Last Minute Amendment of Infringement Contentions Supports § 285 Fee Award

Following summary judgment of invalidity, the court granted defendant's motion for attorney fees under 35 U.S.C. § 285 because plaintiff's litigation tactics weighed in favor of a fee award. "[Plaintiff] has never provided an explanation of its failure to allege infringement of the additional [seven] products prior to the last minute before the close of fact discovery. . . . Although [plaintiff] did serve its amended contentions just before the close of fact discovery, its assertion that the amendments were made 'as soon as reasonably possible based on the information available' does not hold up under scrutiny. . . . [Plaintiff's] amended contentions were principally 'based on publicly available information.' Additionally, five months was more than a reasonable time to amend the contentions to include information [plaintiff] itself characterized as the 'limited documentation produced to date.' The circumstances strongly support the inference that [plaintiff's] assertion of infringement by seven additional vehicles two hours before the close of fact discovery was illegitimately motivated."

Vehicle Interface Technologies, LLC v. Jaguar Land Rover North America, LLC, 1-12-cv-01285 (DED December 28, 2015, Order) (Andrews, J.)

Sanctions Against Plaintiff in Unrelated Cases Do Not Justify § 285 Fee Award

The court denied defendant's motion for attorney fees under 35 U.S.C. § 285 after plaintiff dismissed its action following reexamination and rejected defendant's argument that sanctions were needed to deter plaintiff as a bad faith actor. "[Defendant] asserts that [plaintiff] is a repeat bad-faith actor, pointing to sanctions against [plaintiff] in unrelated cases. . . . It would be one thing if [plaintiff] were bringing multiple frivolous actions based on the patent at issue in this case. But instead, [defendant] attempts to aggregate any litigation misconduct [plaintiff] has ever engaged in, in cases of widely varying subject matter, in an effort to have this particular case declared exceptional. This Court refuses to go down that road. Nothing that [plaintiff] did in those other cases occurred before this Court and this Court has no intention of spending countless hours reviewing and critiquing sanction orders issued by other courts."

Sasco v. Weber Electric Manufacturing Company, 8-13-cv-00022 (CACD December 23, 2015, Order) (Carney, J.)

Defendant’s $6.8 Million Fee Request Not “Obviously Excessive” In Light of Plaintiff’s Settlement Demand

The special master recommended reducing the amount of attorneys' fees defendant requested under 35 U.S.C § 285, but rejected plaintiff's argument that a $6.8 million fee request was inherently unreasonable. "[T]he AIPLA Survey lists the average cost of a patent defense may run as high as $5,500,000.00 to $6,000,000.00 for a claim which might result in damages in excess of $25,000,000.00. In determining the amount involved, [plaintiff] self-servingly attempted to value the case somewhere between $1,000,000.00 and $10,000,000.00. However . . . [plaintiff] demanded a settlement 2 months before trial of $18,300,000.00 upfront and $25,000,000.00 per drug candidate approved for market. . . . [Defendant] was justified in thinking it was facing an exposure in excess of $25,000,000.00 and therefore the AIPLA survey supports a finding the request for counsel fees was not obviously excessive."

Alzheimer's Institute of America, Inc. v. Avid Radiopharmaceuticals, et al, 2-10-cv-06908 (PAED December 22, 2015, Order) (Cohen, Special Master)

Patent Claiming Remote Access Communication Portal Not Invalid Under 35 U.S.C. § 101

The court granted plaintiff's motion for summary judgment that its remote access communication portal patent was not invalid for lack of patentable subject matter and found that the claims were not directed toward an abstract idea. "[Defendant] . . . argues that the invention could be, and was, performed by humans when telephone operators connected one caller to a second caller at the first caller’s request. . . . [Defendant's] analogy breaks down when claim 24 is considered as a whole, as [Alice Corp. Pty. Ltd., v. CLS Bank Int’l., 134 S. Ct. 2347 (2014)] requires. . . . [T]he purpose of claim 24 . . . in creating the private communication channel for remote access is not simply to allow people to talk with each other, but to allow direct access of data on the personal computer from the remote computer. A telephone operator cannot and does not provide the caller with direct access to data on the callee’s desk. [Defendant] oversimplifies the subject matter of the [patent] and claim 24 in an attempt to characterize the invention as an abstract idea. . . . Rather, claim 24 describes a 'particular approach' to solving problems with prior art remote access patents that could only exist in a post-Internet world, utilizing a 'location facility' that creates the private communication portal between the personal and remote computers in a specific way, even if the IP address of the personal computer is dynamic and not publicly addressable, to achieve the solution taught by the [patent-in-suit]."

01 Communique Laboratory, Inc. v. Citrix Systems, Inc., 1-06-cv-00253 (OHND December 21, 2015, Order) (Lioi, J.)

Jury Verdict Awarding $30 Million Reasonable Royalty Includes Damages for Ongoing Infringement

Following a jury verdict of $30 million the court denied plaintiff's motion for an ongoing royalty and accounting. "[T]he jury instructions were clear in providing [plaintiff] with complete relief from infringement. . . . The jury was instructed that, '[T]he damages you award must be adequate to compensate [plaintiff] for the infringement. . . . Your damages award, if you reach this issue, should put [plaintiff] in approximately the same financial position that it would have been in had the infringement not occurred.' In addition, question 2 on the verdict form indicated that the jury would be awarding damages in the amount of a reasonable royalty. The Court finds that an accounting and ongoing royalties would be inappropriate because the $30 million jury verdict represents the jury’s award of a reasonable royalty to compensate [plaintiff] for [defendant's] past, present, and ongoing infringement."

Prism Technologies, LLC v. Sprint Spectrum, LP, 8-12-cv-00123 (NED December 18, 2015, Order) (Strom, J.)

Plaintiff’s Unreasonable § 101 Positions and Vexatious Litigation Strategy Justify § 285 Attorney Fees Award

The court granted defendants' motion for attorney fees under 35 U.S.C. § 285 after the court found that plaintiff's information storage patent was invalid for lack of patentable subject matter because plaintiff's litigation position was unreasonable. "The Court notes that the [patent-in-suit] is demonstrably weak on its face, despite the initial presumptions created when this patent was issued by the PTO. . . . The [patent] claims were clearly directed toward unpatentable subject matter, and no reasonable litigant could have reasonably expected success on the merits when defending against the numerous § 101 motions filed in this case. . . . However, rather than acknowledging the inherent weaknesses of the [patent], [plaintiff] proffered completely untenable arguments to the Court throughout the § 101 briefing process and at the . . . hearing. . . . This causes the Court to question whether [plaintiff] engaged in a reasonable and thorough pre-suit investigation regarding the § 101 standard and relevant authority before filing a significant number of lawsuits. In these particular and focused circumstances, the Court identifies a clear need to advance considerations of deterrence. Accordingly, [plaintiff's] unreasonable § 101 positions support an 'exceptional' case finding."

eDekka LLC v. 3balls.com, Inc., 2-15-cv-00541 (TXED December 17, 2015, Order) (Gilstrap, J.)

Repeated Discovery Violations Warrant Adverse Jury Instruction

The magistrate judge recommended granting plaintiff's motion for an adverse jury instruction on damages because of defendant's discovery failures. "It took a motion to compel, a motion for contempt, a motion for sanctions, and three orders from this Court to dislodge from [defendant] the entirety of its information responsive to [plaintiff's requests]. . . . Additionally, the record shows that [defendant] engaged in tactics designed to delay its production, such as waiting weeks after the Court’s deadline for producing responsive information to ask for a change to the protective order. . . . [T]he fact that [defendant] eventually complied with this Court’s orders does not preclude the imposition of sanctions. In sum, for the reasons stated here and on the record, the Court finds that an instruction is warranted, albeit a less punitive instruction of the type that permits the jury to presume that the belatedly-produced evidence was helpful to [plaintiff] and harmful to [defendant]."

Star EnviroTech, Inc. v. Redline Detection, LLC et al, 8-12-cv-01861 (CACD December 16, 2015, Order) (McCormick, M.J.)

District Court Not Bound by PTAB’s Claim Construction in Rendering IPR Institution Decision

The court denied defendants' motion to modify the court's claim construction in light of the PTAB’s claim construction during inter partes review because issue preclusion did not apply. "In its response [to defendant's petition for inter partes review], [plaintiff] stated that it disagreed with [defendant's] construction of [a claim term], but did not propose any construction of its own. [Plaintiff] then argued that under [defendant's] construction, the patented claims were not anticipated. The PTAB agreed with [plaintiff] and denied the Petition. . . . The defendants argue that because the PTAB relied on a different claim construction than the court, collateral estoppel should apply. The PTAB's choice not to institute an IPR is not the type of adjudication that leads to issue preclusion. In declining to institute the IPR, the PTAB did not reach a final decision on the construction of [the term]. Without analysis, the PTAB adopted [defendant's] construction 'for purposes of this decision.'. . . Contrary to the defendants' assertions, the patentee is not 'trying to have its cake and eat too.' The court is not bound by a preliminary claim construction used by the PTAB for the limited purpose of denying an IPR request."

adidas AG et al v. Under Armour Inc. et al, 1-14-cv-00130 (DED December 15, 2015, Order) (Sleet, J.)

Defendant’s Fee Award Discounted to Account for Reasonable Duplication of Work and Unsuccessful Motions

The court reduced the lead defendant's requested attorney fees under 35 U.S.C. § 285 by 20% for billing overlap. "I know cases like this spawn big teams at big firms, and both partners and associates end up reviewing everything and commenting on everything, while multiple paralegals perform administrative tasks. I do not suggest that this is unreasonable - everyone on the team needs to familiarize himself or herself with developments, and I recognize that many different people end up making meaningful contributions to the finished product. But some duplication of work is inevitable, and when awarding sanctions, a court should make some effort to minimize the effects of that duplication, especially within a single firm. . . . I will apply a 20% discount (over and above the 12% already worked into the bill sent to the client) to the billable hours fees requested by [defendant]. That effectively takes one-third off the full value of [the defense] attorneys' billable hours. This discount will allow not only some remedy for inevitable duplication of effort, but also some remedy for the fact that much of the factual work done is attributable, not only to the Rule 285 motion on which the parties prevailed, but also to the motions on which they did not prevail."

