May 2014

Failure to Meet Indirect Patent Infringement Pleading Standard (and Possible Rule 11 Question)

Judge Gilstrap in the Eastern District of Texas has granted defendants’ motion to dismiss a complaint of indirect patent infringement where the plaintiff failed to meet the applicable pleading standards.  Babbage Holdings, LLC v. Activision Blizzard, Inc., No. 2:13-CV-750 (E.D. Tex. May 15, 2014 (and seven related cases).  Further, because Babbage’s original, first amended, and second amended complaints repeatedly failed to address the defendants’ knowledge of the patent-in-suit, Judge Gilstrap questioned whether Babbage had violated FRCP 11. In September 2013, Babbage sued a slew of defendants alleging infringement of U.S. Patent No. 5,561,811.  The ’811 patent expired on October 1, 2013.  Summons to each of the defendants were only issued on October 9, 2013.  Babbage’s complaint against each defendant alleged that the defendant “knew of the ’811 Patent at least as early as the filing of the Complaint.”  This allegation was contained in the original complaint, and repeated in the first and second amended complaints. Under Bell Atlantic Corp. v. Twombly and Ashcroft v. Iqbal, “the facts plead must allow the Court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”  It was “undisputed” that Babbage’s allegations of contributory infringement and infringement by inducement required… Read More »Failure to Meet Indirect Patent Infringement Pleading Standard (and Possible Rule 11 Question)

No Need to Ask Alice: Districts Continue to Invalidate Patent Claims Based on Ineligible Subject Matter

The patent community is awaiting the U.S. Supreme Court’s decision in Alice Corporation Pty. Ltd. v. CLS Bank International. This decision may or may not clarify standards for determining patent-eligibility under 35 U.S.C. § 101.  Meanwhile, district courts continue to consider, and generally agree with, defendants’ arguments that software patents do not recite patentable subject matter, often when such arguments are made at the pleadings stage in Rule 12 motions. Here are three recent cases (two of which are discussed in more detail in prior posts). Website Display and Financial Business Method Claims Not Patent-Eligible Intellectual Ventures had sued Capital One on four patents, two of which remained at issue: U.S. Patent No. 7,603,382, entitled “Advanced Internet Interface Providing User Display Access of Customized Webpages” and U.S. Patent No. 8,083,137, entitled “Administration of Financial Accounts.”  Capital One contended “that the ‘137 Patent covers simply the abstract idea of basic budgeting,” and that the ’382 patent “cover[ed] the abstract idea of ‘personalizing a website display to reflect a user’s characteristics and navigation history.’”  The court agreed with Capital One, and dismissed the case, finding that neither patented claims that satisfied “either prong of the ‘machine-or-transformation’ test nor otherwise contains a ‘patentable… Read More »No Need to Ask Alice: Districts Continue to Invalidate Patent Claims Based on Ineligible Subject Matter

Federal Circuit Will Not Allow Mandamus Relief Of PTAB Decisions To Initiate Inter Partes Review

In In re The Procter & Gamble Company. LLC, No. 121 (Fed. Cir. Apr. 24, 2014), Clio filed a declaratory judgment action against Procter & Gamble (“P&G”), asserting three P&G patents were invalid.  After unsuccessfully moving to stay an already-pending P&G lawsuit for patent infringement against a Clio customer, Clio dismissed its complaint without prejudice under Federal Rule of Civil Procedure 41(a)(1)(B).  Id. at 3. Later, Clio petitioned the Patent Office’s Trial and Appeal Board (“PTAB”) for inter partes review of the same P&G patents that were the subject of its declaratory judgment complaint.  P&G argued the petitions should be dismissed under 35 U.S.C. § 315(a) as barred by Clio’s earlier-filed declaratory judgment lawsuit.  The PTAB granted them nevertheless.  Id. Section 315(a) states, “[a]n inter partes review may not be instituted if, before the date upon which the petition for such review is filed, the petitioner or real party in interest filed a civil action challenging the validity of a claim of the patent.”  According to the PTAB, however, “because Clio’s declaratory-judgment action was dismissed without prejudice, ‘[i]n the context of § 315(a)(1), the action never existed.’”  Id. at 3-4. The Federal Circuit denied P&G’s mandamus request.  Per the court,… Read More »Federal Circuit Will Not Allow Mandamus Relief Of PTAB Decisions To Initiate Inter Partes Review

