September 13, 2012, by Mandour & Associates, APC

San Diego – A California federal judge on Tuesday threw out OIP Technologies Inc.’s patent infringement suit against Amazon.com Inc. over a system for determining pricing automatically in online retail, saying the patent is ineligible.

OIP sued Amazon in March alleging it infringes OIP’s patent by making and using software systems for automated testing and selection of prices for products offered for sale on Amazon.com, wherein statistics are generated from the testing, estimated outcomes are determined and prices are selected based on those outcomes.

Amazon argued that the patent claims failed the “machine-or-transfomation” test and are directed to the abstract idea of price optimization, which is a fundamental economic principle that is reserved for the public, and Judge Edward M. Chen of the Northern District of California agreed.

The patent’s only machine elements merely incorporate a computer that is employed only for its most basic function, the performance of repetitive calculations, and so do not impose meaningful limits on the scope of those claims, Judge Chen ruled.

More fundamentally, it is clear that the patent falls within the statutory exception for abstract ideas, he said.

U.S. Patent Number 7,970,713 was issued to OIP’s predecessor Optivo Corp. in June 2011, 11 years after the application was filed, is titled “Method and apparatus for automatic pricing in electronic commerce.” The patent is designed to facilitate e-commerce price selection and optimization.

Optivo released its product, marketed as the Optivo Pricing Solution, in 2001 and allowed e-commerce companies to participate in trials of the technology, including Amazon, which took part in June 2001. The parties exchanged information under a non-disclosure agreement during that time.

The parties met in September 2001 to discuss Amazon’s potential acquisition of Optivo and its technology. Optivo gave a detailed presentation regarding the patent-pending technology, and projected that using the Optivo technology could increase margins by $100 million.

Amazon declined to purchase Optivo, but offered employment to two Optivo engineers as “price statisticians.” Both engineers fielded technical questions about the Optivo technology during the interview.

November 2, 2011, by Mandour & Associates, APC

San Diego – Smartphone manufacturer Motorola Mobility, who was recently purchased by Google, has received a total of $228 million in cash and licensing fees from an unnamed company for use of certain patents. Analysts are speculating that the company in question is Blackberry-maker Research in Motion (RIM.)

In a recent SEC filing, Motorola announced that in June of this year, it had entered into a settlement and licensing agreement with a company to resolve all outstanding legal disputes between them. Records indicate that in January 2010, Motorola filed a complaint with the United States International Trade Commission accusing Research in Motion of engaging in unfair trade practices by the importation and sale of RIM products that allegedly infringe on five Motorola patents.

A spokesperson for Motorola Mobility declined to share any information on the identity of the mystery company, however both Motorola and RIM announced in June that they had entered into a similar agreement. The agreement states that the two companies will share license rights to a number of unnamed patents that covered aspects of 2G, 3G, 4G, 802.11, and wireless email technology.

“The agreement includes provisions for an upfront payment of $175 million from the other company to [Motorola Mobility], future royalties to be paid by the other company to [Motorola Mobility] for the license of certain intellectual property, and the transfer of certain patents between the companies,” said the SEC statement.

The legal settlement announced in June between Motorola and Research in Motion came nearly two months before Google made public its plans to purchase Motorola Mobility, a subject also covered in the SEC filing. Motorola indicated that the Merger with Google might have a “negative impact” due to “intensifying litigation or increasing new legal claims from competitors and other third parties, particularly as companies vigorously pursue and protect their intellectual property rights with patent litigation.”

Motorola Mobility also claimed that the merger may be hampered due to uncertainty of the outcome from employees and customers alike.

October 10, 2011, by Mandour & Associates, APC

Los Angeles – Smartphone Technologies has filed suit against Amazon in the Eastern District of Texas, alleging that the Amazon Kindle Fire and other Kindle products infringe five separate patents. Amazon unveiled the Kindle Fire last week and has scheduled for a November 15 release. Preorders for the widely anticipated tablet reached 95,000 sales in the 24 hours after the tablet was first announced. By releasing the Kindle Fire, Amazon is hoping to push past the e-reader market and to compete with Apple and its iPad.

Smartphone Technologies is owned by Acacia Research Corp., a nonpracticing entity, which amasses patents and licenses them to subsidiaries. Smartphone’s complaint alleges that Amazon is infringing patents for:

• Power Conserving Intuitive Device Discovery Technique in a Bluetooth Environment
• Handheld Computer System that Attempts to Establish an Alternative Network Link Upon Failing to Establish a Requested Network Link
• Method and Apparatus for Communicating Information over Low Bandwidth Communications Networks
• Method for controlling a handheld computer by entering commands onto a display feature of the handheld computer; and
• System and method for displaying and manipulating multiple calendars on a personal digital assistant

Each of these patents covers common features in smartphones and tablets. Smartphone has alleged similar patent infringements against other companies in the past, including Apple, Research in Motion, and Motorola.

Smartphone’s complaint against Amazon, however, does not include requests for preliminary injunctions. The company is seeking only damages and reasonable royalties. Therefore, Amazon customers who have preordered the Kindle Fire can breathe a sigh of relief because it appears that Smartphone’s lawsuit will not affect the release date of Kindle Fire. While this is good news for Amazon customers, Amazon cannot be happy about getting tangled up in the constant patent litigation surrounding personal electronics. This is not exactly a warm reception into the tablet market.

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