The Federal Circuit has upheld the $20M verdict in favor of EcoFactor, Inc. in its smart thermostat campaign, turning away several challenges from trial court defendant Alphabet (Google). Western District of Texas Judge Alan D. Albright had denied a motion for summary judgment challenging an asserted patent under Alice, opting to send related questions to the jury, which found in EcoFactor’s favor. Google appealed Judge Albright’s denial of summary judgment, which turned out to be the wrong path, the court commenting in its recent opinion that “[d]enial of summary judgment decides only one thing—that the case should go to trial”.

The outcome of a validity challenge at the Patent Trial and Appeal Board (PTAB) frequently depends on a comparison of the challenged claims to asserted prior art. However, as a recent Federal Circuit ruling makes clear, the dividing line between such a comparison and an outright claim construction can be a “fine” one—and this distinction can be critical, because claim constructions receive less deference on appeal. In its precedential Google v. Ecofactor decision, the court held on February 7 that while the PTAB stated that it was not construing a key claim at issue in inter partes reviews (IPRs) filed by Alphabet (Google) and Ecobee, it had in fact done so by effectively limiting the claim’s scope. The Federal Circuit also ruled that this implicit construction had been incorrect as a matter of law, agreeing with the petitioners that the Board had been wrong to reject their invalidity arguments as a result.

This week there was a flurry of activity in Taction Technology, Inc.’s litigation against Apple, much of it centered around the plaintiff’s third-party litigation funding (TPLF), characterized as having been provided by two special purpose vehicles (SPVs) associated with the litigation finance firm Burford Capital. Among several recent orders issued by Magistrate Judge Jill L. Burkhardt of the Southern District of California, one in particular stands out in light of the continuing debate over TPLF-related discovery: an order to show cause why sanctions should not be imposed on the Burford SPVs for their potential violation of a duty of candor to the court.

The Federal Circuit has for the first time interpreted a closely watched decision on venue from the Fifth Circuit, the regional circuit that determines the applicable law governing convenience transfers in Texas patent cases. That October 2022 ruling, In re: Planned Parenthood, appeared to depart from the Federal Circuit’s prior take on issues central to the analysis of such transfer motions, including the location of evidence, the cost of attendance for witnesses, and the district judge’s overarching discretion over such matters. However, the Federal Circuit’s precedential In re: Google opinion, issued on February 1, argues that Planned Parenthood does not undercut its current approach. In Google, the court held that a clear showing that a venue is more convenient takes precedence over the district judge’s discretion. Even more significantly, the Federal Circuit determined that NPEs do not have an interest in getting cases to trial quickly—and that a district judge lacks the discretion to give undue weight to his district’s time to trial. The opinion reversed another transfer denial from Western District of Texas Judge Alan D. Albright, and comes months after Judge Albright began attempting to fill the gap with his own reading of Planned Parenthood.

In litigation as complicated as EcoFactor, Inc.’s smart thermostat campaign, any three-month period could see significant developments, but over the last three months, in this particular campaign, a Western District of Texas jury has returned a $20M verdict in EcoFactor’s favor while an Administrative Law Judge (ALJ) in EcoFactor’s second investigation before the International Trade Commission (ITC) has handed down an initial determination (ID) against EcoFactor, finding no Section 337 violation. With that partial backdrop, EcoFactor has filed yet another district court case against Alphabet (Google) (6:22-cv-00350), again in West Texas where District Judge Alan D. Albright prepares for upcoming trials in 2020 cases filed against ecobee and Vivint.  

The start of 2022 has seen yet another round of litigation in the smart thermostat campaign of EcoFactor, Inc. The patent holder has filed new suits against familiar defendants Alarm.com (Pointcentral) (6:22-cv-00055), Alphabet (Google) (6:22-cv-00032), ecobee (6:22-cv-00033), Vivint (6:22-cv-00034), and Resideo Technologies (6:22-cv-00069), as well as a first suit against new defendants Amazon (6:22-cv-00068) and LG Electronics (8:22-cv-00103). This campaign started in 2019, with prior rounds of litigation either centering around or sandwiched between two investigations before the International Trade Commission (ITC), one ending with no violation found (337-TA-1185) and the other having seen a December 2021 evidentiary hearing (337-TA-1258). This latest round is further complicated, as earlier rounds have been, by competing declaratory judgment actions, one filed by ecobee (1:22-cv-10049) and another by Google (5:22-cv-00162).

In late February 2021, EcoFactor, Inc. filed a second complaint before the International Trade Commission (ITC) naming as respondents in the proposed investigation Alphabet (Google), Carrier Global, ecobee, Emerson Electric, Honeywell, Johnson Controls, Resideo Technologies, and Siemens (337-TA-1258). Infringement of five patents is alleged, with EcoFactor’s sights set on the provision of certain smart thermostats, prompting five proposed respondents—Carrier (1:21-cv-00328), ecobee (1:21-cv-00323), and Emerson Electric (1:21-cv-00317) in the District of Delaware; Google (3:21-cv-01468) and Resideo Technologies (3:21-cv-01496), in the Northern District of California—to file subsequent declaratory judgment actions over the same set of patents, perhaps to avoid EcoFactor filing yet more litigation in either the District of Massachusetts, where this metastasizing campaign started in late 2019, or the Western District of Texas, where it spread in early 2020.

EcoFactor has filed a second round of cases in its smart thermostat litigation, hitting the same six defendants: Alarm.com (6:20-cv-00076), Alphabet (Google) (6:20-cv-00075), APX Holdings (Vivint) (6:20-cv-00080), Daikin Industries (6:20-cv-00077), ecobee (6:20-cv-00078), and Schneider Electric (6:20-cv-00079), this time in the Western District of Texas. Last October, EcoFactor filed a complaint against all six with the International Trade Commission (ITC), following up with a District of Massachusetts case against each, asserting up to four different patents. The Texas front in the litigation has been opened shortly after the Massachusetts suits were stayed to await the outcome of the ITC investigation now underway, the hearing for which is scheduled for this July.