TC Heartland Changed the Law on Venue for Patent Litigation

TC Heartland Changed the Law on Venue for Patent Litigation

By Keith J. Grady and Karen Z. Morris

On May 22, 2017, in TC Heartland LLC v. Kraft Foods Group Brands, LLC, 137 S.Ct. 1514 (2017), the Supreme Court held that patent venue is controlled exclusively by 28 U.S.C. § 1400(b), which restricts venue in patent cases to (1) where the Defendant resides, or (2) where the Defendant commits an act of infringement and has a regular and established place of business. The decision was immediately hailed by commentators as a significant break with past precedent. Many suggested that the decision could sound the death knell for patent litigation in the Eastern District of Texas and would likely result in a dramatic increase in the numbers of patent cases filed in the District of Delaware. Some commentators correctly noted that the decision would spawn litigation over what constitutes a “regular and established place of business” within the meaning of § 1400(b). 

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Alert: Recent Federal Circuit Decisions Provide Mixed Messages on Patent Eligible Subject Matter

Alert: Recent Federal Circuit Decisions Provide Mixed Messages on Patent Eligible Subject Matter

By: John R. Bednarz

The Supreme Court’s Alice decision is now more than three years old, however, stakeholders, the courts and the U.S. Patent and Trademark Office are still struggling to understand Alice and, in particular, how to determine whether software and computerrelated inventions claim patentable subject matter.

For example, in July 2017, former Federal Circuit Chief Judge Paul Michel testified before the House of Representatives IP subcommittee that, while Alice has allowed more cases to be resolved early in litigation under the two-part Alice “abstract ideas” test, he also warned, “[t]he problem part of it is the standards are so vague and uncertain that there is massive unpredictability.” Unfortunately, it remains challenging to understand what makes a software or computer-related invention patentable subject matter or an abstract idea.

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Minelab Electronics Pty Ltd. v. XP Metal Detectors, et al.

Minelab Electronics Pty Ltd. v. XP Metal Detectors, et al.

Defendants’ motion for summary judgment that the asserted claims were invalid under 35 U.S.C. §101 was denied. First the court determined that the claim at issue was not directed to an abstract idea because it requires the use of a specific type of metal detector, which is not employed “merely as a tool to make [the claimed method] process more efficient.” Next, the court determined that even if the claim was directed to an abstract idea, the claim would fulfill the second Alice step. Again the court focused on the fact that the claimed method required the use of a specific metal detector and determined that without said detector the claimed method could not be performed. As such, the court reasoned the second Alice step was met. 

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Technology Development and Licensing, LLC v. Comcast Corp. et. al.

Technology Development and Licensing, LLC v. Comcast Corp. et. al.

The court found that the claims concerned the abstract idea of assigning labels to channels to eliminate the need for large user generated “conversion chart” to locate desired channels necessitated by the increasing number of channels available in cable and satellite TV. Court further noted that this abstract idea was implemented through routine use of a computer to perform a function previously performed manually. In doing so, it rejected multiple arguments by the plaintiff that requiring a control signal to travel through multiple channel signals imparted any inventive concept primarily because such a transmission was generally known in the art. 

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Evicam International, Inc v. Enforcement Video, LLC

Evicam International, Inc v. Enforcement Video, LLC

The Court described the claims of both asserted patents as broadly encompassing the abstract idea of collecting, organizing, and controlling access to vehicle incident information. “The ’907 Patent discloses an on-board secure vehicle mounted surveillance system that includes: (1) cameras for monitoring the interior and the exterior of the vehicle; (2) a coded access recording device for storing video and other data; and (3) a means for downloading video and data. And the ’013 Patent discloses a tamper-proof data repository for retaining information from an on-board, vehicle surveillance system. Information is obtained from the on-board system using a transfer device.”

