April 2015

The PTAB Can Be Aggressive in Raising Patent-Eligibility Under Alice

Entering a new ground of rejection under 35 U.S.C. § 101, the Patent Trial and Appeal Board, deciding an ex parte appeal, applied Alice Corp. Pty. Ltd. v. CLS Bank Int’l. to hold that claims directed to a system and method for “propagating a media item recommendation” were not patent-eligible. Ex parte Svendsen, Appeal 2012-010845; Application 11/757,079 (PTAB April 3, 2015). Although agreeing with the Appellant that the Examiner had erred in making prior art rejections, the PTAB found that the claims were “directed to the abstract idea of a first and second ‘message’ each having content ‘information’ (i.e., data) comprising ‘a media item identifier of a media item and presence information.’” Further, the PTAB found that the claims did not recite “significantly more,” but instead simply incorporated known computer concepts. This decision, like most PTAB decisions, was designated as non-binding. Nonetheless, this is one of those decisions that strikes fear into the heart of a practitioner, and not just because the PTAB raised the patent-eligibility question de novo. The claims appear on their face to have only technical application, and, along the lines used to uphold patent-eligibility by the Federal Circuit in DDR Holdings, LLC v. Hotels.com, L.P., to… Read More »The PTAB Can Be Aggressive in Raising Patent-Eligibility Under Alice

Patent-Eligibility of Auction Claims Is Never a Good Bet After Alice

Patent claims directed to a “method of hosting a computer-based auction over the internet” were held invalid under 35 U.S.C. § 101 in Advanced Auctions LLC v. eBay, Inc., No. 13CV1612 BEN (JLB) (S.D. Cal., March 26, 2015). The court found the patent claims directed to “the abstract idea of an auction and the generic computer implementation of that idea on the Internet without the addition of any inventive concept.” DDR Holdings, LLC v. Hotels.com, L.P. was distinguished because the claims in this case did “not override any routine sequence of events.” Further, unlike the claims here, the claims in DDR Holdings were “not directed to implementation of a ‘business practice known from the pre-Internet world.’”

Internet Auction Claims Held Not Patent-Eligible

Patent claims directed to a two-mode computer-based Internet auction have been held patent-ineligible under 35 U.S.C. § 101, and a motion for judgment on the pleadings under FRCP 12(c) was accordingly granted in Advanced Auctions LLC v. Ebay Inc., No. 13CV1612 BEN (JLB) (S.D. Cal Mar. 27, 2015). According to United States Patent No. 8,266,000, during a first mode of an Internet auction, a user receives updated information on an auction bid by manually refreshing a web page (screen). A second mode of operation provides auction information automatically to users (bidders). A variety of ways are disclosed for the user to receive automatic auction information. For example, the second mode can auto-update the page an hour before an auction is scheduled to end, automatically refresh specific items such as the price and highest bidder, or stream video for an update. The court determined that the ’000 patent claims were directed to the abstract idea of an auction, and lacked any “additional inventive concept that would make [them] patent eligible.” The claims “simply implement a two-part auction, the Internet equivalent of a silent auction followed by a live auction.” During the first mode, the bidders monitor the status of the bids… Read More »Internet Auction Claims Held Not Patent-Eligible

A District Court’s Denial of a Motion to Stay Is Not Appealable After a Petition Seeking a CBM Review Proceeding at the PTAB Has Been Filed (but not Granted)

The Federal Circuit has dismissed, for lack of subject matter jurisdiction, a denial of a motion to stay where petitions had been filed, but not granted, seeking covered business method (“CBM”) reviews  at the Patent Trial and Appeal Board (“PTAB”). Intellectual Ventures II LLC v. JPMorgan Chase & Co., 2015 U.S. App. LEXIS 5204 (Fed. Cir. Apr. 1, 2015). The accused infringer’s motion for a stay had been denied by the district court.  Intellectual Ventures II LLC v. JPMorgan Chase & Co., 13 Civ. 3777 (AKH) (S.D.N.Y. Aug. 11, 2014). The district court applied the four-factor test set forth in § 18(b)(1) of the America Invents Act (“AIA”), and concluded that overall judicial efficiency would be best served (i.e., the dispute would be resolved more quickly) by litigating the case in district court. The districts court’s main rationale was that the PTAB would first need to consider whether to even grant the petitions for CBM review. The district court noted that the PTAB is allowed to take twelve months to complete a CBM review, and this timeline could be extended another six months. The district court estimated that this procedure could take up to “four years,” as opposed to being… Read More »A District Court’s Denial of a Motion to Stay Is Not Appealable After a Petition Seeking a CBM Review Proceeding at the PTAB Has Been Filed (but not Granted)

Internet Sales Processing Claims Held Patent-Ineligible

Patent claims directed to a sales processing system for conducting Internet business transactions were held patent-ineligible under 35 U.S.C. § 101. Consequently, the court in Priceplay.com, Inc. v. AOL Adver., Inc., No. 14-92-RGA (D. Del. Mar. 18, 2015), granted the defendant’s FRCP 12(b)(6) motion to dismiss with regard to all claims of United States Patent Nos. 8,050,982 and 8,494,917. The patent claims recite a sales method in which the price of a product is determined partially from results of an on-line auction, and partially from a buyer’s performance during an on-line Price-Determining-Activity, or “PDA.” A price-determining-activity can be a video game, electronic board game, crossword puzzle or combination of activities. The system uses “multiple databases accessible by at least one computer server,” which calculates the product price based on the performance of the auction and the price determining activity. The court found that the patent claims lacked a patent-eligible inventive concept, reasoning that “reliance on an intermediary activity to determine price has been a practice in sale negotiations throughout history.” Furthermore, the abstract ideas of “[a]uctions, competitive activities, and sales transactions” do not become “non-abstract when combined and conducted over the Internet.”

