This post is our latest review of noteworthy case developments in the Eastern and Northern Districts of Texas for the month of August 2019. Two subjects stand out this month from the Eastern District: (1) a new EDTX local rule from Chief Judge Gilstrap regarding "Eligibility Contentions" for challenging claims as patent-ineligible under § 101; and (2) venue.
New "Eligibility Contentions" Requirement
On July 25, 2019, Chief Judge Gilstrap issued a standing order for all patent infringement cases filed in his court, in which he introduced § 101 subject matter Eligibility Contentions. As a result, defendants that wish to challenge a patent as patent-ineligible under § 101 now need to provide fact-based Eligibility Contentions early in the case.
Specifically, the rule states, "No later than 45 days after receiving service of the 'Disclosure of Asserted Claims and Infringement Contentions,' each party alleging that any asserted claim does not qualify as patent-eligible subject matter . . . shall serve on all parties its 'Eligibility Contentions,' . . . ." The 45-day deadline coincides with the deadline to serve invalidity contentions. See P.R. 3-3.
Judge Gilstrap's order further requires that the "Eligibility Contentions" include a chart containing the following information:
- Each exception to eligibility (e.g., abstract idea) to which each challenged claim is directed and the factual and legal basis therefor.
- Whether one or more of the challenged claims are representative of any other challenged claims.
- A description of the industry, at the relevant time, in which the challenged claims are alleged to be well understood, routine, and conventional, and the factual and legal basis therefor.
- A description of how each element of each challenged claim, both individually and in combination with the other elements of that claim, was well understood, routine, and conventional in the relevant industry at the relevant time, and the legal and factual basis therefor.
- Other factual or legal basis for how the challenged claims are otherwise ineligible for patent protection.
In addition to the charts, "[w]ith the 'Eligibility Contentions,' the party alleging that any Challenged Claim does not qualify as patent-eligible subject matter must produce or make available for inspection and copying all materials upon which that party seeks to rely."
Dynamic Data Technologies, LLC v. Qualcomm Inc., et al. , 2:18-cv-00470 (2019-08-13, Order, E.D. Tex.) (Robert W. Schroeder, III).
Qualcomm had performed interoperability testing in two labs located in the Eastern District of Texas. Judge Schroeder held that these labs did not constitute regular and established places of business for Qualcomm, and granted Qualcomm's alternative motion to transfer for improper venue. Judge Schroeder reasoned that "[Plaintiff] has not shown that [defendant] owns or leases the [Interoperability Testing] Labs, publicly lists the locations as their own, maintains any physical signage at the location, stores inventory for distribution or sales or conditions employment on proximity to the district." He further stated that Plaintiff "has [only] established that [defendant's] employees travel to the [Interoperability Testing] Labs to conduct interoperability testing but has not shown how such testing activities render or ratify the [Interoperability Testing] Labs as places of [defendant]."