Friday, March 6, 2015

No Institution of IPR for Indefinite Means-Plus-Function Claims

The Board denied the petitioner's request for institution of an inter partes review of a patent related to landing and recovering a reusable launch vehicle at sea, as the challenged means-plus-function claims were not amenable to construction. "[The petitioner] contends that, although the Specification discloses that 'the routine starts with booster engine ignition' and that 'booster engine cutoff occurs at a predetermined altitude,' the Specification is otherwise silent on details about igniting, shutting off, or reigniting the engines, in terms of both structure and function. . . . Unable to identify structure in the Specification corresponding to the recited functions, [the petitioner] urges us to construe the 'means for' limitations as 'any suitable structure' that ignites, shuts off, or reignites a rocket engine. That, we cannot do. . . . Interpreting means-plus-function language to encompass any structure for performing the recited function not only violates 35 U.S.C. § 112, ¶ 6, . . . but also violates our standard of applying the 'broadest reasonable construction' to claims undergoing inter partes review. . . . A lack of sufficient disclosure of structure under 35 U.S.C. § 112, ¶ 6 renders a claim indefinite and, thus, not amenable to construction. . . . Because the challenged claims are not amenable to construction, we are unable to reach a determination on the reasonable likelihood of [the petitioner] prevailing on the prior art ground asserted in the Petition."

Petition for Inter Partes Review by Space Exploration Technologies Corp., IPR2014-01378 (PTAB March 3, 2015, Order) (DeFranco, APJ)

Thursday, March 5, 2015

Customized Proposal Preparation Patent Invalid Under Alice

The court granted defendant's motion to dismiss plaintiff's claims for infringement of its proposal preparation patents because the asserted patents lacked patentable subject matter. "[T]he asserted claims are directed to the abstract idea of creating a customized sales proposal for a customer. . . . [T]he Court does not hold that all claims in software-based patents are directed to an abstract idea. Indeed, the contours are often unclear between those inventions that are directed to an abstract idea and those that are not. . . . Although verbose, the claims as a whole broadly recite a simple process which, in this case, does not require the type of complex programming that confers patent eligibility. Importantly, the claims in no way 'purport to improve the functioning of the computer itself.' Likewise, the claimed invention is not 'necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks.'. . . The claims identify no inventive algorithms or otherwise creative means for generating a customized sales proposal other than an instruction that the basic process be performed using generic computer components."

Clear With Computers, LLC v. Altec Industries, Inc., 6-14-cv-00079 (TXED March 3, 2015, Order) (Gilstrap, J.)


Success Rates of § 101 Challenges at the Pleading Stage

Traditionally, pre-trial challenges to the validity of patents were raised primarily in summary judgment motions, not in challenges to the pleadings under Rule 12(b)(6) or a motion for judgment on the pleadings. Conventional wisdom dictated that, in most situations, a court could not address validity until after discovery and claim construction. Alice is changing that for validity challenges based on §101. During the four year period from 2008 to 2011, courts ruled on only seven such motions and granted two for a success rate of 28.6%. By 2014, courts ruled on 24 such motions and granted 13, for a success rate of 54.2%. In 2015 we’ve seen rulings on 9 motions and all but two were granted, for a success rate of 77%. To view a Motion Success Report showing the success rates and outcomes of these motions since 2008, click here.

Wednesday, March 4, 2015

Assertion of Patent Claims After Unfavorable Claim Construction of Related Patents Warrants § 285 Attorney Fee Award

The court granted defendants' motion for attorney fees under 35 U.S.C. § 285 following summary judgment of noninfringement because plaintiff should have known its claims were meritless. "The infringement claims against [defendants] depended on a claim construction that the court clearly rejected in prior litigation on closely related patents. . . . [Plaintiff] justifies the arguments it advanced here on the wording differences, asserting that the prior construction in [the earlier case] was not 'controlling.' The prior construction was not preclusive, but it certainly was clear. . . . [Plaintiff's] arguments for a different construction in the present cases were wholly unsubstantial and without merit. . . . It was merely a vehicle to relitigate prior, clearly rejected, positions."

TechRadium Inc v. FirstCall Network, Inc., 4-13-cv-02487 (TXSD February 27, 2015, Order) (Rosenthal, J.)


Success Rates of Motions for Attorney Fees Under 35 USC § 285

Since 2008, U.S. district courts have ruled on 924 motions for attorney fees under 35 USC § 285. About 60% were denied each year, with the exception of 2013 when the denial rate increased to 67%. It appears Octane Fitness and Highmark may be changing that. Last year only 57.6% were denied and the denial rate in 2015 to date is only 48%.

Click here to view a Motion Success Report showing all outcomes of motions for attorney fees since 2008. Using the filters on the left side of the page, you can modify the report to focus on a specific court or judge. You can also print the report in PDF format by clicking the printer icon.

