Jacksonville, FL – Gillis Way & Campbell (GWC) has scored an impressive victory for Jacksonville based client, Greenshades Software, Inc. In a fiercely contested patent infringement lawsuit, United States District Court Judge Harvey E. Schlesinger sitting in the Middle District of Florida issued an order invalidating two patents held by Minnesota based software company, Aatrix Software, Inc. and dismissing with prejudice all claims in the lawsuit.
The lawsuit filed in February, 2015, alleged that Greenshades tax filing software, which it markets, sells and licenses to consumers to assist in preparing payroll tax forms violated two patents held by Aatrix on similar products. H. Timothy Gillis, Ethan Way, and Nancy Johnson, all partners of GWC, argued that the two patents were invalid under federal patent law because the patents were not “subject matter eligible.” Specifically, the products that were issued a patent by the United States Patent Office are not eligible for patentability under federal law.
Judge Schlesinger agreed with the Gillis Way & Campbell attorneys as he analyzed the patents under the two-step approach required under recent Supreme Court jurisprudence and determined that both patents at issued described only an “abstract idea” of processing data on a generic computer using a generic scanner and generic computer systems which could also be done by a human using pen and paper. The Court concluded that the patents described are simply not patent eligible. The process of figuring out how much tax is owed and of filling out tax forms – which has been done throughout the United States since the birth of the country – is not a process deserving of special sanctioning by the government elevating one company’s tax preparation software over another company’s software.
According to Timothy Gillis, Managing Partner, Gillis Way & Campbell, “Historically it has been nearly impossible to dispose of a patent infringement lawsuit at an early stage and fortunately the tide has now turned with respect to a notoriously abused class of patents covering software and other abstract ideas.” According to Gillis, patent litigation is expensive and, therefore, companies faced with an allegation of patent infringement have been willing to pay hundreds of thousands of dollars to plaintiffs to avoid the expense of litigation, even if the defending company was confident that no infringement existed. Patent litigation, or the threat of litigation, has been used as a form of legal extortion. “Now, District Courts are empowered to dispose of these meritless lawsuits by making an early stage determination that the patents at issue should never have been granted in the first place, thus saving the victims of these lawsuits from hundreds of thousands of dollars in legal fees, as well as, the loss of privacy that accompanies intrusive discovery into the defending company’s confidential business records,” said Gillis.
This is a significant victory for Greenshades as Aatrix was seeking damages in excess of seven figures claiming that Greenshades’s success in this marketplace illegally allowed Greenshades to profit by infringing on a patent. Greenshades denied that the Aatrix patent was enforceable. Although the Federal Circuit has recently remarked that ‘it will be rare that a patent infringement suit can be dismissed at the pleading stage for lack of patentable subject matter,’ GWC’s contentions, on behalf of Greenshades, that this lawsuit was simply a nuisance and that the arguments were frivolous have been validated. Despite a concern that Aatrix may appeal this decision, Greenshades’s founder and CEO Matthew Kane said, “We are thrilled to have been vindicated knowing our product’s success in this competitive market is based on the company’s reputation and quality of service and products.”
Gilllis Way & Campbell, Attorneys at Law, is headquartered in the Riverside area of Jacksonville and has offices in Ponte Vedra and Tallahassee. GW&C practice expertise includes: Litigation, Transactional, Corporate, Mergers/Acquisitions, Private Equity & Investment, Securities, Franchise, Healthcare, General Counsel Services, Criminal, Family, and Commercial Real Estate.
“We are thrilled to have been vindicated knowing our product’s success in this competitive market is based on the company’s reputation and quality of service and products.” – Matthew Kane – Greenshades Software, Inc.