In Ericsson, Inc., et al v. D-Link Systems Inc., et al, No. 2013-1625, -1631, -1632, 1633, a case relating to Wi-fi technology, the Texas federal judge upheld a 2013 jury verdict that found that D-Link Systems, Netgear Inc., and five other companies infringed three Ericsson patents and rejected defendants’ request for a new trial. More specifically, the Federal Circuit held that for “standard essential patents” (“SEPs”), which are patents that cover specific technology that a certain industry standard requires such that complaint devices necessarily infringe certain claims in the patent, many of the standard Georgia-Pacific factors, which are factors used to determine reasonable royalties, do not apply to cases involving SEPs. We also reflect on the Alice Corporation Pty. Ltd. v. CLS Bank International, et al., 134 S. Ct. 2347 (2014) decision, which has now confirmed that what used to be a much laxer § 101 subject matter gatekeeper has transformed into a relentless business method patent-barring nightmare for many. The Supreme Court held that transforming a long-known method of reducing risk in financial trading to be implemented by a computer does not overcome a §101 subject matter rejection. Although the ruling provided some guidance in terms of how computerrelated patents should be written to avoid an Alice rejection, most practitioners and industry experts are unsatisfied with the “we’ll know it when we see it” attitude that seems to be spreading throughout the lower court holdings.
Additionally, we discuss a recent case from the U.S. Court of Appeals for the Federal Circuit, e.Digital Corp v. Futurewei Techs., Inc., et al, No. 3:13-cv00783,No. 2014-1019, -1242, -1243 (Fed. Cir. Nov. 19, 2014), wherein the court held that the collateral estoppel doctrine (issue preclusion) prevents a new claim construction for the same limitation in a second proceeding if there is an “identical issue,” meaning that there is no “new matter that could materially impact the interpretation of a claim.” Id. at *5.
Jury Instructions for “Reasonable and Nondiscriminatory” (“RAND”) Terms in Standard Essential Patents (“SEPs”) Infringement
Standards for technology tend to require a collaborative effort involving multiple patent-eligible parts developed by multiple parties. SPEs are patents that cover parts that are required for a set standard. Because the standard is set such that users of the standard necessarily will be infringing on the SPEs for that standard, to alleviate potential concerns, standards development organizations (“SDOs”), which publish lists of technical requirements used for certain set standards, often seek assurances from patent owners before publishing the standard. One particular SDO, IEEE, would ask SEP owners, like Ericsson, to pledge that they will grant licenses to an unrestricted number of applicants on ‘reasonable and nondiscriminatory (“RAND”) terms. Ericsson, Inc. et al v. D-Link Systems Inc., et al, No. 2013-1625, -1631, -1632, -1633 at *8.
On appeal, D-Link argued that the district court erred in giving all the GeorgiaPacific factors when many were not relevant and likely misleading, especially in the RAND context. D-Link also argued that the district court erred in omitting the patent hold-up and royalty stacking instruction.
The Federal Circuit stated that the trial court should have instructed the jury about Ericsson’s actual RAND promise rather than adding a generalized 16th factor. It also clarified that it was not holding that there is a modified version of the Georgia-Pacific factors that should be used for all RAND-encumbered patents but it is a case-by-case basis.
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Jury Instructions for “Reasonable and Nondiscriminatory” (“RAND”) Terms in Standard Essential Patents (“SEPs”) Infringement
The Effect of Alice Corp. : Current Relevant Case Law & Tips for Business Method Patents
The Federal Circuit uses the two-step framework detailed in Alice for more recent §101 patent eligibility cases with abstract idea issues: (1) determine whether or not claimed steps, viewed individually and in combination, are directed to the abstract idea of showing an ad before delivering free content and (2) determine whether or not that the disputed claims do no more than simply describe the abstract method and do not add any meaningful limitations. The court further explained that including additional routine, conventional steps, and including the internet is not enough in itself to overcome patent-ineligibility under Alice.
Although the analysis builds the case law library supporting Alice regarding where the §101 threshold lies, the weight of the support tends to rest on subjective values. Thus, even if many more cases were to continue analyzing using the two-step framework, it will still be a gamble in terms of what to rely on for other software patents.
Despite the cloud of confusion by Alice Corp., for defendants at least, the updated interpretation of § 101 has produced a valuable gatekeeper for patent litigation that may help provide an early opportunity to challenge invalid patent claims before incurring substantial expenses. For patent owners, it has produced a conundrum when it come to responding to motions to dismiss under Section 101. For more information, please click below:
The Effect of Alice Corp. : Current Relevant Case Law & Tips for Business Method Patents
Collateral Estoppel: When is the Second Proceeding Stuck With the Claim Construction of a First Proceeding?
Due process generally allows parties a chance to address any issue relevant to their case. However, the doctrine of collateral estoppel blocks parties from relitigating issues that had already been finally decided. “Collateral estoppel applies if: (1) the issue necessarily decided in the previous proceeding is identical to the one which is sought to be relitigated; (2) the first proceeding ended with a final judgement on the merits; and (3) the party against which collateral estoppel is asserted was a party or in privity with a party at the first proceeding.” e.Digital Corp v. Futurewei Techs., Inc., et al, No. 3:13-cv-00783, No. 2014-1019, -1242, -1243 at 5 (citing Hydranautics v. FilmTec Corp., 204 F.3d 880, 885 (9th Cir. 2000)). In the recent case at the U.S. Court of Appeals for the Federal Circuit, e.Digital Corp v. Futurewei Techs., Inc., et al, the only issue was whether the construction of the “sole memory” limitation presented an “identical issue.”
The court held that for one of the claims, even though the patent involved in the second proceeding disclosed a purported improvement to the patent involved in the first proceeding, the two patents are unrelated in that the patent involved in the second proceeding disclosed a different invention. Therefore, the patent in the second proceeding required a new claim construction.
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Tsircou Newsletter – February 2015
Please feel free to contact us if you would like additional information. We look forward to assisting you with your intellectual-property matters.
Sincerely,
Kyriacos Tsircou
Tsircou Law, P.C.