Intellectual Ventures II LLC v. PNC Financial Services Group et al.

I'll research this case thoroughly using web searches.

Let me dig deeper into the docket history, outcome, and parallel PTAB proceedings.

Let me verify the PTAB proceedings, the 2013 complaint's patents, and the ultimate outcome.

Case Overview — Intellectual Ventures I & II LLC v. PNC Financial Services Group, Inc., No. 2:13-cv-00740 (W.D. Pa.)

Parties. The plaintiffs are Intellectual Ventures I LLC and Intellectual Ventures II LLC, two arms of Nathan Myhrvold's Bellevue, Washington–based patent-holding enterprise (founded 2000; the complaint and contemporaneous reporting state IV had acquired more than 70,000 patents and earned over $3 billion licensing them). IV is the paradigmatic non-practicing entity/patent aggregator — it does not make or sell products; it monetizes patent portfolios through licensing and litigation. The defendants are PNC Financial Services Group, Inc. and PNC Bank, N.A. (and, in the second suit, PNC Merchant Services Company, L.P.) — a large U.S. bank holding company and its national bank subsidiary, headquartered in Pittsburgh at One PNC Plaza. Counsel for IV in the second action included Ian Feinberg, Marc Belloli, David Alberti and Elizabeth Day (Feinberg Day Alberti & Thompson) plus Joseph Butcher and others; PNC was represented by Thomas L. Allen and Justin J. Kontul (Pittsburgh), and in the parallel PTAB proceedings by WilmerHale (Donald Steinberg, Gregory Lantier, Monica Grewal). Note that the case was captioned with both IV I and IV II as plaintiffs — IV II owned the '666, '574, '002 and '409 patents, while IV I owned the '298 patent (Compl. ¶¶19–20).

Accused technology. IV accused PNC's online and electronic banking systems and services — including pnc.com, pncsites.com and PNC's Pogo mobile-payment site — of infringing. The infringement theories are notably standard- and infrastructure-based rather than product-specific: IV alleged PNC infringed the '574 patent simply by complying with the PCI Data Security Standard for encrypting data transmitted during banking sessions (accusing claim 18, and alleging both direct and induced infringement through PNC's website instructions to customers), and alleged PNC infringed the '666 patent through its use of IBM System z mainframe computers, including IBM zEnterprise systems (accusing claim 4, a hardware "crypto-engine" co-processor claim). This "compliance with an industry standard equals infringement" theory later drew scrutiny in the parallel PTAB proceedings, where petitioners argued IV could not treat the '574 as essential to financial transactions in one forum and "not incidental" to finance in another.

Patents asserted. Despite the single-patent metadata for this case, the complaints at issue asserted five patents: U.S. 5,745,574 ("Security Infrastructure for Electronic Transactions," issued Apr. 28, 1998; sole inventor Dr. Sead Muftic) — a hierarchical public-key-infrastructure (PKI)/certificate authority system for issuing, verifying and revoking public-key certificates; U.S. 7,634,666 — a hardware cryptographic co-processor ("crypto-engine") for a host computer; U.S. 6,546,002 ("System and Method for Implementing an Intelligent and Mobile Menu-Interface Agent") — an adaptive user-interface agent; U.S. 7,757,298 ("Method and Apparatus for Identifying and Characterizing Errant Electronic Files") — file-integrity/diagnostic software; and U.S. 6,314,409 ("System for Controlling Access and Distribution of Digital Property") — digital-content access-control/DRM. (I was not able to confirm from the sources retrieved that the May 2013 complaint listed precisely this same five, though PNC's SEC disclosures describe five patents in the first suit and the June 2014 complaint identified these five.)

