The Federal Circuit has vacated a lower court’s judgements in a patent infringement case involving  smart thermostat products.

The dispute relates to patents directed to improvements in a building automation system (BAS). 

Ollnova Technologies Ltd. sued ecobee Technologies ULC for infringement of U.S. Patent Nos. 7,860,495 (’495 patent), 8,264,371 (’371 patent), 7,746,887 (’887 patent), and 8,224,282 (’282 patent) (collectively, the Asserted Patents).

According to the patent specifications, a BAS is an integrated system of components that automates a process control within a building or facility. These components include, for example, controllers, sensors, alarms, and air handling units configured to manage heating, ventilation, air conditioning (HVAC), air quality, and fire prevention throughout the individual floors of a building.

As the court explained, “The components may operate together to detect events, sense conditions, respond to detected events or changes in conditions, and/or control operation of connected devices.”

BAS components were traditionally managed via wired communications, but wireless networks are increasingly used to reduce installation and maintenance costs.

The Asserted Patents are directed to improvements in wireless communications used in building automation systems, by reducing power usage and bandwidth use and also implementing redundancy mechanisms to mitigate data loss in the event of communications failures.

Ollnova contended that ecobee’s smart thermostat products infringe the Asserted Patents.

The case went to trial and the jury found that:

• ecobee infringed at least one of the Asserted Patents (but without identifying which patent or patents); 
• the ’495 patent’s asserted claims were not directed only to “well-understood, routine, and conventional” technology; and 
• the ’282 patent’s asserted claims were invalid.

The jury awarded Ollnova lump sum damages of $11.5 million covering the life of the patents.

ecobee appealed, based in part on allegedly flawed jury instructions and the verdict form as to ecobee’s challenge to the ’495 patent’s validity under 35 U.S.C. § 101.

The jury instructions read as follows:

To succeed on its claims for patent ineligibility, ecobee must establish two things. The first is whether the claims are directed to an abstract idea. That issue is one for the Court to decide and not the jury. It is not something you will have to decide in this case.

However, you, the jury, will decide the second question related to patent eligibility. Specifically, and in that regard, ecobee must show that the claims involve nothing more than the performance of activities which a person of ordinary skill in the art would have considered well-understood, routine, and conventional at the time the patent application was filed.

(Emphasis added by Federal Circuit.)

ecobee argued that the verdict form improperly combined all Asserted Patents into a single infringement question and permitted the jury to find liability without unanimous agreement that ecobee infringed any particular claim of any patent.

The Federal Circuit agreed, noting that

The verdict form permitted a finding of infringement without requiring juror agreement as to which patent was infringed—so long as each juror believed that some claim of some patent was infringed, he or she could enter a finding of infringement, even if various jurors believed that different asserted patents were infringed.

In a prior case, the court had held that to ensure a unanimous verdict in a patent case, “the verdict form needed to have included, at the very least, separate infringement questions for each asserted patent.”

ecobee also argued that the jury instructions and verdict form on the ’495 patent’s eligibility were erroneous. The court agreed, finding that “the jury was effectively asked to determine whether the claim contained an inventive concept without being instructed on the underlying abstract concept required to frame that analysis….”

The court determined that a new trial on infringement was required and it vacated the damages award.

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