Klarquist has helped clients achieve great successes in the courtroom, ranging from large plaintiff jury verdicts to defense summary judgments. The following cases represent a small but important slice of our more recent work and results.
Operation Technology, Inc. (ETAP) won partial summary judgment invalidating all 138 asserted patent claims in four patents, in a lawsuit filed by Power Analytics Corp. The patents are in the field of modeling electrical systems. ETAP, founded in 1986 by Dr. Farrokh Shokooh, is a technology leader in modeling, design, analysis, optimization, monitoring, control, and automation software for electrical power systems.
Hon. John A. Kronstadt, U.S. District Court for the Central District of California, ruled that all asserted claims are invalid under the abstractness exclusion to patent eligibility under section 101 of the Patent Act. The claims are invalid in part because none exceeded “the abstract idea of evaluating and reacting to prediction deviations,” the Court ruled.
Power Analytics Corporation v. Operation Technology, Inc. et al – Order and Decision
Klarquist scored a key victory for client Nautilus, Inc., fending off four IPR petitions filed by rival exercise equipment company Icon Fitness. The denied petitions attempted to challenge four Nautilus patents relating to elliptical machines. Nautilus is asserting those patents against Icon in district court litigation, alleging infringement by the NordicTrack FreeStride Trainers. Klarquist also represents Nautilus in that litigation, which commenced in May 2016 in the Western District of Washington. The four petition denials are particularly significant given that the Patent Trial and Appeal Board grants more than 70% of such petitions.
Microsoft prevailed as the petitioner over Smart Skins in an inter partes review decision involving a mobile device cover with attached peripherals. The Patent Trial and Appeal Board ruled all six claims under review unpatentable, finding that the interrelated teachings of two prior art patents made obvious the challenged patent claims.
Microsoft Corporation v. Smart Skins LLC – Final Written Decision
Oregon animal nutrition company OmniGen Research and parent company Prince Agri Products obtained a permanent injunction and $3.8 million award for trade secret theft and other claims against former employee, scientist Yongiang Wang and his wife Yan Zheng. Confidential information of OmniGen was misappropriated by selling knock-offs of OmniGen’s feed additives in China through businesses Bioshen and Mirigen. Earlier in the case, Judge McShane of the Oregon U.S. District granted OmniGen and Prince Agri’s motion for terminating sanctions due to the destruction of evidence, finding for them on all liability issues. Following an October 2017 trial focused on remedies, the Court issued a permanent injunction prohibiting the defendants from further violations and future involvement with Bioshen and Mirigen. The Court also ordered the defendants to pay $3.8 million in damages and attorneys’ fees and costs for claims including breach of contract, trade secret misappropriation, intentional interference with economic relations, copyright infringement, breach of fiduciary duty, and false advertising in violation of the Lanham Act.
SunModo Corporation prevailed on summary judgment in a patent infringement suit brought by D Three Enterprises. D Three had alleged infringement of three patents relating to roof mount assemblies that can be used for solar panels.
Klarquist argued invalidity of all of the 30+ asserted claims. On March 15, Judge Craig B. Shaffer ruled that D Three’s asserted claims were invalid since they were not entitled to the earliest asserted effective filing date under 35 U.S.C. §§ 112 and 120. D Three did not dispute that the claims were invalid in view of intervening prior art if not entitled to the earliest possible effective filing date of a provisional patent application.
D Three Enterprises, LLC v. SunModo Corporation – Memorandum Opinion and Order
On October 17, in a precedential opinion, the Federal Circuit affirmed summary judgment granted by Judge Maxine M. Chesney, USDC, Northern District of California, invalidating under Section 101 claims of three Synopsys, Inc. patents.
The claims are directed to “the abstract idea of: translating a functional description of a logic circuit into a hardware component description of the logic circuit.” Judge Chen (with Judges Lourie and Moore on the panel) agreed with the trial court that the claimed translation methods “can be performed mentally or with pencil and paper,” as the named inventors confirmed when they “admitted to performing the steps mentally themselves.”
While the claimed translation technique was designed for use by computers, the asserted claims require no computer or other hardware. Again, this was conceded as “none of Synopsys’ proposed constructions required the use of a computer or any type of hardware,” and Synopsys’ counsel stated at the summary judgment argument that “computers aren’t called out” in the representative patent claim.
The panel dismissed the alleged novelty of the claimed translation technique because “a claim for a new abstract idea is still an abstract idea.” Similarly, it is irrelevant that the claimed translation technique differed from how a human logic-circuit designer would translate such a description, as the Supreme Court in Gottschalk v. Benson faced the same situation and rejected the claims nonetheless.
Finally, the panel noted what was not before it: patent claims directed to a computerized design tool.
