University of Pittsburgh v. Varian Medical (Fed. Cir. 2009)
The district court dismissed Pitt’s infringement action for lack of standing because Carnegie Mellon is a co-owner. Ordinarily all co-owners must join as plaintiffs in an infringement suit, and here Carnegie Mellon did not join. Notably, the district court dismissed the case with prejudice – barring Pitt from later re-filing the lawsuit once Carnegie is on-board.
On appeal, the Federal Circuit took a minimalist approach – holding only that the district court abused its discretion in dismissing with prejudice rather than without prejudice.
Federal Rule of Civil Procedure 12(b)(7) allows a district court to dismiss an action for failure to join a party under Rule 19. However, it is clear that a dismissal for failure to join a party is not an adjudication on the merits, and thus, should not have preclusive effect—i.e. such a dismissal should be without prejudice. See Hughes v. United States, 71 U.S. (4 Wall.) 232, 237 (1866).
…
Fieldturf, Inc. v. Sw. Recreational Indus., 357 F.3d 1266, 1269 (Fed. Cir. 2004) (“Ordinarily, dismissal for lack of standing is without prejudice. On occasion, however, a dismissal with prejudice is appropriate, especially where it is plainly unlikely that the plaintiff will be able to cure the standing problem.”).
Ortho-McNeil Pharm., Inc. v. Mylan Labs., Inc. (Fed. Cir. 2009)(Dyk, J.),
In 2005, the Federal Circuit affirmed a district court ruling in this case supporting the validity of Daiichi’s Levofloxacin’s patent.
Under the Federal Rules of Civil Procedure (R. 54(d)), non-attorney-fee costs are presumptively awarded to the prevailing party. These usually include costs associated with court fees, subpoena fees, transcripts, copying, and translations.
Daiichi calculated its costs as $2.2 million, but the district court reduced those costs to $1.3 million (including $1 million in translation costs). On appeal, the Federal Circuit affirmed these costs.
The one exception to the affirmance involves a parallel case against Teva. Although there was no joint discovery agreement, some depositions were taken jointly by Mylan and Teva for the convenience of Daiichi. Because the Teva case settled, the court in that case did not award any costs. However, Mylan argued that Teva’s portion of the costs was implicit in the settlement payment. The Federal Circuit agreed – holding that Mylan should not be required to pay more than 50% of the costs for the joint depositions.
Here it is apparent that Daiichi has in effect already recovered some amount of costs through its settlement agreement with Teva. Although Teva did not actually pay costs to Daiichi in cash, the taxable costs in the New Jersey action (including deposition costs) were unquestionably taken into account by the parties’ settlement, in which Daiichi agreed not to seek actual payment of costs as consideration for Teva foregoing its appeal. Having recovered the value of those costs in the form of the foregone appeal, Daiichi cannot now recover more than its total entitlement by obtaining those same costs again from Mylan. . . . Because the district court here did not apportion costs between the two actions, we vacate the award of costs in this one respect and remand for further proceedings.
Both Ecolab and FMC sell chemical mixtures used by beef and poultry factories to help protect raw meat from “pathogens, such as E. coli and salmonella.” Both parties hold patents on their mixtures, and in litigation each asserted infringement against the other. A jury awarded both parties damages for infringement. However, the district court refused to issue permanent injunctive relief. On appeal, the Federal Circuit invalidated Ecolab’s claims and then focused on whether the district court erred in refusing to grant an injunction to stop Ecolab from infringing.
Injunctive relief is awarded according to the traditional principles of equity. In eBay v. MercExchange, the Supreme Court interpreted those principles to require a patentee seeking injunctive relief to demonstrate “(1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.”
In this case, the district court did not explicitly consider any of the eBay factors. “That is an abuse of discretion.” In this instance, the Federal Circuit refused to consider whether – based on the fact at hand – an injunction would be proper. Rather, on remand the district court must consider whether relief is warranted based on a consideration of the four listed factors.
Note:
While construing claims, the decision distinguishes Chef America’s statement that claims are construed “as written, not as the patentees wish they had written it.” “Because the claim language at issue in Chef America was unambiguous, that case is distinguishable from the present case. In the present case, the definition of “sanitize” is ambiguous in that it does not indicate when consumption is to take place . . . and the district court did not err when it construed the term “sanitize” to mean that the treated meat has become safe for human handling and post-cooking consumption.”
