In re Fortinet (Fed. Cir. 2020)
British Telecom (BT) and Fortinet have a written agreement associated with their global commercial relationship that establishes the courts of England as the “exclusive jurisdiction” for resolving both “contractual and/or non-contractual obligations” between the parties. Despite that agreement, BT sued Fortinet in U.S. Federal Court (D.Del.) alleging infringement of its U.S. patent.
The district court refused to dismiss the case on forum-non-conveniens — holding that it was not clear that BT would have an alternative forum. In particular, it is not clear that an English court would entertain allegations of infringement of a U.S. patent that occurred U.S. soil.
I need not resolve whether Plaintiffs’ claims are covered by the Frame Agreement because Fortinet has failed to demonstrate that an English court would have jurisdiction over Plaintiffs’ patent claims.
British Telecomm. PLC v. Fortinet Inc., 424 F. Supp. 3d 362, 369 (D. Del. 2019) (District Court Decision).
Denial of a motion-to-dismiss is interlocutory and thus not immediately appealable as a right. Still, Fortinet petitioner for writ of mandamus from the Federal Circuit. However, that court has now denied the petition. The court’s basic conclusion is that Fortinet has not the high standard required for mandamus: “it simply is not indisputably clear that Fortinet has established a right to dismissal under the doctrine of forum-non-conveniens.”
The leading precedent in Fortinet’s favor is Atlantic Marine Construction Co. v. United States District Court for Western District of Texas, 571 U.S. 49 (2013). In Atlantic Marine, the Supreme Court explained that “a valid forum-selection clause should be given controlling weight in all but the most exceptional cases.” A major difference here is that this involves a request to move litigation to a foreign venue while Atlantic Marine involved transfer between U.S. districts courts that both had proper subject matter jurisdiction. As such, the Supreme Court in Atlantic Marine did not consider “whether courts are precluded from considering the availability of
the alternative forum in the course of conducting its forum non conveniens doctrine analysis.”
The district court’s reasoning that the English court might not have “jurisdiction” over the patent infringement claim ignores the fact that the parties contractually agreed to litigate those claims in England. I do not see how agreeing to litigate in England would be materially different, from a legal standpoint, to agreeing to arbitration or some other voluntary dispute resolution practice. English courts are regularly called upon to apply the law of other countries in resolving disputes (as are American courts). I could understand the district court’s ruling if an English court had refused to entertain patent claims based on U.S. law, but it doesn’t look like the district court even gave the English courts a chance to decide that.
As an aside, BT and Fortinet could have agreed to arbitrate patent infringement claims, as this is expressly allowed under 35 U.S.C. 294, and the agreement would likely have been enforceable.
I find it interesting your comment of “English courts are regularly called upon to apply the law of other countries in resolving disputes (as are American courts). ” and the notion of ‘proper subject matter jurisdiction.
I wonder if this is a chasm too wide to cross, or whether my own comment of 7.1 is a bridge to cross that divide.
I found it interesting too. We know that, when the patents court of England is petitioned to decide matters of infringement and validity in relation to a pan-European patent issued by the EPO, the court is frequently
“….. called upon to apply the law of other countries”
But in that case, England is a forum conveniens. When it is petitioned to decide matters of validity and infringement of a single patent, one issued by the USPTO, it is no longer to “convenient” to do it in England.
Joey: “So where will they be holding the trial: Delaware, California or Texas?”
Chandler “Actually, it’s happening in London.”
link to tenor.com
One question I never saw asked (or discussed) in these comments is what would happen if this case actually was decided by a British court? How would that affect the validity of the patent in the US? Assuming the patent was found to be invalid, that decision would not have any binding effect on any other party in the US. The entire thing would have to be litigated again here. What about the one year date for a possible IPR? Would (or does) this litigation start that clock ticking? Add in different rules of evidence, could the losing party argue that they were denied Due Process with respect to the validity of a US patent when US rules and procedures are not followed? This seems like a train wreck that could keep crashing into things for the next upteen years or until they decide to actually settle the suit.
This appears to be less a patent law issue per se and more a freedom-to-contract/limitation of contracts per violations of public policy.
The public policy that happens to be on hand is the Sovereign nature of patent law.
This appears to be less a patent law issue per se and more a freedom-to-contract/limitation of contracts per violations of public policy.
