In a series of related cases brought by Joao Bock Transaction Systems, LLC, Judge Sue L. Robinson granted defendants’ motions to stay pending a final determination by the Federal Circuit in a different case brought by this plaintiff and involving the same patent-in-suit. E.g. Joao Bock Transaction Systems, LLC v. Capital One Financial Corporation, et al., C.A. No. 14-425-SLR (D. Del. Jan. 12, 2015) (related cases 14-529, 14-530). Because the Federal Circuit will decide whether this patent is invalid under Section 101, a stay would simplify the cases’ issues and streamline the litigations. Id. at 2. The Court pointed out that “under the circumstances at bar, the movants are not seeking an undue litigation advantage, but simply seeking the guidance of the Federal Circuit (as is this court) before having to invest in potentially needless litigation.” Id. at 2-3.
In Intellectual Ventures I LLC, et al. v. Canon Inc., et al., C.A. No. 13-473-SLR (D. Del. Dec. 16 2014), Judge Sue L. Robinson limited the number of patents to be presented at the Markman hearing. Judge Robinson explained that the Court was presented with “65 disputed terms from 95 claims in 11 patents,” and that the Court’s resources were not “substantial enough to warrant a claim construction decision to issue on all 11 patents on or before January 27, 2015.” Judge Robinson therefore ordered the plaintiffs to select the six patents and related limitations they would like to present at the December 22, 2014 Markman hearing. Judge Robinson did note that the Court would “discuss with the parties at that time the disposition of the remaining patents in terms of the case schedule.”
In a memorandum opinion, Judge Sue L. Robinson granted and denied in part defendants’ motion to dismiss plaintiffs’ claims of infringement of U.S. Patent Nos. 7,664,701 (“the ’701 patent:), 8,083,137 (“the ’137 patent”), 7,603,382 (“the ’382 patent”), and 7,260,587 (“the ’587 patent”) based on the failure of those patents to recite patentable subject matter pursuant to 35 U.S.C. § 101. Intellectual Ventures I LLC et al. v. Manufacturers and Traders Trust Company, C.A. No. 13-1274-SLR (D. Del. Dec. 18, 2014).
First, Judge Robinson determined that the Court “may proceed on a § 101 analysis” without a claim construction, “as the parties’ arguments are not focused on specific claim limitations, but instead on the broader concepts of the claims and the computer components used.” Id. at 9-10.
Judge Robinson then relied on the two-step framework set forth in Alice Corp. Ply. Ltd. v. CLS Bank Int’l, 134 S.Ct. 2347(2014) to assess the subject matter eligibility of each of the asserted patents. Starting with the ’137 Patent, Judge Robinson noted that it disclosed “a system and method which allows consumer users to establish self-imposed limits on the user’s spending (borrowing) such that when the limit is reached the consuming user is notified,” which Judge Robinson determined to be a “longstanding and fundamental practice, utilized in personal and business finances” under the first prong of Alice. Id. at 11-12. Turning to Alice’s second prong, Judge Robinson found that plaintiffs’ arguments failed, given that an “abstract idea implemented on a computer [that] allows for more or faster monitoring of accounts is not the crux of the patentability analysis.” Id. at 13. Judge Robinson further noted that “[t]he computer and components (central processor) described in the specification are generic. The database is also generic; the specification does not describe a ‘specially programmed database,’ but a database used to store data.” Id. at 14. Judge Robinson further explained that the recitation of a “means for storing,” a “means for presenting transaction summary data,” and a “means for listing,” did not change the analysis, “as only generic computers and components are disclosed in the specification.” Id. at 15. Judge Robinson thus found the ’137 patent invalid for lack of patentable subject matter. Id. at 15-16.
Addressing the ’832 patent, Judge Robinson noted that it is directed to “a system for selectively tailoring information delivered to an Internet user depending upon the particular needs of the user.” Id. at 16. Judge Robinson explained that “[i]nstead of working in a ‘normal, expected manner,’ the ’382 patent describes an idea and solution for customized web page content, [and] thus, ‘the claimed solution is necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks.’” Id. at 18. Judge Robinson therefore found that the ’832 patent recites patentable subject matter.
Turning to the ’587 patent, Judge Robinson noted that it disclosed “a method, system and apparatus for automatically organizing a large number of images that may be obtained from a variety of different sources,” which was found to be “akin to a computerized photo album, a routine and conventional idea” under the first prong of Alice. Id. at 20. As to the second prong, Judge Robinson found that “[t]he claims do no more than ‘computerize’ a known idea for organizing images” and therefore concluded that the ’587 patent was invalid for lack of patentable subject matter. Id. at 21-22.