Advanced Video Technologies LLC v. HTC Corporation et al, 1-11-cv-06604 (NYSD December 14, 2015, Order) (McMahon, J.)

Stay Pending IPR Does Not Justify Extension of Statutory 30-Month Stay of FDA Approval

The court denied plaintiffs' motion to extend the stay of FDA approval after the court granted defendants' renewed motion to stay pending inter partes review. "Plaintiffs argue that if the Court grants Defendants’ request for a stay, the Court should order corresponding extension of the regulatory stay. There is no law that justifies this request. The only basis that courts have relied on to extend the regulatory stay is the violation of the statutory requirement of 21 U.S.C. § 355(j)(5)(B)(iii) that a party has failed to reasonably cooperate in expediting the litigation. There is no basis to make such a finding in this case. Therefore, the Court declines Plaintiffs’ invitation to extend or toll the regulatory law stay."

Eli Lilly and Company et al v. Accord Healthcare, Inc. et al, 1-14-cv-00389 (INSD December 11, 2015, Order) (Baker, M.J.)

In Deciding Motion to Transfer Venue, Judicial Economy Does Not Override Convenience Factors

The court granted defendant's motion to transfer venue from the Eastern District of Texas to the Northern District of California even though judicial economy weighed against transfer. "Given that this Court is the only court with substantive experience with some of the patents-in-suit, and currently has twenty-six pending cases involving all four asserted patents, and six cases involving two asserted patents — all assigned to the same judge — there were at least some apparent judicial economy benefits at the time of the filing that favor this action remaining in this District. . . . In this situation, where [defendant] has made a strong showing in favor of transfer on factors such as the location of sources of proof and the convenience of witnesses, the benefits of judicial economy do not outweigh [defendant's] showing that the Northern District of California is clearly more convenient. Simply put, where [defendant] has shown the Northern District of California is a clearly more convenient forum, the considerations of judicial economy involving this Court’s prior experience with an overlapping patent do not override that showing to warrant a denial of transfer."

Chrimar Systems, Inc. et al v. Ruckus Wireless Inc., 6-15-cv-00638 (TXED December 9, 2015, Order) (Love, M.J.)

Patent Claiming a Human “Viewer” is Not Invalid for Claiming a Human Organism

The Commission affirmed the ALJ's final initial determination that no violation of section 337 occurred with respect to complainant's vehicle accessory patents and rejected respondent's argument that the claims were directed to unpatentable subject matter because they were directed to a human organism. "[Respondent] contends that [certain claims of a patent-in-suit] claim[s] 'a viewer' and [complainant's] expert . . . testified the claimed viewer is a person; therefore, under the America Invents Act ("AIA") § 33(a) . . . [the claims] are invalid. . . . The Commission finds that a person is not a limitation of the claims, and therefore the claims are not invalid on this basis. The specification discloses 'a substantially opaque black-out frit to mask the presence of such members when viewed from outside the vehicle through the front windshield.' The use of the word 'when' illustrates that the patent does not require a person to actually be looking through the windshield from outside the automobile."

Vision-Based Driver Assistance System Cameras and Components Thereof, 337-TA-907 (ITC December 1, 2015, Order) (Trade Commission, J.)

Expert Testimony Concerning Hypothetical Negotiation Involving Third Parties Excluded as Unreliable

The court granted plaintiff's motion in limine to exclude the testimony of defendant's damages expert to the extent the expert relied on a hypothetical negotiation that included entities other than the plaintiff and defendant. "[The expert's] opinions are thoroughly laced with legal commentary and that his opinions about what constitutes a reasonable royalty are based on a hypothetical negotiation that includes an entity other than the plaintiff and the defendant as a party to the negotiation. . . . [H]is opinion on the topic of a reasonable royalty is largely predicated on the financial status and interest of that third-party entity, and . . . the controlling law is predicated on a hypothetical negotiation between the plaintiff and the defendant. . . . [Defendant's expert] is precluded from testifying on legal matters and from rendering opinions about a reasonable royalty that are based on a hypothetical negotiation that is not structured as involving only the plaintiff and defendant or that relies on the financial data or status of a third-party to the hypothetical negotiation."

Samsung Electronics Co., Ltd. et al v. NVIDIA Corporation et al, 3-14-cv-00757 (VAED December 8, 2015, Order) (Payne, J.)

Invalidation of Certain Claims Under 35 U.S.C. § 101 Does Not Invalidate Entire Patent

The court partially denied defendant's motion for summary judgment that issue preclusion barred plaintiff's claims of infringement for its arterial thermometer patents after another court found certain claims invalid for lack of patentable subject matter and rejected defendant's argument that an invalidation of certain claims invalidates an entire patent. "[Defendant] makes a sweeping argument that the [other court's] decision invalidates all of the claims of the [patents-in-suit]. In pushing this argument, [defendant] relies on the rule regulating patent prosecution that permits a patent application to claim only one 'independent and distinct' invention. . . . [Plaintiff] counters, and this court agrees, that [defendant's] argument amounts to an impermissible bypass of the required claim-by-claim analysis. [Defendant] cites no authority for the proposition that rules of prosecution have any effect on a judicial determination of validity."

Exergen Corporation v. Kaz USA, Inc., 1-13-cv-10628 (MAD December 7, 2015, Order) (Stearns, J.)

Plaintiff’s Reprehensible Conduct Justifies Recovery of Defendant’s Expert Witness Fees

The court granted in part defendant's motion for expert witness fees as sanctions under the court's inherent power because of plaintiff's reprehensible conduct. "The conduct was more reprehensible than the typical frivolous claim asserted to extract a cost of litigation settlement. . . . Instead of inventing something novel deserving of patent protection, [plaintiff] applied for a patent on its competitor's product with the intention of suing for infringement. . . . Selective information was provided to an expert in order to obtain a misleading declaration used to convince the examiner. Examples provided in the patent claimed experiments that were never conducted. . . . From beginning to end, this was a pernicious scheme to use the patent system and the judicial process for an improper purpose. It was not the first time [plaintiff] had employed such a scheme. This misconduct merits recovery of expert witness fees and expenses, at least for. . . a testifying expert, in the amount of $173,193.19. I decline to award fees for [an expert], who did not testify but was retained as a rebuttal expert on damages."

Apotex, Inc., et al v. UCB, Inc., et al, 0-12-cv-60706 (FLSD December 4, 2015, Order) (Middlebrooks, J.)

Defendants’ Discovery Failures Justify Monetary Sanctions and Reduction in Number of Depositions

The court granted plaintiff's motion for monetary sanctions, reduced the number of depositions available to defendants, and indicated it would close defendants' discovery for any further abuses. "Notwithstanding the amount of discovery that defendant did provide after [the court's prior order compelling discovery], among other failures, defendant failed to disclose requested material information about product redesign and pre-redesign products. Defendant also failed to provide requested material information over which it appears to have had joint control, but that at the least was easily accessible to it on request from [a third party], notwithstanding the court's order to defendant to use all of its leverage to obtain this information and defendant's confirmation that it would do so. As a result, it is ordered that defendant's number of non-30(b)(6) depositions is reduced from 10 to 9, and defendant shall pay plaintiff's reasonable costs in taking defendant's 30(b)(6) deposition and plaintiff's costs in making the instant motion. . . . It is further ordered that if the court [finds] that defendant has failed in a material way to meet its discovery obligations after [this order] then the court will close defendant's discovery in this case."

Cree, Inc. v. Kingbright Electronic Co., Ltd. et al, 3-14-cv-00621 (WIWD December 3, 2015, Order) (Crocker, M.J.)

Defendant’s Discovery Abuse and Spoliation Warrant Terminating Sanctions and Fee Award

The court entered a judgment of default against defendant for discovery abuses and spoliation of evidence. "Defendant has so damaged the integrity of the discovery process, as well as the litigation process itself, that a case dispositive motion is appropriate. . . . Defendant demonstrated a complete inability to comply with virtually any deadline in this case, whether the deadline was set by agreement of the parties or the Court. Defendant significantly delayed responding to discovery, meeting and conferring over discovery disputes, and supplementing discovery. Further, when Defendant actually responded to discovery, such responses were routinely, significantly, and unrelentingly, deficient. . . . Defendant also committed spoliation of evidence by admittedly destroying products which infringed the Patent, doing so after Defendant knew of the existence of this lawsuit. . . . Such behavior makes it so there is no assurance that this matter can proceed to trial on the true facts. . . . Due to the fact that full, fair, and adequate discovery could not be obtained by Plaintiff, preventing any ability to determine damages with any precision, Plaintiff is entitled to an award of its reasonable attorney’s fees and costs under the relevant statutes."

United Construction Products, Inc. v. Tile Tech, Inc., 2-14-cv-08570 (CACD December 1, 2015, Order) (Real, J.)

No Determination of Data Compression Patents’ Validity Under 35 U.S.C. § 101 Prior to Claim Construction

The magistrate judge recommended denying without prejudice defendants' motion to dismiss the asserted claims of plaintiff’s data compression patents because claim construction had not occurred and defendant failed to establish that the claims were directed toward an abstract idea. "Defendants urge the Court to read the patents as to conclude that the data to be compressed is so simple that it can be performed mentally or with pencil and paper and that the output described within the patents requires no 'particular tangible form.'. . . The parties’ disagreements revolving around these claim terms indicate that claim construction is necessary. It would be improper for the Court to accept Defendants’ interpretation of the claim terms without determining how a person of ordinary skill in the art would do so. Further, an assessment of the claims at issue — by a careful reading of the claims themselves — does not clearly reveal that the patents are abstract, that they have 'no particular concrete or tangible form,' which further prevents the Court from summarily finding the claims to be abstract prior to claim construction."

Realtime Data LLC d/b/a IXO v. Actian Corporation et al, 6-15-cv-00463 (TXED November 30, 2015, Order) (Love, M.J.)

