Wednesday, November 25, 2015

Plaintiff’s Failure to Seek Increase in Number of Asserted Claims Justifies Dismissal of Unasserted Claims With Prejudice

The court granted defendants' motion to dismiss, with prejudice, all claims and counterclaims regarding four patents that were no longer at issue after plaintiff was ordered to reduce the number of its asserted claims. "[Plaintiff] had the absolute right to assert a claim in each of the now unasserted patents by reducing the number of claims asserted in other patents, and . . . had the right to increase the number of claims through a motion showing 'that the additional claims present[ed] unique issues.'. . . [Plaintiff] chose neither of these options and now seeks to preserve the unasserted patents and claims for a separate suit. . . . The Court is well within its discretion under the plain reading of the rule to dismiss all unasserted claims and counterclaims with prejudice for two related reasons: (1) Plaintiff failed to prosecute by not seeking to increase the number of claims in a timely fashion under the Court’s permissible due process procedure; and (2) to the extent Plaintiff wanted to assert claims regarding the four (now unasserted) patents, Plaintiff failed to timely comply with the order that directed it to submit a motion to include those additional patents and claims. . . . For [plaintiff] to now claim that due process would be offended by such a result is not persuasive. With an army of resources and lawyers, [plaintiff] clearly could have used the 'efficient and fair' procedure the Court provided to preserve its due process rights."

Magna Electronics, Inc. v. TRW Automotive Holdings Corporation et al, 1-12-cv-00654 (MIWD November 23, 2015, Order) (Maloney, J.)

Tuesday, November 24, 2015

Network Security Patent Not Invalid Under 35 U.S.C. § 101

Following jury and bench trials, the court found that plaintiff's network security patent was not invalid for lack of patentable subject matter and found the claims were not directed toward an abstract idea. "Plaintiff contends that contrary to Defendant’s overgeneralization of claim 1 of the [patent-in-suit], claim 1 covers a specific technique of protecting computer networks. . . . The Court finds the claim at issue to be similar to the hypothetical claim in the Patent Office’s guidance. Although Defendant argues and the Court recognizes that the Patent Office’s guidance is not binding, the Court finds its reasoning persuasive. . . . [C]laim 1 of the [patent-in-suit] is directed towards receiving a downloadable, identifying suspicious or malicious code and generating a security profile, and associating the downloadable with the security profile. These steps do not describe an abstract concept as they are directed towards performing steps leading to identifying malicious code to create a new data file containing a security profile. Further, the Patent Office’s hypothetical claim is 'necessarily rooted in computer technology because malicious code or ‘viruses’ have no significance outside the realm of computer technology.' Similarly, claim 1 of the [patent] is also rooted in computer technology as it covers the identification of suspicious code which do not have significance outside the realm of computer technology."

Finjan, Inc. v. Blue Coat Systems, Inc., 5-13-cv-03999 (CAND November 20, 2015, Order) (Freeman, J.)

Monday, November 23, 2015

In-Store Discount Patents Not Invalid Under 35 U.S.C. § 101 Prior to Claim Construction

The magistrate judge recommended denying without prejudice defendants' motion for judgment on the pleadings that plaintiff's in-store discount patents were invalid for lack of patentable subject matter because defendants did not establish, prior to claim construction, that the claims were directed toward an abstract idea. "Defendants ask the Court to invalidate the asserted claims on the basis that they are directed to the abstract idea of 'offering, tracking, and processing discounts'—a concept Defendants contend is a longstanding commercial practice. . . . [A] review of the asserted claims does not clearly show that they 'recite[] an abstraction—an idea, having no particular concrete or tangible form.' The discount vehicle claims, for example, include physical structures such as a discount vehicle with information identifying products and their associated discounts, and a select code that can be selectively deactivated as to certain discounts, while remaining active for future use as to others. The data processing system claims recite . . . a data processor connected to memory that is capable of selectively deactivating the select code for redeemed discounts, while leaving the select code active for unused discounts. The presence of these structures counsels away from summarily concluding that the asserted claims are directed to an abstract idea. Consequently, it is impossible to make a final determination before claim construction that the claims are simply 'a drafting effort designed to monopolize [an] abstract idea,' rather than a patent-eligible application of the idea."

Advanced Marketing Systems, LLC v. CVS Pharmacy, Inc., 6-15-cv-00134 (TXED November 19, 2015, Order) (Mitchell, M.J.)