As to the ’701 patent, Judge Robinson noted that the patent’s central idea is directed to “providing a user with aliases to use in conducting transactions,” which was found to be an “abstract idea” under Alice’s first prong, given that “[t]he use of aliases to maintain privacy in financial transactions is not limited to Internet transactions.” Id. at 22-23. Pursuant to the second prong, Judge Robinson noted that “in order to pass muster under § 101, it is no longer sufficient to use the Internet through generic computer components to achieve a useful result.” Judge Robinson determined that the ’701 patent fell under such a category, and thus found the ’701 patent was invalid for failure to recite patentable subject matter. Id. at 25-26.
Judge Sue Robinson has invalidated U.S. Patent Nos. 5,862,321 and 6,144,997, which relate to digital file identification and had been asserted against Amazon and Barnes & Noble, as claiming abstract ideas under Section 101 and Alice Corp. Cloud Stachel, LLC v. Amazon.com, Inc., et al., C.A. No. 13-941-SLR, 13-942-SLR, Memo. Op. at 19 (D. Del. Dec. 18, 2014).
The patents claimed a system for transferring location information for documents, allowing users to access files without being limited by the memory available on the device they are using. Judge Robinson held that this was an abstract idea, accepting the defendants’ characterization of the claimed inventions as similar to cataloging documents to aid retrieval of the documents, which had existed for “[n]early two millennia.” Id. at 13-14. Turning to whether there were sufficient limitations on the abstract idea, Judge Robinson found that there were not, accepting the defendants’ argument that any limitation present was essentially a conventional computer component or process that operates similarly to a book of call numbers in a library. Id. at 14-18. Accordingly, Judge Robinson concluded that “[a]llowing the asserted claims to survive would curb any innovation related to computerized cataloguing of documents to facilitate their retrieval from storage, which would monopolize the ‘abstract idea.’” Id. at 18.
Judge Robinson also explained that a claim construction decision was not necessary for her finding of Section 101 invalidity, because she would have reached the same conclusion even if she had adopted all of the plaintiff’s proposed constructions. Id. at 1 n.2.
Judge Sue L. Robinson recently granted a defendant’s motion for summary judgment that a patented financial transaction security apparatus was invalid under 35 U.S.C. § 101. Joao Bock Transaction Sys., LLC v. Jack Henry & Assocs., Inc., Civ. No. 12-1138-SLR (D. Del. Dec. 15, 2014). The Court described the invention as adding “transaction security by allowing interaction between the central processing computer and a communication device to enable the point-of-sale terminal operator of the card holder to allow or deny a transaction using the communication device over a communications network.” Id. at 2-3. The Court agreed with the defendant’s argument that the claims at issue were directed to the abstract idea of, essentially, enabling a bank customer to give a stop payment instruction to a bank on a given check presented for payment, and having the bank honor that instruction by locating the check at issue and not paying it. See id. at 12-14.
The Court then considered whether the claimed abstract idea was limited by an inventive concept such that “the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.” Id. at 14 (quoting Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347, 2355 (2014)). The Court rejected the plaintiff’s argument that “the claims use ‘specific computers’ with bank processing software, making them ‘special purpose computers[,]’” and found, based on the specification, that “[t]he computer components are being employed for basic functions, including storage, transmitting and receiving information . . . .” Id. at 14-15. The Court added that “[w]hile the computer components do allow the abstract idea to be performed more quickly, this does not impose a meaningful limit on the scope of the claim.” Id. at 15.
In Tessera, Inc. v. Amkor Technology, Inc., C.A. No. 12-852-SLR (D. Del. Dec. 10, 2014), Judge Sue L. Robinson recently denied plaintiff’s motion to vacate, modify, or correct an arbitration award connected with the parties’ ongoing patent infringement dispute. The parties had previously entered into an agreement that licensed plaintiff’s technology and patents to defendant, and disputes would be settled by arbitration. Id. at 1-2. The parties had adjudicated a number of disputes in arbitration relating to royalty payments, in which plaintiff was awarded damages that also included damages based on conduct following the termination of the license agreement. Defendant unsuccessfully attempted to appeal this award in California state court. Its motion before this Court to vacate, modify, or correct the arbitration award claimed that the parties had agreed to arbitrate license royalties, but not “patent infringement after the termination of their license”; as a result, the arbitration award’s inclusion of damages based on post-termination conduct was improper, and this Court, not the California state courts, had jurisdiction to review the arbitrator’s award of post-termination damages. Id. at 5.
The Court disagreed, noting that the agreement’s arbitration clause was broad enough to cover post-termination damages. Id. at 5. In addition, the Court chose to abstain from hearing the matter, citing the fact that the license agreement was governed by California law, that the California state courts were already involved in the matter, and that the merits of defendant’s arguments had already been rejected by the California courts. Id. at 6-7. Further, defendant had “invoked the jurisdiction of the California courts until it was handed an adverse decision.” Id. at 7.
