May 2013

When Is a Software Patent Case Ripe for Summary Judgment?

Lawyers for patent infringement defendants have a new Federal Circuit case to point to when explaining to frustrated clients why an early summary judgment motion of non-infringement is not always a good expenditure of resources. In Baron Services, Inc. v. Media Weather Innovations, LLC, Nos. 2012-1285, -1443 (Fed. Cir. May 7, 2013), a panel majority of Judges Prost and Dyk, with Judge Reyna dissenting, vacated the district court’s order of summary judgment and award of attorney’s fees in favor of the defendant/appellee, MWI. Baron, the plaintiff/appellant, had brought suit based on U.S. Patent No. 6,490,525, generally related “to systems and methods for weather reporting and forecasting, and more particularly, to computerized systems and methods for reporting and forecasting real-time weather information.” At the outset of the case, MWI had resisted Baron’s discovery request for its source code by bringing a motion, subsequently granted by the district court, for a protective order. MWI supported the motion with affidavits from its employees, Fannin and Ritterbusch. After the court granted the motion, the parties “continued to proceed with discovery.” Of relevance was that “Baron noticed depositions of Ritterbusch and Fannin, and MWI served Baron with numerous written discovery requests.” Baron moved the court for a new scheduling… Read More »When Is a Software Patent Case Ripe for Summary Judgment?

Jury Award for Software Trade Secrets Theft Affirmed by Fifth Circuit

Wellogix sued Accenture (and other parties) for misappropriating trade secrets related to software that helped manage the process of constructing an oil well. A jury awarded $26.2 million in compensatory damages, and $68.2 million in punitive damages, the punitive award having subsequently been reduced to $18.2 million by a remittitur. On appeal, the Fifth Circuit affirmed the jury’s verdict that Wellogix’s trade secrets had been misappropriated, and also affirmed the damages awards. Wellogix, Inc. v. Accenture, L.L.P., No. 11-20816 (5th Cir. May 15, 2003). Facts In 2005, Wellogix entered into an agreement with SAP to integrate its software with SAP’s accounting software. Under that agreement, Wellogix provided its source code to SAP. Wellogix also entered into marketing agreements with Accenture. Further, Wellogix conducted pilot programs with oil companies and Accenture.  In the pilot programs, subject to confidentiality agreements, Wellogix shared its technology, including source code, with the oil companies and Accenture. Later, in developing a component for software for BP, Accenture and SAP “apparently accessed Wellogix technology—including flow diagrams, design specifications, and source code critical to Wellogix’s software.” Wellogix sued BP and SAP in addition to Accenture. SAP was dismissed for lack of proper venue, and claims against BP were resolved in an… Read More »Jury Award for Software Trade Secrets Theft Affirmed by Fifth Circuit

Business Method Claims Not Patent-Eligible in CLS Bank, Deeply Divided Federal Circuit Holds

The Federal Circuit has held that patent claims directed to using an intermediary in financial transactions to eliminate settlement risk are not patent-eligible.  CLS Bank International v. Alice Corp., No. 2011-1301 (May 10, 2013).  Sitting en banc, a majority of the Court, albeit not all on the same grounds, found that “the asserted method and computer-readable media claims are not directed to eligible subject matter under 35 U.S.C. § 101.”  However, the Court was equally divided in affirming “the district court’s holding that the asserted system claims are not directed to eligible subject matter under that statute.”  Further, a majority of the court agreed that “the particular method, medium, and system claims at issue in this case should rise or fall together in the § 101 analysis.” In July, 2012, a three judge panel (Judges Linn and O’Malley were in the majority, and Judge Prost wrote in dissent) had found the claims at issue to be patent-eligible. The panel had reversed the district court’s holding that the claims were not patent-eligible.  The present case follows the Federal Circuit’s decision to grant a rehearing en banc following the panel’s decision. Judge Lourie’s Opinion Judge Lourie, joined by the plurality of Judges Dyk,… Read More »Business Method Claims Not Patent-Eligible in CLS Bank, Deeply Divided Federal Circuit Holds