The following telephone arguments will be available to the public live. Access information will be available by 9 AM ET each day of argument at: http://www.cafc.uscourts.gov/public-access-arguments.
After Publishing Technologies asserted U.S. Patent No. 7,908,342 (“the ’342 Patent”) against RPX Corporation, RPX filed two IPR petitions challenging the claims of the ’342 patent. The Patent Trial and Appeal Board (“PTAB”) instituted on both. While the PTAB declined to construe certain terms at institution, instead giving them their plain and ordinary meaning as RPX had urged, in the FWDs, the PTAB adopted Publishing’s proposed constructions of these terms before finding the claims invalid.
On appeal, Publishing first argues that the PTAB violated the Administrative Procedure Act (“APA”) by adopting constructions of the claim terms for the first time in its FWDs. According to Publishing, the PTAB should have construed the terms at institution after Publishing alerted the PTAB of a district court’s prior construction of these terms. It argues by giving these terms their plain and ordinary meaning, the PTAB unfairly required Publishing to respond to substantive arguments and determine whether to amend the claims without understanding the Board’s view of the claim language. It argues it had no notice that the PTAB would change course and adopt its constructions in the FWDs. Further, Publishing next argues RPX failed to identify the appropriate real parties in interest (“RPIs”) to the IPRs. According to Publishing, Google—a party against which a previous assignee had asserted the ’342 patent—should have been disclosed by RPX as an RPI in the IPRs because it is a member of RPX’s defense network. It argues if Google is an RPI, the IPRs should have been denied as time barred under 35 U.S.C. § 102(b).
RPX responds first that the Board’s adoption of Publishing’s constructions for the claim terms in the FWDs did not violate the APA because Publishing was on notice of its own constructions and could have presented argument and evidence based on those constructions. Next, RPX argues Publishing’s assertion that Google, a litigant in the previous lawsuit, should have been considered an RPI is speculative and not based in fact and, in any case, is unreviewable under § 315(b) and Thryv Inc. v. Click-to-Call Technologies, LP. According to RPX, Publishing’s attempt to reframe its time-bar argument as an argument about compliance with RPI disclosure requirements under § 312(a) is foreclosed by ESIP Series 2, LLC v. Puzhen Life USA, LLC.
Andrew Hirshfeld, Acting Director of the United States Patent and Trademark Office (“the PTO”), intervenes to argue the PTAB’s RPI determination and related § 315(b) time-bar decisions are beyond judicial review under ESIP and Thryv.
CosmoKey Solutions GMBH asserted U.S. Patent No. 9,246,903 (“the ’903 patent”) against DUO Security LLC in the District of Delaware. DUO filed a motion for judgment on the pleadings, asserting the authentication system claimed in the ’903 patent was patent ineligible under 35 U.S.C. § 101. The district court granted DUO’s motion, finding at Alice Step One that the claims were “directed to the abstract idea of authentication” and at Alice Step Two that the claims did not include an inventive concept.
On appeal, CosmoKey argues that the district court’s § 101 analysis was flawed. Regarding Step One, CosmoKey argues the district court oversimplified claim language, ignoring specific technical elements of the claims. As in Enfish v. Microsoft Corporation, CosmoKey argues, the district court untethered the claims from the claim language used. According to CosmoKey, the district court’s reliance on Prism Technologies LLC v. T-Mobile USA, Inc. was misplaced because Prism’s claims lacked the technical elements of the claims in the ’903 patent, including the “two-channel timing mechanism.” It argues the two-channel timing mechanism represents an improvement in computer functionality, noting that the PTAB found it nonobvious in IPRs of the ’903 patent. Regarding Step Two, CosmoKey argues the court fell prey to hindsight bias in finding there was no inventive concept. It argues the two-channel timing mechanism was not conventional, noting again the PTAB’s finding that it was nonobvious. Pointing to Berkheimer, it argues at a minimum the case should be remanded to the district court to allow for development of the factual question of whether the claims were conventional at Step Two.
DUO responds that the district court properly ruled on its motion for judgment on the pleadings. At Step One, DUO argues the district court correctly determined the claims are directed to an abstract idea. It argues the two-channel timing mechanism is itself an abstract idea, as the use of time as an authentication criterion has been inherent in multifactor authentication techniques for millennia. It argues the claimed steps are performed with generic devices, and there is no improvement to computer functionality. At Step Two, DUO argues that the use of time as an authentication criterion is not an inventive concept sufficient to confer patent eligibility at least because it is itself an abstract idea. It argues there are no disputed questions of material fact that prevent resolving patent eligibility on the pleadings as a matter of law. Regarding the PTAB’s IPR decisions, DUO argues these are not binding on the district court. Further, DUO argues, CosmoKey conflates the PTAB’s analysis of § 103 obviousness with patent eligibility under § 101, noting SAP America, Inc. v. InvestPic, LLC held a claim that survives a § 103 challenge can still be patent ineligible under § 101.
Andra Group, LP brought suit in the Eastern District of Texas (“the District”) against Victoria’s Secret Stores, LLC (“VSS”), Lifestyle Brands, Inc. (“LBI), Victoria’s Secret Direct (“VS Direct”), and Victoria’s Secret Brand Management (“VS Brand”), alleging the website www.victoriassecret.com infringes Andra’s U.S. Patent No. 8,078,498. VSS, LBI, VS Direct, and VS Brand moved to dismiss for improper venue. The district court granted the motion as to LBI, VS Direct, and VS Brand but denied the motion as to VSS, finding VSS’s store locations in the District were “regular and established places of business” rendering venue proper.
On appeal, Andra argues that the district court incorrectly found venue was improper as to LBI, VS Direct, and VS Brand (collectively, the “Venue Defendants”). First, Andra argues the Venue Defendants have “regular and established place[s] of business” in the District. Under In re Google, Andra argues, a “regular and established place of business” requires the “regular, physical presence of an employee or other agent of the defendant conducting the defendant’s business,” and VSS’s employees are agents of the Venue Defendants. Second, Andra argues the Venue Defendants ratified VSS’s store locations in the District as their own. According to Andra, the district court was incorrect that “corporate separateness is of paramount importance in determining venue.” It argues the central concern under In re Cray and In re ZTE is the Venue Defendants’ connection to and the extent of the Venue Defendants’ control over VSS’s store locations, and this analysis does not change just because VSS and the Venue Defendants are separate-but-related entities. It argues the Cray and ZTE factors show the Venue Defendants ratified VSS’s store locations as their own.
Venue Defendants respond that the district court correctly found venue improper as to them. First, Venue Defendants argue they do not have any “regular and established place of business” in the District. Under Cray and Google, they argue, for venue to be proper the Venue Defendants “must actually engage in business from” the VSS store locations, and the district court correctly found they do not. They argue Cannon Mfg. Co. v. Cudahy Packing Co. held that the presence of a corporate subsidiary does not create jurisdiction over the parent unless the related corporations create an alter ego situation by ignoring the corporate form, which the Venue Defendants and VSS have not done. They argue the district court considered and correctly rejected Andra’s principal/agent theory. Second, Venue Defendants argue ratification is not a separate inquiry from Cray; rather, it relates to Cray’s requirement that the brick-and-mortar store be “the place of the defendant.” Because Andra cannot establish the other Cray requirements for venue, they argue, there is no need for the court to reach ratification. If ratification is reached, they argue, Andra’s arguments undermine the corporate separateness doctrine and were properly rejected by the district court.
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