Tuesday, February 8, 2022
Real-Time Adaptive Streaming vs. Netflix, Inc.No. 21-1484
In 2017, Realtime sued Netflix for patent infringement in the District of Delaware (“Delaware Lawsuit”). After Netflix sued inter partes examination (“IPR”) on the claimed patents, Realtime voluntarily dismissed the Delaware lawsuit. Realtime then sued Netflix in the Central District of California (“California Lawsuit”), but also voluntarily dismissed the California lawsuit. Netflix filed the California lawsuit for attorneys’ fees under 35 USC § 285 for the Delaware lawsuit, IPRs, and the California lawsuit. The court awarded costs for the California lawsuit only. Realtime is appealing the sentence and Netflix is cross-appealing.
On appeal, Realtime argues that the court erred in awarding attorneys’ fees. First, Realtime argues that Netflix was not a “winning party” under Section 285. According to Realtime, his voluntary termination without prejudice to the California lawsuit did not make Netflix a “winning party” because there was no “judicially sanctioned change in the legal relationship of the parties”, as RFR Industries, Inc. v. Century Steps, Inc. requires. Realtime argues that the “two-termination rule,” whereby an earlier voluntary termination turns a subsequent voluntary termination into a termination with prejudice, does not apply until a third suit is filed, and Buckhannon Board & Care Home, Inc. v. West Virginia Department of Health and Human Resources couldn’t take it any other way. He argues that even if the voluntary dismissal were with prejudice, it would not be a “final court decision”, citing DE Mossberg & Sons, Inc. v. Timney Triggers, LLC. Second, Realtime argues that there was nothing “exceptional” about its choice to refile its lawsuit in the Central District of California. He argues this type of forum selection is permitted by federal rules, and even though this was a forum purchasesas the court concluded, attorneys’ fees cannot be awarded on this basis alone.
Netflix defends the court’s award of attorneys’ fees for the California lawsuit, arguing that the “two-fire rule” applies and makes Netflix a “winning party.” In addition, according to her, this case was globally “exceptional”, and not only because of the two voluntary dismissals. On cross-appeal, Netflix argues that it should also have been awarded attorney fees for the IPRs and Delaware lawsuit. According to Netflix, PPG Industries, Inc. v. Celanese Polymer Specialties Co. the stated Section 285 allows a prevailing party to recover costs incurred in a related Patent Office proceeding that is a “substitute for litigation”, and IPRs are such a substitute. And the Delaware lawsuit, according to Netflix, is a related litigation of the type of the Ninth Circuit which arranged for the transfer of warrant costs.
Wednesday, February 9, 2022
Alphatec Holdings, Inc. v. NuVasive, Inc., No. 20-2245
In a previous DPI requested by Medtronic, Inc. (“NuVasive I”), the Board concluded that the Frey and Michelson prior art references invalidated claim 1 – the only independent claim – of Alphatech’s patent. The Federal Circuit confirmed. Alphatec then applied for IPR of dependent claims 6-9 and 18 of the ‘334 patent (“NuVasive II”). In the final written decision, the Commission stated that, from NuVasive Ithe collateral estoppel “applies to the non-patentability of claim 1”, and NuVasive was “excluded from reviving [in NuVasive II] if Frey and Michelson teach all the limitations of claim 1. . ., including for the purpose of determining the patentability of [the] dependent claims. Only claim 18 has survived. Alphatec appeals.
According to Alphatec, in upholding claim 18, the Board misapplied collateral estoppel. He submits that the Board’s analysis was based on the conclusion that “Michelson does not support the modification proposed by the applicant to make the Frey implant long and narrow”, but the limitation “long and narrow” appears in claim 1 and was found in NuVasive I be taught by Michelson and Frey. It adds the only additional limitation of claim 18 – “wherein said maximum lateral width of said implant is approximately 18mm” – was not addressed by the Board.
NuVasive responds that the Board correctly applied collateral estoppel in the analysis of claim 18. It argues that Alphatec’s IPR, unlike Medtronic’s, argued that claim 18 was not patentable over Michelson, Frey and an additional reference. According to NuVasive, the Commission’s statements regarding Michelson concerned an amendment based on the additional reference which was not at issue in NuVasive II, so collateral estoppel did not apply. NuVasive also argues that the PTAB has authority limited to that granted by Congress which does not include derived common law authority such as the application of collateral estoppel.
Friday, February 11, 2022
Apple Inc. v. Zipit Wireless, Inc.No. 21-1760
In 2013, Zipit notified Apple that Apple’s iPhone® enforced Zipit’s patents and that Apple needed a license. Until 2016, the parties exchanged communications, with Zipit claiming the patents were infringed and Apple claiming the patents were invalid and not infringed. Zipit also made two in-person visits to Apple’s California offices. In 2020, Zipit asserted the patents against Apple in the Northern District of Georgia, where Zipit resides. After Zipit voluntarily dismissed its complaint, Apple filed a lawsuit for declaratory judgment in the Northern District of California (“district court”). Zipit requested dismissal for lack of personal jurisdiction, and the district court granted Zipit’s motion. While the district court found that the first two due process factors were met (Zipit (1) “deliberately directed its activities” against Apple, a forum resident, and Apple’s claim (2) “ar[ose] out of or bound[d] to “Zipit’s forum activities”), he concluded that the third due process factor was not because it would not be “reasonable” to exercise personal jurisdiction over Zipit. The district court found most of the Burger King Corp. against Rudzewicz the reasonableness criteria are met, but have held precedent on the federal circuit, Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc., required a finding of unreasonableness because Zipit’s contacts with the forum were solely “for the purpose of warning of infringement or negotiating license agreements”. Apple is appealing.
On appeal, Apple argues that the court should have exercised personal jurisdiction over Zipit. Because Red Wing Shoe Co.he argues, other federal circuit cases like Trimble Inc. v. PerDiemCo LLCclarified that there is no clear rule prohibiting specific jurisdiction where a patent holder’s activities in the forum are for the purpose of warning against infringement or negotiating licensing agreements. Trimble, he argues, cautioned against such “special rules for patent cases” and believed that the “central question” remains whether due process factors are met. Apple argues that Zipit’s communications to Apple and forum visits are sufficient under Burger King for a reasonable exercise of personal jurisdiction.
Zipit responds that it would be unreasonable for the district court to exercise personal jurisdiction over Zipit. He argues Red Wing Shoe detained cease-and-desist letters and license offers of the type he sent to Apple do not establish personal jurisdiction. red wing, he argues, likened them to settlement offers, which the Supreme Court declined to use for jurisdiction, citing public interest. He argues that the Federal Circuit has ruled that personal jurisdiction also cannot arise from the accused infringer’s residency in the forum, or from visits to the forum to negotiate licenses.
© 2022 Finnegan, Henderson, Farabow, Garrett & Dunner, LLPNational Law Review, Volume XII, Number 40