ACC_SF_PA

PRESENTER NAMECOMPANY NAME1 I
ACC Litigation Committee Meeting
A Rebalancing Act: Early Patent Litigation Strategies
in Light of Recent Federal Circuit Cases
Demarron Berkley
Patent Litigation
Counsel
Matt Hult
Senior Litigation
Patent Counsel
Jim Knox
Vice President,
Intellectual
Property
Mackenzie Martin
Partner – Dallas
July 28, 2016 | Palo Alto
July 29, 2016 | San Francisco

3|
PATENT LAWSUIT FILINGS IN 2015 CLOSE TO
HISTORIC HIGH
Source: Lex Machina, 2015 Patent Litigation Year in Review.

4|
PATENT LAWSUITS FILED IN 2015 BY DISTRICT

5|
NEW CASES IN D. DEL. AND E.D. TEX. BY YEAR AND
PLAINTIFF CLASSIFICATION

6|
DISTRICT COURT PATENT DETERMINATION STATISTICS
Source: Docket Navigator, 2015 Patent Litigation Year in Review.

7|
PATENT FILINGS 2011-2016, BY QUARTER
Source: Lex Machina

WHAT EXPLAINS THE 2016 “DIP”?
8|

9|
POTENTIAL REASONS FOR THE 2016 “DIP”
• Supreme Court Alice Corp. v. CLS Bank Int’l case and aftermath
• United States Patent and Trademark Office proceedings invalidating
patents
• Raised pleading standards for patent cases (elimination of Form 18)
• Natural ebb and flow?

10|
IN THE WORDS OF ONE OF THE COUNTRY’S MOST
PROLIFIC PATENT LITIGATION PLAINTIFFS:
Craig Tadlock of Tadlock Law Firm, which has represented numerous prolific
non-practicing entities (“NPEs”) was recently interviewed by Law360:
• Commented that recent decisions finding patents invalid under Alice
“plainly have an impact on plaintiff patent holders”
• Indicated that the reduction could be tied to the raised pleading
standards for patent cases
• Said that the lower number of suits in Q1 of 2016 was “largely part of
the natural ebb and flow of things”
Source: Law360, “EDekka Cools Off EDTX Patent Hotbed As Suits Drop 47%,” April 6, 2016

12|
ALICE PRIMER
• Alice Corp. v. CLS Bank International, 134 S. Ct. 2347 (2014), was a June
2014 decision of the United States Supreme Court about patentable
subject matter
• Alice patents declared invalid as being directed to “abstract idea” of
using an intermediary to facilitate simultaneous exchange of financial
obligations between parties to minimize risk
• Alice spelled out a two-part test:
(1) determine whether the claims are directed to a patent-ineligible
concept (i.e., laws of nature, natural phenomena, or abstract
ideas); and
(2) determine whether the claim’s elements, considered both
individually and as an ordered combination, transform the nature
of the claims into a patent-eligible application

13|
IMPACT OF ALICE IN THE DISTRICT COURTS
THROUGH 2015

14|
WHY IS ALICE SUCH A GAME-CHANGER IN
DEFENDING PATENT ACTIONS?

15|
RECENT CASE DEVELOPMENTS
• Enfish, LLC v. Microsoft Corporation, 2016 U.S. App. LEXIS 8699 (Fed. Cir.
2016)
• Applied the first step in the Alice inquiry and asked: “whether the
focus of the claims is on the specific asserted improvement in
computer capabilities . . . or, instead, on a process that qualifies as
an ‘abstract idea’ for which computers are invoked merely as a
tool”
• Claims in Enfish pertained to software for a “self-referential”
database which allowed the computer to search for data faster and
to more efficiently store data
• Claims were patentable under Alice because they were directed to
improving a computer’s capabilities, not simply to abstract ideas

16|
• BASCOM Global Internet Servs. v. AT&T Mobility LLC, 2016 U.S. App.
LEXIS 11687 (Fed. Cir. June 27, 2016)
• Applied the first step in Alice and found that the claims were
directed to an abstract idea
• Applied the second step in Alice:
• Agreed with the district court that “the limitations of the
claims, taken individually, recite generic computer, network
and Internet components, none of which is inventive by
itself”
• Disagreed with the district court’s “analysis of the ordered
combination of limitations”

17|
• BASCOM Global Internet Servs. v. AT&T Mobility LLC, 2016 U.S. App.
LEXIS 11687 (Fed. Cir. June 27, 2016)
• Second step analysis continued:
• “As is the case here, an inventive concept can be found in the
non-conventional and non-generic arrangement of known,
conventional pieces.”
• “The inventive concept described and claimed in the '606
patent is the installation of a filtering tool at a specific
location, remote from the end-users, with customizable
filtering features specific to each end user. This design gives
the filtering tool both the benefits of a filter on a local
computer and the benefits of a filter on the ISP server.”