Post-Alice Issuance of Related Patent Does Not Inoculate Patent-In-Suit From Invalidity Under 35 U.S.C. § 101

The court granted defendant's motion for summary judgment that plaintiff's search refinement patent was invalid for lack of patentable subject matter and rejected plaintiff's argument that its patent was valid because a nearly identical continuation patent had just been issued by the PTO. "[Plaintiff] argues the post-Alice issuance of a continuation patent similar to the [patent-in-suit] confirms the validity of the asserted claims of the [patent]. . . . [Plaintiff] notes a Corrected Notice of Allowance issued for the [continuation] patent . . . after the Supreme Court’s decision in Alice, purportedly adding further confirmation that the Patent Office believes these claims qualify for patent protection. . . . Although [plaintiff] states it provided the Patent Office with [defendant's] prior art, invalidity contentions, and expert report during the prosecution of the [continuation] patent, it does not aver [defendant] had raised its Section 101 contentions during that time period. It appears it had not. Also the fact that a Corrected Notice of Allowance issued post-Alice does not persuade the court of [plaintiff's] position on this issue. Were that fact determinative, [plaintiff's] position appears to be that any patent issued post-Alice would be inoculated from invalidity under Section 101. That is not the case."

Collarity Inc. v. Google Inc., 1-11-cv-01103 (DED November 25, 2015, Order) (Thynge, M.J.)

Power Integrations Does Not Preclude Discovery of Foreign Sales Information

The court sustained plaintiffs' objections to the magistrate judge's order denying their motion to compel defendant to produce discovery on foreign sales. "[Defendant] asserts that recent Federal Circuit jurisprudence [principally Power Integrations, Inc. v. Fairchild Semiconductor Intern., Inc., 711 F.3d 1348, 1372 (Fed. Cir. 2013)], read in the context of a revitalized presumption against the extraterritorial application of U.S. patent law, precludes discovery concerning foreign sales of an allegedly infringing product. . . . None of [defendant's] cited authorities demonstrates that discovery of foreign sales information – which is relevant to [plaintiffs'] claim for damages for allegedly infringing activities in the United States since it has, at a minimum, implications for the valuation of the invention – is precluded by the presumption against extraterritoriality. Even if [plaintiffs] were only entitled to a 'reasonable royalty for the use made of the invention by the infringer,' the profits that [defendant] allegedly obtained from the sales to foreign customers would be relevant to the determination of a reasonable royalty."

GE Healthcare Bio-Sciences AB et al v. Bio-Rad Laboratories, Inc., 1-14-cv-07080 (NYSD November 25, 2015, Order) (Swain, J.)

ANDA Applicant’s Communications With FDA Concerning REMS Discoverable Under D.N.J. Local Patent Rules

The court granted plaintiff's motion to compel defendants to produce communications with the FDA regarding defendants' negotiation of a joint Risk Evaluation and Mitigation Strategy program. "This dispute centers on whether the documents in question 'pertain' to Defendants' ANDAs pursuant to L. Pat. R. 3.6(j) . . . The plain language of L. Pat. R. 3.6(j) requires an ANDA applicant to produce 'a copy of all correspondence between itself and the FDA pertaining to the ANDA application to each party asserting infringement, or set forth the basis of any claim of privilege for such correspondence. . . .' The parties have not submitted any case law interpreting that clause and the Court has not located any through its independent research. . . . All parties agree that the product at the center of this case . . . will be not be sold to the public without a REMS, which is required by the FDA. . . . While those communications do not appear to be directly relevant to the questions of infringement or validity, they certainly pertain to and concern the central issue in these cases: Defendants' ANDAs."

Jazz Pharmaceuticals, Inc. v. Amneal Pharmaceuticals, LLC, 2-13-cv-00391 (NJD November 23, 2015, Order) (Dickson, M.J.)

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.)

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.)

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.)

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.)

Purchase of Accused Product Through Amazon.com 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 Amazon.com; 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.)

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.)

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.)

Evidence of "General Association" Insufficient to Justify Real Party in Interest Discovery

The Board denied the patent owner's motion for additional discovery regarding whether the petitioner failed to name a real party in interest. "We deny Patent Owner’s request because Patent Owner’s request amounts to no more than a mere allegation of some kind of general association between Petitioner and [named company]. For example, Patent Owner argues that Petitioner has an equity stake in [the company], that counsel for Petitioner allegedly represents [the company], and that publicly available documents supposedly imply a connection between Petitioner and [the company]. The alleged facts presented by Patent Owner during the conference call do not show more than a mere possibility that something useful will be discovered and are therefore insufficient to show beyond mere speculation that discovery would be in the interests of justice."

Petition for Inter Partes Review by The Mangrove Partners Master Fund, Ltd., IPR2015-01046 (PTAB November 12, 2015, Order) (Siu, APJ)

Multi-Player Gaming Patent Not Invalid Under 35 U.S.C. § 101

The court denied defendant's motion to dismiss the asserted claims of plaintiff’s multi-player gaming patent for unpatentable subject matter and found that defendant failed to establish that the claims were directed toward an abstract idea. "[T]he [patent-in-suit] is directed to the 'idea of multi-player gaming using a hand-held controller that has a display screen where the players are also in front of a shared display.' Defendant has not pointed to any authority compelling the conclusion that such an idea, which is by definition limited to the field of multi-player gaming and which requires the use of multiple hardware components . . . is 'abstract' within the meaning of Section 101. Moreover, Defendant's argument that Plaintiff 'does not actually explain how any of the components identified by [Defendant] are not generic, let alone why any of those components actually make the claim less abstract under Step One' misreads Supreme Court and Federal Circuit precedent, which make clear that 'recitation of generic computer limitations does not make an otherwise ineligible claim patent-eligible,' but do not broadly hold that courts must 'strip away' each claim element that recites hardware containing computing elements, such as a video game controller, when performing step one of the Alice/Mayo test."

TimePlay, Inc. v. Audience Entertainment LLC, 2-15-cv-05202 (CACD November 10, 2015, Order) (Otero, J.)

Image Scanning Patent Not Invalid Under 35 U.S.C. § 101

The court denied defendant's motion for summary judgment that plaintiffs' image scanning patent was invalid for lack of patentable subject matter and found that the claims were not directed toward a patent-ineligible concept. "[Defendant] argues that 'the [patent-in-suit] is drawn to the idea of extracting digital data at a purportedly improved scan rate by implementing a mathematical relationship on a conventional scanner.' [Plaintiff] responds that the asserted claims are directed to the internal operation of a particular physical device (a scanner), with particular physical components (image sensors and motors), using signals having a particular timing relationship that differs from the prior art. The asserted claims describe steps including determining the parameters (which meet a certain mathematical formula) and applying parameters to operate a scanner. The court concludes that such claims do not claim the mathematical formula nor do they seek to simply 'implement' such a formula, therefore, the claims are not directed to an abstract idea."

Intellectual Ventures I LLC et al v. Canon Inc. et al, 1-13-cv-00473 (DED November 9, 2015, Order) (Robinson, J.)

Patent For Searching and Unifying Data Invalid Under 35 U.S.C. § 101

The court granted defendant's motion for judgment on the pleadings that plaintiff's patent for searching and unifying data was invalid for lack of patentable subject matter and found that the claims lacked an inventive concept. "[P]laintiff’s proffered improvements, i.e., the solutions to 'data overload,' 'costs for organizing data,' 'data permissions,' and 'downstream proliferation of data,' are not 'necessarily rooted in computer technology to overcome a problem specifically arising in the realm of computer networks.' Rather, these are common problems generally associated with large amounts of data, not computer networks. 'Data overload,' which plaintiff describes as 'the proliferation of different data sources' has been around for ages and is a problem that undoubtedly affects noncomputerized data storage."

DATATRAK International, Inc. v. Medidata Solutions, Inc., 1-11-cv-00458 (OHND November 6, 2015, Order) (Gaughan, J.)

CBM Estoppel Applies Only to Petitioners and Does Not Bar the PTAB From Addressing Unpatentability Grounds

Following the Board's request for additional briefing, the Board found that the petitioner was estopped under Section 325(e)(1) from asserting unpatentability of certain claims under Section 101, but denied the patent owner's request to file a motion to terminate the proceeding based on that estoppel. "[Patent owner] requests 'leave to file a Motion to Terminate CBM2015-00015 and -00016 with respect to claim 1 in light of this estoppel.' We deny [patent owner] authorization to file a motion to terminate these cases with respect to these claims. Section 325(e)(1) speaks to actions that may not be undertaken by Petitioner (or its real party in interest or privy) – '[t]he Petitioner . . . may not request or maintain a proceeding before the Office'. The statutory provision, however, does not proscribe actions that we may take. . . . There is a public interest in resolving the issues raised by these challenges because the record is fully developed. Moreover, we are making determinations in related cases involving similar issues and argument. Administrative resources will be conserved by resolving all the similar issues at once."

Petition for Covered Business Method Patent Review by Apple Inc., CBM2015-00015 (PTAB November 5, 2015, Order) (Elluru, APJ)

Expert Testimony on “Transition Damages” From Inventory Buy-Back Excluded

The court granted defendant's motion to exclude the testimony of plaintiff's damages expert regarding transition damages as unreliable. "[Plaintiff's expert] asserts Plaintiff rolled out 'the Everbilt private label dryer venting and air distribution products for Home Depot' in 2014 and the cost for this transition included 'an inventory buy-back cost of about $1,114,000.' [Plaintiff's expert] concludes that 'but for [defendant's] infringing competition, [plaintiff] would have been able to manage its [product] launch in a way that would have avoided the inventory buy-back cost.' However, Plaintiff must establish why damages are legally available. Here, Plaintiff cites no legal authority under which it is entitled to 'transition damages.'"

Deflecto, LLC v. Dundas*Jafine Inc., 4-13-cv-00116 (MOWD November 4, 2015, Order) (Smith, J.)

