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Hi all,
This one comes as a surprise to me and it will be interesting to see what we get from an RNS but I have provided my initial views below.
Samsung and Nanoco have filed a joint motion to stay the case until IPRs are completed next year and I suspect it will be granted. I don't see any reason why Gilstrap would deny such a motion. I am trying to read the tea leaves as to why Nanoco would have changed stance in agreeing to stay the proceedings. Fact and expert discovery is closed and aside from Samsung's outstanding motion to compel Nanoco to produce information - we don't know what the exact information is - and updating financial information for alleged infringed products, we were on to pre-trial motions. When you consider what Gilstrap's track record is like when it comes to staying cases that are so near to trial where patents are subject to IPR, there is little doubt that we would have gone to court in October.
One important point from a legal strategy perspective is that is that in the IPR petitions, Samsung said that if the IPRs are instituted, they wouldn't then try to invalidate the patents in district court based on the same grounds raised at the board or grounds that it reasonably could have raised. Putting this more simply, this means Samsung is bound by stipulation not to argue invalidity if the PTAB says the patents or asserted claims are patentable. Samsung would have otherwise argued invalidity at trial, this was always there plan as we know, but they won't have this option if they lose at the PTAB. In gambling terms, Samsung are putting all their chips on black at the PTAB - they have gone all in.
This will all have the effect of simplifying the case and making sure a judgement holds if and when we get one. If Samsung cannot argue invalidity - although they can still appeal the IPR decisions - then any claims we assert that are found to be patentable are highly likely to bring us a judgement. What is quite peculiar about this case so far is that we have not modified any of our claims, either individual assert claims or specific patents, as the case has gone on. On one hand, that is not surprising because producing quantum dots is a chemistry process and the patents (and individual claims) are linked, but on the other it is because usually these cases get narrowed.
Keep in mind that if we were awarded damages on any claims which were later found to be unpatentable, I imagine we would likely end up with a retrial, so from our side we also want to see the path to a judgement streamlined via the IPR process.
I can only guess as to what is going on and why, but there must be more to this. We probably won't get a whole lot from management on the change in tack for obvious (confidentiality and privilege) reasons. What Brian Tenner has said all along is that we need to win at the district court level and at the PTAB and he is right.
The feedback I got was that Gilstrap rules pretty quickly on these things and its usually around 2 weeks (give or take) from the filing of the sur-reply (filed on 14th) to get a ruling. We should get something at some point next week.
Hi everyone,
I read Samsung's reply - there are no new arguments and it is a regurgitation of the original motion.
The motion to compel Nanoco to produce document is under seal, so we don't know what information they are requesting and for what reasons it is being denied. Perhaps this is privileged information (Nanoco emails to counsel or IP advisors etc) or perhaps it is information that doesn't actually exist. I also have a sneaking suspicion that it could be a delay tactic from Samsung to slow down the discovery process as a way to artificially increase the chances for a stay to be granted. It is impossible to say.
I am out of pocket for the next few days but am monitoring the filings and if something relevant pops up will let you know.
All the best,
Lobo
Lads (and ladies), in my view, we have them by the short and curlies as BT may say in Ireland, where I am also from.
I think the PTAB filings offer us very solid argumentative grounds to our asserted claims, namely those that weren't an object of grounds for institution and in fact we were supported by the PTAB - subject to expert witness confirmation, which I am confident we will have. Our friends down in Korea are literally trying to argue that 'after speaking to Nigel, we read a few textbooks, where each of the textbooks provided one portion of the secret sauce to create a magic potion. This isn't flying with the PTAB and I can tell you it wont fly with a jury in the the Eastern District of Texas.
Samsung are hanging on to strings. Imagine when the picture is painted to a jury that Samsung was not able to produce QDs, saw Nigel's presentation in a conference, followed up, developed a partnership, then dropped off the radar as they moved commercial production. Coupled with an adverse civil court and PTAB ruling on ANY of the asserted claims, it ain't going to fly very far for the Koreans.
We are on the right path and I haven't even given one thought to the organic side of the biz. Keep the faith in Brian Tenner - like myself, the Irish are as tough as nails and we will get through this.
