Website Digital Labelling Patents Not Invalid Under 35 U.S.C. § 101

The magistrate judge recommended denying defendant's motion for summary judgment that plaintiff's website digital labelling patents were invalid for lack of patentable subject matter and found that the claims were not directed toward an abstract idea. "'Gathering' data may describe an abstract idea, but 'producing' a 'label' based on that data does not describe an abstract idea. . . . Processing gathered data to 'produce' 'something symbolic' does not describe an abstract idea because that process is a specific and concrete implementation of data storage. . . . The 'responding' limitation may describe the somewhat abstract idea of reacting to information from a source. The 'guiding' limitation, however, describes a more specific and concrete way of processing information."

Gonzalez v. InfoStream Group, Inc., 2-14-cv-00906 (TXED February 6, 2016, Order) (Payne, M.J.)

NPE Plaintiff’s Communications With Inventors Prior to Acquiring Patent Rights Not Subject to Common Interest Privilege

The court granted defendant's motion to compel communications between an NPE plaintiff and its counsel that plaintiff disclosed to the named inventors before plaintiff acquired the exclusive option to purchase the patent-in-suit and rejected plaintiff's work product argument. "Before [plaintiff] acquired an exclusive option to purchase the patent, it lacked a common legal interest with the named inventors. At that point, [plaintiff's] interest was in pitching the value of a business partnership to the named inventors and possibly in highlighting concerns about invalidity and title in order to drive down the price. Any discussion of litigation at that stage remained hypothetical and incidental to the arms length evaluation of the prospect of a business relationship. . . . The presence of a non-disclosure agreement covering these disclosures weighs in favor of finding a common legal interest, but it is not conclusive. [Plaintiff] may not extend the scope of work-product immunity by asserting that a common legal interest existed according to a contract where one does not otherwise exist under the law."

Rembrandt Patent Innovations, LLC et al v. Apple, Inc., 3-14-cv-05094 (CAND February 4, 2016, Order) (Alsup, J.)

Settlement Alone Does Not Justify Vacatur of Invalidity Finding

The court denied the parties' motion to vacate the court's earlier order granting defendant's motion for judgment on the pleadings that plaintiff's data processing patent was invalid because the parties had settled. "[T]he parties do not address any element of Rule 60(b). Rather, they simply indicate that vacatur is proper because it would 'serve the public interest since it facilitates a resolution of all the litigation between the parties and the dispute regarding this particular issue.' In other words, the public interest is served by the settlement of this action. This is insufficient. . . . The parties do not point to any 'extraordinary circumstance' that would warrant vacatur."

DATATRAK International, Inc. v. Medidata Solutions, Inc., 1-11-cv-00458 (OHND February 3, 2016, Order) (Gaughan, J.)

Magnitude of Nexus Goes to Weight, Not Admissibility, of Copying Evidence

The court overruled defendants' objection to the magistrate judge's ruling allowing evidence of copying and rejected their argument that the magistrate judge failed to consider the magnitude of the nexus between the alleged copying and the patented features. "The Magistrate Judge correctly held that 'secondary considerations of non-obviousness serve as an important check on hindsight bias and ‘must always when present be considered.’'. . . [T]he Magistrate Judge correctly admitted evidence of copying for which [plaintiff] had shown a prima facie nexus, e.g., via an expert opinion that the copied product practices one or more asserted claims." The court rejected defendant's argument that "'[t]o be relevant, the alleged copying must be of the patented feature of that product and not, for example, some unpatented feature.' The magnitude of the nexus between the alleged copying and the patented features determines whether evidence of copying should be 'given significant weight.'"

Genband US LLC v. Metaswitch Networks Corp. et al, 2-14-cv-00033 (TXED February 2, 2016, Order) (Gilstrap, J.)

Expert’s Royalty Base Apportionment Analysis Insufficient​

The court deferred ruling on defendant's motion to exclude the testimony of plaintiff's damages expert regarding a reasonable royalty for unreliable apportionment and ordered plaintiff to produce a supplemental report curing the expert's deficiencies. "[Plaintiff's damages expert] considered [an industry expert's] opinion on the desirability of [plaintiff's] patented features and reduced [defendant's] total revenue by 50% to account for a 'conservative calculation' of the 'but-for' revenue allegedly 'enabled' by [plaintiff's] patents. Then, [he] subtracted out those revenues he believed were subject to lost profits from the 50% 'but-for' revenue to determine the incremental revenue that comprises the royalty base. . . . Though [plaintiff] argues that the original 50% reduction was sufficient to 'isolate or apportion the incremental revenue associated with use of the patents in suit,' the Court finds that such reduction is insufficient. . . . [The expert] fails to properly apportion out the value of the unpatented features of [the] accused products in determining his reasonable royalty opinion. Consequently, [his] current opinion fails to provide an ultimate combination of royalty base and royalty rate based on the 'incremental value that the patented invention adds to the end product.'"

BMC Software, Inc. v. ServiceNow, Inc., 2-14-cv-00903 (TXED February 1, 2016, Order) (Gilstrap, J.)

Allegation that Jury Reached “Quick Compromise” No Basis for Overturning $15.7 Million Verdict

The court denied defendant's renewed motion for judgment as a matter of law that the jury's damages finding was insufficient and rejected defendant's argument that the jury reached a quick compromise award of $15.7 million. "[Defendant] alleges that the jury simply 'split the difference' between [the parties'] competing damages calculations to arrive at an 'arbitrary' award. [Defendant] alleges that [plaintiff's damages expert] provided the jury with no evidence or guidance in selecting an amount within his proposed damages range and that the speed with which the jury returned its verdict [about an hour] implies that the jury rendered a quick compromise decision. . . . The jury ultimately awarded . . . a number near the low end of [plaintiff's] request. . . . [T]he Court concludes that the jury reached a reasoned and supportable decision and declines to disturb the jury’s judgment."

Rembrandt Wireless Technologies LP v. Samsung Electronics Co., Ltd., et al, 2-13-cv-00213 (TXED January 29, 2016, Order) (Gilstrap, J.)

Interactive Television Patent Invalid Under 35 U.S.C. § 101

The court granted defendant's motion to dismiss because the asserted claims of plaintiff’s interactive television application patent encompassed unpatentable subject matter and found that the claims were directed toward an abstract idea. "The practice of controlling access to information by verifying credentials (via well-known encryption methods) is neither novel nor specific to interactive television systems. . . . [The patent-in-suit] merely applies this practice to a specific technological environment (i.e. internet based interactive television applications) with the use of a general purpose computer, which performs credential verification. . . . [T]he [patent] claims are directed to the abstract idea of controlling access rights of software applications to access other software applications in the technological environment of interactive television systems."

OpenTV, Inc. et al v. Apple Inc., 5-15-cv-02008 (CAND January 28, 2016, Order) (Davila, J.)