Posts Tagged: "Judge Richard Linn"

Several weeks ago, the Court of Appeals for the Federal Circuit issued a nonprecedential decision in Glasswall Solutions Limited v. Clearswift Ltd., affirming a district court’s findings that claims from two patents that were asserted in an infringement case filed by Glasswall were directed to unpatentable subject matter under 35 U.S.C. § 101… The Federal Circuit found that testimony offered by an expert witness for Glasswall didn’t preclude a dismissal on the pleadings as the alleged factual assertions in that testimony weren’t actually factual in nature but, rather, were conclusory legal arguments the district court wasn’t bound to accept as true.

A claim is entirely without color when it lacks any legal or factual basis.  Because of the relative paucity of § 101 cases between Alice and AlphaCap’s complaint, the law was unsettled.  The Federal Circuit noted that when the applicable law is unsettled, attorneys may not be sanctioned merely for making reasonable arguments for interpreting the law.  Further, the court found that Gutride presented a colorable argument that the claims were analogous to those in DDR Holdings, LLC v. Hotels.com L.P., and therefore patent eligible under § 101.

Of the many lingering issues left in TC Heartland’s wake for domestic corporations, a Federal Circuit panel resolved several of them recently. In In re ZTE (USA), No. 2018-113, the court addressed two of the most common issues dogging appeals over the application of § 1400(b): whose law governs burden, and where does that burden lie. In In re Bigcommerce, No. 2018-120, the court addressed the territorial bounds mapped by the phrase “judicial district” in § 1400(b). Judge Linn authored both. 

In patent infringement suits brought against a corporate defendant in a state with multiple judicial districts, venue is only proper in the single district where the defendant maintains a principal place of business. If the principal place of business is not in the state of incorporation, venue is proper in the single judicial district where the office registered in its corporate filings is located.

After the case was filed in the Eastern District of Texas, ZTE filed a motion to transfer the case to the Northern District of Texas under 28 U.S.C. § 1404(a) and filed a motion to dismiss for improper venue under 28 U.S.C. § 1406 and § 1400(b). The district court ruled that the Eastern District of Texas was a proper venue. Relying on Fifth Circuit law, the district court denied ZTE’s motion to dismiss, finding that ZTE “failed to meet its burden to show that it does not have a regular and established place of business in the District.” ZTE filed a petition for a writ of mandamus alleging that the district court improperly placed the burden of proof on the defendant.

According to the Federal Circuit, The claims simply do not simply recite an abstract result. Because the claims recite specific steps that accomplish a desired result, the the claims were found to be directed to a non-abstract improvement in computer functionality, not an abstract concept of computer security. Nevertheless, the Federal Circuit said the jury verdict of infringement relative to the ’968 patent should be set aside because there is no evidence that the accused product includes a feature claimed in the patent. Several errors were identified with respect to the royalty calculation of the ‘844 patent, which the Federal Circuit remanded to the trial court for further consideration. For the ’731 and ’633 patents, Finjan’s expert did apportion the revenues comprising the royalty base between infringing and non-infringing functionality of Proxy SG. The jury’s damages awards for infringement of these two patents were affirmed.

In Finjan, Inc. v. Blue Coat Systems, Inc., the United States Court of Appeals for the Federal Circuit recently affirmed-in-part, reversed-in-part, and remanded the case to the district court. Notably, however, the Federal Circuit found no error in the district court’s subject matter eligibility determination, meaning the claims of Finjan’s ‘844 patent were patent eligible under 35 U.S.C. 101. Perhaps more remarkable, the claims of the ‘844 patent relate to virus-screening and were determined to be not abstract. Still more remarkable, the author of this Federal Circuit decision was Judge Dyk, who is not know as a zealous advocate for software patent eligibility.