Comments on Patently-O: I have updated the commenting software. Now there are threaded comments, so it is easier to reply directly to a prior comment. If you sign-up for a free Typepad account then you can personalize the image associated with your moniker.
Law Firms as Patent Owners: Photo site SmugMug recently filed a declaratory judgment action against the patent holding entity VPS, LLC. VPS previously settled with Pictage earning a “multi-million dollar fee” as well as with Kodak Gallery and Shutterfly. VPS’s ownership is interesting. Its managing partners are all patent attorneys: Carl Moore (patent attorney at Marshall Gerstein); Timothy Vezeau (patent attorney at Katten Muchin); and Nate Sarpelli. The VPS patents were originally assigned to Monet, Inc. but subsequently assigned to the Marshall Gerstein firm. In 2002, the law firm assigned the rights to VPS. (See Pat. No. 6,321,231). SmugMug Complaint for Declaratory Judgment.pdf
Design Patent Customs Registration: The IPO has voted to support a statutory change that would create a design patent registry within the Customs and Border Protection (CBP) bureau of the Department of Homeland Security. The CBP already keeps a registry of trademarks and copyrights to assist customs agents in preventing infringing importation through any of the 317 official ports of entry into the US. [CBP E-Recordation System] (No bill has been proposed.)
Update Your PTO Registration Data Online: Link. Before you can use the system, the OED will first send a letter to you with a User ID. After you respond, you will be sent a password.
Ariad has petitioned the Federal Circuit for an en banc rehearing – boldly asking the court to eliminate the written description test as a distinct requirement of patentability under 35 USC Section 112, paragraph 1. The petition – drafted by Professors Duffy and Whealan – is essentially a well-formed collage of quotations from Federal Circuit dissents and 19th Century Supreme Court decisions.
The petition raises the following two questions:
(1) Whether this Court has erred by “engrafting . . . a separate written description requirement onto section 112, paragraph 1 …. ” Ariad Pharms., Inc. v. Eli Lilly & Co., 560 F.3d 1366, 1380 (Fed. Cir. 2009) (Linn, J., concurring).
(2) What is the proper test to satisfy the requirement in Section 112, paragraph 1, that a patent specification contain “a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same”?
Apart from the merits of this case, the brief notes that half of the Federal Circuit judges “have either voted to grant en banc review of this Court’s written description jurisprudence (Newman, Rader, Bryson, Gajarsa, and Linn, JJ.), or have expressly noted that future en banc review may be appropriate because this Court’s written description standards are unsatisfactory. (Dyk, J.).
The original opinion was written by Judge Moore and joined by Judge Prost. Judge Linn wrote a concurring opinion as a reminder of his belief that the written description requirement should be eliminated and enablement be allowed to do its job.
Both Tafas and GlaxoSmithKline (GSK) have filed petitions for en banc rehearing asking the Federal Circuit to stop the US Patent & Trademark Office (PTO) from implementing any of its proposed rules on continuations and claims.
The proposed rules can be split into two major categories: Rule 75 (requiring applicants to submit Examination Support Documents (ESD) to accompany any application that includes more than five independent or 25 total claims); Rule 78 (limiting applicants to two continuation applications absent a showing of need for more).
In a split decision, the Federal Circuit held that the limitations on continuations improperly conflict with 35 U.S.C. § 120, but that the remaining limits are "within the scope of the USPTO's rulemaking authority." (Limitations on RCEs do not create a problem).
In the motion for en banc rehearing, GSK raises the the questions of:
Whether the Panel majority erred in rejecting the test for determining whether a Patent and Trademark Office ("PTO") rule is "substantive," as set forth in the controlling precedent of Chrysler, supra; Animal Legal Defense Fund, supra; and Cooper Technologies, supra.
Whether the Panel majority erred in holding that the challenged Final Rules, 72 Fed. Reg. 46,716 (Aug. 21, 2007), fall within the PTO's limited, non-substantive rulemaking authority.
Tafas raises similar questions of whether the Federal Circuit:
misapplied significant binding Supreme Court and Federal Circuit precedent concerning the correct standard for classifying administrative rules as "substantive" versus "non-substantive";
failed, contrary to Supreme Court and Federal Circuit precedent, to fully consider evidence that the Final Rules significantly and adversely affect individual rights and obligations under the law;
failed to correctly address, as required by Supreme Court precedent, the threshold question of whether the PTO has the jurisdictional authority under 35 U.S.C. § 2(b)(2) to enact the Final Rules; and
misapplied Chevron deference to its improper determination that Final Rules 75, 265 and 114 were not "inconsistent with existing law".
