September 2013

Decision on Patent-Eligibility of Real Estate Valuation Claims Deferred Until After Claim Construction

Noting the ambiguity of the Federal Circuit’s recent CLS Bank and Ultramercial decisions, a district court has denied without prejudice a defendant’s motion to dismiss. Zillow, Inc. v. Trulia, Inc., No. C12-1549JLR (W. D. Wash. Sept. 6, 2013). The motion had been brought seeking a ruling that claims that United States Patent No. 7,970,674 did not recite patent-eligible subject matter. The claims of the ’674 patent, as its title suggests, were directed to “[a]utomatically determining a current value for a real estate property, such as a home, that is tailored to input from a human user, such as its owner.” The defendant had originally brought its motion about a year ago. The court had deferred its ruling, hoping that, in rendering an en banc decision in CLS Bank, the Federal Circuit “would provide guidance in resolving” this case. The defendant now claimed that the plurality opinion in CLS Bank, combined with concurring opinions, would allow the court to decide the patent-eligibility question now. The plaintiff, on the other hand, argued that the recent panel decision holding claims patent-eligible in the Ultramercial should govern the court’s analysis. The court decided to analyze and compare these two cases because they were “written… Read More »Decision on Patent-Eligibility of Real Estate Valuation Claims Deferred Until After Claim Construction

Court Denies Motion for Judgment on the Pleadings That Patent Claims Relating Musical Notations To Color Are Not Patent-Eligible

At least at the pleadings stage, a court has declined to hold patent-ineligible patent claims directed to “relating electromagnetic waves to harmonic sound waves.” Michael Sandborn & Mark Sandborn P’ship v. Avid Tech., Inc., No. 11-11472-FDS (D. Mass Sept. 5, 2013).  Accordingly, the plaintiff’s lawsuit alleging infringement of U.S. Patent No. 6,930,235 was allowed to proceed. Claim 1 of the ’235 patent was representative and recited: 1. A method for relating electromagnetic waves to harmonic sound waves, comprising the steps of: assigning one fundamental color of a color spectrum of twelve analogous colors to one of twelve fundamental tones of a musical 5th relationship, wherein the tones are represented by notes; and consecutively associating the remaining analogous colors to the tones. The court analyzed the defendant’s motion for judgment on the pleadings under the rubric of 35 U.S.C. § 101. Citing Diamond v. Diehr, 450 U.S. 175 (1981), and Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289 (2012), the court acknowledged that the applicable test was whether the patent claims covered an “abstract idea.” However, the court also noted that “[n]either the Supreme Court nor the Federal Circuit has set forth any definitive framework for conducting the… Read More »Court Denies Motion for Judgment on the Pleadings That Patent Claims Relating Musical Notations To Color Are Not Patent-Eligible

First Sale Doctrine Inapplicable to Antitrust Claims Concerning Licensed Software

The first sale doctrine governing transfers of copyrighted works could not be used to allege that statements made to potential customers were “false, predatory or anti-competitive.” Int’l Equip. Trading v. Ab Sciex Llc, No. 13 C 1129 (N.D. Ill. Aug. 29, 2013). The plaintiff in this case had brought a number of unfair competition claims, including antitrust claims, against the defendant. The court was considering a Rule 12(b)(6) motion to dismiss for failure to state a claim, and therefore based its opinion on the following facts as pled in the plaintiff’s complaint. The plaintiff distributed medical laboratory equipment, including new and pre-owned mass spectrometers manufactured by the defendant. The parties were competitors because the defendant also sold its own pre-owned products. The defendant owned a copyright for software needed to operate the spectrometers. Licenses to this software were not transferable; a customer purchasing a pre-owned spectrometer therefore would also need to purchase a license from the defendant. The defendant had instituted the practice of telling customers that a $40,000 “site license fee” was required for pre-owned spectrometers purchased from anyone other than the defendant. However, the complaint alleged that the defendant had never actually imposed this $40,000 fee. The complaint… Read More »First Sale Doctrine Inapplicable to Antitrust Claims Concerning Licensed Software

