Search Results for: Heartland

Supreme Court Update: Extending the ITC’s Reach Beyond US Borders

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by Dennis Crouch

Constitutional Challenge to Inter Partes Review: Although the Constitutional issues in Cooper v. Lee and MCM v. HP were law-professor-interesting, they were not substantial enough for certiorari.  The Supreme Court has now denied the Cooper and MCM petitions — leaving the IPR regime unchanged.  Although Cooper v. Square is still pending, its chances are slight. The Supreme Court has also denied certiorari in Encyclopaedia Britannica (malpractice), Gnosis (appellate review), and GeoTag (case-or-controversy).

A new 101 Challenge: In its first conference of the term, the Supreme Court denied all of the pending petitions regarding patent eligibility.  However, Trading Technologies has filed a new petition asking whether a new card game is categorically unpatentable so long as it uses a standard deck (rather than a novel deck) of cards.  My post on the case asks: Does the Patent Statute Cabin-in the Abstract Idea Exception?  That question references Section 100 of the Patent Act that expressly allows for the patenting of new use of a known manufacture.

Extra Territoriality of Trade Secrecy Law: On the trade secrecy front, Sino Legend has petitioned to review the Federal Circuit’s affirmance of the International Trade Commision’s ban on Legend’s importation of rubber resins used for tire production. The underlying bad-act was a trade secret misappropriation that occurred in China and the question on appeal asks: Whether Section 337(a)(1)(A) permits the ITC to adjudicate claims regarding trade secret misappropriation alleged to have occurred outside the United States.  A Chinese court looked at the same case and found no misappropriation.

Design Patent Damages: Oral arguments were held earlier this week in Samsung v. Apple. During the arguments, all parties agreed that (1) the statute does not allow for apportionment of damages but rather requires profit disgorgement; (2) the article-of-manufacture from which profits can be calculated may be a component of the product sold to consumers; and (3) the determination of what counts as the article-of-manufacture is a question of fact to be determined by the jury.   The only dispute then was on the factors that a jury should be considered and when the “inside gears” of a product should ever be included in the calculation.

Upcoming Supreme Court Oral Argument: SCA Hygiene (laches) on November 1; Star Athletica (copyright of cheerleader outfit) on October 31.

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Supreme Court Patent Cases – September 28 Update

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by Dennis Crouch

Cooper v. Lee and Cooper v. Square are both ask the same question: whether 35 U.S.C. §318(b) violates Article III of the United States Constitution, to the extent that it empowers an executive agency tribunal to assert judicial power canceling private property rights amongst private parties embroiled in a private federal dispute of a type known in the common law courts of 1789, rather than merely issue an advisory opinion as an adjunct to a trial court.”  The issues here are also parallel to those raised in MCM Portfolio v. HP (“Does IPR violate Article III of the Constitution?”).  The cases received a boost this month with the Court’s call for response (CFR) in Cooper v. Square.  Square had previously waived its right to respond, but its response is now expected by October 11, 2016.  Under Supreme Court R. 37, the Call for Response reopens the period for filing of an amicus curiae brief in support of petitioner. (~ due October 8, 2016).  Eight Amici Curiae briefs were filed in MCM and two in Cooper v. Lee.  In general, each brief additional brief incrementally increases the odds of certiorari.  Statistical analysis also suggests that a call for response significantly increases the odds of certiorari being granted.

I wrote earlier this week about the new IPR process challenge in Ethicon where the patentee has challenged Director Lee’s delegation of institution decision authority to the PTAB.  The case is one of statutory interpretation but uses the separation-of-function doctrine as an interpretive guide. The same question is also presented in LifeScan Scotland, Ltd. v. Pharmatech Solutions, Inc.  Both petitioners (Ethicon and LifeScan) are owned by J&J.

The final new petition is a personal jurisdiction case: Mylan v. Acorda.  The Hatch-Waxman setup involved Mylan preparing and filing its abbreviated new drug application that created a cause of action for infringement under 35 U.S.C. 271(e)(2). Although the ANDA preparation occurred in West Virginia and the filing in Maryland, the infringement lawsuit was filed by Acorda in Delaware.  Mylan asks: “Whether the mere filing of an abbreviated new drug application by a generic pharmaceutical manufacturer is sufficient to subject the manufacturer to specific personal jurisdiction in any state where it might someday market the drug.”  The argument builds on the non-patent decision Daimler AG v. Bauman, 134 S. Ct. 746 (2014). In the pro-business case of Daimler, the Supreme Court reduced the scope of general personal jurisdiction to states where the defendant company is incorporated or has its personal place of business.

 

In the claim construction front, the Supreme Court also called for a response in Google v. Cioffi. In that case Google suggests an interpretative principle of “strictly construing” amended claim language against the patentee. [GoogleCioffiPetition]

On the merits side – we have three patent cases pending oral arguments.  First-up is the design patent damages case of Apple v. Samsung.   Although not a party, the Solicitor General has requested to been granted leave to participate in oral arguments.   Its brief, the SJ argued (1) Section 289 does not permit apportionment but rather requires award of the infringers profits on the relevant article of manufacture; but (2) the article of manufacture can be a “component” rather than a finished product sold to end-users.  In the end, the SJ argues that the jury should have been tasked with determining the appropriate article-of-manufacture and that the case should be remanded to determine whether a new trial is warranted.  Briefing continues in both SCA Hygiene (laches) and Life Tech (Component Export liability).

 

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Letter to Congress from 28 Law Professors & Economists Urging Caution on the VENUE Act

Patent,

In July 2016, I discussed a letter from 45 professors arguing for statutory reforms to limit venue in patent infringement cases.  The letter focused on the “staggering concentration of patent cases in just a few federal district courts” and offered the the positive conclusion that such a concentration is “bad for the patent system.”  In the abstract, concentration of cases is not necessarily bad — here though, the particular arguable “badness” is that the high concentration of cases is in the Eastern District of Texas rather than Silicon Valley, New York, Chicago, or Delaware.

Now, a competing group of law professors has offered their suggestion – urging caution in terms of patent venue reform, especially with regard to the pending VENUE Act. Venue Equity and Non-Uniformity Elimination Act, S.2733, 114th Cong. (2016).   The proposed VENUE Act would allow patent actions to be brought only in judicial districts where:

  • the defendant has its principal place of business or is incorporated;
  • the defendant has committed an act of infringement of a patent in suit and has a regular and established physical facility that gives rise to the act of infringement;
  • the defendant has agreed or consented to be sued;
  • an inventor named on the patent conducted research or development that led to the application for the patent in suit; or
  • a party has a regular and established physical facility and has managed significant research and development for the invention claimed in the patent, has manufactured a tangible product alleged to embody that invention, or has implemented a manufacturing process for a tangible good in which the process is alleged to embody the invention.

Under the current statutory framework (as interpreted), venue is proper in any jurisdiction where the court has personal jurisdiction over the defendants.  For any large company operating in the US, this current approach leads to the results that venue for a patent infringement case is proper in any federal court across the country – including those located in the Eastern District of Texas.