The federal circuit majority opinion by Judge Prost included a dissent by Judge Rader (arguing that the rules are substantive) and a concurring opinion by Judge Bryson (arguing that the conflict with Section 120 only applies to continuations that are co-pending with the first-filed application).
The diversity of opinion here gives this case an excellent chance at being heard by the full 12-member court. The important administrative law issues will also be appealing to the Supreme Court when it comes time to petition for certiorari.
Agilent Tech., Inc. v. Affymetrix, Inc. (Fed. Cir. 2009)
Agilent’s microarray hybridization genetic analysis patent issued in 2003. After seeing those issued claims, Affymetrix amended a pending application by adding identical claims in order to provoke an interference. The Agilent patent has a priority date of 1998 while the Affymetrix application claims priority back to 1995. The Board of Patent Appeals and Interferences (BPAI) awarded priority to Affymetrix in 2006. That holding was upheld by a N.D. California district court in 2008.
Here, the Federal Circuit reverses – holding that Affymetrix cannot claim priority back to its 1995 filing because that original application “does not satisfy the written description requirement for the claims at issue.” Written description is particularly relevant in interference cases where one party typically copies claims from another patent document.
Claim Construction in an Interference: Several articles have been written on the complicated and ever-changing scope of a patent claim. At the PTO, claims are usually given their broadest reasonable meaning while in litigation, courts look for how a PHOSITA would interpret the scope, etc.. Phillips teaches that proper claim construction looks at the literal language of the claims as well as supporting information from the specification and prosecution history. In an interference, however, the copied claims originally came from another application.
Faced with a split of precedent, the Federal Circuit here decided to continue with multiple interpretations of an individual claim. Following Spina, the court holds that – for the purposes of the written description requirement – the newly added claims should be interpreted based on the specification and history of the opposing source application. However, following Rowe, the Federal Circuit held that for the purposes of novelty and nonobviousness, the newly added claims should be construed based on the specification and history of the amended application.
To be clear, as this court explained in Rowe, when a party challenges written description support for an interference count or the copied claim in an interference, the originating disclosure provides the meaning of the pertinent claim language. When a party challenges a claim’s validity under § 102 or § 103, however, this court and the Board must interpret the claim in light of the specification in which it appears.
This change in primary interpretative materials allowed the Federal Circuit to also change the claim construction and consequently hold that Affymetrix’s application “does not satisfy the written description requirement for the claims at issue.”
Notes:
As a pending application, Affymetrix’s claims had no presumption of validity. “Thus, Agilent’s burden of proving a lack of written description in Affymetrix’s Besemer application is a simple preponderance of the evidence. Eli Lilly & Co. v. Aradigm Corp., 376 F.3d 1352, 1365 (Fed. Cir. 2004).”
My keen research assistant Patrick Barnacle pulled up records on 56 ex parte patent appeals that have been decided by the Court of Appeals for the Federal Circuit since March 2005. All of these cases arise from rejections sustained by the USPTO’s internal Board of Patent Appeals and Interferences (BPAI). We are working to create a more complete database. In the meantime, I wanted to report some preliminary results on timing.
The median ex parte appeal took just over fifteen months to complete as measured from the date of the BPAI decision until the date of the Federal Circuit decision. As measured from the filing of the CAFC Notice of Appeal, the median appeal took exactly one year (365 days). Some appeals took longer: Comiskey, Ferguson, and Bilski each took more than two years from the NOA, but they were all tied to en banc decisions. About 25% of the appeals took less than ten months from the NOA.
Once oral arguments (if any) are complete, the Federal Circuit is rather quick at issuing an opinion. The median decision was issued 47 days after the oral arguments. (Again, a skewed average of 86 days is driven by the handful of en banc decisions) 30% of the decisions came within one week of oral arguments – most of those took one to two days.
We have not yet analyzed the correlation between delay and results, but it appears that especially quick decisions tend to favor the PTO over the applicant. As you might expect, delays in judgment correlate with longer opinions; opinions marked precedential; dissenting opinions; and opinions with Judge Newman on the panel.
