Posts in District Courts

The District Court’s errors in the Broadband iTV decision are a paradigmatic and telling manifestation of certain of the manners in which district courts are misapplying the two-step Alice test in order to invalidate patents, creating something of a fait accompli at the outset of the filing of an Alice motion. Most notable is the alarming trend of certain district court Section 101 Alice invalidations that purport to resolve questions of law but that, upon closer scrutiny, only nominally invoke Section 101 to improperly sidestep the work of Sections 102, 103 and 112 of the Patent Act. The problem in so-doing is that district courts are utilizing the summary legal analysis permissible under Section 101 when, in fact, they should be undertaking the factually-intensive analysis required by Sections 102, 103 and 112. This sleight of hand has resulted in what is becoming a systematic invalidation of patents on a far lesser “legal” showing rather than the rigorous factual showing mandated by the Patent Act.

On April 1, 2016, Rovi Corporation (NASDAQ: ROVI), a pioneer in the field of electronic program guides, filed a patent infringement lawsuit against Comcast in the Eastern District of Texas, Marshall Division. The lawsuit alleges that twelve years ago Comcast took a license to Rovi’s patent portfolio, but that license expired on March 31, 2016, without being renewed. Rovi says that Comcast has failed to remove any of its products and services from the market and also continues to provide those products and services, all of which are now infringing because of the expiration of the patent license agreement.

2015 is the second straight year in which the list of top plaintiffs has been led by eDekka LLC, a patent holding company, which at times has been accused of exhibiting trolling behaviors… Atop this list was the U.S. District Court for the Northern District of California (N.D. Cal.), which between 2005 and 2015 has awarded more than $2.1 billion in compensatory damages over the course of 2,169 cases filed. Following behind them was the U.S. District for the Southern District of California (S.D. Cal.), U.S. District Court for the Southern District of New York (S.D.N.Y.), and followed in fourth place by E.D. Tex. Median damages for cases terminating between 2000 and 2015 showed a different story, however, as that list was topped by the District of Delaware, which had a median award of $10.46 million in 40 cases with damages. The Eastern District of Texas follows in second with a $7.68 million median damages award and in third is the U.S. District Court for the Eastern District of Virginia (E.D. Va.), with a median award of $2.98 million. After that, there’s a steep drop and every other district is showing a median damages award of less than $1 million.

Karen Gren Scholer has been nominated to serve on the United States District Court for the Eastern District of Texas. If confirmed, Scholer, who was born in Tokyo, Japan, will become the first Asian American to serve as a federal district court judge in Texas or any of the courts encompassed by the United States Court of Appeals for the Fifth Circuit, a territory that encompasses Texas, Louisiana, and Mississippi.

What makes this particularly noteworthy, however, is the fact that in the nearly six years since the lawsuits were originally filed, these TransData patents have collectively prevailed in thirteen separate patent validity challenges at the U.S. Patent and Trademark Office with all asserted claims remaining intact. What is further interesting about this case is that is that not only have each of the patents survived multiple reexaminations, but each has also had a request for inter partes review (IPR) denied by the PTAB.

The availability of high speed Internet access (HSIA) is a major factor determining consumer satisfaction when staying in hotel or resort lodgings, and it’s this market where Blueprint RF has been stepping into Nomadix’s IP territory. “It’s fairly widely known that Nomadix has patents protecting this technology,” said Doug Muehlhauser, a partner at the Knobbe Martens law firm and the lead litigation counsel for the Nomadix infringement case. Both he and Mark Lezama, another Knobbe Martens litigation partner, were able to offer us more insight into the legal case. This kind of infringement case is exactly why the patent system exists, Muehlhauser said. “People should really be acknowledging the value of this technology, but some participants in the market are not willing to do that,” he said.

Future Motion launched a successful Kickstarter campaign to fund the earliest prototypes of the OneWheel on January 6th, 2014. Within 24 hours, the project had already collected 40 percent of the funds it needed for the next phase of development. Within three days, it had secured 85 percent of its funding request and it only took a total of four days to reach the $100,000 pledge goal that Future Motion had initially set out to achieve. All told, Future Motion received a total in excess of $630,000 within 25 days and was able to meet stretch goals for LED lighting systems and mobile app development.

While we tend to think of Las Vegas’ tourism-based economy as built on gambling, trade shows also bring hundreds of thousands of visitors to the city each year. Thus, the issue of effective enforcement of the patent laws at these trade shows becomes entwined with the health of the city’s economy. Against this backdrop, the Las Vegas bench of the U.S. District Court for Nevada has developed a muscular set of equitable remedies for U.S. patent holders who complain to the court of patent infringement by a trade show exhibitor, remedies that the court can and does deploy with sufficient speed to be effective within the narrow timeframe of a trade show.

