BLOGS: Georgia IP Litigation



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Monday, June 27, 2016, 10:09 AM

Judge Totenberg Grants Stay of Litigation Pending IPR Proceeding

ETS-Lindgren, Inc. (“ETS”), as the assignee of U.S. Patent No. 8,331,869 ("the '869 patent") pertaining to testing wireless devices, brought an infringement action against MVG, Inc. (“MVG”), on May 28, 2015.  MVG petitioned the Patent Trial and Appeal Baord (“PTAB”) almost a year later, on April 12, 2016, for inter partes review (“IPR”) of the '869 patent.  This filing was shortly followed by ETS’s motion to stay.

Judge Totenberg noted her discretion to stay the pending action pending the PTAB’s review.  See Procter & Gamble Co. v. Kraft Foods Global, Inc., 549 F.3d 842, 848-49 (Fed. Cir. 2008).  The Order set forth the three factors to be considered by the Court:

            (1) “whether discovery is complete and a trial date has been set”;
            (2) “whether a stay will simplify the issues in the case”; and
            (3) “whether a stay would unduly prejudice or present a tactical disadvantage to the nonmovant.”

Id. (citing Xerox Corp. v. 3Com Corp., 69 F. Supp. 2d 404, 406 (W.D.N.Y. 1999)); accord Intellectual Ventures II LLC v. SunTrust Banks, Inc., No. 1:13-cv-02454-WSC, 2014 WL 5019911 (N.D. Ga. Oct. 7, 2014).

Noting that discovery was not complete, no depositions had been taken, no Markman hearing had been held, and a trial date had not bee set, Judge Totenberg found “intra-case timing weighs in favor of a stay.”  

The Court noted that simplification by the IPR could occur in three ways:  (1) claims could be found unpatentable; (2) the IPR could find anticipation or obviousness precluded one or more claims (binding MVG from relying on those defenses), or (3) a refusal to grant the IPR potentially because the claims are indefinite and “simply cannot be construed and compared to the prior art.”
According to the ruling, prejudice or disadvantage to the non-movant was either neutral of only slightly against a stay.  MVG did not have other counterclaims unrelated to patent validity and did not argue the presence of any witness location or retention issues.  The Court noted the quick resolution required of the PTAB and that the IPR had been initiated by MVG.  The Court did not feel any tactical disadvantages to MVG as a result of another case between the same parties proceeding before Judge Steve Jones was “sufficient to overcome the benefits of a stay in this case.”
The case was administratively closed following the entry of the stay.

The order is ETS-Lindgren, Inc. v. MVG, Inc., Docket no. 87, decided June 14, 2016, in 1:15-cv-03859-AT, in the United States District Court for the Northern District of Georgia, Atlanta Division, entered by Judge Amy Totenberg.

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Wednesday, June 15, 2016, 5:13 PM

Amendment Moots Motions for Both Parties without Specific Adoption of Prior Filings

The latest order in a patent case in the Northern District of Georgia delves into the procedural niceties of federal practice, illustrating both how form continues to have power over substance and how the Court can nevertheless point the parties to a viable, low-cost solution.

This case involves a complaint by Modtruss, Inc. (“Modtruss”), for willful patent infringement and related claims filed on April 22, 2016, along with a motion for a temporary restraining order and preliminary injunction.  Defendant, Battlefrog LLC (“Battlefrog”) filed a motion to dismiss prior to the May 25th hearing date set on the motion.  

The motion to dismiss was not ripe at the time of the May 25th hearing and was thus not addressed by the Court.  On June 3rd, Modtruss filed a response to the motion to dismiss and the parties jointly asked the Court to stay discovery until the motion to dismiss was decided.  Immediately thereafter, on the same day, Modtruss filed its “First Amended Complaint,” which added an additional claim for patent infringement, which almost mirrored an existing claim.

