Freshub, an emerging Smart Kitchen Commerce technology company that supports IoT based in-home grocery shopping, recently filed a patent infringement lawsuit against Amazon (Amazon.com, Amazon Digital Services, Prime Now, Whole Foods Market Group, Whole Foods Market Service). In the lawsuit, Freshub alleges that Amazon voice-purchasing technology, that allows Amazon customers to purchase groceries, infringes Freshub’s patents. Specifically, Freshub points to Alexa enabled devices that can be used to purchase products from Amazon using voice commands. The Alexa enabled devices included in Freshub’s Complaint are Amazon Echo Products, Fire TV Products, Fire Tablet Products, and Amazon Apps.
In particular, Freshub alleges that Amazon infringes four patents from the same family (US 9,908,153, US 10,213,810, US 10,232,408, and US 10,239,094). This family of patents all depend from a parent patent, US 9,821,344, and relate to technology for scanning food products to determine when a product will expire and then reminding a user to consume/use expiring products on or before their expiration date. The patents also disclose reordering products based on expiration date, consumption patterns, delivery schedules, current household item inventory, and user preferences.
In its Complaint, Freshub alleges that Amazon had knowledge of the company and its products (its wireless in-home grocery scanner) as it shipped several of its in-home grocery scanners to Amazon in 2010. In addition, individuals from Amazon and Freshub participated in panels at a Smart Kitchen Summit in 2015 and 2018. Freshub also indicates that Amazon and it had discussions about a potential partnership or collaboration back in 2015. Further, Freshub points out that the parent application of the family was cited on the face of an Amazon patent application during its prosecution at the US Patent and Trademark Office (PTO).
While the alleged infringement by Amazon is perhaps not too surprising given Amazon’s recent expansion acquiring Whole Foods, the interesting part of this case comes from Amazon’s affirmative defenses. Besides the typical non-infringement and invalidity defenses, Amazon alleges inequitable conduct in the parent application from which all the asserted patents depend. This allegation is based on the fact that this parent application was abandoned during prosecution and then later revived. In more detail, the parent patent application was filed back in late 2005. In June 2011, a Final Office Action was sent, rejecting the pending claims in the application. Freshub failed to respond to the Final Office Action by the January 2012 due date, and the PTO sent a Notice of Abandonment of the parent patent application to Freshub.
Fast forward to five years after receiving this Notice of Abandonment, in January 2017, Freshub filed a Petition for Revival of the application claiming that the abandonment was “unintentional.” The PTO allowed revival of the application without any further description or discussion as to why Freshub waited five years to revive its abandoned application. To be sure, five years is an extraordinarily long time to seek revival of a purportedly unintentionally abandoned patent application.
An inequitable conduct allegation requires clear and convincing evidence that a patent applicant (1) misrepresented or omitted information material to patentability, and (2) they did so with specific intent to mislead or deceive the PTO. These two elements – materiality and intent – are separately established during litigation. Materiality requires proof that the PTO would not have allowed a claim to be patented but for the misrepresented or omitted information. Intent, on the other hand, is based on a reasonable inference drawn for evidence of intent to deceive the PTO. In another case, the Court of Appeals for the Federal Circuit held that compliance with standard PTO procedures for reviving an abandoned patent application using a PTO form for that purpose did not provide clear and convincing evidence of withholding of material information with the intent to deceive the PTO.
It will be interesting to see how this litigation between competitors plays out. Waiting five years before reviving an abandoned application (in which time Freshub’s competitors developed IoT based products that generally relate to the abandoned application) hardly seems “unintentional.” However, the burden of proof of clear and convincing evidence is a higher standard of proof that will require Amazon to prove that the facts supporting its inequitable conduct allegation are substantially more likely to be true than not to be true. As such, the outcome of this inequitable conduct allegation will be highly dependent on what evidence is found during discovery. Perhaps Amazon will also argue some type of estoppel that would prevent Freshub from enforcing its patents because it failed to revive the patent for five years, during which time, Amazon developed its allegedly infringing products. After all, an abandoned application/patent typically indicates that the invention disclosed is now open for free use. Regardless of the outcome, this dispute represents yet another example of the rising tide of IoT based patent lawsuits, many of which are between direct competitors.