Ollnova Technologies v. Ecobee — Federal Circuit Vacates $11.5M Smart-Thermostat Patent Verdict Over Flawed Jury Instructions

Background

Ollnova Technologies sued ecobee, the maker of popular smart thermostats, in the Eastern District of Texas for infringing four patents directed to wireless building automation systems. The patents describe techniques for using dual wireless networks with different protocols (such as WiFi and Bluetooth) to control HVAC and other building components, with features like selective data transmission to conserve bandwidth and redundancy mechanisms that maintain local control when one network fails.

At trial, the jury found that ecobee infringed at least one of the asserted patents, that the claims of the ’95 patent were not directed to well-understood, routine, and conventional technology, that the ’82 patent was invalid, and awarded Ollnova $11.5 million in lump-sum damages covering the life of the patents. Ecobee appealed on multiple grounds, including the verdict form and jury instructions on patent eligibility.

The Court’s Holding

Verdict form vacated for lack of unanimity. The Federal Circuit vacated the infringement judgment because the district court used a single verdict question asking whether ecobee infringed “ANY” of the asserted claims across all four patents, rather than separate questions for each patent. Following its recent precedent in Optis Cellular Technology v. Apple, the court held this structure created an unacceptable risk of a non-unanimous verdict—different jurors could have agreed that “some” claim was infringed while disagreeing about which patent was actually infringed, violating the Seventh Amendment unanimity requirement.

Alice step-two instructions were fatally flawed. The district court submitted the ’95 patent’s Section 101 eligibility to the jury at Alice step two but never told the jury what the abstract idea was. The instruction simply said that step one “is one for the Court to decide and not the jury” and asked the jury whether the claim limitations were “well-understood, routine, and conventional.” The Federal Circuit held this was reversible error: without knowing the abstract idea, the jury had no way to separate the abstract concept from any potential inventive concept, and could have improperly relied on the abstract idea itself to find the claims patent-eligible. The court remanded for a new trial with proper instructions that identify the abstract idea and caution the jury it cannot supply the inventive concept.

Section 101 eligibility upheld for two patents. The court affirmed that the ’87 patent (dynamic value reporting for wireless automation) and the ’71 patent (change-of-value communication) are not directed to abstract ideas under Alice step one. The ’87 patent recites specific timing constraints and conditional transmission triggers that reduce network traffic—a “technological solution to a technological problem” rather than generic data collection. The ’71 patent similarly recites specific aggregation and redundancy mechanisms for communicating change-of-value information in building automation networks.

Non-infringement JMOL denied for the ’71 patent. The court affirmed the denial of ecobee’s motion for judgment as a matter of law on non-infringement of the ’71 patent, finding sufficient evidence supported the jury’s finding on that issue.

Key Takeaways

• Multi-patent verdict forms must ask separate infringement questions per patent. After Optis v. Apple, a single “any patent” infringement question across multiple patents is per se improper because it cannot guarantee juror unanimity on which patent was actually infringed.
• Juries deciding Alice step two must be told what the abstract idea is. A court cannot ask the jury whether claim limitations are “well-understood, routine, and conventional” without first identifying the abstract idea. Otherwise, the jury may unwittingly rely on the abstract idea itself as the inventive concept.
• IoT and building-automation patents can survive Section 101. Patents reciting specific techniques for managing wireless network communications—such as polling intervals, conditional transmission triggers, and aggregated change-of-value updates—are directed to technological improvements, not abstract data-handling concepts.
• The $11.5 million verdict is vacated. The case returns to the Eastern District of Texas for a new trial on infringement and damages, as well as renewed Section 101 proceedings on the ’95 patent.

Why It Matters

This decision is one of the Federal Circuit’s clearest statements on how district courts must handle Section 101 jury instructions. For patent litigators, the message is plain: if Alice step two goes to a jury, the court must identify the abstract idea in the instructions and tell the jury not to count it as the inventive concept. Failing to do so is reversible error, even if expert testimony at trial focused on elements beyond the abstract idea.

For smart-home and IoT companies, the ruling is a mixed bag. Ecobee erased the $11.5 million verdict and gets a second chance on both infringement and eligibility. But Ollnova secured important holdings that its wireless building-automation patents are eligible under Section 101—a meaningful signal for the broader IoT patent ecosystem, where claims involving sensor networks, conditional data transmission, and wireless redundancy are common.