All the best,
Lobo
I have read the brief and not surprisingly, it is very well drafted and contains convincing arguments from our lawyers. We have discussed many reasons for why a stay would not be granted, but I will summarise some key points below.
We are already well through discovery and on the way to trial. A stay would be highly disadvantageous to Nanoco, a small-cap company whose products continue to be infringed versus a multi-billion dollar giant for whom the legal expenses (and other resources required to manage such litigation) are immaterial.
At the same time, the parallel IPR proceedings do not overlap with the civil case, so that outcome will not simplify the case. Samsung's argument that the PTAB has instituted on all challenged claims is baseless because this is what the PTAB does since 2018 after SAS v Iancu. In fact the PTAB throws shade on many (if not most of Samsung's individual claim challenges) in the institution decisions, as our lawyers note.
Our lawyers also lean on the recent Solas OLED and Arbor decisions, which we have discussed here, where a stay was not granted ahead of IPR.
The reality is that IPR was only granted because Samsung agreed to be bound by stipulation not to argue invalidity on the findings of the patent office. They have tried to be clever on this point to avoid PTAB exercising its discretion to “deny institution based on an advanced stage of a parallel proceeding.” - one of the Fintiv factors. It was like they agreed to this knowing that the PTAB would have to latch on to this stipulation as they then wouldn't be impacting the parallel civil proceedings. This was a double edged sword for Samsung given many asserted claims look like they will go untouched by the PTAB and in fact the PTAB makes comments that Nanoco's claims have merit.
I picked out one very interesting point. Our lawyers note that in his first expert report, Samsung’s expert witness on invalidity stated “I do not expect to testify that the Asserted Patents are anticipated or rendered obvious by prior art references at trial in this litigation.” and that this was a contingency, which was then removed. So it seems that they won't argue invalidity, because their expert is estopped (prohibited) and this therefore means the civil case won't be simplified by the IPRs.
Our lawyers then throw more muck at Samsung by saying that they just use some general statistics to show that for patents where IPR is granted, many claims are invalidated, but they use a very wide data set versus a data set that should just be post SAS v Iancu (from 2018 onwards).
Our lawyers then refer to the PTAB's writings with respect to the challenges made and the strengths of many of of our individual claims, that the PTAB also recognises.
Let's see what Samsung return fire with.
Dear all,
I hope you are well. There have been a number of new filings released in the past few days. I thought I would summarise what they are and what they mean so everyone is on the same page.
May 25th - OBJECTION TO CLAIM CONSTRUCTION filed by Nanoco Technologies Ltd.. (Newman, Michael)
-Nanoco have objected to the construction of polymer. You will recall that the contentious point here is that Nanoco's teachings refer to LMA as a polymerisable substance, which is actually a monomer. They feel that the definition of polymer should also cover this. The arguments are reasonable but I am not sure what the chances of Judge Payne changing the construction is.
May 24th - OBJECTION TO CLAIM CONSTRUCTION Memorandum and Order Dkt. No. 84 filed by Samsung Electronics America, Inc., Samsung Electronics Co., Ltd.(Smith, Melissa)
-Samsung have objected to the construction of three terms, where Nanoco has been successful in obtaining the preferred construction in the Judge's opinion. I
May 24th - NOTICE of Designation of Mediator, Honorable David Folsom, filed by Nanoco Technologies Ltd.. (Ward, Thomas)
-When I first read this, I thought this may imply that there could be settlement talks brewing beneath the surface but I am wrong. It is very common for parties in a dispute to appoint a mediator - usually after the Markman hearing - or for the judge to do so. In this case, it looks like the parties had both agreed on Hon. David Folsom - upon researching his background he is a former EDTX judge himself. Supposedly he is not cheap so we can infer his appointment as meaning both sides think this is a very substantial case.
There are a couple of other filings related to MOTION TO COMPEL NANOCO TO PRODUCE RELEVANT DOCUMENTS WITHHELD BY NANOCO by Samsung Electronics America, Inc., Samsung Electronics Co., Ltd..(Smith, Melissa). This will be related to document and fact discovery, which will have closed. The filings are under seal so there isn't a whole lot we can learn from them, but this is normal in the course of the discovery process.
