Southeast Litigation Update: May 2024

Finnegan, Henderson, Farabow, Garrett & Dunner, LLP


Finnegan, Henderson, Farabow, Garrett & Dunner, LLP is a law firm dedicated to advancing ideas, discoveries, and innovations that drive businesses around the world. From offices in the United States, Europe, and Asia, Finnegan works with leading innovators to protect, advocate, and leverage their most important intellectual property (IP) assets.
This is part of a series of articles discussing recent orders of interest issued in IP cases by the United States District Courts in the Southeast...
United States Intellectual Property
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This is part of a series of articles discussing recent orders of interest issued in IP cases by the United States District Courts in the Southeast

In Natera, Inc. v. NeoGenomics Labs., Inc., No. 1:23-cv-00629-CCE-JLW (M.D.N.C. May 17, 2024), Chief Judge Eagles issued a claim construction order, construing certain terms of U.S. Patent Nos. 11,519,035 and 11,530,454. The court also found that the '454 patent was not invalid for indefiniteness because there was not clear and convincing evidence that the claims failed to inform those skilled in the art with reasonable certainty about the scope of the invention.

Along with a host of other claim construction arguments, Defendant NeoGenomics contended that the '454 patent was invalid for indefiniteness because the patent failed to provide (1) a frame of reference to differentiate between a “clonal” and “subclonal” mutation or (2) any guidance on the correct method of calculating a limit of detection for the claimed ranges of DNA concentration. The court rejected both arguments.

As to the terms “clonal” and “subclonal,” the court found that both parties' experts had the same understanding of their meanings and that the agreed-upon meanings allowed for differentiation between the two terms: a mutation detected in all sampled areas of a tumor is clonal while a mutation detected in some but not all sampled areas is subclonal. Finding the terms not ambiguous, the court concluded that NeoGenomics had not carried its burden to show indefiniteness.

As to whether the claimed ranges of concentration required a limit of detection, the court found that the claims do not recite any limit of detection. The court further found that there was no persuasive evidence to indicate that the method of calculating the limit of detection mattered. Instead, any method capable of detecting the mutation below or within the claimed ranges would do. Accordingly, the court held that the claim terms were not indefinite.

In Sanho Corp. v. Kaijet Tech. Int'l Inc., No. 1:18-CV-05385-SDG (N.D. Ga. May 20, 2024), Judge Grimberg denied several dispositive motions but granted summary judgment on the parties' false advertising claims, finding neither party liable for false advertising. The court also granted summary judgment that Plaintiff Sanho is not liable for false patent marking.

Sanho and Kaijet are competitors in the MacBook dongle market. Since 2005, Sanho has used the “HyperDrive” name on a variety of electronic accessories, including its MacBook hubs, which it released in late 2016 or early 2017. Kaijet sells a line of competing “UltraDrive” MacBook hubs, which it released sometime in late 2017. Sanho subsequently filed suit, asserting several intellectual property claims against Kaijet, including a false advertising claim. Kaijet responded with false advertising and false marking counterclaims against Sanho.

Sanho's False Advertising Claim

Sanho asserted that Kaijet falsely advertised one of the accused hubs as an “8-in-1” product when the hub only had seven ports, as shown below.


Kaijet moved for summary judgment on the grounds that “8-in-1” was not literally false because the accused hub had eight functions even if it had only seven ports. The court agreed, finding that the phrase was too ambiguous for it to be literally false, and that it was, at worst, misleading. However, for Sanho to prevail on a “literally true but misleading” theory, it had to present evidence of customer confusion, and it had failed to do so. Accordingly, the court granted summary judgment to Kaijet on Sanho's false advertising claim.

Kaijet's False Advertising Claim

Kaijet's false advertising counterclaim was based on Sanho allegedly engaging in a “fake review campaign” to manufacture positive product reviews on e-commerce retail sites. Sanho moved for summary judgment, arguing that the alleged false or misleading statement was immaterial. The court agreed, finding that Kaijet only presented evidence showing generally that a significant portion of consumers read product reviews, not that the alleged fake reviews were material to consumers' purchasing decisions. The court, therefore, granted summary judgment to Sanho on Kaijet's false advertising counterclaim.

