March 2014

Fee Award Under 35 U.S.C. § 285 Supported by Evidence of Subjective Bad Faith and Objective Baselessness

Awards of attorneys fees under 35 U.S.C § 285 may seem difficult to obtain, given the dual requirement of proving a party’s subjective bad faith, as well as the objective baselessness of its position.  However, as demonstrated in Gabriel Technologies Corp. v.  Qualcomm Inc., No. 2013-1205 (Mar. 18, 2014), some conduct is so egregious that significant awards may be justified. Gabriel, the plaintiff, had acquired rights to a 1999 license agreement to which a company later acquired by Qualcomm was also party.  The present suit, as the Federal Circuit described it, was essentially Gabriel’s investors’ attempt to recoup some benefit from the 1999 license agreement. Accordingly, the plaintiffs filed a complaint in 2008 that included 11 claims, including “for correction of inventorship, breach of the 1999 license agreement, fraud/fraudulent inducement, unfair competition, and misappropriation of trade secrets.”  However, at the root of each claim was “the contention that individuals affiliated with [plaintiffs’ predecessor] conceived of the inventions disclosed in several Qualcomm patents.” The plaintiffs had proceeded with their claims even after the district court suggested a “strong likelihood” of defendants’ recovery of fees under 35 U.S.C. § 285, and required them to post an $800,000 bond.  The problem for the… Read More »Fee Award Under 35 U.S.C. § 285 Supported by Evidence of Subjective Bad Faith and Objective Baselessness

FRCP 12 and 35 U.S.C. § 101

Three recent district court cases illustrate the viability, and the limitations, of bringing a motion to dismiss and/or for judgment on the pleadings, under Federal Rule of Civil Procedure 12, based on a failure of patent claims to define eligible subject matter under 35 U.S.C § 101.  In each of these cases, courts considered the question of whether a Section 101 determination could be made prior to claim construction and fact discovery.  The answer to this question is that a Rule 12 motion based on Section 101 can can provide an accused infringer with an early victory, but a defendant must be prepared to show that claims are invalid under any possible claim construction. In a case where defendants prevailed on a motion for judgment on the pleadings under Rule 12(c), Judge Davis of the Eastern District of Texas held that claims directed to an inventory sales system were invalid.  Clear With Computers, LLC v. Dick’s Sporting Goods, Inc., No. 6:12-CV-674 (E.D. Texas Jan. 21, 2014).  Where patent claims directed to a system for screening an equipment operator for impairment were at issue, Judge Hart of the Northern District of Illinois denied without prejudice a Rule 12(c) motion alleging Section… Read More »FRCP 12 and 35 U.S.C. § 101

Federal Circuit Reverses Software System Patent Claim Construction

In an opinion authored by Chief Judge Rader, and joined by Judges Dyk and Taranto, the Federal Circuit has reversed and vacated a summary judgment of non-infringement in favor of Google, finding that the district court based its finding of non-infringement on an erroneous claim construction.  Vederi, LLC v. Google, Inc., No. 13-1057 (Fed. Cir. March 14, 2014).  In the wake of Lighting Ballast Control LLC v. Philips Electronics N.A. Corp., which reaffirmed that the Federal Circuit will subject district court claim constructions to de novo review, this decision provides a clear illustration of how claim construction contributes to making patent litigation such a high-risk and expensive enterprise. At issue here were claim terms from U.S. Patent Nos. 7,239,760, 7,577,316, 7,805,025, and 7,813,596, which shared a common specification, and claimed priority to a common provisional application.  The patents were generally directed to “to methods for creating synthesized images of a geographic area through which a user may then visually navigate via a computer.”  The images were captured by a car-top recording device or devices, e.g., one or more cameras.  In other words, Google’s famed “Street View” was at issue. The meaning of the term “substantially elevations” was at issue on… Read More »Federal Circuit Reverses Software System Patent Claim Construction

Knowledge Not Enough for Induced Patent Infringement

A retailer’s Rule 12(b)(6) motion to dismiss a claim of induced patent infringement has been granted where the only allegation of intent to induce infringement rested on the retailer’s alleged knowledge that the product’s user manual instructed customers to perform infringing acts.  Tierra Intelectual Borinquen, Inc. v. ASUS Computer Int’l, Inc., No. 2:13-CV-38-JRG (E.D. Texas March 3, 2014). The plaintiff’s complaint alleged that both Asus and OfficeMax infringed claims of U.S. Patents No. 7,350,078, 7,725,725, and 8,429,415, based on sales of the ASUS TF700 Transformer Pad Infinity.  In particular, the plaintiff alleged that OfficeMax induced infringement.  However, the only “mechanism of inducement” pled in the complaint was “that the TF700 User Guide instructs users to perform acts which infringe the ‘078, ‘725, and ‘415 Patents.”  Further, the only way in which OfficeMax could “be inferred to have provided the” user guide to customers was by the user guide being “included in the box with the device as produced and delivered to OfficeMax by Asus for retail sale.” Judge Gilstrap first considered whether the user guide could plausibly support a claim for induced infringement, and concluded that it could.  The plaintiff did not need to “allege that the User Guide instruct… Read More »Knowledge Not Enough for Induced Patent Infringement

Is Section 101 Patent Eligibility Determined By Claim Breadth?

A Federal Circuit panel has held invalid, for not reciting patent-eligible subject matter under 35 U.S.C. § 101, patent claims directed to separating telephone transaction data into component parts, and storing it at different destinations.  CyberFone Sys., LLC v. CNN Interactive Group, Inc., Nos. 2012-1673, 2012-1674 (Fed. Cir., Feb. 26, 2014).  An opinion authored by Judge Dyk, and joined by Judges Lourie and Wallach, explained that the claims were directed to an “abstract idea.” Representative claim 1 of U.S. Patent No. 8,019,060 recited: 1. A method, comprising: obtaining data transaction information entered on a telephone from a single transmission from said telephone; forming a plurality of different exploded data transactions for the single transmission, said plurality of different exploded data transaction indicative of a single data transaction, each of said exploded data transactions having different data that is intended for a different destination that is included as part of the exploded data transactions, and each of said exploded data transactions formed based on said data transaction information from said single transmission, so that different data from the single data transmission is separated and sent to different destinations; and sending said different exploded data transactions over a channel to said different… Read More »Is Section 101 Patent Eligibility Determined By Claim Breadth?