July 2015

Stay Granted Based on Inter Partes Review Petition Filed Four Months Before Patent Lawsuit

Judge Gilstrap in the Eastern District of Texas has granted a defendant’s motion for a stay based on institution of an Inter Partes Review (IPR) proceeding.  MemSmart Semiconductor Corp. v. AAC Technologies Pte. Ltd., No. 2:14-CV-1107-JRG (E.D. Texas July 10, 2015).  The defendant was able to present strong facts in support of a stay.  Notably, the defendant had filed its petition for IPR review four months before the lawsuit was instituted.  Moreover, the petition was granted before the defendant was served. The IPR petition was filed in August 2014, the lawsuit commenced in December 2014, and the IPR instituted by the Patent Trial and Appeal Board (PTAB) at the U.S. Patent and Trademark Office in February 2015.  The defendant then filed its motion for a stay in May 2015. The court began by listing factors typically considered in evaluating a motion for stay: “(1) whether a stay will unduly prejudice or present a clear tactical disadvantage to the nonmoving party; (2) whether a stay will simplify issues in question and trial of the case, and; (3) whether discovery is complete and whether a trial date has been set.” Here, the defendant sought a stay of nine months (not the two… Read More »Stay Granted Based on Inter Partes Review Petition Filed Four Months Before Patent Lawsuit

Patent-Eligibility at the PTAB in Ex Parte Appeals

Far from finding relief from an examiner’s patent-ineligibility rejection at the Patent Trial and Appeal Board (PTAB), patent applicants may find that ex parte appeals are their undoing.  A recent decision in an appeal filed in 2012, reversing an examiner’s prior art rejections under 35 U.S.C. § 103(a), but setting forth a new ground of rejection under 35 U.S.C. § 101, is illustrative.  Ex Parte Gustafson, Appeal No. 2013-003397, Application No. 12/638,254 (May 28, 2015). The claims at issue were directed to “intent mining,” defined as a “type of document analysis in which willingness of an author to perform an action is analyzed through grammatical patterns.”  Representative claim 1 recited: 1. A method for intent mining comprising: performing a preliminary search of a constrained source using one or more seed phrases to generate a plurality of preliminary search results representing different ways of expressing a desired intent; identifying each of the plurality of preliminary search results that have expressed the desired intent to generate a plurality of intent results; producing a plurality of action search strings around one or more action verbs in each of the plurality of intent results; and applying each of the plurality of action search strings… Read More »Patent-Eligibility at the PTAB in Ex Parte Appeals

Two More District Courts Follow Alice

Having just posted on a slew of U.S. District Court cases holding patent claims patent-ineligible under 35 U.S.C. § 101 and the Alice case, here are two more: Smart Systems v. Chicago Transit Authority, No. 14 C 08053 (N.D. Ill. July 10, 2015).  Patent claims directed to using credit cards to pay for public transit were held invalid under 35 U.S.C. § 101, and a defendant’s Rule 12(c) motion for judgment on the pleadings granted.  All of the claims were directed to “paying for a subway or bus ride with a credit card.”  The court acknowledged that the patents encompassed more, to wit, “how the transit operator should collect bankcard data, recognize certain bankcards, and store that information in memory to fix what Smart Systems characterizes as the ‘latency’ problem.”  Nonetheless, the claims simply sped up the performance of a financial transaction.  The claims had no additional technical innovation, but simply included limitations to a technological environment.  The invalidated patents were U.S. Patent Nos. 7,566,003; 7,568,617; 8,505,816; and 8,662,390. IPLearn-Focus, LLC v. Microsoft Corp., No. 14-cv-00151-JD (N.D. Cal. July 10, 2015).  Summary judgment of invalidity under 35 U.S.C. § 101 was granted on three patents.  Each of the patents was… Read More »Two More District Courts Follow Alice

