DISTRICT COURT CASES

New York Court Invalidates Targeted-Advertising Patents under Alice

A federal judge in the Southern District of New York granted counterclaim-defendant TNS’s motion for summary judgment ruling that three patents related to targeted-advertising were invalid under Alice. As a preliminary matter, the court rejected Tivo’s (TRA) presumption of validity argument noting that “the presumption of validity—and its concomitant clear and convincing evidence standard—does not apply to section 101 claims.” In analyzing the patents, the court found that all three patents describe the same basic invention in five basic steps: “(1) collecting household-level data from a variety of digital sources, (2) matching this data to individual households through the use of digital double-blind matching, (3) digitally storing this matched data, (4) applying a “cleansing and editing algorithm” to the data to remove extraneous and/or private information, and (5) calculating an advertising metric based on the data.” Accordingly, the court found claim 71 of the ’940 patent to be representative of all asserted claims—essentially a method for correlating the advertisements that consumers view and their purchasing behavior.

In applying the Alice standard, the court ruled that “[b]ecause the asserted claims are directed to an abstract idea and nothing in the claims comprises an inventive concept, TRA claims are patent-ineligible. Under step one of Alice, the court stated that the “abstract nature of TRA’s patent is confirmed by the fact that TRA’s claim, as a whole, can be performed by humans rather than computers” and are therefore, “directed towards a patent-ineligible abstract idea.” Under step two of Alice, the court found that the asserted claims lacked an inventive concept stating that “claim 71 of the ‘940 patent recites only “well-understood, routine, [or] conventional activities” such as data collection, data storage, and routine ‘post-solution’ activities (activities performed on the data following the double-blind match) that are insufficiently inventive to render TRA’s claims patentable.”

TNS Media Research LLC et al. v. TiVo Research and Analytics Inc., Case No. 1:11-cv-04039 (S.D.N.Y. Feb. 22, 2016) (Scheindlin, J.).)

- Author: Jay K. Tatachar

Prejudicial Statements by Attorney during Closing Warrants New Trial

After a jury found infringement and no invalidity in a patent case involving HVAC systems, Judge Robinson of the District of Delaware granted a new trial based on prejudicial and gratuitous statements made by an attorney during closing arguments. The court explained that of the most common reasons for granting a new trial, one is “improper conduct by an attorney or the court [that] unfairly influenced the verdict.” Opinion at 4. Defendant Goodman argued in the post-trial phase that Plaintiff Carrier’s counsel made improper arguments during closing regarding indemnity and copying issues, as well as the burden of proof.

In the first instance, counsel for Carrier likened an indemnity clause Goodman had signed to a motivation to ignore patent rights. The court noted that such statements were “a pretty big stretch” and that there was “no good way to fix” the issue. Opinion at 34. Second, counsel for Carrier—after it was agreed by the parties that there would be no evidence of copying—described Goodman’s knowledge of Carrier’s product in the context of copying, arguing, “Why would [Goodman] have done that [compared products] if they truly didn’t infringe?” Opinion at 36. Third, counsel for Carrier explained the clear and convincing burden in the context of taking away parental rights. Specifically, he argued that invalidating a patent takes away the patent from an inventor like “taking away someone’s kid.” Id. As to the copying and burden arguments, the court noted that counsel’s “gratuitous argument” was sufficient to tip the balance for the wrong reason. Opinion at 37. The court, thus, concluded that a new trial was warranted based on these statements.

Carrier Corp. v. Goodman Global, Inc., Civ. No. 12-930-SLR (D. Del. Feb. 22, 2016). [J. Robinson]

- Author: Rehan M. Safiullah

N.D. Cal. Judge Denies Summary Judgment Motions in Dispute Over Hepatitis C Products

Judge Freeman of the Northern District of California issued an order on February 1, 2016, denying plaintiff Gilead Sciences, Inc.’s motion for summary judgment of invalidity of two patents assigned to Merck Sharp and Dohme Corp. and alleged to cover Gilead’s blockbuster Hepatitis C (HCV) drug sofosbuvir. Sofosbuvir is a key component of Gilead’s Sovaldi(R) and Harvoni(R) products. Gilead argued that the asserted claims were invalid for failure to satisfy “the utility prong of enablement.” This theory is based on the requirement that “the how to use prong of section 112 [requires] that the specification disclose as a matter of fact a practical utility for the invention,”—designed to “prevent the patenting of mere ideas, research proposals, and hypotheses.”

Gilead argued that “one having ordinary skill in the art…would not have accepted the assertion that the nucleoside compounds claimed by the asserted patents could treat HCV.” Merck countered that a “skilled artisan would have understood the methods and compounds claimed in the asserted patents would be useful in treating HCV.” The court agreed with Merck and found “that there is enough evidence to create a disputed issue of material fact as to whether a skilled artisan would have ‘accept[ed] the allegations [in the asserted patents] as obviously correct.’”

In addition, Judge Freeman granted Merck’s uncontested motion for summary judgment concerning both direct and indirect infringement. The issue of ultimate liability remains to be determined at trial following consideration of Gilead’s outstanding invalidity defenses.

Gilead Sciences, Inc. v. Merck & Co, Inc., 13-cv-04057-BLF (N.D. Cal., Feb. 1, 2016).

- Author: Michael Kahn and Law Clerk Matt Weiss (not admitted to practice) co-wrote this article.

PATENT TRIAL AND APPEAL BOARD