Smartflash LLC et al v. Apple Inc.

The Federal Circuit has reversed a $533M infringement verdict against Apple after ruling that claims from three data access and storage patents (7,334,720; 8,118,221; 8,336,772) asserted by Smartflash LLC and Smartflash Technologies Limited (collectively, “Smartflash”) are invalid under Alice (2016-1059). In an opinion issued on March 1, the Federal Circuit ruled that while District Judge Rodney Gilstrap had correctly found the patents are directed to an abstract idea—“conditioning and controlling access to data based on payment”—he had erred in finding that the claims contained the requisite inventive concept. Rather, the court held, the claims merely implemented that abstract idea using generic Internet activity and computer hardware, and are thus not patent-eligible.

The Patent Trial and Appeal Board (PTAB) continues to chip away at patents asserted by Smartflash LLC and Smartflash Technologies Limited (Smartflash) against Amazon, Apple, Google, HTC, Samsung, and others. On Tuesday, the Board determined claim 32 of Smartflash’s 8,118,221 patent to be invalid under Alice (CBM2014-00194). This decision comes a year after a Texas jury found that Apple had willfully infringed that claim, as well as claims of two additional, related patents (7,334,720; 8,336,772), and awarded Smartflash $533M in damages. (Later, in July 2015, District Judge Rodney Gilstrap ruled that Apple’s infringement was not willful; that same week, he also overturned the damages verdict, concluding that the jury had been given flawed instructions on damages, but declined to revisit an earlier decision denying a motion to invalidate the patents-in-suit under Alice.) Also on Tuesday, the Board found claims 6, 8, and 10 of a second patent in Smartflash’s campaign (8,033,458) to be patent ineligible under Section 101 and ruled claim 11 of the same patent to be indefinite (CBM2015-00016).