Fed Circuit remands Fitbit, Nike and Canon patent suit

The US Court of Appeals for the Federal Circuit yesterday, June 25, revived a lawsuit involving fitness companies Fitbit and Nike after concluding that a lower court had erred in its rulings.

California-based Cellspin Soft had filed more than a dozen cases, in which it accused Fitbit, Nike, Canon, GoPro, Panasonic, and others of infringing various claims of four different patents at the US District Court for the Northern District of California.

Each of the patents relates to connecting a data capture device, such as a camera, to a mobile device, so that a user can automatically publish content from the data capture device to a website.

In January 2018, Fitbit and others moved to dismiss the case, claiming that the patents were ineligible for patent protection under section 101. The Californian court granted the motions and awarded attorneys’ fees to the companies.

However, yesterday, the Federal Circuit held: “Because we conclude that the district court misapplied our precedent in granting appellees’ motions to dismiss, we vacate its grant of the motions to dismiss, vacate its award of attorneys’ fees, and remand for further proceedings consistent with this opinion.”

The district court granted the appellees’ motions to dismiss after applying the Alice two-step framework.

On step one, the Californian court concluded that the asserted claims of US patent number 8,738,794 were directed to the abstract idea of “acquiring, transferring, and publishing data and multimedia content on one or more websites”.

On step two, the court concluded that the asserted claims don’t recite an inventive concept, finding that the various claim elements, such as the data capture device and Bluetooth-enabled mobile device, represent generic computer components performing “as expected according to their ordinary use”.

While the district court acknowledged Cellspin’s argument that there was a factual dispute about whether the “combination” of these elements was “well-understood, routine and conventional”, the court held it didn’t need to reach this issue.

Finally, the Californian court concluded that the remaining claims from the other patents were all directed to a “substantially similar abstract idea” as the ‘794 patent.

Cellspin appealed against the decision, arguing that its asserted claims are patent eligible and so the Federal Circuit should reverse the district court’s dismissal and attorneys’ fees awards.

Applying the two-step test, Circuit Judge Kathleen O’Malley said that the Federal Circuit agreed with the district court that the asserted claims are directed to an abstract idea.

However, the Federal Circuit also found that the lower court erred in respect to the inventive concept enquiry, by ignoring allegations that, when properly accepted as true, preclude the grant of a motion to dismiss.

“Cellspin’s allegations identify several ways in which its application of capturing, transferring, and publishing data was unconventional,” said O’Malley.

She added: “In this case, Cellspin made specific, plausible factual allegations about why aspects of its claimed inventions were not conventional, eg, its two-step, two-device structure requiring a connection before data is transmitted. The district court erred by not accepting those allegations as true.”

The district court’s error in granting the motions to dismiss necessitates that the attorneys’ fees awards also be set aside, said the Federal Circuit.

O’Malley concluded: “The district court erred by not accepting Cellspin’s well-pleaded allegations as true with respect to whether its patents capture, transfer, and publish data in a way that is plausibly inventive.”

The court vacated and remanded the case, for further proceedings consistent with its opinion.