The new letter argues that the venue limiting proposals are basically serving as a mechanism of weakening the power of patent holders: “The reality is that the major proponents of changing the venue rules are primarily large high-tech companies and retailers with an online presence sued in the Eastern District of Texas that would rather litigate in a small number of more defendant-friendly jurisdictions.”

= = = = = =

[Read the Full Letter]

Dear Chairman Grassley, Ranking Member Leahy, Chairman Goodlatte, and Ranking Member Conyers:

As legal academics, economists, and political scientists who conduct research in patent law and policy, we write to express our concerns about the recent push for sweeping changes to patent litigation venue rules, such as those proposed in the VENUE Act.[1] These changes would vastly restrict where all patent owners could file suit—contrary to the general rule that a plaintiff in a civil lawsuit against a corporate defendant can select any court with jurisdictional ties to the defendant.[2]

Given the recent changes in the patent system under the America Invents Act of 2011 and judicial decisions that have effectively weakened patent rights,[3] we believe that Congress should adopt a cautious stance to enacting additional changes that further weaken patent rights, at least until the effects of these recent changes are better understood.

Proponents of amending the venue rules have an initially plausible-sounding concern: the Eastern District of Texas handles a large percentage of patent infringement lawsuits and one judge within that district handles a disproportionate share of those cases. The reality is that the major proponents of changing the venue rules are primarily large high-tech companies and retailers with an online presence sued in the Eastern District of Texas that would rather litigate in a small number of more defendant-friendly jurisdictions.

Indeed, the arguments in favor of this unprecedented move to restrict venue do not stand up to scrutiny. Specifically:

  • Proponents for the VENUE Act argue that “[t]he staggering concentration of patent cases in just a few federal district courts is bad for the patent system.”[4] As an initial matter, data indicates that filings of patent lawsuits in the Eastern District of Texas have dropped substantially this year—suggesting a cautious approach until trends have stabilized.[5]
  • Contrary to claims by its proponents, legislative proposals like the VENUE Act would not spread lawsuits throughout the country. In fact, these same proponents have found that restricting venue in a manner similar to the VENUE Act would likely result in concentrating more than 50% of patent lawsuits in just two districts: the District of Delaware (where most publicly traded corporations are incorporated) and the Northern District of California (where many patent defendants are headquartered).[6] Instead of widely distributing patent cases across numerous districts in order to promote procedural “fairness,” the VENUE Act would primarily channel cases into only two districts, which happen to be districts where it is considered much more difficult to enforce patent rights.[7]
  • Proponents for the VENUE Act have argued that the Eastern District of Texas is reversed more often by the Federal Circuit than other jurisdictions, claiming that in 2015 the Federal Circuit affirmed only 39% of the Eastern District of Texas’s decisions but affirmed over 70% of decisions from the Northern District of California and District of Delaware.[8] These figures are misleading: they represent only one year of data, mix trials and summary judgment orders, and fail to take into account differences in technology types and appeals rates in each district. In fact, a more complete study over a longer time period by Price Waterhouse Coopers found that the Eastern District of Texas affirmance rate is only slightly below the national average for all districts.[9]
  • The Federal Circuit recently confirmed in In re TC Heartland (Fed. Cir. Apr. 29, 2016) that 28 U.S.C. § 1400(b) provides that a corporate defendant in a patent case—like corporate defendants in nearly all other types of cases—may be sued in any district in which personal jurisdiction lies. Constitutional due process requires a “substantial connection” between the defendant and forum.[10] Thus, contrary to its title and the claims of its proponents, the VENUE Act does not re-establish a “uniform” litigation system for patent rights by requiring substantial ties to the forum. Instead, the Act thwarts the well-established rule that plaintiffs can bring suit in any jurisdiction in which a corporate defendant has committed substantial violations of the law.[11]
  • The VENUE Act would raise costs for many patent owners by requiring them to litigate the same patent against multiple defendants in multiple jurisdictions, increasing patent litigation overall. In recent years, the America Invents Act’s prohibition on joinder of multiple defendants in a single lawsuit for violating the same patent has directly resulted in increased lawsuits and increased costs for patent owners.[12] Moreover, the VENUE Act would also result in potentially conflicting decisions in these multiple lawsuits, increasing uncertainty and administration costs in the patent system.
  • The VENUE Act encourages the manipulation of well-settled venue rules across all areas of law by the self-serving efforts of large corporate defendants who seek to insulate themselves from the consequences of violating the law. By enacting the VENUE Act, Congress would send a strong signal to corporate defendants that they can tilt the substantive playing field by simply shifting cases to defendant-friendly jurisdictions.

Innovators and their investors have long been vital to a flourishing innovation economy in the United States.  Startups, venture capitalists, individual inventors, universities, and established companies often rely heavily on patents to recoup their extensive investments in both R&D and commercialization.  We urge you to exercise caution before enacting further sweeping changes to our patent system that would primarily benefit large infringers to the detriment of these innovators and, ultimately, our innovation economy.

[Footnotes]

[1] S.2733, Venue Equity and Non-Uniformity Elimination Act of 2016,  https://www.congress.gov/114/bills/s2733/BILLS-114s2733is.pdf.

[2] See 28 U.S.C. § 1391(c)(2). See generally Ferens v. John Deere Co., 494 U.S. 516, 527 (1990) (“a plaintiff . . . has the option of shopping for a forum with the most favorable law”).

[3] These include, among others: (1) administrative procedures for invalidating patents created by the America Invents Act, which have had extremely high invalidation rates, leading one former federal appellate judge to refer to these procedures as “death squads,” and (2) several decisions by the Supreme Court and the Federal Circuit that have drastically curtailed patent rights for many innovators. See Adam Mossoff, Weighing the Patent System: It Is Time to Confront the Bias against Patent Owners in Patent ‘Reform’ Legislation, Washington Times, March 24, 2016, http://www.washingtontimes.com/news/2016/mar/24/adam-mossoff-weighing-the-patent-system/.

[4] Colleen Chien & Michael Risch, A Patent Reform We Can All Agree On, Wash. Post, June 3, 2016, https://www.washingtonpost.com/news/in-theory/wp/2015/11/20/why-do-patent-lawyers-like-to-file-in-texas/.

[5] See Michael C. Smith, “Hot But No Longer Boiling“ – EDTX Patent Case Filings Down almost Half; New Case Allocation and Procedures (No More Letter Briefing for SJ motions), EDTexweblog.com, July 21, 2016, http://mcsmith.blogs.com/eastern_district_of_texas/2016/07/edtx-patent-case-filing-trends-new-case-allocation-and-procedures.html.

[6] Colleen Chien & Michael Risch, What Would Happen to Patent Cases if They Couldn’t all be Filed in Texas?, Patently-O, March 11, 2016, https://patentlyo.com/patent/2016/03/happen-patent-couldnt.html. This study also finds that 11% of cases would continue to be filed in the Eastern District of Texas, concentrating nearly two-thirds of all cases in three districts. See id. The authors of this study are presently expanding their investigation to an enlarged data set, which will also capture additional aspects of the VENUE Act. Neither the data nor their results are available yet. However, we have no reason to believe that the expanded data or analysis will produce results other than what has already been shown: a high concentration of patent cases in a small number of districts.