Although the claims were directed to an abstract idea, the claims added the inventive concept of a secure mounted surveillance system that is inventive over known techniques in the prior art. For instance, the ‘907 patent claims a camera mounted externally in conjunction with another mounted internally. This solved the “issue of not knowing what was happening inside the vehicle during an incident.” The ‘013 patent adds download triggers with an access code, which causes the system to download its secure data to a transfer device, which helps protect incident information by safeguarding it and allowing access by an authorized person. For these reasons, the patents are not subject matter ineligible. 

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SP Plus Corporation v. IPT, LLC

SP Plus Corporation v. IPT, LLC

The patents were found to be directed to the abstract idea of expediting the vehicle immobilization process via self-service. Although Defendant argued that the patents claimed the “novel apparatus” of a self-releasing boot, the Court noted that the claims themselves never go into the technical specifications of the self-releasing boot. Rather, the claims describe the boot with no more specificity than “a locking boot having a unique code.” Further, neither patent claimed an inventive concept. The Court found that there was nothing inherently inventive about the inclusion of several technological devices, such as RFID, and reciting their functions.  

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SAP America, Inc. v. Investpic, LLC

SAP America, Inc. v. Investpic, LLC

The claims were directed toward performing “statistical analysis” using mathematic formulas. Mathematic formulas and calculations are abstract ideas and are, therefore, patent-ineligible subject matter, absent finding ‘something more’ to transform the claim beyond the ineligible concept.  The Court then examined the other limitations claimed in the patent, and found these claims merely represented insignificant pre- and post- solution activity insufficient to add an inventive concept, and further, that executing an abstract idea on a generic computer did not add an inventive concept. The patent was, therefore, invalid.

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PalTalk Holdings, Inc. v. Riot Games, Inc.

PalTalk Holdings, Inc. v. Riot Games, Inc.

Defendant argued the claims of the patents-in-suit were directed to an abstract idea, stating that the asserted patents bore similarities to the claims of an unrelated but previously invalidated patent. The invalidated patent was directed to the abstract idea of implementing “post office functionality” via a computer, with support for the “post office functionality” found in the specification. The Court, however, distinguished the present case, finding that there could be no such comparison made between the patents-in-suit and post office functionalities performed on a computer. Instead, as Plaintiff contended, the claims were directed to a “technical solution to a technical problem.” Because Defendant failed to carry its burden to prove that the claims were directed toward an abstract idea, the motion to dismiss was denied. 

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Tele-Publishing, Inc. v. Facebook, Inc.

Tele-Publishing, Inc. v. Facebook, Inc.

Defendant’s motion for summary judgment that the asserted claims were invalid under 35 U.S.C. §101 was granted. First, the court determined that the claims were directed to “the abstract idea of collecting, storing, and selectively sharing personal information.” In reaching this determination, the court cited several Federal Circuit and district court holdings that held similar claims directed to collecting, storing, and sharing were abstract ideas. The court next determined that the claims did not contain the necessary inventive concepts required to transform the claims into patent-eligible subject matter. The court determined the claims relied upon generic technologies, all the claimed steps could “be performed using a pencil and paper or the human mind,” and the claims did not offer a new solution to a technological problem. Further, the court concluded that if the claims were characterized as an inventive conceptive, it “would risk disproportionately tying up others’ use of the abstract idea of collecting, storing, and selectively sharing personal information.” Thus, the court held that the claims were not directed to patent-eligible subject matter and thus invalid.

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Google, Inc. v. Patrick Zuili

Google, Inc. v. Patrick Zuili

PTAB found that “the challenged claims are directed to the abstract idea of “detecting fraud based on the time between two requests by the same client.” The PTAB further found that the claims were merely directed at using generic process and machinery to carry out this idea. The claims and specification merely described using ordinary computers and routine code to compare the time between clicks. 

Noting that the claims simply implementing data collection and processing, the PTAB found that the claims were invalid because they were merely an abstract idea without an inventive step. In closing the court noted that “[t]he key to the claimed solution here lies in recording who is making a request and measuring the duration between two requests from the same source, using conventional and generic processes and machinery. That is insufficient to render the claimed invention patent eligible.

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Express Mobile, Inc. v. KTree Computer Solutions Inc. et al.

