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Amazon Wins Appeals Court Ruling in Data Patent Validity Fight (1)

Jan. 9, 2019, 4:35 PMUpdated: Jan. 9, 2019, 7:46 PM

Amazon.com Inc. won its bid in federal court to kill a technology company’s patent describing a system for storing copies of data files across a network.

The U.S. Court of Appeals for the Federal Circuit Jan. 9 affirmed a decision by the Patent Trial and Appeal Board that AC Technologies SA’s Patent No. 7,904,680 was invalid because it was covered by a prior invention.

The decision interprets the U.S. Supreme Court’s ruling in SAS Institute Inc. v. Iancu that the PTAB must address all claims in a patent validity challenge if it decides to hear it.

Amazon and Blizzard Entertainment Inc. had challenged the patent’s validity on three separate grounds. The PTAB invalidated some of the patent’s elements based on two arguments about claim construction, which defines meaning and limitations of patent language. On reconsideration, the board invalidated the remaining elements based on their third argument—that a broad definition of the term “computer unit” would make those elements obvious and unpatentable.

AC Technologies appealed to the Federal Circuit, arguing that the board shouldn’t have considered the third argument because it didn’t do so in its initial ruling.

The Federal Circuit said the board must consider all unpatentability grounds raised in administrative challenges known as inter partes reviews, and that included the third argument. “Indeed, it would have violated the statutory scheme had the Board not done so,” the court said.

AC Technologies wasn’t denied due process because the board allowed the company to seek discovery and submit additional evidence related to the third argument, the court said. The company could’ve asked for a hearing before the board if it wanted one, the court said.

The Federal Circuit Jan. 9 also affirmed a separate PTAB decision invalidating another data access patent by AC Technologies, U.S. Patent No. 8,656,125, on the same grounds.

Hardy Parrish Yang LLP, counsel for AC Technologies, didn’t immediately respond to a Bloomberg Law request for comment. Perkins Coie LLP represented Amazon.

The case is AC Techs. SA v. Amazon.com Inc., Fed. Cir., No. 18-1433, 1/9/19.

To contact the reporter on this story: Alexis Kramer in Washington at akramer@bloomberglaw.com

To contact the editor responsible for this story: Rebecca Baker at rbaker@bloomberglaw.com; Keith Perine at kperine@bloomberglaw.com