Judge rejects company’s patent infringement claims against Twilio

Calling the patents "abstract" and a process "that could be worked out with a pencil and paper," U.S. District Judge Vince Chhabria of San Francisco dismissed a lawsuit and the underlying patents asserting a claim over a method of verifying an online registration using a telephone number.

Chhabria's four-page ruling, issued Friday, made brief work of the claims. TeleSign Corp. v. Twilio Inc., 18-CV03279 (N.D. Cal., filed June 4, 2018).

"TeleSign has not plausibly alleged any concrete improvement that could provide an inventive concept 'sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [abstract idea] itself,'" Chhabria wrote, citing Alice Corp. v. CLS Bank International, 134 S. Ct. at 2347 (2014).

"People are beginning to separate a good idea from a patentable idea," said Wayne O. Stacy, the San Francisco-based Baker Botts LLP intellectual property chair who represented Twilio. "Just because it's a good idea doesn't mean patent law is going to protect it."

Stacy added that TeleSign is a competitor. Both companies sell software and services to help companies verify the identities of people online.

The case concerned four patents filed by Marina del Rey-based TeleSign around 2005. The company filed suit in the Central District in Los Angeles in 2015. It sought $874 million in damages, Stacy said.

San Francisco-based Twilio filed to change venue after two major patent rulings last year. In re: BigCommerce Inc., 17-CV03295 (N.D. Tex., filed March 27, 2017) found a company can only be sued in a state that is their principal place of business.

In TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S. Ct. 1514 (2017) the U.S. Supreme Court said a company must have a physical presence in the district where it is sued.

TeleSign and its counsel with Shook, Hardy & Bacon LLP could not be reached for comment Monday.

In oral arguments last month, Chhabria praised the sides for filing their briefs on plain paper then gave a brief speech about the "clutter" created by using lined and number pleading paper.