A week earlier, on October 11, another Federal Circuit panel affirmed a PTAB decision finding obvious claims of another Synopsys synthesis patent. Synopsys had asserted that patent against Mentor Graphics in the same N.D. Cal. lawsuit before Judge Chesney.
Synopsys, Inc. v. Mentor Graphics Corporation – Summary Judgment Decision and Opinion
In a significant Lanham Act false advertising verdict, a jury in the Central District of California found CYME (a division of Eaton Corporation, represented by Jones Day) liable for making false claims about the performance of ETAP’s software. The jury awarded Klarquist’s client, ETAP, $8.42 million in damages, and found that CYME willfully engaged in false advertising.
After a five-day jury trial before Judge Selna, on June 21, 2016, the jury deliberated for under four hours and found CYME liable for false advertising under Section 43(a) of the Lanham Act and that CYME acted willfully.
ETAP had been the victim of a three-year, worldwide smear campaign that started in June 2013. The campaign consisted of YouTube videos and emails distributed throughout the power system software industry. ETAP filed suit in June 2014, won summary judgment in March 2016 that the accused statements were literally false, and got a verdict that CYME is directly liable and responsible for the actions of its Middle East representative.
For this matter, Klarquist was recognized by TopVerdict.com for obtaining one of the top 50 highest jury verdicts in 2016 in California. It also was the highest verdict for a false advertising or Lanham Act claim.
On February 29, 2016, Judge Robert L. Pitman of the Western District of Texas granted judgment on the pleadings to Klarquist client eBay, Inc., finding U.S. Patent No. 7,010,572 invalid under 35 USC § 101 for failing to claim patent-eligible subject matter. Judge Pitman held that the asserted claims failed the Supreme Court’s two-part Alice test for claiming patent-eligible subject matter because they recited the abstract idea of an address directory (using information in a message’s destination address to look up the recipient’s correct email address), and did not add “significantly more” to the abstract idea.
On January 29, 2016, Klarquist obtained a permanent injunction for its client Capsugel in a case asserting two patents and false advertising claims relating to pullulan-based capsules. The team defended parallel PTAB challenges to the asserted patents. Judge Paul Papak granted a permanent injunction for patent owner Capsugel against all four defendants, including the manufacturer in China, barring infringing sales of pullulan capsules in the United States. The defendants also agreed not to sell any of the capsules at issue in Canada or non-organic pullulan capsules in countries in Europe where Capsugel also has patent protection.
In a novel claim between competitors, Klarquist prosecuted a false advertising theory alleging misuse of the term “organic” and the USDA organic seal in connection with capsules containing the synthetic chemical SLS. A favorable settlement in principle was reached on the day set for a hearing on Capsugel’s motion for partial summary judgment on the false advertising claim.
Capsugel v. Bright Pharma Caps – Stipulated Injunction and Consent Judgment
Judge Paul A. Engelmayer of the Southern District of New York granted summary judgment to Klarquist client Bravo Media, LLC (a division of NBC Universal Media LLC) that U.S. Patent No. 6,585,516 (the ‘516 patent) was invalid under 35 USC § 101 for failing to claim patent-eligible subject matter. The ‘516 patent was generally directed to a system and method for using a computer to plan meals to meet one’s nutritional goals. Applying the Supreme Court’s decisions under § 101, including Alice Corp. Pty. Ltd. v. CLS Bank Int’l, Judge Engelmayer held on July 8, 2014, that the ‘516 patent claimed an abstract concept of meal planning on a general purpose computer. Judge Engelmayer also subsequently granted summary judgment to Klarquist client Time Inc. in a separate case on the basis of collateral estoppel. The Federal Circuit affirmed the summary judgment of invalidity on April 10, 2015.
The DietGoal cases against Klarquist’s clients traveled a winding road to victory. DietGoal filed its cases in the Eastern District of Texas. Klarquist filed transfer motions on behalf of its New York-based clients, but the Texas court instead sent the cases to Virginia. The Virginia court then granted Klarquist’s motions to re-transfer the cases to New York, where summary judgment motions were filed and granted.
On March 13, 2015, the Patent Trial and Appeal Board found claims of U.S. Patent No. 8,326,924 of Metasearch Systems, LLC unpatentable under Section 101 and Section 103 of the Patent Act. The decision concluded a Covered Business Method Review Proceeding (CBM2014-00001) filed and tried by Klarquist, on behalf of American Express Co., Expedia, Inc., Orbitz Worldwide, Inc., Priceline.com Inc., Travelocity.com LP, and Yahoo! Inc. d/b/a Yahoo! Travel, and their affiliates American Express Travel Related Services Company, Inc., Hotels.com LP, Hotels.com GP, LLC, and Hotwire, Inc. in response to the 2012 lawsuits filed by Metasearch Systems, LLC in the District of Delaware against these companies.
