Timing Is Everything: Alice in East Texas (Again)

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Timing Is Everything: Alice in East Texas (Again)


Well, we warned you that Alice v. CLS Bank was going to remain a hot topic in 2016.

Two more data points to support that theory have emerged, each of which, in a different way, relates to the proper timing of a judicial decision on the legal question of whether a patent’s claims are written so as to claim an unpatentable abstract idea—that is, the Alice question.

First, Magistrate Judge Payne of the Eastern District of Texas issued an order granting a plaintiff’s motion to strike expert testimony at trial regarding to the Alice question. Noting that the Alice question is a question of law for the judge to decide, not a question of fact for the jury, Judge Payne concluded that he would not allow expert testimony on that issue at trial, and “expect[ed] to rely on [the expert’s] opinions very little, if at all” in deciding the issue himself. That suggests that the Alice question can and should be decided earlier—at the motion to dismiss or summary judgment stages.

Second, the Electronic Frontier Foundation calls attention to a petition for a writ of mandamus filed with the Federal Circuit by Marten Transport in a case brought by Eclipse IP and pending before the same Judge Payne. In that petition, Marten asks the Court of Appeals to order Judge Payne to rule on a motion to transfer venue and a motion to dismiss on Alice grounds, both of which have been pending for nearly six months. During that time, Marten has been required to incur the expenses of defending the case in a forum it believes is inconvenient against a claim it believes to be based on an invalid patent. Marten reports that it has contacted the court about its pending motions without response. That suggests that a defendant can raise the Alice issue early in a case, but may not receive a prompt resolution of that question before being forced to litigate other (expensive) issues in a jurisdiction with as many active patent cases as the Eastern District of Texas.

There is, however, another way. If, as EFF reports, the value of the Eclipse cases is in the $45,000–95,000 range—well below the cost of defending a patent lawsuit to judgment—then there is an easy step courts can take to minimize the costs of litigation and avoid the timing trap. Under the new federal rules governing discovery, in which discovery must be managed so as to be proportional to the value of the case, courts faced with motions posing the Alice question could stay all other discovery until they have a chance to determine whether the asserted patent claims were even eligible for patenting in the first place. If not, case closed. If so, game on.

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