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Fed. Circ. Gives Alarm.com New Life In Vivint IP Challenges

By Matthew Bultman

Law360 (December 20, 2018, 7:41 PM EST) -- The Federal Circuit on Thursday ruled that the Patent Trial and Appeal Board correctly invalidated parts of three Vivint Inc. patents covering the remote monitoring of home appliances, and gave Alarm.com Inc. another opportunity to challenge additional claims the board preserved.

Both Vivint and Alarm.com appealed after PTAB in 2017 issued its decisions in three inter partes review. Each of the decisions was mixed, as PTAB invalidated some claims in the patents and upheld others.

Although the Federal Circuit affirmed the bulk of the board's findings, it agreed with Alarm.com that the board had misinterpreted one particular phrase. Alarm.com said that misinterpretation was the reason PTAB upheld various claims in two of the patents.

The court sent the case back to PTAB to reconsider the validity of the claims under the correct interpretation. Attorneys for Vivint and Alarm.com could not immediately be reached for comment Thursday.

Each of the three patents cover systems for remotely monitoring equipment such as a heating and cooling system. The systems allow someone such as the property owner to be contacted if there are problems with the equipment, according to court documents.

Utah-based Vivint filed a lawsuit in 2015 accusing Alarm.com, a rival home security company, of infringing its patented technology with security and home automation products. That fall, Alarm.com filed the inter partes review challenges that were at issue Thursday.

The board issued its final decisions in those cases in May 2017. Vivint appealed to the Federal Circuit the portions invalidating its claims, and Alarm.com said all the surviving claims should also be found invalid.

The Federal Circuit made quick work of Vivint's appeal Thursday, over the course of one paragraph rejecting each of its arguments. That included the argument that PTAB failed to adequately explain its findings.

"After a careful examination of the board's findings and conclusions as well as a review of the record upon which they were based ... we find no error warranting reversal," the court said.

The appeals court also rejected multiple Alarm.com arguments. Where the company found success was in arguing that PTAB wrongly interpreted a term that appears in several claims in two of the patents.

Alarm.com said the term "communication device identification codes" refers to phone numbers or email address. PTAB, however, interpreted it to include either a device ID, such as a mobile identification number, or the serial number of a device.

The board reasoned the term must refer to something "capable of uniquely identifying communication devices." Even assuming that is correct, the Federal Circuit said, the idea that can't include phone numbers or email address "defies the patents' teachings."

"For example, both patents explain that a mobile identification number refers to a device in the same way that a phone number refers to a cellular phone," the court wrote, saying PTAB's interpretation was not reasonable.

This isn't the first time the dispute between Vivint and Alarm.com has reached the Federal Circuit.

Earlier this year, the appeals court affirmed a PTAB inter partes review decision that invalidated many claims in a fourth Vivint patent. The court in that case found that although the board made some errors in its analysis, it didn't change the outcome that the claims were obvious.

The patents at issue are 6,147,601; 6,462,654; and 6,535,123.

Chief Judge Sharon Prost and Circuit Judges Kathleen O'Malley and Todd Hughes sat on the panel for the Federal Circuit.

Vivint is represented by Robert Greene Sterne, Jason Daniel Eisenberg and Deirdre M. Wells of Sterne Kessler Goldstein & Fox PLLC.

Alarm.com is represented by Richard J. Stark of Cravath Swaine & Moore LLP, David Phillip Emery and William Mandir of Sughrue Mion PLLC, and Teena-Ann V. Sankoorikal of Levine Lee LLP.

The lead case is Vivint Inc. v. Alarm.com Inc., case number 17-2218, in the U.S. Court of Appeals for the Federal Circuit.

--Editing by Stephen Berg.