<em> Freshub, Inc. v. Amazon, Inc. </em>

Nos. 2022-1391, 2022-1425, 2024 U.S. App. LEXIS 4286, at *1 (Fed. Cir. Nov. 7, 2023)

The Federal Circuit rejected Amazon’s cross-appeal and affirmed the district court ruling, determining that the lower court did not abuse its discretion or make a clear error on Amazon’s inequitable conduct defense.

Freshub brought two motions before the Federal Circuit on appeal: a motion for judgment as a matter of law and a motion seeking a new trial due to prejudicial statements made by Amazon at trial. Amazon, in turn, brought a cross-appeal to reverse the District Court's failure to  find inequitable conduct.

The claims mainly focus on U.S. Patent No. 9,908,153 (“153 Patent”), a voice-processing technology that receives "user spoken words" and uses the words to add items to the list. The ‘153 patent's specification discloses a variety of systems for the management of shopping lists. Freshub targeted Amazon's Echo device, which can perform various voice-processing tasks, including maintaining a shopping list, and argued that Amazon infringed on its patent through the sale of the Echo.

Freshub originally sued Amazon and asserted a patent infringement claim at the United States District Court for the Western District of Texas. Amazon denied infringement and asserted a defense based on the inequitable conduct by Freshub's parent company, Ikan Holdings LLC. The jury found that Amazon did not infringe on any allegedly infringed patents. The District Court denied Freshub's post-trial motions, and a bench trial further denied Amazon's attempt to assert inequitable conduct. Freshub then appealed to the Federal Circuit.

Freshub's based its motion for judgment as a matter of law under Fedural Rules of Civil Procedure 50(b) on an argument that the jury's verdict was not supported by substantial evidence. After determining that substantial evidence supported a finding of non-infringement based on the claims, the District Court rejected Freshub’s argument, specifically with respect to 153 Patent. On this appeal, Freshub focused on three claim limitations, two of which the Federal Circuit declined to address. The claim limitation that the Federal Circuit focused on was a requirement that "[U]pon receiving spoken words and translating them to text, the system "identify an item corresponding to the text" and "add the identified item to a list…"

The Court agreed that substantial evidence supported a finding of non-infringement based on the primary claim construction limitation and sufficed alone to  uphold the jury verdict. It further explained that the jury made a reasonable finding, since there was no claim construction or argument regarding claim construction during the trial regarding the word "item." Due to this lack of claim construction, the Court deemed the jury could reasonably find that claim limitation was not met based on the ordinary meaning of "identify and item."

Freshub also sought a motion for a new trial under FRCP 59(a), arguing that Amazon made prejudicial statements at trial, mainly to reference the company's Israeli origins. The standard required for a prejudicial statement is a finding of a "serious effect on the fairness, integrity, or public reputation of judicial proceedings." Freshub similarly sought a new trial in this motion based on a denied motion in limine regarding Amazon's use of dates. Freshub argued Amazon insinuated that Freshub only filed for the asserted patents once the Echo entered the market, which did occur during the trial.

The Court found that Freshub failed to show an abuse of discretion from the District Court. It further found that Amazon made statements regarding Freshub's foreign origins to explain the patent system or background information and did not mean to invoke a foreign v. domestic theme at trial. The Court further affirmed the District Court's denial of a new trial because Freshub failed to properly object during the trial. Their failure to object to either the improper use of dates or prejudicial statements within the 5th Circuit requirements thus precluded a new trial.

Amazon's defense of inequitable conduct was based on actions taken by Freshub's parent company, Ikan Holdings LLC, while prosecuting the parent patent application. Amazon showed evidence that the USPTO sent a final office action regarding the prosecution of U.S. Patent Application No. 11/301,291 ("291 Application) from which all the patents in question descend. After failing to respond to this office action, the United States Patent and Trademark Office (USPTO) sent a notice of abandonment application. Almost five years later, counsel for Ikan petitioned the USPTO to revive the ‘291 application under 37 CFR §1.137(a), which required a showing that the delay in response was unintentional. Counsel for Ikan accomplished this by submitting a signed statement attesting to their lack of intent. The USPTO granted the petition in April 2017, expressing that it was "relying on petitioner's duty of candor and good faith" and accepting their statement that the delay was unintentional. Amazon argued in its motion that Ikan's statement to the USPTO was an intentional misrepresentation and the application had been intentionally abandoned.

The Court found that Amazon failed to provide clear and convincing evidence of the District Court's clear and reversible error that the statement misrepresented Ikan's intent to abandon. This Court mentioned its finding is partially due to a sparse record from the limited available evidence and attorney-client privileges not challenged on appeal. This sparse record failed to show that deceptive intent was the “single most reasonable inference.” Thus, the Court concluded the District Court did not abuse its discretion as it could have reasonably found a lack of deceptive intent regarding the statement.

  Thus, the Federal Circuit affirmed the District Court on all counts.