This is an updated installment in our Augmented Reality/Virtual Reality Litigation Update series. In this article, we provide an update on a few recent developments in some of the cases we highlighted previously in the series. Each of the cases discussed in this series involves AR/VR technologies and discusses the legal proceedings surrounding them. Links to the original articles discussing the cases are provided throughout this article.
Virtual Immersion Technologies Cases
On March 3, 2020, we posted an article discussing the following cases: Virtual Immersion Techs. LLC v. Exxon Mobil Corp., 1-20-cv-00966 (N.D. Ill. 2020); Virtual Immersion Techs. LLC v. Jacobs Eng'g Grp., 1-20-cv-00969 (N.D. Ill. 2020); Virtual Immersion Techs. LLC v. M A Mortenson Co., 1-20-cv-00971 (N.D. Ill. 2020); and Virtual Immersion Techs. LLC v. Siemens Corp., 1-20-cv-00973 (N.D. Ill. 2020). The article can be found here. This case involved Virtual Immersion Technologies, a non-practicing entity, asserting a patent covering a VR theater that allows participants and performers to interact in the VR environment using input/output devices.
Since our initial post about this string of cases, each case has been voluntarily dismissed by Virtual Immersion Technologies. These dismissals are likely an indication that the parties reached a settlement agreement. Since these cases settle so quickly, the settlement agreement was likely a settlement for low value. Even if the settlements were low value settlements, it still provides more money to Virtual Immersion Technologies to file more cases asserting the same or similar patents. We will keep an eye on Virtual Immersion Technologies and provide an update of any subsequent cases involving AR/VR technology.
Syte-Visual Conception Ltd. v. Home Depot U.S.A., Inc.
On March 27, we posted an article discussing Syte-Visual Conception Ltd. v. Home Depot U.S.A., Inc., 1-20-cv-00909-LMM (N.D. Ga. 2020). The article can be found here. This case involved patents covering AR technology implementing systems, apparatuses, and methods for capturing, transmitting, and outputting data in a way that "improves the functioning of the mobile phone." In this case, Home Depot and Slyce Acquisition Inc. allegedly infringed the asserted patents through technology employed in its mobile application to overlay images of products onto images captured by a user.
Since our initial post, Syte-Visual filed an amended complaint, removing Slyce Acquisition as a defendant. Additionally, Home Depot answered Syte-Visual's amended complaint on May 26, 2020, and the Northern District of Georgia Court issued a scheduling order on June 30, 2020 to set deadlines for the case proceedings.
In its answer, Home Depot denied both counts of alleged patent infringement. Additionally, it asserted five defenses: failure to state a claim; non-infringement of the patents-in-suit; failure to mark and limitation on damages for the patents-in-suit; invalidity of the patent-in-suit; and prosecution history estoppel. Home Depot will bear the burden to prove that one or more of these defenses will succeed. A summary of each is below.
A failure to state a claim defense argues that the complaint failed to present sufficient facts which, if taken as true, indicate that a violation of law has occurred (or that the plaintiff is entitled to damages). If this defense succeeds, the case is dismissed. This defense stems from Federal Rule of Civil Procedure 12(b)(6), and it must be presented in the defendant's response to the complaint.
A non-infringement defense is a way for the defendant to argue that the plaintiff has not shown that the alleged infringing product actually infringes the asserted patent. To succeed on a non-infringement defense, the defendant must show that plaintiff did not sufficiently prove that the accused product meets every limitation of the claim language. In a sense, the defendant must poke holes through the plaintiff's infringement arguments.
Patent laws require that patentees give notice to the public that a specific product is a patented article. There are various ways to do this, such as fixing "patent" or another similar mark on the product, its packaging, or its label. A defense of failure to mark and limitation on damages requires a showing that patentee failed to adhere to patent marking standards. In such a case, this defense allows an alleged infringer to evade paying damages to the patent owner. There are some exceptions to this rule, however. For example, if an alleged infringer is given notice that it infringes a patent covering an unmarked product, continued infringement may allow the patent owner to recover damages for the time after the alleged infringer was notified.
An invalidity defense is an argument that the asserted patent is invalid, and thus, it should have never been granted. To succeed on this defense, a defendant must prove that a patent does not satisfy the patentability requirements set by current patent laws. There is most often a presumption of patent validity that the defendant would have to overcome by presenting clear and convincing evidence that the patent is invalid.
A prosecution history estoppel defense argues that, during prosecution of the asserted patent, the patent owner made narrowing amendments to its application that result in preclusion from arguing to broaden the scope of a narrowed claim later in the life of the patent (for instance, in a claim of patent infringement during litigation). Prosecution history estoppel is a complicated doctrine, but generally, to succeed on this defense the defendant must prove that the patent owner made a claim amendment or a statement during prosecution to the United States Patent and Trademark Office narrowing what is covered by the patent to get the claims allowed. The defendant must also prove that it relied on this amendment or statement and is now facing a legal detriment; for example, that the defendant relied on the narrowing amendment to conclude that it did not infringe the asserted patent. If successful, this defense bars the plaintiff from enforcing what would normally be a valid patent right.
Although Home Depot answered the complaint and asserted these defenses, and it appears as if litigation is going to move forward, they likely offered an initial settlement offer. If there was an initial offer, it was not one that the parties could agree to. That being said, there could be additional settlement offers as the case proceeds, particularly as the parties being to engage in discovery and claim construction discussions. As the parties seek discovery and allow claim construction to take shape, they will better understand their positions as it relates to infringement and the various defenses offered by Home Depot. According to the June 30, 2020 scheduling order, some important dates follow: the joint claim construction statement is due November 2, 2020. The court did not set a claim construction hearing date yet, but claim construction related discovery as well as claim construction briefing will conclude by December 22, 2020. A hearing will follow. Additionally, the close of factual discovery is set for February 25, 2021 (eight months after discovery opens).
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