18|
• How are patent plaintiffs applying Enfish and Bascom?
• These cases give plaintiffs tools to fight both steps of the Alice case
• Expect to see an increase in filings
• Requests for reconsideration being filed in cases involving
successful Alice motions

IMPACT OF USPTO PROCEEDINGS
19|

20|
NEW PTAB PETITIONS (2012-2015)
Source:
Docket Navigator

21|
NEW PTAB PETITIONS BY TECH CODE
Source:
Docket Navigator

22|
INSTITUTION OUTCOMES – TOTAL (thru 2015)
Source:
Docket Navigator

23|
PTAB PATENT DETERMINATIONS
FINAL WRITTEN DECISIONS (2012-2015)
Source:
Docket Navigator

24|
2012-2015 BY MONTH
Source:
Docket Navigator

25|
INSTITUTION OUTCOMES – SUCCESS RATES
52%
68.9%
66%
57.8%
19.1%
Success rates of all PTAB claims since AIA was enacted
Claims challenged under 35 U.S.C. § 101

26|
TOP PTAB PETITIONERS (2015)
Source:
Docket Navigator

27|
TOP PATENT OWNERS IN PTAB PROCEEDINGS (2015)
Source:
Docket Navigator

28|
WHY ARE USPTO PROCEEDINGS SUCH A GAME-
CHANGER IN DEFENDING PATENT ACTIONS?

29|
WHY ARE USPTO PROCEEDINGS SUCH A GAME-
CHANGER IN DEFENDING PATENT ACTIONS?
District Court PTAB
Fact finder Juries Skilled patent judge
Cost $$$$ $$
Burden of
proof
Clear and convincing
evidence (75-80%)
Preponderance of the
evidence (50.1%)
Claim
construction
Ordinary and
customary meaning
Broadest reasonable
construction
Grounds Unlimited Limited
Discovery Extensive Limited
Estoppel Common law Statutory

30|
Cuozzo Speed Technologies v. Lee (June 20, 2016)
• This case was the Court’s first decision dealing with the relatively new
USPTO patent trials.
• The Court determined (1) that the PTAB’s institution decisions are not
judicially reviewable; and (2) that the USPTO had authority to apply the
“broadest reasonable interpretation” (“BRI”) standard for claim
construction in PTAB patent trials
• Environment at the USPTO remains petitioner-friendly

31|
Intelligent Bio-Systems, Inc. v. Illumina Cambridge Ltd. (Fed. Cir. May 9, 2016)
• Appeal from IPR2013-00517
• Affirmed PTAB’s finding that petitioner failed to satisfy its burden of
demonstrating obviousness
• Case is interesting for both procedural and substantive reasons:
 Procedural – PTAB declined to consider petitioner’s reply brief and
expert declaration
 Substantive – Federal Circuit clarified that a petitioner must
establish both (1) a motivation to combine the references to
achieve the claimed invention; and (2) that a POSITA would have a
reasonable expectation of success of combining the references to
achieve the claimed invention

32|
Shinn Fu v. The Tire Hanger Corp. (PTAB April 22, 2016)
• IPR2015-00208
• Granted opposed motion to amend claims
• Patent owner did not use an expert declaration with its motion to
amend, relying instead on express disclosures in the prior art and
challenged patent
• Amendment did not enlarge the scope of the claims
• Amendment did not lack written description support

33|
Shinn Fu v. The Tire Hanger Corp. (PTAB April 22, 2016)
• No requirement for a patent owner to analyze expressly every
individual reference cited during prosecution
• A patent owner can group references together in its analysis
• Patent owner complied with its duty of candor in grouping several
references
• PTAB was persuaded by patent owner’s arguments that the prior art did
not recognize the relevant purpose of the claimed invention

34|
FINAL WRITTEN DECISIONS (2012-2015)
Source:
Docket Navigator

IMPACT OF RAISED PLEADING STANDARD
35|

36|
IMPACT OF RAISED PLEADING STANDARD
• December 1, 2015 amendments to the Federal Rules of Civil Procedure
abrogated Rule 84, which provided Form 18 as the “Complaint for
Patent Infringement” in the Appendix of Forms
• Resulted in an important change in the pleading standard for patent
cases
• Flood of cases filed before December 2015
• Fewer cases filed in Q1 of 2016 while plaintiffs “wait and see”

PRESENTER NAMECOMPANY NAME37 I
ACC Litigation Committee Meeting
Demarron Berkley
Patent Litigation
Counsel
Matt Hult
Senior Litigation
Patent Counsel
Jim Knox
Vice President,
Intellectual
Property
Mackenzie Martin
Partner – Dallas
July 28, 2016 | Palo Alto
July 29, 2016 | San Francisco

ACC_SF_PA

Recommended

Recommended

More Related Content

Similar to ACC_SF_PA

Similar to ACC_SF_PA (20)

ACC_SF_PA