Friday, November 20, 2015

Call Routing Patent Invalid Under 35 U.S.C. § 101

The court granted defendant's motion for summary judgment that plaintiff's call routing patent was invalid for lack of patentable subject matter and found that the claims lacked an inventive concept. "[The patent-in-suit] does not 'solve a problem of computer networks in a way that is rooted in computer technology.' Indeed, the problem solved has nothing to do with computer networks; the (perceived) problem is having to punch more than ten digits into a telephone in order to make a long distance call. . . . The genius of the [patent] (and it is indeed clever and creative) lies in seeing that you don't have to input additional numbers in order to complete an overseas call, but can instead use a combination of caller ID and call forwarding to route and connect the call without dialing another digit. . . . The claimed invention is literally no more sophisticated than what Jenny the Operator did on Lassie, those many years ago; as defendant argues, any telephone operator given a copy of the lookup table (which is not part of the claimed invention) can route and connect the call. It may not be cost-efficient to do it that way, but it can most certainly be done - and was for many, many years, when we used to dial (or, later, press) 'O,' and someone connected us to the intended recipient of our call. . . . [P]atents are not available for all inspirations of genius, but only for processes, machines, manufactures and combinations of materials."

Stanacard, LLC v. Rubard, LLC et al, 1-12-cv-05176 (NYSD November 18, 2015, Order) (McMahon, J.)

Thursday, November 19, 2015

Purchase of Accused Product Through Sufficient to Establish Personal Jurisdiction

The court denied defendant's motion to dismiss plaintiff's infringement action for lack of personal jurisdiction because plaintiff's employees' purchase of the accused product through Amazon was sufficient to establish jurisdiction. "It is undisputed that two Massachusetts residents purchased [defendant's] allegedly infringing product; that they purchased the product through; and that both individuals were employees of [plaintiff]. . . . At least in the context of interpreting state long-arm statutes, the Federal Circuit has consistently held that a patent infringer is subject to personal jurisdiction where it sells the allegedly infringing product. . . . Taking [plaintiff's] allegations as true, [defendant] offered the allegedly infringing product for sale in Massachusetts, at least two Massachusetts residents purchased the product, and [plaintiff] suffered 'economic loss' in Massachusetts because it 'los[t] business' here. . . . [Defendant] misconstrues the nature of its own activities in Massachusetts by comparing them with the actions of the defendants in the 'manipulative purchase' line of cases. In [those cases], the defendants sold their products only on their own websites; they did not place their products into the national stream of commerce through online retailers."

PetEdge,Inc. v. Fortress Secure Solutions, LLC, 1-15-cv-11988 (MAD November 17, 2015, Order) (Saylor, J.)

Wednesday, November 18, 2015

PTAB’s Institution of IPR Neutralizes Defendant’s Use of IPR for Tactical Delay

The court granted defendants' renewed motion to stay pending inter partes review after the PTAB instituted review on all claims of the patent-in-suit because the potential simplification of issues and lack of undue prejudice favored a stay. "[W]ere the Court to proceed to trial [in three months], a later USPTO decision could ultimately nullify the Court's judgment. . . . Although the Court would have to reschedule the Rule 16(b) conference and trial date, a stay will still reduce the future burden of litigation since IPR has the possibility of disposing with the entire case. . . . [B]ecause Defendants filed a Motion to Stay pending IPR the same day this Court denied its Motion to Transfer Venue, it appeared as though the stay represented a delaying tactic by Defendants. However, this factor is mitigated strongly by the PTAB's decision to institute IPR on all claims of the [patent], indicating that the PTAB determined Defendants' petition was more likely than not meritorious. . . . Even if Defendants filed their petition as a tool for tactical delay, the Court finds this factor is neutralized by the PTAB's institution of IPR on the merits of Defendants' claims."

Cobalt Boats, LLC v. Sea Ray Boats, Inc. et al, 2-15-cv-00021 (VAED November 16, 2015, Order) (Morgan, J.)

Tuesday, November 17, 2015

Real Estate Information Sharing Patent Claims Invalid Under 35 U.S.C. § 101

The court granted defendant's motion for summary judgment that the asserted claims of plaintiff's patent for sharing information among real estate agents and clients were invalid for lack of patentable subject matter and found that the claims were directed to an abstract idea. "[Plaintiff's] patent specification confirms that real estate agents 'conventionally' connect to a database of real estate information 'to locate properties of interest for their clients.' They then contact each client to determine whether the client is interested in any of the resulting properties and whether the client has found any properties of interest from other sources, such as print advertisements or the Internet. Through this interaction, the agent and clients have exchanged information and collaborated in the real estate search process. [Plaintiff's] invention simply places the interaction online. . . . The fact that [plaintiff's] method is performed online—rather than in an office, over the phone, or through email—does not change the Court’s conclusion that Claim 1 is directed to an abstract idea."

Listingbook, LLC v. Market Leader, Inc., 1-13-cv-00583 (NCMD November 13, 2015, Order) (Biggs, J.)