IP Newsflash

A district court in the Western District of Washington denied Adaptics Ltd.’s (“Adaptics”) motion for summary judgment of patent exhaustion, which was based on a theory that an authorized sale by a downstream reseller can exhaust patent rights against an upstream manufacturer. The plaintiff, Perfect Company (“Perfect”), alleged that two of Adaptics’ app-based products infringed Perfect’s U.S. Patents No. 8.829,365 and No. 9,772,217. Perfect also sued Apple Inc. (“Apple”), alleging that Apple’s sale of Adaptics’ products infringed the same patents.

On February 14, 2017, Judge Chhabria of the Northern District of California granted, in part, Apple’s motion to exclude the expert report of Unwired Planet’s survey expert, Dr. Allenby. Dr. Allenby was hired to conduct a consumer survey to assess the value of the claimed method for “provisioning” a mobile communication device. This process involves the mobile communication device connecting with a server and being authenticated to allow the user access to certain services. According to the decision, Dr. Allenby’s report, however, relied on Unwired Planet’s proposed definition of “provisioning,” and not the court’s construction. The expert had defined the term “provisioning” to mean something akin to “providing;” however, the court’s construction was far narrower.

During IP license negotiations, prudent negotiators will often avoid sharing privileged information about the IP to avoid waiving the attorney-client privilege. But in a recent District of Massachusetts case, the court upheld a claim of privilege to patent prosecution strategy communications between parties who were in the process of negotiating an exclusive license.

On November 1, 2016, The Honorable Rodney Gilstrap of the United States District Court for the Eastern District of Texas added $456,000 in enhanced damages after a jury found that LG willfully infringed two patents owned by Core Wireless LLC. The jury had awarded Core Wireless $2,280,000 in actual damages.

In Affinity Labs of Texas, LLC v. Amazon.com, Inc., Chief Judge Prost affirmed a district court’s finding that Affinity Labs’ patent was invalid for being directed to ineligible subject matter because it was directed to an abstract idea and contained no inventive concept. Affinity’s U.S. Patent No. 8,688,085 is directed to media systems that deliver content to a handheld wireless electronic device. The court went through the two step process articulated in Alice to determine the patent’s eligibility under § 101.

On Wednesday, the District Court for the Northern District of California granted defendant F5’s renewed motion for JMOL that it did not willfully infringe plaintiff Radware’s patent. The court determined that plaintiff failed to submit sufficient evidence to support the jury’s willfulness finding, even under the new preponderance of the evidence standard set forth in the Supreme Court’s Halo decision.

On August 15, 2016, Judge Orrick of the Northern District of California granted-in-part defendant Sophos’s motion to exclude the testimony of plaintiff Finjan’s damages expert. Sophos urged, among other things, that the expert’s apportionment methodology improperly inflated her royalty base. Specifically, Sophos argued that Finjan’s expert improperly inflated the royalty base by double or triple counting revenue attributable to the “threat engine” and “live protection” features of the accused software products. That is, Finjan’s expert apportioned the royalty base by 28.6 percent (or 2/7) as to both patents-in-suit, even though each patent covered those same two features. “In this way, [the expert] counts the revenue attributable to certain features multiple times in calculating her royalty base such that her total apportionment calculation uses a royalty base that is over 100 percent of the total value of several of the accused products.”

On August 10, 2016, plaintiff VirnetX argued that Apple received a fair trial when the jury handed down a $625 million verdict against it. This comes after U.S. District Judge Robert W. Schroeder III of the Eastern District of Texas set aside the jury’s verdict, citing potential fairness issues based on repeated references to earlier litigation between these two parties.