Judge Ross noted that the amended complaint was allowed as a matter of course pursuant to Fed. R. Civ. P. 15(a)(1)(B), but it effected an abandonment of the original pleading under Pintando v. Miami-Dade Hous. Agency, 501 F.3d 1241, 1243 (11th Cir. 2007).  As the original pleading was a nullity, the Court found the motion to dismiss was rendered moot citing several cases including Graham v. Copco, NO. CIV.A. 13-00249-CG-B, 2013 WL 5287613, at *1 (S.D. Ala. July 10, 2013).  Judge Ross pointed out that the joint request for a stay of discovery until a moot motion was decided was inconsistent with the record as controlled by existing law.

The abandonment by amendment had the further effect of undermining the motion for TRO and preliminary injunction which had already been argued.  Although the amendment sought injunctive relief (and was almost identical to the original complaint), it did not adopt the original motion and no additional motion for injunctive relief was filed.

Recognizing that the procedural effects of the amended filing did not appear consistent with the intent of Modtruss’ filings, the Court directed the parties to provide clarification.  Defendant Battlefrog was required to respond to the amended complaint and directed to further file a notice on the docket, either that its motion to dismiss as originally filed applied to the amendment or that a new motion would be filed.  

Similary, Plaintiff Modtruss was directed to file a notice explaining whether its original motion for a TRO and preliminary injunction should be treated as unchanged by the amendment or whether Modtruss intended to file a separate motion for TRO and preliminary injunction.  Without further notice the Court stated that motion was moot.  If Modtruss adopted the original motion, Judge Ross informed the parties that she would treat the briefing as complete.

The Court then granted the requested stay of discovery to allow further clarification from the parties before proceeding with the case.

The ruling illustrates that an apparently innocuous filing can have unintended consequences, if a party does not provide for an exception to the general operation of existing procedural law.

The case is Modtruss, Inc. v. Battlefrog LLC, Docket no. 1:16-CV-1317-ELR, decided June 6, 2016, in the United States District Court for the Northern District of Georgia, Atlanta Division, assigned to Judge Eleanor L. Ross.

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Monday, March 28, 2016, 1:31 PM

Abstract Ideas Cannot be Permitted to Burden the "Basic Tools of Modern-Day Commercial and Social Interaction"

In a case originally filed in 2012, Judge Amy Totenberg granted Judgment on the Pleadings in favor of United Parcel Service, Inc. (“UPS”), and against Mobile Telecommunications Technologies, LLC (“MTel”), relating to U.S. Patent No. 5,786,748 (the ‘748 Patent).  The patent, filed in 1997 and issued on July 28, 1998, addressed a method to track packages and provide status information with text messages.  This case has been the subject of two earlier blog posts:  Court Recognizes Alice Decision Potentially Impacts Case by Allowing LateMotion for Judgment on Pleadings(Order of August 4, 2015) and “Court Delivers Markman Order in UPS Case On Order ofText Message Deliveries (Order of March 17, 2014).
In reciting the standard for granting a Motion for Judgment on the Pleadings, the Court concluded:  “In essence, the pleading ‘must contain sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on its face.”’”  Order, p. 2, quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009),   quoting in turn Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007).

This case is unusual in that the July 2015 Motion for Judgment on the Pleadings followed a fully briefed Summary Judgment Motion on which a Special Master’s recommendation had already issued (on March 25, 2015).  Noting that the motion “perhaps could have been filed sooner,” the Court nevertheless found the issue would likely be raised at trial and the Supreme Court case of Alice Corp. Pty. Ltd. v. CLS Bank Int’l, et al., 134 S. Ct. 2347 (2014), could be dispositive.

The Court recognized that “[s]triking the proper balance in identifying those ‘abstract ideas’ that are too ephemeral to be patentable is not an easy task.”  Undaunted, the Court undertook this task with regard to the ‘748 Patent, which claimed a method for providing notification by wireless communications of an express mail delivery undelivered by the appointed time.

