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.)