Federal Circuit Guts $30 Million Jury Verdict Against Google

Federal Circuit Guts $30 Million Jury Verdict Against Google Diego M. Radzinschi / The Recorder Judge Raymond Chen,U.S. Circuit for the Federal Circuit.

SAN FRANCISCO — A divided panel of the U.S. Court of Appeals for the Federal Circuit threw out a $30 million judgment against Google Inc. on Friday, saying an IP monetization company’s patents on web search technology should have been deemed obvious as a matter of common sense.

A concurring judge singled it out as the kind of software technology case that should never go before a jury in the wake of the U.S. Supreme Court’s June decision in Alice Corp. v. CLS Bank.

The Alice decision reestablished a “technological arts test” for patent eligibility under Section 101 of the Patent Act, Judge Haldane Mayer contended. That test requires “some rough correlation between ‘the give and the get’—applicants who make little, if any, substantive contribution to the existing body of scientific and technological knowledge should not be afforded broad monopoly rights that potentially stifle future research and development.”

Mayer wrote only for himself in I/P Engine v. AOL, and the decision is non-precedential, so its value as authority is limited. Still, it offered one data point on how members of the court are interpreting the closely watched Alice decision.

The majority’s decision in I/P Engine turned on obviousness rather than on patent eligibility. Mayer and Judge Evan Wallach concluded that Google’s method for filtering search results in its AdWords and AdSearch programs were based on an obvious combination of search methods well-known since 1994.

Judge Raymond Chen dissented, saying the appellate court should respect a Virginia jury’s determination that I/P Engine’s particular combination of content-based search and collaborative search—where relevance is based on feedback from other users—was not so clear-cut.

I/P Engine is a patent holding company that bought the two patents at issue in the case for $3.2 million in 2011 and sought damages for infringement dating back to 2005, according to filings in the case. U.S. District Judge Raymond Alvin Jackson said he would leave it to Congress “to consider the merits of non-practicing patent entities in our patent system,” but limited damages to the one-year period following the filing of I/P Engine’s complaint. A jury returned a $30 million award following a 12-day trial.

Friday’s 2-1 per curiam decision held it’s well known content-based and collaborative filtering “are complimentary techniques that can be effectively combined,” and that “very basic logic” would dictate the particular combination claimed in IP/Engine’s patents. “No reasonable jury could conclude otherwise,” the court concluded.

Chen argued that the Federal Circuit should defer to the jury and to Jackson, who also found the patents non-obvious. “We need something beyond the invocation of the phrase ‘common sense’ or ‘simple logic’ to demonstrate the reason to combine the prior art references in this case,” he wrote.

To Senior Judge Mayer, a former chief judge of the court, the arguments over obviousness should be academic in a post-Alice world. It’s now clear, he wrote, that advances in science and technology must be “significant and well-defined” to merit patent eligibility.

That requirement is “particularly acute in the software arena, where claims tend to be exceedingly broad, development proceeds at breakneck speed, and innovation often occurs despite the availability of patent protection rather than because of it,” he wrote.

If patent eligibility had been decided early in the case, “as directed by the Supreme Court, unnecessary litigation, and nearly two weeks of trial and imposition on citizen jurors, could have been avoided,” he concluded.

It’s far from clear that other members of the court will agree with Mayer—the scope of Section 101 eligibility has long divided the court. The issue of when it should be determined has been controversial too, and could be decided next year in Ultramercial v. Hulu.

Google was represented on appeal by Quinn Emanuel Urquhart & Sullivan partner David Perlson. I/P Engine, which is now part of Vringo, was represented by Knobbe, Martens, Olson & Bear partner Joseph Re.

Contact the reporter at sgraham@alm.com.

LOAD MORE
Practice Area(s):