[7] See PricewaterhouseCoopers LLP, 2015 Patent Litigation Study (May 2015) (“PWC Study”), http://www.pwc.com/us/en/forensic-services/publications/assets/2015-pwc-patent-litigation-study.pdf.

[8] Ryan Davis, EDTX Judges’ Love of Patent Trials Fuels High Reversal Rate, Law360 (Mar. 8, 2016), http://www.law360.com/articles/767955/edtx-judges-love-of-patent-trials-fuels-high-reversal-rate.

[9] See PWC Study, supra note 7 (finding an average affirmance rate of 48% for all districts, compared to an affirmance rate of 42% for the Eastern District of Texas).

[10] See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985).

[11] See generally Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947) (“[T]he plaintiff’s choice of forum should rarely be disturbed.”).

[12] See Christopher A. Cotropia, Jay P. Kesan & David L. Schwartz, Unpacking Patent Assertion Entities (PAEs), 99 Minnesota Law Review 649 (2014), http://www.minnesotalawreview.org/wp-content/uploads/2015/02/REVISEDSchwartzetal_MLR.pdf.

 

Support for Mandamus Action to Limit Patent Forum Shopping

Patent,

Last week I discussed the TC Heartland mandamus petition here and here. Two amicus briefs have now been filed in support of the petition.

The basic issue is whether the particular limits on patent venue spelled out in 28 U.S.C. 1400(b) should be given effect in the face of broader venue allowances in the more generalized Section 1391(c).

1400(b) reads:

(b) Any civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.

 

For the past several decades, the court has applied the broader statute 1391(c), and permitted venue so long as the district court has personal jurisdiction over the defendant.  That application has opened the door to venue in E.D. Texas even when the defendant has no place of business there.

John Vandenberg’s team at Klarquist has filed a brief on behalf 24 companies many of which are oft-sued in the E.D. Texas, including Asus, Google, eBay, LinkedIn, NewEgg, SAP, SAS, etc.

The analysis … must start by asking whether this special patent venue statute, standing alone, limits a domestic corporation’s residence to its state of incorporation. The answer is yes: “where the defendant resides” in § 1400(b) “mean[s] the state of incorporation only” for a corporation. (quoting the Supreme Court Fourco decision). . . .

The analysis turns next to the current general venue statute. The question is whether it supersedes this restrictive definition of domestic corporation residence in the special patent venue statute. The answer is that it does not [because the]  current general venue statute expressly subordinates itself to the special venue provisions.

On the policy side, the Amici first highlight the recent John Oliver show ridiculing the E.D. of Texas patent litigation.  The amici then make the argument that forum shopping should not be allowed because it “allows patent owners to choose the forum least likely in our country to allow a speedy or low-cost determination of invalidity or non-infringement. . . . This does not merely disadvantage individual defendants. It undermines the public policy favoring strict scrutiny of issued patents. . . . [H]aving 40% of patent suits in a single district not only burdens individual defendants, it also defeats core public policies of our patent system.”

The Electronic Frontier Foundation (EFF) and Public Knowledge also filed a joint brief in support of mandamus. EFF highlights Judge Moore’s earlier work (then as Professor Moore) where she wrote that extensive forum shopping “conjures negative images of a manipulable legal system in which justice is not imparted fairly or predictably.” Kimberly A. Moore, Forum Shopping in Patent Cases: Does Geographic Choice Affect Innovation?, 79 N.C. L. Rev. 889 (2001).  The brief also highlights a new work by Daniel Klerman & Greg Reilly entitled Forum Selling that argues “judges in the Eastern District have consciously sought to attract patentees and have done so by departing from mainstream doctrine in a variety of procedural areas in a pro-patentee (pro-plaintiff) way.” Neither Moore nor Klerman/Reilly make the 1400(b) argument, but both suggest that forum shopping – when taken too far – is a problem.

Documents:

Kraft’s brief in opposition is due November 9.

Patent Attorney – Law Firm – Minneapolis, Indianapolis, Chicago, or Denver

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Faegre Baker Daniels LLP is seeking an intellectual property attorney with a background in Mechanical or BioMedical Engineering to join the firm as an associate. Responsibilities will involve all aspects of patent preparation and prosecution and successful candidates will have 1+ years’ experience.

At Faegre Baker Daniels, clients come first. They drive us to boldly deliver trusted partnerships with experienced lawyers and consultants, peace of mind through time-tested expertise, and insights to help solve business and legal challenges. We courageously innovate to provide creative legal and consulting solutions and world-class service delivery and client experience.

FaegreBD is one of the 75 largest law firms headquartered in the U.S. Our locations span coast to coast, cover the heartland, and extend to the U.K. and China – with regional and national coordinating capabilities across hundreds of jurisdictions. We collaborate to achieve clients’ objectives — bringing together the best-matched expertise and resources from across our global platform. Our 750 legal and consulting professionals partner with clients ranging from emerging startups to multinational corporations, delivering full-service advice customized to each company’s business needs.

Our priority is to understand your products, core technologies and business needs to help you build effective patent protection, avoidance and enforcement strategies. We take a collaborative approach to our services: Instead of telling you what to do, we empower you to make the most effective business decisions. Our registered U.S. and European patent attorneys and other professionals have backgrounds in a broad range of technology spaces and offer a full suite of patent services including procurement, prosecution, and maintenance of domestic and global patent portfolios, post-grant proceedings, patentability and white space analyses, diligence and transaction advice, pre-suit investigations and opinions, clearance and design-around options.

Contact
Please submit an on-line application including a cover letter, resume, law school and undergraduate transcripts, and a writing sample to www.faegrebd.com/careers.

Additional Info
Employer Type: Law Firm
Job Location: Minneapolis, Indianapolis, Chicago, or Denver

Federal Circuit Affirms Finding of Indefiniteness in Dispute Over Mobile Phone and Camera Patents

Patent

by Dennis Crouch

The U.S. Court of Appeals for the Federal Circuit recently affirmed a finding by  Western District of Texas Judge Alan Albright that certain claims in two patents owned by WSOU Investments LLC were invalid as indefinite under 35 U.S.C. §112.  WSOU Invs., LLC v. Google LLC, Nos. 22-1066, -1067 (Fed. Cir. Sept. 25, 2023).  Although the decision is designated nonprecedential, it includes a number of interesting lessons on the requirements for definiteness and disclosure of corresponding structure under 35 U.S.C. §112.

The Technology at Issue

The first patent at issue was U.S. Patent No. 7,304,563 (“the ‘563 patent”), entitled “Alarm clock.” This patent claimed an alarm clock feature for mobile phones where the alarm involved initiating a connection to another device over a network to cause that device to signal the alarm.