Posture and venue. IV filed the first action on May 29, 2013 in the U.S. District Court for the Western District of Pennsylvania, Pittsburgh Division, assigned to Judge Arthur J. Schwab (docketed 2:13-cv-00740-AJS). PNC answered in July 2013 with invalidity and non-infringement counterclaims, and in November 2013 filed CBM/PGR petitions at the PTAB attacking all five patents (e.g., CBM2014-00031). In December 2013 the court dismissed claims as to two patents and stayed the case pending the PTAB; the docket was reported as terminated Dec. 6, 2013 (consistent with administrative closure on stay). IV then filed a second action on June 25, 2014 (No. 2:14-cv-00832), adding the patent PNC had knocked out of the first suit; on Aug. 12, 2014 Judge Schwab granted consolidation with the 2013 case and stayed it as well (2:14-cv-00832, ECF 37). The Pittsburgh venue mattered because it is PNC's home forum, avoiding a § 1404 transfer fight, and because a bank headquartered there faced an NPE in its own backyard. Critically, the court's decision to stay early and defer to the AIA post-grant proceedings made the litigation outcome largely derivative of the PTAB.

Why it's notable. This case was the opening salvo of IV's 2013 bank-assertion campaign — the same day IV sued PNC it also sued First National Bank of Omaha, targeting online-banking and PKI security technology rather than consumer products, and the campaign ultimately swept in JPMorgan Chase, Capital One, Bank of America, Compass Bank and others. It produced an early and frequently cited CBM jurisdictional ruling: in CBM2014-00032 the Board denied institution on the '298 patent, holding that merely asserting a patent against a bank does not make it a "covered business method" patent — a precursor to the CBM-scope jurisprudence that culminated in Secure Access, LLC v. PNC Bank, 848 F.3d 1370 (Fed. Cir. 2017) (though that appeal arose from a different PNC CBM, CBM2014-00100, on the '191 patent). On the merits the case went badly for IV: the PTAB invalidated all claims of the patents still at issue in IV 1 in April–May 2015; the Federal Circuit affirmed invalidity of two of the same patents in July 2015 in an appeal from a different defendant; IV dismissed its remaining IV 1 claims with prejudice in October 2015, dropped three more IV 2 patents without prejudice, and the court refused to lift the stay. The '574 patent specifically was invalidated at the PTAB in IPR2014-00724 (Compass Bank v. IV II), Final Written Decision Nov. 5, 2015, which held claims 18–31 unpatentable over Kapidzic after rejecting IV's attempt to disqualify the reference as the inventor's own work for lack of corroboration (parallel challenges: IPR2014-00660 (IBM) and CBM2014-00160 (JPMorgan), the latter denied institution).

Sourcing caveat. The final disposition of 2:13-cv-00740 is not well sourced in the materials I retrieved. PNC's SEC disclosures (2016–2017 Form 10-Ks) describe the case as consolidated and stayed as of October 2015, with the stay continued pending related proceedings against other defendants; I could not confirm a subsequent dismissal, settlement or judgment, so the case's ultimate outcome should be treated as unverified. Likewise, the identity of the specific patents dismissed in December 2013/October 2015 and the exact docket-entry numbers for those orders could not be confirmed without PACER access.

I'll research this case across dockets, opinions, PTAB records, and legal news.

Very useful. Let me dig into the specifics of both the IV1 docket and the parallel PTAB proceedings.

Now let me pin down the asserted patents, the district court orders, and the Federal Circuit appeal.

Research note on sources

The two W.D. Pa. cases (2:13-cv-00740 and its later-filed, consolidated companion 2:14-cv-00832) were resolved almost entirely outside the courtroom — through PTAB/CBM proceedings and voluntary dismissals. Very few district-court opinions exist, and much of what is recoverable comes from (a) PTAB decisions and party filings, (b) Justia/PACER docket metadata, and (c) PNC's own SEC 10-K disclosures, which describe the litigation in unusual detail. I flag below where a fact rests only on PNC's characterization or on inference.

---

1. Case snapshot

Sources: Justia docket 2:13-cv-00740; Justia docket 2:14-cv-00832; GeekWire, May 2013.

