The recent news about AudioEye losing patents should concern its market investors and customers regarding the integrity of AudioEye’s technology. AudioEye is losing its patent portfolio after a judge in the Western District of Texas invalidated dozens of claims from seven of the company’s patents; one patent was invalidated completely.
Why are several of AudioEye’s patents being invalidated?
AudioEye originally filed its patent application in 2016, adding additional material in 2018. Since then, the company received 15 patents with approximately 20 claims per patent. AudioEye asserted that competitor accessiBe infringes nine of these patents in a case filed in the United States District Court for the Western District of Texas in 2020 and six more in a second case also in the Western District of Texas in 2021.
On Nov. 8, the USPTO instituted an IPR on the 10,444,934 patent, finding that accessiBe “established a reasonable likelihood that it would prevail with respect to at least one claim.” The PTAB scheduled an oral argument for August 9, 2022 and a decision is due by November 8, 2022. AudioEye’s response to accessiBe’s petition is due February 1, 2022. Following this institution decision, accessiBe also filed IPRs on the ’877, ’946, ’947, ’173 and ’691 patents.
On Nov. 23, the Court found the following of AudioEye’s patents to be invalid as indefinite:
- AudioEye’s Patent No. 10,809,877 is invalid as indefinite on all claims
- AudioEye’s Patent No. 10,845,947 is invalid as indefinite on all but three claims
- AudioEye’s Patent No. 10,860,173 is invalid as indefinite on all but five claims
- AudioEye’s Patent No. 10,866,691 is invalid as indefinite on all but two claims
- AudioEye’s Patent No. 10,444,934 is invalid as indefinite on nine out of twenty one claims
- AudioEye’s Patent Nos. 10,762,280 and 10,867,120 are each invalid as indefinite on three claims
Was the writing on the wall for AudioEye?
The Court’s decision to invalidate so many claims for indefiniteness is unusual. Not only has AudioEye lost a significant part of its patent portfolio, but it also speaks to the potential for the company to lose even more as litigation continues. In the coming weeks, the Court will finalize its decision on AudioEye’s remaining claims while the USPTO commences the IPR.
These events may not come as a surprise to those following recent disorderly conduct from AudioEye’s management. As seen in this assessment, A troubled ‘Tootsie Slide’: we believe that repeated reshuffling at the executive level might also be concerning.