All the best,
Lobo87
Sorry, an important typo. I meant to say - Samsung requested to make their reply due May 28th, whilst Gilstrap has set it for June 7th. Right for sur-reply from Nanoco is set for June 10th.
There isn't a whole lot of acceleration in that timeline @Morbox... But hey, days can feel like seconds or years in litigation, depending on what side your on!
Nothing abnormal. In reading the briefs and Samsung's request for an expedited briefing schedule, where they were seeking a response from Nanoco on May 26th versus June 3rd default date, Judge Gilstrap has now ordered Nanoco's reply on 31st of May. Samsung requested that their reply would be due June 10th, whilst Gilstrap orders it for June 7th. Finally, Gilstrap has also granted Nanoco the right for sur-reply (response to Samsung's reply) which was not in Samsung's request for expedition of proceedings on June 10th.
He hasn't veered far off default course. In my view, he will have taken note of the IPR decisions but is not thinking that this is a game changer for the case - he is not rushing the parties back to the court by any means. By the time Gilstrap has pondered the request, we will have completed fact and document discovery and will be on our way to expert witness discovery.
Ciao Samsung.
Samsung would have been put on notice that they were infringing many years ago. Those thieving rats would have led Nanoco all the way down the gauntlet promising a commercial partnership, that the company would have viewed as transformational - in fact they seemed to be display as the future for the company for the last decade. Then after Samsung broke away, released QLED TVs I'd say they were delicately warned in the first place by Nanoco, who probably tried to salvage the possibility of doing business with them, and then eventually formally put on notice as infringing.
If one reads the motion to stay pending IPR, Samsung make it look like the PTAB is ready to invalidate every bloody claim in the patent. They note something very obvious and nonsensical, which is that IPR has been instituted on all asserted claims. If one claim in the patent is found to have a reasonable probability, then the PTAB will institute for ALL asserted claims. They cloud what has really gone on because as I posted yesterday, many of the claims challenges raised across the patent family were shot down by the PTAB.
Samsung are desperate and clutching at straws. I see we are well through fact discovery and document production and we will now move to expert witness discovery in weeks. From there, there will be motions to strike witnesses, evidence, etc from the record, but we are well on the way to trial. With the case so advanced and the IPR petitions not as strong as meets the eye, it would be highly prejudicial to stay the trial at this stage. Additionally, Nanoco may point to the fact that Samsung has caused them financial harm and as this dispute goes on, it drains resources that are critical to the company. The company does not have the resources to exhaust another 12-18 months to get to trial.
Perhaps we may see Nanoco narrow the scope of the case to the patents and claims where there is a low chance to be invalidated via IPR. This is quite common.
As Hawi said - Mintz are probably the best plaintiff side patent litigation firm in the world. This would have all been scripted out and they will have known Samsung's prior art and combined art defence they are trying to lean back on. It may fly for some claims, but no chance they will pull the wool over the eyes of the PTAB and most importantly, the Jury.
Have a good weekend all.
They are trying to expedite the hearing because we are right up against trial. As they point out, discovery has began, and the further that moves on, the less appeal Gilstrap would have to grant a stay. My base case is no stay. They say there are 'weeks' left in discovery as if it is 6-8 weeks away - without checking the procedural schedule, I wouldn't be shocked if in reality there are two weeks left for discovery and document production.
What I also find funny in the written motion is that whilst Samsung say IPR has been granted on all 5 patents, they don't inform the judge that many of their individual claim challenges were rejected by the PTAB. I reviewed this further and although the original complaint notes 'at least claim 1', we won't know what the individual infringement allegations are across the patents. These are not made public but we can glean insight from the claim construction (Markman ruling) in relation to where disputed terms are in the patents.
Fingers crossed.
PiratePete's post is very relevant here because like in Solas v Samsung, Judget Gilstrap struck out Samsung's motion to stay in Acorn Technologies' case, where IPR was also granted.
I think Samsung are a bunch of rascals. In our case they are using Kirkland & Ellis, who are a lot more expensive than DLA Piper - for good reason - but I am not one bit convinced of any merits to grant a stay.