---

2. Chronology

2013 — Filing, answer, and PNC's PTAB counter-offensive

• 2013-05-29 — Complaint filed. IV I and IV II sued PNC and PNC Bank over online-banking systems, seeking declarations of infringement, past/future damages, and fees. This was the opening of IV's 2013–14 bank assertion campaign (First National Bank of Omaha was sued the same day in D. Neb.); IV's Chief Litigation Counsel Melissa Finocchio publicly confirmed licensing talks had failed (GeekWire).
• 2013-07 — Answer with counterclaims. PNC answered, denied liability, and counterclaimed for declaratory judgments of invalidity and non-infringement (Justia lists PNC as counterclaimant).
• 2013-11-12 — CBM2014-00031 filed (Bank of America + PNC v. IV II, U.S. Pat. 6,182,894). Per PNC's 10-K, in November 2013 PNC filed CBM/post-grant petitions "seeking to invalidate all five of the patents" at issue in IV1 — i.e., CBM2014-00028 ('137), -00029 ('701), -00030 ('382), -00031 ('894), -00032 ('298). This was the decisive move in the case.
• 2013-12 — Partial dismissal and stay. PNC's 10-K: "In December 2013, the court dismissed the plaintiffs' claims as to two of the patents and entered a stay of the lawsuit pending the PTO's consideration of PNC's review petitions, including any appeals." IV's own mandatory notice in IPR2015-01322 lists No. 2:13-cv-00740 as "terminated December 6, 2013," which likely reflects the docket's administrative closure when the stay issued. Note the internal inconsistency in PNC's disclosures: the FY2017 10-K says two patents were dismissed, while the FY2018 10-K says "the one patent not selected for review by the PTO."

2014 — Institution decisions, a second suit, and consolidation

• 2014-05-22 — Institution decisions. The Board instituted CBM review of the '894 ('031) and denied institution on the '298 ('032) — the first decision of its kind holding that mere assertion of a patent against a bank does not make it a "covered business method" patent (Board: the '298 claims "describe software systems that have general utility not specific to any application") (Nat'l Law Review; Lexology). PNC's 10-K records that the PTO instituted on four of the five patents in May 2014. (The '298 became the patent IV re-asserted in the second suit.)
• 2014-06-25 — Second suit filed (2:14-cv-00832); served 2014-07-02. Defendants: PNC Financial Services Group, PNC Bank and PNC Merchant Services Company, L.P. The complaint asserts five patents — '666 (IBM System Z / zEnterprise mainframes), '574 (claim 18, PCI-DSS encryption of online banking sessions, direct + induced infringement), '002, '298, and '409 (complaint text, RPX Insight; notice letter dated 2014-06-23 pleaded as knowledge).
• 2014-08-12 — Consolidation and stay. Dkt. 37 in 2:14-cv-00832: "ORDER granting Motion to Consolidate Cases; granting Motion to Stay. Signed by Judge Arthur J. Schwab on 8-12-14." The stay ran pending the PTO reviews of both cases' patents and any appeals (Justia; IV II mandatory notice, IPR2014-00724).
• 2014-08-18 — CBM2014-00031 Final Written Decision. IV filed a motion to amend cancelling every instituted claim; the Board entered adverse judgment and cancelled claims 1–18 of the '894 patent (Paper 20) (Faegre Drinker/Nat'l Law Review summary; docket: Docket Alarm).
• 2014-12-12 — '409 patent narrowed. In IPR2014-00719 (Compass Bank, Commerce Bancshares, First National Bank of Omaha v. IV II, '409 patent), the Board had instituted on claim 23 only; IV requested adverse judgment and disclaimed claim 23, and judgment was entered. Petitioners' request for rehearing under § 318(a) was denied 2015-03-09 (Board order). Petitioners also filed IPR2014-00724 on the '574 patent in July 2014; its outcome was not recoverable in this research.