Amazon Not Liable for Infringement of Third Party Products Offered for Sale Via Amazon’s Website

Following an advisory jury trial to answer underlying factual questions, the court found that Amazon did not offer to sell the accused products via its website and was not liable for infringement. "[T]his Court is not aware of any Federal Circuit case directly addressing the central issue before this Court – that is, who made the alleged 'offer to sell.'. . . [T]he Court can only conclude that Amazon did not offer to sell the alleged infringing products because there was no manifestation of the willingness of Amazon to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it. However, the Court is troubled by its conclusion and the impact it may have on the many small retail sellers in circumstances similar to the Plaintiffs. There is no doubt that we now live in a time where the law lags behind technology. This case illustrates that point. . . . Amazon enables and fosters a market place reaching millions of customers, where anyone can sell anything, while at the same time taking little responsibility for 'offering to sell' or 'selling' the products. Indeed, under the current case law, Amazon has been able to disavow itself from any responsibility for 'offering to sell' the products at all. . . . [T]he purpose of 'adding "offer [ ] to sell" to section 271(a) was to prevent . . . generating interest in a potential infringing product to the commercial detriment of the rightful patentee.' In this instance, the Court is not convinced that such purpose has been fulfilled. However, that is a subject which must be addressed to Congress and not the courts."

Milo & Gabby, LLC et al v. Amazon.com, Inc., 2-13-cv-01932 (WAWD November 3, 2015, Order) (Martinez, J.)

Plaintiff’s Refusal to Concede Invalidity Under 35 U.S.C. § 101 Does Not Justify Attorney Fee Award

The court denied defendants' motion for attorney fees under 35 U.S.C. § 285 after plaintiff voluntarily dismissed its action following the PTAB's invalidation of its patent during a CBM review because plaintiff's litigation positions were not exceptional. "Although Defendants attempt to characterize the [patent-in-suit] as facially unpatentable by viewing later-issued decisions by the PTAB in [the first CBM proceeding] in an ex ante light, it is far from clear that each of the claims of the [patent] fails to recite patent-eligible subject matter, either before or after Alice, Ultramercial, and other decisions cited by Defendants. . . . Defendants have provided little support for their suggestion that Plaintiff's refusal to 'back down' and not contest [defendants'] multiple requests to the PTAB warrants a finding of 'exceptionality.' Defendants' arguments, when taken to their logical conclusion, would appear to require that any plaintiff asserting a patent 'similar to' patents found unpatentable under Section 101 in a separate case voluntarily dismiss with prejudice their infringement claims — or perhaps even forfeit their patents altogether — or face the risk of an attorneys' fee award pursuant to Section 285. The contours of Section 101 have proven difficult to apply in practice both before and after Alice, and the Court declines the opportunity to read Section 285 so broadly as to impose such a harsh and unfeasible fee-shifting rule on patent owners."

Credit Acceptance Corporation v. Westlake Services, LLC et al, 2-13-cv-01523 (CACD November 2, 2015, Order) (Otero, J.)

Cost Impact Methodology for Calculating Damages Must Apportion Value of Patented Feature

The court denied plaintiff's motion to reconsider an earlier order excluding the testimony of plaintiff's damages expert and rejected plaintiff's argument that there was clear error or manifest injustice. "[Plaintiff's] primary contention is that the cost impact approach utilized by the excluded expert involves a 'reliable damages methodology.' And, indeed, on this point and to that extent, they are correct. . . . [Plaintiff's expert] analyzes the ex-post value of the patent by considering the inventory that [defendant] acquired after infringement began. Essentially, his analysis considers the value of the inventory that [defendant] would be left holding, but unable to sell, because of the patent enforcement -- and as such, the amount that [defendant] would be willing to pay for a license so that it is able to sell this acquired inventory. Herein lies the problem. [Plaintiff's expert] values this inventory in terms of whole product units, rather than the patented component features. While this makes general sense as part of an ex-post valuation, it does not adequately isolate the value of the patented feature itself."

Wonderland Nurserygoods Co., Ltd. v. Thorley Industries, LLC, 2-13-cv-00387 (PAWD October 30, 2015, Order) (Hornak, J.)

Litigation Counsel Barred From Serving as Prosecution Counsel In Lieu of Disqualification

The court granted in part defendant's motion to disqualify plaintiff's counsel who served as both prosecution counsel and litigation counsel and barred counsel from resuming service as prosecution counsel for a year following the conclusion of the case. "[Plaintiff's] removal of [its counsel] as its patent prosecutor appears to resolve [defendant's] arguments that [counsel] should be disqualified as counsel in this case due to his access to [defendant's] trade secrets in this case. . . . [A]s [counsel] is no longer prosecuting patents for [plaintiff], barring him from viewing confidential information and trade secrets disclosed by [defendant] would not be appropriate. It is appropriate, however, to bar [plaintiff] or its successor from reinstating [counsel] – for a period of one year after the final resolution of this case, including appeals – as its patent prosecutor in patent applications that claim priority to the patent in suit here."

Agri-Labs Holdings LLC v. TapLogic, LLC, 1-15-cv-00026 (INND October 29, 2015, Order) (Collins, M.J.)

Counsel Ordered to “Facilitate the Award of Attorney’s Fees” by Providing Contact Information for NPE’s Principals

The court granted plaintiff's motion for attorney fees under 35 U.S.C. § 285 following defendants' covenant not to sue and ordered defense counsel to provide contact information for all of defendants' principals to facilitate the fee award "because their litigation conduct during plaintiff's action was exceptional." "[Defendant] spuriously has tried to argue that its winding up relieves it of any responsibility to pay attorney’s fees. . . . Not only does this argument have no basis in law, but allowing entities to dissolve in order to avoid any contractual or other obligations would fly in the face of any rational public policy. To that end, this court will order [defense] counsel to identify all principals, including officers and agents, of [both defendants] by name and their last known address within fourteen days in order to facilitate the award of attorney’s fees."

Novartis Corporation v. Webvention Holdings LLC et al, 1-11-cv-03620 (MDD October 28, 2015, Order) (Blake, J.)

Mobile Device Data Monitoring Patent Not Invalid Under 35 U.S.C. § 101

The court denied defendant's motion for summary judgment that plaintiffs' mobile device data monitoring patent was invalid for lack of patentable subject matter because defendant did not establish that the claims were directed to an abstract idea. "The goal of the [patent-in-suit's] innovation is to allow a relatively large amount of data about particular external states to be easily monitored on mobile devices and for the information to be digested by the user at a glance. . . . These useful compact displays are coupled with the flexibility of allowing a non-programmer user to configure what external states to monitor and how to monitor them. . . . [Plaintiff] argues that at the time the [patent] was issued, the growth of mobile device usage led to a corresponding increase in the demand for rich information content; however, the 'inevitable' space constraints on mobile devices 'limit[ed] the richness of information content available to a user.' The [patent], then, had 'the specific technical objective of allowing status updates to be displayed more efficiently within the limited display screen of a mobile phone, pager, PDA or similar mobile device.' Indulging every inference in [plaintiff's] favor, the Court concludes the [patent] does not embody an impermissibly abstract idea."

Versata Software, Inc. et al v. Zoho Corporation, 1-13-cv-00371 (TXWD October 26, 2015, Order) (Sparks, J.)

Expert’s 50/50 Profit Split for Determining Royalty Rate Does Not Warrant Directed Verdict on Damages

The court denied defendant's motion for a directed verdict on damages for plaintiff's reliance on a theory similar to the 25% rule of thumb. "[Defendant] sought a directed verdict on damages, arguing [plaintiff's damages expert] had used a 50/50 split of profits attributable to the licensed feature, akin to a prohibited 25% rule of thumb. This does a substantial disservice to the nuanced nature of [the expert's] testimony. . . . [Plaintiff] presented credible testimony from its managing director . . . as the person responsible for negotiating a license with [defendant], that a 50/50 split would have been reasonable. . . . [U]nlike cases in which the Federal Circuit has rejected expert testimony, this was not [the expert's] starting point, nor even central point in arriving at a reasonable royalty opinion in this case. It was just one of many pieces of evidence that [she] relied upon in coming up with her own royalty rate."

Wisconsin Alumni Research Foundation v. Apple Inc., 3-14-cv-00062 (WIWD October 26, 2015, Order) (Conley, J.)

Expert Testimony That Non-Exclusive License Would Command Higher Royalty Rate Than Exclusive License Excluded as Unreliable

The court granted in part defendants' motion in limine to exclude the testimony of plaintiff's damages expert regarding a reasonable royalty rate as unreliable because of the expert's distinction between exclusive and nonexclusive licensees. "[D]efendants contend that [plaintiff's expert] contradicts basic principles of patent law and economics in opining that the non-exclusive hypothetical [party] license could command a higher royalty rate than the [plaintiff-nonparty's] exclusive license because an exclusive license provides the licensee with more rights and benefits than a non-exclusive license. . . . [Plaintiff] bears the burden of showing that [its expert's] testimony is reliable. The Court will not allow [plaintiff's expert] to testify that the non-exclusive hypothetical [party] license would command a higher royalty rate based on surveys he has reviewed because he has not provided citations to any such surveys or demonstrated how they are related to the specific facts of this case."

Trustees of Boston University v. Everlight Electronics Co., Ltd., et al, 1-12-cv-11935 (MAD October 23, 2015, Order) (Saris, J.)

Counsel’s Violation of Protective Order Does Not Warrant Disqualification

The court denied defendants' motion to disqualify plaintiff's counsel after he violated a protective order by disclosing defendants' highly confidential information to plaintiff. "[T]his Court is troubled by the seemingly cavalier attitude towards the Protective Order that was evinced by Plaintiff's attorney in counsel's initial email exchange about the improper disclosure. . . . [Counsel's email correspondence] suggests that Plaintiff's counsel felt that they were justified in ignoring AEO designations and the dictates of the Protective Order, where they had unilaterally decided that disclosure was necessary. Nonetheless, the totality of the circumstances presented here do not justify the imposition of sanctions as severe as those requested by Defendants. . . . [T]his Court cannot conclude that the violation consisted of more than a single incident, in which Plaintiff's counsel disclosed only limited information. Further, Defendants have not shown that they have suffered any commercial harm as a result of the violation. . . . While Defendants argue that Plaintiff's counsel intentionally breached the Protective Order 'because they desired to give [plaintiff] an advantage in responding to deposition inquiries', they do not explain how knowledge of the particular information apparently learned by [plaintiff] actually resulted in a litigation advantage for Plaintiff. . . . Especially given the narrow parameters of the violation that has been demonstrated by Defendants, this Court cannot find that a lesser sanction, such as requiring Plaintiff's counsel to pay Defendants' fees and costs for their motion, would be insufficient to address the situation presented and deter future misconduct."

