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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.”

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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.

 

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In two opinions filed last week, Chief Judge Leonard P. Stark denied defendant’s motions for summary judgment of invalidity, non-infringement, and no standing in Transcenic, Inc. v. Google, Inc., C.A. No. 11-582-LPS (D. Del. Dec. 22, 2014) (“Standing Opinion” and “Invalidity/Noninfringement Opinion”).

As to invalidity and noninfringement, the motions largely constituted a “’battle of the experts that is not amenable to resolution prior to the presentation of evidence, including testimony,” Invalidity/Noninfringement Opinion at 3, and that genuine issues of material fact remained.

As to standing, the Court concluded that no valid assignment contract existed between the inventor and his employer (an alleged assignee), and even if there was one, the assignment obligation would not cover the patent-in-suit. Standing Opinion at 5-6. “[B]ecause [defendant] only present[ed] evidence regarding the relatedness of the patent-in-suit to [the business of the entity that later acquired the inventor’s employer], no reasonable juror could find that [the inventor’s] invention was related to the business of [the employer].” Id. at 6. As a result, defendant’s arguments as to lack of standing failed, and the Court granted plaintiff’s motion for summary judgment regarding the standing defense. Id.

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Judge Gregory M. Sleet recently certified for interlocutory appeal a question relating to where ANDA filers are subject to specific personal jurisdiction.  AstraZeneca AB v. Aurobindo Pharma Ltd., et al., Consol. C.A. No. 14-664-GMS (D. Del. Dec. 17, 2014).  Judge Sleet had previously denied Mylan’s motion to dismiss on personal jurisdiction grounds in an opinion discussed here, but agreed with Mylan that the question of where an ANDA filer is subject to specific personal jurisdiction, in light of the Supreme Court’s decision in Daimler AG v. Bauman, 134 S. Ct. 746 (2014), is a controlling and novel question of law for which there is a substantial ground for difference of opinion.  The Court added that “given the volume of Hatch-Waxman cases pending in this district, the court is of the view that interlocutory appellate review will provide necessary guidance as to whether these cases are properly before the court.”

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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.

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Judge Burke recently considered plaintiffs’ motion to enjoin defendant from maintaining a later-filed action in the District of Massachusetts and defendant’s motion to transfer to that jurisdiction.  TSMC Tech., Inc., et al., v. Zond, LLC, C.A. No. 14-721-LPS-CJB (D. Del. Dec. 19, 2014).  In July 2013, Defendant filed several actions in the District of Massachusetts alleging infringement of seven patents that are different than, but related to, the patents-in-suit.  Id. at 1.  In June 2014, Plaintiffs filed the instant case seeking a declaratory judgment that they do not infringe that patents-in-suit.  Id. at 5.  The next day, defendant filed a complaint in the District of Massachusetts alleging infringement of the same patents.  Id.  Judge Burke acknowledged that the first-filed rule clearly applied to plaintiffs’ motion to enjoin, therefore resolution of the dispute focused on whether an exception to the rule applied.  Id. at 13.  Judge Burke found that no exception was applicable based on the facts presented here.  For example, Judge Burke found that because the parties had been engaged in escalating IP disputes and the fact that “both sides were taking tough, but fair steps in order to fully protect their rights[,]” the filing of the instant case could not be viewed as a “sound reason that would make it unjust or inefficient to continue the first-filed action.”  Id. at 18 (quotations omitted).  Judge Burke also found the “forum shopping” exception to the first-filed rule inapplicable because, among other things, Plaintiffs had “a legitimate, oft-recognized reason” to file suit in Delaware. (i.e., choosing to file suit in defendant’s state of incorporation)  Id. 18-24.  Regarding defendant’s motion to transfer, Judge Burke found that the Jumara factors largely weighed against transfer, therefore denial of defendant’s motion would be appropriate.  Id. at 24-37.

UPDATE:

Chief Judge Stark overruled defendant’s objections and adopted Judge Burke’s Report and Recommendation, granting plaintiffs’ motion to enjoin and denying defendant’s motion to transfer to the District of Massachusetts.  TSMC Tech., Inc., et al., v. Zond, LLC, C.A. No. 14-721-LPS-CJB (D. Del. Jan. 26, 2015).

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In Avid Technology, Inc. v. Harmonic Inc., C. A. No. 11-1040-GMS (D. Del. Dec. 17, 2014), Judge Gregory M. Sleet denied plainitff’s renewed motion for judgment as a matter of law or, alternatively, for a new trial, following the jury’s verdict of noninfringement and no invalidity in this case.  The Court first rejected plaintiff’s argument that the jury had been “misinformed about the proper definition of ‘independent storage units,'” noting that post-trial briefing was not an “apropriate context for [plaintiff] to reiterate its dissatisfaction with the court’s rulings” on what information about the construction was ultimately provided to the jury.  Id. at 4-5.   The Court similarly rejected plaintiff’s arguments that the verdict of noninfringement was not supported by substantial evidence.  See id. at 5-8.  Finally, the Court denied the alternative request for a new trial as plaintiff made no other arguments in support of this request.  Id. at 8.

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At the summary judgment stage of an ongoing patent infringement action, Judge Richard G. Andrews has found a patent related to “a computer-aided learning system” invalid under 35 U.S.C. § 101 for claiming ineligible subject matter. The patent at issue, U.S. Patent No. 6,688,888, as described in its abstract and quoted by Judge Andrews, covered:

A computer-aided learning method and apparatus based on a super-recommendation generator, which is configured to assess a user’s or a student’s understanding in a subject, reward the user who has reached one or more milestones in the subject, further the user’s understanding in the subject through relationship learning, reinforce the user’s understanding in the subject through reviews, and restrict the user from enjoying entertainment materials under certain condition, with the entertainment materials requiring a device to fulfill its entertainment purpose. The generator does not have to be configured to perform all of the above functions.

