March 2019

Attorney Fees for Suing on Patent that “Looks Like Alice”

After dismissing a lawsuit alleging infringement of US Patent No. 9,569,755 (“Financial Management System”), Delaware’s Judge Richard Andrews has awarded attorney fees under Octane Fitness and 35 U.S.C. § 285, finding an exceptional case because claims of the ’755 patent were so clearly ineligible under 35 U.S.C. § 101 and the Mayo/Alice abstract idea test. Finnavations LLC v. Payoneer, Inc., Civil Action No. 1: 18-cv-00444-RGA and 1: 18-cv-00445-RGA (Mar. 18, 2019). Judge Andrews acknowledged that “the law of patent eligibility has perhaps become unpredictable and unclear on the fringes,” but stated that he had “rarely been more confident in the patent ineligibility of a set of claims or more confident in the unreasonableness of a Plaintiff’s decision to sue on a patent.” Here is one of the claims that prompted these comments: 1. A method for transferring payment information to a personal financial management program comprising invoking a financial assistant operating on a network device upon a determination of a transmission of transaction data to a commercial web server configured to conduct online financial transactions intercepting, by the financial assistant on the network device, the transaction data in a first data structure comprising a plurality of components of transaction data,… Read More »Attorney Fees for Suing on Patent that “Looks Like Alice”

PTAB: Derivatives Trading Patent Claim Passes Alice Test, Opinion Designated “Informative”

Here is a sign that the USPTO’s January, 2019, guidance on 35 U.S.C. § 101 and patent-eligibility may have an immediate and significant impact on USPTO rejections under the Mayo/Alice abstract idea test. The guidance became effective January 7, 2019. The Patent and Trial and Appeal Board (PTAB) soon thereafter decided In re Smith (Appeal No. 2018-000064; Application 13/715,476; Feb. 1, 2019), reversing an examiner’s § 101 rejection of claims directed to “trading derivatives in a hybrid exchange system.” Then, on March 19, 2019, the PTAB singled out Smith for designation as “informative.” The PTAB only very rarely designates a decision as “informative,” which it does according to a strictly defined “Standard Operating Procedure.” The “informative” designation means that, while the decision “is not binding authority,” it is deemed to “provide the Board’s general consensus on recurring issues and guidance to examiners, appellants, patent owners, or petitioners in areas where parties routinely misapply the law.” And what is the patent claim that exemplifies the PTAB’s general consensus? Consider the representative independent claim at issue in Smith: A method of trading derivatives in a hybrid exchange system comprising: collecting orders, via a communication network and order routing system, for derivatives and… Read More »PTAB: Derivatives Trading Patent Claim Passes Alice Test, Opinion Designated “Informative”

Factual Dispute Precludes Summary Judgment on Alice / § 101 Motion

Finding that competing expert declarations raised a factual question concerning whether claims recited an inventive concept, a  Delaware magistrate judge found that a summary judgment motion for invalidity of claims of U.S. Patent No. 8,490,123 under 35 USC § 101 and the Mayo/Alice test should be denied. S.I.SV.EL. Societa ltaliana per lo Sviluppo Dell’Elettronica S.p.A v. Rhapsody International Inc., Civil Action No. 18-69-MN-CJB (March 12, 2019). A defense expert said that there was no novelty in an ordered combination recited in the claims, and the plaintiff’s expert said there was. This was enough for the court to deny the summary judgment motion. The ’123 patent is directed to “generating a user profile on the basis of playlists.” Representative claim 1 recites: A method of generating a user profile for a given user from at least one first playlist including a first sequence of content and being associated with the given user and stored on a media device, said method comprising: automatically searching for the at least one first playlist among a plurality of playlists, wherein the plurality of playlists includes at least one of a second playlist and a third playlist, wherein the second playlist has a second sequence of… Read More »Factual Dispute Precludes Summary Judgment on Alice / § 101 Motion

