Posts Tagged: "Patent Litigation"

This week saw 60 district court patent complaints, 76 terminations, 26 Patent Trial and Appeal Board (PTAB) petitions (some post grant reviews [PGRs] in there), and two new Fintiv denials—one PGR and one inter partes review (IPR). Gesture Technology had a handful of IPRs instituted against its asserted portfolio; lots of dismissals from relatively high-profile semiconductor cases suggest either a group or cheap RPX settlement; and a number of older assertion campaigns seemed to wrap up with terminations.

There are many reasons why patent holders might want to put potential infringers on notice of their rights. Such communications can serve the salutary goal of encouraging settlement of disputes without resort to lawsuits. And under some circumstances, notice may be legally necessary under 35 U.S.C. § 287 to enable a patent holder to recover damages for infringement. But a patent holder might be reluctant to do this if providing such notice can subject it to personal jurisdiction for a declaratory judgment suit in a remote and inconvenient forum.

In 1950, Jimmy Stewart starred in the iconic movie “Harvey,” which is the story of Elwood P. Dowd, an affable but eccentric man who pals around with an invisible 6’4” rabbit with an affection for martinis and that has the magical power to stop time. In the end of the movie, the viewer is left to believe that some level of insanity in people is good, and that there is some possibility that Harvey actually exists in some form. Fast forward to May 5, 2022. While many Americans were celebrating Cinco de Mayo, the Federal Circuit was asked to address an entity far more fictitious and unbelievable than Harvey the Rabbit, known as “inventive concept,” during oral hearing in In re Killian (Appeal No. 21-2113).

Four scholars with the International Center for Law & Economics (ICLE) have sent comments to the European Commission urging against any changes to the EU’s legal framework for licensing of standard-essential patents (SEPs) that would limit SEP holders’ ability to seek injunctions against alleged infringers. The ICLE scholars write: “It is simply not helpful for a regulatory body to impose a particular vision of licensing negotiations if the goal is more innovation and greater ultimate returns to consumers.” The comments come in response to the Commission’s February 2022 Call for evidence, which explained that “some users have found that the system for licensing SEPs is not transparent, predictable or efficient. This initiative seeks to create a fair and balanced licensing framework and may combine legislative and non-legislative action.” The feedback period ended May 9 and asked stakeholders to submit their views on: “(i) transparency; (ii) the concept of licensing on FRAND terms and conditions, including the level of licensing; and (iii) effective enforcement.”

Last week, the U.S. District Court for the Southern District of New York granted Block, Inc.’s Motion to Dismiss a complaint brought by AuthWallet, LLC against it for failure to state a claim. The district court found that the claims of AuthWallet’s patent were invalid because they claimed patent ineligible subject matter under 35 U.S.C. § 101. AuthWallet’s U.S. Patent No. 9,292,852 relates to systems and methods for processing financial transaction data. Block provides online platforms, products, and services that facilitate financial transaction data. Specifically, Block offers mobile payment options that provide a means for customers to earn and redeem rewards for multiple vendors. In its complaint, AuthWallet alleged that Block’s payment platforms infringe on one or more of claims of the ’852 patent, either literally or under the doctrine of equivalents. Specifically, AuthWallet alleged that Block put the inventions claimed by the ’852 patent into service (i.e., used them) and, therefore, Block benefited financially and commercially.

A large portion of the technology that we rely on daily—cell phones, computers, and the sensors and infrastructure that connect them, as well as an increasing percentage of drugs—is manufactured outside the United States, and in particular China. Indeed, over the past 25+ years the value of goods imported from China has increased ten-fold. Most companies are aware of the potential patent infringement liability for sales made in the United States but may not know that liability for infringing a U.S. patent can also extend to the processes used to make their product—even when manufacturing is done entirely outside the United States by a contract manufacturer.

My 40th birthday this week brought another litigation explosion (I assume no causation), with 120 new suits, double the average, though a spike is common at the ends of months and quarters; the new filings are dominated by filings by IP Edge, DynaIP, IP Valuation, and to a far lesser extent, Leigh Rothschild’s subsidiaries. There were a typical 30 inter partes reviews (IPRs) and no discretionary denials last week, coupled with an average 79 terminations in district court. A new abbreviated new drug application (ANDA) Paragraph IV suit was launched—GE Healthcare challenging the three remaining patents over their ANDA application to bring a generic Lexiscan® drug to market, against brand Astellas and Gilead. New funded semiconductor litigation and further trial postponements in VLSI rounded out this week.

As Knowledge Ecology International and its allies await the decision of the National Institutes of Health (NIH) on their latest attempt to misuse the Bayh-Dole Act for the government to set prices on any product based on a federally funded invention, they’re growing more uneasy. And that’s understandable. If you’d bet the house on an ivory tower theory that’s been summarily rejected for the past 18 years every time it’s been trotted out, you’d be uneasy too. They know that if the Biden Administration rejects the pending petition to march in on the prostate cancer drug Xtandi because of its cost, this leaky vessel can’t be credibly refloated again.