Federal Circuit Will Not Allow Mandamus Relief Of PTAB Decisions Not To Initiate Inter Partes Review

In In re Dominion Dealer Solutions. LLC, No. 109 (Fed. Cir. Apr. 24, 2014), Dominion petitioned the Patent Office Trial and Appeal Board (“PTAB”) to institute inter partes review of five patents.  The PTAB denied them all.  Dominion petitioned the Federal Circuit for a writ of mandamus.  Id. at 2. The Federal Circuit denied Dominion’s request.  As a preliminary matter, the court noted that a mandamus remedy “is a drastic one, to be invoked only in extraordinary circumstances.”  Id. at 3.  It requires petitioner to show a “clear and convincing indisputable right to relief.”  Id. at 3-4.  And, citing its decision in St. Jude, the court held Dominion had no “clear and indisputable” right to challenge the PTAB’s decision denying its petitions for inter partes review. The take away? A Virginia district court recently held that judicial review of a PTAB non-institution decision is not permitted under the Administrative Procedure Act, the Declaratory Judgment Act, or the mandamus statute applicable to district courts.  Dominion Dealer Solutions, LLC v. Lee, No. 3:13CV699 (E.D. Va. Apr. 18, 2014).  This, in combination with the Federal Circuit’s decisions in Dominion and St. Jude, suggest that the PTAB’s decision not to initiate inter partes review… Read More »Federal Circuit Will Not Allow Mandamus Relief Of PTAB Decisions Not To Initiate Inter Partes Review

Federal Circuit Will Not Allow Appeals Of PTAB Decisions Not To Initiate Inter Partes Review

In St. Jude Medical, Cardiology Div., Inc. v. Volcano Corp., No. 2014-1183 (Fed. Cir. Apr. 24, 2014), St. Jude sued Volcano for patent infringement.  Volcano counterclaimed against St. Jude, asserting St. Jude was infringing a Volcano patent.  Two years later, the district court dismissed all claims against St. Jude relating to the Volcano patent.  Six months after that, St. Jude filed a petition for inter partes review of the Volcano patent.  Id. at 3. The Patent Office Trial and Appeal Board (“PTAB”) denied St. Jude’s petition.  According to the PTAB, Volcano’s counterclaim alleging patent infringement constituted a “complaint alleging infringement of the patent” within the meaning of § 315(b).  Section 315(b) serves as a bar to instituting inter partes review of a patent if the petitioner was served with a complaint alleging patent infringement more than a year before.  St. Jude appealed the denial of its petition to the Federal Circuit.  The PTAB moved to dismiss.  Id. at 3-4. The Federal Circuit granted the motion.  The court pointed out that 35 U.S.C. § 318(a) only authorizes appeals to the Federal Circuit from “the final written decision” of the PTAB.  Id. Likewise, 35 U.S.C. § 141(c) only authorizes an appeal from… Read More »Federal Circuit Will Not Allow Appeals Of PTAB Decisions Not To Initiate Inter Partes Review

A Rare Case? Motion for Judgment on the Pleadings Granted Based on Unpatentable Subject Matter

Patent claims directed to “the offer and sale of items to players in the course of gaming” recited an “unpatentable abstract idea,” held the court in Gametek LLC v. Zynga, Inc., No. CV 13-2546 RS (N.D. Cal. April 25, 2014).  This holding came in response to defendants’ motions under FRCP 12 for judgment on the pleadings.  The court explained that “despite the presumption that every issued patent is valid, this appears to be the rare case in which the defendants have met their burden at the pleadings stage to show by clear and convincing evidence that [U.S. Patent No. 7,076,445 ] claims an unpatentable abstract idea.” Claim 1 of the ‘445 patent was representative; its preamble recited “[a] method of managing the operation of a game which includes a game environment, and is programmed to control a gaming action for at least one of a plurality of users, said managing method using a programmed computer to effect the following steps.”  The recited steps all related to tracking user activity, managing a user account, and conducting a transaction for a user to purchase items in the game. The dependent claims simply spelled out various details of video gaming, such as providing… Read More »A Rare Case? Motion for Judgment on the Pleadings Granted Based on Unpatentable Subject Matter