On January 22, 2013, in Soverain Software LLC v. Newegg Inc., No. 2011-1009, the Federal Circuit (Newman, Prost, and Reyna) reversed a decision by the Eastern District of Texas that had upheld the validity of a computer-implemented invention over an obviousness challenge.  This case suggests that computer-implemented patents may face increased scrutiny on obviousness grounds.

Soverain Software brought suit against Newegg for infringing patents relating to an electronic commerce system involving network-based sales.  During trial, Newegg presented expert testimony on prior art that involved a pre-Internet network sales system.  Although the district court did not discuss the claims or the prior art, it sustained the claims’ validity.

The Federal Circuit held that the district court erred in ruling that Newegg (through its expert) had not presented a prima facie case of obviousness for all three patents.    Analyzing the second Graham factor — the difference between the prior art and the claimed invention — the Federal Circuit rejected the patent owner’s proposed distinction of the prior art because such distinction was neither embodied in the claims nor reflected in the claim construction.  The Federal Circuit also ruled that simply conducting known methods through an Internet web browser was obvious.  The Federal Circuit ultimately held that the patent owner failed to rebut the prima facie case of obviousness and invalidated all three patents.

[UPDATE]  Since this post was originally published on January 22, the deadline passed for the parties to submit extrinsic evidence and additional arguments supporting their respective interpretations of the Google-MPEG LA AVC/H.264 license agreement.  Microsoft submitted both a brief and a supporting Declaration of Lawrence A. Horn, who is the President and CEO of MPEG LA, LLC.  Mr. Horn’s declaration supports Microsoft’s argument (as detailed in our original post below) that the scope of the grant-back under the MPEG LA license agreement extends to all Affiliates of Google, not just to those specifically identified.  For its part, Motorola argues that the “scope” language of the MPEG LA agreement remains ambiguous, and that Mr. Horn’s declaration represents inadmissible hearsay because Motorola was unable to cross-examine him.

The parties’s respective briefs and Mr. Horn’s declaration may be accessed from the links below:

[/UPDATE]

Judge Robart’s forthcoming opinion in the Microsoft v. Motorola RAND breach of contract case in the Western District of Washington is highly anticipated by those who pay attention to standard-essential patent disputes, as it will likely provide a judicially-sanctioned roadmap for how to determine RAND terms and conditions in a given licensing situation.  But before he issues a written decision, a hearing is scheduled for January 28, during which Judge Robart will hear oral argument from Microsoft and Motorola regarding the implications that Google’s AVC/H.264 patent pool license agreement with MPEG-LA may have on the appropriate RAND terms for Motorola Mobility’s H.264-essential patent portfolio. (Google, of course, being the parent company of Motorola Mobility since it acquired Motorola in May 2012).

Continue Reading Preview: Motorola, Microsoft set to debate relevance of Google’s MPEG LA license agreement to RAND terms next week

Earlier this month, InterDigital Communications filed a Section 337 complaint with the ITC, alleging that Samsung, Nokia, ZTE, and Huawei infringed several of InterDigital’s 3G and 4G-essential patents.  As we noted in our earlier post on the matter, InterDigital included a statement regarding the public interest along with its complaint, attempting to preemptively assuage any public interest concerns the Commission may have due to the inclusion of standard-essential patents in the complaint.  Over the past two weeks, though, the proposed respondents have each filed their own public interest statements with the ITC, asserting a number of reasons why the public interest might be adversely affected by the institution of an investigation based on InterDigital’s complaint.

Continue Reading InterDigital, Nokia, others dispute public interest implications of 3G/4G patent assertions

Last week, the ITC released the public version of Order No. 42 in In the Matter of Certain Audiovisual Components and Products Containing the Same, Inv. No. 337-TA-837.  In this order (the confidential version of which issued back in October 2012), Administrative Law Judge David P. Shaw granted respondent Realtek Semiconductor’s motion to compel complainants LSI Corp. and Agere Systems to provide certain RAND-related discovery.  This includes information regarding LSI and Agere’s activities in standard-setting organizations, as well information about licensing and third-party products that practice the asserted patents.  This order provides some incremental guidance on the type of evidence that ALJs consider relevant to RAND-based affirmative defenses in Section 337 ITC actions.

