RPX - Former Operating Company Patents Have Been at Issue in the Majority of NPE Litigation

Here's an article worth reading: Former Operating Company Patents Have Been at Issue in the Majority of NPE Litigation December 2, 2020. RPX indicates approximately 85% of the patent litigation filed in any given year from 2005 forward has concerned some operating company patents. 

The article suggests that operating companies selling patents to non-practicing entities (NPE) are failed or weak companies looking for money. Surely this happens, but it would be interesting to see how many of the "more successful companies,"e.g., public companies listed on NASDAQ also sell their patents to NPEs. Like this article, the results may be surprising.

Copyright © 2020 Robert Moll. All rights reserved.

RPX - Infringement Is the Top District Court Issue Appealed to the Federal Circuit

RPX published a nice summary on what US patent issues are appealed to the Federal Circuit:

"RPX data on the Federal Circuit show that infringement is the most common issue appealed from district court patent cases, appearing in over 450 appeals. Claim construction and invalidity (under Sections 102/103/112) are the next two most frequent issues, each of which appears in over 300 appeals. Two other key issues round out the top five: damages/fees/costs (appearing in around 275 appeals) and invalidity under Alice/Section 101 (just over 240 appeals)."

Note the low reversal rates of many issues appealed point to the importance of winning at trial. As Judge Rich might say, "the name of the game is the claim."

For more detail: RPX Infringement Is the Top District Court Issue Appealed to the Federal Circuit

Copyright © 2020 Robert Moll. All rights reserved.

N.D. Cal. - Google Countersues Sonos for Infringement of Five US Patents

On June 11, Google countersued Sonos for infringement of US patents related to mesh networks, echo cancellation, digital rights management, content notification and search:

• 7,899,187 Domain-based digital-rights management system with easy and secure device enrollment 
• 8,583,489 Generating a media content availability notification
• 10,140,375 Personalized network searching
• 7,065,206 Method and apparatus for adaptive echo and noise control
• 10,229,586 Relaying communications in a wireless sensor system

See Patently Apple article: The Sonos vs. Google Court Battle has Escalated with Google filing a Countersuit yesterday in a California Court

Copyright © 2020 Robert Moll. All rights reserved.

CAFC - In re Google - Lack of Patent Venue in ED Texas

In re Google the Federal Circuit granted Google's petition for a writ of mandamus to dismiss or transfer Super Interconnect Technologies' (SIT) patent infringement suit from the ED Texas, which is perceived as a pro-patent venue.

In TC Heartland decision, the Supreme Court held a patent owner has venue where the defendant resides (state of incorporation) or where the defendant infringes and has "a regular and established place of business." 

SIT’s argument for venue was that Google servers in the district constituted "a regular and established place of business." After the venue issue arose, Google removed its servers, but continued to stream video and ads to residents in the ED Texas using third party internet service providers (ISPs) servers.

The district court denied Google's motion to transfer venue, because the servers constituted "a regular and established place of business." However, the Federal Circuit then granted Google's petition for mandamus to resolve venue due to conflicting district court decisions on what activities constituted "a regular and established place of business."

Applying In re Cray the Federal Circuit held venue was improper in ED Texas, because Google lacked employees and an agent in the district, the ISPs were not agents, and server maintenance was ancillary to Google's business. The concurrence said it agreed with the result, but end users should be also considered. Until they are, it appears servers without employee(s) or agent(s) in a district may not be sufficient to establish "a regular and established business."

Copyright © 2020 Robert Moll. All rights reserved.

OC Register - Cal Tech wins $1.1 billion patent infringement case against Apple, Broadcom

Another huge damage award for US patent infringement:

Yesterday, a jury awarded $1.1B in damages for Apple and Broadcom's infringement of Caltech's U.S. Patent Nos. 7,116,710, 7,421,032 and 7,916,781.

For details see OC Register article Cal Tech wins $1.1 billion patent infringement case against Apple, Broadcom.

Copyright © 2020 Robert Moll. All rights reserved.