For all those looking for us to hit 30p per share - however I think whatever number we hit in the coming months is meaningless if you are a long term shareholder - it may come after the stay is refused.
Been a volatile day with a lot of mixed emotions, but Brian Tenner and the team at Nanoco have us on the right track. I am sure of it.
Good luck to all - hold on.
I have just been pouring through court filings related to Solas OLED v Samsung and want to let you know that in this case - also overseen by Judge Gilstrap - a second motion to stay the case after IPR was instituted was DENIED, even after institution of IPR across ALL claims in the patents. Keep in mind, MANY of Samsung's individual challenges to the claims asserted in this case were DENIED by the PTAB.
In Solas v Samsung, the first motion to stay - which was denied - came after the original IPR petition filing. Exact same script here.
If I am a betting man - which I am - I would put a lump on trial going ahead. Everyone a little bit too excited - we are in good shape.
BeingTheBanker - Whilst you are correct that all eyes are on Judge Gilstrap's decision to stay the trial or not ahead of a final IPR decision, I do not understand what you mean in saying that 'I think they'll succeed given the stakes of this trial'. How high the 'stakes' of a case have nothing to do with the legal merits - this isn't a boxing match being organised by Eddie Hearn.
The answer on whether a stay will be executed or not depends on multiple factors: (1) to what extent the IPRs overlap with the issues in the case. If there is complete overlap, he might grant the stay, but if there is anything outside the granted IPRs, a stay is unlikely. On this point, I direct you to to Brian Tenner's comment this morning in that "We are not surprised that the PTAB has decided to implement the IPRs in the five patents and our plans included this eventuality. We note that many of Samsung's individual grounds of challenge were dismissed against a number of the claims asserted by Nanoco.".
Second, Judge Gilstrap might also view the proximity of trial as weighing against a stay.
The parties will lay this all out for us in the briefing on a motion to stay - lets see.
Admitting the IPR institution as evidence to the jury would be prejudicial, because no decision has been made with respect to invalidity. Keep in mind that the civil court system operates with different standards than the administrative system and allowing the admittance of evidence clouds the civil process. On the other hand, if institution was not granted, this is final and more likely to be admitted as evidence to the jury because it is not prejudicial and is probative.
Samsung's grounds for appeal if they lose in the first instance would have to be on a procedural basis before an IPR decision was handed down. If they are appealing on the grounds of invalidity, they would then need to overturn ALL asserted claims in the IPR proceedings for which they have been found guilty at the civil level in order to be successful.
The company has liquidity runway until 2H 2022 and the litigation proceedings are fully funded, so I am not sure that this will have any huge bearing on our cash position or plans going forward. I think that will boil down to how things look on the organic side of the business.
Answers to your questions:
If a settlement is agreed, Samsung can withdraw their petition.
I was looking at the scheduling and it seems we will have a decision by February 2022.
I would imagine that given at least the 4 patents are in a family, decisions will all be issued at the same time.
What I find incredible is that Samsung claims they read some great text books and PhD research papers to put together its QD production process. Why hasn't anyone managed to do the same if it was so simple??? I'd say Samsung would have just gone out and spoken to experts in the field - in this case Dr. Mark Green who is at Kings College - who sit and read papers in this space day-in-day-out and said please find us an out on their claims by linking together all that you have read.
On the basis of being a UK-based researcher, I am sure Dr. Green knows Nigel Pickett and Nanoco very well and I could only believe there must be a tinge of jealousy on his side of Nanoco's relative commercial success producing QDs!!!
Hi everyone,
I spent a decent amount of time pouring through the 5 decisions to institute IPR yesterday. Whilst this may delay the ultimate outcome (it also may not), we cannot say that the decision to institute across the 5 patents is adverse to our position for a couple of reasons.
