IP Law Daily, PATENT—D. Utah: Vivint’s request to sever claims for smart home patents denied, (Apr 20, 2023)

By Brian Craig, J.D.

A substantial overlap exists in the language of each set of claims, warranting denial of the motion to sever previously stayed claims.

In a long-running dispute between Vivint, Inc. and Alarm.com, Inc. over patents for smart home and security systems, the federal district court in Salt Lake City has refused Vivint’s request to sever certain claims. In denying Vivint’s motion to sever previously stayed claims, the court concluded that a substantial overlap exists in the language of each set of the stayed claims and the other litigated claims. The court found that severing the stayed claims with litigated claims for the same Alarm.com products would waste judicial resources (Vivint, Inc. v. Alarm.com, Inc., April 14, 2023, Waddoups, C.).

Vivint filed a patent infringement action against Alarm.com in 2015 alleging infringement by Alarm.com of six patents relating to smart home and security systems. Alarm.com then filed several petitions seeking inter partes review of several patent claims asserted by Vivint. In 2018, the district court in Utah granted Alarm.com’s motion to stay nine claims. In 2021, the U.S. Court of Appeals for the Federal Circuit reversed the PTO’s decision rejecting some of Vivint’s patent claims. In 2022, the Federal Circuit issued another opinion in the long-running dispute. On March 14, 2022, the PTO terminated reexamination of the stayed claims. On October 11, 2022, Vivint filed the current motion to sever the stayed claims.

Abandonment. The court first rejected Alarm.com’s argument that Vivint abandoned the stayed claims. Alarm.com contended that Vivint abandoned the stayed claims by waiting too long after the PTO terminated reexamination of the stayed claims on March 14, 2022. The court ruled that Alarm.com must submit a proper motion to dismiss to address the abandonment issue.

Severance. Next, the court analyzed whether to sever the stayed claims. The court considers whether severance will serve the ends of justice and further the prompt and efficient disposition of litigation. Factors that courts have considered when evaluating a motion to sever include: (1) whether the claims arise out of the same transaction or occurrence; (2) whether the claims present some common questions of law or fact; (3) whether settlement of the claims or judicial economy would be facilitated; (4) whether prejudice would be avoided if severance were granted; and (5) whether different witnesses and documentary proof are required for separate claims.

Here, the court found that severing the stayed claims with other claims based solely on their stage in the discovery process would undermine the goal of having related claims and issues being decided together. The court found a substantial overlap exists in the language of each set of claims. Additionally, each of the claims comes from the same patent family. While there may be some aspects of the stayed claims that differ from the litigated claims, such as the ability to control equipment remotely, the substantial overlap between the stayed claims and litigated claims exists. A substantial portion of the evidence that is essential to a trial of the litigated claims would also have to be presented at a trial of the stayed claims. This would result in a significant waste of judicial and party resources, the court found.

While the court recognized that this case has already been substantially delayed, and that denying severance will likely delay resolution of the litigated claims to some extent, the difficulties in trying these non-separable claims in separate trials substantially outweigh any inconvenience that would be caused to Vivint. The court found that any prejudice to Vivint can be cured through monetary damages or prejudgment interest. Therefore, the court denied the motion to sever the claims.

The Case is No. 2:15-cv-00392-CW-CMR.

Attorneys: Adrian C. Percer (Weil Gotshal & Manges LLP) and David R. Wright (Foley & Lardner LLP) for Vivint, Inc. Allison N. Kempf (Cravath, Swaine & Moore LLP) for Alarm.com, Inc.

Companies: Vivint, Inc.; Alarm.com, Inc.

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