Judge Sue L. Robinson recently granted a defendant’s motion for summary judgment of non-infringement of design patent claims. Poly-America, L.P. v. API Indus., Inc., Civ. No. 13-693-SLR (D. Del. Nov. 25, 2014). The decision hinged on the “normal use” of the products at issue – cardboard boxes with perforated openings through which plastic garbage bags can be removed. As Judge Robinson noted, the Federal Circuit has defined “normal use” as the “period in the articles life, beginning after completion of manufacture or assembly and ending with the ultimate destruction, loss, or disappearance of the article.” Id. at 4 (quoting In re Webb, 916 F.2d 1553, 1557-58 (Fed. Cir. 1990)). Because the defendant introduced unrebutted evidence that the “normal use” of its product would include “flattening the box for recycling,” at which time its product’s distinct top flaps, tabs, and slots would be viewed by an ordinary observer, the Court found that summary judgment of non-infringement was required. Id. at 15 (“Although Poly questioned the frequency with which an ordinary observer would view these features, it was unable to point to any evidence that would contradict API’s contention that the flaps, tabs and slots are visible at the point of disassembly, or that recycling was part of a box’s ‘normal use.’”) (emphasis in original).
In a recent decision, Judge Sue L. Robinson granted in part a defendant’s motion to dismiss claims relating to a “method of supplying in-room beverage service to a lodging establishment” using “a novel single-use, disposable brew basket for an electric coffee maker.” Courtesy Prods., L.L.C. v. Hamilton Beach Brands, Inc., Civ. No. 13-2012-SLR (D. Del. Nov. 5, 2014). The Court dismissed the plaintiff’s claim for direct infringement of an asserted method claim, finding that the plaintiff failed to allege that the defendant performed all steps of the method claim – i.e. that it “supplies its ‘system’ to lodging establishments or provided any factual information regarding the performance of the last three steps of the claim,” which related to supplying individual hotel rooms with disposable brew baskets and filter packs. The Court also dismissed the willful infringement claim, finding that the plaintiff “offered no factual information to establish ‘awareness’ or ‘full knowledge’ of the patents-in-suit, sufficient to evidence pre-suit knowledge of the patents-in-suit. Moreover, the complaint contains no facts establishing ‘objective recklessness of the infringement risk.’” Id. at 10 (quoting Intellectual Ventures I LLC v. Toshiba Corp., 2014 WL 4365235 (D. Del. Sept. 3, 2014)).
Judge Sue L. Robinson recently denied a defendant’s motion to supplement an invalidity expert report to include newly discovered prior art. Round Rock Research, LLC v. Sandisk Corp., Civ. No. 12-569-SLR (D. Del. Sept. 24, 2014). The newly discovered prior art was “a reference that has always been (perhaps to the exclusion of others) in the possession, custody, and control of” the defendant, but its relevance was only discovered by the defendant after the plaintiff’s infringement report was served. The plaintiff complained that it would need substantial discovery into this prior art reference if the defendant was permitted to supplement. The Court agreed, and explained “[g]iven the extensive discovery in which these parties have engaged, there comes a time to close the record. I conclude that this is the time.”
Judge Sue L. Robinson recently granted Defendant Carrier Corp.’s motion to dismiss Plaintiff Goodman Mfg. Co.’s complaint seeking declaratory judgment of inequitable conduct relating to Carrier Corp.’s U.S. Patent Nos. 7,243,004 and 7,775,452. Goodman Mfg. Co. v. Carrier Corp., C.A. No. 13-2014-SLR (D. Del. Sept. 23, 2014). This declaratory judgment action was filed after Carrier sued Goodman for infringing the same patents, and on the same day Goodman sought leave to amend its answers to assert inequitable conduct in Carrier’s patent infringement action. Id. at ¶ 2. The court subsequently denied Goodman’s motion to amend its answers. Id.
Judge Robinson found that Goodman’s declaratory judgment claim of inequitable conduct is a compulsory counterclaim because it “arises out of the transaction or occurrence that is the subject matter of the opposing party’s claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction.” Id. at ¶¶ 3-5. The Court noted that Goodman made the same arguments in this case that it made to the Court in the Carrier case in support of its motion to amend its answer to add inequitable conduct claims. Id. at ¶ 5. “Goodman may not circumvent the court’s denial of its motion for leave to amend by filing a separate action for the same claims.” Id. Judge Robinson also found that the court did not have subject matter jurisdiction over Goodman’s declaratory judgment counterclaim as to the ‘452 patent because the parties previously stipulated to dismiss their infringement and invalidity claims as to that patent. “Without a corresponding infringement case, under a ‘totality of the circumstances’ review, there are insufficient facts to show the existence of an actual controversy between the parties as to the ‘452 patent.” Id. at ¶ 9.