35 U.S.C. § 101 Alice Train Rolls on in the District Courts

Here are brief summaries of nine recent cases in which district courts have considered validity of patent claims under 35 U.S.C. 101.  The trend is not good for patent owners. Two Patents Survive a Rule 12 Alice Challenge . . . Mirror Worlds Technologies LLC v. Apple Inc., No. 6:13-CV-419 (E.D. Texas July 7, 2015).  Judge Schroeder in the Eastern District of Texas denied without prejudice a motion for judgment on the pleadings (albeit after claim construction).  Claims of U.S. Patent No. 6,006,227 were directed to more than the abstract idea of organizing documents.  In particular, the court stated that the claims required “the computer to maintain data units in a persistent mainstream of all data units received or generated and at least one persistent substream.”  Even if pre-computer analogs were well-known and conventional, these recitations of computer activity were not. Execware LLC v. BJ’s Wholesale Club Inc., No. 1-14-cv-00233 (D. Del. July 15, 2015).  Magistrate recommended denying motion for Rule 12; defendants did not show patent-ineligible subject matter in claims of U.S. Patent No. 6,216,139, directed to a system “to rapidly format and re-format databases or ‘text data objects,’ according to the preferences of the user.” A Lot of… Read More »35 U.S.C. § 101 Alice Train Rolls on in the District Courts

Claims to Online Purchasing Method Not Patent-Eligible

A court has granted summary judgment of invalidity for failure to claim patent-eligible subject matter under 35 U.S.C. § 101 for claims to “[a] method of purchasing goods or services over a data network.”  Source Search Technologies, LLC v. Kayak Software Corp., No. 11-3388 (D. N.J. July 1, 2015). The patent owner conceded that the claims of U.S. Patent No. 5,758,328 were directed to “to an abstract concept, specifically ‘obtaining quotes from selected vendors.’” The claims were saved, the patent owner contended, by the allegedly additional inventive concept of “acquiring the required and available quote information from the vendor’s product database using predistributed software.” The court first rejected the patent owner’s argument that the claims were patent-eligible because they did “not pre-empt other computerized methods for obtaining quotes from selected vendors.”  Claims are not necessarily patent-eligible simply because they do not preempt an entire field of use.  Likewise, claims are not patent-eligible simply because they are novel. The patent owner also made the predictable argument that its claims were directed to an Internet problem and thus were akin to the claims held patent-eligible in the DDR Holdings case.   But the claims here were not “directed entirely to solving a database… Read More »Claims to Online Purchasing Method Not Patent-Eligible

Federal Circuit Holds Two Intellectual Ventures Patents Invalid for Claiming Unpatentable Subject Matter

The Federal Circuit has held two patents, owned by the well-known non-practicing entity Intellectual Ventures, invalid under 35 U.S.C. § 101.  Intellectual Ventures I LLC et al. v. Capital One NA, No.2014-1506 (July 6, 2015).  One of these patents was directed to a budgeting application, and the other was directed to tailoring web pages to individual users, i.e., for advertising purposes.  Almost a year after Alice Corp. v. CLS Bank, a holding that such subject matter is patent-ineligible seems barely newsworthy. A cursory glance at U.S. 8,083,137 and U.S. 7,603,382 raises flags for even the most casual observer of software patents.  The ‘137 patent was entitled “Administration of Financial Accounts.”  It was very easy work for the court to dismiss the ‘137 patent as directed to the abstract idea of budgeting. Claim 1 of the ‘382 patent recites “[a] system for providing web pages accessed from a web site in a manner which presents the web pages tailored to an individual user.  The ‘382 patent might have seemed akin to the Internet solution purportedly claimed in the DDR Holdings case.  However, the court explained that “[t]he patent claims here do not address problems unique to the Internet, so DDR has… Read More »Federal Circuit Holds Two Intellectual Ventures Patents Invalid for Claiming Unpatentable Subject Matter