Nothing to report on the quest for a new PTO director. Although the Obama administration’s “fast start” has been reported by the media, he is now slower than President Clinton who nominated Bruce Lehman in April of his first year in office. President Bush nominated Jim Rogan in May of his first year in office. President Obama has two more days to match that benchmark. (My prediction of a May 8 nomination has come and gone…)
Albritton v. Cisco: The Patent Troll Tracker case continues. Trial in the defamation case is set for September 14 in Tyler Texas. Defendants include Cisco, Richard Frenkel (the Patent Troll Tracker) Mallun Yen, and John Noh.
Ward v. Cisco: Johnny Ward Jr. (son of Judge Ward) has a parallel case running against Cisco in Texarkana (Arkansas). Ward voluntarily dismissed Frenkel from the lawsuit after Cisco “admitted agency.” Discovery is ongoing and the parties have asked for trial to begin December 30, 2009.
Speaking of EDTX: Last week, the Canadian company i4i won a $200 million verdict for willful patent infringement against Microsoft. Apparently i4i’s xml editing software was completely undercut when Microsoft included xml editing software in MSWord. The patent is here. Joe Mullin has more.
Voting continues for the “best patent blog.” (I don’t like this survey, but it is still nice to make a good showing.)
Singulair Patent Reexamination: Earlier this year, ArticleOne asked for prior art on Merck’s Singlair patent and two of its “community members” offered seemingly important references. ArticleOne then filed for reexamination of the patent, which was granted on May 20. Today ArticleOne issued press releases related to the reexamination. Peter Ludwig (Darby & Darby) is representing ArticleOne before the PTO. Singulair garnered $4 billion+ in sales last year.
Information Query: The Singulair patent’s reexamination number is 90/009,432. If you were an investor, how would you go about closely following the prosecution history in that case?
Boss sued Yamaha for infringement of its patents covering a snowmobile seat. After an unfavorable claim construction, Boss admitted that it could not prove infringement. On appeal, the Federal Circuit affirmed the construction and the verdict of noninfringement.
The interesting portion of the opinion focused on the alleged discovery abuses by Yamaha’s counsel. Although a moot point (because Boss did not appeal its motion for sanctions that had been denied), the Federal Circuit felt compelled to at least verbally admonish the attorneys “unacceptable” conduct.
[I]t appears from the record presented to us that Yamaha’s discovery practices were less than commendable. For example, on several occasions Yamaha date-stamped documents to be filed with the district court using the court’s time stamp, but did not actually place the document in the court’s drop-box at that time. Rather, Yamaha actually filed the documents, by placing them in the drop-box, several days after the “filed” stamp was placed on the documents. After the district court realized that this was not an isolated incident, but happened several times, it admonished Yamaha, stating that “[t]his deceitful conduct will not be tolerated” and that this inappropriate practice “is particularly egregious when . . . the court is liberal in granting extensions of time.” The court further noted that “counsel in this case have been admonished before about the gamesmanship that has been taking place in this lawsuit.” In addition, regarding Yamaha’s interpretation of communications with the district court, the court further characterized Yamaha’s actions as “unreasonabl[e]” and “disingenuous.” This type of conduct during litigation is unacceptable and reflects a lack of respect for both the opposing party and the court.
Despite the ruling on misconduct, Yamaha walks away without any sanctions.
Paragon’s patent covers a GPS/physiologic exercise monitoring system that displays realtime calculated values such as heartrate, altitude, velocity. The components of the invention are divided between a data acquisition unit and a display unit. After an unfavorable claim construction, Paragon stipulated to a non-infringement judgment. On appeal, the Federal Circuit vacated judgment – finding that the district court had improperly construed the terms.
Disavowal of Claim Scope : The district court concluded that the claimed “data acquisition unit” must be a single structure encompassing both GPS and physiologic sensors. That ruling was critical because the accused device (Timex Biolink) physically separates the GPS and physiologic monitors. Although the claim language did not limit the acquisition unit to a single physical device, the district court found that Paragon had disavowed that scope
when it amended the claims to require that the acquisition unit be separate from the display unit.
On appeal, the Federal Circuit agreed that the patentee had clearly disavowed a single structure. However the court could not find a reason that the amendment would limit the acquisition unit to a single device.
We conclude that, read in light of the specification, the claim term “data
acquisition unit” is not limited to a single structure but may comprise multiple physically separate str
uctures, and that the applicants did not make a clear and unmistakable disavowal of multiple physically separate structures during prosecution.
