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.
Personalized Media Communications, LLC v. Apple Inc., No. 2021-2275 (Fed. Cir. (E.D. Tex.) Jan. 20, 2023). Opinion by Reyna, joined by Chen. Dissenting opinion by Stark.
PMC sued Apple for infringement of a patent related to encryption technology, and the case went to trial. A jury found that Apple’s FairPlay system infringed and awarded PMC over $308 million in reasonable-royalty damages. The district court then held a bench trial on several remaining issues, including prosecution laches. The court held PMC’s patent unenforceable based on prosecution laches because PMC had implemented an inequitable scheme to extend its patent rights, amounting to an egregious abuse of the patent system.
In support of that ruling, the district court found that the patent applicant’s delay during prosecution was unreasonable and inexcusable under the totality of the circumstances and that there was prejudice attributable to the delay. Specifically, PMC had executed a generally dilatory prosecution strategy that included filing hundreds of burdensome “GATT-Bubble” applications, adding thousands of claims, waiting eight to fourteen years to file its applications, and waiting at least sixteen years to present the asserted claims for examination. The district court also found prejudice because Apple had already begun developing the accused FairPlay system when PMC first added the asserted technology to the pending application, and the patent then issued seven years after FairPlay had matured into the version accused of infringement.
The Federal Circuit affirmed, ruling that the district court did not abuse its discretion in finding prosecution laches. The Federal Circuit identified several parallels to a prior case, Hyatt v. Hirshfeld, where the court held that unreasonable and unexplained prosecution delays amounting to an egregious abuse of the patent system constituted prosecution laches. The Federal Circuit noted that “this case is very similar to Hyatt and prior cases, and, in some ways, involves even more egregious facts.” Here, “the record shows that PMC institutionalized its abuse of the patent system by expressly adopting and implementing dilatory prosecution strategies, specifically to ambush companies like Apple many years after PMC filed its applications.”
Judge Stark dissented because, in his view, Apple failed “to show that it suffered prejudice during the period in which PMC was wrongfully delaying prosecution.” He explained that there was no evidence of prejudice, either individually or as part of the totality of the circumstances, for PMC’s actions that occurred after Apple began developing the accused technology.