The Federal Circuit evidences a great deal of myopia to declare that these patents are not directed to a technological advance, even if they can string together citations that seem to support their sterilized findings. Shouldn’t it seem self evident in 2017 that an open payment system for processing fares on a mass transit system is a technological advance? Shouldn’t it also be equally self evident that there is nothing abstract about the tangible device used by a person who is admitted to a subway through an open payment system? And it’s hard to miss the financial reality that the funds actually do change hands and the fare is paid, isn’t it? And while the app itself may be intangible (i.e., not touchable), but the effects on commerce are very real and extremely valuable, in fact one could argue that the effects on commerce are so significant that they are enabling. By and through this innovation commerce is enabled in an efficient and transparent manner through an immediate arms length negotiation in real time. Of course it should be self evident in the digital age we find ourselves in in this 21st century economy that such an immediately enabled commercial transaction is anything but abstract, such transactions make the entire marketplace work. Indeed, so significant was this technology that Chicago Transit is paying an infringer for the service.

In Smart Sys. Innovations, LLC v. Chi. Transit Auth., the majority of a Federal Circuit panel affirmed a district court’s holding that several claims of four related patents “are directed to an abstract idea and otherwise lack an inventive concept, such that they are patent ineligible under § 101.” *** In a patent-eligibility analysis under Alice, characterizing what the claims are “directed to” is a key aspect of inquiry for abstract ideas. Overly broad and “categorical” characterizations of the claimed invention may be detrimental to the patentability of claims.

Under Patent Office regulations, a party seeking to submit supplemental information more than one month after the date an IPR is instituted must request authorization to file a motion to submit the information. 37 C.F.R. § 42.123(b). The request to submit new information must show: (1) why the supplemental information reasonably could not have been obtained earlier, and (2) that consideration of the supplemental information would be in the interests of justice. Id. The Court found that Ultratec’s motion to admit the expert’s trial testimony satisfied both requirements… Belated evidence in an IPR may be admitted when the evidence was not available sooner and would serve justice to be considered. It is an abuse of discretion for the Board to reject such evidence without a reasonable basis and without explanation.

The Court determined that the scope of the arbitration provision did not cover the intellectual property claims before the district court because the arbitration provision only covered the obligations established by the Agreement (the promotion of the plaintiff’s products).

In the case of Aylus Networks, Inc. v. Apple Inc., the Federal Circuit affirmed the district court’s finding of summary judgment for Apple Inc. (“Apple”). The Court held that statements made by a patent owner during an inter partes review (“IPR”) proceeding, whether before or after an institution decision, can be relied upon to support a finding of prosecution disclaimer… To invoke prosecution disclaimer, the statements must constitute a clear and unmistakable surrender of claim scope. If a prosecution argument is subject to more than one reasonable interpretation, it cannot rise to the level of a clear and unmistakable disclaimer.

On January 3, 2017 the Court of Appeals for the Federal Circuit (the court) handed down two decisions relating to obviousness under § 103 – In re: Marcel Van Os, Freddy Allen Anzures, Scott Forstall, Greg Christie, Imran Chaudhri, No. 2015-1975 (Fed. Cir. 2017) (Van Os) and In re: Ethicon, Inc., No. 2015-1696 (Fed. Cir. 2017) (Ethicon). In Van Os, the Appellants appealed a decision from the Patent Trial and Appeal Board (PTAB) affirming the Examiner’s rejection of the claims of U.S. Patent Application No. 12/364,470 under § 103. The court addressed the question of whether the PTAB properly held that the claims were obvious in light of prior art. The court vacated and remanded. In Ethicon, the Appellant appealed a decision from the PTAB affirming, in a merged inter partes reexamination, the Examiner’s rejection of the claims of U.S. patent 7,591,844 (the ’844 patent) under § 103. The court addressed the question of whether the PTAB properly affirmed the rejection of the claims of the ’844 patent under § 103. The court affirmed. These two cases raise several interesting questions, especially given that they were decided on the same day.

The Federal Circuit found that the district court did not abuse its discretion in admitting the AT&T settlement agreement for several reasons. First, the agreement covered the same patented technology at issue and thus was a reliable estimate of the technology’s value to Prism and potential infringers. Second, though both litigations were commenced the same day, the agreement came from an “earlier” case because it was entered into after all discovery was complete and on a fully developed record. This increased the likelihood that the settlement reflected the value of the patented technology rather than a desire to avoid a potential unfavorable judgment. Finally, the settlement was reached after a large share of litigation costs had already been expended, again reducing the role of litigation cost-avoidance in the decision to settle.