The public policy that happens to be on hand is the Sovereign nature of patent law.
Thus, it is little wonder that MaxDrei below does not seem to grasp the issue that is at heart here.
I agree with David Stein below.
All of this is happening because the Scotus eviscerated anti-trust law. The corporations are so huge that there are only two or three (or even one) in any market and they tend to collude on prices and contracts to the consumers to make more money.
What has happened is that they know they can’t get any bigger or action will be taken against them so they co-exist and collude to maximize their profits.
What is happening is that we have no alternative so we have to take what we can get.
OT, but the final comment from me on the issue.
There are two issues here.
(1) Was it actually invented when the machine put together a combination of elements.
(2) Did the person that first saw the combination of elements invent the invention?
By the legal definition of invent in the USA, the conclusion in (1) is that the machine did not invent the invention.
And, for (2), we can say that the first human brain conceived of the invention, so they did invent it.
For (1), we can’t say that both the machine invented but is not eligible for a patent because it is not a person as the definition of invent is defined in words that apply to human brains and not machines.
For (2), the patent statute explicitly says that the manner of invention does not matter. So if I invent by using a machine to figure out a bunch of stuff and I pick what I want as an invention, then that is inventing. I am the first human brain to conceive of the invention.
There is really no other consistent opinion.
I got all your arguments anon. Please don’t start your nonsense of repeating yourself over and over and claiming I am not addressing your arguments. My position is clear. My position as to your arguments is clear. Yes anon it took me a while to get to this position where I could articulate my position.
And anon if you feel that there is some point I did not address, then act like an attorney and be concise and figure out exactly what our dispute is. What you do is you repeat yourself over and over again when I have addressed your point and I have reduced the argument to our dispute. But you just repeat your position and claim I did not address you. Seriously! If you can’t reduce the dispute down to one sentence then you are being disruptive.
I call B$ on your direct obfuscation.
You retreat from the definition of conception because THAT definition does not work for you, and you try to fold everything into a definition of “invent.”
You ask me to be concise, and yet you have steadfastly refused to pick up the discussion on the concise counterpoints that I have repeatedly given you.
Stop running away.
The reason why I apparently have to keep repeating myself is because you are NOT engaging on those points.
You have NOT ‘reduced our arguments to the points that YOU want to move to — quite the opposite: I have reduced your position to a legal fallacy on a specific point, and you refuse to address that point.
You want one sentence (again)?
Try this: the AI IS the conceiver.
Go from there.
… by the way, the Count Filter is timed: you do get a fresh set of posts every 24 hours.
David Stein asks:
“….what’s to stop massive companies….”?
That’s the point, isn’t it? Think: equality of arms. Think: the “battle of the forms”. It was ever thus, wasn’t it David, since the beginning of time.
Young inventor trying to get finance. Young musician talking to a music publisher. Young person accepting a job with Amazon. No equality of arms there. Shoulder shrug from the “massive company”. Take it or leave it, pal.
But here, two corporations, at arms length, after receiving exhaustive legal advice, freely sign (Win-Win) a contract that gives them both what they want. If, later, one of them wants to dispute in court what the contract means, that party is (at least in the USA) perfectly free to do so and it’s fine that they do, for then we observers will gain from (sarcasm alert) the enhanced legal clarity bestowed upon us by the crystal clear and razor-sharp reasoning found in the written decision handed down by those oh so worldly-wise judges.
Apart from all that though, it is not clear that the court needed at all to get into the non conveniens weeds. The Contract prescribes an exclusive jurisdiction for litigating:
“contractual and/or non-contractual obligations”
Note the word “obligations”.
It is not (or is it?) as if Fortinet is “obliged” not to infringe the US patent. Rather, it is that the Contract with BT is its defence against an accusation of infringement. So, BT has first to bring infringement proceedings, in the USA. And then Fortinet can, in the US court, advance its defence and see if it works.
Max, as Anon noted, certain types of contract provisions can be held unenforceable as against public policy, even for an arms-length negotiated agreement. E.g., requiring royalty payments for a patent after its expiration, prohibiting any validity or anti-trust challenge, etc. A license clause requiring a patent of one country [which is inherently is only licensed for that country] to be litigated only in a highly inconvenient foreign county might well be held unenforceable as against public policy without any good justification?
