Following the addition of U.S. District Judge Jeremy Kernodle to the Eastern District of Texas bench late last year, most of the Tyler docket, including this case, was reassigned from Judge Gilstrap and Judge Schroeder to Judge Kernodle. Judge Kernodle just entered an order denying the defendant’s renewed motion to dismiss for failure to state a claim which argued that the patents in suit claimed ineligible subject matter.
The tempo is picking up on Judge Albright’s Waco patent docket, with this order last week denying a motion to dismiss that raised a patentable subject matter defense.
Section 101 motions asserting lack of patentable subject matter are sometimes brought as motions for judgment on the pleadings under FRCP 12(c). After reading this order, I think I might reconsider whether that’s a good idea.
Section 101 rulings are always welcome because they show where judges are on specific fact patterns based on the current state of the appellate caselaw. Normally I’d say that the facts are the variable, not the caselaw, but on this subject the first can vary, and the second can … evolve. This week provides another data point on 101 rulings, with an opinion that drops findings into the no/no, no/yes, yes, and “nope” categories.
A Texarkana jury in Judge Schroeder’s court returned a verdict in favor of Maxell against defendant ZTE (USA), Inc. last Friday following a two-week trial. The jury found all 16 claims from the 11 asserted patents infringed. Eleven of the claim from seven patents were found to be infringed willfully. The jury found that four claims across two patents had not been shown to be invalid as anticipated or obvious (one question for all invalidity theories), and assessed damages at $43.3 million. But the jury also made an additional finding in the defendant’s favor with respect to five of the claims that bear some closer scrutiny, as it begins to tell us how 101 claims can be addressed in front of a jury. This reminded me of how Judge Schroeder addressed a similar issue dealing with contract formation in my April jury trial in Texarkana, so I wanted to address that issue in some additional detail (as well as a few others) by analyzing the court’s instructions to the jury.
Seems like just last week that I summarized where we were on local decisions after the Federal Circuit held that some Section 101 issues were questions of fact. Oh wait, it was just last week. Well, we have another one – this time within an order denying a Section 101 motion at the pretrial stage, this time explicitly concluding that there were issues of fact that precluded dismissal as to two of the three asserted patents.
One of the most haunting moments of the season finale of the original Twin Peaks in 1992 was Jimmy Scott singing Under the Sycamore Trees as things got really, really weird. I think of this song whenever I read opinions in Sycamore IP Holdings v. AT&T, which gave us more to consider recently. Actually, much, much more.
It’s often helpful to cut something open to see how it works. During World War II, the Navy cut open a damaged PBY Catalina flying boat and mounted it on a wall in a training facility in Pensacola to help train sailors who would be crewing its sister craft. The cutaway PBY was a local fixture from 1944 to 1997, and was eventually moved to the nearby National Museum of Naval Aviation to sit under a fully restored version, where my youngest son Parker (who’s a certified WW II plane nut) got to study it up close. (That I have a PBY on my work bench at the moment had nothing to do with the trip. Honest)
Readers will recall that I posted last month that a Marshall jury in Judge Roy Payne’s court returned a verdict last month in favor of Ericsson in a case brought against TCL Communications and set damages at $75 million. Two of the numerous pretrial rulings in that case were on the defendant’s motions for summary judgment under Section 101, and on the plaintiff’s claims of willful infringement, both of which Judge Payne denied.
Since the 101 ruling runs against the recent trend of more than half of 101 rulings going the defendant’s way, it is worth a review. But the one I really want to focus on is the willfulness ruling because, as the Court wrote, “it is helpful to explain the standard as it stands today [post-Halo]” which began a metaphorical popping off of the fuselage panels on the standard in order to spend several pages poking around on what the wilfulness standard requires, and what factors need to be considered when deciding whether to bifurcate a willfulness claim. When you’re done reading it, you might find yourself with the same thought I had after studying the interior of a full-size PBY – I have really not understood how this thing fits together, and I have really screwed up ….
2017 has been a golden year for 101 motions in the Eastern District of Texas, with the reported grant rate – at least for the six month period from last fall through this spring – hovering at 75%, compared to 18% in Delaware. It’s even triple the 25% grant rate during the same period in the Northern District of Texas, according to the below table from Bilksiblog.com. Last week saw another negative data point on 101 motions for plaintiffs, as Judge Gilstrap granted a 101 motion on one patent – and on a claim that the PTAB had declined to institute review on – 45 days after the motion was filed, and stayed the case as to several others pending PTAB proceedings.
This recent order by Judge Schroeder granting for the most part a motion to dismiss for lack of patentable subject matter builds on an earlier grant as to different claims from two of the same patents. Accordingly, the procedural history is a little complex, but the discussion rewarding …