Four Winds Interactive Voluntarily Drops Its Patent Lawsuit Against 22 Miles

June 5, 2017 by Dave Haynes

Four Winds Interactive has dropped its lawsuit against 22 Miles, filed last year over claims of patent infringement.

Denver-based FWI voluntarily dismissed the case last week, without prejudice, according to documents filed in a Colorado district court.

The digital signage CMS company went after Silicon Valley-based 22 Miles last spring over patent infringement, copyright infringement and something called Patent False Marking, in addition to other related claims. 22 Miles responded that the claims had no merit.

“Our entire team is extremely pleased with the outcome of the case,” says Joey Zhao, CEO of 22 Miles, in a prepared statement. “It is an important victory for 22 Miles because it confirms our position as a true industry leader and innovator.”

Recently, the Magistrate Judge in the case had recommended dismissal of four out of five of FWI’s claims, the statement continues. In his recommendation, he found that FWI’s patent was invalid because it “fails to include an ‘inventive concept’ and thus is patent ineligible.”

He further explained that, “FWI has not identified any improvement to the functionality of the computer system itself, but rather utilizes conventional computer activities to improve the process of providing customized directions.”

In the end, he found, “FWI’s patent claims should be dismissed because the ‘402 Patent does not address patent-eligible subject matter and thus is invalid.”

In addition, the Magistrate found a lack of legal support for most of FWI’s other claims. In addition to recommending dismissal of those claims, the Court also ordered FWI to describe how 22 Miles supposedly infringed FWI’s copyrights by May 30. Instead of providing this description as ordered by the Court, FWI officially dismissed the case on the day the description was due.

Joey Zhao, CEO of 22 Miles, explained, “With FWI dropping this case, they are effectively admitting there was no copyright infringement against 22 Miles. We were confident that this would be the result as 22 Miles has developed its own source code for the past 10 years and we knew that the allegations never had any real basis. Indeed, 22 Miles software was cited on FWI’s Patent’s cover page as prior art, so even FWI knew we came first.”

FWI CEO David Levin confirms the case was dismissed. “It just wasn’t worth it to keep pursuing, so we made the business decision to withdraw without prejudice, which means we can re-file. There are a number of things that just aren’t right, it was a difficult decision.”

Here’s the company’s official, lawyered statement:

Four Winds Interactive (“FWI”) values the opportunity to compete fairly in the marketplace and produce a quality visual communications product that is a benefit to all our customers.  FWI has and will always protect its intellectual property and the concept of fair competition.  Last year, FWI filed litigation against a company in the visual communications market, 22 Miles, due to the concern that 22 Miles was competing in a manner that violates the law.  In the past few days, FWI has decided not to proceed with the litigation at this time based on several factors, including the involvement of other parties and the increased cost to continue to pursue the litigation.  FWI’s decision has resulted in its filing of a notice of dismissal of the litigation without prejudice.

UPDATED

Four Winds’ General Counsel Jenny Brook also followed up, after seeing the press statement from 22 Miles:

Mr. Zhao failed to mention that we dismissed one of the claims, because 22 Miles corrected the behavior at issue (patent false marking), by removing the inaccurate representations from their marketing materials.  

As to the remainder, Mr. Zhao understandably has quoted selectively from Magistrate Varholak’s recommendation, and omitted those statements favorable to FWI.  Most importantly, the recommendation is not an Order of the Court and was in the process of being reviewed by the District Court Judge at the request of both 22 Miles and FWI.  

Unfortunately we cannot meaningfully respond to the remainder of Mr. Zhao’s characterizations or to 22 Miles’ business practices without violating the terms of a Protective Order.