Tuesday, August 23, 2016

Where Do TXED Cases Go?

Anyone with a knowledge of the current patent infringement lawsuit landscape in the United States has more than likely noticed one court venue which has seen a huge influx of patent cases. The U.S. District Court for the Eastern District of Texas (E.D. Tex.) has seen an extremely large number of patent infringement cases on its docket, prompting some to go so far as to suggest that legislation limiting venue options should be pursued by Congress.

A plaintiff’s choice of venue in patent infringement cases is defined by Section 1400(b) of U.S. Code Title 28, which states that civil actions for patent infringement may be brought in the judicial district where the defendant resides or where the defendant has committed infringement and has a regular and established place of business. Because patent infringement plaintiffs can bring action in a venue where the defendant is doing business and not where it is headquartered, both the cost and inconvenience of defending a case in a distant venue may be reason enough for file a motion for a transfer of venue.

Legal teams preparing a defense for a party in a patent infringement suit filed in E.D. Tex. might find effective strategies for arguing a transfer of venue by investigating what has worked for others in the past. It’s not that rare to find cases in E.D. Tex. which have seen a motion to transfer venue granted.

As of this writing, in 2016 alone, there have been nearly 50 patent infringement cases which have been transferred out of E.D. Tex., with 19 of those cases ending up in the U.S. District Court for the Northern District of California (N.D. Cal.).

One such case which was successfully transferred is Game and Technology Co. Ltd. vs. Blizzard Entertainment, Inc. et al. Game and Technology Co. brought suit against Blizzard and others, including Valve Corporation and RIOT Games, in E.D. Tex. over a trio of patents related to video gaming and online gameplay. The court granted the motion to transfer venue based on the fact that the relevant evidence and witnesses were more easily found in the districts identified by the defendants. Blizzard does business in the area covered by E.D. Tex. but the primary function of that office was customer support. The cases involving Blizzard and RIOT were directed to the U.S. District Court for the Central District of California (C.D. Cal.), while Valve’s case was transferred to the U.S. District Court for the Western District of Washington (W.D. Wash.).

Another E.D. Tex. case in which the defense’s motion to transfer venue was successful is Intelligent Automation Design, LLC vs. Zimmer Biomet Holdings, Inc. et al. The patent-in-suit protects a method of controlling how screws are seated to prevent them from becoming stripped. Biomet Microfixation, one of the case’s defendants, petitioned for a transfer of venue based upon the fact that a previous case involving a Zimmer company was transferred out of E.D. Tex. for convenience. Biomet Microfixation also noted that it has no offices or facilities in Texas as well as the fact that the accused system was developed in the Kansas City region. The case was transferred to the U.S. District Court for the Middle District of Florida (M.D. Fla.), which is where Biomet Microfixation’s headquarters are located.

There are dozens of recent patent infringement cases which legal teams can analyze to determine successful strategies for motions to transfer venue. Docket Navigator gives attorneys the analytical tools they need to quickly find granted motions regardless of the district court within which the case was originally filed.

Charts made using Docket Navigator's data.
This guest post was written by Steve Brachmann.

Economic Analysis and Damages Opinion of Bayesian Statistics Expert Excluded as Unqualified

The court granted plaintiff's motion in limine to preclude defendants' damages expert from testifying at trial as unqualified. "[T]here is merit to plaintiff’s argument that [defendants' expert] 'does not do what he is qualified to do and is not qualified to do what he does.'. . . [The expert] explicitly claims to provide an 'economic analysis' in support of his opinions, which purport to apply concepts drawn from the 'economic subfield' of 'industrial organization, and specifically antitrust economics.' Yet [his] graduate studies did not include coursework in economics or any of its subfields, nor does [he] hold a degree in economics or accounting — two fields from which damages experts commonly emerge. . . . At best, the record establishes that [the expert] has expertise in the fields of Bayesian statistics (which, he explained, 'deals specifically with the introduction and incorporation of subjective probability assessments integrated with – in settings in which data is unavailable,' and economic modeling. But [he] denied conducting 'any kind of Bayesian analysis' to arrive at his opinions in this case, and nothing in his report suggests that he performed any economic modeling. . . . [D]efendants insist that he is not 'being offered up as "an economist,"' but rather as 'a damages expert and economic modeler.' As just noted, however, defendants do not point to any portion of [the expert's] report in which he performs economic modeling, and none of the authorities they cite suggests that 'damages expert' is a recognized field of expertise."

