Phelps Dunbar Secures Win in Patent Infringement Dispute; Invalidation of Opponent's Patents

September 07, 2017

NEW ORLEANS – Phelps Dunbar recently obtained a complete victory for firm client, SP Plus Corporation, a publicly traded corporation. Phelps brought suit in the U.S. District Court for the Eastern District of Louisiana after an entity in the parking industry threatened SP Plus with a patent infringement action related to the client’s use of self-release parking boots in New Orleans. Phelps successfully sought an order from the district court declaring that the two patents issued by the U.S. Patent and Trademark Office were invalid as a matter of law.

Through cease-and-desist letters and eventually, counterclaims, the defendant—IPT, LLC d/b/a Paylock (“Paylock”)—claimed that it possessed two patents that gave it broad intellectual property rights over certain types of parking enforcement, and threatened the plaintiff—SP Plus—with claims to injunctive relief and millions of dollars in infringement damages, including attorneys’ fees and treble damages for alleged bad faith. However, after research and analysis, Phelps filed a declaratory judgment action on behalf of SP Plus alleging that the patents were facially invalid.

Approximately six months after SP Plus filed its suit (the “New Orleans Action”), Paylock filed a related patent infringement suit in the U.S. District Court for the District of New Jersey (the “New Jersey Action”) alleging infringement against SP Plus’s prime contractor in New Orleans, but not against SP Plus. After reviewing the New Jersey Action, Phelps filed a motion for a preliminary injunction seeking to enjoin Paylock’s prosecution of the second-filed New Jersey Action. After a hearing, the federal district court in New Orleans granted SP Plus’s motion for preliminary injunction, thereby effectively halting the New Jersey Action and requiring all infringement claims related to New Orleans parking enforcement to proceed in the New Orleans Action.

After that initial procedural victory, Phelps drafted an extensive motion for judgment on the pleadings in the New Orleans Action, arguing that the relevant patents were directed to “abstract ideas,” and therefore were not patent-eligible. The district court ultimately granted SP Plus’s motion for judgment on the pleadings, and specifically determined that Paylock’s patents were invalid as a matter of law. Thus, at this stage, Paylock no longer possesses the patents upon which it originally based its infringement threats against SP Plus. Because of the issues implicated and the result, the decisions in favor of SP Plus have already been the subject of industry articles and comments by intellectual property publications.

The substantial victories were the result of teamwork by multiple firm attorneys in multiple firm offices. Partner Chris Ralston led the team, which included attorneys Lindsay Calhoun, Jeremy Grabill, Lillian Grappe and Arthur Kraatz. Partners Harry Rosenberg and Allen Darden also provided valuable insight and guidance on the myriad legal issues.

Phelps Dunbar served as lead defense counsel, though counsel for the other defendants included K&L Gates, Jones Walker and Leake & Anderson. Paylock was represented by Sills Cummis from its New York City office.

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With offices positioned along the Gulf Coast from Houston to Tampa, Phelps Dunbar is a regional law firm of more than 260 attorneys uniquely equipped to serve clients in the major commercial centers of the burgeoning “Third Coast” of the United States. Locations in New Orleans and Baton Rouge, Louisiana; Jackson, Tupelo and Gulfport, Mississippi; Houston and Dallas/Fort Worth, Texas; Tampa, Florida; Mobile, Alabama; Raleigh, North Carolina; and London enable Phelps Dunbar to serve clients not only along the Third Coast, but also the South, nationwide and abroad.