Appeals Court Affirmation of Firewall Patent’s Invalidity Will Have ‘Positive Lasting Impact’ on Financial Services IndustryNews | August 3, 2017
In March of 2017 the United States Court of Appeals for the Federal Circuit dismissed Intellectual Ventures’ (“IV”) appeal of the Patent Trial and Appeal Board’s ruling that invalidated a firewall patent IV used to sue financial institutions across the nation. Intellectual Ventures II, LLC v. Commerce Bancshares, Inc, Nos. 2016-1519, 2016-1520, 2016-1528, 2017 WL 1130320 (Fed. Cir. March 27, 2016). “This is a tremendous victory for our clients, and it will have a positive lasting impact on the entire financial services industry,” states Jason Jackson, a partner in Kutak Rock’s Omaha office. “It deals a significant blow to the business model of non-practicing entities who acquire patents for the purpose of bringing lawsuits alleging that technology commonly used in the banking industry is infringing.” Kutak Rock represented three large, regional banks (“the Banks”), Commerce Bancshares, Inc., Compass Bank, and First National Bank of Omaha, who were cross-appellants.
The growth of the non-practicing entity (“NPE”)—typically a company whose only business is to acquire patents and aggressively enforce them—has led to innumerable lawsuits over the last decade. IV, which allegedly holds more than 70,000 patents and is perhaps the best-known NPE, filed suit against several financial institutions in a number of jurisdictions alleging infringement of a patent relating to network firewalls. In 2014, in response to IV’s lawsuits, the Banks challenged the patentability of IV’s firewall patent in inter partes review proceedings before the Patent Trial and Appeal Board (“PTAB”) at the United States Patent and Trademark Office. At trial, Jackson, lead counsel for the Banks, successfully argued that the firewall patent was invalid. IV subsequently appealed that decision. On December 9, 2016 Jackson argued for the Banks before the United States Court of Appeals for the Federal Circuit that the patent was properly found invalid by the PTAB. On March 27, 2017 the Court affirmed the PTAB’s decision.
Jackson leads Kutak Rock’s Post-Grant Proceeding Group and has served as counsel in more than a dozen post-grant proceedings before the PTAB. He also has served as lead counsel in numerous patent infringement suits brought in various U.S. district courts.