In assessing whether MTel’s patent addressed an abstract idea the Court tried to “detect the beating heart of the patent, its animating function.”  Bancorp Servs., L.L.C. v. Sun Life Assur. Co. of Canada (U.S.), 687 F.3d 1266, 1279 (Fed. Cir. 2012).

The Court noted the two-part test identified by Alice.  First, is the claim “directed to an abstract idea or other patent-ineligible concept.”  Alice at 2355.  Second, does the claim add “an ‘inventive concept’ that includes an element or combination of elements that is ‘sufficient to ensure that the patent in practice amounts to significantly more’ than the abstract idea itself.”  Id. at 2355.  Describing in general terms a series of conventional steps will not suffice.  Id. at 2357.

Judge Totenberg found the recent case of Wireless Media Innovations, LLC v. Maher Terminals, LLC, 100 F.Supp.3d 405, 417 (D.N.J. 2015) aff’d per curiam 208 WL 463218 (Fed. Cir. Feb. 8, 2016), persuasive and strikingly similar.  In Wireless Media specifying monitoring details relating to the location and load status of shipping containers did not “overcome the fact that the core of the claim was about a basic organizational business process.”  Id.  The Court distinguished method patents that addressed “a specific piece of technology or technological problem.”  Order at 10.

Judge Totenberg found that the animating goal of the ‘748 Patent was to notify customers whether a package had arrived or not.  “Delivery notification is . . . the kind of conventional business practice long ‘prevalent in our system of commerce.’”  Order at 11.  The patent “concerns a longstanding ‘method of organizing human activity.’”  Order at 12.

Having found that the ‘748 Patent addressed an abstract idea, the Court next addressed whether it contained an “inventive concept” to carry it “across the threshold of patentability.”  Order at 12.  An “inventive concept” is required in order “to ensure that the claim is more than a drafting effort designed to monopolize the abstract idea.”  Alice at 2357.  Time after time the introduction of a computer configured to practice the method has been found insufficient.  Order at 13.  The Court further noted that the “machine or transformation” test is no longer “sufficient by itself.”  Order n. 2 citing Vehicle Intelligence and Safety, LLC v. Mercedes-Benz USA, LLC, 2015 WL 9461707, at *4 (Fed. Cir. Dec. 28, 2015).  Judge Totenberg found a concurring opinion of Judge Mayer particularly relevant to her analysis:  “generic computers and the internet are ‘the basic tools of modern-day commercial and social interaction,’ and their use should remain ‘free to all men and reserved exclusively to none.’”  Order at 15, quoting Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 723 (Fed. Cir. 2014) (Mayer, J., concurring).

The “inventive concept” addition is determined by quality not quantity.  Order at 16.  The Court noted that MTel’s limitations only served to illustrate that its purpose was to capture a specific technological implementation of a known business practice.  Arguments that UPS could perform the function of the patent with voice-communications and not just text ran against MTel’s arguments that the concept was innovative.  Order at 17-19.

In rejecting MTel’s arguments that UPS’s assertion of Section 101 was waived by its tardiness, the Court noted that patent eligibility is a question of law, and thus MTel was not prejudiced on the merits by an inability to develop the factual record.  Order at 21.  However, the Court noted its wide discretion in awarding costs and referenced the additional costs incurred by MTel as a result of UPS’s delay in affording the parties an opportunity to engage in settlement discussions before a final order is entered.

The case is Mobile Telecommunications Technologies, LLC v. United Parcel Service, Inc., No. 1:12-cv-03222-AT, Dkt. 161, entered in the U.S. District Court for the Northern District of Georgia, Atlanta Division, on March 24, 2016, by U.S. District Judge Amy Totenberg.

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Friday, March 18, 2016, 8:52 AM

NaturaLawn Attempts to Clip the Competition, brings Trademark Suit against Naturescape




 On February 23, 2016, Signum, LLC and NaturaLawn of America, Inc. (collectively, “NaturaLawn”), Maryland-based companies, filed a complaint in the Northern District of Georgia alleging trademark infringement, false designation of origin and unfair competition against Naturescape, Inc. (“Naturescape”), a Wisconsin corporation, due to its use of the mark NATURE’SLAWN.