Another Delayed Patent Eligibility Decision

Once again, a district court in California urged parties to improve their pleadings before deciding patent eligibility under 35 U.S.C. § 101. In Kajeet v. Qustodio, CV18-01519 JAK (Feb. 28, 2019), the Central District of California granted, without prejudice, a motion to dismiss a complaint for patent infringement under F.R.C.P. 12(b)(6). Plaintiff Kajeet, Inc. asserted U.S. Patent Nos. 8,712,371, 8,630,612, and 8,667,559, directed toward rule enforcement for mobile devices, against Defendant Qustodio, LLC. Defendant filed a motion to dismiss under Rule 12(b)(6), alleging that the claims of the asserted patents were ineligible under § 101. Defendant analogized the claims to those in Bascom Glob. Internet Servs., Inc. v. AT&T Mobility LLC, arguing that the concepts embodied in the claims were well-known and conventional, failing the second part of the two-part Alice v. CLS Banktest. Plaintiff provided an expert declaration to support that the claims were directed to a technical improvement that would satisfy the second part of the Alice test. The Court relied on the Federal Circuit’s recent decisions in Berkheimer v. HP Inc.and Aatrix Software, Inc. v. Green Shades Software, Inc., noting two main points: (1) eligibility is a question of law that can contain underlying factual determinations, and… Read More »Another Delayed Patent Eligibility Decision

Patent Prior Art Inherency Requires More Than Mere Possibility

A finding that prior art inherently disclosed elements of claims of U.S. Patent No. 7,802,310 was not supported by substantial evidence; the Federal Circuit therefore reversed the Patent Trial and Appeal Board’s conclusion that the ’310 patent was unpatentable as obvious. Personal Web Technologies, LLC  v. Apple, Inc., No. 2018-1599 (Fed. Cir. Mar. 8, 2019). This precedential opinion arose from an inter partesreview (IPR) proceeding, but will be of interest to patent prosecutors, inasmuch as inherency is often used (and misused) by patent examiners. Claim 24 of the ’310 patent, reproduced below, was discussed as representative: A computer-implemented method implemented at least in part by hardware comprising one or more processors, the method comprising: (a) using a processor, receiving at a first computer from a second computer, a request regarding a particular data item, said request including at least a content-dependent name for the particular data item, the content-dependent name being based, at least in part, on at least a function of the data in the particular data item, wherein the data used by the function to determine the content-dependent name comprises at least some of the contents of the particular data item, wherein the function that was used comprises a message… Read More »Patent Prior Art Inherency Requires More Than Mere Possibility

Absolute or Equitable Intervening Rights, It Matters

Delaware District Court grants-in-part and denies-in-part patentee’s motion for summary judgment regarding accused infringer’s defense of intervening rights.  Sonos, Inc. v. D&M Holdings, Inc.,No. 14-1330-WCB (D. Del. Nov 7, 2017). The owner of a patent that survives reexamination “is only entitled to infringement damages for the time period between the date of issuance of the original claims and the date of the reexamined claims if the original and the reexamined claims are substantially identical.” Convolve, Inc. v. Compaq Comput. Corp.,812 F.3d 1313, 1322-23 (Fed. Cir. 2016). This case pertains to an issue of law not squarely addressed by the Federal Circuit—i.e., whether 35 U.S.C. § 252, second paragraph, first sentence extends to process claims (or only to product claims).  First, a little background… The first sentence of 35 U.S.C. § 252, second paragraph commonly is referred to as a defense of absolute intervening rights. This defense allows a party whose products infringe a reissued or reexamined patent to continue to use or sell specific products that were made, purchased, or used before the reissuance or reexamination, if the asserted claim was not in the original patent, so long as the accused infringer began its infringing activity before the patent was reissued or… Read More »Absolute or Equitable Intervening Rights, It Matters

District Courts Avoid Determining Patent Eligibility

How much evidence and claim construction does a court need to make a determination on eligibility under 35 U.S.C. § 101? According to district courts in California, it depends? In SkyHawke Techs. v. DECA Int’l, CV 18-1234-GW(PLAx) (C.D. Cal. Feb. 4, 2019), the Central District of California granted a motion for partial judgment on the pleadings under FRCP 12(c), admonishing Plaintiff to amend its complaint. In contrast, in Express Mobile v. Core and Theory, 18-cv-04679-RS (N.D. Cal. Jan. 29, 2019), the Northern District of California denied Defendants’ motions to dismiss, holding claims of U.S. Patent Nos. 6,546,397 and 7,594,168, could not be invalidated even after claim construction had occurred. The SkyHawke plaintiffs asserted U.S. Patent No. 6,456,938 under 35 U.S.C. § 101, directed to golf course GPS devices, and pled that the ‘938 patent is eligible under 35 U.S.C. § 101. The defendants argued that claim 1 of the ‘938 patent is invalid under § 101 as an abstract idea without something more. In granting the motion, the Court noted the complaint was filed in 2011, predating crucial decisions on § 101 including Mayo Collaborative Servs. v. Prometheus Labs and Alice Corp. v. CLS Bank, but Plaintiff did not amend its complaint to… Read More »District Courts Avoid Determining Patent Eligibility