On January 20, 2015, the United States District Court for the Northern District of California (Hon. Maxine M. Chesney) granted summary judgment to Mentor Graphics Corporation, invalidating all asserted claims of three patents for claiming patent-ineligible subject matter under Section 101 of the Patent Act. The order issued on a motion briefed and argued by Klarquist in an action brought against Mentor Graphics by Synopsys, Inc.
On December 30, 2014, the Federal Circuit Court of Appeals affirmed the dismissal with prejudice for lack of standing of four patent cases brought by Walker Digital, LLC, against Klarquist clients Amazon.com, Inc. and Zappos.com, Inc., Fish & Richardson client Expedia, Inc., and Potter Anderson client Barnes & Noble, Inc. Delaware District Court Judge Sue L. Robinson had held that Walker Digital did not own the patents in suit, because it assigned them to eBay as part of a litigation settlement agreement. The Federal Circuit affirmed, holding that the settlement agreement unambiguously assigned continuations-in-part, such as the patents in suit, and dismissal with prejudice was not an abuse of discretion because Walker Digital had multiple opportunities to cure the defect.
On September 29, 2014, in reexamination proceedings, the Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office (USPTO) affirmed the cancellation of all patent claims asserted against Klarquist’s client Microsoft in a separate case brought by NetView Technologies, Inc. NetView had accused Microsoft’s Excel Services of infringing U.S. Patent No. 7,251,776 (the ‘776 patent) in a 2009 lawsuit it filed in the District of Massachusetts. Klarquist represented Microsoft both in district court and before the USPTO.
Slep-Tone has filed more than 150 cases around the country asserting trademark infringement for use of its karaoke tracks. Klarquist was the first to successfully argue that the legal theory underlying Slep-Tone’s nationwide litigation campaign was without merit. Slep-Tone sued Canton Phoenix alleging that Canton Phoenix possessed unauthorized copies of karaoke tracks that were originally engineered and produced by Slep-Tone. Slep-Tone alleged that the public performance of these karaoke tracks in karaoke shows (in which Slep-Tone’s trademark was briefly displayed in the video before and after the lyric cues) created confusion in the viewing public as to whether the karaoke tracks were authorized copies. Canton Phoenix moved to dismiss for failure to state a claim on the grounds that Slep-Tone’s only articulated injury sounded in copyright law and that trademark law could not be extended to cover alleged copyright injuries under the Supreme Court’s decision in Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23 (2003). The District of Oregon granted the motion and dismissed Slep-Tone’s federal trademark claims with prejudice.
On April 28, 2014, Nautilus argued before the Supreme Court to reject the Federal Circuit’s lenient standard for definiteness. The Supreme Court unanimously held that the standard for definiteness applied by the Federal Circuit was too liberal. And it articulated that patent claims are indefinite if “read in light of the specification delineating the patent, and the prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention.”
Positive Tech asserted claims involving matrix display controllers against the electrophoretic displays in Amazon’s Kindle e-reader. After the case was transferred from the E.D. Tex. to the N.D. Cal., Amazon successfully narrowed the alleged damages period to 10 months, and the case was settled on favorable terms.
Proxyconn alleged certain features of Microsoft Windows infringed claims having to do with reducing the amount of redundant data transmitted over a network. Klarquist successfully narrowed the scope of indirect infringement claims and filed one of the first IPR’s initiated in the PTAB. Klarquist negotiated a stipulated dismissal of the case pending the outcome of the IPR.
On Pi day 2011, NPR ran a radio story featuring Michael Blake’s YouTube video titled “What Pi Sounds Like.” Less than a month later, Blake was sued for copyright infringement by Lars Erickson who copyrighted a work called the “Pi Symphony” in 1992. Klarquist filed a motion to dismiss. On Pi day, March 14, 2012, Judge Michael Simon granted Blake’s motion to dismiss, finding that Erickson was impermissibly attempting to extend his copyright to cover the idea of creating a musical work based on the number Pi.
A win on summary judgment of patent invalidity (on preemptive multithreading software) for our client Microsoft thereby also eliminating Plaintiff’s claimed patent priority date on a second asserted patent. The Patent Office granted a reexamination request regarding the validity of the second patent and invalidated all its claims. The Court of Appeals for the Federal Circuit affirmed the trial court’s invalidity ruling.
Klarquist defended GE and GE Healthcare in a patent infringement suit brought by the University of Washington. Klarquist promptly initiated an inter partes reexamination of the patent in suit, and after only six months of litigation obtained a stay of the case pending reexamination. After office actions rejected all challenged claims in reexamination, the University of Washington dismissed with prejudice its lawsuit. The Patent Office subsequently cancelled all challenged claims in reexamination.