 

NaturaLawn, according to the complaint, is a nationwide leader in lawn care services with over 27 years’ experience and over 70 franchises across 23 states. The complaint relates to two of NaturaLawn’s registered trademarks, Registration Nos. 1,414,588 and 2,543,921 for NATURLAWN and NATURALAWN , respectively.

 

Naturescape filed an intent-to-use trademark application for NATURE’SLAWN (Ser. No. 86521202), which NaturaLawn opposed during the opposition period. On March 1, NaturaLawn filed a Motion to Suspend the Opposition due to the civil trial, which has not been granted at this time.

 


While NaturaLawn does not currently offer services in the Atlanta market, according to the complaint, it has had Atlanta franchisees in the past and is in talks with potential franchisees to re-open in the area. Naturescape recently opened lawn care services in the Atlanta area using the name NATURE’SLAWN, instead of their company name, Naturescape, which they allegedly use in all other locations.

 

NaturaLawn claims it requested Naturescape to cease using the NATURE’SLAWN mark, however when it did not, NaturaLawn brought this suit asserting trademark infringement, false designation of origin and unfair competition.

 

NaturaLawn seeks an injunction, destruction of all of Naturescape’s advertising materials in relation to NATURE’SLAWN, withdrawal of the NATURE’SLAWN application, attorney’s fees and any further relief the court deems necessary.

 

The case is Signum, LLC and Naturalawn of America, Inc. v. Naturescape, Inc.., No. 1:16-cv-00560-WCO, filed 02/23/16 in the U.S. District Court for the Northern District of Georgia, Atlanta Division, and assigned to U.S. District Judge William C. O’Kelley.  

                                                                                                                   

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Wednesday, February 17, 2016, 10:45 AM

Patent Dispute over Unmanned Aerial Vehicles Launched in the Northern District of Georgia

Burkhard Wiggerich (“Wiggerich”), a German citizen residing in Arnsberg, Germany, commenced a patent infringement action against a Kansas limited liability Company, Blue-Chip Unmanned Aerial Solutions, LLC (“Blue-Chip”), on November 30, 2015 in the Northern District of Georgia.  The complaint asserts infringement of United States Patent Number 8,238,128 (the ‘128 Patent), which Wiggerich claims to have invented and own, and relates to unmanned aerial vehicles. 

Wiggerich asserts personal jurisdiction over Blue-Chip in part due to Defendant’s placement of “infringing devices into the stream of commerce” – a legal concept which potentially takes on new meaning with unmanned aerial vehicles.

Blue-Chip’s founders are promoted on its website as being military veterans who specialized in unmanned aerial vehicles (UAVs) and UAV operations.  The website declares “they were instrumental in successfully integrating UAS operations and training into high level DoD and DHS exercises both at home and abroad.” 

Wiggerich is the Managing Director of AirRobot GmbH & Co. and a Director of AirRobot US Inc., a Virginia corporation.  Figure 2 from the ‘128 Patent and an image from the web of an AirRobot unmanned aerial vehicle are pictured below:
  
The complaint asserts that Blue-Chip is liable for direct infringement of ‘128 patent , as well as for contributory and induced infringement.  The complaint alleges that the infringement has been and continues to be “willful, deliberate and intentional,” and that Wiggerich has suffered direct and proximate monetary damages.  Wiggerich prays for an injunction, an award of damages, a finding that the case is exceptional, an award trebling the damages because of the willful and intentional infringement, and reasonable attorney fees.

The case is Burkhard Wiggerich v. Blue-Chip Unmanned Aerial Solutions, LLC, No. 1:15-cv-04156, filed in the U.S. District Court for the Northern District of Georgia, Atlanta Division, on November 30, 2015, and assigned to U.S. District Judge Thomas W. Thrash, Jr.

