Patent Filings Roundup: Disney Displeasure Cruise; WSOU Investments’ Recordation Problems; and Chinese Company Targets Chinese Counterfeiters in U.S. Court

A slightly higher than average 38 petitions were filed at the U.S. Patent and Trademark Office (USPTO) last week, all inter partes reviews (IPRs), a number again propped up by five more patent filings against the prolific Craig Etchegoyen-led WSOU. That entity’s near-200 patents and 200 lawsuits brought in the district court represent roughly 5% of all 2020 litigation, and they show no signs of slowing their aggressive stance. District court litigation was roughly stable, with a few new campaigns popping up as outlined below.

It’s worth noting—not because it’s evidence of any trend or even statistically significant, but just given the rarity—that for the first time since I started writing these updates more than a year ago, the USPTO did not issue any Fintiv trial date or other procedural denials.

In other news, there was yet another Jeffrey Gross-led campaign initiated, this one so far targeting solely foreign e-banking (or really cybersecurity) features, called Auth Token. It has asserted two patents on transactional tokens against French, Japanese, Chinese, and Philippines-based e-transactions companies. Couple that with Caselas, LLC, yet another Raymond Anthony Joao campaign of five business method patents targeting upwards of 25 regional U.S. banks, both filed entirely in the Western District of Texas, and you can see that the end of covered business method (CBM) proceedings and the dramatic shift in patent venues has led to a continued resurgence of cases against the financial industry.

Disney Displeasure Cruise: Last year, the niche technology company, Decurtis Corporation, through their IP asset holding company Decurtis, LLC, launched a declaratory judgment suit stemming from a licensing dispute with Carnival Cruise Lines (or at least, their corporate parent, Carnival Corporation). Filed appropriately in the Middle District of Florida, the case implicates Disney Magicbands.

The allegations cut deeper than a pure patent dispute and implicate strong words and wide-ranging (if unproven) allegations of unfair business practices. Here, Decurtis offers—essentially—Wi Fi and other SAS solutions related to “guest experience,” including wearable identifiers (think Disney Magicbands) for guests to interact with on-board activities. They do so for rival cruise lines Virgin Cruise Intermediate Limited, Inc. (“Virgin”) and Norwegian Cruise Line (“NCL”) via their DPX System, and indeed, had worked with Disney Cruise Lines as a supplier since 2008.

Decurtis alleged a little under a year ago that while they were working with Disney to implement some form of guest services at their parks in a particular restaurant, a Disney executive, John Padgett, spearheaded a project that resulted in Disney’s massively successful Magicbands project, and at the time, Carnival was a client of Decurtis; that they had already pitched Carnival on such a system; and that Padgett then moved to Carnival, rejected their concept, and launched his own OceanMedallion project (to be clear, Decurtis does not allege any liability or corporate wrongdoing by Disney or even Padgett while he was at Disney).

The really unique part of the Decurtis action, though, is that it alleges Carnival is and was abusing its market position via fraudulently obtaining and threatening patents on (effectively) the same on-ship technology solutions. They claim that they have had to indemnify one customer and have lost the other, based entirely on Carnival’s actions. Decurtis first sought declaratory judgment that those patents failed to name the right inventors and that Carnival “sham” threatened litigation. The action is for unenforcability, a Sherman Act monopolization claim, non-infringement, unfair competition, and tortious interference with prospective business advantage, but does not raise invalidity. Now Decurtis has fired off three invalidity warning shots, filing three IPRs to date on three patents originally included in the non-infringement DJ.

Nokia and WSOU’s Paper of Record: It’s widely known that super-NPE WSOU Investments LLC, run by former Uniloc head Craig Etchegoyen, purchases thousands of Nokia patents and has been asserting hundreds of them for just over a year. As the twenty-first challenge to one of the hundreds of asserted patents shows, however, Etchegoyen may have some recordation problems on his hands—as at least some of the patents are still assigned to Nokia and no transfer or assignment has ever been recorded. This comes after evidence of other breaks in chain-of-title and questions were raised in some of the district court proceedings about the action of the transfer to WSOU Investments. This particular IPR, by Huawei Technologies, was one of five filed by various defendants this week and is likely not the last to be filed against the aggressive filer, by a longshot. The IPR is IPR2021-00692 and the patent is U.S. 7,406,074.

Design Patent Counterfeiting Suit Brought by Chinese Company Against Chinese Counterfeiters: The Northern District of Illinois is developing quite the reputation as a top place to file against online overseas counterfeiters, in part because of a local rule that waives Hague service for certain ephemeral virtual storefronts. As can be seen by regular public litigation filings, parties have taken to filing large “Schedule A” defendant lists and seeking temporary restraining orders and preliminary injunctions against the widescale platform infringement, earning (presumably) settlements and default judgments along the way. The courts there and elsewhere in the United States seem to be taking pity on consumer goods sellers who otherwise have an intractable global counterfeiting problem. The practice, though, has also helped fuel the rise of design patent litigation of a similar caliber. While it’s generally been used by U.S. companies against schedules of foreign-based storefronts seeking to extract some form of freeze and payment from foreign counterfeiters unlikely to appear, one company based in the People’s Republic of China is seeking to turn that assumption on its head— Shen Zhen Pin Zheng Digital Electronic Technology Co., Ltd. has filed just such an action there on a single design patent, D866998, alleging widespread counterfeiting of the successful design of an inflatable baby mat that company sells. It will be interesting to watch and see if this betokens a broader push by foreign companies to use the forum the same way U.S. companies have been, and if the court takes the location of the filer into consideration in any meaningful way when granting relief, in law or otherwise.

PTAB (38)

District Court (59)

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