2015 — PTAB invalidations and Federal Circuit affirmance

• 2015-03-02 — Consolidated final hearing in CBM2014-00028/-00029/-00030/-00033 (BoA/PNC v. IV I and IV II) before APJs Giannetti, Jung and Anderson (rescheduled from 2015-02-23 due to a USPTO weather closure). The Board construed "interactive interface" in the '382 patent as "an Internet interface that provides a medium for information users to communicate with information providers" (hearing transcript/notice; CBM2014-00030 FWD, 2015-04-24).
• April–May 2015 — Board invalidates the remaining IV1 patents. CBM2014-00030 FWD issued 2015-04-24 (trial instituted solely on § 101), with the companion '701 decision following in May. PNC's 10-K: "In separate decisions issued in April and May 2015, the PTO invalidated all claims with respect to the patents that were still at issue in IV 1."
• April 2015 (other defendant's proceeding) — the Board upheld the patentability of one IV2 patent; that decision was appealed and affirmed by the Federal Circuit in February 2016 (10-K).
• 2015-07 — Federal Circuit affirms invalidity of two patents. Per PNC's 10-K: "in an appeal arising out of proceedings against a different defendant relating to some of the same patents, the U.S. Court of Appeals for the Federal Circuit affirmed the invalidity of the two patents at issue in both IV 1 and the Federal Circuit appeal." I could not independently confirm the case caption or which two patents; treat as PNC's characterization pending verification.
• 2015-10 — Endgame in the district court.
  • IV moved to dismiss with prejudice its IV1 claims on the patents not previously dismissed; granted.
  • In IV2, IV voluntarily dismissed without prejudice claims on three patents (after adverse PTO and district-court rulings), leaving two patents at issue.
  • IV moved to deconsolidate IV1 and IV2 and lift the stay — denied in October 2015; the stay continued "until certain court proceedings against other defendants related to the same patents are resolved" (10-K).

Claim construction, trial, and post-trial motions

• No Markman/claim construction in the district court. The case was stayed in December 2013 (IV1) and August 2014 (IV2) at the pleading/infringement-contention stage. The only claim-construction activity was the PTAB's BRI analysis (e.g., "interactive interface" in the '382 CBM).
• No discovery phase of consequence, no trial, no verdict, no JMEM/JMOL/new-trial or fee motions. IV served infringement contentions early (Ex. 1009 in CBM2014-00031), which PNC used as CBM petition exhibits; discovery otherwise effectively froze when the stay issued. The "strategic" discovery event was PNC's use of the statutory CBM regime to obtain a stay before claim construction and before substantial discovery.

---

3. Disposition and present posture

• IV1 (2:13-cv-00740): terminated by dismissal with prejudice in October 2015 as to all claims not previously dismissed; every asserted patent had been cancelled, disclaimed, or invalidated (by the PTAB, and per PNC's 10-K, by the Federal Circuit).
• IV2 (2:14-cv-00832): remained stayed as of PNC's last substantive disclosure (FY2018 10-K filed 2018), with two patents nominally live. I could not confirm a later terminating order, settlement, or judgment; one patent-analytics page lists 2:14-cv-00832 as "Closed," but I would not rely on that alone. The final disposition of IV2 should be verified on PACER (docket sheet for 2:14-cv-00832, post-2016 entries).
• No damages award, injunction, or fee award was entered in either case.

---

4. Parallel PTAB proceedings (on patents asserted in these cases)

Effect on the litigation: the CBM filings converted PNC's invalidity defense into a litigation-ending strategy — early stays (Dec. 2013, Aug. 2014), no claim construction or trial, and eventual cancellation/invalidation of essentially the entire IV1 portfolio. IV's ability to keep IV2 alive was also limited by adverse PTAB and district-court § 101 rulings in parallel suits (e.g., the April 16, 2014 E.D. Va. opinion in IV I v. Capital One, No. 1:13-cv-00740, and the Dec. 18, 2014 D. Del. opinion in IV I v. Manufacturers & Traders Trust, No. 13-1274-SLR, both cited in the '382 FWD), and by IV II v. JPMorgan Chase, No. 13-cv-3777-AKH (S.D.N.Y.) (partial SJ under § 101 on 2015-04-28; the '574 was withdrawn on consent, ECF 519, 2015-09-17) (opinion excerpt).

