March 29, 2016

Chicago-based Telular Corporation has secured victories in U.S. District Court against two patents asserted by Joao Control & Monitoring Systems, LLC (JCMS). In a Memorandum Opinion and Order issued March 23, 2016, U.S. District Court Judge Rebecca R. Pallmeyer held two JCMS patents asserted against Telular Corporation invalid as being directed to patent-ineligible subject matter. It is the first time these patents have been struck down in a U.S. court. 

Judge Pallmeyer found the fact that the two patents purport to solve a problem by allowing individuals to monitor their property remotely through the use of a computer network does not make the patents non-abstract. The Judge determined the two patents embody the abstract idea of monitoring and controlling property without an “inventive concept” in the patent claims “sufficient to transform the idea into a patent-eligible invention.”

Telular was represented by Michael J. Femal and James P. Hanrath, intellectual property attorneys at Chicago-based law firm Much Shelist.  Joao Control & Monitoring Systems, LLC v. Telular Corporation was decided on a motion for judgment on the pleadings by Telular in the U.S. District Court for the Northern District of Illinois, Eastern Division. Read the opinion.  

Background 
In December 2014 Plaintiff JCMS sued Defendant Telular for allegedly infringing two patents directed to systems designed to provide security for vehicles and premises through a computer network connected to the Internet. The two asserted patents are United States Patent No. 6,587,046 having a total of 112 patent claims and United States Patent No. 7,397,363 having a total of 88 patent claims.

Telular filed its Motion for Judgment on the Pleadings in August 2015 contending that the two patents contain no more than abstract ideas that are patent ineligible subject matter in violation of 35 U.S.C. § 101.

Court Opinion 
Judge Pallmeyer applied the legal standards for patent eligibility set forth in the 2014 U.S. Supreme Court decision of Alice Corp. Pty. Ltd. v. CLS Bank Int’l and found the two JCMS patents are directed to the abstract idea of monitoring and controlling property and communicating this information through generic computer functions.

“The outcome is significant because the Court found that, at its core, the purpose of the JCMS-claimed invention is an abstract idea and one that can’t be upheld by a patent,” said Michael Femal. “In fact, in the Opinion, the judge characterized the monitoring or surveillance of property in order to provide security as a ‘well-known’ concept that ‘humans have always performed.’”

The Opinion stated: “As early as 31 BC, for example, the Romans monitored and secured their empire through numerous watchtowers, which could communicate through a signaling system … In recent times, the monitoring of vehicles and premises has become ubiquitous - one would be hard-pressed to find a store or street corner in all of Chicago that is not under some sort of video surveillance.”

In a written statement Telular said: “Telular takes claims of patent infringement very seriously. We are very pleased with Judge Pallmeyer’s decision. Her analysis is thorough, well-reasoned, and supported by guidance from the Supreme Court, the Federal Circuit, and a number of recent U.S. District Court decisions addressing the asserted patenting of abstract concepts by coupling them to common computer components or the Internet.”