Tuesday, March 31, 2015

Real-Time Auction Patent Invalid Under Alice

The court granted defendant's motion for judgment on the pleadings that plaintiff's real-time auction patent was invalid for lack of patentable subject matter and found the claims did not contain an inventive concept. "The patent itself describes implementing an existing abstract idea — an auction — refined for implementation on the Internet. Two-modes does not change this. . . . Likewise, a partial update of the web page with only minimal information is also just Internet implementation of a 'real live auction'. . . . Individually and collectively these variations do not make the abstract idea described patent eligible. . . . [Plaintiff] claims its approach to an online auction minimizes server use. . . . [T]he [patent] does not identify server bandwidth as a problem to be solved by the Patent. However, even if it were, it is only a incidental benefit to generic implementation of the [patent] claims."

Advanced Auctions LLC v. eBay Inc., 3-13-cv-01612 (CASD March 27, 2015, Order) (Benitez, J.)

Complimentary Access to MIP’s Special Report on the Surge in New Patent Cases in February 2015

The number of patent lawsuits being filed in 2015 so far is higher than that seen in 2014. This has been driven by a surge in software patent cases, which in February had the largest number of lawsuits filed since April last year. Managing Intellectual Property has published a special report analyzing this increase in new case filings based on Docket Navigator data. Complimentary access has been made available as a benefit to Docket Navigator subscribers. Click here to access the report.

Monday, March 30, 2015

No Reduction of Attorney Fees for Unnecessary “Frontloaded” Work

The court granted in part defendant's motion for attorneys' fees under its inherent power because plaintiff's litigation was in bad faith and rejected plaintiff's argument that defense counsel frontloaded their work. "Defendant entered into a fixed-fee arrangement under which it paid counsel a set amount each month, irrespective of the amount of work performed during that period. Plaintiff argues that the arrangement incentivized defense counsel to perform work earlier than necessary so that counsel 'did not substantially exceed the cap on the payments it was to receive when the case started moving.'. . . [T]he Court does not find that defense counsel performed unnecessary, frontloaded work. . . . [R]esponsible attorneys would not stand around and wait for months once their client has been accused of infringement and then rush to perform all their work once they get more specific information. It is reasonable to begin investigating and preparing a defense once an infringement suit has been brought."

Parallel Iron LLC v. NetApp Inc., 1-12-cv-00769 (DED March 25, 2015, Order) (Andrews, J.)

Friday, March 27, 2015

Use of Trade Show to Identify Potential Infringers Justifies Exercise of Personal Jurisdiction Over Patentee

Following jurisdictional discovery, the court denied defendant's motion to dismiss plaintiff's declaratory relief action for lack of personal jurisdiction. "[Defendant's] receipt of service of the amended complaint while he was attending the SHOT Show in Las Vegas establishes personal jurisdiction. [Defendant] was physically present in Nevada and he was personally served. Due process in this case requires nothing more. . . . [E]ven if [defendant] had not been personally served with the amended complaint in Las Vegas, the record developed through discovery supports a finding of personal jurisdiction here. . . . [Defendant] routinely used the SHOT Show as a venue to identify potential infringers and that he, through counsel, made efforts to discourage potential infringers from displaying their products at the SHOT Show by sending cease-and-desist letters only days before the event. . . . In such a situation, it should come as little surprise to the patentee that he is required to defend himself against a declaratory judgment action for noninfringement in the forum he repeatedly utilized to identify products potentially infringing his patent."

Bravo Company USA, Inc. v. Badger Ordnance LLC et al, 2-14-cv-00387 (NVD March 25, 2015, Order) (Jones, J.)

Thursday, March 26, 2015

“Shotgun” Infringement Pleading May Support Exceptional Case Finding

The court denied defendant's motion to dismiss plaintiff's "shotgun" direct infringement claim but warned of a potential exceptional case finding later. "[Plaintiff's] asserted patents are clearly complex. Among the six patents, there are over 900 claims, many of which [plaintiff's] counsel admits are inapplicable to [defendant's] products and services. A pleading that alleges 'one or more' of the over 900 claims in the patents-in-suit are infringed gives [defendant] and this court scant notice of what is truly alleged to be at issue in this case. Although adhering to the minimum requirements of Form 18, [plaintiff's] direct-infringement pleading is a classic example of a 'shotgun' approach to pleading, where the sheer volume of potential asserted claims and complexity of the patents are overwhelming to the parties and to the court. . . . Still, because the requirements of Form 18 have been met, the court will not at this time instruct [plaintiff] to redraft its direct-infringement allegations. . . . However, the court does remind [plaintiff] that a sprawling resource-depleting approach to this case, which ultimately proves to be unduly wasteful, may factor into a finding that this case is an 'exceptional' case that justifies fee shifting."

