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AI Bulletin

AI Bulletin – July 23, 2020

Artificial Intelligence Bulletin


Willful Infringement of Aerial Image Recognition Patents Results in $125 Million Damages Award

Background. EagleView Technology Corporation is a provider of aerial imagery, data analytics, and geographic information systems. In 2013 and early 2014, it entered into negotiations to be acquired by Verisk Analytics, a multinational provider of predictive analytics to insurance companies. During the due diligence process, Verisk reviewed EagleView’s patent portfolio, including five patents directed to machine learning-assisted image capture and 3D modeling algorithms. The parties agreed to a $650 million acquisition in January 2014. But in December the FTC challenged the transaction, alleging that it would create a virtual monopoly in rooftop aerial measurement services and reports, and Verisk and EagleView opted to mutually walk away from the proposed acquisition.

Complaint and Causes of Action. In September 2015 - less than a year after the dissolution of the merger - EagleView filed a complaint for patent infringement against Verisk and a subsidiary in the U.S. District Court for the District of New Jersey. The complaint alleged infringement of nine EagleView patents. Further, EagleView alleged that the infringement was willful based on Verisk’s review of the patents during the due diligence period.

Inter Partes Review (IPR) Petition and Motion to Dismiss. In February 2016, Verisk submitted an IPR petition to the Patent Trial and Appeal Board (PTAB) to invalidate EagleView’s patents. Simultaneously, Verisk moved to dismiss the complaint, arguing that the patents were unpatentable because they were directed to abstract ideas. In August 2016, the district court denied the motion to dismiss. In 2017, PTAB issued its final rulings on the IPRs (example here), upholding the validity of over 90% of the challenged patent claims. The PTAB specifically cited as evidence of non-obviousness examples of public praise of Eagleview’s technology by Verisk’s CEO during the proposed 2014 acquisition.

Motion for Summary Judgment. In January 2019, Verisk moved for Summary Judgment, arguing again that EagleView’s patents were unpatentable as merely abstract ideas. In denying that motion, the district court ruled that “the asserted claims are directed to an improvement in the functioning of a computer. They solve the specific problem of generating a roof repair estimate without direct human measurement of a roof. The claims rely on the concrete and specific technological solution of a computer's correlating, with or without user input, different locations points on two, different, non-stereoscopic aerial views of a roof section and then calculating via photogrammetric methods from the correlated aerial views a mathematical model of the roof section.” This, the court emphasized, “suggests a specific inventive concept.”

Trial. The case proceeded to a twelve-day jury trial in September 2019. During the trial, EagleView’s attorneys introduced internal Verisk documents showing that Verisk viewed EagleView as a revolutionary threat, and had been pricing aggressively to try to take its market share. After less than two hours of deliberation, the jury found that Verisk willfully infringed five EagleView patents, and awarded $125 million in damages for lost profits. The district court also issued a temporary restraining order (TRO) preventing Verisk from selling any products using technology found to infringe on EagleView’s patents. On October 18, 2019, the district court converted the TRO into a permanent injunction.

What’s Next. On November 12, 2019, Verisk moved for a judgment as a matter of law and a new trial. On the same day, EagleView moved for an award of enhanced damages and attorneys’ fees pursuant to the jury’s finding of willful infringement. If granted, an award of enhanced damages authorizes the district court to “increase the damages up to three times the amount found or assessed.” 35 U.S. Code § 284. Both motions are currently pending before the district court. Execution of the monetary judgment has been stayed while the motions are considered.



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