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Tuesday, January 19, 2016, 2:11 PM

New Georgia Statute on Bad Faith Patent Cases May Discourage Both Weak and Strong Cases from Being Brought in Georgia

Plaintiff Walter Farmer (“Farmer”) initiated suit in September 2014 asserting infringement of claim 1 of his U.S. Patent No. 7,362,007 (the “’007 Patent”), issued April 22, 2008, and covering uninterruptable power supply technology (“UPS”) products against Alpha Technologies, Inc. (“Alpha”).  Alpha moved pursuant to a relatively new Georgia statute, O.C.G.A. §10-1-772 et seq., for an order requiring Farmer to post a $250,000 bond because of Farmer's alleged bad faith patent assertion.  The motion was addressed by Special Master James L. Ewing, IV in a 29-page Recommendation and Opinion that was adopted by Judge Leigh Martin May on December 9, 2015.

Special Master Ewing detailed a series of communications over several months beginning in April 2014 between the parties whereby Farmer informed Alpha of the perceived infringement by providing a claim chart and Alpha requested time to investigate the matter.  After Alpha missed its own September deadline, Farmer initiated action but held off service in a further effort to resolve the matter.  Alpha requested that Farmer hold off service until December 5 by which time it would substantively respond. Alpha submitted a response on December 5 denying infringement and asserting invalidity (without providing a claim chart).  Alpha further asserted that it appeared “that Mr. Farmer failed to conduct an adequate investigation and analysis” though no reasoning was provided for this conclusion.

Farmer filed a return of service on January 29, 2015.  The Special Master then considered O.C.G.A. §10-1-772 in connection with Alpha’s motion.  That statute sets for nine factors that may be considered tending to support the requirement of bond and seven that may be considered in denying bond.  

The nine factors potentially favoring requirement of a bond are:
            (1)  The demand letter fails to include the patent number, the name and address of the owners or any assignees, and fails to show specifically how the recipient’s products are covered by claims of the patent;
            (2)  Prior to sending the demand letter no analysis comparing the claims to the accused products was done or the analysis failed to identify specific areas in which the accused products were covered by claims;
            (3)  The recipient requested information omitted from the demand letter (as specified in 1) and that information is not provided;
            (4)  The demand letter demands a license fee or response within an unreasonably short time;
            (5)  A license is offered for an amount not reasonably based on a reasonable estimate of the value of the patent;
            (6)  The asserted claim is meritless or should have been known to be so;
            (7)  The claim or assertion is deceptive;
            (8)  Other similar claims of patent infringement have been asserted and information listed in these factors was not provided or a cout has found those similar claims to be meritless; or
            (9)  Any other factor the court finds relevant.

The seven factors which may be considered in support of a finding that there was no bad faith assertion are:
            (1)  The demand letter included the patent number, name of owners and assignees, if any, and showed specifically how the accused product was covered by the claims;
            (2)  The author of the demand letter provided any undisclosed information within a reasonable time after request;
            (3)  The author of the demand letter engaged in a good faith effort to establish infringement and to negotiate an appropriate remedy;
            (4)  The author of the demand letter has made a substantial investment in using or producing the patent or selling an item covered by its claims;
            (5)  The author of the demand letter is an inventor or original assignee, or is affiliated with an institution of higher education;
            (6)  The author has demonstrated good faith business practices in prior efforts to enforce the patent (or a substantially similar patent) or successfully enforced the patent (or a substantially similar patent); or
            (7)  any other factor the court finds relevant.

The Special Master addressed the factors in detail over 11 pages of his Recommendation and Report.  The comprehensive analysis found that the factors in each and every instance addressed favored denial of the motion.  Nevertheless, there was no sua sponte criticism of Alpha for bringing the motion.  Although the statute may require a plaintiff to defend a motion with little basis, neither the statute nor the Special Master, in this instance, portend any risk to a defendant for pursuing motion that does not satisfy any of the statute factors (much less a majority of them). In providing his analysis, the Special Master found it unnecessary to address whether or not the Georgia statute had been preempted by federal law.  The Special Master found no reasonable likelihood that Farmer made a bad faith assertion of patent infringement, and with respect to each factor he found the position of Farmer superior to the position of Alpha.  The Special Master’s Recommendation and Opinion was adopted by Judge May in full without objection by the parties.