Joao Control & Monitoring Systems, LLC v. Protect America, Inc., 1-14-cv-00134 (TXWD March 24, 2015, Order) (Yeakel, J.)

Wednesday, March 25, 2015

Parties Ordered to Identify Ten Most Significant Disputed Terms

In response to the parties' joint claim construction statement addressing twenty-three disputed terms, the court ordered the parties to "identify the ten terms the construction of which will be the most significant in the resolution of this dispute." "It is not apparent to the court why many of the terms, such as 'file,' are in dispute, let alone case or claim dispositive. . . . The purpose of requesting construction of a term is not to lard the record with potential error or to impose costs on an opponent. Given the number of terms in dispute, the court orders that the parties meet and confer in good faith, in an attempt to reduce the number of terms in need of construction and to determine those terms on which agreement can be reached. . . . The traditional primer on the general principles of Markman v. Westview Instruments, Inc., 517 U.S. 370, 116 S. Ct. 1384 (1996) and Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc) is not likely to be necessary or helpful."

Personal Audio LLC v. Acer America Corp. et al, 1-14-cv-00008 (TXED March 23, 2015, Order) (Clark, J.)

Tuesday, March 24, 2015

Failure to Include Known Prior Art and Arguments in IPR Petition Justifies Denial of Subsequent Petition

"[The petitioner] does not show that we misapplied § 325(d) in assessing whether 'the same or substantially the same prior art or arguments' were raised in the first and second petitions. . . . Our authority is grounded not only in § 325(d), but also in the broader discretion to deny a petition under § 314(a). . . . [The petitioner] argues that the Board should not have considered whether any new prior art or arguments raised in the second petition were known or available to [the petitioner] at the time of filing the first petition. . . . [The petitioner] advances a bright-line approach that would allow petitioners to file 'follow-on' second petitions in order to 'correct deficiencies noted' by the Board in decisions that deny a first petition. That bright-line approach would allow petitioners to unveil strategically their best prior art and arguments in serial petitions, using our decisions on institution as a roadmap, until a ground is advanced that results in review—a practice that would tax Board resources, and force patent owners to defend multiple attacks. We did not err by adopting a more flexible approach that assesses each case on its particular facts to achieve a result that promotes the efficient and economical use of Board and party resources, and reduces the opportunity for abuse of the administrative process."

Petition for Inter Partes Review by Conopco, Inc., IPR2014-00628 (PTAB March 20, 2015, Order) (Obermann, APJ)

Monday, March 23, 2015

Determining §101 Validity at the Pleading Stage Warranted Only in “Narrow Circumstances”

The magistrate judge recommended denying defendant's motion to dismiss and rejected the argument that the validity of the asserted patient monitoring patent under §101 could be determined at the pleading stage. "While handling the issue of §101 eligibility at the pleading stage is permissible, those issues are often inextricably tied to claim construction. Thus, it seems a definitive ruling on eligibility before claim construction is only warranted in narrow circumstances, making such a ruling the exception rather than the rule. . . . The difficulty of making a substantive ruling on the validity of an issued patent in what is – in essence – a complete vacuum cannot be understated. While the claim language of some patents may be so clear that the court need only undertake a facial analysis to render it invalid at the pleading stage, that will not be the norm and is certainly not the case here."

My Health, Inc. v. LifeScan, Inc., 2-14-cv-00683 (TXED March 19, 2015, Order) (Payne, M.J.)

67% Success Rate for §101 Challenges at the Pleading Stage in 2015

In the first few months of 2015, district courts have ruled on twelve Rule 12(b)(6) motions to dismiss and motions for judgment on the pleadings challenging the validity of patents under §101. Eight were granted, for a success rate of 67%. To view a Motion Success Report showing the outcomes of these motions since 2008, click here.