CAFC Rejects Inventor’s Sotera Stipulation Challenge against LG, Affirms Google and Microsoft Win at PTAB

The U.S. Court of Appeals for the Federal Circuit (CAFC) issued a precedential decision Friday in Hafeman v. Google LLC affirming Patent Trial and Appeal Board (PTAB) final written decisions (FWDs) invalidating all claims of three related patents owned by inventor Carolyn Hafeman.  The court also dismissed Hafeman’s argument that the inter partes reviews (IPRs) should have been terminated based on the district court’s finding that LG–a real party in interest to the IPRs–violated its Sotera stipulation.

Hafeman owns U.S. Patent Nos. 10,325,122, 10,789,393, and 9,892,287, which share a common specification and relate to methods for displaying owner contact and recovery information on a computer screen at boot-up to assist in returning a lost or stolen device. The representative ‘122 patent describes a system in which a return screen is automatically shown before or alongside a lock screen, and in which the owner can remotely update the displayed information without any action by the user of the computer.

In July 2021, Hafeman filed a lawsuit against LG Electronics Inc. in the U.S. District Court for the Western District of Texas, accusing LG-manufactured phones, tablets, and laptops preloaded with Google and Microsoft “Find My Device” features of infringing the three patents. Google and Microsoft responded in July 2022 by filing six inter partes review (IPR) petitions against the patents, naming LG as a real party in interest.

Hafeman opposed the institution, relying on then-U.S. Patent and Trademark Office (USPTO) Director Vidal’s interim guidance counseling discretionary denial where a parallel district court proceeding was pending. After Hafeman filed her opposition, LG served a Sotera stipulation agreeing not to pursue in district court any ground that Google or Microsoft raised or reasonably could have raised in the IPRs, and the Board instituted six IPRs in January 2023.

The district court later found that LG violated the Sotera stipulation. Hafeman argued the violation warranted terminating the IPRs, or at a minimum, that the Board’s final written decisions should address why the proceedings should continue. The Board issued its three FWDs in January 2024 without revisiting those arguments, finding the claims of all three patents unpatentable over prior art references Jenne and Cohen.

The CAFC held Hafeman’s challenge was barred from judicial review under 35 U.S.C. Section 314(d), which says “the decision whether to institute inter partes review is ‘final and nonappealable.’” Hafeman argued she was not challenging the institution, but rather the conduct of the proceedings after the institution, but the court found that framing unavailing.

The CAFC relied on Thryv, Inc. v. Click-To-Call Techs., LP, concluding Hafeman’s challenge was within Section 314(d)’s prohibition on appeals. The relief Hafeman sought made institution the direct subject of the challenge because the Sotera stipulation had been a basis for the institution decision itself. As the court held, “[p]ointing to a different agency action…does not automatically alter the analysis; § 314(d) applies when a party attempts to dislodge institution.” The court also cited its recent decision in Federal Express Corp. v. Qualcomm Inc., where a similarly framed challenge was found unreviewable for the same reason, and dismissed the Sotera portion of the appeal accordingly. “That Ms. Hafeman purports to challenge the FWDs does not enable our review when the heart of her challenge goes to institution,” concluded the CAFC.

In regard to claim construction, Hafeman argued the Board implicitly and incorrectly construed the “without assistance by a user with the computer” limitation. She contended the limitation should prohibit any user action beyond powering on the device, including establishing an internet connection. Under that reading, she argued, the prior art reference Jenne, which requires the user to log in and connect to the internet before remote updates could occur, failed to teach the limitation.

The CAFC disagreed. Examining the language of claim 1 of the ‘122 patent, the court concluded that “without assistance by a user” modifies only the act of “initiating or changing return information,” not the separate and “unrecited act of establishing a network connection.” Hafeman herself conceded that some form of connection must exist, and the specification reinforced the court’s reading by describing the invention’s remote update capability as analogous to anti-virus software that checks for updates “every time you go on-line.” On the arguments relating to prosecution history, Hafeman argued that because the limitation was added to distinguish prior art requiring the user to press a specific interrupt key, requiring an internet connection should likewise be barred. The CAFC was not convinced, finding the history showed only an intent to avoid that narrow keystroke requirement. The court held that “‘without assistance by a user’ modifies “the action of ‘initiating or changing return information’; it does not limit the unrecited action of establishing an internet connection in the first instance.”

On secondary considerations of non-obviousness, the CAFC affirmed the Board’s finding that Hafeman failed to establish the required nexus between the asserted evidence and the claimed invention. Hafeman pointed to industry praise, commercial success, and alleged copying by Google and Microsoft, all tied to her commercial product known as the Retriever. But the court agreed with the Board that the praise in the record centered on unpatented features, particularly the Retriever’s verbal alarm function, as reflected in a newspaper article titled, “Talking software goes global.” Evidence of website visitors and pricing lacked any explanation connecting that traffic to the merits of the invention, and Hafeman’s copying argument was forfeited for not having been raised before the Board.

Ultimately, the CAFC dismissed the Sotera related portion of Hafeman’s appeal for lack of jurisdiction under Section 314(d) and affirmed the Board’s FWDs.