O.C.G.A. § 10-1-772 should serve as a road map to all counsel prior to filing a patent infringement action in Georgia.  There are two areas where it may have particular impact.   

First, non-practicing entities may be less inclined to initiate patent suits in Georgia as they may be subjected to motions and potential bond requirements that can be avoided elsewhere, and this statute makes it at least appear that the state is less receptive to NPE suits.  

Second, companies that want to assert patents in Georgia need to be mindful of the interplay between this new statute and the First-to-File rule, which strongly favors the choice of forum of the party first filing a patent infringement suit or suit for declaratory judgment on the patent.  See Michael A. Cicero, "First-to-file and Choice-of-Forum Roots Run too Deep for Micron to Curb Most Races to the Courthouse," Journal of the Patent and Trademark Office Society, August 2008, Vol. 90, No. 8, at 541-614.  See also Electronics for Imaging, Inc. v. Coyle, 394 F.3d 1341, 1347-1348 (Fed. Cir. 2005) (discussing anticipation alone insufficient to overcome First-to-File Rule being favored). 

A party seeking to send a demand letter in keeping the statute will usually want to avoid jurisdiction preemption by an infringing party (with a suit for declaratory judgment).  The statute, therefore, may require adoption of a strategy that takes the First-to-File rule into account.  For example, a conservative approach might involve sending a demand letter showing conformance with the statute and allowing a reasonable time for response.  The letter could be carefully drafted to satisfy an exception to the First-to-File Rule as discussed in T2 Products, LLC v. Advantus Corp., 2014 WL 4181932 at 2-4 (W.D.N.C.), and in Nutrition & Fitness, Inc. v. Blue Stuff, Inc., 264 F.Supp.2d 357, 360-362 (W.D.N.C. 2003)Under this approach, the recipient could be given an opportunity to further assist in expanding or clarifying the results of the infringement investigation (as described in the letter) and to respond to a claim chartYet, in addition, the letter could inform the recipient that litigation was imminent if contrary facts, opinions, and other information were not provided within a reasonable timeThe letter could propose thirty days as a reasonable time to respond, but might wisely indicate receptiveness to a longer period based on a reasonable request.  The letter could assert an objective of ensuring a full and fair decision on infringement was made before litigation commenced, but that, absent timely additional information, litigation was imminent and would be promptly commenced upon expiration of recipient's period to respond.  The paragraph could conclude with a statement that the letter was further intended to reasonably notify recipient of the status of the investigation and dispute, so as to avoid any necessity (or reasonableness) of anticipatory litigation on the part of recipient.  There are a number of factual specific considerations that must be taken into account in connection with this approach (for example, if a patent holder has a history of making unfulfilled threats, uncertainty remains - weighing against the exception).  

The First-to-File Rule has not lost its vitality and allows for a great deal of judicial discretion.  Therefore, no matter how good the strategy, there can be no guarantee of success to the patent holder in ultimately moving forward in the desired forum.  

In the final analysis, O.C.G.A. § 10-1-772 will likely discourage NPEs from pursuing claims with little merit in Georgia as designed, but the statute also complicates the strategic approach of Praciticing Entities and NPEs with stronger claims who desire to pursue a patent infringement claim in the stateA number of patent holders may elect to pursue claims in other jurisdictions where there is less risk (or cost) in ensuring that jursidiction can be obtained and retained in the forum preferred by the patent holder.


Walter Farmer v. Alpha Technologies, Inc., Dkt. No. 62, Case No. 1:14-cv-2958-LMM (N.D. Ga. Dec. 9, 2015), adopting the Recommendation and Opinion of Special Master James L. Ewing, IV, Dkt. No. 61, filed November 18, 2015.

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