Claim 16 is is recited in means-plus-function form:

issuing means for issuing an alert when the current time matches the alert time by initiating a connection to another communication terminal over a network so as to cause that other terminal to locally signal the incidence of the connection incoming thereto

‘563 Patent, claim 16. Claim 16 is clearly written in means-plus-function form, but the focus of the appeal was on claim 1, which was substantially similar.  The key difference though is that the claim 1 limitation was directed to “an alerting unit” rather than an “issuing means:”

an alerting unit configured to issue an alert when the current time matches the alert time, the alerting unit being configured to issue the alert by initiating a connection to another communication terminal over a network so as to cause that other terminal to locally signal the incidence of the connection incoming thereto

‘563 Patent, claim 1.  Judge Albright found both claims to be in means-plus-function form and the Federal Circuit affirmed on appeal.

In patent law, “means-plus-function” (MPF) claiming is a way to define an element of a patent claim by the function it performs rather than by its specific structure. This type of claiming is governed by 35 U.S.C. § 112(f), which allows patentees to express a claim limitation as “a means or step for performing a specified function.” When a claim is interpreted under § 112(f), the claim limited to the specific structure disclosed in the specification and equivalents thereof.   This limitation to actually disclosed structure (and equivalents) severely limits the scope of MPF claims that often seem much broader when read in the abstract.  But, the beauty of MPF analysis is that it is designed to preserve the validity of claims that might be unduly indefinite, not enabled, or even extent to ineligible subject matter.   Patentees often fall into the common trap of using of MPF limitations without providing adequate structure within the specification.  If no structure is disclosed in the specification for a means-plus-function (MPF) claim, the claim is deemed indefinite and therefore invalid. In re Donaldson Co., 16 F.3d 1189 (Fed. Cir. 1994).

The Federal Circuit has established a two-step framework for determining whether a claim limitation is subject to MPF construction under 35 U.S.C. 112(f). First, the court must determine if the limitation uses the term “means.” If so, a rebuttable presumption is triggered that 112(f) applies. Williamson v. Citrix Online, LLC, 792 F.3d 1339 (Fed. Cir. 2015). Prior to Williamson, there was a strong presumption associated with use of the word “means.”  In particular, courts generally assumed that a claim term that did not use the word “means” was not subject to § 112(f) interpretation. Williamson altered this landscape by holding that the presumption can be quickly overcome, even if the word “means” is not present, if the claim term fails to recite sufficiently definite structure or else recites a function without reciting sufficient structure for performing that function.

In Williamson, the court noted that patentees had begun using various “nonce words” that were effectively non-limiting placeholders designed to avoid MPF interpretation.  Here, for instance, the claimed “alerting unit” is roughly equivalent to a means-for-issuing-an-alert.  The presumption against MPF can quickly be overcome in situations where the patentee uses a nonce word to designate the element if the limitation generally fails to recite sufficiently definite structure.

Looking particularly at claim the court first noted the rebuttable presumption against means-plus-function treatment since Claim 1 is directed to a “unit” and does not use the term “means.”  In rebutting the presumption, the court agreed with Judge Albright that in the context of the claims and specification, the term “unit” was defined only by the function it performs, rather than connoting any specific structure.  In its analysis, the court held that the language surrounding “alerting unit” in the claim consisted of purely functional language that provided no structural context. Terms like “configured to issue an alert” and “initiating a connection” were purely functional.  The court also looked to the specification to see how the “alerting unit”  phrase was used — finding that it was also described in the same purely functional terms as the claim language.  In the end, the appellate panel agreed with the district court that “unit” and “means” were used interchangeably in the patent, indicating “unit” was a generic placeholder rather than structural term.

The patentee WSOU had offered expert testimony on point, but the appellate court rejected the extrinsic evidence for its attempt to be a “gap filler.”

To the extent that WSOU argues that the ‘interpretation of what is disclosed in the specification must be made in the light of knowledge of one skilled in the art,’ it invites us to improperly use the knowledge of a skilled artisan as a gap-filler, rather than a lens for interpretation.  WSOU argues that a skilled artisan would ‘understand the structure involved with a mobile phone using GSM ….

However, those arguments are irrelevant as The indefiniteness inquiry is concerned with whether the bounds of the invention are sufficiently demarcated, not with whether one of ordinary skill in the art may find a way to practice the invention.

WSOU (internal citations and quotations removed).  This quote from the appellate panel rejects WSOU’s attempt to use expert testimony regarding PHOSITA to overcome the lack of structural disclosure in the specification. The court emphasizes that gaps in the specification cannot be filled by skilled artisan knowledge during the 112(f) analysis.

Having determined that claim 1’s “unit” was in MPF form, the court then moved to the next step — looking for the corresponding structure within the specification to perform the claimed function.  On appeal, the appellate panel again agreed with Judge Albright that no such structure had been disclosed.  The court examined the disclosed processor, communication engine, antenna, and communication protocols , but found no clear link between these components and the claimed function of “initiating a connection to another communication terminal over a network.” Rather, the specification disclosed these structures in a general sense without specifically tying them to the network connection function. Merely mentioning general components is insufficient to provide corresponding structure for a means-plus-function limitation. Because the patentee failed to disclose adequate structure for the “alerting unit” limitation under 112(f), Claim 1 was held invalid as indefinite.

For the ‘563 patent, the court determined that the “issuing means” limitation in Claim 16 was subject to 35 U.S.C. §112(f), which governs interpretation of means-plus-function claim limitations. The court identified two functions for this means-plus-function limitation: (1) initiating a network connection to another device, and (2) causing signaling means to locally signal the user. The court held that the specification failed to disclose sufficient structure corresponding to either of these functions, and therefore the claim was indefinite under §112(f). The court reached the same conclusion regarding the similar “alerting unit” limitation in Claim 1.

I quibble with the Federal Circuit’s doctrine on MPF indefiniteness. In particular, the court’s precedent creates an if-then approach: if no sufficient structure then automatically indefinite.  I would suggest an additional step asking whether the claim provides reasonably certain scope, recognizing that 112(f) was particularly designed to permit flexibility using narrowing of claims rather than invalidation.

The second portion of the appeal focused on U.S. Patent No. 8,238,681 that appears to include a pretty big typo within its claims:

the plurality of parts [including] a first part closest to a center, a third part farthest from the center, and a second part in between the first part and the second part.

‘681 patent, claim 1 (simplified).  You can see that the claim requires a “second part” located between the first and second part.  Nonsense.  It is pretty clear to me that the patentee intended (but did not claim) that the second part would be between the first and third parts.   Unfortunately for the patentee, this exact typo was also found within the specification, and the patent did not include a clear drawing showing the correct aspect.

The court emphasized that it cannot redraft claims to contradict their plain language, even to make them workable.

We have explained repeatedly and consistently, ‘courts may not redraft claims, whether to make them operable or to sustain their validity.’ Chef Am., Inc. v. Lamb-Weston, Inc., 358 F.3d 1371 (Fed. Cir. 2004). Even ‘a nonsensical result does not require the court to redraft the claims of the [patent at issue]. Rather, where as here, [when] claims are susceptible to only one reasonable interpretation and that interpretation results in a nonsensical construction of the claim as a whole, the claim must be invalidated.’ Id.

Slip OP.

The patents here were both originally owned by Nokia.  They were later transferred to WSOU, a patent assertion entity associated with Craig Etchegoyen, a former CEO of another patent assertion entity, Uniloc.

