Adobe Bests Argument That RPX Patent License Is Endorsement

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By Tony Dutra

April 8 — Adobe Systems Inc. was victorious over non-practicing entity Digital Reg of Texas LLC when the Federal Circuit affirmed April 8 that a Digital Reg patent was invalid even though it was previously licensed for $8.5 million to patent aggregator RPX Corp. 

RPX Corp. sometimes licenses patents from non-practicing entities, paid to license 6,389,541 from Digital Reg of Marshall, Texas.

It sublicensed that patent, which is on regulating access to digital information or content, to its members.

Defendant Adobe Systems Inc., which was accused of infringing the patent, did not have a sublicense.

Digital Reg argued that RPX's license signaled its blessing of a valid patent, at least to the extent of overcoming Adobe's evidence of obviousness.

But Adobe succeeded in keeping the $8.5 million that RPX paid for the patent hidden from the jury on the grounds that it had limited relevance and because of RPX's unique business model.

Judge Claudia Wilken of the U.S. District Court for the Northern District of California agreed to withhold the fact of the license's cost— but not its existence. An Adobe expert testified that the value of Digital Reg's other licenses was “really, really low,” and the court allowed Digital Reg to counter that the RPX license was “much, much higher” in value than the others.

The jury, which was instructed to consider the “commercial success of a product due to the merits of the claimed invention” in its analysis, found the '541 patent invalid as obvious.

Digital Reg argued in its appeal brief that the jury was precluded from determining the claims were obvious because evidence of the RPX licence was excluded at trial. But Wilken rejected its post-trial motions.

The Federal Circuit affirmed without opinion.

Digital Reg asserted the same patent in the Eastern District of Texas against a number of other companies. Apple Inc. and Microsoft Corp. were dismissed from one case. Litigation against Texas Instruments Inc., No. 6:15-cv-00744, and Siemens Product Lifecycle Management Software Inc., No. 6:15-cv-00742, among others, was stayed pending the Federal Circuit's opinion.

DiNovo, Price, Ellwanger & Hardy LLP represented DR. Weil, Gotshal & Manges LLP represented Adobe.

To contact the reporter on this story: Tony Dutra in Washington at adutra@bna.com

To contact the editor responsible for this story: Mike Wilczek in Washington at mwilczek@bna.com