Motion for Patent-Ineligibility of Modem Communications Software Denied

A court has declined at the pleadings stage to hold patent-ineligible, under 35 U.S.C. § 101, patent claims directed to software controlling communications between a user modem and a telephone company modem. The court in Modern Telecom Sys. LLC v. Juno Online Servs., Case No. SA CV 14-0348-DOC (ANx) (C.D. Cal. Mar. 17, 2015), denied a motion under FRCP 12(c) for judgment on the pleadings alleging Section 101 invalidity with respect to U.S. Patents Nos. 6,504,886, 6,332,009, 6,570,932, 6,163,570, 7,062,022, and 5,970,100. Claims of the various patents-in-suit were categorized as follows: The Learning Sequence Patents (the ‘866 and ‘009 patents) claim a programmable digital communication synchronization system that allows optimized communications between two devices (presumably modems). One modem can “learn” communication channel impairments, e.g. attenuation, distortion, noise, from the other and adjust accordingly. The Power Level Calculation Patents (the ‘932 and ‘570 patents) “describe using specific formulas to calculate modem power levels.” Each modem uses the same power calculation formula and verification scheme so that the maximum power transmitted over a data communication channel does not exceed regulatory limits. The Fast Start-Up Patent (the ‘022 patent) describes a procedure that allows for a reduced modem system initialization period by utilizing… Read More »Motion for Patent-Ineligibility of Modem Communications Software Denied

Patent Term Adjustment Can Be Reduced Even Without “Actual Delay” in Prosecution

In Gilead Sciences, Inc. v. Lee, the Federal Circuit that supplemental applicant submissions during patent prosecution need not incur “actual delay” to be counted as a reduction in calculating patent term adjustment (PTA). 2015 U.S. App. LEXIS 2828 (Fed. Cir. Feb. 26, 2015). Plaintiff Gilead Sciences, Inc. (“Gilead”) had appealed the decision of the Eastern District of Virginia’s grant of summary judgment to the Director of the United States Patent and Trademark Office (“USPTO”), Michelle Lee, and the Federal Circuit affirmed. Read Peter Keros’s post on the decision on the Bejin Bieneman PLC blog.

Attorneys’ Fees Awarded in Patent Case Under Octane Fitness Standard

Discovery abuse and a reversal in an inventor’s trial testimony made for an exceptional case under 35 U.S.C. § 285, and therefore warranted an award of attorneys’ fees against a losing plaintiff in Digital Reg of Texas, LLC v. Adobe Systems Inc., Case No. 4:12-cv-01971-CW (N.D. Cal. Mar. 9, 2015). This case provides an example of a district court’s application of Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749, 1756 (2014) in determining what makes for an exceptional case justifying the award of attorneys fees. The plaintiff alleged that the defendant infringed claims of U.S. Patent Nos. 6,389,541, 6,751,670 and 7,421,741. The court issued a claim construction order on the ‘741 patent and entered summary judgment in favor of the defendant. The defendant subsequently prevailed in a trial on the ‘541 and ‘670 patents, in which disputed patent claims were found to be invalid for obviousness. Following trial, the defendant successfully moved for attorneys’ fees under 35 U.S.C. § 285, which provides that “the court ‘in exceptional cases may award reasonable attorney fees to the prevailing party.’”  The U.S. Supreme Court, in Octane Fitness, explained that “exceptional” is determined “case-by-case” considering the “totality of the… Read More »Attorneys’ Fees Awarded in Patent Case Under Octane Fitness Standard

Pleading Trade Secret Misappropriation Requires Detail, Even If Not All Support Needed for the Plaintiff to Ultimately Prevail

In Vesta Corp. v. Amdocs Mgmt., No. 3:14-cv-1142-HZ (D. Or. Jan. 13, 2015), the plaintiff survived a Rule 12(b)(6) motion to dismiss a claim of alleged trade secret misappropriation.  The plaintiff alleged that the defendant stole its confidential information during a joint development effort, and used that information to develop a competing product. Both the plaintiff and defendant provided services to mobile phone network operators (MNOs). Metro PCS, a large MNO, was the target customer for collaboration efforts between the two parties. The plaintiff specialized in electronic payment solutions and fraud prevention technology that assist the MNO in receiving payments from the end-user of the mobile device. The defendant offered mobile telephone billing software and services as a billing platform that maintains account status and account information for the MNO and its customers. MNOs “generally require both payment solutions and billings platforms to serve their customers.” With this premise in mind, the parties underwent a joint effort to “integrate their services and platforms in order to appeal to their shared customer base.” After the relationship ended, the plaintiff alleged that the defendant used its confidential information to develop and sell a competing product to Metro PCS. A threshold question was… Read More »Pleading Trade Secret Misappropriation Requires Detail, Even If Not All Support Needed for the Plaintiff to Ultimately Prevail