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Vedder Thinking | News Vedder Price Client Wins Dismissal of Patent Infringement Suit on the Pleadings

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On April 20, 2015, Vedder Price's client Global Terminal & Container Services, LLC won dismissal of a patent infringement suit on the pleadings on the grounds that the subject patents were invalid under Section 101 of the Patent Act and the U.S. Supreme Court's decision in Alice Corp. v. CLS Bank International, 134 S. Ct. 2347 (2014). This win, granting a motion to dismiss filed by Vedder Price’s patent litigation team, is part of a growing trend in the district courts and the Federal Circuit to address Section 101 defects in patents-in-suit at the earliest possible stage of the litigation, thereby achieving considerable efficiencies and business certainty in appropriate cases. Such defects, including Section 101’s prohibition of patents on abstract ideas, have been made more amenable to motion practice at the pleading stage by the Alice ruling.  More such dismissals can be expected.

This case was brought by a non-practicing entity alleging that various shipping terminals and shipping practices infringed patents on inventory monitoring methods and systems. In granting the motion to dismiss, the court held that such patents were drawn to abstract ideas and not to "new and useful" processes and machines, as required by Section 101. The court determined that the patents were "directed to [an] abstract idea: monitoring locations, movement and load status of shipping containers within a shipping-container yard, and storing, reporting and communicating this information in various forms through generic computer functions." On this basis, the patents were ruled invalid, and the case was dismissed in its entirety.


Charles J. Nerko