Express Mobile, Inc. v. KTree Computer Solutions Inc. et al.

Claims were directed to “addressing a problem particular to the Internet, dynamically generating websites and displaying web pages based on stored user-selected settings.” As such, the issues were necessarily rooted in computer technology and directed to a specific solution for that issue. Rather than being a “do-it-on-a-computer” claim, these claims appeared to include an inventive concept. Thus, at this early stage dismissal was not warranted as the court believed claim construction and a more complete record were necessary to determine patent eligibility.

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Cardionet, LLC, and Braemar Manufacturing, LLC v. Infobionic, Inc.

Cardionet, LLC, and Braemar Manufacturing, LLC v. Infobionic, Inc.

The court found the ‘767 patent was targeted at “the age-old concept of gathering a limited set of patient data and then determining whether it is necessary to gather additional data,” but found that it was unable to determine as a matter of law whether the claims laked an inventive concept. 

The court further found that Claim 31 of the ’850 Patent and Claim 12 of the ’996 Patent are directed to the abstract idea of correlating one set of data to another. It then noted that the claims simply directed a user to use conventional hardware and routine steps to execute the abstract idea. Accordingly, the claim were found invalid under § 101. 

The court found that the claims of the ‘715 Patent were directed at abstract idea of filtering raw cardiogram data to optimize its output, rather than a specific improvement in the existing mobile cardiac telemetry field. Nevertheless, the claims disclosed a novel set of computer components that meet the machine or transformation test and therefore was sufficiently inventive. 

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Sungkyunkwan Uni. V. LMI Tech. (Usa) Inc.

Sungkyunkwan Uni. V. LMI Tech. (Usa) Inc.

Court found the claim invalid because it failed to explain how the invention intends to optimize exposure. It sought to patent the idea of a solution rather than provide the actual solution of the problem. Given the breadth of the claims, the case was dismissed without prejudice. Patentee was given a chance to re-file and assert dependent claims that might avoid the issues of claim 1.

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D&M Holdings Inc v. Sonos Inc.

D&M Holdings Inc v. Sonos Inc.

As to the ‘435 patent, the Court concluded the claims were directed to the abstract idea of receiving, detecting, and storing data that is not tied to any device. The representative claim requires “1) receiving a compressed data stream; 2) detecting compression block, archive block, and file boundaries; and 3) saving the information detected in step 2” which is substantively similar to various Federal Circuit decisions holding collecting and storing data is an abstract idea. The claims recite no improvement in data storage or receipt, and the claim does not otherwise cover an improvement in existing technology. 

As to the ‘850 patent, the Court faulted Defendant’s insufficient explanation for why the representative claim failed for the same reasons as the claims of the ‘435 patent. Ultimately, the Court held that Defendant had oversimplified and ignored specific limitations of the representative claim of the ‘850 patent, which the court noted is “more specific” than the corresponding claim of the ‘435 patent. Further, the claim was plausibly directed to an improvement in data management, the resumption of an interrupted file download and a specific use of information to accomplish this. 

As to the ‘210 patent, the Court concluded that construction of some of the terms could impact the Section 101 analysis, as some claims involved mean-plus-function claims, and declined to opine on whether the claims were unpatentable at the pleadings stage. 

As to the ‘694 patent, the Court held the claims were directed to the abstract idea of automating the following process: “1) asking a user to match a receiver connection with an encoding format; 2) identifying the encoding format of a selected piece of media; 3) identifying the receiver connection matched to the encoding format in step 1; 4) telling the receiver to use the receiver connection found in step 3.” The specification effectively admitted this is performed by a user each time a media is selected in the media management system. The Court did not find any technological solution in the claim language, and found no inventive concept. For those reasons, the Court found the asserted claims of the ‘694 patent are invalid for lack of patentable subject matter.

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Umbanet v. Epsilon Data Management LLC

Umbanet v. Epsilon Data Management LLC

As to the ‘374 patent, the Court turned to Federal Circuit precedent, including Preservation Wellness and Intellectual Ventures I, to conclude that the claims were directed to the abstract idea of providing selective or particularized access to an email. Such selective access to information based on an individual’s role is only an abstract idea. Conditioning access to parts of an email message according to the “role” of the recipient did not add an inventive concept as such conditioned access was well known. 