Mandamus for Improper Venue

Patent

by Dennis Crouch

The U.S. Court of Appeals for the Federal Circuit recently declined to issue a writ of mandamus directing the U.S. District Court for the Eastern District of Texas (Judge Gilstrap) to dismiss a patent infringement lawsuit against Charter Communications based upon improper venue. In re Charter Commc’ns, Inc., No. 2023-136 (Fed. Cir. Sept. 5, 2023). Although non-precedential, the decision highlights a key difference between motions to dismiss for improper venue under 28 U.S.C. § 1406 and motions to transfer venue for convenience under 28 U.S.C. § 1404. It also shows the high bar for obtaining the “extraordinary remedy” of mandamus relief from denial of an improper venue motion.

The usual rule for appeals is that parties must wait until final judgment.  Assuming that it loses on the merits, Charter will have another opportunity to appeal venue once the case is concluded.

Background: Entropic sued Charter for infringing several of its patents, including US10135682.  The patents cover various aspects of cable network management, focusing on Cable Modem Termination Systems (CMTS) that serve multiple cable modems. The CMTS determines various Signal-to-Noise Ratio (SNR) related metrics for these modems and assigns them to different service groups based on these metrics.

Although Charter derives substantial revenue from customers located in the Eastern District of Texas, it still moved to dismiss the case for improper venue under § 1400(b), arguing it lacked a regular and established place of business in that district.  This statute limits the locations where patent infringement lawsuits can be filed.

1400(b) Any civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.

Id.  The Supreme Court has interpreted this statute to limit actions against corporations to either (1) their state of incorporation or (2) a district where the defendant “has a regular and established place of business” and also infringes the patent by making, using or selling the invention.   Charter is a Delaware company and does not operate its own retail stores in the Eastern District.  Still, the district court denied the motion to dismiss, finding venue was proper because Charter ratified retail stores operated by its subsidiaries in the district and those subsidiaries were Charter’s agents.

Improper vs. Inconvenient Venue

There is an important distinction between improper venue under § 1400(b) and inconvenient venue under § 1404(a). Section 1400 applies when venue is “wrong” or “improper” in the chosen district. If venue is improper, the district court must dismiss the case or transfer it to a proper district.  And, if a case goes to conclusion in an improper venue, a losing defendant would have an opportunity to appeal and at least get a new trial in a proper venue.

In contrast, § 1404 allows transfer “[f]or the convenience of parties and witnesses” even when venue is proper. Courts have greater discretion in deciding § 1404 transfer motions based on case-specific factors like convenience and judicial economy.  And, by the end of a trial, it is almost never “convenient” to retry the case in another venue.  Thus, post-trial section 1404 appeals are basically automatic losers.

Thus, even though “wrong venue” sounds like a bigger deal than “inconvenient venue” the Federal Circuit has historically only granted immediate mandamus actions for the latter.  The difference here is that, absent mandamus, the inconvenient venue issue cannot practically be appealed.

Mandamus Standards

The party seeking a writ of mandamus must show (1) no other adequate means to attain relief; (2) a clear and indisputable right to issuance of the writ; and (3) the writ is appropriate under the circumstances. Cheney v. U.S. Dist. Ct. for D.C., 542 U.S. 367 (2004).  In the past, the court has suggested that 1400(b) issues are unlikely to lead to mandamus relief because “post-judgment appeal is an adequate alternative means for attaining relief” if venue is found improper on appeal. In re Monolithic Power Sys., Inc., 50 F.4th 157 (Fed. Cir. 2022).

The Federal Circuit’s Decision

In a short opinion authored by Judge Cunningham, the Federal Circuit denied Charter’s petition for mandamus, finding no justification for immediate review of the district court’s order:

At most, CCI’s arguments present a record-specific dispute: whether CCI exerts control sufficient to impute its subsidiaries’ in-district operations to CCI under Fifth Circuit law. . . . CCI’s petition does not raise the type of broad, fundamental, and recurring legal question or other considerations that might warrant mandamus review.

In re Charter Commc’ns, Inc., (Fed. Cir. Sept. 5, 2023) (internal citations and quotation marks omitted). The court here emphasized that mandamus is an “extraordinary remedy” and Charter had not shown the district court’s decision was clearly wrong or raised a novel legal issue requiring prompt resolution. Rather, Charter seemed to “present[] a record-specific dispute” about imputing its subsidiaries’ activities to Charter for venue purposes. The court also explained that Charter could still challenge venue on direct appeal after final judgment, which provided an adequate alternative remedy.

Conclusions

The court has refused to take the bait and expand mandamus relief to improper venue challenges under § 1400(b). Defendants must generally wait to appeal after final judgment, even if venue may have been erroneous. Note though that mandamus may be still be justified for improper venue decisions implicating unsettled areas of law or where the party can show a major resulting injustice. But disagreements about case-specific facts and analysis are unlikely to clear the high mandamus bar.

 

US Patent Number 11,000,000

Patent

by Dennis Crouch

On May 11, 2021, the USPTO issued US Patent Number 11,000,000.  Eleven million. Don’t forget that the office has issued another 1,000,000 design+plant patents and an additional 10,000 patents from 1791 to 1836 before the current numbering system was established.  I was a junior in college at Princeton when Patent No. 5,500,000 issued to John Feagin covering a zip-tie method for suturing. Over the past 25 years, the number of U.S. patents has effectively doubled.

U.S. Patent No. 11,000,000 is one of a family of inventions owned by 4C Medical Tech. of Minneapolis directed to heart surgery tools. The inventors are Saravana Kumar and Jason Diedering.  The patent claims a method of delivering and also repositioning a prosthetic heart-valve (AltaValve) that is used to repair a leaky-valve issue experienced by several million Americans (typically over age 75).

The invention itself is quite simple — basically, there is a catheter tube with a set of wire pairs.  Each pair includes one wire with a looped end and a second with a straight end.  The pairs work together to deliver, release, and position the prosthetic valve within the heart.  The claims were rejected as obvious and then allowed after a fairly minor amendment.

The patent and its family have been prosecuted by Jeff Stone and his team at Barnes & Thornburg (Minneapolis).  Check back here in Spring 2024 when I’m expecting an announcement for Number 12,000,000.

From the USPTO: https://www.uspto.gov/about-us/news-updates/united-states-issues-patent-number-11000000

 

PTAB Request Amicus Support for its Decision on Immunity

Patent

In what appears to be a first, the Patent Trial & Appeal Board (PTAB) has requested briefing from Amacus Curie on the question of whether Tribal Ownership of a patent immunizes the patent from Inter Partes Review (IPR) challenge. The case is Mylan v. Saint Regis Mohawk Tribe, IPR2016-01127 et al.

The panel writes:

[W]e authorize briefing from any other amici curiae, which shall also be no more than 15 pages by December 1, 2017. To the extent possible, to avoid redundancy and in the interests of efficiency, we direct any interested amici who wish to present similar arguments to the Board to coordinate in their filing of a joint amicus brief. Arguments redundant to those already presented by the parties or other amici may not be considered.

[98 – Order granting Amicus briefs].  Interesting approach to what is essentially a backdoor administrative rule-making.

