Patent Affirmed as Unenforceable Due to Prosecution Laches

PERSONALIZED MEDIA COMMUNICATIONS, LLC V. APPLE INC.

Before Reyna, Chen, and Stark. Appeal from the United States District Court for the Eastern District of Texas.

Summary: The district court did not abuse its discretion by holding that Personalized Media Communication’s patent was unenforceable based on prosecution laches.

Personalized Media Communications, LLC (PMC) sued Apple in the U.S. District Court for the Eastern District of Texas for patent infringement. At trial, a jury found that Apple infringed at least one of the claims and awarded PMC over $308 million in reasonable-royalty damages. The district court held a bench trial on remaining issues and found PMC’s patent unenforceable based on prosecution laches. The district court concluded that “the only rational explanation for PMC’s approach to prosecution is a deliberate strategy of delay,” determining that PMC successfully employed an inequitable scheme to extend its patent rights.

The Federal Circuit affirmed the lower court’s ruling, concluding that the district court did not abuse its discretion by finding that PMC’s delay in prosecution was unreasonable and inexcusable under the totality of the circumstances, and that Apple suffered prejudice attributable to the delay. The Federal Circuit affirmed the district court’s analysis that PMC’s patent prosecution strategy was unreasonable and inexcusable under the totality of the circumstances by considering, among other facts: PMC’s institutional abuse of the patent system by filing 328 applications in the months leading up to the patent term change from 17 to 20 years; the establishment of a Consolidation Agreement with the USPTO to prosecute PMC’s patents over time; and waiting 16 years after the patent’s priority date to introduce specific claim limitations into the claims. Further, the Federal Circuit explained that the district court properly held that Apple established prejudice by showing Apple invested in the development and launch of an infringing product during PMC’s express strategy of prosecution delay.

Editor: Paul Stewart