Kaijet's False Marking Claim

Lastly, Kaijet asserted that Sanho falsely marked one of its products as covered by three patents despite the product being outside the scope of those patents. Sanho moved for summary judgment on the basis that, even if the product was falsely marked, there was no competitive injury. The court agreed, finding that the social media posts in which Sanho mocked the accused products as copying HyperDrive were insufficient to reasonably infer that any competitive injury was caused by the false patent marking. Accordingly, the court granted summary judgment to Sanho on Kaijet's false marking counterclaims.

In Dongguan Saienchuangke Technology Co. Ltd, v. The Individuals, Partnerships and, Unincorporated Associations Identified on Schedule “A,” No. 0:24-cv-60865 (S.D. Fla. May 28, 2024), Judge Damian granted the plaintiff's motion for alternative service of process via email and website posting against oversees defendants who established Internet-based businesses in the United States.

Plaintiff Dongguan Saienchuangke Technology Co. Ltd (“Dongguan”) is a Chinese-based internet retailer that sells water balls, a popular pool toy, on Amazon. Dongguan owns U.S. Design Patent No. D1,025,139, which covers the exterior design pattern of its water balls. Dongguan sued multiple defendants for patent infringement of its design patent, alleging that they were an interrelated group of infringers working together to set up multiple Amazon storefronts to hide their identity and sell allegedly infringing water balls in the United States.

Because the defendants are all overseas, Dongguan moved for alternate service of process under Rule 4(h)(2) and 4(f)(3) of the Federal Rules of Civil Procedure. Rule 4(h)(2) describes the various ways in which a plaintiff may serve foreign entities, and Rule 4(f)(3) explains that service may be accomplished by means not prohibited by international agreement. Rule 4(f)(3) is available without first attempting service by other means if service upon a foreign corporation is cumbersome, such as where the same retailer allegedly used multiple different names and storefronts to conceal its identity.

Judge Damien held that alternate service of process via email under Rule 4(f)(3) was warranted because (1) the Hague Convention does not preclude service via email and website posting, (2) China has not expressly objected to this form of service, and (3) the Defendants used at least one known and valid form of email to conduct their Amazon storefronts. Dongguan explained that Amazon merchants are required to disclose a valid email to set up their accounts with Amazon and that Amazon may disclose the email addresses after receiving a subpoena. Therefore, the court allowed Dongguan to serve the defendants via email by providing a copy of all relevant filings to the email associated with the defendants' Amazon accounts and via website publication by posing a copy of the relevant filings on a designated webpage that is sent to the defendants via email.

In Tri-X, Inc. v. Anthony Foley, No. 8:24-cv-00542-SDM-NHA (M.D. Fla. May 2, 2024), Judge Merryday granted Plaintiffs Tri-X, Inc. and Laura Foley's (“Tri-X”) motion to remand, concluding that defendants' motion to remove the state action to federal court was untimely because defendants failed to remove within the thirty-day deadline under 28 U.S.C. § 1446 or show cause for an extension.

Tri-X had filed a state action against Defendant Anthony Foley for, among other things, breach of contract under Florida law. Anthony Foley, in his answer, counterclaimed for patent infringement. Two years later, Tri-X added another defendant to the state action, and Anthony Foley amended his counterclaims to include an additional federal claim based on trademark infringement. On the eve of trial, Tri-X moved to dismiss the patent and trademark counterclaims for lack of jurisdiction. After the state judge continued the trial, Anothony Foley removed the state action to federal court in the Middle District of Florida under 28 U.S.C. § 1454.

In federal court, Tri-X moved to remand the action back to the state court, arguing that Anthony Foley failed to timely remove the action within the thirty-day deadline permitted under 28 U.S.C. § 1446. In response, Anthony Foley contended that the time limitation may be extended for “cause shown,” and argued that Tri-X moving to dismiss the federal counterclaims and the state judge continuing trial qualified as cause. The court disagreed. Noting that Anthony Foley failed to remove the complaint for ten months after being served the amended complaint and after adding another federal counterclaim, the court concluded that Anthony Foley should have “intelligently ascertained” that the action warranted removal months before the scheduled trial and, at the very least, when he added another federal claim. Accordingly, the court remanded the action back to state court.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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