As to the ‘730 patent, the Court tersely concluded that claim construction would be necessary to determine if the claims have a sufficiently specific implementation, and further noted a potential Section 112(6) dispute precluded disposition as to this patent at the pleadings stage. 

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Network Architecture Innovations LLC v. CC Network Inc

Network Architecture Innovations LLC v. CC Network Inc

The Court found the claims were directed to the abstract idea of systems and methods of appending bulletins to information being transmitted over a network. The patent’s purported purpose of identifying a user in order to optimally match advertising is no different than the “age-old” practice of including advertising inserts in a newspaper. The Court rejected the Plaintiff’s assertion that the claims are directed to improvements in computer and network technology, holding that there were no such limitations in the claims. The court then held that there was no inventive concept in the limitations, individually or as an ordered whole. The claimed bulletin server is not a new type of server but a generic one that stores a plurality of servers. The Court concluded the claims were directed to unpatentable subject matter. 

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Falkon Treasures LLC v. Adidas America, Inc.

Falkon Treasures LLC v. Adidas America, Inc.

The magistrate recommended finding claim 12 invalid under § 101. The magistrate first found the claim directed to the abstract idea of validating a customer’s identity and then displaying a shopping list to a customer. Nothing in the claim suggested the invention represented an improvement in computer-related technology or resolution of a problem created by the Internet. The magistrate further found that the claim did not recite anything more than conventional activity using components such as a “personal computer,” a “wired or wireless Internet access device,” a “personal digital assistant, or a “cellular telephone,” which were insufficient to inject an inventive concept into claims that are otherwise abstract.

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Twilio, Inc. v. Telesign Corporation

Twilio, Inc. v. Telesign Corporation

As to the ‘051 patent, the Court examined the claims’ “character as a whole”, beginning with claim 1, to determine what they were directed to, and conclude they were directed to selecting the best message routing option based on separately transmitted feedback, and then evaluated these to see if there was a “brick and mortar” physical analogue to this task. The Court concluded there was such analogues, for instance in the selection of a restaurant based on reviews from a third party source. The Court did not find any improvement in message routing technology, and this no improvement in computer functionality. The court reviewed the dependent claims and likewise concluded they were directed to abstract ideas. The court determined there was no inventive concept as the functions and components were purely conventional. They failed as an ordered whole: “selecting one channel for one type of message and a different channel for another type of message is not unconventional.” These claims were held invalid for lack of patentable subject matter.

As to the ‘217 patent, the Court found the claim was directed to enabling multi-modal communication by looking up and selecting one or more external communication provider(s) associated with a communication destination. Again using the “brick and mortar” evaluation, the Court  again found this to be a well-known method of informing a user of that user’s options, for instance, how a common carrier provides customers with information on shipping options. These claims additionally fail as they are simply processes that may be performed mentally. There was no improvement in computer functionality because the technology was routine and conventional. The dependent claims were likewise directed to abstract ideas. Looking up options for external communication providers did not improve the communications or networking, and thus there was no improvement that could add an inventive concept. These claims were held invalid for lack of patentable subject matter.

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In the Matter of Certain Mobile and Portable Electronic Devices Incorporating Haptics (Including Smartphones and Laptops) and Components Thereof

In the Matter of Certain Mobile and Portable Electronic Devices Incorporating Haptics (Including Smartphones and Laptops) and Components Thereof

ALJ Bullock denied summary judgment because he found the ’260 patent did not claim an abstract idea, but rather an improvement in computer technology. The ’260 patent claims a computer implemented process for detecting pressure on an input device and providing feedback in response. ALJ Bullock found that the patent provided this solution by detecting and resolving different levels of professor and generated responsive signals utilizing appropriate hardware and processors. Thus, the patent provided sufficient explanation of the methodology and structure used such that it reflects patentable subject matter.

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