Federal Circuit Reverses on Laches: Google Lacked Prejudice Proof

The Federal Circuit has reversed in part and affirmed in part a district court decision finding Sonos’s patent claims for controlling media playback systems invalid.

The court reversed the district court’s decision that Google was prejudiced by Sonos’s alleged delay in claiming the subject matter at issue via continuation.

As the court explained,

Sonos owns the ’966 and ’885 patents (collectively, “the Zone Scene patents”) and the ’033 patent (“the Direct Control patent”), all of which are generally directed to controlling various aspects of media playback systems….

The Zone Scene patents are directed to creating and saving predefined groups of “zone players,” e.g., speakers, into so-called “zone scenes” to play synchronous audio. … The Zone Scene patents were each filed in April 2019 and claim priority from a September 2006 provisional application and a September 2007 nonprovisional application.

Independent claim 1 of the ’885 patent reads:

1. A first zone player comprising:

a network interface . . . ;

one or more processors;

a non-transitory computer-readable medium; and

program instructions . . . that, when executed by the one or more processors, cause the first zone player to perform functions comprising:

while operating . . . in a networked media playback system comprising the first zone player and at least two other zone players;

(i) receiving . . . a first indication that the first zone player has been added to a first zone scene comprising a first predefined grouping of zone players including the first zone player and a second zone player . . . ; and

(ii) receiving . . . a second indication that the first zone player has been added to a second zone scene comprising a second predefined grouping of zone players including at least the first zone player and a third zone player . . . wherein the second zone player is different than the third zone player . . . .

(Emphasis added by court.)

In short, explained the court, the claims recite the creation of “overlapping” zone scenes in which any given speaker—the claimed “first zone player”—can simultaneously belong to two different zone scenes.

The issues raised on appeal regarding the Zone Scene patents concern their disclosure of the “overlapping” nature of the claimed zone scenes.

The “Zone Scene Patents” were filed in 2019, claiming priority from a 2006 provisional application and a September 2007 nonprovisional application.

In 2020, Sonos sued Google for alleged infringement of the Zone Scene Patents. A jury found Google liable and awarded $30 million in damages.

However, the district court judge threw out the verdict, holding the patents unenforceable for prosecution laches and invalid for lack of written description support.

An issue in the case was whether continuation applications can support a finding of laches where the defendant argues that the patent owner could have filed the claims earlier.

The US Supreme Court ruled in 2017 that laches cannot be invoked as a defense against a claim for damages brought within the limitations period of 35 U.S.C. §286:

Except as otherwise provided by law, no recovery shall be had for any infringement committed more than six years prior to the filing of the complaint or counterclaim for infringement in the action.

As the court explained in this case, under the equitable defense of prosecution laches, a patent may be rendered unenforceable when it has issued only after an unreasonable and unexplained delay in prosecution that constitutes an egregious misuse of the statutory patent system under the totality of the circumstances.

To succeed in its defense, said the court,

Google must establish that Sonos’s delay in prosecution was unreasonable and inexcusable under the totality of circumstances, and that Google suffered prejudice attributable to that delay.

To prove such prejudice, Google “must show evidence of intervening rights,” i.e., that either Google or others “invested in, worked on, or used the claimed technology during the period of delay.”

The district court found that Google had “shown that it suffered prejudice as a result of Sonos’s delay, explaining that ‘Google began investing in the accused products by at least 2015, when it released its first products that practiced the invention’.”

The Federal Circuit explained that Google needed to show “that Sonos’s delay in prosecution was unreasonable and inexcusable under the totality of circumstances, and that Google suffered prejudice attributable to that delay.”

The court concluded that Google failed to prove prejudice because

Google presented no evidence—testimony or otherwise—to support its assertion that its investment in those products actually began in 2015, or that it was caught unawares that Sonos may have already invented the adjudicated-infringing functionality when making those investments.

Also, said the court,

even if we accept as fact that Google’s investment began in 2014 or 2015, it cannot establish prejudice on this record. Although Sonos submitted a nonpublication request with the filing of its 2007 nonprovisional application (an entirely lawful request, see 35 U.S.C. § 122(b)(2)(B)(i)), that application was published when it issued as U.S. Patent 8,483,853 on July 9, 2013. … As we have concluded above, no reasonable factfinder could conclude that the specification—which was published in 2013, before any of Google’s asserted investments—does not reasonably disclose overlapping zone scenes. Google cannot be prejudiced by incorporating into its products a feature that was publicly disclosed in a patent application prior to its investment.

Thus, the Federal Circuit found that the district court abused its discretion in holding the Zone Scene patents unenforceable for prosecution laches.

Sonos also argued that the district court erred in granting judgment of invalidity of the Zone Scene patents and in granting summary judgment of invalidity of U.S. Patent 10,779,033 (the “Direct Control patent”).

The Federal Circuit agreed, finding the district court erred in finding the claims of the Zone Scene patents invalid due to a lack of written description of the overlapping zone scenes.

However, the Federal Circuit agreed with the district court that the claims of the ‘033 patent were obvious in view of prior art.