Yes, All Elements Rule Still Applies to Infringement

Patent,

Medgraph v. Medtronic (Fed. Cir. 2016)

Medgraph’s claims are directed to a set of methods “for improving and facilitating diagnosis and treatment of patients.” See U.S. Patent 5,974,124 and U.S. Patent 6,122,351.   The problem is that the claims require actions by both the computer system and also a patient/doctor.  This claim structure directly runs headlong into traditional requirement for direct infringement of a patent – that all steps of the claim be performed-by or attributable-to a single entity.

In its 2015 decision, the district court ruled that Medtronic could not be liable for infringement because there was no “showing that Medtronic itself directly infringed the method claims or that it acted as a ‘mastermind’ by controlling or directing anyone else’s direct infringement.” Citing Akamai Techs., Inc v. Limelight Networks, Inc., 786 F.3d 899 (Fed. Cir. 2015) (decision on remand from SCT).

Following the district court’s decision in this case, the Federal Circuit issued a per curiam en banc decision broadening the scope of potential attribution. Akamai Techs., Inc. v. Limelight Networks, Inc., 797 F.3d 1020 (Fed. Cir. 2015).  In this most recent en banc decision, the court held that the “single entity” theory of direct infringement can also be extended “when an alleged infringer conditions participation in an activity or receipt of a benefit upon performance of a step or steps of a patented method and establishes the manner or timing of that performance.”

On appeal here, Medgraph argued for remand to allow the district court to consider infringement under this broader theory.  However, the Federal Circuit rejected that suggestion.  The court held instead that Medgraph’s case fails on any and all theories of direct infringement because Medgraph failed to produce evidence that the missing steps were actually performed by the patient and doctor. In addition, Medgraph failed to identify evidence fitting within the new broader attribution guidelines.

“The district court also correctly concluded that Medtronic was not liable under a theory of indirect infringement, because indirect infringement is predicated on direct infringement. That rule was also unaffected by Akamai V, so the outcome would, again, not change if we were to vacate and remand. ”

Dismissal Affirmed

= = = =

I was curious how the patentee here thought it might win without proving infringement of each element. In its reply brief, Medgraph explained that (1) Medtronic instructed users to practice the claim steps; and (2) Medtronic ‘admits’ that about 20% of patients used the system in an infringing manner.  This admission came from Medtronic’s appeal brief that stated “the record shows that approximately 80 percent of customers in fact use the system in this non-infringing way.”  This evidence coupled with its expert testimony are, according to Medgraph, enough to prove infringement. See Vita-Mix Corp. v. Basic Holding, Inc., 581 F.3d 1317 (Fed. Cir. 2009) (circumstantial evidence sufficient); Moleculon Research Corp. v. CBS, Inc., 793 F.2d 1261, 1272 (Fed. Cir. 1986) (“[c]ircumstantial evidence is not only sufficient, but may also be more certain, satisfying and persuasive than direct evidence.”).

= = = =

Although the Federal Circuit’s most recent Akamai decision loosened the knot a bit on the strict single-entity requirement, it remains a tough requirement.  Here, for instance, it does not appear to be enough that an accused infringer instructed its customers on how to use its system in a way that infringes.  Rather, liability under Akamai will only be created if the alleged infringer requires that those steps be followed or receives some benefit upon their performance.

No Contradiction ⇒ No Indefiniteness

Patent

by Dennis Crouch

The Federal Circuit recently issued a decision in Maxell, Ltd. v. Amperex Technology Limited, No. 2023-1194 (Fed. Cir. Mar. 6, 2024), reversing Judge Alan Albright’s finding that certain claims of Maxell’s patent covering rechargeable lithium-ion battery indefinite under 35 U.S.C. § 112, ¶ 2 (112(b)). U.S. Patent No. 9,077,035.

The case provides important cover for patent prosecutors who inelegantly add narrowed limitations from the dependent claims into the independent claims without rewriting or deleting the corresponding broader element descriptions already there.

(more…)

Bolstered by 5th Circuit, Federal Circuit Again Rejects WTDX Judge Albright’s Venue Analysis

Patent

by Dennis Crouch

The Federal Circuit has granted a large number of mandamus petitions in order to move cases out of Judge Alan Albright’s W.D.Tex. courtroom based upon the inconvenience felt by large multinational defendants.  On December 14, 2023, the appellate court once again took the extraordinary step, this time on behalf of Samsung, of granting a petition for a writ of mandamus, ordering the infringement lawsuit to be transferred to the Northern District of California.  In re Samsung Elecs. Co., Ltd., No. 2023-146 (Fed. Cir. Dec. 14, 2023).

For convenience transfer motions under 28 U.S.C. 1404(a), the Federal Circuit follows the law of the particular regional circuit court of appeals. Because most of these cases stem from Texas, this means the Fifth Circuit who recently established further precedent the copyright case In re TikTok, Inc., 85 F.4th 352 (5th Cir. 2023).

The Fifth Circuit in In re TikTok granted TikTok’s petition for a writ of mandamus, directing the Western District of Texas to transfer a copyright infringement case brought against TikTok by a Chinese company to the Northern District of California. The court applied the test for mandamus review of improper venue decisions established in In Re Volkswagen, requiring the movant to show the transferee venue is “clearly more convenient.” After analyzing each of the eight court created private and public interest factors that govern transfer, the Fifth Circuit concluded that the district court’s denial of transfer amounted to a clear abuse of discretion leading to a patently erroneous result.

Specifically, in TikTok, the Fifth Circuit found the district court erred in weighing the witness convenience and ease of access to proof factors against transfer, since the key evidence and witnesses were predominately located in China and California. It also critiqued the district court’s reliance on post-motion case progress to deny transfer as an abuse of discretion, where the court itself was responsible for delay in deciding the transfer motion. Since multiple factors favored transfer and none favored the plaintiff’s chosen venue, the Fifth Circuit granted mandamus directing the Western District of Texas to transfer the case.

In Samsung, the Federal Circuit followed-in-suit and ordered Samsung’s case to be transferred.  One key factor in the case has to do with travel time from potential Korean witnesses, and the Federal Circuit concluded that the NDCA was much more convenient as a travel destination from Korea:

The Fifth Circuit recently rejected similar reasoning in In re TikTok . . . . Because most of the potential witnesses here are in Korea and NDCA, transfer would greatly reduce the time and inconvenience of travel. As in TikTok, the presence of some [party] employees in Eastern Texas . . . ‘cannot overcome the immense inconvenience that the majority of relevant witnesses would face if this case were to be tried in’ WDTX.

Samsung at 4.  The court here does not provide its factual basis for explaining why traveling from Korea to NDCal is immensely more inconvenient than Korea to Texas, and has previously rejected the use of travel distance as a key factor — especially in situations like patent cases that will typically involve an extended trial.

Judge Albright had also noted that party witnesses were willing to travel to Texas — even if located in Korea or California.  On Mandamus, the Federal Circuit that “[t]he Fifth Circuit recently rejected similar reasoning” in TikTok.