Parallel Construction: In construing claims, courts presume that a term in one claim will hold its meaning throughout the claims. That presumption is overcome when “it is clear from the specification and prosecution history that the terms have different meanings at different portions of the claims.” Here, because the claimed “acquisition unit” can be multiple structures, the Federal Circuit found that the claimed “display unit” may also include multiple structures.
Real Time Data: The district court interpreted the claimed “real time” display of data as contextual. For some activities – such as mountain climbing – a thirty second delay may well be “real time.” However, for ot
her activities, a thirty second delay would not be considered real time.
On appeal, the Federal Circuit held that this context-dependent definition is not proper in an apparatus claim. “[A]pparatus claims cover what a device is, not what a device does.” Hewlett-Packard v. Bausch & Lomb, 909 F.2d 1464, 1468 (Fed. Cir. 1990).
Absent an express limitation to the contrary, any use of a device that meets all of the limitations of an apparatus claim written in structural terms infringes that apparatus claim. … Construing a non-functional term in an apparatus claim in a way that makes direct infringement turn on the use to which an accused apparatus is later put confuses rather than clarifies, frustrates the ability of both the patentee and potential infringers to ascertain the propriety of particular activities, and is inconsistent with the notice function central to the patent system.
Consequently, the Federal Circuit modified the construction of “displaying real-time data,” to be “displaying data without intentional delay, given the processing limitations of the system and the time required to accurately measure the data.”
Based on these modifications to the claim construction, the Federal Circuit vacated the finding of non-infringement and remanded for further proceedings. I wonder — if the specification had clearly indicated that the definition of “real-time” could shift depending on the type of use, would the claim then be held invalid as indefinite under 35 USC 112.
Notes:
This case could potentially have an impact on pharmaceutical composition claims that include limitations such as “a physiologically sufficient amount.” Of course, whether a drug is “physiological sufficient” will often depend upon the individual patient and that patient’s particular situation at that time.
There are two major difference between the Paragon situation and my hypothetical compound claim. First, the real-time display capability in Paragon was seen as a structural limitation while the “physiologically sufficient” amount could be seen as a functional limitation. This difference is important because the Federal Circuit expressly limited its holding to the construction of “non-functional term[s].” However, that distinction is slight because it is unclear what the court meant by “non-functional.” (I.e., “a non-functional term” could be a purely aesthetic limitation; it could be a means-plus-function term; it could be a term that defines the purpose of a particular structure; etc.) A second distinction is that Paragon’s claim is an apparatus claim not a compound claim. Neither of these distinctions appear compelling.
Autogenomics v. Oxford Gene Tech (Fed. Cir. 2009) 08-1217.pdf
The opposing viewpoints of Judges Newman and Moore continues to be seen in Federal Circuit decisions. This appeal arrived at the Federal Circuit after the Central District of California district court dismissed the case for lack of personal jurisdiction over the declaratory judgment defendant (and patent holder) Oxford Gene Technology.Writing for the majority, Judge Moore (joined by N.D. Ill. Judge Gettleman sitting by designation) affirmed the judgment. Judge Newman wrote in dissent.
Even in patent cases, a federal court’s personal jurisdiction over parties is based on state boundaries. Here, the case was filed in a federal court sitting in California. When a defendant challenges personal jurisdiction, the court must consider two general factors: (1) whether the forum state’s long-arm statute permits service of process and (2) whether assertion of personal jurisdiction would violate due process.” Most states have extended their long-arm statutes to the bounds of due process. Thus, the question collapses to a consideration of the US Constitutional as applied at the geographic state boundaries.
The Constitutional limits of due process can be met by either showing general personal jurisdiction (based on continuous and systematic contacts with the state) or specific personal jurisdiction (based on a defendant’s activities in the state that relate to the cause of action.)
Focusing on specific personal jurisdiction, this case is in some ways a repeat of the court’s 2008 Avocent holding that a patentee’s efforts at commercialization are irrelevant to the specific jurisdiction question. Rather, the minimum contacts for specific jurisdiction must relate to “only enforcement or defense efforts related to the patent.” Thus, although Oxford has licensed its patents to several California companies, those licenses do not work toward a finding of specific personal jurisdiction over the foreign company.
DJ Jurisdiction over a Non-US Company: Both the majority and dissent expressed concern that foreign patent holders may often fly under the radar in such a way that no US court would have personal jurisdiction. Of course, the patent statute deals with that potential eventuality. For a non-US patent holder, the District of Columbia Federal Court has jurisdiction “to take any action respecting the patent or rights thereunder” to the same extent “that it would have if the patentee were personally within the jurisdiction of the court.” 35 USC 293.