RPX - Executive Spotlight: RPX’s Head of Analytics on the State of Patent Litigation in 2019

Mr. Brian Howard, RPX's Vice President of Analytics, published an article that indicates patent owners are seeing certain favorable changes in US patent litigation. For details see Executive Spotlight: RPX’s Head of Analytics on the State of Patent Litigation in 2019.

RPX Corporation (Rational Patent Exchange) seeks to reduce patent litigation expense by offering patent acquisition, patent intelligence and advisory services to its clients.

Copyright © 2019 Robert Moll. All rights reserved.

Federal Circuit - Intellectual Ventures v. Trend Micro - Attorney Fees Awards, 35 USC § 285

In Intellectual Ventures v. Trend Micro, the Federal Circuit remanded a case to the district court to reconsider Trend Micro's attorney fees award under the proper legal standard.

Under 35 USC § 285, a court may award attorney fees to the prevailing party in "an exceptional case." An exceptional case stands out from others with respect to the (1) strength of a party’s litigating position (considering the law and facts) or (2) unreasonable manner in which the case was litigated.

Intellectual Ventures (IV) sued Trend Micro and Symantec for infringement of US patents, including US Patent No. 6,460,050, related to filtering data files (e.g., email messages).

The Symantec action proceeded first. During the claim construction and throughout pretrial IV's expert opined the "characteristic" of documents in claims should be interpreted as including "bulk email." After the court adopted the expert's opinion, the expert changed his opinion after he talked to IV's attorneys.

After the Symantec trial was complete, Trend Micro moved for clarification on claim construction and the IV attorney argued the expert's opinion had not changed. Trend Micro then moved for attorney fees due to the expert's changed opinion. The district court granted attorney fees of $444,051. It didn't appreciate the expert's last minute change and the attorney arguing nothing had changed.

The Federal Circuit vacated the attorney award stating the court must determine whether the case overall is exceptional not whether an isolated action is exceptional. Notably, the district court granted attorney fees, but conceded IV's case was not overall unreasonable. The district court relied on the circumstances surrounding the changed expert's opinion alone.

I agree that isolated mistakes must be viewed within the totality of the circumstances. Experts may change opinions and attorneys misstate their position, but the court must consider whether the overall case and manner of litigation is reasonable before granting attorney fees. Otherwise, it encourages parties to seek attorney fees for isolated acts that are "exceptional" with respect to the overall case.

Copyright © 2019 Robert Moll. All rights reserved.

District Court - Jury awards $200 million in damages for Wells Fargo's US patent infringement

Here's a sizeable US patent damage award relating to mobile devices. An ED Texas court jury awarded USAA $200 million in damages after finding Wells Fargo willfully infringed its patents that allow customers to use mobile devices to photograph and deposit checks without visiting a branch.

The complaint asserted: US Patent Nos. 8,699,779, 9,336,517, 8,977,571, and 9,818,090. I haven't studied these patents, but what jumps out is the substantial disclosure of prior art.

The press release says nearly every US bank and credit union uses this technology, benefiting 87 million US consumers so USAA isn't a patent troll. See press release for details.

Of course, this case is not over yet. Wells Fargo filed petitions for inter partes review (IPR) seeking to invalidate the USAA patents in the USPTO right after the jury decision. Given the stakes, one would expect that IPRs were filed within one year of the service of the patent infringement complaint filed in June 2018. See 35 U.S.C. § 315(b).

PTAB refused to institute covered business method (CBM) which would have permitted an Alice challenge in October 2019.

Copyright © 2019 Robert Moll. All rights reserved.

RPX - Patent Litigation and Marketplace Report - Public Excerpt

RPX's Patent Litigation and Marketplace Report - Public Excerpt (March 2019) tells us "the pendulum" is swinging back in favor of patent owners:

"The US patent system is often described as a pendulum, swinging between periods of change favoring first patent owners and then defendants. Just a few years ago, that arc bent toward defendants, as reforms implemented by the America Invents Act (AIA) and judicial decisions like Alice made it easier for companies to defend against patent suits and pushed patent prices down. However, there are now clear signs that the pendulum is swinging back ...."

Copyright © 2019 Robert Moll. All rights reserved.