This decision continues a trend of the Federal Circuit relying on mandamus to repeatedly overturn Judge Albright’s refusal to transfer cases out of his WDTX courtroom. Both the outcome and the tone of In re Samsung signals that the Federal Circuit remains skeptical of plaintiff-preferred venues that lack meaningful connections to patent disputes.

Venue Transfers Without Delay

Patent

by Dennis Crouch

In re Apple, — F.4th — (Fed. Cir. Nov 8, 2022)

The Federal Circuit has again ordered Judge Albright to halt pending litigation until he decides Apple’s motion to transfer venue on grounds of inconvenience under 28 U.S.C. 1404(a).  In particular, the court (1) vacated the scheduling order; and (2) directed Judge Albright to postpone fact discovery and “any other substantive proceedings.”

Aire Technology sued Apple for infringement back in October 2021.  In April 2022, Apple filed its motion to transfer.  At that point, the parties conducted some amount of ‘venue discovery’ that was completed around the end of June 2022.  However, instead of ruling on the motion, Judge Albright  told the parties he would postponed ruling for another 7-8 months while fact discovery in the case was ongoing.  Apple then petitioned for writ of mandamus, arguing that delay created a critical injury to the tech giant’s convenience that deserved immediate remedy. And, the Federal Circuit has complied–ordering the district court to go ahead and decide the transfer motion.

In this situation, I have tremendous sympathy for Judge Albright’s ruling.  Albright had previously noted problems with Apple’s venue declarant, Mark Rollins who “frequently and repeatedly submitted unreliable and misleading declarations to this Court.”  Scramoge Tech. Ltd. v. Apple Inc., 2022 WL 1667561 (W.D. Tex. May 25, 2022) (finding Rollins to be not credible).  Even without these particular problems with a 30(b)(6) declarant, my experience is that the witnesses and evidence arguments made in the 1404(a) context at the pleading-stage are notoriously unreliable because they do not reflect the actual evidence/witness issues that become clear around the end of discovery.  Further, parties treat the Section 1404(a) factors as a scorecard or checklist in ways that are often divorced from the interests of justice.

This mandamus is particularly about delaying a transfer decision while the case is developed.  I see little harm in that delay.  Discovery in federal courts is a nationwide endeavor. Evidence is exchanged electronically; parties go to the location of witnesses to conduct discovery; and discovery disputes needing court intervention are ordinarily resolved over the phone (or Zoom).  Thus, there would not be much difference for the parties during this period in terms of litigating in N.D. Cal. vs W.D. Tex.–with the one exception that Judge Albright  remains the judge if the case stays in W.D. Tex.  It is clear that this final Albright-factor underlies Apple’s true purpose in filing these motions and mandamus actions: to escape from Judge Albright.  Of course, that true reason is not justified under the law and so is never mentioned.

One key benefit of an early transfer would be to permit the new district court to get up-to-speed on the issues in the case and begin exerting their own style of case management.  That said, N.D.Cal. judges ordinarily defer the whole discovery process to a magistrate judge and thus rarely become involved.  The Federal Circuit cited some precedent about how an early transfer avoids double-work by two district courts. However, it is not clear how that precedent is applicable in this situation.

In its decision, the Federal Circuit did not delve into the particular issues, but rather focused on prior precedent that “entitles parties to have their venue motions prioritized.”  Id.

Brand-Generic Drugs: Infringement Judged by the ANDA Filing

Patent

by Dennis Crouch

Par Pharm., Inc. v. Eagle Pharm., Inc., No. 2021-2342, — F.4th — (Fed. Cir. Aug. 18, 2022)

In 2018, Eagle filed its Abbreviated New Drug Application (ANDA) with the FDA seeking to market a generic version of Par’s vasopressin injection product (Vasostrict) used for emergency blood pressure treatment.  Par had listed two patents in the Orange Book as covering its product and so, as required, Eagle’s ANDA included a Paragraph IV certification that the two patents were either (1) invalid or (2) would not be infringed.  35 U.S.C. § 355(j)(2)(A)(vii)(IV).

In order to facilitate resolution of brand-generic patent conflict, the Patent Laws include a form of paper infringement–a legal fiction that simply filing an ANDA and Paragraph IV certification counts as a form of patent infringement.  This gives the branded drug maker (here PAR) the ability to immediately sue to keep the generic off the market (if the patent turns out to be enforceable).  But, these Hatch-Waxman lawsuits are considered a form of declaratory relief and no actual damages are available.  This setup also means that these cases are not “Suits at common law” and so the Seventh Amendment right to a jury trial does not apply.  Thus, ANDA patent lawsuits are ordinarily decided by bench trial–and typically by one of the Delaware district court judges.  In patent law, injunctive relief has been difficult to obtain, but under the Hatch-Waxman law, the FDA will automatically delay any market approval by 30 months if the brand-patentee sued.

Vasopressin is a naturally occurring mammalian hormone and been generally known for decades.  As its name suggests the chemical has always been known since its naming for its ability to constrict blood vessels — the same use that Par’s patents claim.  Par’s two patents here cover a particular vasopressin composition (9,750,785) and a method of treatment using the composition (9,744,209).

Both Par patents include a pH requirement: “wherein the unit dosage form has a pH of 3.7-3.9.” In its ANDA, Eagle was careful to specify that its product would have a slightly different pH range: 3.4–3.6.  Eagle then argued that this difference was enough to avoid infringement.

Despite its nominal specifications, Par presented evidence that (it claims) Eagle’s product pH would “drift up” while sitting on the shelf.  It coupled that evidence with the very slight difference between Eagle’s product and Par’s patent to make the argument that Eagle’s product “would inevitably drift into Par’s claimed range.” Slip Op.   The district court (Judge Connolly) held a three-day bench trial and ultimately issued a judgment of noninfringement.  In particular, Judge Connolly concluded that the evidence failed to prove any upward drift of pH, but rather simply “minor fluctuations” without “any discernable trend.” Id. On appeal, the Federal Circuit has affirmed–seeing no “clear error” in the district court’s factual findings.

I mentioned above that this form of ANDA-filing infringement is a legal fiction created by Congress to facilitate a more competitive marketplace.   One problem then is that there is no actual product to inspect.  We have the ANDA filing, but there  are always substantial design choices before final release.   The prophetic inquiry thus looks to what is the “probable ANDA product” and asks whether that probable product would be infringing if actually made.

Still, the primary guide is the ANDA documents as the source of infringement in this highly regulated area. At times, a court can look to other relevant evidence, but only when the ANDA filing fails to “speak clearly and directly to the question of infringement.”  Rather, the court assumes that the ANDA filer will “act in full compliance with its representations to the FDA.”  In re Brimonidine Patent Litig., 643 F.3d 1366, 1378 (Fed. Cir. 2011).

Here, the ANDA documents are clear that the product does not infringe. The pH range in Eagle’s ANDA document is different than that claimed by Par.  And, the ANDA filings also indicate that the pH range will remain stable throughout the shelf life of the product.  Thus, the ANDA documents indicate no drift into Par’s protected space.

No Declaratory Judgment of Infringement. (Neither court decision discusses the doctrine of equivalents.)