Insurance Business Method Claims Held Not to Recite Patent-Eligible Subject Matter

Patent claims directed to “a system for generating tasks to be performed in an insurance organization” do not recite patent-eligible subject matter under 35 U.S.C. § 101, according to a divided Federal Circuit panel. Accenture Global Services GmbH v. Guidewire Software, Inc., No. 2011-1486 (Fed. Cir. Sept. 5, 2013). Accordingly, in an opinion authored by Judge Lourie and joined by Judge Reyna, the court affirmed the district court’s summary judgment of invalidity in favor of Guidewire; Chief Judge Rader wrote in dissent. Procedural Background The district court had held claims 1-22 of U.S. Patent No. 7,013,284 invalid for reciting patent-ineligible subject matter. Accenture had filed this patent infringement lawsuit in December 2007, but the district court granted Guidewire’s summary judgment motion only after the Supreme Court’s decision in Bilski v. Kappos. Accenture then appealed the district court’s holding only with respect to system claims 1-7, “but did not appeal the similar method claims 8-22.” (Nonetheless, as discussed below, the court held that one basis for invalidating the system claims was that these claims recited the same subject matter, and thus were invalid for the same reasons as, the method claims.) Majority Opinion The court’s discussion of the law began by… Read More »Insurance Business Method Claims Held Not to Recite Patent-Eligible Subject Matter

Joinder Ordered of All Parties with Potential Standing to Assert Patent

Following a patent owner’s appeal of an adverse judgment, and a remand by the Federal Circuit for consideration of a motion to substitute a purported purchaser of rights in the patent-in-suit, a district court has ordered joinder of the purported purchaser. Mformation Techs. v. Research in Motion, No. C-08-4990 EMC (N.D. Cal. Aug. 29, 2013). The original patent owner (MT) moved for a new trial, and then the next day appealed the district court’s judgment to the Federal Circuit. The Federal Circuit deactivated this appeal because of the motion for a new trial, which motion was subsequently denied by the district court. The alleged new patent owner (MST), and not MT, then filed a second appeal with the Federal Circuit. After the appeals were consolidated, “MST filed a motion to substitute with the Federal Circuit.” In response, “RIM opposed the motion and cross-moved to dismiss for lack of standing.” RIM contended that MST had provided inadequate documentation concerning the alleged transfer of property. Only in its reply supporting the motion to substitute did MST provide documentation including a “Bill of Sale” and a “Confirmation Agreement.” The Federal Circuit remanded the consolidated appeals to the district court for the limited purpose… Read More »Joinder Ordered of All Parties with Potential Standing to Assert Patent

Conclusory Pleadings Insufficient to Support Indirect Patent Infringement Claims

While the Federal Circuit has held that adherence to Form 18 of the Federal Rules of Civil Procedure is sufficient to support a claim of direct patent infringement, courts have not uniformly addressed the requirements for pleading indirect infringement, i.e., contributory infringement and infringement by inducement. In one recent example, the court held that a plaintiff’s conclusory statements concerning contributory and induced infringement were insufficient to sustain claims of indirect patent infringement. SkipPrint, LLC v. Rastar, Inc., No. 2:13-cv-00039 (D. Utah Aug. 16, 2013.) The plaintiff brought suit alleging direct and indirect infringement of five patents of which it was the exclusive licensee. Following an amended complaint, the defendant brought a motion to dismiss the indirect patent infringement claims. The court began its analysis by citing the U.S. Supreme Court’s Iqbal and Twombley decisions, as well as the Federal Circuit’s decision in In re Bill of Lading, 681 F.3d 1323 (Fed. Cir. 2012). Saying nothing about the pleading requirements for direct infringement, the court noted that pleading indirect infringement, according to this precedent, required more than “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements.” Regarding contributory infringement, the amended complaint provided a similar… Read More »Conclusory Pleadings Insufficient to Support Indirect Patent Infringement Claims