A win on summary judgment of non-infringement (on assisted opening knives) for our client Columbia River Knife & Tool (“CRKT”) in the Eastern District of Tennessee. An early resolution sought by CRKT resulted in minimal discovery for CRKT limited to 22 models CRKT included in its motion, which were representative of every assisted opening knife in CRKT’s product line alleged to infringe. Plaintiff consented to entry of a final judgment dismissing its infringement claims with prejudice and the Court of Appeals for the Federal Circuit affirmed the judgment of no infringement.
Klarquist helped our client Microsoft win on summary judgment in the District Court of Arizona that Plaintiff RCT’s twelve asserted patent claims were invalid. The Court of Appeals for the Federal Circuit affirmed the invalidity of eight of those claims that cannot be backdated to an earlier patent application because the claims lack written description support in the earlier application. The Federal Circuit remanded the remaining four patent claims to the District Court.
Paul Allen’s Interval Research LLC sued Klarquist’s clients, eBay, Netflix, Staples, and Office Depot, of patent infringement of patents 6,757,682 and 6,263,507. After less than a year of litigation, District Judge Marsha J. Pechman stayed the case pending reexamination, following the United States Patent and Trademark Office’s grant of reexamination requests. The reexaminations are currently pending.
Biosig, a Canadian-based company, sued Nautilus in August 2004 alleging that various heart rate monitor devices sold by Nautilus with its exercise equipment infringe U.S. Patent Number 5,337,753. Klarquist Sparkman assumed the defense of the case from Ropes Gray in 2008, and promptly moved to put the patent in reexamination. Following the grant of the reexamination request, the parties agreed to dismiss the case without prejudice on March 26, 2009.
Klarquist represents Hewlett-Packard in a multi-defendant case asserting two patents (104 claims) on database systems for end-to-end B2B commerce. The case is stayed pending reexamination requests filed by Klarquist.
A win on summary judgment of non-infringement (on slot machine jackpot methods) for our client IGT before the Honorable Ronald M. Whyte of the Northern District of California of asserted patents 7,056,215 and 7,108,603. Appeal is pending.
Klarquist defended General Electric Company against claims of patent infringement raised by Enpat, Inc. District Judge Gregory A. Presnell stayed the case pending reexamination, following the United States Patent and Trademark Office’s grant of a reexamination request filed by Klarquist and Klarquist’s filing of summary judgment motions of invalidity and non-infringement. The case settled shortly thereafter.
A win on summary judgment of copyright infringement, DMCA, and Lanham Act claims for our client MEI, LLC regarding copying and modification of MEI’s IDX software. Chief Judge Ann Aiken also awarded MEI compensatory damages, issued an injunction, and ordered the return or destruction of unauthorized software and devices used to circumvent access controls for the IDX software. MEI also won summary judgment dismissing counterclaims for alleged trade secret misappropriation, breach of contract, and tortious interference with contract.
In a case in which Anascape alleged that Microsoft infringed 12 patents regarding video game controllers, Klarquist employed both litigation and reexamination as tools to achieve a successful outcome for our client Microsoft. The firm filed reexamination requests for all 12 asserted patents, which caused the Court to stay the litigation on six of the 12 patents, effectively cutting the case in half. Klarquist then helped Microsoft win its proposed claim construction on most of the remaining six patents. After the Court also granted Microsoft’s partial summary judgment motions on both non-infringement and no willful infringement, the case settled before trial.
In 2006, the District of Maryland granted summary judgment of patent invalidity and entered final judgment of dismissal of Dr. Frank T. Buckley, Jr.’s patent infringement suit against Klarquist’s client Freightliner LLC. Dr. Buckley subsequently agreed to surrender his right to appeal. Dr. Buckley’s patent, which issued in 1981 and expired in 1998, had been the subject of six different lawsuits against a dozen different defendants over the last 25 years. Represented by Klarquist, Freightliner was the first to prove that the Dr. Buckley’s patent was invalid.
Klarquist helped its client CollegeNET win a jury verdict of infringement against a principal competitor, ApplyYourself, in 2003. The jury found that ApplyYourself infringed two of CollegeNET’s patents for online college application systems and awarded damages to CollegeNET. Part of the jury verdict was set aside by the district court. Represented by Klarquist, CollegeNET prevailed on appeal with the Court of Appeals for the Federal Circuit reinstating the full jury verdict. The case subsequently settled.
Klarquist helped its client, Kassab Jewelers, obtain a permanent injunction against a local competitor to prevent it from using the name “C Kassab Designs.” Kassab Jewelers alleged that C Kassab Designs, LLC was infringing Kassab Jewelers’ KASSAB and KASSAB JEWELERS trademarks.
A jury verdict win of infringement (on semiconductor technology) for our client TransLogic Technologies, Inc. that its patent is valid over prior art cited by Hitachi. The jury returned a verdict of $86.5 million. The trial court entered a permanent injunction and final judgment of over $106 million (with prejudgment interest). On appeal, the Federal Circuit vacated the judgment after affirming a Patent Office reexamination decision that the patent is invalid.