Stay Pending IPR Prior to Institution Decision Not Premature in light of Estoppel

The court granted defendant's motion to stay pending its petitions for inter partes review because the potential simplification of issues, stage of the case, and lack of undue prejudice favored a stay. "[I]t is likely that a stay will simplify the issues in this case because the vast majority of requests for inter partes review are accepted and in virtually all of the cases in which final written decisions have been issued, the PTO has cancelled some or all of the challenged claims. Although [plaintiff] contends entry of a stay is premature because the PTO has not yet decided to grant the petition for review, it does not point to any deficiencies in [defendant's] petition that might result in rejection of the petition. . . . [T]he case is likely to be streamlined even if no claims are cancelled because of the estoppel provisions of 35 U.S.C. § 315(e), which will estop [defendant] from asserting that surviving claims are invalid on grounds that were addressed during the inter partes review."

Brixham Solutions Ltd. v. Juniper Networks, Inc., 3-13-cv-00616 (CAND April 28, 2014, Order) (Spero, M.J.)

In-App Purchase Game Patent Invalid for Claiming Unpatentable Subject Matter

The court granted defendants' motions for judgment on the pleadings that plaintiff's in-app purchase gaming patent contained an unpatentable abstract idea. "A patent need not . . . preempt an entire field to run afoul of § 101; instead, the question is whether the patent 'would risk disproportionately tying up' the use of the abstract idea. . . . According to [plaintiff], because the claims are directed to methods which use a programmed computer to effect twelve specific concrete steps, the claims do not wholly preempt third parties from very generally using a computer for gaming or allowing players to purchase additional objects during a game. [Plaintiff] does not explain, however, how the claim leaves any meaningful space for a third party to practice the abstract idea of allowing a user to purchase an object for use in the course of game play. Limiting the abstract idea to the field of video games is not enough to make the concept patentable."

Gametek LLC v. Zynga Inc., 3-13-cv-02546 (CAND April 25, 2014, Order) (Seeborg, J.)

Abusive Discovery Tactics Necessitate Client Certification and Presence at Future Hearings

After finding that counsel had engaged in abusive discovery tactics, the court ordered the parties' to obtain their clients' consent before proceeding with any further discovery motions. "Counsel have been engaged in discovery abuse and abusive litigation practices, and I will not tolerate it. . . . [B]efore filing a motion or brief, the lawyers must meet with their clients . . . and obtain their clients’ direction to proceed. All discovery motions and briefs filed in connection with discovery matters must contain a certificate that . . . the client expressly directs that the action be taken. . . . Each client involved in a discovery dispute must appear in person at any hearing concerning the dispute. In the case of a corporate client, the president or chief executive officer must attend. . . . In the event I award a monetary sanction in connection with the discovery dispute, I will award it against the client in view of the certificate that the client directed that the action be taken."

Port-a-Pour, Inc. v. Peak Innovations, Inc. et al, 1-13-cv-01511 (COD April 17, 2014, Order) (Boland, M.J.)

Denial of IPR Petition Not Excluded from Trial Evidence

The court denied defendant's motion in limine to preclude evidence regarding the PTO's rejection of defendant's petition for inter partes review of one of the patents-in-suit. "Defendant argues that introducing evidence of the PTO’s rejection of Defendant’s inter partes review petition would be irrelevant because the legal standards applicable to an inter partes review are different than those that apply here, and that it would increase the complexity of the trial and confuse the jury. Any potential confusion can be addressed by appropriate jury instructions on the standard of proof applicable to patent invalidity defenses and counterclaims."

Universal Electronics Inc. v. Universal Remote Control Inc., 8-12-cv-00329 (CACD April 21, 2014, Order) (Guilford, J.)

Failure to Establish Comparability of Prior Settlement Agreements Warrants Exclusion of Reasonable Royalty Opinion

The court granted defendant's motion in limine to exclude the opinions of plaintiff's reasonable royalty expert because the expert based his opinion on an arbitrary baseline rate. "[Plaintiff's expert] does not even attempt to compare the [patent-in-suit] to the agreements that he asserts establish a baseline royalty rate for that patent. . . . Nor did [he] account for how the litigation context of his 'baseline' licenses was affected by the litigation from which they arose. . . . [He] simply assumes that the litigation licenses represent 'the lowest royalty rate or the ‘floor’ for compensation for the accused infringer’s authorized use of [plaintiff's] patent rights that [plaintiff] is willing to accept even without the assumption that the patent rights are valid and infringed . . . .' This ignores that a litigation defendant may pay simply to 'avoid[] the risk and expense of litigation.' While settlement licenses may be considered, the patentee has the burden to prove the comparability of the licenses."

Universal Electronics Inc. v. Universal Remote Control Inc., 8-12-cv-00329 (CACD April 21, 2014, Order) (Guilford, J.)

Determination of Unpatentability in CBM Review Does Not Warrant Relief From $391 Million Judgment

The court denied defendant's motion for relief from a judgment of more than $391 million based upon the PTAB's non-final decision during CBM review that the asserted claims were unpatentable. "Defendants assert that the PTAB has issued a non-final decision that the asserted claims are invalid. Of course, on the other hand, there is a final judgment in this case finding that the claims are valid. . . . Defendants have taken advantage of a full and fair opportunity to litigate the validity of the patent before this Court, before the jury, and before the Federal Circuit, even pursuing a writ to the United States Supreme Court. To hold that later proceedings before the PTAB can render nugatory that entire process, and the time and effort of all of the judges and jurors who have evaluated the evidence and arguments would do a great disservice to the Seventh Amendment and the entire procedure put in place under Article III of the Constitution. . . . Defendants rely heavily on the amount of the judgment in arguing for a stay. However, the jury’s damage award has been closely reviewed by both this Court and the Federal Circuit and found to be proper. There is also no showing that the amount of the judgment would cause undue harm to the Defendants."

Versata Software, Inc. et al v. SAP America, Inc. et al, 2-07-cv-00153 (TXED April 21, 2014, Order) (Payne, M.J.)

PTAB to Consider Whether Terminal Disclaimer Undermines Institution of IPR Based Upon BRI Standard

During a conference call, the Board ordered additional briefing on the patent owner's intent to file a terminal disclaimer of the remaining term of the challenged patent to avoid application of the broadest reasonable interpretation standard. "Patent Owner stated that it intends to file a terminal disclaimer of the remaining term of the [challenged] patent, such that the patent will be expired and the Board should not apply the broadest reasonable interpretation standard to the challenged claims. Patent Owner requested authorization, if the terminal disclaimer is filed, to file a motion to terminate the proceeding on the basis that the Board applied the broadest reasonable interpretation standard in the decision to institute this inter partes review. . . . Petitioner asserted that Patent Owner should have raised the issue in its response when Patent Owner had the opportunity to state how it believes the challenged claims should be interpreted. . . . The present situation appears to be an issue of first impression in inter partes reviews. As such, we are persuaded that briefing from the parties is warranted. . . . In their papers, the parties should state what action(s), if any, they believe the Board should take with respect to the terminal disclaimer and with respect to this proceeding in general."

Petition for Inter Partes Review by Amkor Technology, Inc., IPR2013-00242 (PTAB April 14, 2014, Order) (Arbes, APJ)