On February 9th, Judge Liam O’Grady of the U.S. District Court of the Eastern District of Virginia (E.D. Va.) entered an order granting a motion that invalidated a series of eight patents, which had been asserted by Virginia Innovation Sciences, Inc. against e-commerce giant Amazon.com Inc. (NASDAQ:AMZN). The motion for judgment was filed pursuant to Federal Rule of Civil Procedure 54(b) regarding judgments on multiple claims. This comes just more than one month after another eight patents asserted by Virginia Innovation against both Amazon and Taiwanese consumer electronics firm HTC Corporation (TPE:2498), which were also similarly invalidated in the Eastern District of Virginia under the standard set by the U.S. Supreme Court’s decision in Alice Corp. v. CLS Bank International.
This series of motions for invalidating Virginia Innovation’s patents come within a year of Virginia Innovation filing suit against Amazon in the Eastern District. Patent risk management firm RPX Corporation published information online indicating that Virginia Innovation first filed its patent suit against Amazon last July asserting a total of 16 patents in the consumer electronics and personal computer sector. In an amended complaint filed by Virginia Innovation this January, the number of patents asserted were reduced to the eight, which were just invalidated by order of Judge O’Grady. Virginia Innovation had alleged that Amazon’s sale of the Kindle Fire HD 8.9, the Amazon Fire HDX 8.9 and “all reasonably similar products of Amazon” infringed upon the patents asserted.
Also on February 9th, Judge Henry E. Hudson entered a memorandum opinion in a different case before the Eastern District of Virginia, which granted a motion to dismiss a count of patent infringement alleged by a subsidiary of wireless communications firm CalAmp Corporation (NASDAQ:CAMP) against mobile network provider ORBCOMM Inc. (NASDAQ:ORBC). The Eastern District of Virginia memorandum opinion invalidated one of the two patents asserted by CalAmp, again under the standard set by the Supreme Court’s decision in Alice.
It’s interesting to note that the CalAmp case against ORBCOMM is another instance where it only took a few months for a determination of patent invalidity. CalAmp first filed two suits asserting the same two patents, including the recently invalidated patent, against ORBCOMM last October. One of those suits filed by CalAmp was dismissed in early November and the other suit resulted in the recent motion to invalidate one of the asserted patents.
In both of these cases, Eastern District of Virginia was able to come to a determination of patent invalidity within a year. Given this case timing, it seems reasonable to question at least one aspect of the Patent Trial and Appeal Board (PTAB), which is often touted as a valuable aspect of PTAB proceedings. Under the terms of the America Invents Act, which established PTAB, the appeals board is required to issue a final written decision on the patentability of challenged claims within one year, although six-month extensions may be filed in some cases. Yet there are multiple cases, at least within Eastern District of Virginia, which are able to issue decisions on patent eligibility well within that time frame.
The primary vehicle used to challenge patent post grant is an inter partes review (IPR) challenge. With IPRs the petitioner is not allowed to challenge patent eligibility, or the sufficiency of the written description. With an IPR only matters of novelty (under 35 U.S.C. 102) and obviousness (under 35 U.S.C. 103). So this is not a strict apples to apples comparison, but it is still nonetheless informative. This type of speed is hardly out of the ordinary for the Eastern District of Virginia, which is known throughout the legal community as the “Rocket Docket” because the judges move cases from inception to completion with tremendous speed.
One major criticism of the PTAB has been whether it is appropriate for an Article II tribunal to strip a vested property right of constitutional importance away from owners. Historically, prior to the AIA, challenges to patents were only able to be brought in the form of a reexamination (which is an examination proceeding where the patent owner can avail themselves of the full gamut of amendment options, including adding claims as can be done to any application) or in an Article III tribunal. The AIA upset this delicate balance, and for the large part of the PTAB’s existence the Federal Circuit, which is an Article III tribunal, has simply rubber stamped PTAB decisions — even agreeing with the PTAB that they did not have to consider timely submitted evidence filed as a matter of right. What this means is there has been little or no serious oversight of the PTAB, something that has changed in the past few months as the PTAB has continued to ignore basic statutory requirements.
So the question presented is this: If the Eastern District of Virginia can dispatch patent cases in less time than the PTAB, why should we suffer the indignity of the lack of due process and constitutional infirmity of an Article II tribunal striping vested property rights without much, if any, real oversight by an independent judiciary?