2015 saw the second-most patent infringement cases brought to court, according to Lex Machina’s data. A total of 5,830 patent cases were filed, a 15 percent increase over the 5,070 patent cases which were filed during 2014. 2015 still trailed behind 2013 in terms of patent infringement cases; that year set the high-water mark for patent infringement cases with 6,114 cases filed in that year.

If the allegations in the Valencell complaint against Apple proves to be true, the dispute between Valencell and Apple yet another example of a small company that was lead astray by a larger company pretending to want to license their technology only to get a better look so they could shamelessly copy without regard to whether they infringed any existing patents. Indeed, the complaint says that would be in keeping with Apple’s long standing policy, quoting Steve Jobs as having said that Apple has “always been shameless about stealing great ideas.” See Complaint paragraph 14.

On November 2, 2015, San Francisco-based Fitbit Inc. filed a Section 337 complaint with the International Trade Commission (ITC) against AliphCom (d/b/a Jawbone) and BodyMedia, Inc. (Investigation No. ITC-337-3096). In a parallel proceeding in the U.S. District Court for the District of Delaware, Case No. 1:15-CV-00990, Fitbit alleged infringement of three patents assigned to Fitbit—namely, U.S. Patent Nos. 8,920,332 (titled Wearable Heart Rate Monitor); 8,868,377 (titled Portable Monitoring Devices and Methods of Operating Same); and 9,089,760 (titled System and Method for Activating a Device Based on a Record of Physical Activity). According to the district court complaint, Jawbone’s products associated with components of its UP series of trackers indirectly infringe the patents-at-issue. Fitbit hopes that it will be successful in preventing the import and sale in America of wearable activity tracking devices sold by Jawbone by requesting the ITC to issue a limited exclusion order and a cease and desist order.

A case currently pending before the Federal Circuit is anticipated to provide greater guidance into the answer to this question, namely, how district courts should determine whether a claim is directed to an abstract idea. The case, McRo, Inc. v. Bandai Namco Games America, No. 2015-1080, recently heard oral argument on December 11, 2015. The panel’s questioning indicated that its anticipated decision may provide greater insight into how district courts are to determine whether a claim is, in fact, directed to an abstract idea. The patents are directed to automatic three-dimensional lip-synchronization for animated characters. Whereas prior art lip-synchronization required manually synchronizing an animated character’s lips and facial expressions to specific phonemes, the patents are directed to rules for automating that process.

Patent risk solutions provider RPX yesterday released its 2015 NPE Activity: Highlights report, which offers a first look at trends in patent litigation activity for 2015. According to RPX, NPE litigation activity rebounded in 2015 following what now appears to have been a slowdown in the latter half of 2014. The Eastern District of Texas also continues to dominate as the venue of choice for NPEs, with NPEs suing more defendants there in 2015 than in any year since 2009.

On July 8, in In re Cuozzo, the CAFC denied en banc review of a prior panel decision that confirms the PTAB can use a different standard for interpreting claims than a district court. The patent owner in In re Cuozzo filed a Petition for a Writ of Certiorari to the Supreme Court on October 6, 2015. The response was due on November 9, 2015. If the Supreme Court takes up the issue, it could decide contrary to the current Federal Circuit precedent. It is also possible that Congress could change the standard for claim construction that applies to post-grant proceedings through legislation.

Employers often assume that they have the same weapons in their arsenal to prevent theft of virtual trade secrets as they have against other types of loss. As the prosecution of Sergey Aleynikov in Federal and New York courts showed, however, that simply isn’t true. Even though juries in both courts found him guilty of downloading confidential computer code from his employer, judges ultimately found that the laws under which he was prosecuted did not cover the acts he committed. A careful employer should therefore make sure it puts precautions in place that prevent theft of computer code, rather than relying on the threat of criminal prosecution.

Aleynikov was a computer programmer employed by Goldman Sachs to write high-frequency trading code. In 2009, he accepted a job offer to join a potential competitor, where he would create a new high-frequency trading platform from the ground up. Before he left Goldman, however, he sent portions of Goldman’s high frequency trading code to a German server for his own future use. After Goldman found out, it went to the FBI; Aleynikov was then arrested on a flight home from a visit to Chicago. With that arrest began his circuitous journey through the U.S. legal system, governed by two different sovereigns and under two different legal regimes.