Patent Case Summaries May 19, 2021

Patent Case Summaries | Week Ending May 14, 2021

A weekly summary of the precedential patent-related opinions issued by the Court of Appeals for the Federal Circuit and the opinions designated precedential or informative by the Patent Trial and Appeal Board.

Free Stream Media Corp., et al. v. Alphonso Inc., et al., Nos. 2019-1506, -2133 (Fed. Cir. (N.D. Cal.) May 11, 2021). Opinion by Reyna, joined by Dyk and Hughes.

Free Stream Media (d/b/a Samba) accused Alphonso Inc. of infringing two patents generally related to systems that provide a mobile phone user with advertisements that are deemed relevant based on data gathered from the user’s television.

Addressing the first patent, the district court construed the claim term “communication session” to require a bidirectional exchange during the session. Samba stipulated to noninfringement under that construction. Addressing the second patent, the district court denied Alphonso’s motion to dismiss on grounds that the asserted claims are patent ineligible under 35 U.S.C. § 101. The court concluded that the claims were not directed to an abstract idea of tailored advertising as argued by Alphonso. Samba appealed, and Alphonso cross-appealed.

The Federal Circuit affirmed the district court’s claim construction for the first patent, leaving Samba’s stipulation of noninfringement unaffected. The Federal Circuit ruled that “one-way communication is not contemplated by the claim term ‘communication session.’” Instead, given the specification, a skilled artisan would have understood the term as requiring bidirectional communication. The court ruled that Samba’s desired construction, covering one-way communication, “contradicts the specification.”

Turning to the second patent, the Federal Circuit applied the two-step Alice framework in reversing the district court’s judgment as to patent eligibility. At step one, the Federal Circuit commented that it had, “in other cases, noted that similar claims were directed to the abstract idea of ‘targeted advertising.’” Here, the claims “do not recite an improvement in computer functionality,” instead using “a computer as a tool.” Thus, the claims are abstract since “the alleged technological improvement does nothing more than implement a computer to achieve the abstract idea of providing targeted advertising to the mobile device user.”

At step two, the Federal Circuit ruled that “the claims simply recite the use of generic features, as well as routine functions, to implement the underlying idea.” The conventional components and functions were “generic to the technology.” Thus, the claims are patent ineligible under § 101.

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Pacific Biosciences of California, Inc. v. Oxford Nanopore Technologies, Inc., et al., Nos. 2020-2155, -2156 (Fed. Cir. (D. Del.) May 11, 2021). Opinion by Taranto, joined by Lourie and Stoll.

PacBio sued Oxford for infringement of two patents that claim methods for sequencing nucleic acids using nanopore technology. A jury found all asserted claims infringed and supported by the written description but also found them invalid under 35 U.S.C. § 112 for lack of enablement.

The district court denied PacBio’s post-trial motion for judgment as a matter of law (JMOL) on enablement. The court concluded that the record “as a whole” contained substantial evidence to support the verdict of non-enablement.

The district court also denied PacBio’s motion for a new trial, ruling that certain improper remarks by Oxford during its opening statement (relating to the potential applications of its accused products in the then-emerging COVID-19 crisis) did not warrant a new trial. After Oxford’s opening, the district court judge had given a curative instruction to the jury that PacBio had requested.

On appeal, PacBio argued that the jury’s finding of non-enablement is unsupported and that PacBio is entitled to a new trial based on Oxford’s statements about COVID-19. The Federal Circuit disagreed. Reviewing the record in the light most favorable to Oxford, the Federal Circuit determined that “the jury had substantial evidence of non-enablement of the full claim scope.” The court concluded that the evidence supported a finding that, before the patents’ priority date, “relevant artisans did not know how to perform nanopore sequencing for more than a narrow range of the full scope of nucleic acids covered by the asserted claims.”

Regarding PacBio’s request for a new trial, the Federal Circuit explained that a new trial based on improper remarks is proper if “the appellee made prejudicial remarks and it is ‘reasonably probable’ those prejudicial remarks influenced the jury’s verdict.” Noting that the views of the judge who supervised the trial “are entitled to considerable weight,” the Federal Circuit saw no abuse of discretion in the district court’s decision to deny a new trial.

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Uniloc 2017 LLC v. Apple Inc., Nos. 2020-1403, -1404 (Fed. Cir. (PTAB) May 12, 2021). Opinion by Bryson, joined by Prost and Reyna.

Apple petitioned for IPR of a Uniloc patent directed to systems and methods that enable Voice over Internet Protocol (VoIP) providers to maintain control over optional features such as caller-ID and call waiting. The Patent Trial and Appeal Board held some but not all of the claims invalid for obviousness. Uniloc appealed as to the invalidated claims, arguing that the Board relied on an erroneous construction of the claim term “intercepting,” which the Board defined to mean that “the signaling message is received by a network entity located between the endpoints of the call.” Apple cross-appealed, arguing that the Board erred by not finding the remaining challenged claims invalid as obvious.

The Federal Circuit affirmed the Board’s rulings. Uniloc argued that under the plain and ordinary meaning of “intercepting,” the entity that intercepts a message cannot be an intended recipient of the message. The Federal Circuit ruled, however, that “just because the receiving client device is the ultimate ‘intended recipient’ does not mean that the sending client device cannot intentionally direct the message to the intercepting entity.” The patent describes embodiments where the sending client purposefully directs the message to an intermediate recipient that performs the intercepting. The Federal Circuit thus affirmed the claim construction and the associated findings of obviousness.

Turning to Apple’s cross-appeal concerning the remaining challenged patent claims, the Federal Circuit ruled that the allegations Apple presented in its IPR petition were insufficient. Apple had limited its allegations to focus only on certain disclosures in the prior art. The Board found that Apple’s allegations were insufficient to demonstrate obviousness, and the Federal Circuit ruled that the Board’s conclusion was not erroneous. Therefore, the Federal Circuit affirmed.

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New Vision Gaming & Development, Inc. v. SG Gaming, Inc., et al., Nos. 2020-1399, -1400 (Fed. Cir. (PTAB) May 13, 2021). Opinion by Moore, joined by Taranto. Opinion concurring in part and dissenting in part by Newman.

The Federal Circuit vacated and remanded the Patent Trial and Appeal Board’s determinations in two covered-business method review proceedings in light of the court’s decision in Arthrex. Because Arthrex issued after the Board’s final written decisions and after New Vision’s requests for rehearing, the Federal Circuit held that “New Vision has not waived its Arthrex challenge by raising it for the first time in its opening brief before this Court.”

In a separate opinion, Judge Newman agreed that Arthrex applies and that “it is appropriate to vacate the decision of the unconstitutional Patent Trial and Appeal Board.” In her view, however, a threshold issue warrants resolution because it may make remand unnecessary. Specifically, Judge Newman explained that “there may be no basis for any PTAB proceeding at all, for the parties to this dispute had agreed to a different forum,” and New Vision sought compliance with that agreement.

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