Chrimar Systems, Inc. d/b/a CMS Technologies et al v. Anixter Inc.

Recent setbacks before the Patent Trial and Appeal Board (PTAB) have not dissuaded ChriMar Systems, Inc. and ChriMar Holding Company, LLC (collectively, “ChriMar”) from continuing to file new lawsuits. Last week, the affiliated NPEs sued Polycom (6:19-cv-00015) in the Western District of Texas and USA Vision Systems (3:19-cv-00114) in the Northern District of Texas. Among the four patents asserted across these new complaints (all four against USA Vision; two, against Polycom) are three patents that were successfully challenged in inter partes reviews (IPRs), the invalidations arising from which have been appealed to the Federal Circuit. As it has throughout this campaign, ChriMar accuses the defendants of infringement through the provision of “Power over Ethernet powered devices and/or power sourcing equipment”, both complaints targeting “powered devices” (IP phones for Polycom and IP cameras for USA Vision Systems) but only the USA Vision Systems complaint targeting “power sourcing equipment” (“switches, midspans/injectors, and network video recorders”).

Early in June, affiliated NPEs ChriMar Systems, Inc. and ChriMar Holding Company, LLC (collectively, “ChriMar”) filed its second case of 2018, accusing Anixter (6:18-cv-00248) of infringement through the sale (and/or offer for sale) of products made by one of a long list of identified “unlicensed manufacturers”. ChriMar breaks the accused products into two categories: (1) those that receive power through an Ethernet port, providing as example categories “cameras, speakers, phones, access points, and keypads” and (2) those that provide power to another device through an Ethernet port, providing “PoE (Power over Ethernet) switches, midspans/injectors, and network video recorders” as example categories. The new complaint adheres to ChriMar’s pattern of asserting patents earlier in suit, together with the most recently issued member of the same family, which generally relates to communicating information about remote electronic equipment on a network.

The Patent Trial and Appeal Board (PTAB) had an eventful April, capped by two US Supreme Court decisions addressing inter partes review (IPR). While the Court found IPR constitutional in Oil States Energy Services, in its companion decision in SAS Institute, the Court also barred the PTAB’s practice of instituting trial as to a subset of the challenged claims (partial institution decisions). As a result, since those April 24 opinions, the PTAB has begun to institute trial for all challenged claims for IPR petitions where the petitioner is likely to prevail as to at least one claim (and for all petitioned grounds, a practice not required by SAS Institute). Among the affected IPRs instituted in late April were two against Lone Star Silicon Innovations LLC, while the PTAB saw IPR petitions filed in April against Oyster Optics, LLC and Uniloc Corporation Pty. Limited. The Board also issued final decisions throughout April in IPRs against ChriMar Systems, Inc.; Global Equity Management (SA) Pty. Ltd.; Papst Licensing GmbH & Company Kg; Skky, Inc.; and Uniloc.

The Patent Trial and Appeal Board (PTAB) saw petitions for inter partes review (IPR) filed in large campaigns affecting a variety of market sectors in January, including the automotive campaign waged by Intellectual Ventures LLC; frequent plaintiff Realtime Data LLC’s long-running data compression and media streaming campaign; the USB device charging campaign brought by Fundamental Innovation Systems International LLC; and the mobile device campaign run by IPA Technologies Inc., a subsidiary of publicly traded Quarterhill Inc. The Board instituted trial in January for petitions against Realtime Data and in the sprawling, 12-year anti-malware campaign still being litigated by publicly traded Finjan Holdings, Inc. The PTAB also issued final decisions in January in IPRs against Realtime Data; ChriMar Systems, Inc.; and IP Bridge, Inc.

The Patent Trial and Appeal Board (PTAB) remained at the center of a heated public debate over the issue of tribal sovereign immunity in December 2017. Motions to dismiss filed by the Saint Regis Mohawk Tribe in IPRs against several Allergan patents—acquired by the tribe and licensed back to their original owner to shield them through sovereign immunity—remain pending as the PTAB considers a wave of amicus briefs filed on both sides of the issue. The Board has since denied the tribe’s motion for an oral hearing on discovery related to alleged bias held by the USPTO and its leadership, and that bias’s effect on the selection of judges for the tribe’s case. Meanwhile, among the petitions for inter partes review (IPR) filed in December was one brought by Apple against MEC Resources, LLC, an entity owned by another Native American tribe, which took over an existing lawsuit asserting the challenged patent against Apple in the fall. Also in December, the Board issued institution decisions in petitions against Iridescent Networks, Inc.; Lone Star Silicon Innovations LLC; and publicly traded Quarterhill Inc.; while an IPR against Packet Intelligence LLC ended in an adverse judgment after petitioner Sandvine prevailed in a November trial.

ChriMar Systems, Inc. and ChriMar Holding Company, LLC (collectively, “ChriMar”) have filed two more Eastern District of Texas cases in their Power-over-Ethernet (PoE) campaign, one each against Johnson Controls (6:17-cv-00654) and Watchnet (6:17-cv-00657). The new complaints assert different subsets of ChriMar’s portfolio, targeting “PoE powered devices”, primarily networked cameras, that practice PoE standards. The newest patent to issue to ChriMar is asserted in both suits, and, as has become the practice each time ChriMar has asserted earlier, related patents throughout the campaign, HP and HP Enterprise (Aruba Networks) (2:17-cv-13784) and Cisco (2:17-cv-13770) have filed actions in the Eastern District of Michigan seeking declaratory judgments of noninfringement and unenforceability of the newly issued patent.

Affiliated NPEs ChriMar Systems, Inc. and ChriMar Holding Company, LLC (collectively, “ChriMar”) have filed cases since November 2008 asserting members of the same patent family, adding new suits as the USPTO has issued additional, related patents. The campaign has hit over 60 defendants over the years, and true to form, the latest complaint, filed against Panasonic (6:17-cv-00637) in the Eastern District of Texas, asserts not only patents already in suit in earlier cases but also the latest member of the family, which issued on November 7, 2017. The patents generally relate to communicating information about remote electronic equipment on a network. ChriMar has targeted devices (e.g., IP phones, network access points) that practice Power-over-Ethernet (PoE) standards. Two cases in this campaign have already been tried to juries, against defendants China Huaxin Post & Telecommunication Economy Development Center (Alcatel-Lucent Enterprise) and Aerohive Networks, with different results.