Robertson Transformer Co. v. General Electric Company, et al, 1-12-cv-08094 (ILND August 19, 2016, Order) (Bucklo, USDJ)

Monday, August 22, 2016

Personalized Nutrition Information Patent Deemed Unpatentable Under 35 U.S.C. § 101

In a final written decision, the Board found claims of a patent directed to a computerized method and system to provide personalized nutritional information to consumers unpatentable under 35 U.S.C. § 101. "Relying on the distinction made in [Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347, 2354 (2014)] between, on one hand, computer-functionality improvements and, on the other, uses of existing computers as tools in aid of processes focused on 'abstract ideas,' the court in [Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016)] clarified that a relevant inquiry in step one of the Alice framework is to ask whether the 'focus' of the claims is on the specific asserted improvement in computer capabilities or, instead, on a process that qualifies as an 'abstract idea' for which computers are invoked merely as a tool. . . . [T]he challenged claims in this case, contrary to Patent Owner’s assertion, are not directed to a barcode entry device, personal data related to the individual, and prestored nutritional data, because the claims are not focused on any specific improvement in the functioning of a barcode reader or a nutritional database. . . . [W]e determine that . . . the focus of the challenged claims is on collecting and correlating information, a process that qualifies as an 'abstract idea' for which conventional components, such as a barcode reader, data input devices, a processor, and a nutritional database, are merely invoked as tools used in their ordinary and conventional manner."

Petition for Covered Business Method Patent Review by Google Inc., CBM2015-00071 (PTAB August 18, 2016, Order) (Chung, APJ)

Friday, August 19, 2016

Willful Infringement Following Six-Year Period of Intervening Rights Does Not Justify Enhanced Damages

Following a jury verdict of willful infringement, the court denied plaintiff's motion for enhanced damages because of defendant's absolute intervening rights defense. "At the summary judgment stage, the Court granted [defendant's] motion for summary judgment in its favor on its defense of absolute intervening rights. . . . Thus, the period of infringement in the present case began [8 months ago]. This fact is important to the Court’s analysis because, in [Halo Elecs., Inc. v. Pulse Elecs., Inc., No. 14-1513 (June 13, 2016)], the Supreme Court explained that an infringer’s culpability should be measured at the time of the challenged conduct. . . . Under the Court’s intervening rights ruling, [defendant] is not liable for any sales of [the accused] capacitors that occurred prior to [8 months ago]. Therefore . . . [defendant] had already been permissibly selling the accused products without being subject to damages liability for almost six years. Moreover, at the time infringement began, [the parties] were well into the present litigation. . . . [T]he Court declines to find that the willful infringement that occurred in the case after [intervening rights applied] constitutes an 'egregious' case of misconduct warranting an award of enhanced damages. Rather, the present action was a 'garden-variety' hard-fought patent infringement action between two competitors."

