SRC Labs, LLC et al v. Microsoft Corporation CAFC

FG SRC LLC has filed two new cases, suing Intel (6:20-cv-00315) in the Western District of Texas and Xilinx (1:20-cv-00601) in the District of Delaware, targeting certain Field Programmable Gate Array (FPGA) products of each company. A single patent, generally related to an FPGA that contains a data prefetch unit that moves data from one memory to another independently of the logic blocks, is asserted against Intel and Xilinx, with FG SRC adding against the latter assertion of a second patent, broadly concerning maintaining dynamic random access memory (DRAM) data while reconfiguring an FPGA. To date, those two have fared the best through multiple inter partes reviews (IPRs) of FG SRC’s patents, including of patents originally at issue in separate cases filed in October 2017 against Amazon and Microsoft by SRC Labs, LLC and Saint Regis Mohawk Tribe (SRMT), cases now consolidated and stayed before the Western District of Washington.

The US Supreme Court has declined to grant certiorari in Saint Regis Mohawk Tribe v. Mylan Pharmaceuticals (2018-0899), ending a controversial patent-shielding strategy first used in late 2017 by a Native American tribe and its counsel. Under that strategy, the Saint Regis Mohawk Tribe acquired certain patents from pharmaceutical company Allergan and NPE SRC Labs, LLC, hoping to shield those assets from inter partes review (IPR) using the tribe’s sovereign immunity. However, in February and July 2018, the Patent Trial and Appeal Board (PTAB) and Federal Circuit each ruled that the tribe could not assert its immunity against IPR, although they each reached that conclusion on markedly different grounds from one another.

In October 2018, the Patent Trial and Appeal Board (PTAB) continued to see petitions for inter partes review (IPR) filed against Native American tribes following the Federal Circuit’s July ruling that the tribes’ sovereign immunity does not apply in the context of IPR, including a petition brought against the Saint Regis Mohawk Tribe over patents at issue in the campaign waged by SRC Labs, LLC. That petition was filed shortly before the Federal Circuit declined to revisit its sovereign immunity opinion in late October. Also in October, the PTAB instituted trial in four IPRs against a subsidiary of Quarterhill Inc., which just reported a significant drop in quarterly patent licensing revenue over the previous year. Meanwhile, October saw a number of notable final decisions, including one issued in an IPR against a subsidiary of General Patent Corporation.

In July 2018, the Patent Trial and Appeal Board (PTAB) saw the first new petition for inter partes review (IPR) filed against a Native American tribe since the Board’s March ruling that IPRs against tribes are not barred by sovereign immunity, a decision that was upheld by the Federal Circuit on July 20. Institution decisions were also issued by the Board in July for IPRs against Uniloc Corporation Pty. Limited and Sound View Innovations, LLC, among other notable plaintiffs. In addition, the PTAB issued final decisions throughout July for IPRs against a variety of other NPEs, from Intellectual Ventures LLC (which has continued to pursue its existing campaigns but has seemingly stopped filing new US litigation) to smaller entities like Andrea Electronics Corporation and XPRT Ventures LLC as well as individual inventor Daniel L. Flamm.

The Patent Trial and Appeal Board (PTAB) has rejected a motion to dismiss filed in several inter partes reviews (IPRs) by the Saint Regis Mohawk Tribe, declining to hold that the tribe’s sovereign immunity protects it from IPR. The February 23 ruling is just the latest setback for Allergan, the original owner of the patents challenged in those IPRs, which in September 2017 announced a controversial agreement under which it would assign the patents to the Mohawk tribe to shield the patents from PTAB challenges—only to see the same patents invalidated in district court. Meanwhile, shortly after the Board’s decision in the Allergan IPRs, Apple cited the same arguments in its opposition to a similar motion to dismiss in its IPR against MEC Resources, LLC, an entity owned by another Native American tribe seeking to leverage sovereign immunity.

Early last month, Allergan and the Saint Regis Mohawk Tribe announced a controversial arrangement under which the tribe would acquire the patents for Allergan’s dry eye treatment Restasis and license them back to Allergan. While the deal was intended to shield the patents from inter partes review (IPR) under the tribe’s sovereign immunity, that protection does not protect the patents from district court validity challenges, since the filing of suit waives immunity for such proceedings. As a result, Allergan’s deal with the tribe did not prevent District Judge William C. Bryson from ruling, on October 16, that all of the asserted claims from the six Restasis patents at issue are invalid as obvious over prior art (2:15-cv-01455). That order comes shortly after the September assignment of an additional 59 Restasis patent assets, from Allergan to the Saint Regis Mohawks, was made public by the USPTO. Meanwhile, the tribe has started a new campaign with coplaintiff SRC Labs, LLC under a similar licensing arrangement; the two entities have accused Amazon (2:17-cv-00547) and Microsoft (1:17-cv-01172) of infringing several computing patents.