Law360 (October 8, 2021, 4:18 PM EDT) -- The Federal Circuit on Friday appeared to call into question EagleView's $375 million win over a
Verisk Analytics unit, suggesting its patents on technology for determining roof repair estimates through aerial imagery might be invalid under Alice.
The three-judge panel was considering Verisk Analytics Inc. subsidiary Xactware Solutions' appeal of a New Jersey federal judge's determination that the patents aren't invalid under the
U.S. Supreme Court's
Alice decision. Alice held that known ideas are invalid as abstract absent an inventive concept, and that carrying out a known idea with conventional computer functions doesn't make it patentable.
Xactware argued that the district court erred in determining that the patents solved the problem of generating roof repair estimates without using human measurements, and were therefore patent-eligible for improving a computer's functioning. The company's attorney Mark A. Perry of
Gibson Dunn & Crutcher LLP argued during Friday's 40-minute hearing that the claims should have been found abstract because they only cover "the idea of measuring roofs using photographs."
EagleView countered that the district court rejected Xactware's eligibility arguments three times, and said its patents squarely pass muster under Alice because they revolutionized the industry by eliminating the need for workers to climb on roofs with tape measures. EagleView attorney John C. O'Quinn of
Kirkland & Ellis LLP told the panel the patents therefore "did not automate conventional ideas for roof measurements."
That contention was put to the test Friday.
U.S. Circuit Judge Raymond T. Chen asked whether anything in the case record shows the claims could be carried out by a person using a pen and paper. Perry pointed to the inventor's notebook, which he said shows a sketch of a roof, equations and their solutions.
"It is absolutely done on pencil and paper with ... an X, Y, Z equation — basic trigonometry and the Pythagorean theorem," he said. Since the claims just say to carry out roof measurement on a computer, Perry told the panel "they are Alice claims through and through."
O'Quinn rejected that assertion, telling the panel the claims contain two concrete requirements that are both inventive: They use oblique images that have to be correlated.
U.S. Circuit Judge Raymond C. Clevenger, however, questioned whether that was inventive.
"Isn't the use of the computer to correlate images well-known? Then that's what's happening in your patent," he said.
U.S. Circuit Judge Richard G. Taranto also piped in, asking O'Quinn whether anyone outside the roofing industry had been using the claimed technique. The attorney said it had been used to develop maps and to determine other spatial relationships, but that nothing in the prior art showed it was conventional at the time.
The dispute over the aerial patents dates back to 2015, after EagleView and affiliate Pictometry International Corp. accused Xactware and Verisk of infringing claims in nine patents with Xactware's own rooftop measurement products. Xactware hit back with counterclaims, arguing that the asserted patents were invalid.
Xactware had argued that EagleView's patents claim the abstract idea of using photogrammetry — the science of using photographs to survey or measure objects — to measure rooftops and produce a report, according to court documents. EagleView had countered that the human mind is incapable of performing these types of three-dimensional modeling and calculations.
The issue of patent eligibility under Alice didn't make it to the jury, which found in a September 2019 verdict that the patents were not shown to be invalid as obvious or anticipated, and that Xactware had
willfully infringed. A federal court denied Xactware's bid for a new trial and ordered a
permanent injunction prohibiting it and Verisk from making and selling certain products.
The district court also granted EagleView
enhanced damages, saying the jury's finding of willful infringement was supported by the evidence. U.S. District Judge Renée Marie Bumb said in a Feb. 16 opinion that when the defendants "started to hear of EagleView's products, they saw EagleView as a real threat to their business. Indeed, defendants admitted at that time that they had two choices: Either adopt EagleView's technology for themselves or work with EagleView."
The patents-in-suit are U.S. Patent Nos.
8,078,436;
8,170,840;
8,818,770;
9,129,376; and
8,825,454.
Judges Richard G. Taranto, Raymond C. Clevenger and Raymond T. Chen sat on the panel for the Federal Circuit.
EagleView is represented by John C. O'Quinn of Kirkland & Ellis LLP.
Xactware and Verisk are represented by Mark A. Perry of Gibson Dunn & Crutcher LLP.
The cases are
EagleView Technologies Inc. v. Xactware Solutions Inc., case numbers
21-1048,
21-1049 and
21-1743, in the
U.S. Court of Appeals for the Federal Circuit.
--Additional reporting by Tiffany Hu, Craig Clough and Sarah Jarvis. Editing by Adam LoBelia.
