A suit brought by Vringo subsidiary I/P Engine against Google and several companies was overturned by the US Court of Appeals for the Federal Circuit in Washington on August 15. The 2-1 decision resulted in Vringo’s shares falling more than 70%.
Vringo brought the suit in 2012 against Google and some its customers, which included AOL, Gannett, IAC/InterActive, and Target. The suit claimed that Vringo’s original filtering technology, which determines where within search results to place advertisements, had been used in such Google products as AdWords and AdSense. Google claimed that the filtering methods had been used by several search engines and that the invention was not new.
Vringo had initially won a jury verdict of infringement against Google in 2012 and had been awarded $30 million. The jury had found that the Google’s Adwords had infringed upon two of Vringo’s patents.
The Federal Circuit decision overturned the previous trial decision.
The per curiam majority opinion written by Judge Evan Wallach ruled the claims at issue are patent-ineligible on the basis of obviousness under Section 103. However, Judge Haldane Robert Mayer wrote a concurring opinion with a commentary explaining why the claims at issue are to patent-ineligible subject matter in contravention of Section 101.
“The Supreme Court in Alice Corporation v CLS Bank International…for all intents and purposes, recited a ‘technological arts’ test for patent eligibility,” Judge Mayer wrote. “Because the claims asserted by I/P Engine…disclose no new technology, but instead simply recite the use of a generic computer to implement a well-known and widely-practiced technique for organising information, they fall outside the ambit of 35 USC 101.”
In a footnote, Judge Mayer noted that “[t]here is, of course, some ‘overlap’ between the eligibility analysis under section 101 and the obviousness inquiry under 35 USC § 103. Section 103, however, asks the narrow question of whether particular claims are obvious in view of the prior art. By contrast, the section 101 inquiry is broader and more essential: it asks whether the claimed subject matter, stripped of any conventional elements, is ‘the kind of discover[y]’’ that the patent laws were intended to protection.”
This prompted Hal Wegner, partner at Foley & Lardner, to ask whether an element in a non-obvious combination can be “conventional” under Section 101, “The concurrence argues that the Section 101 issue should have been decided first – particularly as a time time-saving device. But, how can something be considered ‘conventional’ if it is nonobvious?” Wegner asked in one of his widely-read email alerts.
The Federal Circuit’s decision was criticised by Michael Borella, associate with McDonnell Boehnen Hulbert & Berghoff, on the Patent Docs blog. He described the decision as “disturbing.”
Judge Mayer said the Supreme Court’s June 6-3 Alice v CLS Bank opinion "made clear that abstract ideas untethered to any significant advance in science and technology are ineligible for patent protection." He described the two-prong CLS Bank test as a "technological arts test for patent-eligibility” and said that when applying this test "advances in non-technological disciplines, such as business, are irrelevant".
Borella said Judge Mayer was staking out “shaky ground” when he asserted that claims drawn to the application of principles outside of the scientific realm cannot be saved from patent ineligibility because they are “overly broad”. Judge Mayer said I/P Engine’s claims failed the Mayo/CLS Bank test because they “simply describe the well-known and widely-applied concept that it is often helpful to have both content-based and collaborative information about a specific area of interest."
Borella responded: “We have three of nine Supreme Court justices, and at least one Federal Circuit judge, ready to bar business method patents completely. The math is simple –patentees are one Federal Circuit judge away from a panel that will likely find any business method claim patent-ineligible, regardless of whether its contribution is novel and non-obvious.
“Further, the evidentiary standard for invalidating a patent under 101 appears to be quite low as well as subjective – just throw around the words ‘routine,’ ‘conventional,’ ‘generic,’ and ‘too broad’ rather than compare the language of the claims to relevant prior art.”
Judge Raymond Chen dissented in the verdict.
Vringo’s stock fell more than 70% after the opinion came out. It said last week that it intends to file a petition with the Federal Circuit for an en banc review of the decision. The petition is due on September 15 under Federal Circuit rules, but I/P Engine has filed an unopposed motion for a 30-day extension.
