The PTAB rejects Microsoft's attempt to institute an IPR proceeding almost 7 years after being served with a complaint involving the patent-at-issue

September 30, 2014

In Microsoft Corporation v. Virnetx Inc., Microsoft filed a petition seeking inter partes review of U.S. Patent No. 7,188,180 ("the '180 patent") on May 19, 2014. The '180 patent was asserted in a complaint for VirnetX Inc. v. Microsoft Corp., Case No. 6:07-cv-00080 (E.D. Tex. filed April 5, 2007) ("the 2007 complaint"), and a complaint for VirnetX Inc. v. Microsoft Corp., Case No. 6:10-cv-00094 (E.D. Tex. filed March 17, 2010) ("the 2010 complaint"). The '180 Patent also is involved in VirnetX Inc. v. Microsoft Corp., Docket No. 6:13-cv-00351 (E.D. Tex.) ("the 2013 complaint") as well as other pending litigation, two inter partes reexaminations (one concluded and one pending), and a second, concurrently filed inter partes review.

The issue before the Board was whether Section 315(b)'s one year time limitation to file a petition after being served with a complaint barred Petitioner's IPR in light of the 2007 and 2010 complaints or whether the time should run from the service of the 2013 complaint:

Petitioner was served with a complaint alleging infringement of the '180 patent on three occasions. The first complaint (i.e., the 2007 complaint) was served on April 5, 2007, and the second complaint (i.e., the 2010 complaint) was served on March 17, 2010. The 2007 complaint and the 2010 complaint were both served more than one year prior to the date on which the Petitioner filed the present Petition requesting inter partes review (February 4, 2014). The third complaint (i.e., the 2013 complaint) was served less than one year prior to the date on which the Petitioner filed the present Petition requesting inter partes review...As described above, 35 U.S.C. § 315(b) states that an inter partes review may not be instituted if the petition is filed more than one year after the date of service on Petitioner of a complaint alleging infringement of the patent.

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District Court Grants Motion to Dismiss for Lack of Standing Where Plaintiff Did Not Provide Evidence That It Owned the Patent at the Time of Filing the Complaint

September 29, 2014

Juno Lighting, LLC ("Juno") filed a complaint against Nora Lighting, Inc. ("Nora") on February 11, 2013. The complaint alleged that Nora infringed Juno's patent, No. 5,505,419 ("'419 Patent"), entitled Bar Hanger for a Recessed Light Fixture Assembly. Nora filed a counterclaim on May 28, 2013.

After the case was stayed pending a reexamination of the patent by the Patent Office and a summary judgment motion for literal infringement was granted in favor of Juno, Nora filed a motion to dismiss for lack of standing.

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Court stays litigation pending IPR challenge, but requires that Defendants agree to be estopped from asserting any invalidity contention that was "actually raised and finally adjudicated" in the IPR proceedings

September 25, 2014

In Coho Licensing LLC v. Glam Media, et al., Coho filed suits against defendants AOL Inc. ("AOL"), Glam Media Inc., Ning Inc., LinkedIn Corp., Rovi Corp., and Twitter, Inc. (collectively referred to as "Defendants"). On May 16, 2014, AOL filed petitions for IPR challenging the validity of all the claims of two of the three asserted patents, and, on June 17, 2014, AOL filed a petition for IPR challenging the validity of all claims of the third patent. Defendants subsequently moved to stay the above captioned cases pending the IPR. As summarized below, the Court granted AOL's motion to stay and granted the motions of the remaining defendants on the condition that they agree "to be estopped from asserting any invalidity contention that was actually raised and finally adjudicated in the IPR proceedings."

