US Court of Appeals for the Federal Circuit

Frequent readers of the Cloudflare blog are aware of the efforts we’ve undertaken in response to our first encounter with a patent troll. We’re happy to report that on Wednesday, the U.S. Court of Appeals for the Federal Circuit issued an opinion affirming a lower court decision dismissing the case brought by Blackbird Tech. This is the last step in the process 1, we’ve won.

In addition to vigorously opposing this case in court, we created and sponsored Project Jengo to push back against the incentives that empower patent trolls like Blackbird Tech. Now that the case is over, we will be wrapping up Project Jengo and will report back with a summary of the Project’s successes in the near future.

But before we move on from the litigation, I want to share a few reflections on this case.

We noted from the very beginning: “The infringement claim is not a close one … if the ‘335 patent is read broadly enough to cover our system (which shouldn’t happen), it would also cover any system where electronic communications are examined and redacted or modified.”

Our initial observation, which we thought was obvious, was borne out. And we were able to prevail on our arguments as swiftly and cleanly as is possible in the federal court system. The U.S. District Court resolved the case on a motion to dismiss, meaning the court didn’t even consider the factual circumstances of the case, but looked at the face of the complaint and the language of the patent itself and determined that the claims in the patent were too vague to allow anyone to enforce it. It was so obvious to the court that Judge Chabbria’s decision was little more than a single page. You can read our discussion of the lower court decision in a previous blog.

Yet Blackbird appealed that dismissal to the U.S. Court of Appeals for the Federal Circuit, a specialized court based in Washington, DC that hears appeals of all patent cases. A panel of three judges from that court heard arguments on the appeal last Friday, but didn’t ask our attorney a single question about the substance of our argument on the abstractness of the patent. He sat down with almost half of his 15 minutes of argument time left because there was nothing more to say. Yesterday, just three business days after that hearing, the court affirmed the lower court’s decision in summary fashion, which means they didn’t even write about the claims or arguments, they just said “Affirmed” (see below).  

If it were a boxing match, it would have been called by the referee in the first minute of the first round after three knockdowns. It was easy and painless, right?  

Not at all.  

Blackbird filed this case in March 16, 2017. For nearly two years, anyone doing due diligence on Cloudflare might have had questions about whether there was a cloud over our rights to our technology. And we had to go through a lot of briefing, and the related legal expenses, to get to this point. Blackbird’s combined legal filings at the district court and appellate court amounted to more than 650 pages, our responsive briefs were more than 900 pages.

The two courts spent less than two pages describing a result that was obvious to them, but it took us two years of uncertainty and cost to get there. Federal court litigation doesn’t make anything easy. Even if Blackbird had won the case, it is not clear they would have been able to collect significant damages. Our allegedly infringing use was not a product or feature that we charged for or made money from – it was essentially posting interstitial messages for various errors. Even though we were able to win this case early in the legal process and keep our costs as low as possible, it’s possible we spent more money resolving this matter than Blackbird would have been able to collect from us after trial.

This is the dysfunction that makes patent trolling possible. It is why the option for a quick settlement, in the short term, is always so appealing to parties sued by patent trolls. It’s why we exerted efforts on Project Jengo to try and change the long-term calculus and help out others in the community who may soon find themselves in a similar predicament.  

A final note…

Anthony Garza and Steven Callahan of Charhon Callahan Robson & Garza, a litigation boutique in Dallas, are great lawyers. They provided exceptional counseling, perfect legal work, and strong arguments at every step of this process. In every hearing, I was extremely happy that Anthony was the lawyer on our side -- he demonstrated complete control of both the relevant legal authorities and the intricate details of the patent and its various claims. He had the advantage of being right, but he never left any doubt who was making the better argument.  My thanks for their hard work and guidance.

Footnote

[1] Yes, I am aware that Blackbird could seek discretionary review of this decision at the U.S. Supreme Court. But the Supreme Court accepts less than 5% of the cases presented to it, so there isn’t even a request to that court in most cases unless the case is particularly significant or reflects a disagreement among federal courts. I don’t reasonably expect they would take this case.