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

The court granted defendant's motion for judgment on the pleadings that plaintiff's BIOS multitasking patent was invalid for lack of patentable subject matter and found that the asserted claims were directed toward an abstract idea. "[T]he central idea of [the claims] are . . . abstract. Claim 1 discusses the basic process of doing two things nearly simultaneously. This is something all people do, but chefs would be particularly aware of the basic concept. . . . [T]he invention of the [patent] is not directed towards an improvement of the BIOS itself. Rather, the invention simply purports to improve the experience of the user of the computer because the user is able to access aspects of the system faster than it would without the multitasking improvement and make 'efficient use of the BIOS boot-up time.' The BIOS itself functions in the same way with or without the improvement. This focus on making efficient use of time is the abstract concept of multitasking, and in the [patent] the BIOS is merely a conduit for multitasking."

Kinglite Holdings Inc. v. Micro-Star International Co. Ltd. et al, 2-14-cv-03009 (CACD May 26, 2016, Order) (Selna, J.)

Counterclaim for Declaratory Judgment of No Presumption of Validity Dismissed

The court granted plaintiff's motion to dismiss defendant's counterclaim for a declaration that the presumption of validity did not apply because the PTO failed to properly discharge its duties. "[Defendant] asserts that, where there is evidence that the [PTO] did not properly discharge its duties, the application of this presumption violates constitutional due process guarantees. . . . [D]eclaratory relief is inappropriate 'where the substantive suit would resolve the issues raised by the declaratory judgment action.' . . . [I]t is apparent that . . . [defendant's] counterclaim is not an appropriate request for declaratory relief. The relief it seeks has no relevance outside of the context of this lawsuit. Rather, [defendant] asks the Court to make a preemptive legal determination for purposes of this suit only. . . . But even if [defendant's] request were a proper claim for declaratory judgment, there is an independent reason for rejecting it. . . . [I]n the civil law context, a presumption will be upheld against a due process challenge unless it is arbitrary . . . . [T]he presumption of validity is not arbitrary, but rather is substantiated by a number of rational policy justifications. Some of these support the application of the presumption even where there are reasons to question the integrity of the PTO’s determinations."

Lippert Components Manufacturing, Inc. v. MOR/ryde International Inc. et al, 3-14-cv-01999 (INND May 20, 2016, Order) (DeGuilio, J.)

Increasing Importance of AIA 18(d)(1) on CBM Institution Decisions

CBM review is available only to a party charged with infringement of a CBM patent. Under AIA § 18(d)(1), a patent qualifies as a CBM patent if it contains at least one claim directed to a financial product or service that is not technological. In 2013 and early 2014, no CBM petitions were denied institution for failure to satisfy AIA § 18(d)(1). But that is changing. In recent months, more than 20% of the CBM petitions were denied institution for failure to satisfy AIA § 18(d)(1). Click here to view a statistical analysis of the increasing importance of AIA § 18(d)(1) in CBM institution decisions.

Dismissed Corporate Parent’s Refusal to Provide Discovery Warrants OSC Re Evidentiary Sanctions and Adverse Inference of Infringement

The court accepted the magistrate judge's recommendation that defendants could not be compelled to produce discovery from their previously dismissed parent company, but ordered defendants to show cause why evidentiary sanctions or an adverse inference of infringement should not be imposed. "After the dismissal of [the corporate parent], [the remaining subsidiary defendants] stated that the technical documents sought by [plaintiff] were not in their possession or control, but might be obtained from [the parent]. [The parent] refused to provide the documents voluntarily. Unable to obtain timely discovery from [the remaining defendants], [plaintiff] sought discovery from [the corporate parent] through international Letters Rogatory. That request was denied by the Japanese Ministry of Foreign Affairs. . . . As a last resort, [plaintiff] moved to compel [defendant] to produce documents and Rule 30(b)(6) testimony regarding the design and operation of the accused products. [The magistrate judge] denied the motion, based on the legal confines effectively imposed by [a Technical Assistance Agreement]. . . . [T]he parent company of the defendants has relevant information critical to a fair and just resolution of this patent infringement case, and has erected legal barriers to the production of such information through its subsidiaries, barriers that were known but not disclosed to the court when considering dismissal. It is a defendant's obligation under this court's rules to provide all relevant, non-privileged information. The court declines to allow [defendants' parent] and defendants to use the TAA as both a sword and a shield."

Intellectual Ventures I LLC v. Ricoh Americas Corporation et al, 1-13-cv-00474 (DED May 23, 2016, Order) (Robinson, J.)

