AdvanceMe Inc v. RapidPay LLC, --- F.Supp.2d ----, 2007 WL 2350644 (August 14, 2007)
Judge: Leonard Davis
Holding: Defense verdict following bench trial - patent invalid
The bench trial in this case concluded on day 5 on July 20, 2007. As I noted previously, each side used a little under 11 hours. A little over three weeks later, Judge Davis issued his 54 page findings and conclusions under FRCP 52(a) which held that the patent invalid because it was obvious and anticipated.
"The patent-in-suit, simply put, is a computerized method for securing debt with future credit card receivables," Judge Davis wrote. "While the patent inventor, Barbara Johnson, implemented an aggressive marketing and business development program that brought this financing method to widespread use, she did not invent a new business method. Rather, Johnson built on long-established prior art, packaged the idea in a new way, and marketed it aggressively. . . . There are multiple prior art references, not considered by the PTO when issuing the patent, that render the patent invalid, especially in light of the Supreme Court’s recent ruling in KSR Int’l Co. v. Teleflex, Inc. . . . While Johnson’s work exhibits excellent entrepreneurship, it does not entitle AdvanceMe to a legal monopoly on this method of providing financing to small businesses. Rather AdvanceMe must continue to compete in the marketplace for its share of the market, which will benefit the economy and consumers as a whole."
Judge Davis held that there was insufficient evidence to conclude that Johnson obtained the patent through inequitable conduct, and that the evidence was also insufficient to establish that this was an exceptional case and that the Defendants are entitled to attorneys’ fees. In a footnote, he concluded that both Reach and MMT infringe the ‘281 patent, both directly and by inducing and contributing, based on the infringement analysis he conducted as part of his findings, but that the infringement was not willful. As for court costs, he included a footnote directing the parties to review his recent opinions before submitting a bill of costs.
For those of you keeping score, that drops the 2007 win rate for plaintiffs to 33% and the two-year win rate to 57%.
