Success Story

Key Ruling May Influence Patent Infringement Cases Across Tech Industry

The U.S. Court of Appeals for the Federal Circuit affirmed a milestone Arizona federal court ruling for LLC in its patent dispute with Los Angeles-based patent-holding company RPost Communications/RMail Ltd. (RPost). The Federal Circuit denied RPost’s request for en banc review, making the court’s affirmance the final word on the matter. GoDaddy’s win will have a widespread effect on other RPost cases across the country.

The Ballard Spahr Intellectual Property team representing GoDaddy in this case was led by prominent patent litigator Brian LaCorte and included Jonathon Talcott. The team secured an important win for a valued client and produced a favorable precedent for the entire email technology sector of the U.S. economy.

The dispute began after GoDaddy received several threatening demand letters from RPost in 2013 alleging infringement of RPost patents. In January 2014, GoDaddy took a proactive approach—suing RPost in Arizona federal court seeking a court order that each of the six RPost patents in question was invalid and that, therefore, RPost could not enforce the patents against GoDaddy.

In June 2016, U.S. District Judge James A. Teilborg sided with GoDaddy, ruling that RPost’s patents covered abstract ideas—making each of the claims invalid under Section 101 of the Patent Act and applying the patent eligibility test from the U.S. Supreme Court’s landmark 2014 decision in Alice Corp. v. CLS Bank International. In that case, the Supreme Court ruled that abstract ideas involving basic escrow services implemented using a computer were not patent eligible.

Judge Teilborg granted GoDaddy’s request for summary judgment on the same invalidity issue, ruling the RPost patents covered ineligible abstract ideas concerning collection and reporting of information regarding the transmission status and or delivery of messages. By invalidating the RPost patents (at least the numerous patent claims asserted in the case), the court vacated a trial that had been set to begin in Phoenix in August 2016. In May 2017, the Federal Circuit denied RPost's appeal and in August 2017 denied the company's petition for rehearing and rehearing en banc.

"This is not a case where the claims are directed to 'a problem specifically arising in the realm of computer technology,'" Judge Teilborg said in his decision. "Rather, the problem of verifying the receipt of a message existed in the pre-internet, analog world, and [some of the disputed] claims simply disclose a process 'for which computers are invoked merely as a tool.'"

The case is one of the first published decisions in the U.S. District Court for the District of Arizona on the Section 101 patent eligibility issue following the U.S. Supreme Court ruling in Alice, and stands as an important early decision by an Arizona federal judge concerning the Supreme Court’s Alice test and guidelines for patent eligibility.

The ruling was a significant win for our client, and enables GoDaddy to operate unfettered by the threat of patent infringement claims by RPost. The high-profile decision could also have far-reaching implications for RPost's numerous cases throughout the country against other email marketing technology companies accused of infringing the same patents.

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