OLLNOVA TECHNOLOGIES LTD. v. ECOBEE TECHNOLOGIES ULC
Authored by: Jeremy J. Gustrowsky
A jury in the Eastern District of Texas awarded Ollnova Technologies Ltd. $11.5 million after finding that ecobee Technologies ULC’s smart thermostats infringed at least one of four asserted patents covering wireless building automation systems. On appeal, however, the Federal Circuit vacated both the infringement and damages judgments, sending the case back for a new trial. The court also affirmed key patent-eligibility rulings in Ollnova’s favor on two of the patents, while ordering a do-over on the Section 101 analysis for a third.
The appeal centered on several procedural and substantive issues, but two problems with how the case was submitted to the jury were decisive. First, the verdict form contained a single combined infringement question asking whether ecobee infringed “ANY” of the asserted claims across all four patents. Relying on its recent decision in Optis Cellular Technology v. Apple, the Federal Circuit held that this format created an unacceptable risk of a non-unanimous verdict, because jurors could individually believe different patents were infringed while still collectively answering “yes.” The court reiterated that, at a minimum, verdict forms must include separate infringement questions for each asserted patent. Notably, the parties had jointly proposed exactly that format, but the district court adopted its own combined version.
The second problem involved the jury instructions on patent eligibility for U.S. Patent No. 7,860,495, which covers a dual-wireless-network architecture for building automation. The district court had determined at Alice step one that the claims were directed to an abstract idea but left step two for the jury. However, neither the instructions nor the verdict form told the jury what the abstract idea actually was, nor explained that the abstract idea itself cannot supply the “inventive concept” needed to make a claim patent-eligible. The Federal Circuit found this omission was not harmless, because Ollnova’s expert had described the inventive concept in terms that closely tracked the very abstract idea the court had identified.
On the substantive eligibility questions, the Federal Circuit handed Ollnova two wins. The court affirmed that claims of U.S. Patent No. 7,746,887 (covering dynamic value reporting using polling intervals, transmission intervals, and conditional transmission triggers) and U.S. Patent No. 8,264,371 (covering aggregated “change-of-value” updates with repeated transmission until acknowledgment) are not directed to abstract ideas. The court emphasized that both sets of claims recite specific technical solutions to concrete technical problems in wireless building automation networks, such as limited bandwidth, power consumption, and communication failures. The court rejected ecobee’s attempts to characterize the claims at a high level of abstraction and dismissed its “human-driven analogies” as failing to account for the actual wireless network challenges the patents address.
The court also affirmed denial of ecobee’s motion for judgment as a matter of law on non-infringement of the ‘371 patent, finding substantial evidence that ecobee’s thermostats repeatedly send the same information to the server when no acknowledgment is received. As to the ‘495 patent eligibility on the merits, the court found enough evidence in the record for a reasonable jury to conclude that the “free of communications” dual-network architecture was not well-understood, routine, or conventional, so JMOL of ineligibility was not warranted.
Because the damages award was vacated along with the infringement verdict, the Federal Circuit did not reach ecobee’s challenges to expert damages testimony or Ollnova’s cross-appeal on prejudgment interest. Those issues, along with a new trial on infringement and a redo of the Alice step two analysis on the ‘495 patent, now return to the district court. The decision serves as a reminder for trial courts that, when multiple patents are at issue, verdict forms must preserve unanimity on a patent-by-patent basis, and that juries deciding step two of an eligibility challenge must be told what the abstract idea is and that the abstract idea itself cannot supply the inventive concept.