---

5. Open items I could not verify (do not treat as facts)

1. Exact identity of all five IV1 patents — the five I list are inferred from PNC's/BoA's CBM petitions plus the 10-K's "five patents" statement; confirm against the 2013 complaint.
2. Whether the December 2013 order dismissed one or two patents (PNC's 10-Ks conflict).
3. The caption and patents in the July 2015 Federal Circuit decision affirming invalidity.
4. Final disposition of 2:14-cv-00832 after 2016, and whether it was settled as part of IV's bank licensing campaign.
5. Outcome of IPR2014-00724 on the '574, and the full text/status of CBM2014-00160.
6. Whether any attorneys' fee motion was filed (none surfaced).

Best next steps: pull the PACER docket sheets for 2:13-cv-00740 and 2:14-cv-00832 (orders of Dec. 2013, Aug. 2014, Oct. 2015, and any post-2016 entries); and retrieve CBM2014-00029/-00030 FWDs and IPR2014-00724 from PTAB E2E to confirm claim-level outcomes.

I'll research the docket and counsel appearances for this case.

Let me dig into the docket sheet and the specific attorney names.

Let me pull the docket entry details, including pro hac vice motions and local counsel.

Bottom line

Plaintiffs in 2:13-cv-00740 are Intellectual Ventures I LLC and Intellectual Ventures II LLC (the docket caption is "Intellectual Ventures I LLC et al. v. PNC Financial Services Group, Inc. et al."), so "plaintiff's counsel" spans both IV entities. The plaintiff-side team was Feinberg Day Alberti & Thompson LLP (Menlo Park / Los Angeles, CA) — the same trial team IV used across its entire 2013–14 bank campaign — working with Intellectual Ventures' in-house patent litigation group in Bellevue, WA. Local Pittsburgh counsel appears on the docket but I could not attribute a name to the plaintiffs' local-counsel role with confidence, so I flag that gap rather than guess.

---

Counsel of record for the plaintiffs (district court, 2:13-cv-00740)

In-house (Intellectual Ventures, 3150 139th Ave. SE, Bellevue, WA)

• Tim R. Seeley (Reg. No. 53,575) — IV in-house counsel; appears as PTAB backup counsel for IV II throughout the bank campaign.
• Donald J. Coulman (Reg. No. 50,406) — IV in-house counsel; PTAB backup counsel and the in-house contact for IV in related proceedings.
• James R. Hietala (Reg. No. 51,802) — IV; later IV II PTAB power-of-attorney filings.

I did not find an in-house attorney formally entering an appearance on the 2:13-cv-00740 docket; IV's in-house group appears in the PTAB papers and at oral argument/hearings rather than as district-court counsel of record.

Parallel PTAB/ITC-side representation (not district-court counsel of record)

These firms represented IV in the CBM/IPR proceedings that drove the case, and are worth noting because they, not the district-court team, argued the merits that ended the case:

• Knobbe Martens Olson & Bear LLP (Irvine, CA) — Brenton R. Babcock (lead), Ted M. Cannon (backup): IV I/IV II patent-owner counsel in CBM2014-00028/29/30/32 and the '574 IPR family.
• Novak Druce Connolly Bove & Quigg LLP (Washington, D.C.) — Henry A. Petri Jr., James Murphy: argued CBM2014-00029/-00030 for IV.
• Sterne, Kessler, Goldstein & Fox PLLC (Washington, D.C.) — Lori A. Gordon (lead, Reg. No. 50,633), Jonathan M. Strang (backup): IV II's designated lead/backup counsel in later IPRs (e.g., IPR2015-01322).

Local counsel — unresolved

The existence of pro hac vice motions (e.g., Day's, ECF No. 7 and its granting order) implies Pittsburgh local counsel sponsored them, and the docket's aggregated "Represented By" block contains names I could not confirm as plaintiff-side or defense-side (partial entries such as "Joseph F. ___," "Daniel E. ___," and "Samantha Quinn"). I am not able to identify the plaintiffs' W.D. Pa. local counsel by name from the sources retrieved, and I will not supply one. Note that two other names on that block — Gregory H. Lantier and James L. Quarles III — are WilmerHale attorneys and were defense-side (PNC's CBM petitioners), so the aggregator list mixes both sides.