Section 293 makes an exception for non-US patent holders who designate a US person to receive process. The statute does not indicate that such designation serves as consent to personal jurisdiction in the person’s home location. However, cases have held that designating a US process agent under Section 293 operates as consent to personal jurisdiction. See In re Papst Licensing, 590 F. Supp. 2d 94 (D.D.C. 2008).
Section 293 reads as follows.
Every patentee not residing in the United States may file in the Patent and Trademark Office a written designation stating the name and address of a person residing within the United States on whom may be served process or notice of proceedings affecting the patent or rights thereunder. If the person designated cannot be found at the address given in the last designation, or if no person has been designated, the United States District Court for the District of Columbia shall have jurisdiction and summons shall be served by publication or otherwise as the court directs. The court shall have the same jurisdiction to take any action respecting the patent or rights thereunder that it would have if the patentee were personally within the jurisdiction of the court.
In the past year, about 11 patent infringement cases were filed in DC District Court.
Farrago v. Rawlings Sporting Goods (Fed. Cir. 2009)
Farrago’s patent covers a pad for relieving knee stress. The argument focused on whether Rawlings’ product has four surfaces (as claimed) or only three surfaces (as Rawlings argues). On appeal, the Federal Circuit quickly affirmed summary judgment of noninfringement without opinion. (A narrowing amendment during prosecution precluded application of the doctrine of equivalents.)
I’ll only focus here briefly on the appellate practice. Farrago submitted a sample of the accused product to the appellate court so that the judges and clerks could examine the product prior to oral arguments. During oral arguments, the court thanked Farrago’s attorney – noting that the sample “was very helpful.” Of course, the court needed only 24 hours to release its opinion against Farrago.
In re Genentech (Fed. Cir. 2009)(granting mandamus and ordering transfer) 09-M901.pdf In re Volkswagen of America (Fed. Cir. 2009)(denying mandamus) 09-M897.pdf
Since deciding TS Tech, the Federal Circuit has received a gaggle of Mandamus petitions – most of them asking the appellate court to order cases transferred out of the Eastern District of Texas to more convenient locations. In a pair of opinions – both authored by Judge Linn and released on the same day – the appellate court has provided additional guidance on deciding these transfer issues.
Genentech – Transfer Granted:
Key Witnesses: Genentech identified several witnesses in Northern California and argued it would be more convenient for them to attend trial in that locale. The district court, however gave little weight to Genentech list because the did not identify location of “key” witnesses. On appeal, the Federal Circuit held that at such an early stage of trial, it is unreasonable to require a defendant to show that potential witnesses are “more than relevant” or face denial of transfer.
European Witnesses: Several identified witnesses would come from Europe. The Texas court held that it would be more convenient for the European witnesses to travel to Texas than to California because California is further from Europe than is Texas. Here, the district court directly followed the Fifth Circuit’s proportionality test that “[w]hen the distance between an existing venue for trial of a matter and a proposed venue under § 1404(a) is more than 100 miles, the factor of inconvenience to witnesses increases in direct relationship to the additional distance to be traveled.” On appeal, the Federal Circuit noted that the difference in distance should be given less weight when the witnesses are already traveling a great distance.
Centralized Location: Although Texas is certainly a more central location, the Federal Circuit held that the factor could not favor a Texas venue because none of the identified witnesses reside in Texas. Rather, the court found that California is more centralized because a number of material witnesses reside within California.
Convenience to the Parties: Genentech is in Northern California, Biogen (another defendant) is in San Diego, Sanofi (the plaintiff) is in Germany.
Availability of Compulsory Process: If trial is in Texas, there may be several third-party witnesses that could not be compelled to attend because they are in California – outside the long-arm of Texas jurisdiction.
Evidence: “In patent cases, the bulk of the relevant evidence comes from the accused infringer.” Here, all of Genentech & Biogen’s relevant evidence is in California.
Prior Suit: Genentech has been a plaintiff in the Eastern District of Texas and the district court. On appeal, the Federal Circuit ruled that it would be legal error to consider a prior case that would not otherwise provide for judicial economy.