Jay, M.D. v. Spectrum Brands Holdings, Inc. et al, 1-13-cv-08137 (NYSD October 20, 2015, Order) (Freeman, M.J.)

Motion in Limine Requiring Plaintiff to Remove Website Content Prior to Trial Denied

The court denied defendant's motion to order plaintiffs to remove certain prejudicial statements from their website before the upcoming jury trial. "Defendant asks the Court to Order that Plaintiffs remove certain statements from their website, which it asserts are inaccurate, prejudicial, and may taint potential jurors, and also constitute impermissible argument regarding remedial measures. Plaintiffs respond that such action would be an unconstitutional prior restraint on speech, and that evidence of subsequent remedial measures is admissible in certain circumstances. . . . Both parties will have the chance to explore with the jurors during voir dire their familiarity with any of the parties and the issues in this case. Further, the Court has standard instructions for the jurors regarding internet research and exposure to the media, and there is no reason to believe at this time that the jurors will not follow such instructions."

Milo & Gabby, LLC et al v. Amazon.com, Inc., 2-13-cv-01932 (WAWD October 21, 2015, Order) (Martinez, J.)

Error in Describing Chain of Priority, Addressed Via Certificate of Correction, Does Not Render Asserted Patents Invalid

The court denied defendant's motion to dismiss plaintiff's claims for infringement of five patents-in-suit due to errors in the chain of priority addressed with a certificate of correction. "[Defendant] moves to dismiss [plaintiff's] claims of infringement . . . on the ground that due to errors during the application process in describing the chain of priority for these patents, each is now invalid as a matter of law. . . . According to [defendant] . . . a certificate of correction under [35 U.S.C. § 255] cannot be used to correct a defective chain of priority in a continuation application. . . . While neither party cites any binding authority that squarely addresses this issue, I am persuaded that [plaintiff] has the better argument. [Defendant's] position is based on a hypertechnical reading of sections 120 and 255 that ignores longstanding PTO practice as well as the case law that exists concerning the interaction between the two statutes. . . . [Defendant] argues that section 255 cannot be used to fix section 120 mistakes because 'certificates of correction apply only to patents, not applications.' [Defendant] cites no authority for this argument, and I have not found any. . . . [T]he PTO has allowed patentees to use section 255 certificates of correction to correct section 120 priority chains since at least as early as 1976."

Word to Info, Inc. v. Google, Inc., 3-15-cv-03486 (CAND October 19, 2015, Order) (Orrick, J.)

BIOS Authentication Patent Invalid Under 35 U.S.C. § 101

The court granted defendants' motion for judgment on the pleadings that plaintiff's BIOS authentication patent was invalid for lack of patentable subject matter and found that the claims lacked an inventive concept. "[Plaintiff] responds that the inventive concept arises from the fact that authentication through the use of digital signatures is in the specific context of invoking BIOS services. [Plaintiff] also emphasizes the [patent-in-suit’s] use of a cryptographic key pair, as opposed to other authentication methods used in non-computer settings, as well as the patent’s role in protecting BIOS services from unauthorized service requests. . . . [T]he [patent] claims, viewed individually and as an ordered combination, simply instruct the practitioner to implement the abstract idea of authentication with routine, conventional activity on a generic computer. That mathematical algorithms are used in the authentication process, or that the process is used solely to invoke BIOS services, are of no consequence. . . . The Court rejects [plaintiff's] argument that Defendants have failed to show patent-ineligibility by clear and convincing evidence. The [patent] alone, and the obvious deficiencies therein, is the clear and convincing evidence."

Kinglite Holdings Inc. v. Micro-Star International Co. Ltd. et al, 2-14-cv-03009 (CACD October 16, 2015, Order) (Selna, J.)

Telephone- or Internet-Based Reverse Auction Patent Unpatentable Under 35 U.S.C. § 101

In a final written decision, the Board found claims of a telephone- or Internet-based reverse auction patent unpatentable under 35 U.S.C. § 101. "In the ’211 Patent, the producer tests a plurality of prices throughout the auction. . . . [T]he producer adjusts the demand curve by reducing the quantity available based on customers’ reactions to the various price offers, and selects new prices based on the estimated outcome . . . . In [OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359 (Fed. Cir. 2015)] the court discussed 'the claims’ recitation of ‘present[ing] [offers] to potential customers’ and ‘gathering . . . statistics generated during said testing about how the potential customers responded to the offers,’' concluding that '[t]hese processes are well-understood, routine, conventional data-gathering activities that do not make the claims patent eligible. . . . [T]he addition of steps to test prices and collect data based on customer reactions does not add any meaningful limitations to the abstract idea.' The claims of the ’211 Patent recite a patent ineligible abstract idea, similar to the offer-based pricing claims the Federal Circuit found ineligible in OIP. . . . [T]he claimed 'inventive concept' argued by Patent Owner is simply the application of the well-known offer-based pricing principles."

Petition for Covered Business Method Patent Review by The Jewelry Channel, Inc. USA, CBM2014-00119 (PTAB October 16, 2015, Order) (McNamara, APJ)

PTAB’s Denial of Institution of Inter Partes Review Does Not Render Obviousness Defense Objectively Reckless

The court granted defendant's renewed motion for judgment as a matter of law that it did not willfully infringe plaintiff's computer processing patent and rejected plaintiff's argument that the PTAB's decision denying institution of inter partes review rendered defendant's obviousness defense objectively reckless. "[Plaintiff] points to PTAB’s finding that [defendant] 'has not shown, under 35 U.S.C. § 314(a), that there is a reasonable likelihood that it will prevail with respect to at least one of the challenged claims.' According to [plaintiff], this finding precludes [defendant] from now arguing that its obviousness defense was objectively reasonable because the PTAB 'standard is lower than the ‘clear and convincing evidence’ required to prove invalidity in District Court.' The court rejects this argument. All PTAB found was that [defendant] was not likely to prevail on its defense by proving obviousness by clear and convincing evidence. PTAB did not consider whether this defense was objectively reasonable or raised a substantial question. As such, the PTAB finding -- like the jury’s finding rejecting the invalidity challenge -- does not settle the issue of whether [defendant's] defense was objectively reckless."

Wisconsin Alumni Research Foundation v. Apple Inc., 3-14-cv-00062 (WIWD October 15, 2015, Order) (Conley, J.)

Water Treatment Patent Invalid Under 35 U.S.C. § 101

The court granted defendant's motion for summary judgment that plaintiff's water treatment patent was invalid for lack of patentable subject matter and found that the claims were directed to an abstract idea. "[A]t bottom, the claims cover the general process of observing, analyzing, monitoring, and alerting that can be done entirely by the human mind and by using pen and paper. . . . [Plaintiff] argues that Defendants failed to consider the [patent-in-suit’s] claim limitations, including the system’s use of hardware and software to predict future events. But even with those limitations, the claims still only describe the abstract idea of collecting data, monitoring the data, processing results, and alerting the user of the results."

Neochloris, Inc. v. Emerson Process Management Power & Water Solutions, Inc. et al, 1-14-cv-09680 (ILND October 13, 2015, Order) (Chang, J.)

"Poster Child For Impermissible Hindsight Reasoning" Does Not Warrant § 285 Fee Award

The court denied plaintiff's motion for attorney fees under 35 U.S.C. § 285 because defendants' invalidity and unenforceability arguments were not baseless. "[Plaintiff] argues that the defendants’ Paragraph IV certifications were baseless because the asserted obviousness and unenforceability theories were legally deficient and flawed. . . . The Federal Circuit, in affirming our findings as to the validity and enforceability of the [patent-in-suit], forcefully declared this case a 'poster child for impermissible hindsight reasoning.' While that ringing phrase certainly gives strength to [plaintiff's] argument for attorney fees, this Court found numerous substantive issues raised by the defendants requiring careful analysis in this Court’s trial opinion. It was a high-stakes case involving patent coverage of a so-called blockbuster drug. But the factual and legal issues presented, as well as the procedural history and discovery, were similar to those frequently encountered in this expensive area of pharmaceutical patent law."

Otsuka Pharmaceutical Co., Ltd. v. Sandoz, Inc., 3-07-cv-01000 (NJD October 9, 2015, Order) (Cooper, J.)

Voice and Data Communications Unification Patents Invalid Under 35 U.S.C. § 101

The court granted defendant's motion to dismiss because the asserted claims of plaintiff’s voice and data communications unification patents encompassed unpatentable subject matter and found that the claims were directed toward an abstract idea. "Plaintiff argues that the patents-in-suit 'are directed to unifying different types of electronic voice and data communication systems, and allowing users to operate the systems through natural speech recognition and commands.' The claim language (which does not recite a unification theory) calls for using a 'computer and telecommunications network for receiving, sending and managing information from a subscriber to the network and from the network to a subscriber.'. . . Although at the time of issuance the challenges addressed by the patents-in-suit undoubtedly were considered to be Internet-centric, under the current analytical paradigm (i.e., in hindsight), the fact that there are pre-Internet analogs to the patent claims suggests methods of organizing human (business) activity and, therefore, an abstract idea."

Parus Holdings, Inc. v. Sallie Mae Bank et al, 1-14-cv-01427 (DED October 8, 2015, Order) (Robinson, J.)