Presidio Components, Inc. v. American Technical Ceramics Corp., 3-14-cv-02061 (CASD August 17, 2016, Order) (Huff, USDJ)

Thursday, August 18, 2016

Early 35 U.S.C. § 101 Eligibility Challenge Denied in Light of Enfish

The court denied defendant's motion to dismiss plaintiff's amended complaint on the ground that plaintiff’s identity protection patent encompassed unpatentable subject matter because claim construction had not occurred. "The Court granted the motion to dismiss [the original complaint] on the grounds that the patents are invalid because they are drawn to an abstract idea. . . . The Court is persuaded by the additional briefing that it should not make a final decision about patent eligibility until after claim construction has occurred. Defendants contend that 'it is the claims — not the specification or figures — that matter.' However, the Federal Circuit [in Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016)] recently clarified the two-step process of determining whether a patent’s subject matter is eligible for patent protection. It described 'a stage-one filter to claims, considered in light of the specification, based on whether 'their character as a whole is directed to excluded subject matter.''. . . In its decision, the Federal Circuit reversed the district court. This reversal was largely based on the Federal Circuit's finding that 'the district court oversimplified . . . the claims and downplayed the invention's benefits.' By first allowing claim construction, the Court hopes to avoid that situation in this case."

Mantissa Coporation v. Ondot Systems, Inc. et al, 4-15-cv-01133 (TXSD August 11, 2016, Order) (Ellison, USDJ)

Wednesday, August 17, 2016

Expert’s Reasonable Royalty Testimony Excluded for Double Counting Revenue Attributable to Accused Features

The court granted defendant's motion to exclude the testimony of plaintiff's damages expert regarding a reasonable royalty base as unreliable. "[Defendant] moves to exclude [the expert's] testimony on the grounds that she improperly inflated the royalty base by double or triple counting revenue attributable to certain features of the accused products. . . . [The expert's] method of counting the revenue attributable to certain features multiple times, when those features are covered by multiple patents, is not a reasonable method of counting the value added by the patented features. If only 6/12 total features of a particular product are infringed by any of the accused patents, and we assume that each feature has an equal value, then the total value added of all of the combined patents cannot exceed 50 percent of the total product value. However, several of [her] value-add calculations assume that the combined value added of the alleged patents would exceed the total product value. . . . [W]hat is not possible, as a matter of law and logic, is that the [two] patents’ combined add more value to the threat engine feature than its total value. This is what [the expert's] report assumes by apportioning the value of the threat engine feature to both [patents]. . . . This flaw may be cured by amending [the expert's] total damages calculation to reflect a royalty base that does not exceed the total possible value added of the combined asserted patents."

Finjan, Inc. v. Sophos, Inc., 3-14-cv-01197 (CAND August 15, 2016, Order) (Orrick, USDJ)

Tuesday, August 16, 2016

Exercise Equipment Patents Not Invalid Under 35 U.S.C. § 101

The court denied defendants' motion for judgment on the pleadings that plaintiff's exercise equipment patents encompassed unpatentable subject matter and found that the claims were not directed toward a law of nature or abstract idea. "Defendants argue that claim 16, and [one patent-in-suit] as a whole, are drawn to laws of nature, specifically focusing on the haptic equation mentioned in the last line of claim 16. This argument either grossly misreads the claims in the patent or stretches the rule in [Alice Corp. Pty. v. CLS Bank Int'l, 134 S. Ct. 2347 (2014)] beyond recognition. While it is true that the claim includes a formula, the claim is clearly directed at a piece of exercise equipment, and the formula is simply one part of the overall scheme. Including a law of nature as one part of a claim does not transform the entire scheme into an abstract idea. . . . The method claim in [another patent-in-suit] is a closer call. . . . However . . . the nature of the method claim is the operation of a piece of exercise equipment, like a treadmill, elliptical, or stationary bike, in order to simulate the conditions of running or biking outdoors. Unlike other patents which were determined to be directed at abstract concepts, the [patent] is aimed at a 'particular concrete or tangible form.'. . . It describes a way of running a specific type of machine in order to achieve a particular type of training. This is not the type of broad idea that threatens to monopolize 'basic tools of scientific and technological work' or 'the building blocks of human ingenuity.'"

POWERbahn, LLC v. Foundation Fitness, LLC et al, 3-15-cv-00327 (NVD August 11, 2016, Order) (Du, USDJ)