Engadget - Amazon tries hiring lawyers for sellers claiming patent infringement - And it only costs $4,000

In Amazon tries hiring lawyers for sellers claiming patent infringement, Engadget reports Amazon has figured out how to deal with patent infringement.

In short, patent owner pays $4,000 fee to have case heard by a neutral. If defendant doesn't pay $4,000 fee to enable a rebuttal, the patent owner gets fee back and defendant's product is removed from Amazon. If both parties pay their fees, the neutral evaluates the merits and rules: a winning patent owner gets $4,000 fee back and an injunction, and a losing defendant's $4,000 fee pays the neutral for evaluation. A losing patent owner's $4,000 fee is used to pay for the neutral evaluation, the defendant gets $4,000 fee back and the accused product stays on Amazon.

Liked the article but appears short on basic details. For example, can an accused infringer go to district court to seek reversal of a "bad decision" by an Amazon neutral? Another question, can a winning US patent owner get an injunction against foreign sales?

Copyright © 2019 Robert Moll. All rights reserved.

Law360 - Qualcomm Wins $31M From Apple In Smartphone Patent Trial

Law360 reports Qualcomm Wins $31M From Apple In Smartphone Patent Trial.

Copyright © 2019 Robert Moll. All rights reserved.

CNBC - Apple recovers losses after Chinese court bans sale of most iPhones

The CNBC article Apple recovers losses after Chinese court bans sale of most iPhones tells us Qualcomm was able to get an injunction that bans sale of iPhones in China. A few infringed Qualcomm patents can apparently shut down significant iPhone sales in China. Even if the injunctive relief is overturned this sounds disruptive.

Copyright © 2018 Robert Moll. All rights reserved.

NY Times - Apple and Samsung End Smartphone Patent War

In Apple and Samsung End Smartphone Patent War, the NY Times argues the patent war that began in 2011 was a waste because the technology is outdated and became largely a fight about money rather than an exclusion of infringing Samsung phones.

This article doesn't make sense to me. Successful tech companies management would not engage in patent litigation unless it was economically rational. So should we jump in after the fact and speculate they after careful consideration wasted time and money? One way to consider if it is wasteful is to take the value of infringing a patent multiplied by the probability of a successful defense. If that product is greater than the cost of defense, the defendant should litigate as a matter of economics. This appears to be Samsung's approach. I am not sure how they conclude hundreds of millions were spent on defense even after seven years of patent litigation. On the other hand, if you own patents like Apple and are a marketplace leader, you would be rational to enforce the patents against others copying or infringing to catch up. Otherwise you encourage many others to free ride off your R&D.

Samsung had seven years of patent litigation and setbacks and victories that should have been opportunities to settle the cases. Yet Samsung didn't and managed to whittle down the damage awards. However, a jury ordered Samsung to pay Apple $539 million for patent infringement in May. This is a large value for infringing the patents, the defense had failed, and shortly after Samsung settles. Santa Clara University law professor Brian Love claims the litigation "didn't really accomplish anything" because "at the end of the day, no products went off the market." I have trouble accepting this "didn't really accomplish anything" given the likelihood substantial money was transferred to Apple in settlement after the $539 million award. Finally, the Apple and Samsung phones contain the patented technologies the article says is long outdated. Again, nothing in the article to support this claim.

Rutgers law professor Michael Carrier saying "the case is likely to serve as a lesson that 'the courtroom is not always the place to try to get ahead" sounds right but to me Apple was not trying to get ahead; Samsung was trying to catch up and decided to infringe/copy patented features and Apple said not so fast and sued after failing to reach a settlement.

Professor Carrier's statement "there’s always the trade-off between litigation and innovation, and in the time these companies spent in the courtroom, they weren’t innovating." This lost time idea might make more sense for a small company but appears inapplicable to Samsung and Apple given that large tech companies largely insulate key innovators from the litigation. Moreover, reasonable litigation of patent rights should protect the incentive to innovate.

Copyright © 2018 Robert Moll. All rights reserved.