Executable Software Decompiler Patent Not Invalid Under 35 U.S.C. § 101

The court denied defendant's post-trial motion for judgment on partial findings that plaintiff's executable software decompiler patent was invalid for lack of patentable subject matter and found that the claims contained an inventive concept. "The translation of binary code and storing of an intermediate representation that can be used to analyze the underlying executable software code – in other words, decompilation – is . . . sufficiently well-established that there must be some meaningful innovative concept to render it patent-eligible. [Defendant] - seizing on [the inventor's] testimony that the claimed method could be performed manually - argues that the patent does not indicate any mechanism by which the computer-implemented method improves this longstanding process rather than simply automating it. To the contrary, however, the claimed method’s focus on the generation of an optimized, exhaustive model, as these descriptors have been defined in the claim construction process, renders the claimed invention more complex than what could be done by humans and transforms the claimed invention from an abstract idea simply automated by a computer into an inventive concept. . . . If the invention merely improved the speed and accuracy of a particular task through computer implementation, that would not be enough to generate a patent-eligible concept. But the claimed method exceeds mere automation of a well-known process by harnessing and improving upon the unique properties and complex capacities of computer technology."

Veracode, Inc., et al v. Appthority, Inc., 1-12-cv-10487 (MAD September 30, 2015, Order) (Woodlock, J.)

Denial of Inter Partes Review of Patent-in-Suit Excluded Due to Potential Jury Confusion and Prejudice

The court granted defendant's motion in limine under FRE 403 to preclude plaintiff from presenting evidence that the PTAB denied defendant's petition for inter partes review of the patent-in-suit. "There appears to be no controlling Federal Circuit law on the admissibility of evidence from an IPR proceeding. . . . An IPR proceeding is not an examination by a patent examiner in which a decision is made about the scope and validity of a patent. It is an adjudicative proceeding during which PTAB, comprised of three administrative law judges, determine whether the challenger has shown 'a reasonable likelihood' that it will prevail on its challenges. Moreover, the prior art that can be considered by PTAB is more limited. . . . Not only is PTAB’s decision not binding in these proceedings, the law is not even clear on whether and how much the PTAB’s decision denying [defendant's] request for review should affect the weight given to the two prior art references presented during the IPR proceedings. Although the court could attempt to provide instructions to the jury regarding the purpose and current standards applicable to the IPR proceeding, it would be difficult for a jury to understand, much less apply, the nuanced differences between the various proceedings and to determine how much weight should be given to PTAB’s decision, if any."

Wisconsin Alumni Research Foundation v. Apple Inc., 3-14-cv-00062 (WIWD September 29, 2015, Order) (Conley, J.)

Containerized Data Patents Invalid Under 35 U.S.C. § 101

The court granted defendant's motion to dismiss because the asserted claims of plaintiff’s containerized data patents encompassed unpatentable subject matter and found that the claims were directed toward an abstract idea. "[T]he [first patent-in-suit] recites the abstract idea of searching and processing containerized data. Updating searchable containers of information based on past search results or based on external time or location resembles age-old forms of information processing such as have previously been employed in libraries, businesses, and other human enterprises with folders, books, time-cards, ledgers, and so on. . . . [T]he [second] patent is also directed to an abstract idea: containerized data storage utilizing rules and instructions."

Evolutionary Intelligence, LLC v. Yelp, Inc., 5-13-cv-03587 (CAND October 6, 2015, Order) (Whyte, J.)

Digital Content Usage Rights Patents Not Invalid Under 35 U.S.C. § 101

The court denied defendants' renewed motion for judgment on the pleadings that plaintiff's digital content usage rights patents were invalid for lack of patentable subject matter and found that the claims were not directed toward an abstract idea. "[T]he Patents-in-Suit are not directed toward an abstract idea, at least because they are directed toward patent-eligible methods and systems of managing digital rights using specific and non-generic 'trusted' devices and systems. Though the Patents-in-Suit address problems associated with creating and enforcing usage rights with content, they are directed to non-abstract solutions through the use of trusted systems. Further, the Court finds Defendants’ analogy to library loans unpersuasive. A library cannot effectively enforce usage restrictions on a book once that book has left the library’s premises. . . . Defendants essentially argue that the Patents-in-Suit must disclose detailed levels of security in order to require 'specific computer programming.' However, the implementation of the invention disclosed in the Patents-in-Suit may require 'specific computer programming,' even though the Patents-in-Suit may not disclose the particular security levels of that implementation."

ContentGuard Holdings, Inc. v. Amazon.com Inc. et al, 2-13-cv-01112 (TXED October 5, 2015, Order) (Gilstrap, J.)

Mobile Device Game Promotion Patent Invalid Under 35 U.S.C. § 101

The court granted defendant's motion for judgment on the pleadings that plaintiff's mobile device game promotion patent was invalid for lack of patentable subject matter and found that the claims were directed toward an abstract idea. "Plaintiff emphasizes that the Examiner considered 'many . . . articles and publications . . . during publication . . . that relate to promotions or coupons and are directed to the same purported 'abstract idea' identified in Defendant's Motion.' This fact does not help support a finding that the claims of the [patent-in-suit] are patentable. The references considered by the Examiner may very well have also been directed at an abstract idea. . . . [T]he claims of the [patent] are directed to the economic strategy and abstract idea of . . . 'using a code to unlock a benefit[] in a game.' This abstract concept is not unlike the rules for any number of long-extant promotions, lotteries, or games, or other efforts to entice people to try a product or service."

Inventor Holdings, LLC v. Gameloft, Inc., 1-14-cv-01067 (DED September 30, 2015, Order) (Stark, J.)

Delay Filing IPR Petition Weighs Against Litigation Stay

The court denied defendants' motion to stay two of plaintiff's actions pending fourteen inter partes review and reexamination proceedings, eleven of which were initiated by third parties, and found that the undue prejudice to plaintiff weighed slightly against a stay. "Significant delay is a consideration here, because many of the inter partes review proceedings were not filed until almost a full year after Plaintiff filed its complaint in this case. . . . If a defendant desires a stay, it should endeavor to minimize prejudice to a plaintiff, by diligently conducting a prior art search, and then drafting and filing an inter partes review petition if it desires to do so. . . . [A defendant] filed its inter partes review petition on the one-year statutory deadline. Staying this case until completion of the inter partes review proceedings would mean that this case would likely not get started for at least two-and-a-half years after the filing of the complaint. Such a pace would not be appropriate for the prompt dispatch of judicial business. . . . While the absence of competition between the parties weighs against a finding of prejudice, that aspect is outweighed by possible harm from the slow pace to resolution that a stay would produce."

Signal IP, Inc. v. Ford Motor Company, 2-14-cv-13729 (MIED September 30, 2015, Order) (Goldsmith, J.)

Fee Award Recommendation Returned to Magistrate Judge for Additional Findings

Following plaintiffs' objections to the magistrate judge's order recommending that defendants' motion for attorney fees under 35 U.S.C. § 285 be partially granted, the district judge returned the motion to the magistrate judge with further instructions. "[The magistrate judge] recommended that the Court grant Defendants a portion of the $1,768,920.88 they sought by their Motion, with the specific amount to be determined after submission of further evidence. . . . Despite the thoroughness of [the magistrate judge's] analysis, the Report does not expressly state a conclusion on three important points. First, are attorney fees warranted here because certain of Plaintiff's litigation conduct is conduct that the Court should be trying to deter? Second, are attorney fees warranted here because Defendants are deserving of compensation? Third, and most importantly, in light of the 'totality of the circumstances,' after giving appropriate weight to all of the pertinent factors, is this case as a whole 'exceptional' under § 285 in light of the specific instances of behavior deemed to be objectively unreasonable or otherwise improper? In this case, the Court would benefit from having [the magistrate judge] address these issues. She handled the vast majority of this litigation. She is in the best position to explain whether (and, if so, how much) Plaintiffs should have to pay Defendants based on two identified missteps over the course of eight-plus years of litigation, in light of the totality of the circumstances of the case as a whole."

Magnetar Technologies Corp, et al v. Six Flags Theme Park Inc., et al, 1-07-cv-00127 (DED September 30, 2015, Order) (Stark, J.)

Video-On-Demand Patent Invalid Under 35 U.S.C. § 101

The court granted defendant's motion for summary judgment that plaintiff's video-on-demand patent was invalid for lack of patentable subject matter and found that the claims were directed toward an abstract idea. "Plaintiff briefly complains that Defendants’ descriptions of the patent claims are 'oversimplifications,' but it does not delineate what, if anything, Defendants leave out. . . . [T]he patent claims the concept of 'using the same hierarchical ordering based on metadata to facilitate the display and locating of video content.' To do so, the patent exploits matches between hierarchical identifiers – uploaded at one end of the process as metadata, and read at the other end to display listed videos – in order to facilitate the automatic [electronic program guide] listing of videos sent to cable companies by outside publishers. . . . Even though the [patent-in-suit] anticipates that its steps will be performed through computer operation, it describes a process that a person could perform '[u]sing a pen, paper, and her own brain.'"

Broadband iTV, Inc. v. Time Warner Cable, Inc.; Oceanic Time Warner Cable, LLC, 1-15-cv-00131 (HID September 29, 2015, Order) (Kay, M.J.)

Transfer of “Flash Title” to Domestic Parent Does Not Excuse Plaintiff’s Failure to Mark Imported Products

The court denied plaintiff's motion to reconsider an earlier order granting defendant's motion for summary judgment to limit damages because plaintiff failed to mark its products. "[Plaintiff] takes title to a product when it leaves the manufacturer and retains it until it reaches the end customer. Immediately before title transfers to the customer, [plaintiff's] American parent takes 'flash title,' temporary legal ownership that lasts only a split second. [Plaintiff] now argues that, under these facts, it is the American parent, and not the plaintiff and patentee, that imports DAS products practicing the [patent-in-suit]. . . . [T]here is very little case law addressing what factors determine whether an entity has imported or sold a product here for the purposes of Section 287(a). But the Federal Circuit has provided substantial guidance on the interpretation of the corresponding terms in 35 U.S.C. § 271(a). . . . [T]he court must look to the precedent on Section 271(a) as instructive on the issue of how to interpret Section 287(a). . . . For at least a substantial percentage of its transactions, the plaintiff patentee holds legal title to its DAS products until a split second before they reach their end customers in the United States. Nothing [plaintiff] properly submits suggests otherwise. . . . It is undisputed that [plaintiff] ships products into the United States, and in fact ships them directly to the end customers who ordered them from [plaintiff's] American parent. [Plaintiff] therefore imports these products into the United States, and it was required to mark them under Section 287(a)."

