Patent law is a quirky mix of private and public law. Individual inventors and their assigns are granted private property rights and the freedom-of-contract to license those rights as they see fit. But, patents are designed to serve a public purpose, and the courts have occasionally struck-down private agreements that go too-far — especially agreements that frustrate the invalidation or cancellation of wrongfully issued patents.
In Kannuu Pty Ltd., v. Samsung Electronics Co., Ltd. (Fed. Cir. 2021), the question on appeal is whether an agreement between parties can enforceably prohibit the filing of an Inter Partes Review (IPR) petition. In the case, Kannuu and Samsung entered into an NDA that included a forum selection clause — choosing NYC Courts (Federal or State) as the sole arena for litigating actions or proceedings relating to the agreement. Kannuu shared substantial information about its patent porfolio. Samsung decided not to pursue any license agreement but did (allegedly) adopt the disclosed navigation/search functionality Samsung Smart TVs.
Kannuu then sued (6 years later) after several of its patents had issued in NYC Federal Court. In response, Samsung filed a batch of IPR petitions. The PTAB granted 2 of 5. Although Kannuu raised the forum-selection argument to the PTAB, the PTAB did “declined to consider the merits of whether the FSC barred Samsung’s petitions.” Kannuu brief. Back in court, the district court refused to issue an anti-IPR injunction — holding that the forum selection clause did not exclude IPR filings. The preliminary injunction denial is now on appeal with two basic questions:
- Do the terms of this particular forum-selection-clause prohibit Samsung from filing the IPR.
- If so, is the forum-selection-clause unenforceable as a violation of public policy favoring patent challenges.
Law professors have gotten involved in the appeal with Kannuu being represented by Prof. Ted Sichelmann (USD) and competing amicus briefs filed on each side:
- Kannuu Appellant Brief.
- Kannuu Appellee Brief.
- Kannuu Prof Amicus Supporting Kannuu. Prof. Adam Mossoff (George Mason) & Matthew Dowd is representing a group of law professors supporting Kannuu’s position. These include Profs. Jonathan Barnett (USC); Richard Epstein (NYU/UChicago); Jay Kesan (Illinois); Adam Mossoff (George Mason); and Kristen Osenga (Richmond).
- Kannuu Prof Amicus Supporting Samsung. Stanford’s IP Clinic (Phillip Malone) has filed a brief supporting Samsung’s position on behalf of a group of law professors. These include Profs. Margo Bagley (Emory); Jeremy Bock (Tulane); Dan Burk (UCIrvine); Michael Carrier (Rutgers); Rochelle Dreyfuss (NYU); Samuel Ernst (GGU); William Gallagher (GGU); Shubha Ghosh (Syracuse); Leah Chan Grinvald (Suffolk); Erik Hovenkamp (USC); Mark Lemley (Stanford); Orly Lobel (USC); Brian Love (SCU); Stephen McJohn (Suffolk); Michael Meurer (BU); Shawn Miller (USD); Tyler Ochoa (SCU); Christopher Turoski (Minnesota).
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Here, I expect that the Federal Circuit will duck the question of general public policy and instead affirm the narrow interpretation of the forum-selection clause.
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The IPR proceedings continue to more forward. These were instituted in September 2020 and so we can expect a that the final written decision will be issued September 2021. The Federal Circuit has ordered an expedited appeal with oral arguments planned for July 2021.