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Court Denies Declaratory Judgment Defendant's Request to Re-Align Parties as Realignment Would Frustrate the Purpose of the Declaratory Judgment Act

September 24, 2014

Plaintiffs filed the declaratory judgment complaint in this patent case after receiving a letter from defendants alleging that Plaintiffs' products infringe two of defendants' patents. Plaintiffs sough declaratory judgment that Defendants' patents, U.S. Patent Nos. 6,830,014 (filed Aug. 5, 2003) ("the '014 Patent") and 7,267,082 (filed Dec. 30, 2005) ("the '082 Patent"), were invalid and/or that Plaintiffs' products do not infringe the patents. Defendants asserted counterclaims of infringement. The remaining issues for trial involved the scope and validity of the '082 Patent and whether Plaintiffs' product design infringed the '082 Patent.

The individual defendant filed a motion to re-align the parties to allow himself to present his case first because he had the burden of proof on the "most important issue" remaining for trial. Plaintiffs opposed the motion on the grounds that they bore the burden of proof on the declaratory judgment claim of invalidity and because they initiated the lawsuit.

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Court Excludes PTAB Decision That Conflicts With Prior Final District Court Judgment

September 23, 2014

In Affinity Labs of Texas, LLC v. Ford Motor Co., Affinity moved in limine to exclude any reference to the decision of the PTAB regarding an inter partes reexamination filed by a defendant in an earlier case involving a related patent, i.e.., one stemming from the same application and thus sharing the same specification. In the prior decision, the PTAB found that the specification lacked written description for the term "soft button." Affinity argued that the PTAB's decision should be excluded because it conflicted with a prior decision of the district court on the same issue.

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Patent Infringement Complaint Dismissed for Lack of Standing Where Co-Inventor Had Not Assigned Rights to Plaintiff

September 22, 2014

Plaintiffs Alpha One Transporter, Inc. and American Heavy Moving and Rigging, Inc. (collectively "Alpha One") filed a complaint against Defendant and Third-Party Plaintiff Perkins Motor Transport, Inc. ("Perkins"). Perkins subsequently filed a motion to dismiss Alpha One's complaint for lack of standing on one of the patents-in-suit (the '897 Patent) because a co-inventor of the patent had not assigned his rights to Alpha One.

In its opposition, Alpha One did not dispute that the co-inventor status but argued that the co-inventor's (Mr. McGhie's) prior assignment of rights in a 2002 provisional patent application ("2002 Assignment") provided Alpha One ownership of the '897 Patent. Because the parties disputed these jurisdictional facts, the district court determined that Alpha One bore the burden of proof to show it had standing to sue on the '897 patent.

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Failure to Make A Third Party Witness Available May Result In The Testimony Being Ignored

September 18, 2014

In the Mexichem Amanco Holdings S.A. de C.V. v. Honeywell International, Inc., the Patent Owner moved for additional discovery to depose a third party witness whose declarations were relied upon by Petitioner in its Reply to the Patent Owner's Response. The witness originally submitted declarations in reexamination proceedings involving a patent related to the challenged patent.

In its motion, the Patent Owner argued that the Garmin factors each strongly support granting the deposition. In particular, the Patent Owner argued that " (Factor 1) there is credible, concrete evidence (more than a possibility and mere allegation) that the deposition of [the witness] will provide significant evidence regarding the non-obviousness of and teachings away from the invention in the [challenged] patent;" that (Factor 2) the deposition does not seek Petitioner's litigation positions or their underlying basis;" that (Factor 3) the "Patent Owner has no ability to obtain information from [the witness] by other means;" that "(Factor 4) the deposition will follow common deposition protocols and easily understandable instructions;" and, that "(Factor 5) the deposition only requires production of [the witness] and is not overly burdensome.

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Parent Company Ordered to Produce Documents in Response to Request to Subsidiary Where Parent and Subsidiary Shared Servers and Databases

September 17, 2014

Plaintiff Dri-Steem Corporation ("Dri-Steem") sought production of documents in the possession and control of the defednant's parent company National Environmental Products, Ltd. ("National"), via its wholly-owned subsidiary NEP Inc., dba Neptronic ("NEP"). Dri-Steem asserted that NEP has custody and control of the requested documents because it can secure them from National to meet its business and litigation needs, as demonstrated by NEP's ability to obtain highly confidential National documents and information at will.

