EDTX & NDTX Monthly Wrap-Up — December 2018

The past few months produced several interesting opinions out of the Eastern and Northern Districts of Texas, two of which are discussed below.

Judge Gilstrap recently granted a motion for partial summary judgment, finding several asserted claims invalid as indefinite.[1] The decision hinged on the term "optimize" as used in the claim element "to optimize end-user quality of service (QoS) for an Internet Protocol (IP) flow."[2] Finding the claim term impermissibly subjective, Judge Gilstrap held that the common specification "prevents the Court from being able to set objective boundaries, and thus breathe life into, the claim term."[3]

35 U.S.C. § 112 governs indefiniteness, and the Federal Circuit has provided guidance on terms of degree. §112 ¶ 2 states that "[t]he specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the inventor or a joint inventor regards as the invention." "Claim language employing terms of degree has long been found definite where it provided enough certainty to one of skill in the art when read in the context of the invention."[4] But the claims "must provide objective boundaries for those of skill in the art."[5] "[A] term of degree fails to provide sufficient notice of its scope if it depends on the unpredictable vagaries of any one person's opinion."[6]

The patents' procedural history aided the Defendants in proving invalidity. Intellectual Ventures sued Defendants T-Mobile and Nokia in 2017, asserting several patents that shared a common specification.[7] An unasserted patent with the same specification also included the term "optimize," and the District of Delaware held this term to be invalid as indefinite.[8] The Federal Circuit affirmed.[9]

Intellectual Ventures attempted to distinguish the unfavorable precedent and argued that its asserted claims "have additional context which renders the claims definite," but the Court was not convinced.[10] The Court found that the specification did not set objective boundaries for the term, holding that "although the patentee referred to differentiating between different types of data traffic, the patentee did not define or sufficiently explain the meaning of '€˜optimize,' especially in the context of '€˜end-user' QoS." The extrinsic evidence was also unavailing and failed to overcome the problems with the specification.[11] As a result, the Court found the implicated claims to be invalid as indefinite.

Over in the Northern District, Judge Kinkeade found certain claims for patent infringement barred by claim preclusion and partially granted a motion to dismiss.[12] The Court held that the previous dismissal of two cases between the parties barred the claims based on alleged infringement occurring before final judgment, but the claims based on subsequent acts survived.[13] A previous settlement agreement did not waive the defense of claim preclusion, and the Court's preclusion holding hinged on the element requiring that "the same claim or cause of action is involved in both suits."[14]

Claim preclusion bars claims that were brought in previous case or should have been brought in a previous case.[15] To support a defense of claim preclusion in the Fifth Circuit, a defendant must show that "1) the parties in the subsequent action are identical to, or in privity with, the parties in the prior action; 2) the judgment in the prior case was rendered by a court of competent jurisdiction; 3) there has been a final judgment on the merits; and 4) the same claim or cause of action is involved in both suits."[16] While parties may agree that claim preclusion does not bar a future cause of action, they must do so by an express agreement.[17] Moreover, claim preclusion typically only bars causes of action that were ripe at the time of the prior judgment.[18]

In determining whether two patent cases involve the same claim or cause of action, the accused devices and asserted patents are compared.[19] The accused devices from the previous suit must be essentially the same at those presently accused.[20] Similarly, the scope of the newly asserted patent claims cannot be materially different than the previously asserted claims.[21]

MAZ previously sued Blackberry in two separate patent infringement suits, and the parties settled both cases simultaneously.[22] The cases involved two patents related by a series of continuation applications, and the accused devices were the same in both cases.[23] The parties signed a settlement agreement containing a release and license limited to the two asserted patents.[24]

The Court first dispensed with MAZ's argument that Blackberry waived the defense of claim preclusion.[25] MAZ argued that the settlement agreement's limitation to the previously asserted patents showed the parties' intent.[26] The Court found that this limitation was not the requisite express agreement and rejected MAZ's attempt to bring in events from during the negotiation process.[27]

Next, the Court determined that the same claim or cause of action in the present suit was involved in one of the prior suits.[28] The Court found that the asserted claims in the present suit were not materially different than one of the previously asserted patents, rejecting MAZ's argument that an additional limitation concerning a long known process for encrypting and decrypting a document made the claims patentably distinct and materially different.[29] Because there was no genuine dispute that accused devices in both suits were the same, the Court found a substantial overlap between the transactional facts of the present case and previous one, strongly supporting the fourth element of claim preclusion.[30]

With no real dispute existing regarding the other three elements of claim preclusion, the Court turned to the issue of which claims should be barred.[31] Blackberry argued that all causes of action in the present case should be barred regardless of when the alleged infringement occurred.[32] The Court disagreed, holding that acts of infringement occurring after the final judgment in the previous case could not have been brought.[33] Therefore, claims of infringement concerning those acts were not barred.[34]

 

[1] Intellectual Ventures I LLC v. T Mobile USA, Inc., No. 2:17-CV-00577-JRG, 2018 WL 5809267 (E.D. Tex. Nov. 6, 2018).

[2] Id. at *1-2.

[3] Id. at *5.

[4] Interval Licensing LLC v. AOL, Inc., 766 F.3d 1364, 1370 (Fed. Cir. 2014).

[5] Id. at 1371.

[6] Id. (citation and internal quotes omitted).

[7] Intellectual Ventures I, 2018 WL 5809267 at *1.

[8] Id.

[9] Id. (citing Intellectual Ventures I LLC v. T-Mobile USA, Inc., 902 F.3d 1372 (Fed. Cir. 2018).)

[10] Id. at *3.

[11] Id. at *7 (quoting Teva Pharms. USA, Inc. v. Sandoz, 789 F.3d 1335, 1342 (Fed. Cir. 2015) ("A party cannot transform into a factual matter the internal coherence and context assessment of the patent simply by having an expert offer an opinion on it.")).

[12] MAZ Encryption Techs., LLC v. Blackberry Ltd., No. 3:17-CV-03267-K, 2018 WL 5026279 (N.D. Tex. Oct. 15, 2018).

[13] Id. at *7.

[14] Id. at *4-5.

[15] Id. at *2 (citing Duffie v. United States, 600 F.3d 362, 372 (5th Cir. 2010).).

[16] Id.

[17] Id. at *3 (citing Aspex Eyeware, Inc. v. Marchon Eyeware, Inc., 672 F.3d 1335, 1346 (Fed. Cir. 2012)).

[18] Id. (citing Brain Life, LLC v. Elekta Inc., 746 F.3d 1045, 1053-54 (Fed. Cir. 2014)).

[19] Id.

[20] Id. (citing Brain Life, 746 F.3d at 1053).

[21] Id. (citing Aspex Eyeware, 672 F.3d at 1341).

[22] Id. at *1.

[23] Id.

[24] Id. at *3.

[25] Id. at *3-4.

[26] Id.

[27] Id. at *4.

[28] Id. at *4-5.

[29] Id. at *5.

[30] Id. at *5-6.

[31] Id. at *7.

[32] Id.

[33] Id.

[34] Id.