PTAB Grants Motion to Amend

In granting the patent owner's motion to amend several challenged claims, the Board rejected the petitioner's argument that the patent owner did not address all known prior art. "While not required to prove that the claims are patentable over every item of prior art known to a person of ordinary skill, [the patent owner] is required to explain why the claims are patentable over the prior art of record. In addition, [the patent owner]'s duty of candor to the Office requires that it discuss any relevant prior art not of record but known to it. . . . [The petitioner] identifies three references in particular . . . [However], the three references cited by [the petitioner] are relevant to [the patent owner's] teaching away argument, not any issue newly raised by the Motion to Amend. As [the patent owner] points out, [the petitioner] does not allege that any of the proposed substitute claims are unpatentable over a combination of references that includes [the three prior art references at issue]. We consider the present case to be distinguishable from that of [ScentAir Tech., Inc. v. Prolitec, Inc., Case IPR2013-00179, slip. op. at 27–30 (PTAB June 26, 2014) (Paper 60)], and decline to deny the Motion for failing to address all relevant prior art."

Petition for Inter Partes Review by Syntroleum Corporation, IPR2014-00192 (PTAB June 5, 2015, Order) (Crumbley, APJ)

Patent Owner's Failure to Consult Inventor Prior to Asserting Infringement No Basis for Attorney Fee Award

The court denied plaintiff's motion for attorneys' fees under 35 U.S.C. § 285 and rejected plaintiff's argument that defendant's infringement claim was baseless because it failed to contact the inventor before filing suit. "[Plaintiff's] argument on this basis relies in large part on [defendant's] failure to contact and interview . . . the inventor of the [patent-in-suit] until after it had threatened [plaintiff] with litigation. . . . [The inventor] ultimately rendered an opinion that [plaintiff's] product did not infringe on [defendant's] patent. . . . [The inventor's] interpretation of the [patent] is undoubtedly entitled to weight, but [he] is not a patent attorney or even an attorney. . . . [Plaintiff] does not cite any authority demonstrating that [defendant] was required to solicit the interpretation of the patent's inventor before initiating a patent infringement claim, nor is this Court willing to impose such a stringent requirement on patent holders."

Sport Dimension, Inc. v. The Coleman Company, Inc., 2-14-cv-00438 (CACD June 4, 2015, Order) (O'Connell, J.)

Expert’s Opinion Excluded With Respect to Non-Comparable Licenses and Royalty Data

The court granted plaintiff's motion to exclude the testimony of defendant's damages expert regarding a reasonable royalty as unreliable where the expert relied on noncomparable third party license databases and industry reports. "The patents relied on by [defendant's expert] through the RoyaltySource database are not comparable to the patents-in-suit. Furniture, enzymes, spider silk, and the like have no bearing on the royalty estimations in this cami-bra case. [The expert's] reliance on incomparable patents is flawed and unreliable. . . . [Plaintiff] contends since it is impossible to determine from [a report based on the same data as the RoyaltySource database] what licenses are used to arrive at the rates provided, or to determine the terms of those specific licenses, [the expert] is unable to prove such data is comparable to the hypothetical licenses at issue in this lawsuit. . . . [T]he Court agrees with [plaintiff]. . . . Since [an industry] report covers generic evidence, rather than a specific product line such as bras, the evidence is not reliable. The Court takes issue, for instance, with how there is no way of knowing how many licenses are used to generate the data or details about the licenses."

Chico's FAS, Inc. v. Wink Intimates et al, 2-13-cv-00792 (FLMD June 3, 2015, Order) (Chappell, M.J.)

Data Security Patent “Incidental or Complementary” to Financial Activity Subject to CBM Review

The Board granted institution of covered business method review of a data security patent and rejected the patent owner's argument that the challenged patent was not directed to a financial product or service. "Patent Owner [argues] that the Petition does not cite to 'any single word in any single claim' that is directed to a financial product of service; none of the prior art cited by Petitioner is directed to a financial product or service; and Petitioner does not cite any examples of actual financial products that employ the method of the claims. . . . [A]t least one claim claims a method for performing data processing or other operations that are at least incidental or complementary to the practice, administration, or management of a financial product or service. . . .The Specification discloses that protection attributes are used to protect against unauthorized access of a data portion in a database and that banking is a field where protection against unauthorized access to databases that are used for administering and storing sensitive information is desired."

Petition for Covered Business Method Patent Review by Informatica Corporation, CBM2015-00021 (PTAB June 1, 2015, Order) (Turner, APJ)

Inventor's Failure to Disclose Invalidating Prior Art Justifies Attorney Fee Award

The court granted defendant's motion for attorneys' fees under 35 U.S.C. § 285 because plaintiff failed to disclose a prior art software program later determined to be invalidiating prior art in a reexamination proceeding. "[Plaintiff] wrongly argues that 'inequitable conduct cannot be the primary basis for an attorney’s fees award . . . .' If a plaintiff knows that its patent would not have issued but for the intentional omission of material information during prosecution of the patent, then the plaintiff knows that the patent is invalid and acts deceitfully in suing for its infringement. . . . In light of [the inventor's] declaration that [a prior art] program was key to his conception, the failure to identify it and produce it violated the good faith requirements of [Local Patent Rule 3.2.b]. Early disclosure of this reference in accordance with the rules could have substantially impacted and shortened the litigation and the reexamination proceedings."

Deep Sky Software, Inc. v. Southwest Airlines Co., 3-10-cv-01234 (CASD June 1, 2015, Order) (Bencivengo, J.)

Incentive Program Patent Invalid Under 35 USC § 101

The court granted defendant's motion for summary judgment that plaintiff's incentive program patent was invalid for lack of patentable subject matter and found that the patent lacked an inventive concept. "Nothing in the claims purports to improve the functioning of the computer itself, and the computer-related elements of the claim add nothing that is not already present in the steps of the claimed system and methods, other than the speed and convenience of basic computer functions such as calculation, communication, and the display of information. . . . [Plaintiff] relies on the presumed volume of information and speed required in large, commercial incentive award programs, which a human armed with only a pencil and paper could not keep up with. But the claims apply to incentive award programs without regard to their size, and there is no room for doubt that if the incentive program were small, humans could perform each of the tasks that the claims assign to computers without the need for processing assistance."

Kroy IP Holdings, LLC v. Safeway, Inc., 2-12-cv-00800 (TXED May 29, 2015, Order) (Bryson, C.J.)

Protective Order Prohibiting Use of Confidential Information to Determine Infringement of Additional Patents Denied

The court denied without prejudice defendant's motion to modify a protective order to preclude plaintiff from using "[defendant's] confidential information, and more specifically its ANDA, to determine if [defendant] violated [plaintiff's] patent not already named in the complaint." "This appears to be an issue of first impression. . . .The Court will not issue a blanket rule prohibiting [plaintiff] from reviewing [defendant's] confidential information to determine if a new patent should be added to the case. . . . The term limiting the use of confidential information to 'this action' is broader than [defendant's] proposal seeking to limit the use to only the 'claims and defenses' already asserted in the complaint. . . . [A] party may use confidential information to add a new patent to a case, provided that the new patent is sufficiently related to the pleaded claims and defenses that an amendment would be permitted under the applicable Rules of Civil Procedure."

Shire LLC v. Amerigen Pharmaceuticals Limited, 1-14-cv-06095 (NJD May 27, 2015, Order) (Schneider, M.J.)