Although NEP had already been given an opportunity to brief the issue, NEP did not dispute the relevancy of the requested discovery under Rule 26, nor did it provide any argument or evidence to dispute that it has access or control over these documents in order to meet its own business needs. Instead, NEP asserted that it does not have possession and control of the documents.

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PTAB to Apple: No Third or Fourth Bite at the Apple

September 16, 2014

In inter partes proceeding Apple Inc. v. Rensselaer Polytechnic Institute et al., IPR2014-00320, Petitioner Apple sought a second request for rehearing, before an expanded panel of the PTAB, on the Board's decision not to institute an inter partes review of RPI's U.S. Patent No. 7,177,798 ("the '778 Patent"). The Board held that Apple's request was unauthorized and therefore ordered it expunged from the record of the proceeding.

On January 3, 2014, Apple initially filed its IPR petition seeking invalidity of the '798 Patent based three pieces of prior art that Apple alleged anticipated and/or rendered obvious certain claims of the '798 Patent. On April 17, 2014, RPI filed its preliminary response asserting that the Board should deny the petition just as it denied Apple's first petition for inter partes review of the '798 Patent. In its preliminary response, RPI asserted that the Board already considered (and rejected) the same grounds and prior art that Apple now relies on in the second petition. Accordingly, RPI argued that the second petition should be denied because "[t]he Board denied the first petition [which included the same prior art asserted in the second petition] as to all challenged claims because Apple failed to establish that it would prevail in showing that even a single claim of the '798 Patent is unpatentable."

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Motion to Dismiss Granted Where Patent Claimed Unpatentable Subject Matter

September 15, 2014

Amazon.com ("Amazon") filed a motion to dismiss Tuxis Technologies, LLC's ("Tuxis") complaint for failure to state a claim. Tuxis alleged infringement of the 6,055,513 ("the '513 patent") against Amazon. As explained by the district court, the '513 patent relates to a method of upselling. The term "upsell" is defined in the patent to be "an offer or provision of a good or service which is selected for offer to the customer and differs from the good or service for which the primary contact was made." The patentee defined "real time" as "during the course of the communication initiated with the primary transaction or primary interaction."

Amazon moved to dismiss, asserting that the '513 patent's claims are invalid because they do not claim patent-eligible subject matter under 35 U.S.C. § 101. After analyzing the recent case law on section 101 of the Patent Act, including Alice Corp., the district court found that "[i]n applying the framework set out above, it is clear that the claim 1 of the '513 patent is drawn to unpatentable subject matter. It claims the fundamental concept of upselling--a marketing technique as old as the field itself. While the additional limitations of the claim do narrow its scope, they are insufficient to save it from invalidity."

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IPR Proceedings Filed Eight Months Apart Is Too Long to Permit Joinder

September 11, 2014

In the Macronix International Co., Ltd. et al. v. Spansion LLC, the PTAB denied Petitioner's motion for joinder under Section 315(c). On November 8, 2013, the Petitioner filed a petition for inter partes review of U.S. Patent No. 7,151,027 ("the '027 patent"), which was later granted on May 8, 2014. Subsequently, on June 4, 2014, the Petitioner filed a second petition for inter partes review of the '027 patent. At that time, the Petitioner also moved to join the two IPR proceedings and proposed a revised schedule in the event its motion for joinder was granted.

The Board explained the factors establishing entitlement to joinder:

As the moving party, Petitioner has the burden of proof in establishing entitlement to the requested relief. 37 C.F.R. §§ 42.20(c), 42.122(b). A motion for joinder should: (1) set forth the reasons why joinder is appropriate; (2) identify any new grounds of unpatentability asserted in the petition; (3) explain what impact (if any) joinder would have on the trial schedule for the existing review; and (4) address specifically how briefing and discovery may be simplified. See Kyocera Corp. v. SoftView LLC, IPR2013-00004, Paper 15, 4 (Apr. 24, 2013).