Renjun Bian - Many Things You Know About Patent Infringement Litigation in China Are Wrong

The conventional wisdom is filing a patent in China is a waste of money, because China is lax in enforcing patent rights especially those of foreign patent owners. Now U.C. Berkeley law student Renjun Bian's article Many Things You Know About Patent Infringement Litigation Are Wrong gives some data that suggests that conventional wisdom is wrong.

Here's the Abstract:

"As the Chinese government continues to stimulate domestic innovation and patent activities via a variety of policies, China has become a world leader in both patent applications and litigation. These major developments have made China an integral venue of international patent protection for inventors and entrepreneurs worldwide.

However, due to the lack of judicial transparency before 2014, westerners had virtually no access to Chinese patent litigation data and knew little about how Chinese courts adjudicated patent cases. Instead, outside observers were left with a variety of impressions and guesses based on the text of Chinese law and the limited number of cases released by the press.

Taking advantage of ongoing judicial reform in China, including mandated public access to all judgments made since January 1, 2014 via a database called China Judgements Online (CJO), this paper analyzes 1,663 patent infringement judgments – all publicly available final patent infringement cases decided by local people’s courts in 2014. Surprisingly, many findings in this paper contradict long-standing beliefs held by westerners about patent enforcement in China.

One prominent example is that foreign patent holders were as likely to litigate as domestic patentholders, and received noticeably better results – higher win rate, injunction rate, and average damages.

Another example is that all plaintiffs won in 80.16% of all patent infringement cases and got permanent injunctions automatically in 90.25% of cases whose courts found patent infringement, indicating stronger patent protection in China than one might expect."

Copyright © 2017 Robert Moll. All rights reserved.

Joe Mullin - Supreme Court Won't Hear Apple v. Samsung Round Two

In Supreme Court Won't Hear Apple v. Samsung Round Two, Joe Mullin reports that the US Supreme Court has left in place Apple's damage award of $120 million for Samsung's infringement of US Patent No. 8,074,172 (auto correction), US Patent No. 5946647 (quick links), and US Patent No. 8,046,721 (slide-to-unlock).

For background details on this lengthy battle see the Supreme Court of United States blog: Samsung Electronics, Ltd. v. Apple, Inc. 

Copyright © 2017 Robert Moll. All rights reserved.

PWC - 2017 Patent Litigation Study - Change on the Horizon?

Tonight, I recommend reading Price Waterhouse Cooper's 2017 Patent Litigation Study - Change on the Horizon? Here are few findings of the PWC study with my comments:

1. In 2016, US patent cases dropped 9% from 2015. Thus, we continue the downward trend in patent cases filed from 2013. Lobbyists pushing the "out of control patent litigation button" to persuade Congress to pass more anti-patent reform may have a credibility issue.
2. Patent owners saw a 74% success rate in jury trials and 52% success rate in bench trials in 2016. This rate of success at trial was surprising, but is a subset of patent owners that overcame pre-trial motions, summary judgment and challenges in AIA trials.
3. The median damage award of $10.2M in 2015 has decreased to $6.1M in 2016.
4. The median jury award was 15 times greater than median bench awards in last five years. Give that fact, I am not sure why any patent owner wouldn't request a jury trial.
5. Jury trials to bench trials have increased from 75/25 in 2015 to 80/20 in 2016. The report states the increase in jury trials is due to their larger awards and success rates.
6. Medical devices and telecommunications median awards are significantly higher than other technologies such as consumer products. 
7. Top five districts for patent cases filed: ED Texas, Delaware, Northern District of California, Illinois Northern, and New York Southern.
8. Damage awards for non-practicing entities (NPEs) are 3.8 times greater than for practicing entities. This is surprising given the negative press about "patent trolls" that should undermine jury damage awards to NPEs.

The PWC study is based on the Lexis Advanced database and 2,446 district court decisions since 1997.

Copyright © 2017 Robert Moll. All rights reserved.

Reuters - Nokia sues Apple for infringing patents, industry back on war footing

Reuters reports "Nokia Corp (NOKIA.HE) said on Wednesday it had filed a number of lawsuits against Apple Inc. (AAPL.O) for violating 32 technology patents, striking back at the iPhone maker's legal action targeting the one-time cellphone industry leader a day earlier.