Patents Directed to Categorizing Summarized Information Not Invalid Under 35 U.S.C. § 101

The magistrate judge recommended denying defendant's motion to dismiss the asserted claims of plaintiff’s patents for categorizing summarized information for lack of patentable subject matter because defendant failed to establish that the claims were directed toward an abstract idea. "The Court agrees with [defendant] . . . that businesses have used past transaction information to predict future transactions or for business purposes long before the [patents] existed. Those ideas, or close variations of them, have been found to amount to abstract ideas. The key question as to step one, however, is whether [defendant's] asserted abstract idea encompasses the 'basic character' of the claimed inventions. The Court concludes that it does not. . . . What the [patents] claim to add is not simply the idea of summarizing past transaction information for some future predictive purpose or for a business purpose (as [defendant's] proffered abstract ideas suggest), but rather the added value of having a categorization system that grows and improves in its ability to do its job, based on the consistent incorporation of new information. . . . The specifications . . . go on to identify the 'key ingredient' of the claimed system in this regard: 'an ability to grow and improve the network categorization system.'. . . . [Defendant's] proffered 19th century example of the asserted abstract idea does not appear to speak to how the catalog service would periodically amend their predicting or forecasting processes based on updated information -- the asserted improvement that is called out by the patent specifications and referenced in the claims."

Yodlee Inc. v. Plaid Technologies Inc., 1-14-cv-01445 (DED May 23, 2016, Order) (Burke, M.J.)

Facebook Activities Unrelated to Infringement Claims Insufficient to Exercise Personal Jurisdiction

The court granted defendants' motion to dismiss plaintiff's infringement action for lack of personal jurisdiction. Although defendants' Facebook activities were purposefully directed at the forum, those activities were not directly related to plaintiff's claims. "The Federal Circuit has not expressly addressed what Facebook activities might constitute purposeful direction in the personal jurisdiction context. However, it seems apparent that friending a Nebraska resident and inviting a Nebraska resident to like a business page are both activities that are purposefully directed at Nebraska. . . . [B]y posting advertisements for [the company defendant's] products on his personal Facebook profile after friending Nebraska residents, [the owner defendant] has purposefully directed activities toward Nebraska. . . . [T]he actions of friending Nebraska residents and inviting a Nebraska resident to like the [the company defendant's Facebook] business page clearly do not give rise to the patent infringement claims. These activities do not, by themselves, constitute making, using, offering to sell, or selling patented inventions. . . . [The owner defendant's] posts on his personal Facebook profile do not constitute offer to sell under the meaning of § 271. Next, although the plaintiff asserts that [the owner defendant] provided instructions on his Facebook profile for how to operate and install the [accused] product, none of the evidence the plaintiff cites appears to support that particular assertion. Accordingly, the plaintiff's claims for indirect infringement do not arise from or directly relate to the activities the defendants purposefully directed toward Nebraska."

HVLPO2, LLC v. Oxygen Frog, LLC et al, 8-15-cv-00176 (NED May 20, 2016, Order) (Gerrard, J.)

NPE Plaintiff Utilizing In-House Litigation Counsel Must Agree to Prosecution Bar and Covenant Not to Sue on After-Acquired Patents

In response to the parties' dispute concerning the scope of a protective order governing confidential information, the court ordered the parties to submit a revised order imposing a prosecution bar on plaintiff's in-house litigation attorneys and granting defendants a covenant not to sue on plaintiff's after-acquired patents in the lighting industry. "[Plaintiff] describes its business as 'a new model for individual inventors and small companies to monetize their intellectual property.' . . . '[Plaintiff] achieves this goal by acquiring patents and litigating on behalf of itself, using experienced patent litigators that are directly employed by [plaintiff] instead of outside counsel, at a great cost savings.' . . . '[Plaintiff's] argument that its principals are not competitive decisionmakers because it is not a direct competitor of any Defendants rings hollow. . . . Given these three . . . lawyers' roles as competitive decisionmakers, I think there is a concrete, particularized risk of inadvertent disclosure and misuse here. . . . I think that a prosecution bar and covenant not to sue these Defendants on after-acquired patents in the lighting industry would adequately protect Defendants' interests while allowing [Plaintiff] to prosecute these actions with its in-house lawyers. . . . Because [plaintiff] purposefully diversifies its patent portfolio and does not target any particular industry or technology by design, temporary limitations on its patent assertion activities against these Defendants should not be unnecessarily harmful to its business."

Blackbird Tech LLC d/b/a Blackbird Technologies v. Service Lighting and Electrical Supplies, Inc. d/b/a 1000Bulbs.com et al, 1-15-cv-00053 (DED May 18, 2016, Order) (Andrews, J.)