I have not thought through all the claim preclusion issues. But, once the product is released Par may be precluded from suing again based upon res judicata and the Kessler Doctrine.

= = =

Judges: Moore, Prost, Hughes
Opinion by: Moore
Attorneys: Martin Black (Dechert) for the patentee Par along with Sharon Gagliardi, Brian Goldberg, Luke Reilly, Robert Rhoad, Daniel Roberts, and Jonathan Loeb. John O’Quinn (Kirkland) for Eagle along with Bill Burgess, Bryan Hales, Benjamin Lasky, and Jenna Wacker.

Watch Party Moves to N.D.Cal.

Patent

In re Netflix (Fed. Cir. 2022)

This was an easy mandamus transfer.  The plaintiffs, CA Inc. and Avago Technologies Int’l,  are both subsidiaries of Broadcom Corp. The plaintiffs are both headquartered in San Jose and Broadcom is down in Southern California.  Netflix is also Silicon Valley. Still, the plaintiffs sued Netflix for patent infringement in the Eastern District of Texas.  Although Netflix itself does not have a place of business in EDTex, the district court found that its intimate relationship with ISPs to provide local content delivery was sufficient.  The vast majority of Netflix content is delivered directly from local residential Internet Service Providers (ISPs).

The district court also refused to transfer for inconvenient forum. Although N.D. California was certainly the locus-of-relevant-events, the court noted court congestion and access to evidence weighed against transfer.  Although the source code is located in N.D. California, the court saw no evidence showing that it would be difficult to get that data to Texas. Netflix does have more internet traffic than any other company, right!

On mandamus, the Federal Circuit only addressed the inconvenient forum question — ordering the case transferred.   The appellate panel particularly focused on the district court’s apparent bias against transferring venue.  In particular, the district court discounted Netflix arguments of evidence availability because Netflix did not “articulate the precise way that the evidence supports its claim or defense.”  At the same time, the court did not place the same precision requirement on CA regarding its evidence.  This bias was improper:

[W]e see no basis for reasonably demanding more from Netflix than it provided at this stage of the litigation, when a transfer motion must be filed and ruled on. . . . Nor have we been shown any reasons here to doubt that the documents and sources would be relevant and material to the issues here.

Id.

 

H. R. 5874: Restoring America’s Leadership in Innovation Act of 2021

Patent

Rep Massie (R-KY) along with three republican co-sponsors has introduced a new pro-patent-holder legislative proposal. [LINK]

Elements of the proposal:

  1. Restore a first-to-invent system and one-year grace period: “a person shall be entitled to a patent where the inventor is first to conceive of the invention and diligently reduces the invention to practice.”  This includes substantial reversion of Section 102 to its pre-AIA status.
  2. Abolish Inter Partes Review and PGR: “Chapters 31 and 32 of title 35, United States Code, are repealed.”
  3. Allow for civil actions to demand patent rights from the USPTO in any district court.
  4. End Fee-Diversion of USPTO Revenue.
  5. Abrogation of Alice, Mayo, Bilski, and Myriad “to ensure that life sciences discoveries, computer software, and similar inventions and discoveries are patentable, and that those patents are enforceable.”  This includes statutory revision of Section 101.
  6. Expressly establishing a patent as a private property right: “A patent right is a private property right secured to an inventor upon issuance of the patent that shall only be revoked by a court ruling in a judicial proceeding, unless the patent owner consents to an administrative or other procedure.”
  7. End Automatic publication of patent applications.
  8. Patent term tolled during any period of patent validity challenge.
  9. Patent infringement judgment presumptively results in an injunction.
  10. Best mode reestablished as an operative condition of patentability.

What are your thoughts on these proposals?

 

 

 

No Escape from the Western District of Texas

Patent

Guest post by Paul Gugliuzza and Jonas Anderson. Paul Gugliuzza is Professor of Law at Temple University Beasley School of Law. Jonas Anderson is Associate Dean for Scholarship and Professor of Law at American University Washington College of Law.

We’ve discussed in this space a few times the remarkable lengths Judge Alan Albright has gone to to attract patent cases to his Waco, Texas courtroom. Judge Albright’s efforts have succeeded in large part because his court, the U.S. District Court for the Western District of Texas, assigns cases to judges in a way that allows plaintiffs to know, with absolute certainty, that their case will be assigned to Judge Albright and not one of the fifteen other judges in the district.

Judge Albright’s been back in the news the past couple weeks because he’s granted two motions to transfer cases out of the Western District of Texas—something he’s rarely done in his two-plus years on the bench.

But, at the same time, Judge Albright has been drawing a roadmap for patentees who want to make sure their cases aren’t transferred away from Waco in the future.

The relevant cases all have the same basic facts: the patentee, a North Carolina LLC called Ikorongo Technology, created a Texas LLC and assigned the Texas LLC the right to several patents only in certain counties in Texas, including counties in the Western District. The LLCs jointly filed infringement suits in Waco against Samsung, LG, Lyft, Uber, and Bumble. Each defendant filed a motion to transfer to the Northern District of California.

In a series of orders—including one issued earlier this week—Judge Albright denied the motions. According to Judge Albright, Ikorongo’s assignment to the Texas LLC made transfer out of Texas impossible. Under the transfer of venue statute, the proposed transferee district must be one in which the case “might have been brought.” Because the defendants infringed the Texas LLC’s patent rights only in Texas, Judge Albright reasoned, the case couldn’t have been “brought” anywhere else.

The patentee’s tactic here is a brazen and transparent attempt to manipulate venue. If Judge Albright’s decisions are allowed to stand, patentees will be able to guarantee their cases are never transferred away from the Western District of Texas by simply creating a shell company that has an exclusive license to the patent only in the Western District of Texas. When the companies file suit as co-plaintiffs in Judge Albright’s Waco courtroom, escape will be impossible.

Fortunately, the Federal Circuit has a chance to step in and condemn these machinations in a pair of pending mandamus proceedings challenging orders by Judge Albright denying motions to transfer in cases filed by Ikorongo. [LG Mandamus Petition; Samsung Mandamus Petition].

We’re optimistic the Federal Circuit will grant those petitions. Both the Supreme Court and the Federal Circuit have repeatedly and forcefully condemned the sort of jurisdictional and venue gamesmanship Ikorongo is plainly engaged in. Moreover, there’s a good argument based on the patent venue statute that the question is not whether the plaintiff’s patent rights have been infringed in the proposed transferee district, as Judge Albright ruled, but whether the defendant has committed acts of infringement in the district.

Regardless of what the Federal Circuit rules in these cases, patentees will continue to develop clever strategies to keep their lawsuits in the Western District of Texas. As we discuss in a forthcoming law review article, the stakes surrounding venue choice are just too high and the advantages Judge Albright offers to patentees are just too great. Congress, the Judicial Conference of the United States, or the district courts themselves need to step in and stop the case assignment practices that enable plaintiffs to shop for specific judges, that incentivize judges to favor the parties who choose the forum, and that have repeatedly led to a single judge—whether in the Eastern District of Texas or, now, the Western District of Texas—hearing a quarter or more of all patent cases nationwide.