CAFC Says Appellant Declaration Failed to Tie Planned Product Features to Challenged Substitute Claims

Today, the U.S. Court of Appeals for the Federal Circuit issued a precedential decision in ironSource Ltd. v. Digital Turbine, Inc. dismissing Israeli software developer ironSource’s appeal of the Patent Trial and Appeal Board’s (PTAB) decision to grant mobile app tech developer Digital Turbine’s revised motion to amend patent claims challenged by ironSource in post-grant review (PGR) proceedings. The opinion, authored by Chief Judge Moore, determined that ironSource lacked Article III standing to pursue its appeal because it failed to establish an injury in fact based on Digital Turbine’s veiled threats that its patent claims covered aspects of discontinued ironSource products.

Declaration By ironSource Alleges Product Modifications, Additional Indemnification

Although the PTAB invalidated original claims 1 through 22 of Digital Turbine’s U.S. Patent No. 11157256, Instant Installation of Apps, in previous PGR proceedings involving the parent patent, the Board accepted substitute claims 23 through 37 in the PGR appealed by ironSource. Those substitute claims of the ‘256 patent, which claims a network-connected device configured for downloading and installing mobile device applications in the background without visiting an app store, included new additional limitations directed to an installation client checking if a second software application is eligible to use the installation client’s capabilities, and querying for the network address of an installation file for a first software application.

Failing to prove Digital Turbine’s substitute claims invalid at the PTAB, ironSource appealed to the Federal Circuit. At the appellate court, Digital Turbine argued that ironSource lacked Article III standing to pursue its appeal outside of the administrative agency. In response, ironSource identified threats from Digital Turbine that its patents cover certain “Click to Install” (C2I) features of ironSource’s Aura product, which it has since discontinued selling. These arguments were made in a declaration from ironSource’s Senior Director of Strategic Partnership Management, who testified to the company’s modifications of Aura and additional indemnification offered to customers contacted by Digital Turbine regarding its patent claims.

Assessing ironSource’s Article III standing at the time that its appeal was filed, the Federal Circuit noted that the injury-in-fact requirement of standing involves the “concrete and particularized” invasion of a legally protected interest that is “actual or imminent, not conjectural or hypothetical” as described by the U.S. Supreme Court in Lujan v. Defenders of Wildlife (1992). Where that injury in fact is based upon potential patent infringement liability, the Federal Circuit’s 2018 ruling in JTEKT Corp. v. GKN Automotive holds that an appellant challenging patent validity must establish concrete plans for future activity that create a substantial risk of future infringement.

Declaration Failed to Tie Planned Product Features to Narrowed Substitute Claims

Here, the Federal Circuit ruled that the declaration from ironSource’s senior executive was insufficient to show an injury in fact because it failed to demonstrate that ironSource planned to reintroduce Aura with C2I features implicated by Digital Turbine’s substitute claims at issue. The infringement allegations referenced in the declaration were understood by ironSource to involve both the parent patent and the ‘256 patent continuing from that patent. However, the analysis from ironSource’s executive focused solely on the original claims of the ‘256 patent, arguing it was substantially similar to the invalidated parent patent but with broader claims.

As the Federal Circuit pointed out, those original independent claims were not at issue. Further, the record leaves undisputed that the additional installation client limitations narrowed the scope of the substitute claims. ironSource’s declaration was silent to these limitations and their relationship to its C2I features.

Pointing to the Federal Circuit’s 2020 ruling in General Electric v. Raytheon Technologies, ironSource argued that oblique references to the claims at issue suffice to show an injury in fact establishing Article III standing. However, in General Electric, declarations submitted by the appellant tied the appellant’s engine design to features claimed by the patent owner. Though those references were oblique, they were linked to the claims at issue in a way that ironSource failed to link its products to Digital Turbine’s claimed C2I features, the Federal Circuit concluded.

Considering ironSource’s remaining arguments unpersuasive, the Federal Circuit dismissed the appeal for lack of jurisdiction and ordered costs to Digital Turbine.