Patent reform was supposed to make patent litigation less common and less costly. But it could wind up costing Versata Software Inc. a whopping $391 million, if SAP America Inc. and its lawyers at Finnegan, Henderson, Farabow, Garrett & Dunner get their way.
On Sept. 16, SAP petitioned the U.S. Patent and Trademark Office to review a Versata patent that SAP was found to have infringed by a jury last year, in one of the biggest patent showdowns of 2011. The filing makes SAP among the first to take advantage of new post-grant review provisions of the America Invents Act that took effect the same day — exactly one year after President Barack Obama signed the AIA into law. The new rules allow anyone charged with infringement of a business method patent to request that the USPTO cancel one or more of the patent’s claims. Other types of patents will be eligible for post-grant review after the final phase of the AIA is implemented next March.
In March 2011, after seeing an earlier verdict against SAP wiped out, lawyers for Versata at McKool Smith persuaded a federal jury in Marshall to hit SAP with a $345 million verdict for infringing a patent related to pricing technology. The jury’s award — which grew to $391 million with interest — is now on appeal before the U.S. Court of Appeals for the Federal Circuit.
In its 78-page petition, filed Sept. 16 by Erika Arner of Finnegan Henderson, SAP told the freshly formed U.S. Patent Trial and Appeal Board that at least five of Versata’s patent claims should be thrown out. Arner argued that the patent claims are variously too abstract, based on prior art, and that they cover “well-understood, routine, conventional activity.”
McKool partner Scott Cole says he and the rest of Versata’s legal team are examining the petition, which he says he hadn’t anticipated. “They’re attempting to take advantage of the new provisions of the America Invents Act,” he says. “They’re making invalidity arguments that they didn’t make during the trials.”
SAP’s Federal Circuit appeal is still being briefed, and Cole says oral arguments could be heard early next year. But if the Sept. 16 petition is granted, it’s possible that the court will stay the appeal until the PTO board issues a ruling.
Finnegan Henderson’s Arner declines comment on SAP’s petition. SAP was represented by Thomas Melsheimer of Fish & Richardson and James Batcheler of Ropes & Gray in the East Texas trial last year.
At least three other petitions were filed requesting post-grant review of business method patents on Sept. 16, according to the USPTO website. Five petitions were submitted for inter partes review — a process in which a third party can challenge the validity of any issued patent on the basis of prior art.