
fails to show that the patents alone are what motivated consumers
to enter into the Butane Supply Agreements.
(D.I. 459 at 2)
The Federal Circuit has rejected Sunoco’s contention that just because the non-patented
features at issue here are not sold separately from the patented features it follows that the “sole
driver” requirement is satisfied. See LaserDynamics, 694 F.3d at 68 (“It is not enough to merely
show that the [patented] method is viewed as valuable, important, or even essential to the use of
the [accused product]. Nor is it enough to show that [the accused product] without [the patented]
method would be commercially unviable . . . .”). Sunoco’s evidence of an established licensing
program, and insistence that all of the non-patented features of its services have no value outside
of the patented invention, do not render Dr. Ugone’s analysis consistent with governing law. See
id. (“[P]roof that consumers would not want a laptop computer without such features is not
tantamount to proof that any one of those features alone drives the market for laptop
computers.”). The purported lack of evidence that any entity took a license from Sunoco due
even in part to the non-patented features (see Tr. at 15-16) 4 does not (even if true) help Sunoco
satisfy its burden.
Nor has Sunoco adduced evidence to meet its burden to demonstrate that the patented
features “substantially create[] the value of the component parts,” especially given the
4
See also generally D.I. 476 at 8 (Sunoco suggesting “if there was a demand for the services
offered by Sunoco separate and apart from the demand for the patents-in-suit, then one would
expect Sunoco to have executed some number of butane supply agreements relating to nonpatented systems (e.g., manual blending systems or services a la carte”).
12
undisputed evidence that Sunoco’s services are valued for their non-patented features, such as
their expertise and algorithm. (See, e.g., D.I. 380 Ex. 9 (Colella Tr.) at 536-37 (“[W]e have the
supply and the logistics and the know-how, to enable us to be the supplier [of butane]. And most
of our blend partners recognize our expertise in this area and choose to use us as their supplier.”);
D.I. 380 Ex. 12 (Myers Tr.) at 140-41 (stating belief that Sunoco’s proprietary blend equation
had role in delivering results to customers and “the results of the blending of those algorithms, I
think was the selling point”)) In addition to the fact evidence showing there is value to Sunoco’s
non-patented features, Dr. Ugone also recognized in formulating his expert opinions that
Sunoco’s algorithm and software are necessary and valuable components to what Sunoco
includes in its Butane Supply Agreements (“BSAs”) which form the basis for his opinions. (See,
e.g., D.I. 459-2 Ex. 1 at ¶¶ 5(b), 32(b))
Dr. Ugone’s apportionment analysis is also unreliable. See Uniloc USA, Inc. v. Microsoft
Corp., 632 F.3d 1292, 1318 (Fed. Cir. 2011) (“[T]he patentee . . . must in every case give
evidence tending to separate or apportion the defendant’s profits and the patentee’s damages
between the patented feature and the unpatented features . . . .”) (internal quotation marks
omitted). While Sunoco emphasizes that Dr. Ugone analyzed the value of supplying butane and
hedging (D.I. 476 at 18-19), he did not analyze the value of other non-patented features of the
BSAs, including Sunoco’s blending algorithm – a feature a Sunoco witness described (as noted
above) as the “selling point” for Sunoco’s products. (D.I. 459 Ex. 2 at 13-14) Sunoco attempts
to justify this omission by arguing that the algorithm is “part of the patented system” (D.I. 476 at
13
17-18), but this is contradicted by Dr. Ugone’s testimony that the algorithm is “proprietary and a
Sunoco trade secret” (that is, not disclosed in a patent) (D.I. 459 Ex. 2 Ex. 1 at ¶ 5(b)(ii)). 5
Finally, even assuming arguendo that Dr. Ugone is offering what Sunoco calls a “lost
opportunity cost opinion,” it, too, is unreliable because Dr. Ugone failed to apportion the value
lost due to non-infringing manual blending (and, thus, failed to identify the value lost to
infringing automated blending). (See D.I. 478 at 5) Further, for all the reasons already given,
the Court is not persuaded by Sunoco’s contention that Defendants’ challenge to Dr. Ugone’s
purported explanation for why he concluded Sunoco’s patents drive demand for the BSAs goes
to the weight to be given to Dr. Ugone’s analysis, as opposed to its admissibility under binding
precedent.
The Court will not permit Sunoco to file yet another report from Dr. Ugone, attempting
once again to overcome the deficiencies contained in two successive reports from Dr. Ugone.
(See, e.g., D.I. 459 at 14 (Defendants: “Again, despite the Court’s warning in its prior order, Dr.