IpLearn, LLC v. K12 Inc., C.A. No. 11-1026-RGA, Memo. Op. at 3 (D. Del. Dec. 17, 2014).

Judge Andrews explained that the novelty of the invention at issue was the use of computers. Examining the patent specification, His Honor observed: “Three things are noteworthy about this passage. First, the educational practices were described as being ‘decades’ old. Second, the educational testing practices that the inventors considered to be desirable were all well-known, as evidenced by the inventors’ description of the undesirable practices as being ‘typical’ and ‘usual.’ Implicit in the inventors’ recitation is that the better practices were known, but rarely used. Third, the solution is described as ‘[add] computers.’” Id. at 9.

Judge Andrews first found that the patent claims were directed to the abstract idea of “instruction, evaluation, and review.” Id. at 9-12. The asserted claims, he observed, “follow several steps directed at the abstract idea of instruction, evaluation, and review. More specifically, the steps are an abstraction, addressed to fundamental human behavior related to instruction, which is apparent when the steps are summarized without their generic references to computers and networks: 1) accessing a learner’s test results, 2) analyzing those test results, 3) providing guidance on weaknesses, 4) generating a report on two or more subjects to be shared with others, 5) considering the learner’s preferences, 6) allowing access to areas of a subject on the Internet, 7) providing an identifier for a learner, 8) storing the learner’s materials, and 9) allowing a search of those materials. None of these steps taken individually, or taken collectively, is sufficiently concrete. As a whole, they represent an abstract idea of conventional everyday teaching that happens in schools across the country. While there are limitations, they do not save the claims from being directed at an abstract idea.” Id. at 11. Judge Andrews continued: “the ‘888 patent’s Background section begins, ‘[t]he present invention relates generally to learning and more particularly to using a computer to enhance learning.’ Such subject matter seems precisely the building blocks of ingenuity the Supreme Court in Alice Corp. was so concerned about inhibiting. Instructing students, evaluating those students, and providing methods to review their progress are concepts that have probably existed as long as there has been formal education.” Id. at 11 (internal citations omitted).

Judge Andrews then turned to whether the “method outlined in the patent is sufficiently transformative of the abstract idea to make it patent eligible.” Id. at 11-14. Although the asserted claims did contain limitations, Judge Andrews found that “none are sufficient to ensure that the claims amount to ‘significantly more’ than patenting the abstract idea of instruction, evaluation, and review. Nor do they possess inventive concepts to transform the abstract idea.” For example, “[g]enerating learning materials, allowing diagnostic testing, and allowing a learner to search an area for material on the learner’s weaknesses are not meaningful limitations.” Id. at 12.

Judge Andrews used the following hypothetical to illustrate his point:

An elementary student is taught multiplication tables. She takes a test, and her results are graded (or “accessed”) by her teacher. The teacher analyzes the student’s test results against a grading rubric to determine the student’s weaknesses. The teacher provides guidance to the student about her weaknesses. The teacher puts together a progress report on the student’s multiplication tables, highlighting the student’s most recent test, perhaps identifying weaknesses with multiples of 6 and 11. This progress report is shared with others, perhaps in a parent-teacher conference. The teacher takes into consideration the student’s preference for math games over timed pop quizzes. The student is allowed to access flash cards (“materials”) on her weak multiples, which are kept in a file cabinet in her classroom. Using the student’s first and last name as an identifier, the teacher stores the student’s materials in a file. Her parents can also request to see her file by telling the teacher her name. This is the kind of hypothetical that could happen every day in elementary schools in this country. Allowing the claims at issue would simply inhibit fundamental educational instruction and the building blocks of human ingenuity. The fact that computers, networks, the Internet, computer readable medium, or computer program code figure into [the] claims . . . and the dependent claims, does not save them. . . . As a thought experiment, if these generic terms are excised, the claims preempt the most fundamental aspects of educational instruction with teachers and testing.

Id. at 13.

Judge Andrews also provided a few interesting indications of what information he found useful to his section 101 analysis, noting that it “is clear that a number of district courts are grappling with section 101 issues after Alice Corp. v. CLS Bank International, 134 S. Ct. 2347 (2014). With the exception of Ultramercial, Inc. v. Hulu, LLC, 2014 WL 5904902 (Fed. Cir. Nov. 14, 2014), however, the Court found most of this additional authority [from district courts and the Federal Circuit] not entirely relevant or on-point.” Id. at 2 n.1.

Judge Andrews also noted: “In a recent concurrence [in Ultramercial], Judge Mayer wrote that section 101 eligibility is a ‘threshold question,’ ‘the primal inquiry, one that must be addressed at the outset of litigation,’ explaining that the determination ‘bears some of the hallmarks of a jurisdictional inquiry.’ The Court is not certain whether Judge Mayer’s opinion is a correct statement of the law for all cases but believes it is instructive in this case. IpLearn has asserted that K12 must provide evidence to support the contention that the claims at issue are abstract ideas. Because section 101 determinations are questions of law, and a threshold inquiry, and because every judge and lawyer has firsthand experience with instructional methods, this Court does not believe it necessary that K12 proffer evidence that the type of instruction and testing outlined in the claims is time-honored.” Id. at 8 n.6 (citations omitted).

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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.

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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.

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