California’s Jurisdiction over Sanofi: There is some question of whether the California court has jurisdiction over Sanofi. The Federal Circuit held that the potential lack of personal jurisdiction in the transferred venue does not weigh heavily against transfer. “There is no requirement under § 1404(a) that a transferee court have jurisdiction over the plaintiff or that there be sufficient minimum contacts with the plaintiff.”
Court Congestion: This is a speculative factor and given little weight.
In re Volkswagen – Mandamus Denied:
The plaintiff – MHL – is a small company headquartered in Michigan, but registered in Texas.
In two lawsuits separate lawsuits (both in the Eastern District of Texas), MHL has sued over thirty US & Foreign automobile companies for patent infrignement.
VW has asked that the case be transferred from the Eastern District of Texas to the Eastern District of Michigan.
Multiple Lawsuits: The Federal Circuit identified the “existence of multiple lawsuits” involving the same patents and overlapping issues to be “a paramount consideration when determining whether a transfer is in the interest of justice. … Although these cases may not involve precisely the same issues, there will be significant overlap and a familiarity with the patents could preserve time and resources. Because the district court’s decision is based on the rational argument that judicial economy is served by having the same district court try the cases involving the same patents, mandamus is inappropriate under our precedents.”
Comment: In patent cases, these venue games tend to approach the absurd, and I am surprised that the Federal Circuit has taken these cases so seriously. Defendants want to move out of the Eastern District of Texas because they fear trial and the potential major damage award. The “convenient venue” argument is concocted because the Eastern District of Texas is clearly a “proper forum” with personal jurisdiction over the defendants.
MHL is a patent holding company that registered as a Texas business in June of 2007. That registration appears to have served its purpose – to win the Texas venue argument even though the principles of the business are all located in Michigan. On the other side – it looks like the Federal Circuit refused to consider the two most important facts of convenience in the Genentech case. First, in 2006, Genentech sued MedImmune for patent infringement in the Eastern District of Texas. At that time, Genentech calculated that Texas was perfectly suitable even though neither party was located in the state. Yet, the Federal Circuit held that it was legal error for the district court to consider Genentech’s prior activities in the present motion for Venue. The second issues is jurisdiction – it just does not make sense to transfer a case to a new forum without some assurances that the court has personal jurisdiction over the parties.
Disclaimer: I just noticed that my former firm MBHB (who is now a sponsor of Patently-O) is involved in the Genentech case. I do not represent any clients these days. One reason why I have enjoyed having MBHB as a sponsor is that the firm has never tried to exert editorial control over the blog or its content beyond the layout of the firm’s ad.
Merger: Lumileds owns a patent covering a light-emitting diode (LED) with an electrically conductive window layer that is both brighter and more efficient than other LEDs. The conductive layer helps spread the flow of electrical current avoid “current crowding.”
At issue in this case is the impact of a corporate merger/buyout on a settlement agreement that included a promise to not challenge a patent’s validity.
Lumileds and Epistar have signed at least two prior settlement agreements involving the patent at issue here. In those agreements, Epistar agreed to pay a licensing fee for certain products, but reserved its right to challenge the patent if Lumileds asserted the patent against other patents. A third company, UEC, agreed that neither it nor its successors would later challenge the validity of the Lumileds patents.
Subsequently, Epistar purchased UEC, and the patentee argued that UEC’s agreement should also bind Epistar. On appeal, the Federal Circuit partially rejected that argument – holding that the UEC settlement continues to bind the parties, but only “as understood and intended by them, according to its ordinary terms.” Thus, even though Epistar took on all the legal obligations of UEC, Epistar can still challenge the Lumileds patent if the case does not involve UEC related products.
UEC’s settlement agreement has preclusive effect upon Epistar only “to the same extent as upon [UEC it]self.” Restatement (Second) of Judgments § 43 (1982). The preclusive effect of that agreement, if any, is limited to UEC’s pre–Epistar product lines. To paraphrase this court in International Nutrition v. Horphag Research, Epistar’s acquisition of UEC does not have the effect of limiting Epistar’s rights that are unrelated to the product lines it acquired from UEC. Accordingly, this court overturns the Commission’s final determination that Epistar is estopped from challenging validity of the ’718 patent when asserted against its own products, separate from the UEC–Lumileds settlement agreement.
Here, the court could have done well to cite the Supreme Court’s decision of Lear v. Adkins and its statements favoring the ability to challenge patent validity based on on “the strong federal policy favoring the full and free use of ideas in the public domain.”
