Innovation Sciences, LLC v. HTC Corporation DC CAFC

The Federal Circuit has just upheld an attorney fees award for Amazon in litigation brought by Virginia Innovation Sciences, Inc. (VIS). Ruling on January 5, the appellate court agreed that the case became “exceptional” under Octane after a Markman order destroyed the NPE’s remaining claims, faulting the plaintiff for pushing ahead afterward without a viable infringement theory. Along the way, the Federal Circuit also more broadly clarified the significance of summary affirmances under Rule 36, explaining that a decision to uphold a ruling without providing an opinion is not a reflection of whether a case was “close, frivolous, or noncontroversial”.

District Judge Amos L. Mazzant has denied a motion to dismiss Eastern District of Texas cases brought by Innovation Sciences, LLC against Resideo Technologies and Philadelphia Contributionship Mutual (Vector Security). Those two defendants challenged the plaintiff’s standing to bring the lawsuits as to one of the many patents asserted in the campaign, arguing that a coinventor’s employment agreement at the time of the patent’s application nullified a later assignment of rights to the predecessor of Innovation Sciences. Judge Mazzant’s denial presents a procedural warning for patent infringement defendants.

Innovation Sciences, LLC, the Texas incarnation of Virginia Innovation Sciences, Inc. (VIS), has added a new round of litigation against four defendants already active in its long-running campaign, filing five suits against Amazon (4:19-cv-00769), HTC (4:19-cv-00752, 4:19-cv-00770), Resideo Technologies (4:19-cv-00771), and Philadelphia Contributionship Mutual (Vector Security) (4:19-cv-00772) last week in the Eastern District of Texas. Those new cases follow an August 2019 complaint filed against HTC and Resideo before the International Trade Commission (ITC) (337-TA-1180). This burst of activity comes in the wake of the Federal Circuit’s October 9 refusal to take up on mandamus a motion to transfer four existing cases, filed against the same defendants in July 2018, out of Texas and back to the Eastern District of Virginia. That motion was denied in a 69-page order months in the making and notable in several respects, including through its detailed analysis of how District Judge Liam O’Grady back in Virginia—despite having issued multiple orders regarding earlier members of the same patent family, including Alice and claim construction decisions—“does not have [the] extensive familiarity with the technology or the legal issues involved” that might otherwise have weighed in favor of transfer.

Last August, Virginia Innovation Sciences, Inc. (VIS) filed additional, separate cases against Amazon and HTC, asserting patents that had just issued in a large family already in litigation against the two companies. Those suits were dismissed without prejudice shortly thereafter, apparently to let the earlier cases play out. They now have—at least partially. In an April 2018 per curiam decision, the Federal Circuit upheld judgments from the Eastern District of Virginia ending cases in Amazon’s and HTC’s favor as to most of the patents asserted, and earlier in the year, VIS appealed subsequent orders in the defendants’ favor as to the remaining patents. Rather than await outcomes in those second appeals, VIS has opened up new cases against both Amazon (4:18-cv-00474) and HTC (4:18-cv-00476), this time asserting even newer patents, issuing in March 2018 and April 2018, as well as reasserting those August 2017 patents. The plaintiff has also filed separate cases against Honeywell (4:18-cv-00475) and Philadelphia Contributionship Mutual (Vector Security) (4:18-cv-00477), asserting one of the 2018 patents also at issue against Amazon and HTC. All of this new litigation has been filed in the Eastern District of Texas, rather than in Virginia.

Virginia Innovation Sciences, Inc. (VIS) has filed a second case against Amazon (2:17-cv-00422), asserting two patents already at issue in a separate, July 2016 suit against the defendant, as well as two patents newly asserted in the campaign, one of which issued on the date the complaint was filed, August 8. That same day, VIS filed yet another case against HTC (3:17-cv-00560), asserting two patents not among the multiple, related patents already at issue between the two defendants. In January 2017, those patents, also asserted against Amazon, were invalided under Alice, as patent-ineligibly drawn to the abstract idea of “converting a video signal for a mobile terminal to an ‘alternate display terminal’”. VIS has appealed that ruling to the Federal Circuit (2017-1482), as litigation before the district court continues.

The Patent Trial and Appeal Board saw the filing of petitions against a host of publicly traded NPEs in February, including Acacia Research Corporation, Pendrell Corporation, Wi-LAN Inc. (WiLAN), and Xperi Corporation (f/k/a Tessera Holding Corporation), with challenges also filed in campaigns waged by Intellectual Ventures LLC (IV); IP Bridge, Inc.; Uniloc Corporation Pty. Limited; and Monument Patent Holdings, LLC.