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Motion for Summary Judgment Based on Apple License as Defense Denied Where Apple Products Were Not Used to Satisfy Any Claim Element

September 10, 2014

In this patent infringement action between Personal Audio ("Personal Audio") and Togi Entertainment, Inc. ("Togi"), the defendants filed a motion for summary judgment based on a license defense. They requested summary judgment "to the extent Plaintiff's claims involve Apple software, products, systems, or services, all of which were previously licensed by Plaintiff under Section 2.2 of the Apple License."

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PTAB's Guidelines for Foreign Language Depositions

September 9, 2014

In the Ariosa Diagnostics v. ISIS Innovation Limited inter partes review, the PTAB set for the guidelines for taking depositions in a foreign language as required by 37 C.F.R. § 42.53(c). In addition to the requirement of 42.53(c) that the party calling the witness must initiate a conference with the Board at least five days before the deposition, the Board directed the parties to the following guidelines:

In the guidelines below, "party" refers to the party proffering the witness, and "opponent" refers to the party cross-examining the witness.

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Court Rejects Exhibit Lists and Objections That Would "Require a Judge to Shovel Through Steaming Mounds of Objections" and Orders Objections Waived

September 8, 2014

As this patent infringement action headed to trial, the district court scolded both parties for their exhibit lists and, in particular, the objections to the exhibit lists. The district court explained that "Affinity has submitted a 39 page list of 979 exhibits. Out of the first 360 exhibits Ford objected to no less than 250, at which point the court stopped counting, although it appears that the percentage of objections is about the same for the remaining 607 exhibits. Even better, the objections are not actually stated and do not refer to specific portions of any exhibit. Instead Ford uses a code consisting of 16 symbols."

The district court then criticized Ford's "secret decoder ring" of objections. "Ford did provide a version of a 'secret decoder ring' so the court could discern, for example, that exhibits marked 'BT' were objected to on the ground that they were 'Admissible for Bench Trial Only,' an objection not listed in the Federal Rules of Evidence. However, most of the exhibits were marked with multiple symbols, requiring repeated references to the 'code.' For example, Plaintiffs Exhibits 174 through 228 were all marked ' R, P, H.'"

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Withholding A Court's Order From the USPTO in A Co-Pending Reexamination May Render A Patent Unenforceable in Litigation

September 5, 2014

In Masimo Corporation v. Philips Electronic North America Corporation, et al., the Philips Defendants moved for leave to amend their answer to add a defense of inequitable conduct based on Masimo's alleged inequitable conduct during the ex parte reexamination of the patent-in-suit. Masimo opposed the amendment on the grounds that it was futile and unduly prejudicial. As summarized below, the Court sided with Philips and allowed the amendment and related discovery.

After setting forth the good cause standard for leave to amend after a deadline in the scheduling order, the Court recited the substantive elements of inequitable conduct required to plead this defense:

"(l) an individual associated with the filing and prosecution of a patent application made an affirmative misrepresentation of a material fact, failed to disclose material information, or submitted false material information; and (2) the individual did so with a specific intent to deceive the PTO." Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1327 n.3 (Fed. Cir. 2009). "[I]n pleading inequitable conduct in patent cases, Rule 9(b) requires identification of the specific who, what, when, where, and how of the material misrepresentation or omission committed before the PTO." Id. at 1327. Generally, the materiality required to establish inequitable conduct is "but-for materiality." Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1291 (Fed. Cir. 2011). As for the intent prong, Rule 9(b) states that "[m]alice, intent, knowledge, and other conditions of mind of a person may be averred generally." The relevant "conditions of mind" for inequitable conduct include: "(l) knowledge of the withheld material information or of the falsity of the material misrepresentation, and (2) specific intent to deceive the PTO." Exergen, 575 F.3d at 1327.

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