Nokia's lawsuits, filed in courts in Dusseldorf, Mannheim and Munich, Germany, and the U.S. District Court for the Eastern District of Texas, cover patents for displays, user interfaces, software, antennas, chipsets and video coding."

For more details: Nokia sues Apple for infringing patents, industry back on war footing.

Copyright © 2016 Robert Moll. All rights reserved.

Stanford Technology Law Review - Predictably Expensive: A Critical Look at Patent Litigation in the Eastern District of Texas

Brian Love of Santa Clara University Law School and James Yoon of Wilson Sonsini Goodrich & Rosati's article Predictably Expensive: A Critical Look at Patent Litigation in the Eastern District of Texas to be published in the Stanford Technology Law Review is worth review.

Here is the abstract:

"In this Essay, we compare U.S. patent litigation across districts and consider possible explanations for the Eastern District of Texas’s popularity with patent plaintiffs. Rather than any one explanation, we conclude that what makes the Eastern District so attractive to patent plaintiffs is the accumulated effect of several marginal advantages — particularly with respect to the relative timing of discovery deadlines, transfer decisions, and claim construction — that make it predictably expensive for accused infringers to defend patent suits filed in East Texas. These findings tend to support ongoing efforts to pass patent reform legislation that would presumptively stay discovery in patent suits pending claim construction and motions to transfer or dismiss. However, we also observe that judges in the Eastern District of Texas tend to exercise their discretion in ways that dampen the effect of prior legislative and judicial reforms that were aimed (at least in part) at deterring abusive patent suits. Given the broad discretion courts have to control how cases proceed, this additional finding suggests that legislation restricting venue in patent cases may well be the single most effective reform available to Congress."

Copyright © 2016 Robert Moll. All rights reserved.

Stanford Technology Law Review - Octane Fitness: The Shifting of Patent Attorneys' Fees Moves Into High Gear

Scott Flanz's article Octane Fitness: The Shifting of Patent Attorneys' Fees Moves Into High Gear published in the Stanford Technology Law Review is worth reading.

Here is the abstract:

"In 2014, the United States Supreme Court decided Octane Fitness. LLC v. ICON Health Fitness, LLC, significantly altering the standard for granting attorneys' fees shifting at the close of a patent litigation. Combine with precedent announced on the same day in Highmark Inc. v. Allcare Health Management Systems, scholars have opined that under the new regime, the standard for proving entitlement to attorneys’ fees in patent litigations will be considerably relaxed. Despite the widespread acceptance of the viewpoint, few empirical analyses—if any—have objectively confirmed it.

This paper provides a first glimpse into whether the Supreme Court’s decision in Octane changed the attorneys’ fees standard in practice. By investigating the rate at which courts have granted attorneys’ fees motions before and after Octane, broken down by whether the movant was a patentee or accused infringer, the technology of the patent asserted, the circuit and district where the suit was decided, and what factors were considered by each court in its opinion, this research confirms that Octane’s reinterpretation of § 285 has had observable effects. In particular, this study finds a statistically significant increase in the rate of attorneys’ fee shifting after Octane, particularly for motions filed by accused infringers and in motions concerning electronics and software patents. The results of this study shed light on meaningful and recent changes to the patent litigation incentive structure and will be helpful in predicting future changes to the patent litigation landscape."

Copyright © 2016 Robert Moll. All rights reserved.

Apple loses patent retrial to VirnetX, owes $302.4 million

On September 30, a federal jury ordered Apple to pay $302.4 million for its infringement of VirnetX's patents relating to virtual private networks and secure communications links.

This retrial occurred after Judge Schroeder vacated VirnetX's $625.6 million win over Apple in a previous trial, because jurors may have been confused. The patents are complex, and even if not it appears patent litigation with big money at stake is likely to stretch for years. As noted, Apple's continued fight may have saved over $300 million less its attorney's fees.

For further details see Reuters Apple loses patent retrial to VirnetX, owes $302.4 million

Copyright © 2016 Robert Moll. All rights reserved.