Ugone simply did not undertake the necessary apportionment analysis.”); id. at 15 (Defendants
arguing that Sunoco’s “continued refusal, without any justifiable, analytical basis, to account for
the undisputed value of the non-patented features . . . shows that this strategy is not the result of
inadvertence”))
Because the Court is striking Dr. Ugone’s supplemental report, it is not necessary to
resolve the parties’ now-moot objections to the January Ugone Order.
5
Further demonstrating that the algorithm is not part of the patent claims is Sunoco’s counsel’s
refusal to agree that Sunoco would have to prove an accused infringer practices the algorithm in
order to prove infringement. (See Tr. at 11-12)
14
Defendants’ Pretrial Disclosures
Sunoco’s Motion to Strike certain of Defendants’ pretrial disclosures is denied. Instead,
the parties are directed to meet and confer, particularly in light of today’s rulings, and thereafter
Defendants shall provide Sunoco with a reduced set of deposition designations, after which
Sunoco shall identify its deposition counter-designations. In the joint status report the parties are
being ordered to provide they shall (among other things) provide the Court with their proposed
deadlines for the exchange of these updated disclosures.
Defendants’ Motion to Stay
Defendants’ Motion to Stay is based on the Patent Trial and Appeals Board’s (“PTAB”)
Final Written Decision finding that the asserted claims of Sunoco’s ’948 and ’548 patents are
invalid. Defendants seek to stay all further proceedings with respect to the ’948 and ’548 patents
until after completion of Sunoco’s anticipated appeal of the PTAB’s decision (such further
proceedings being necessary only if the Court of Appeals at least partially modifies or reverses
the PTAB). Defendants’ Motion to Stay is denied.
In determining whether to stay litigation, courts typically consider (1) whether a stay will
simplify the issues and trial of the case, (2) whether discovery is complete and a trial date has
been set, and (3) whether a stay would unduly prejudice or present a clear tactical disadvantage
to the non-moving party. See St. Clair Intellectual Prop. v. Sony Corp., 2003 WL 25283239, at
*1 (D. Del. Jan. 30, 2003).
The Court is not persuaded that a stay will simplify the litigation, particularly given the
overlapping issues between the claims with respect to which Defendants do not seek a stay and
those of the ’948 and ’548 patents (issues of infringement and invalidity, for instance). (See Tr.
at 58, 62-63) Other purported simplifications are now moot (because the Court has resolved all
15
of the parties’ claim construction and summary judgment disputes, including those that may have
been avoided had the requested stay been granted). The Court’s strong desire to avoid a second
trial is a related consideration, as the risk of a second trial is reduced by trying all patents-in-suit
at the forthcoming trial.
The status of the litigation weighs heavily against the requested stay, as fact and expert
discovery were completed months ago, all motions have been resolved, and trial is scheduled to
begin in approximately six weeks.
Finally, Sunoco would suffer undue prejudice from a stay, which might eliminate
Sunoco’s opportunity to seek injunctive relief with respect to the ’948 and ’548 patents (which
expire in February 2022). (D.I. 534 at 13-14) Additionally, Sunoco and Defendants appear to
compete to some extent. (See id. at 15-16)
Moving Forward
A jury trial in this matter is currently scheduled to begin on July 20. Due to the
coronavirus pandemic, no jury trial has been held in this District since March 19 and no new jury
has been selected since March 9. Jury trials here are currently suspended through at least June
30. The District may yet make a decision to suspend jury trials for some or all of July or even
later; of course, it also may decide not to do so.
As of today, the jury trial in this matter remains on the Court’s calendar, and it remains
the Court’s hope that it may proceed as scheduled. But the Court will only move forward with a
jury trial on July 20 if it can be done in a manner that protects the health and safety of all
involved, including the jury, the larger community, and Court personnel, as well as the parties,
their witnesses, and their attorneys.
16
The Court requires further input from the parties to determine how to proceed.
Therefore, the parties shall meet and confer and, no later than June 11, submit a joint
status report, advising the Court of their views on, among other things: (i) whether they believe
trial can and should proceed on July 20; (ii) whether they believe they have a right to a jury trial
and, if so, whether they are willing to waive that right in favor of a bench trial; and (iii) whether,
if the trial proceeds on July 20, any witnesses might request to appear by video or other remote
technology rather than travel to the courtroom.
The Court will hold a status teleconference on June 12 at 11:30 a.m. Participants (and
any observers) shall dial in to 877-336-1829 and use the access code 1408971.
________________________________
HONORABLE LEONARD P. STARK
UNITED STATES DISTRICT JUDGE
June 9, 2020
Wilmington, Delaware
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