Corning Optical Communications Wireless Ltd. v. Solid, Inc. et al, 5-14-cv-03750 (CAND September 28, 2015, Order) (Grewal, M.J.)

Data Transmission Patents Not Invalid Under 35 U.S.C. § 101

The court denied defendant's motion for summary judgment that plaintiff's data transmission patents were invalid for lack of patentable subject matter and found that the claims were not directed toward an abstract idea. "[T]he Patents-in-Suit are not directed toward an abstract idea, because they are directed toward patent-eligible methods and systems of 'using a central broadcast server' to package and transmit 'data from an online information source to remote computing devices.' Though Defendants argue that the Patents-in-Suit are directed to the abstract idea of 'packaging and transmitting information,' Defendants do not explain how such a characterization, which ignores significant claim limitations, encompasses the invention claimed by the Patents-in-Suit. Such conclusory argument, without more, is not enough for Defendants to meet their burden of establishing that the Patents-in-Suit are directed to an abstract idea. . . . The Court does not disagree that the patented inventions, at some level, contain an implementation of the abstract idea of 'packaging and transmitting information.' However, every invention can be reduced to some form of an abstract idea."

SimpleAir, Inc. v. Google Inc. et al, 2-14-cv-00011 (TXED September 25, 2015, Order) (Gilstrap, J.)

Expert’s Use of Market Share as a Proxy or Bargaining Strength Does Not Render Testimony Unreliable

The court denied defendants' motion to exclude the testimony of plaintiff's damages expert regarding a reasonable royalty as unreliable because she used market shares as a proxy for the parties’ relative bargaining strength. "Defendants offer a variety of third-party sources suggesting that market share can be used to estimate bargaining position. This is not a misapplication of the Nash Bargaining Solution . . . or the 25% Rule. . . . Here, whatever her other shortcomings, [plaintiff's expert] grounds her analysis in the relative market shares of the parties, the DAS industry, the asserted patent, the parties’ profitability, competition between the parties, and [plaintiff's] unwillingness to relinquish market share."

Corning Optical Communications Wireless Ltd. v. Solid, Inc. et al, 5-14-cv-03750 (CAND September 24, 2015, Order) (Grewal, M.J.)

Paging Carrier Transmission Patent Not Invalid Under 35 U.S.C. § 101

The court denied defendants' motion for judgment on the pleadings that plaintiff's paging carrier transmission patent was invalid for lack of patentable subject matter and found that the patent was not directed toward an abstract idea. "[Defendant] contends that [the patent-in-suit] 'covers the abstract idea of selecting the transmission frequencies for multi-carrier transmission via a mathematical formula.'. . . Transmitting 'paging carriers' from 'the same location' and modulating their transmission frequencies is not an abstract idea in the vein of 'a fundamental economic practice.'. . . [Defendant] has cited no authority that holds that when an otherwise patent-eligible claim is expressed as a mathematical formula, the claim becomes patent-ineligible under § 101. . . . The fact that some requirements of a claim can be rewritten in the language of mathematics does not inherently mean that the claim is directed to an abstract idea because '[a]t some level, "all inventions … embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas."'"

Mobile Telecommunications Technologies, LLC v. Leap Wireless International, Inc. et al, 2-13-cv-00885 (TXED September 23, 2015, Order) (Payne, M.J.)

Network Resource Access Control Patents Not Invalid Under 35 U.S.C. § 101

The court granted plaintiff's cross-motion for summary judgment that its network resource access control patents were not invalid for lack of patentable subject matter and found that the claims contained an inventive concept. "During the mid-1990s, the patents addressed an inventive concept that solved the problem of delivering resources over an untrusted network. . . . [T]he patents’ inventive use of identity associated with the client computer to control access to resources over an untrusted network was an improvement over the current technology of that time . . . [T]he patents in application do more than 'broadly and generically claim ‘use of the Internet’ to perform an abstract business practice.' The claims modify the way the Internet functions to provide secure access over a protected computer resource. The problems addressed by [plaintiff's] claims are ones that 'arose uniquely in the context of the Internet, and the solution proposed was a specific method of solving that problem.'"

Prism Technologies v. T-Mobile USA, Inc., 8-12-cv-00124 (NED September 22, 2015, Order) (Strom, J.)

Plaintiff’s Inability to Assert Assignor Estoppel in IPR No Basis for Preliminary Injunction Precluding IPR Petition

The court denied plaintiff's motion for a preliminary injunction precluding defendant from seeking reexamination or inter partes review because plaintiff failed to establish irreparable harm through its inability to raise an assignor estoppel defense in post-grant proceedings. "Plaintiff asserts it will be irreparably harmed if the Court does not enjoin Defendant from seeking reexamination or inter partes review . . . [because] Plaintiff would be unable to raise assignor estoppel as a defense during inter partes proceedings; and . . . Defendant may succeed in having one or more of the claims in the patents cancelled. . . . Multiple contingencies must occur before Defendant's petition would injure Plaintiff. Specifically, the [PTO] would have to institute the proceedings and reach a finding of invalidity before Plaintiff would actually suffer injuries from Defendant's petition. Since, at this time, the Court cannot predict whether the [PTO] will decide to institute inter partes review, the circumstances Plaintiff offers show a possibility of injury, but are too contingent to satisfy the likelihood of irreparable harm standard. . . . Plaintiff has not provided, and the Court has not found, any precedent case enjoining a defendant from seeking inter partes review at this stage in the proceedings."

IGT v. Aristocrat Technologies, Inc., 2-15-cv-00473 (NVD September 18, 2015, Order) (Navarro, J.)

Motion to Redact Plaintiff’s Website Denied Without Prejudice

The court denied without prejudice defendants' motion to redact from plaintiff's website information that should not be communicated to jurors after plaintiff agreed to temporarily disable portions of its website. "[Plaintiff] has placed on its website content that should not be communicated to the jurors in the instant case, including a version of certain matters regarding the case that – if communicated to any juror – would appear to require a mistrial. [Plaintiff] contends that it has First Amendment rights that entitle it to make such statements on its website and that, in any event, the Court should not assume that jurors will fail to follow the Court's instruction to eschew research (including use of the Internet) relating to the instant case or parties. . . . [Plaintiff] contends that, by virtue of its voluntary action, there will be no need to address the 'significant First Amendment issues' that would arise if the matter were litigated. The Court will assume, without seeing the revised website promised by [plaintiff], that the redaction will eliminate all matters excluded from presentation to the jury in the instant case."

Paice LLC, et al v. Hyundai Motor Company, et al, 1-12-cv-00499 (MDD September 18, 2015, Order) (Garbis, J.)

Directional Drilling Patents Not Invalid Under 35 U.S.C. § 101

The court denied defendant's motion for judgment on the pleadings that plaintiff's directional drilling patents were invalid for lack of patentable subject matter and found that the claims were not directed toward an abstract idea. "[Plaintiff] asserts that its patented technology eliminates the guess work previously inherent in directional drilling. [Plaintiff] asserts that its patented method of rotating or oscillating the drill string to a predetermined angle enables drillers to control the rotation of the drill string instantly and automatically while drilling, increasing the accuracy of the directional drilling process. . . . Contrary to Defendant’s argument, [plaintiff's] patent claims in this case are not an attempt to patent the abstract concept of rotation. . . . The claims in [plaintiff's] patents address specific challenges in directional drilling through a concrete process for controlling the rotation of the long drill strings to and between predetermined angles. The patent claims are directed to a physical apparatus and drilling process of controlled rotation by a specific amount (the predetermined angle). Such tangible, industrial processes have long been considered eligible to receive patent protection. . . . Although rotation in isolation is an abstract concept, [plaintiff's] patented process uses controlled rotation within predetermined angles to orient and oscillate a drill string. This eliminates the guess work, and resulting inaccuracies, inherent in the prior method of directional drilling."

Canrig Drilling Technology Ltd. v. Trinidad Drilling Ltd. et al, 4-15-cv-00656 (TXSD September 17, 2015, Order) (Atlas, J.)

Plaintiff’s Lost Profits Contentions Undermine Claim for Pre-Suit Damages

The court granted defendants' motion for summary judgment that plaintiff was not entitled to pre-suit damages because it did not comply with 35 U.S.C. § 287(a). "[Plaintiff] argues that it has not sold or imported any patented products in this country, so it need not comply with § 287(a). This is not plausible, however, in light of [plaintiff's] own admissions. In its infringement contentions, [plaintiff] specifically alleges that several of its products practice multiple claims of the [patent], and in seeking damages for lost profits, [plaintiff] claims that it would have earned more revenue in the United States from selling these products but for Defendants’ infringement. It cannot protest simultaneously that it was not selling any products here and that it lost revenue from not selling more of them."

Corning Optical Communications Wireless Ltd. v. Solid, Inc. et al, 5-14-cv-03750 (CAND September 16, 2015, Order) (Grewal, M.J.)

Forehead Thermometer Patent Invalid Under 35 U.S.C. § 101

The court granted defendant's motion for summary judgment that plaintiff's temporal artery thermometer patent was invalid for lack of patentable subject matter and found that the claims lacked an inventive concept. "[Plaintiff] argues that when taken together, the measurement of body temperature from the surface of the forehead is patent eligible because this practice was thought to be impossible at the time the [patent-in-suit] was issued. . . . [Plaintiff's CEO/inventor] spent years conducting clinical trials of [plaintiff's] forehead thermometer to overcome skepticism among medical professionals who believed that measuring temperature at the forehead could not lead to accurate estimates of core body temperature. . . . No matter how novel the concept of measuring body temperature from forehead skin temperature or how valuable the contribution to the medical community, this idea as set forth in the asserted claims is fundamentally a discovery of a natural relationship between skin temperature and body temperature. 'Groundbreaking, innovative, or even brilliant discovery does not by itself satisfy the § 101 inquiry.'"

Exergen Corporation v. Thermomedics, Inc. et al, 1-13-cv-11243 (MAD September 15, 2015, Order) (Casper, J.)