I still find it unlikely that Judge Gilstrap will stay proceedings whilst we wait for an IPR outcome. We only have to look to his decision in Solas OLED v Samsung, where trial went ahead and the plaintiffs received a judgement before the IPR process had concluded. This is the precise reason why both the EDTX and WDTX are favourable jurisdictions for claimants. See more on the Solas OLED decision here (https://lawstreetmedia.com/tech/intellectual-property/judge-blocks-ipr-stay-in-samsung-patent-case/#:~:text=A%20renewed%20motion%20to%20stay,Judge%20Rodney%20Gilstrap%20on%20Friday.). You will recall last week that I posted an article where Judge Albright in the WDTX also said that he rarely stays a case whilst waiting for an IPR decision.
Samsung threw the proverbial s*** at the wall in challenging many claims across the patent portfolio - not just ones where infringement has been alleged. IPR can be granted - meaning all claims in the patents are reviewed - if there is a reasonable chance that just one of these claims can be invalidated. Remember that we just need to show one of these claims was valid and wilfully infringed by Samsung.
That leads my to my next point. We asserted that at least one claim in each of the patents had been infringed. On the '828 patent in the original complaint, we asserted that claims 1 and 14 have been infringed upon. I also keep in mind that on the '068 patent there is only one claim.
There is language in the PTAB's decision on the '068 and '828 patents which throw a lot of shade on Samsung's assertions that the claims are invalid, particularly with respect to claim 14 in the '828. I will pull the language later but you can pick it up towards the end of the written decision in the '828.
It is quite funny to read as with respect to the 4 core patents relating to the production of QDs, Samsung basically claim - in hindsight - that they read a few chemistry research papers and it all became obvious how to produce cadmium free QDs. They may get away with that, or show that there was prior art in combining processes in a few of these claims, but I would say near impossible across all the asserted claims.
I also need to recheck whether we amended the original complaint to assert specific claims or whether we had just kept the 'at least' language without prejudice. My feeling is that we will now amend the complaint knowing what Samsung's defence is and we may also go back and even amend the patents. What struck me - and I didn't notice it before - was that we never rebutted their expert's arguments across the sphere of assertions/challenges made.
Hang tight.
I don't think there is any issue with a 'non-technical' CEO. Brian Tenner is no slouch - he has held CFO and finance director roles at a number of technology, advanced materials, and engineering companies (NCC, Renold, Scapa, etc). He is also an independent director at Velocity Composites. Don't forget that there is a deep bench of 'technical' people on the board and management team (Nigel, Chris, Alison) so I don't think we are short of brains.
I haven't been following this as long as some of you but the previous CEO, Michael Edelman, struck me as someone who was great with chit chat but hadn't really delivered any material results. I also found it strange that he was based in the US for quite some time - was this choice driven by personal or business motives (I see he has now moved to Boston permanently).
I am guessing it would have been Brian who pulled off the potentially transformational litigation funding transaction, snatching victory from the jaws of defeat, and has managed our finances well whilst also continuing to cultivate customer relationships as today's RNS shows.
Bottom line - I think we are in good hands...
"It seems to me that it's beneficial to all parties to have a docket where the case gets resolved in the same manner it would in the PTAB, meaning in a relatively sane period of time," he said. "I've never heard anyone who's said in any civil case, 'Gosh, I wish this judge would spend another three years working on this case.'". Judge Albright alluded to the possibility that his current practice could be challenged at the Federal Circuit. "I may get guidance from the people who grade my papers at some point that that's not the right approach, but as of right now, I haven't gotten that guidance," he said.
He also noted that he has no reservations about the PTAB system itself, saying that "everyone I know who sits as a PTAB judge is a thousand times smarter than me. They're great lawyers and I think it's a very good system." One of those judges, PTAB Chief Judge Scott Boalick, was on the panel with Judge Albright and fielded questions about the board's current practice of exercising its discretion not to review patents when a trial is looming in district court, often in Judge Albright's courtroom.
Judge Boalick said he was constrained about what he can say about the policy, which is the subject of pending litigation by Cisco, Apple and other technology giants who say it unfairly limits the ability of accused infringers to challenge patents at the board. He said the board is currently reviewing the practice and the more than 800 public comments that were submitted about it last year. "We've read through all of them and we're currently pondering our next steps," Judge Boalick said. "I don't have definitive next steps for you right now, but we are looking at a whole range of options."