Independent Inventor Renews Sotera Stipulation Abuse Allegations at CAFC

Last week, independent inventor Carrie Hafeman filed an opening brief for the appellant at the U.S. Court of Appeals for the Federal Circuit (CAFC) seeking reversal of the Patent Trial and Appeal Board’s (PTAB) invalidation of her device location and theft prevention patent claims. The brief includes Hafeman’s most recent challenge to alleged abuses of Sotera stipulations by Big Tech firms working in concert to invalidate Hafeman’s claims. The appellate brief also challenges the PTAB’s claim construction and obviousness analysis in reaching its invalidity determinations.

LG Continues Priority Date Challenge After Filing Sotera Stipulation at PTAB

Hafeman, an inventor who has advocated for action on Section 101 issues, owns patent claims claiming priority to 2004 and covering a system for controlling device access using remote communication capabilities. After Hafeman asserted these patent claims in U.S. district court against LG Electronics in 2021, tech giants Google and Microsoft filed a series of six petitions for inter partes review (IPR) at the PTAB, identifying LG Electronics as a real party-in-interest in the petitions.

Although LG Electronics incorporated invalidity grounds included in Google and Microsoft’s IPR petitions in Hafeman’s district court infringement case as it progressed toward trial, LG filed a Sotera stipulation in November 2022 to prevent the PTAB from dismissing the IPR petitions under Fintiv’s discretionary denial framework for parallel validity challenges at the PTAB and in district court. Hafeman opposed the Sotera stipulation, arguing that LG’s invalidity expert in district court had submitted a report using grounds from the IPR petitions after the stipulation was filed, but the PTAB instituted the IPRs, in part relying on LG’s stipulation. The PTAB entered final written decisions invalidating all claims of Hafeman’s challenged patents in January 2024, three months before the Western District of Texas found that LG violated its Sotera stipulation and was estopped from challenging the priority date of Hafeman’s patent claims in that action.

Appealing the PTAB’s final written decisions, Hafeman argued that the Board abused its discretion by failing to address LG’s alleged violation of its Sotera stipulation in its final written decisions. According to Hafeman, the PTAB should have acknowledged in those decisions that the IPRs would not have been instituted but for LG’s Sotera stipulation, which maintained that LG would not advance the same challenge to Hafeman’s priority date in district court that Google and Microsoft raised in the IPR petitions. LG’s violation was not cured by the district court’s estoppel ruling, Hafeman argued, and the PTAB was required to at least address the alleged violation given LG’s real party-in-interest status.

Brief Alleges Errors in Implicit Claim Construction, Rejection of Secondary Considerations

Aside from the Sotera violation, Hafeman also challenged the PTAB’s implicit construction of the claim limitation “without assistance by a user” in finding this limitation was taught by prior art reference U.S. Patent Application No. 20030122864 (“Jenne”). Hafeman contends that the legally correct definition of “without assistance” involves the establishment of an Internet connection to remotely receive recovery information without any user invention other than powering the device. Hafeman adds that the “without assistance” limitation was added during prosecution of her patent claims to overcome prior art that required users to press a key to change device ownership information.

By finding this limitation disclosed by Jenne, Hafeman argues that the PTAB implicitly construed “without assistance” to require that a device user establishes an Internet connection as taught in Jenne. Hafeman’s brief claims that the PTAB confused a distinction between Hafeman’s invention and prior art communications systems referenced in Hafeman’s patent specification to determine that the “without assistance” limitation involves user interaction to establish a connection. Jenne, which is directed toward the display of advertisements during a user waiting time, does not teach the initiation or change of ownership information without user interaction. Hafeman argued that this limitation is also not met by European Patent No. 687968 (“Cohen”), which discloses user inputs of ownership information on a local device without any remote connection.

Finally, Hafeman said that the PTAB erred by rejecting various secondary considerations alleged by the patent owner to overcome the obviousness challenge raised in the IPR proceedings. Hafeman alleged there was a clear nexus between the asserted patents and The Retriever software product that obtained commercial success, noting 34 references to “The Retriever” in the patent specification and several patent figures depicting The Retriever’s user interface. Finding no nexus without explanation in light of patent owner arguments to the contrary is reversible error under Federal Circuit case law including PPC Broadband v. Corning Optical Communications RF (2016).

Although the PTAB found that industry praise targeted the non-patented features of The Retriever, Hafeman argued that this ignored significant praise for the software’s display of device ownership information and custom messages. Hafeman also challenged the PTAB determination of no commercial success in light of records showing $600,000 in software sales, and the Board’s rejection of evidence of copying by Google and Microsoft’s Find My Device programs.

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