January 2013

No Patentable Subject Matter in Gift Card Patent Claims

Patent claims drawn to “a method of exchanging a gift card” failed to recite patentable subject matter under 35 U.S.C. § 101, according to the court in Cardpool, Inc. v. Plastic Jungle, No. C 12-04182 WHA (N.D. Cal. Jan. 22, 2013). Therefore, the court granted the defendant’s motion to dismiss the plaintiff’s complaint for patent infringement. The only independent claim of United States Patent No. 7,494,048 recited: 1. A method of exchanging a gift card, comprising: providing data associated with a first gift card; validating the data associated with the first gift card; selecting either a money rebate associated with the first gift card, or a second gift card; exchanging the first gift card for either a money rebate or the second gift card; and charging a first service fee for issuing the second gift card. Judge Alsup’s opinion made quick work of this claim, following the analysis set forth by the U.S. Supreme Court in Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289 (2012). Quoting Mayo, the court noted that “[p]henomena of nature, . . . mental processes, and abstract intellectual concepts . . . are the basic tools of scientific and technological work.” The court… Read More »No Patentable Subject Matter in Gift Card Patent Claims

Federal Circuit Holds E-Commerce Claims Obvious

The Federal Circuit has held claims of three e-commerce patents invalid on grounds of obviousness. Soverain Software, LLC v. Newegg, Inc., No. 2011-1009 (Fed. Cir. Jan 22, 2013). The court, in an opinion authored by Judge Newman, reversed the holding of the U.S. District Court for the Eastern District of Texas that claims of United States Patent Nos. 5,715,314, 5,909,492, and 7,272,639 were valid, and accordingly vacated judgments of infringement and an award of damages. Strikingly, the district court had not even allowed the question of obviousness to go to the jury. Judge Newman’s opinion gave little credence to the district court’s action, noting that the district court gave little explanation in stating that there was insufficient evidence to support a finding of obviousness, and that the question would simply “confuse the jury.” Moreover, the question of obviousness is a question of law that the Federal Circuit reviews de novo. Quoting KSR International Co. v. Teleflex, Inc., 550 U.S. 398 (2007), the court explained that summary judgment without remand was appropriate where the prior art as well as “the scope of the patent claim, and the level of ordinary skill in the art are not in material dispute” and lead to a conclusion of obviousness.… Read More »Federal Circuit Holds E-Commerce Claims Obvious

Permanent Injunction Entered in Patent Case

An injunction was the only way to remedy the plaintiff’s loss of its ability to exclusively practice its patent claims, according to the court in Brocade Comm. Sys. v. A10 Networks, No. C 10-3428 PSG (N.D. Cal. Jan 10, 2013). The court thus granted the plaintiff’s motion for a permanent injunction following a finding of patent infringement. The defendant had been found liable for infringing four claims of three patents, U.S. Patent No. 7,454,500, U.S. Patent No. 7,581,009 , and U.S. Patent No. 7,558,195. In reaching its decision, the court took note that the Federal Circuit has articulated standards for injunctions in the wake of the Supreme Court’s eBay decision, providing an implicit reminder that eBay did not kill patent injunctions. The plaintiff and the defendant both sold “application delivery controllers (‘ADC’) with Global Server Load Balancing (‘GSLB’) and High Availability (‘HA’) features.” The patents related to use of GSLB devices. While the jury found infringement of the four patent claims, and awarded damages, it did not find willful or induced infringement. The court articulated the applicable legal standard as follows: Pursuant to eBay, Inc. v. MercExchange, LLC, there is no presumption in favor of an injunction in patent infringement cases.… Read More »Permanent Injunction Entered in Patent Case

Section 337 “Domestic Industry” Requirement Satisfied by Licensing

Patent licensing activities in the U.S. satisfy the “domestic industry” requirement of 13 U.S.C. 1337(a), the Federal Circuit has reaffirmed. Interdigital Communications, LLC v. ITC, No. 2010-1093 (Fed. Cir. Jan. 10, 2013). Nokia, the accused importer of infringing devices in an International Trade Commission proceeding, had petitioned for a rehearing, either by the panel or en banc, of the Court’s earlier decision. The Court denied both petitions. Judge Bryson authored an opinion by the panel.  Judge Newman sharply dissented. Under Section 337(a), the ITC’s jurisdiction, and ability to issue exclusion orders, exists “only if an industry in the United States, relating to the articles protected by the patent, copyright, trademark, mask work, or design concerned, exists or is in the process of being established.” 13 U.S.C. § 1337(a)(2). Further, an industry in the United States shall be considered to exist if there is in the United States, with respect to the articles protected by the patent, copyright, trademark, mask work, or design concerned— (A) significant investment in plant and equipment; (B) significant employment of labor or capital; or (C) substantial investment in its exploitation, including engineering, research and development, or licensing. The court disagreed with Nokia’s argument “that the International Trade Commission… Read More »Section 337 “Domestic Industry” Requirement Satisfied by Licensing

Adequacy of Patent Infringement Contentions

A patent plaintiff’s infringement contentions were inadequate in multiple respects in Pagemelding, Inc. v. Espn, Inc., No. C 11-06263 WHA (N.D. Cal. Jan. 4, 2013). Although the court denied the defendant’s motion for the sanction of dismissal, the court did order the plaintiff to supplement its infringement contentions in certain respects, and further held that in other respects the plaintiffs would be limited to arguing for infringement of specific items identified in their infringement contentions. (This case was the subject of earlier posts on this blog when the court first granted, and then, upon reconsideration in light of the Federal Circuit’s In re Bill of Lading decision, denied, the defendant’s Rule 12(b)(6) motion to dismiss for failure to state a claim on which relief could be granted.) Like many jurisdictions, the Northern District of California, in its Local Patent Rule 3-1(c), requires a patent plaintiff to provide an infringement claim chart mapping asserted claim elements to structures or acts in an accused instrumentality. Here, after the plaintiff had served and then amended infringement contentions under Local Rule 3-1(c), the plaintiff contended that the defendant’s “amended infringement contentions: (i) fail to identify the specific web pages it accuses of infringement; (ii) improperly rely on activity… Read More »Adequacy of Patent Infringement Contentions

When Does Internet Use Create Personal Jurisdiction?

A defendant’s use of computers in Canada to access servers in Connecticut was sufficient to give rise to personal jurisdiction in Connecticut, the Second Circuit Court of Appeals has held. MacDermid, Inc. v. Deiter, No. 11-5388-cv (2nd Cir. Dec. 26, 2012). A district court had held that the defendant’s conduct was not covered under Connecticut’s long arm statute. The Second Circuit reversed. MacDermid, the plaintiff, was headquartered in Connecticut. MacDermid employed the defendant, Deiter, as an account representative in Canada. Deiter learned that MacDermid was about to terminate her employment. In advance of her termination, she downloaded and forwarded to her personal e-mail account certain data files that MacDermid alleged were confidential and proprietary. MacDermid then sued Dieter, “alleging unauthorized access and misuse of a computer system and misappropriation of trade secrets.” Dieter brought a Rule 12(b)(2) motion to dismiss, alleging lack of personal jurisdiction. Connecticut’s long arm statute, Conn. Gen. Stat. § 52-59b(a), allows Connecticut courts to exercise personal jurisdiction over anyone who “uses a computer . . . located within the state.” The District Court had reasoned that Deiter had not used a Connecticut computer, but rather had simply sent e-mails from one computer in Canada to another… Read More »When Does Internet Use Create Personal Jurisdiction?