---

Docket context that matters for the "counsel" question

• Filed May 29, 2013, assigned to Judge Arthur J. Schwab, W.D. Pa. (Pittsburgh). IV's own PTAB mandatory notices describe the case as "filed May 29, 2013, terminated December 6, 2013" — i.e., administratively closed/stayed after two patents were dismissed and PNC's CBM petitions were filed.
• PNC subsequently filed CBM2014-00029, -00031, -00032 (PNC/IV I/IV II), and the case was consolidated with 2:14-cv-00832 (IV 2) on August 12, 2014 (ECF No. 37, granting motions to consolidate and stay).
• After PTAB and Federal Circuit losses invalidated the asserted patents, plaintiffs dismissed their remaining claims with prejudice in October 2015 (granted by the court; recited in PNC's Form 10-Q and 10-K). So the plaintiffs' counsel of record never tried the case to judgment.
• The '574 patent (the only patent listed in this case's metadata) was also the subject of IPR2014-00660 and IPR2014-01410 (IBM), CBM2014-00160 (JPMorgan Chase), and IPR2014-00724 (Compass Bank, Commerce Bancshares, First National Bank of Omaha) — petitions in which Knobbe Martens and IV in-house appeared for IV II.

---

Sourcing and confidence

• High confidence: Feinberg Day Alberti & Thompson attorneys (Alberti, Day, Lim, Belloli, Feinberg, Thompson, Zolotorev) as IV's plaintiff-side counsel in the 2013–14 bank campaign and on this docket; Elizabeth Day's pro hac vice filing in this case; WilmerHale as PNC-side counsel; Knobbe Martens / Novak Druce / Sterne Kessler as IV's PTAB counsel.
• Medium confidence: the precise role labels (lead vs. co-lead vs. of counsel) — district dockets in this era did not designate a single "lead counsel," and I am inferring roles from hearing transcripts and campaign-wide appearance motions rather than from a designation in this docket.
• Unverified / explicitly not asserted: the identity of plaintiffs' Pittsburgh local counsel; any sealed filings; and the full/complete "Represented By" list (the public aggregators truncate first names — e.g., "Thomas L. ___," "Jonathan L. ___," "David C. ___," "Justin J. ___," "Daniel E. ___," "Joseph F. ___").

Key sources: dockets.justia.com docket 2:2013cv00740 (W.D. Pa.) and 2:2014cv00832; plainsite docket for Intellectual Ventures I LLC v. PNC (ECF No. 7, motion and order for Elizabeth Day pro hac vice); IV II's Mandatory Notices, IPR2015-01322 (identifying the PNC case and its termination); Knobbe Martens' Third Updated Notice of Related Matters, IPR2014-00724 (listing all nine '574 bank suits and PTAB counsel); CBM2014-00028/29/30/33 oral hearing transcript, Mar. 2, 2015 (appearances: Petri/Murphy, Novak Druce; King/Cannon, Knobbe Martens; Steinberg/Lantier/Grewal, WilmerHale); IV II v. JPMorgan Chase Markman transcript, S.D.N.Y. 13-cv-3777, Mar. 5, 2014 (Alberti, Lim, Zolotorev of Feinberg Day); IV II v. Commerce Bancshares, W.D. Mo. 2:13-cv-04160, Oct. 15, 2013 pro hac vice order; PNC Financial Services Group Form 10-K (2016) and Form 10-Q (Q3 2015), Patent Infringement Litigation disclosures; Elizabeth Day firm bio (bdiplaw.com).

I'll research this case using multiple targeted searches.

Let me pull the docket and counsel entries directly.

Now let me verify the defendant-side counsel through the docket and firm sources.