Continue Reading Motion to compel RAND-related discovery granted (U.S.I.T.C. Inv. No. 337-TA-837)

  • The Pittsburgh Post-Gazette reports that in the wake of a couple of large damagesmillion dollar bill settlement
    awards in patent infringement cases brought by universities, more higher education institutions are beginning to think about flexing their IP muscles. (via The Blog of Legal Times)
  • On February 19, the Supreme Court will hear arguments in Bowman v. Monsanto, a case that involves the applicability of the patent exhaustion doctrine to patented, self-replicating plant seeds (Bowman had purchased these seeds but replanted them without a license from Monsanto, creating later generations of the patented seeds).  The U.S. Government recently filed an amicus brief supporting Monsanto, taking the position that exhaustion only applies to the seeds purchased by Bowman, and not to subsequent generations, which represent infringing “makings” under the patent laws.  More from Dennis Crouch at Patently-O.
  • Some provisions in the America Invents Act were thought to to limit infringement suits brought by non-practicing entities.  But did the AIA just turn NPEs’ litigation focus to startups?  (via Forbes)

On January 17, 2013, Magistrate Judge John D. Love issued an order in Network-1 Security Solutions, Inc. v. Alcatel-Lucent USA Inc., No 6:11-cv-492 (E.D. Tex.), granting the defendants’ motion to sever the case into several different actions.  Judge Love found that infringement allegations stemming from the defendants’ compliance with the same technology standard was insufficient to warrant joinder.  However, Judge Love found that in order to effectively manage the cases and preserve judicial resources, the cases would be consolidated for all pre-trial purposes except venue.

Continue Reading Compliance with same technology standard insufficient to warrant joinder of otherwise unrelated defendants (Network-1 Security Solutions v. Alcatel-Lucent)

Until today, the U.S International Trade Commission had set a deadline of February 6, 2013 to issue its Final Determination in In the Matter of Certain Electronic Devices, Including Wireless Communication Devices, Portable Music and Data Processing Devices, and Tablet Computers (Inv. No. 337-TA-794).  In this highly-anticipated decision, the ITC is likely to address various issues relating to the assertion of standard-essential patents in Section 337 investigations before the Commission (for more information, see our previous post on the case).  However, today the ITC issued a Notice of Commission Determination to Extend the Target Date for Completion of the Investigation, giving notice that it is extending the target date for issuance of its Final Determination until March 7, 2013.

Continue Reading Decision delayed in Samsung-Apple ITC case until March 7

  • nike already shoe comparisonLast week, the United States Supreme Court handed down its unanimous opinion in Already, LLC v. Nike (No. 11-982).  The Court held that Nike’s issuance of a broad covenant not to sue on one of its trademarks extinguished Already’s standing to its counterclaim for invalidity of Nike’s trademark.  While this case involved trademarks, not patents, the Court’s reasoning could certainly have some implications for covenants not to sue and invalidity claims in patent proceedings.  More on this case from IP Watchdog.
  • Speaking of the Supreme Court, Epic Systems Corp. and Limelight Networks each recently filed petitions for certiorari to the Court, urging the Justices to reverse the Federal Circuit’s previous en banc decision in Akamai — where the court held that a single party need not perform all of the infringing elements of a claim in order for there to be a finding of indirect infringement.  (Epic Petition) (Limelight Petition)
  • And finally, on the topic of Federal Circuit en banc cases, Apple has asked the Federal Circuit to take up en banc review of its October 2012 decision to deny injunctive relief in Apple v. Samsung (695 F.3d 1370), where the court held that Apple failed to establish a “causal nexus” between Samsung alleged infringement and irreparable harm to Apple.  Samsung, of course, believes review is unwarranted.

Later this year, in the case of Apple Inc. v. Motorola Inc. (Nos. 2012-1548, -1549), the Federal Circuit is set to address several issues that could have a big effect on future licensing and assertion of standard-essential patents.  As explained in our previous post “catching up on” the details of this dispute, this appeal follows Judge Posner’s dismissal of both Apple’s and Motorola’s dueling infringement claims, which was based on the parties’ failure to prove entitlement to the remedies sought.  Because Motorola had asserted a FRAND-encumbered standard-essential patent against Apple’s UMTS-compliant products, the Federal Circuit is likely to decide at least two issues that may have widespread implications for SEP licensing and litigation for years to come: (1) whether injunctive relief may be an appropriate remedy for Apple’s alleged infringement of Motorola’s FRAND-pledged SEPs; and (2) how to calculate damages for Apple’s alleged infringement of Motorola’s FRAND-pledged SEPs.

Continue Reading Various amici weigh in on SEP-related issues in Apple-Motorola Federal Circuit appeal

Early in January we noted that a non-practicing entity named Steelhead Licensing had filed a number of complaints for patent infringement against various wireless device manufacturers and cellular carriers.  Of particular note in those suits was that the patent at issue in all of the actions — U.S. Pat. No. 5,491,834, entitled “Mobile Radio Handover Initiation Determination” — was previously owned by British Telecom, is due to expire next month, and (according to Steelhead, apparently) is essential to various 3G and 4G wireless communications standards.  On Friday, January 11, Steelhead expanded its assertion activities relating to the ‘834 patent, filing infringement actions against Acer, Amazon.com, Asustek, and Dell.

Continue Reading Steelhead Licensing expands cellular-essential patent assertion activities