On April 29, the United States Court of Appeals for the Federal Circuit (CAFC) affirmed in part, reversed in part, vacated in part, and remanded a decision of the United States District Court for the Northern District of Illinois regarding alleged infringement by U.S. Venture Inc., (Venture) of certain patents owned by Sunoco Partners Marketing & Terminals L.P., (Sunoco). Sunoco sued Venture, alleging that its operation of butane-blending systems infringed claims of U.S. Patent Nos. 7,032,629 (the ‘629 patent), 6,679,302 (the ‘302 patent), and 9,606,548 (the ‘548 patent). Venture counterclaimed, asserting that the patents were not infringed, were invalid and unenforceable. The district court ultimately awarded Sunoco $2 million in damages, which were trebled to $6 million. Venture appealed the district court decision challenging “(I) [the] rejection of its on-sale-bar defense, (II) [the] determination that it infringed two patents we have since held invalid, (III) [the] construction of two claim terms, and (IV) [the] decision to enhance damages.” On cross-appeal, Sunoco challenged the lower court’s decision not to grant its reasonable-royalty award or lost-profits damages.

On April 28, Google’s General Counsel Halimah DeLaine Prado authored a post published on Google’s official blog to voice concerns felt by one of the world’s richest corporations that the U.S. patent system is currently in a state of growing crisis. The post offers several suggestions, each sanctioned by Google, as to steps that can be taken in all three branches of the U.S. federal government to address patent quality, abusive litigation and forum shopping. Unfortunately, the proposed reforms would help very little, if at all, toward improving certainty and clarity in patent rights in a way that would actually improve American innovation by supporting small startups and individual inventors in our country. Indeed, any informed observer of the U.S. patent system would recognize that Google’s proposed reforms would instead do a great deal to advance Google’s own business interests ahead of those startups and individual inventors who need the patent system to work in order to survive.

The U.S. Court of Appeals for the Federal Circuit on Friday, April 29, held that the Patent Trial and Appeal Board (PTAB) erred in finding that Auris Health, Inc. had failed to demonstrate that the claims of Intuitive Surgical Operations, Inc.’s patent for robotic surgery systems were unpatentable as obvious. The CAFC said the PTAB impermissibly rested its motivation-to-combine finding on evidence of “general skepticism” about the field of invention and thus vacated and remanded.

Senators Mazie K. Hirono (D-HI) and Thom Tillis (R-NC) sent a letter yesterday to U.S. Patent and Trademark Office (USPTO) Director Kathi Vidal to express their concern over the Patent Trial and Appeal Board (PTAB) decisions to institute inter partes review (IPR) proceedings in OpenSky Industries, LLC v. VLSI Technology LLC and Patent Quality Assurance, LLC v. VLSI Technology LLC. “The facts and circumstances around these proceedings suggest petitioners OpenSky Industries, LLC (OpenSky) and Patent Quality Assurance, LLC (PQA) brought the proceedings to manipulate the U.S. Patent and Trademark Office (USPTO) for their own financial gain,” explains the letter.

With an average 33 Patent Trial and Appeal Board (PTAB) filings (one post grant review, the rest inter partes reviews[IPRs]), a relatively high number (89) of district court terminations (including some high-profile settlements), and a somewhat low number (63) of suits this week, we are rolling into May. Chief Judge Connolly of the U.S. District Court for the District Court of Delaware  filed a standing order in all of his cases requiring litigation funding disclosures; there were more filings by more Magentar entities (who, by last count, are up to 15 high-profile litigation funded campaigns), and more IPR counters; and still more IPRs (22 or 23) in the Israeli-based Bright Data assertion campaign. The patents there are a range, but are based, broadly, on Internet connectivity.

Patent owners facing inter partes review (IPR) challenges have the option of filing a motion to amend as a contingency plan. This motion, accompanied by proposed substitute claims, allows the patent owner a fallback position if the Patent Trial and Appeal Board (PTAB) finds the original claims unpatentable. If successful, despite the unpatentability of the original claims, the patent owner maintains the substitute claims. While this sounds great in concept, the historical success rate of such motions is low. From October 2012 through March 2020, only 14% of motions to amend were granted. This improved slightly in 2020, to 25%, but dropped back to 18% in 2021 (calculated using data from Docket Navigator). The recent decision in Hunting Titan, Inc., v. DynaEnergetics Europe GmbH thus presents the somewhat rare case in which an amendment was granted by the PTAB and affirmed on appeal. That said, the Federal Circuit’s narrow holding does not indicate an easier future for patent owners’ motions to amend; indeed, the opposite may be true.

The U.S. Court of Appeals for the Federal Circuit (CAFC) on Friday directed Judge Alan Albright’s Waco Division of the U.S. District Court for the Western District of Texas to transfer a case brought by CPC Patent Technologies PTY Ltd against Apple to the Northern District of California. The CAFC said the district court erred in weighing the convenience of the witnesses factor as only slightly favoring transfer, noting that the court has historically rejected the view that this factor should be based solely on the distance the witness would have to travel.