Tuesday, March 3, 2015

Google’s Size, Wealth, and Market Power Relevant to Hypothetical Negotiation

The court partially denied Google's motion in limine to preclude references to its size, wealth, and alleged market power. "Google’s size and wealth, on their own, are not relevant to the issues to be tried. [Plaintiff] may not make general statements about Google’s financials that are unrelated to damages in this case. Google’s market power, however, is relevant to the bargaining position that the two parties would take in a hypothetical negotiation. Testimony and argument on Google’s market power is permissible to the extent that it relates to that negotiation, but is not permissible to the extent that it suggests that Google behaves as a monopoly or engages in unlawful or anticompetitive practices. Evidence and arguments about Google’s non-location-related revenues and profits, as well as the value of 'location' to Google, are similarly relevant to damages and are permissible for that purpose. With these principles in mind, the parties may raise objections to specific mentions of these issues as appropriate at trial."

Skyhook Wireless, Inc. v. Google, Inc., 1-10-cv-11571 (MAD February 27, 2015, Order) (Zobel, J.)

Monday, March 2, 2015

Stay Pending IPR Conditioned on Defendants’ Stipulation to § 315(e) Estoppel Even in the Event of Withdrawal

The court conditioned a stay pending inter partes review on defendants' stipulation to be bound by estoppel even if petitioners withdrew but the PTAB still issued a final written decision. "The purpose of the stipulation is to provide defendants with a stay if they would, in substance, be treated as if they were subject to the estoppel pursuant to 35 U.S.C. § 315(e). That is, as if they were a petitioner, or 'the real party in interest or privy of the petitioner.' . . . An IPR petitioner who withdrew before decision – perhaps because it perceived that it was not likely to receive a favorable PTAB decision – would not escape the estoppel consequences. . . . I will not permit the defendants to avoid estoppel if the IPR petitioners decide to withdraw and the PTAB thereafter issues a 'final written decision.'"

CTP Innovations LLC v. EBSCO Industries Inc., 1-14-cv-03884 (MDD February 25, 2015, Order) (Garbis, J.)


Conditions of Stays Pending IPR, CBM and PGR

Since the creation of new post-grant proceedings before the Patent Trial and Appeal Board, U.S. district courts have ruled on 617 motions to stay pending inter partes review (IPR), covered business method review (CBM), and post-grant review (PGR). Most of those rulings either granted or denied a stay. However, in 27 rulings, courts granted the stay upon certain conditions, the most common of which was defendants’ agreement to 35 USC § 315(e) estoppel. In some cases, the stipulated estoppel was weaker than estoppel under § 315(e). In other cases, stay was conditioned on the PTAB reaching certain determinations that might impact the litigation. To view all orders granting stays upon certain conditions, click here.

Friday, February 27, 2015

Foreign Plaintiffs Not Required to Post Bond for Defendant’s Fees and Costs

In connection with plaintiff's motion to strike plaintiff's infringement contentions, the court denied without prejudice defendant's motion to require plaintiffs' to post a bond of $750,000 for defendant's anticipated 35 U.S.C. § 285 claim. "There is no general federal statute or civil rule governing whether plaintiffs may be required to post security for the costs and fees the opposing party may incur in order to proceed with an action. 'However, the federal district courts have inherent power to require plaintiffs to post security for costs.' . . . [E]ven if Defendants had demonstrated a reasonable likelihood of success on the merits . . . they have not shown that this case is 'frivolous,' that it arises from improper motivation, or that there is objective unreasonableness in the factual and legal components of the case. [Plaintiff] is seeking to protect patents he has owned for many years, and that he alleges were infringed after business talks broke down between himself and Defendants. While the Court may entertain a renewed motion if Plaintiffs again fail to satisfy Patent Local Rule 3-1, if the Court determines their claim is invalid under Federal Rule of Civil Procedure 11, or if the Court determines Plaintiffs lack standing, there is insufficient evidence for the Court to say this action is 'extraordinary' as currently litigated."

James Sung et al v. Shinhan Diamond America, Inc. et al, 2-14-cv-00530 (CACD February 25, 2015, Order) (Fitzgerald, J.)

Thursday, February 26, 2015

TCP/IP Wireless Transmission Patent Not Invalid Under Alice

The court denied defendant's motion for summary judgment that plaintiff's TCP/IP wireless transmission patent was invalid for lack of patentable subject matter because the claims contained an inventive concept. "[Defendant] alleges that the asserted claims of [a patent-in-suit] are invalid under 35 U.S.C. § 101 because they claim the abstract idea of allocating wireless bandwidth based on packet contents. . . . [Plaintiff's] expert opined that the claimed improvement 'schedules the flow of information on the network according to the claimed method as opposed to how it would otherwise proceed.' . . . [T]he present invention 'specif[ies] how interactions with the [network] are manipulated to yield a desired result' by reallocating bandwidth based on the contents of packet headers. Even though claim 1 itself does not provide a detailed explanation of how packet headers are used to allocate the bandwidth, the inventive concept lies in the limitation of using packet headers to allocate bandwidth, not in the details of implementation."

Intellectual Ventures I LLC et al v. Motorola Mobility LLC, 1-11-cv-00908 (DED February 24, 2015, Order) (Robinson, J.)