Personal Audio, LLC

A Delaware jury has returned two verdicts in favor of Personal Audio, LLC against Alphabet (Google). A “Phase One” verdict finds four of five tried claims (from two patents) infringed and finds none of those five claims proven invalid as obvious, a “Phase Two” verdict finding with respect to all four infringed claims that Personal Audio proved “that Google actively induced users of unlicensed Android phones with Google Play Music installed to infringe”. A “Total Reasonable Royalty” of $15.1M, after a $33M ask, was awarded to the plaintiff, with the jury indicating in that second verdict that the infringement found was willful. Given that Chief Judge Colm F. Connolly presides over this litigation, the public can make a more informed guess as to where that damages award, if and however enhanced, might go.

The seven-plus-year litigation (1:17-cv-01751) leading up to the June trial between Personal Audio, LLC and Alphabet (Google)—over five claims from two audio player device patents—has been typical in many respects. It has seen a transfer (from the Eastern District of Texas to the District of Delaware); a stay (pending the conclusion of certain inter partes review (IPR) proceedings); a multimillion dollar ask (here, $33M in reasonable royalties); and the usual flurry of dispositive, Daubert, and in limine motions. The flurry in this case, though, surfaced an atypical question for Chief Judge Colm F. Connolly to answer: whether Personal Audio should be permitted to substitute a live expert at trial for one that it did not realize had died in January 2022 until just a few weeks ago. Per Judge Connolly, it should not.

In mid-April, District of Delaware Chief Judge Colm F. Connolly posted two new standing orders related to that courtroom’s disclosure requirements: one requiring litigants to disclose details related to any nonrecourse funding arrangements with third parties and a second requiring comprehensive disclosure of corporate control. The first has a time frame associated with its mandates, while the second is open ended; however, Judge Connolly has now handed down at least one “show cause” order taking a plaintiff to task for ignoring the new requirements for litigants assigned to his courtroom.

In a burst of new filings, Honeyman Cipher Solutions LLC has sued six defendants across three districts: Adidas (1:20-cv-00401), ASICS Digital (1:20-cv-00402), Evernote (1:20-cv-00403), and PayPal (1:20-cv-00404) in the Western District of Texas; Asana (3:20-cv-00928) in the Northern District of Texas; and Slack (1:20-cv-01076) in the District of Colorado. As with its last complaints, filed separately in the District of Delaware against LogMeIn and Snap, infringement allegations focus on the defendants’ use of Apple’s iTunes Connect and Google’s Android Developer Console to register and distribute their iOS and Android apps. There is a history of challenges to those allegations.

Multiple Delaware NPEs under the same apparent control have each taken over the litigation of patents—earlier passed to a Texas entity for assertion—after the patents have boomeranged back. Most recently, Circuit Ventures LLC assigned a family of circuit monitoring patents to Texas entity Wireless Monitoring Systems LLC, which asserted them in litigation from November 2016 to January 2019 before assigning the family back. Circuit Ventures has sued NXP Semiconductors (6:19-cv-00275) and Pepprl + Fuchs (4:19-cv-01515) in April 2019 and Honeywell (1:19-cv-00857), Link Interactive (1:19-cv-00856), and Scout Security (1:19-cv-00858) so far in May. Likewise, Universal Cipher LLC assigned a single patent generally related to “dynamic” text generation to Cumberland Systems, LLC, which asserted it in litigation from May 2017 to May 2018 before returning the patent to Universal Cipher, which has now sued Best Buy (2:19-cv-00160), Target (2:19-cv-00163), and Wal-Mart (2:19-cv-00164) over it. These reversals, as well as other assignment activity, suggest a return to Delaware for these and other NPEs affiliated with the same patent attorney, perhaps motivated by a recent Federal Circuit opinion clarifying that targets of letter-writing campaigns can seek declaratory judgments in their home districts, rather than risk being sued elsewhere.

A patent infringement suit brought against Google by Personal Audio, LLC has been transferred from the Eastern District of Texas (1:15-cv-00350) to the District of Delaware (1:17-cv-01751) due to improper venue. This appears to be the first time that a court has transferred a case against Google for that reason since the US Supreme Court issued its May 22 opinion in TC Heartland, which held that the narrower patent venue statute (28 USC Section 1400(b)), not the general venue statute (28 USC Section 1391), governs in infringement suits. In addition to the issue of venue propriety itself, the court also ruled on two other, threshold issues related to venue that had not been previously addressed by TC Heartland or subsequent cases: that the burden of proof for venue challenges falls on the plaintiff, under prior precedent for the patent venue statute; and that venue in patent suits should be analyzed based on facts and circumstances existing at the time a suit is filed, in light of the text of the statute.