Website Navigation Claims Patent-Ineligible, Says Federal Circuit

The Federal Circuit has agreed with a district court that claims of U.S. Patent No. 7,707,505 were directed to “retaining information lost in the navigation of online forms,” and that this subject matter constitutes an unpatentable abstract idea.  Internet Patents Corp. v. Active Network, Inc., Nos. 2014-1048, 2014-1061, 2014-1062, 2014-1063 (Fed. Cir. June 23, 2015).  Two aspects of this case are worth noting.  First, the invalidated claims were held to be abstract even though they had no manual analog, and could not have been practiced without a computer.  Second, the court’s opinion was authored by Judge Newman, who, one has to believe, would have reached a different result if not bound by Alice Corp. v. CLS Bank. The “broadest claim” of the ‘505 patent recited “a method of providing an intelligent user interface to an online application.”  The patent owner argued that maintaining state information as a user accessed “back” and “forward” buttons in a web browser distinguished from the prior art and thus made the claims recite “significantly more” than the allegedly unpatentable abstract idea. The Federal Circuit agreed with the district court that the claim in fact “contains no restriction on how the result is accomplished.”  Moreover, the… Read More »Website Navigation Claims Patent-Ineligible, Says Federal Circuit

Federal Circuit Affirms Patent-ineligibility of Online Retailing Pricing Claims

In OIP Techs., Inc. v. Amazon.com, No. 12-CV-1233 (Fed. Cir. June 11, 2015), the Federal Circuit agreed with a lower court that U.S. Patent No. 7,970,713 failed to claim patentable subject matter under 35 U.S.C. § 101, but rather “merely [used] a general-purpose computer to implement the abstract idea of ‘price optimization’.” The ‘713 patent is directed to a method for price optimization of merchandise. Claim 1 is representative, reciting a method whereby a plurality of prices for a single product are tested among numerous potential buyers to gather price data informing a merchant of the optimum price of the product. The Federal Circuit held that the ‘713 patent claims at best “the fundamental economic concept of offer-based price optimization.” Applying Alice, the court found that the invention both is directed to a fundamental abstract concept and that there fails to be any meaningful inventive aspect limiting the overarching economics concept that the patent so describes. The court drew parallels between the instant case and Alice, declaring that “relying on a computer to perform routine tasks more quickly or more accurately is insufficient to render a claim patent-eligible.” Judge Mayer’s concurrence focused on a procedural objection made by the patent… Read More »Federal Circuit Affirms Patent-ineligibility of Online Retailing Pricing Claims

Ultramercial Cert. Petition Denied

The Supreme Court has denied the latest petition for certorari in Ultramercial, LLC, et al. v. WildTangent, Inc., thus ending a case that had already taken two trips to the SCOTUS. Last December, the Federal Circuit finally took a hint and held that the claims of Ultramercial’s patent, directed to a method for monetizing Internet content, were invalid under 35 U.S.C. 101.  The case had been remanded to the Federal Circuit in the wake of Alice Corp. v. CLS Bank.  The denial of Ultramercial’s cert. petition therefore comes as no surprise, but does serve to punctuate the effect that Alice has had on the world of software and Internet patents.

Williamson v. Citrix Online, LLC, and Lessons for Patent Drafting

Williamson v. Citrix Online, LLC, No. 11-CV-2409 (Fed. Cir. June 16, 2015), raises the specter that software patent claims, already oft-challenged in the wake of Alice Corp. v. CLS Bank, could face the additional challenge of being unexpectedly construed as “means-plus-function” claims under 35 U.S.C. § 112(f). (Or, prior to the America Invents Act, “Section 112, paragraph 6.”)  No drafting technique can produce a software patent claim that is impervious to challenge in today’s environment. However, a reading of Citrix Online does suggest some fairly straightforward guidelines for patent applicants, drafters, and prosecutors to consider.  These guidelines are offered below, after a summary of the Federal Circuit’s decision. Summary of Citrix Online In Citrix Online, the Federal Circuit, in an opinion by Judge Linn, affirmed the district court’s holding that claim language deemed functional was indefinite due to the failure of U.S. Patent No. 6,155,840 to enable the claimed function. The district court had construed independent claim 8 of the ’840 patent as including “means plus function” language in reciting a “distributed learning control module.” The Federal Circuit agreed. The ’840 patent is directed to “methods and systems for distributed learning,” i.e., long-distance learning via computers and the Internet.  Independent claim… Read More »Williamson v. Citrix Online, LLC, and Lessons for Patent Drafting