Patent Directed to Method and System For Making Loans Unpatentable Under 35 U.S.C. § 101

In a final written decision, the Board found claims of a patent directed to a method and system of making loans unpatentable under 35 U.S.C. § 101. "[Petitioner] has established, by a preponderance of evidence, that each of the challenged claims is directed to a fundamental economic or longstanding commercial practice of loan processing. . . . Whereas conventional loan processing required human beings to collect, compare, evaluate, and disseminate loan applications and loan information by hand, claims 1 and 19 recite the use of a database and transaction server to maintain loan applications so parties can search and modify the loan applications using those computer components instead of using pen and paper to perform these processes. . . . The Federal Circuit recently held that the use of generic computer functions to automate a price optimization process was a fundamental economic practice and abstract idea. . . . The challenged claims of the ’947 patent recite methods and systems for processing loan applications that fall squarely within the realm of an abstract idea."

Petition for Covered Business Method Patent Review by E-Loan, Inc., CBM2015-00012 (PTAB February 16, 2016, Order) (Calve, APJ)

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Lost Profits Expert Need Not Define a Single But-For Market

The court denied defendant's motion to exclude the testimony of plaintiff's damages expert regarding lost profits as unreliable. "Instead of identifying a single but-for market in which to allocate lost sales, [the expert] opines that [plaintiff] would have made a share of [defendant's] sales in either of two market segments. . . . [Plaintiff's expert] expresses no opinion as to which of the two market segments more accurately models consumer behavior. . . . [Defendant] argues that [the expert's] lost profits analysis is unreliable because it fails to define a single relevant but-for market and that it is improper for [the expert] to thus leave the ultimate question of the appropriate market segment to use for calculation of lost profits damages to the trier of fact. . . . [Defendant] does not take issue with the methodology underlying each of [the expert's] two market reconstructions and there is no reason not to consider each of the reconstructions, on its own, sufficiently reliable to be helpful to the trier of fact. . . . [T]hat [the expert] leaves to the factfinder the determination of predicate facts underlying an ultimate determination of the appropriate lost profits within the reliably established range is not a ground to exclude his opinions."

EMC Corporation, et al v. Pure Storage Inc., 1-13-cv-01985 (DED February 11, 2016, Order) (Andrews, J.)

Products Covered by Patents Other Than The Currently Asserted Patent May be Considered Non-Infringing Substitutes

The court denied plaintiff's motion to strike the updated report of defendant's damages expert regarding his opinion that five defendant phones not subject to the upcoming retrial were noninfringing alternatives. "[The five phones at issue] were all accused of infringing the [one] patent at the [original] trial. At the [original] trial, the jury found that all five phones did not infringe [that] patent but did infringe other [plaintiff] patents. . . . The Federal Circuit did not hold, as [plaintiff] urges the Court to do in the instant case, that products covered by patents other than the one for which damages are sought cannot, as a matter of law, be evidence of available non-infringing alternatives. . . . Because an acceptable non-infringing alternative need not be a product that was actually on the market at the time of infringement, the fact that the [defendant's] products infringed some of [plaintiff's] patents does not preclude [defendant] from arguing that the non-infringing aspects of these products provide evidence that [defendant] could have offered a fully non-infringing product that would have been an acceptable non-infringing alternative."

Apple Inc. v. Samsung Electronics Co. Ltd., et al, 5-11-cv-01846 (CAND February 10, 2016, Order) (Koh, J.)

Disclaimed Financial-Related Claims Disregarded in Determining Whether Non-Overlapping Claims Qualify for CBM Review

Following the patent owner's disclaimer of certain challenged claims, the Board denied institution of covered business method review of a patent directed to electronic commerce because the petitioner did not show that the patent was a covered business method patent under § 18(d)(1) of the AIA. "Petitioner challenges claims 1–20 of the ’177 patent, of which claims 1–10 have been disclaimed. . . . [F]or the purposes of whether or not to institute a covered business method patent review, we treat claims 1–10 as never having existed. . . . We acknowledge that other panels of the Board have taken the caveat that an otherwise statutorily disclaimed dependent claim, which includes finance-related subject matter, may still be considered, to the extent that the still pending independent claim from which it depends may include claim limitations that encompass the finance-related subject matter of that dependent claim. . . . Petitioner has identified little relevant overlap between claims 1–10 and claims 11–20, in that the more overt finance-related subject matter of claims 1–10 identified by Petitioner – 'selection client' of claims 2 and 6, and 'retrieval client' of claim 7 – are not recited in claims 11–20. Accordingly, we determine that in this proceeding, a proper analysis as to whether the ’177 patent is a covered business method patent should focus exclusively on claims 11–20."

Petition for Covered Business Method Patent Review by Bitco Corp., CBM2015-00171 (PTAB February 9, 2016, Order) (Kim, APJ)

Witness Advocate Rule Does Not Require Disqualification of Plaintiff’s Former In-House Attorney

The court denied defendants' motion to disqualify one of plaintiff's attorneys who previously acted as in-house counsel for a company related to plaintiff on the basis that defendants intended to call the attorney as a witness. "Defendants argues that [the attorney] should be disqualified because they intend to call him as a witness on a variety of topics. . . . Defendants have failed to demonstrate that any testimony by [the attorney] would be sufficiently adverse to [plaintiff]. Accordingly, as Plaintiff does not intend to call [him] to testify on its behalf and as Defendants have not met their burden of showing that [his] testimony would be adverse to Plaintiff, the Court will not disqualify [the attorney] on the basis of [the Florida Advocate Witness Rule]."

JLIP, LLC v. Stratospheric Industries Inc. et al, 0-14-cv-61798 (FLSD February 8, 2016, Order) (Seltzer, M.J.)

Cloud Computing Patent Invalid Under 35 U.S.C. § 101

The magistrate judge recommended granting in part defendants' motion to dismiss because certain asserted claims of plaintiff’s cloud computing patent encompassed unpatentable subject matter and found that the claims were directed toward an abstract idea. "The Court concludes that 'setting up and managing a cloud computing environment' does, in fact, amount to an abstract idea. The concept implicates an idea 'having no particular concrete or tangible form' and that is 'devoid of a concrete or tangible application.'. . . Plaintiff's position here seems to be that '[m]anagement of cloud computing environments [have] only recently emerged as a technological innovation[,]' and are not as 'longstanding' a commercial practice as other forms of computing system or resource management. But nowhere have courts concluded that a patent claim cannot be directed to an abstract idea if the claim relates to a field that is of somewhat recent vintage."

Kaavo Inc. v. Cognizant Technology Solutions Corporation, 1-14-cv-01192 (DED February 5, 2016, Order) (Burke, M.J.)