While a Texas court considers a motion to dismiss a September 2015 affirmative case filed by Personal Audio, LLC, Alphabet (Google) has filed an action (3:17-cv-05583) in the Northern District of California seeking declaratory judgments that the same two patents at issue in Texas are invalid and are not infringed and that the accused products specifically identified in infringement contentions are licensed. The patents generally relate to audio player devices, with infringement accusations focused on devices that include the Google Play Music application. Google filed the motion to dismiss for improper venue in the wake of the US Supreme Court’s TC Heartland decision; it earlier lost a motion to transfer for convenience to California.

Inventor Leigh M. Rothschild has continued his streak of conceding to venue challenges in Texas, less than a year after largely consolidating his litigation in that state. On July 18 and 24, dockets were opened in the Central District of California and Delaware, respectively, for the cases against ShopStyle (1:17-cv-00978) and Clique Media (2:17-cv-05463) brought by the Rothschild-controlled Product Association Technologies, LLC after the defendants filed motions to dismiss due to improper venue in the Eastern District of Texas cases against them (2:17-cv-00270, 2:17-cv-00265). Product Association also dismissed cases against IAC Search & Media (2:17-cv-00269) and Verizon (Altaba (f/k/a Yahoo), Polyvore, Yahoo Holding) (2:17-cv-00272, 2:17-cv-00268) with prejudice on July 20 after the defendants filed motions to dismiss for improper venue or, in the alternative, to dismiss due to the alleged invalidity of the asserted patent (6,154,738) under Alice. Each of those virtually identical motions was filed on June 26 and alleged that the ‘738 patent is impermissibly directed to the abstract idea of “locating and sending product information in response to a request”.

Codec Technologies LLC has filed ten new suits in its sole litigation campaign against Craig Electronics (2:16-cv-01426), Curtis (2:16-cv-01436), Datawind (2:16-cv-01437), Global Phoenix Computer Technologies Solutions (2:16-cv-01432), Naxa Electronics (2:16-cv-01428), Pivos Technology Group (2:16-cv-01427), PLR IP Holdings (2:16-cv-01435), RSPA (d/b/a Sungale) (2:16-cv-01429), Voxx Electronics (2:16-cv-01430), and Vulcan Electronics (2:16-cv-01431). The new complaints allege that tablets made and sold by each defendant infringe a single patent (6,825,780) generally related to data compression using multiple encoders on a single integrated circuit.

Plano Encryption Technologies, LLC (PET) has recently added cases against Alkami (2:16-cv-01032), Best Buy (2:16-cv-01049), Etsy (2:16-cv-01050), and Shutterfly (2:16-cv-01053) to its sole litigation campaign. The new complaints assert two patents (5,991,399; 5,974,550) generally related to security in online transactions, targeting the defendants’ mobile apps. At roughly the same time, the court granted dismissals, all but one with prejudice, in earlier cases in the campaign, all of which were brought against banks or providers of online and mobile banking applications.

As the PTAB gears up to review Personal Audio LLC’s 6,199,076 and 7,509,178 patents, the NPE continues to assert them in litigation against operating companies. This week, Personal Audio filed suit against Google, alleging that the company’s Google Play Music application, in combination with a device such as a smart phone or tablet, infringes the audio program patents (1:15-cv-00350).

Personal Audio sued Acer, ASUS, Apoolo, Azpen, Barnes and Noble, Fujitsu, Huawei, Lenovo, Toshiba, and ZTE in a single case asserting two patents (6199076; 7509178). Both patents relate to playlists and survived reexamination efforts by former defendant, Apple. In 2011, Apple was ordered to pay Personal Audio $8 million in damages. This new case accuses defendants’ devices that use music apps supplied by Google and Microsoft of infringement. The complaint also notes that Personal Audio sent assertion letters to several of the defendants in late 2012 and early 2013. 1/10, Eastern District of Texas, 1:14cv00008