” . . . in all but the most exceptional cases.”
A trans-national / trans-sovereign case such as this certainly qualifies as an exceptional case.
If this is permitted, what’s to stop massive companies from making their arbitration clauses even more onerous?
Today: Any conceivable lawsuit that our customers might bring against us under U.S. law must first be heard by arbitrators of our choosing.
Tomorrow: Any conceivable lawsuit that our customers might bring against us under U.S. law must be litigated by a legal body established in a location of our choosing, which plaintiffs must visit on their own dime. Designated location: The planet Mars.
Or China? And as an attempt to prevent IPRs?
All of this is happening because the Scotus eviscerated anti-trust law. The corporations are so huge that there are only two or three (or even one) in any market and they tend to collude on prices and contracts to the consumers to make more money.
What has happened is that they know they can’t get any bigger or action will be taken against them so they co-exist and collude to maximize their profits.
If this is permitted…
Well, sure, if. But it was not permitted, was it? The district court refused to dismiss the case for forum non conveniens, and the CAFC refused to order the district court to do so. So, no problem.
This sounds less like a big-corporation-versus-little-guy situation, in which the corporation effectively imposes an adhesion contract to cause the customer to waive his right to redress in a real court, and more like a typical choice-of-venue clause in a contract that’s actually negotiated by the two parties. And I don’t see where an analogous situation to the present one could arise in the corporation-versus-little-guy context (where the corporation is a defendant), unless, e.g. Verizon or Chase were to write into its customers’ contracts, “BTW, if you’re a customer of ours and you also have a patent that you think we’re infringing, by being our customer you waive your right to sue us for infringement of that patent.” If you’re not in a contract with a corporation, you can’t waive your right to a particular forum vis-a-vis that corporation (or anyone else).
On the other hand, in the patent context the poster child for corporate abuse of a forum clause in customer contract would be from your own backyard, Greg. Monsanto used such adhesion contracts to drag several farmers from outside Missouri into St. Louis as defendants in suits for infringement of its patents covering glyphosate-resistant seeds. But at least the suits were heard in court… And it took some nifty lawyering to get the courts to agree that Monsanto hadn’t exhausted its rights in the seeds by selling those seeds to the farmer.
Shhhh – AM, Greg did not like the discussion on exhaustion that was entirely per ve rted by the Supreme Court (but then again, Greg – as a Big Pharma sycophant, has always had a twisted view on exhaustion).
(and I see that my prior reply to Greg never made it out of the George Carlin filter)
Do you believe in the conspiracy? The fact that you are singular does NOT mean that THAT singular you does not post under multiple pseudonyms.
I believe that you are an arse.
A rather unremarkable and rather dull arse, but an arse nonetheless.
Not sure exactly why you would pick this comment eleven days after it posted to put your “the conspiracy” meme. You are still using the word conspiracy incorrectly.
I wonder what it is that you think that your current line of work is.
Do you see yourself as some Holden Caufield?
Are you ‘patrolling’ the fields of rye, ‘protecting’ everyone from the ‘big bad anon?’
Does that line of work deal solely with you scouring my posts with a fervent hope for some (even slight) misstep, so that you can (gloriously) pounce and say, “Gotcha!”?
How very sad of you.
Not only do you reinforce your own pettiness, you miss out on the excellent opportunities to actually learn something.
I suppose that you think that your days of learning something are long over.
That shines through.
I don’t see where an analogous situation to the present one could arise in the corporation-versus-little-guy context (where the corporation is a defendant), unless, e.g. Verizon or Chase were to write into its customers’ contracts, “BTW, if you’re a customer of ours and you also have a patent that you think we’re infringing, by being our customer you waive your right to sue us for infringement of that patent.” If you’re not in a contract with a corporation, you can’t waive your right to a particular forum vis-a-vis that corporation (or anyone else).
Yeah, this sounds right to me. There just is not much scope for the would-be patent defendant to contrive a circumstance in which this forum selection issue would arrive in any more than ~2% of patent cases.
Classic Greg, responding in a “sounds right,” but really skirting the underlying issue that is NOT ‘sounds right’ to Greg (improper law concerning exhaustion).
Brush away the feint, and even less than that “~2%” number is there, albeit describing something else.
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