Patent Directed to Determining State of Well Drilling Operations Invalid Under 35 U.S.C. § 101

The court granted defendant's motion to dismiss because plaintiff’s well state detection patent claimed unpatentable subject matter and found that the claims were directed toward an abstract idea. "[Defendant] argues . . . that Claim 1 'involves nothing more than the basic steps of (1) making a list of possible values (drilling "states"), (2) receiving data about those values, (3) applying mathematical rules to the data (by comparing data to the "limit")[,] and (4) interpreting the results to choose a value from the list.” [Defendant] . . . asserts that [plaintiff's] claimed method falls squarely within the type of data-interpretation claims that the Federal Circuit and district courts have held are abstract. . . . The steps that both [parties] contend are at the core of the [patent-in-suit] are . . . simple steps of storing data, receiving data, and using mathematics or a computer to organize that data and generate additional information. This is an abstract concept."

TDE Petroleum Data Solutions, Inc. v. AKM Enterprise, Inc. d/b/a Moblize, Inc., 4-15-cv-01821 (TXSD September 11, 2015, Order) (Miller, J.)

Under Rule 11, Counsel May be Jointly and Severally Liable for Entire Section 285 Fee Award

The court granted defendant's motion to sanction plaintiff's counsel under Rule 11, but sanctioned counsel $100,000 rather than finding them jointly and severally liable for the $1.1 million attorney fees award. "This is a close question. Holding [plaintiff's counsel] jointly and severally liable for the fee award would arguably be appropriate given that the sanctionable conduct was the filing of a frivolous complaint, which resulted in [defendant] having to defend itself throughout a lengthy lawsuit. . . . The Court believes that a sanction of $100,000, coupled with the reprimand that a sanctions award represents, is sufficient to deter [counsel] from bringing frivolous patent infringement suits in the future. And the award puts similarly-situated attorneys on notice of the possibility that they could be held jointly and severally liable under Rule 11 for an entire section 285 fee award if they file such an objectively baseless patent infringement suit in the future. . . . [E]ven though [plaintiff's] attorneys devised and put forth objectively baseless claim construction and infringement positions, the record suggests they did not pursue the lawsuit in bad faith or with an improper purpose."

Segan LLC v. Zynga Inc., 3-14-cv-01315 (CAND September 10, 2015, Order) (Chhabria, J.)

Health-Care Data Analysis Patent Satisfies “Financial Product or Service” Requirement for CBM Review

The Board granted institution of covered business method review of a health-care data analysis patent finding the patent was directed to a financial product or service. "Patent Owner contends that the [challenged] patent has no particular relation to the financial services industry, and does not 'particularly target' the financial sector. . . . We have considered Patent Owner’s contention, but hold that AIA § 18(d)(1) does not require that the claimed invention particularly target the financial industry as argued by Patent Owner. . . . The [challenged] patent claims a system and method that de-identifies health care records. . . . The system and method are disclosed as being used to generate reports such as market shares, sources of business, and patient demographics. Further, the specification discusses the use of the claimed system 'in a number of ways to help make business decisions,' including enhanced sales force targeting, early warning of market share shifts, and accurate intelligence on market size and demand. . . . [W]e determine that the claimed system and method recite activities used in the practice, administration, or management of a financial product or service."

Petition for Covered Business Method Patent Review by Symphony Health Solutions Corporation, CBM2015-00085 (PTAB September 10, 2015, Order) (Tierney, APJ)

No Disqualification of Counsel for Conflict Imputed From Former Law Firm

The court denied defendants' motion to disqualify plaintiff's counsel, who left the firm that initially represented plaintiff, because there was no imputed disqualification and their prior representation of defendants on patent matters was not substantially related to the current action. "[I]t is possible that some of the patent applications that [plaintiff's original law firm's] lawyers were pursuing on behalf of Plaintiff were 'directly adverse' to the Defendants' interests. There is no evidence, however, that any of [plaintiff's current] lawyers, as prohibited by Rule 1.10(a)(l), 'knowingly'' represented Plaintiff at a time when they had any reason to believe (let alone knowledge) that there was a conflict with another client's interests. . . . When [plaintiff's current] lawyers left [the original firm], they left any imputed disqualifications behind them. . . . Although [plaintiff's current] attorneys' prior representation of Defendants involved matters relating to patent litigation, it involved different patents and different products. . . . At most, Defendants disclosed their general strategy for handling patent litigation, which is not enough to warrant disqualification."

Sonos, Inc. v. D&M Holdings Inc. d/b/a The D+M Group et al, 1-14-cv-01330 (DED September 9, 2015, Order) (Andrews, J.)

Object Oriented Software-Relational Database Interface Patent Not Invalid Under 35 U.S.C. § 101

Following remand, the court denied defendant's motion for summary judgment that plaintiff's database interface patent was invalid for lack of patentable subject matter and found that the patent was not directed toward an abstract idea. "The Federal Circuit has described the [patent-in-suit] as . . . 'directed to interfacing an object oriented software application to access data stored in a relational database. . . . [T]he . . . patent discloses creating 'interface objects' that act as intermediaries between the object oriented application and the relational database.' . . . [W]hen read as a whole, the patent here does not recite a computer as a post-solution limitation or a specific application of a more generic abstract idea. Rather, the [patent] is directed at solving a problem that specifically arises in the realm of computing; indeed, object-oriented programs exist only in the realm of computers, and relational databases are utilized primarily, if not exclusively, on computers."

DataTern, Inc. v. MicroStrategy, Inc., 1-11-cv-12220 (MAD September 4, 2015, Order) (Saylor, J.)

CBM Standing Does Not Require Continuing Controversy

The Board denied the patent owner's post-institution request to file a motion to terminate the review. "In related litigation, [Credit Acceptance Corp. v. Westlake Services, LLC, CV 13-01523 SJO (C.D. Cal.)], the district court granted Patent Owner’s motion to voluntarily dismiss with prejudice, concluding that no case or controversy remained after Patent Owner gave a covenant not to sue Petitioner for infringement of the ’807 patent. According to Patent Owner, we have the discretion, under 37 CFR § 42.72, to terminate a proceeding 'where appropriate.' Patent Owner seeks authorization to file a motion to terminate this proceeding, arguing that, after giving its covenant not to sue, there is no case or controversy sufficient to maintain this proceeding. . . . In this case, standing is conferred by AIA Section 18(a)(1)(B). This statute places a restriction on who may 'file' a petition for covered business method patent review, limiting it to a person who 'has been sued for infringement of the patent or has been charged with infringement under that patent.' The statute is unambiguous. By its terms, it specifies a requirement evaluated at the time a petition is filed. Patent Owner points us to no language in the statute, and we see none, imposing a requirement of a continuous infringement controversy between the parties in order to maintain a proceeding."

Petition for Covered Business Method Patent Review by Westlake Services, LLC d/b/a Westlake Financial Services, CBM2014-00176 (PTAB September 3, 2015, Order) (McKone, APJ)

Plaintiff’s Eve of Trial Changes to Litigation Claims No Basis for Attorney Fee Award

Following a jury verdict of noninfringement and invalidity, the court denied defendant's motion for attorney fees under 35 U.S.C. § 285 because plaintiff's litigation tactics were not unreasonable. "[A]fter jury selection but before opening statements, [plaintiff] dropped [one patent-in-suit] and several claims from [another] patent. . . . [Plaintiff] dropped its willfulness allegations after the Court relied on those allegations to admit a key piece of evidence that painted [defendant] in a bad light. . . . [Plaintiff] sought to change its infringement theory prior to and during trial. . . . The Court has repeatedly voiced its displeasure with some of [plaintiff's] trial tactics. . . . But the Court concludes that they do not rise to the level of exceptional conduct for which an award of fees is warranted. Significantly, [defendant] makes no allegations of unprofessional conduct from [plaintiff's] counsel for the more than two years this case was litigated prior to trial. . . . The concerns [defendant] raises involve decisions made during the heat of trial."

RLIS, Inc. v. Cerner Corporation, 3-12-cv-00209 (TXSD September 3, 2015, Order) (Costa, J.)

Signal Transmission Patent Invalid Under 35 U.S.C. § 101

The court granted defendants' motion for judgment on the pleadings that plaintiff's signal transmission patent was invalid for lack of patentable subject matter and found that the patent was directed toward the abstract concept of translation. "Plaintiff argues that the claimed invention is not directed to an abstract idea because it addresses a problem that 'specifically arises in the context of communication networks due to the presence of incompatible devices and formats.'. . . This problem, however, does not 'specifically aris[e] in the realm of computer networks,' and the solution is not 'necessarily rooted in computer technology.' Incompatible communication types have existed since before the emergence of computers and the Internet. Translators have been used for centuries to facilitate communication between individuals who speak different languages. The translator receives a message in one language, translates it into another, and delivers the translated message. Here, the claims require a computer system that receives a payload in one media form, translates it into a different media form, and delivers the translated payload. This is no different than the function of a translator."

Novo Transforma Technologies, LLC v. Sprint Spectrum LP et al, 1-14-cv-00612 (DED September 2, 2015, Order) (Andrews, J.)

No Reduction of $1.6 Million Fee Award for Alleged Overstaffing

The court partially awarded defendant's requested attorney fees under 35 U.S.C. § 285 and rejected plaintiff's argument that defendant over-staffed its case with higher level attorneys. "[Plaintiff] contends that 85% of attorney billings before appeal were attributable to partner-level attorneys, and that high level attorneys engaged in routine tasks such as document review and legal research. . . . This case was also aggressively litigated by [plaintiff], and [defendant] properly employed skilled and experienced attorneys to defend itself against [plaintiff's] claims. Although partner-level attorneys performed some document review and legal research, a substantial majority of the time entries identified by [plaintiff] as purported examples of overstaffing were performed by a partner whose hourly rate was . . . more commensurate with that of an associate than a partner. . . . As further assurance that this matter was neither overstaffed nor unreasonably billed, [defendant's] attorney rates and monthly bills were scrutinized by its patent insurance carrier. . . . [The carrier] has a vested business interest in ensuring it does not pay above-market rates or overspend on patent litigation."

Icon Health & Fitness, Inc. v. Octane Fitness, LLC et al, 0-09-cv-00319 (MND September 1, 2015, Order) (Montgomery, J.)