Victory for Defendants in Engate Appeal

The United States Court of Appeals for the Federal Circuit issued a 14-page decision on December 26 in which it ruled against Engate and provided a complete victory on appeal for the two remaining defendants in the Engate litigation, Esquire Deposition Services LLC and Atkinson-Baker Inc. See http://www.fedcir.gov/opinions/06-1140.pdf

The Court of Appeals affirmed the district court's earlier decisions that there was no direct or indirect patent infringement by these two defendants. More important, the Court of Appeals affirmed the district court's decision that 21 of Engate's patent claims were invalid and also reversed the district court's decision that a 22nd patent claim was valid, declaring it invalid as well. Although Engate asserted hundreds of patent claims in its original demand letters, this means that all of the key patent claims that were actually asserted by Engate in the litigation were held invalid and cannot be asserted by Engate against any other reporter or firm.

Procedurally, Engate may now file a motion for rehearing before the three circuit court judges that unanimously ruled against Engate, or for reconsideration en banc before all 12 circuit court judges, or for review by the United States Supreme Court. However, given the factual and legal basis on which the district court and court of appeals reached their decisions, the likelihood that Engate may still prevail is remote.

Immediately after Engate first issued its demands in 2001, NCRA created a Joint Defense Group for reporters and firms that chose not to pay Engate in order to continue to use the realtime technology for which Engate demanded license fees. NCRA retained its own patent counsel to analyze Engate's patent claims and to draft a legal opinion on which the members of the Joint Defense Group could rely in order to protect against claims of willful infringement. Throughout the litigation, NCRA kept all members informed about the ramifications of the Engate litigation, so that individual member reporters could make informed and independent decisions about what actions were in their own and their
firm's best interests.

Due to the importance of the realtime technologies at issue in the Engate litigation, NCRA has worked hard over the past five years in support of this massive defense effort, by providing extensive factual evidence of prior art (including testimony by former NCRA President,Merilyn Sanchez), by hiring its own patent counsel to advise the Joint Defense Group and to file an amicus brief in the district court, and by providing financial support for the appeal after the insurance coverage for the remaining two defendants was exhausted.

As in the past, NCRA will continue to keep the Joint Defense Group and all other members informed of any further developments. Hopefully, this complete victory on appeal will be the end of Engate's threat against realtime technologies.