Articles Posted in Federal Circuit Cases

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On May 5th, the Federal Circuit denied Microsoft’s mandamus petition to force the transfer of a case filed by PersonalWeb Technologies, LLC against it in the Eastern District of Texas. Microsoft asserted that District Court Judge Leonard Davis abused his discretion in denying the transfer where a similar request by Apple resulted in the transfer of a case over the same patents.

Writing for the three judge panel of Judges Lourie, Dyk and Reyna, Judge Lourie explained in the order:

Although the question of transfer in this case is close, we cannot say that the district court’s determination amounted to a clear abuse of discretion. . . . Deference as to the proper administration of justice is particularly appropriate in this type of circumstance, where the trial court is “familiar with [an] . . . asserted patent and the related technology . . . coupled with the fact there is co-pending litigation before the trial court involving the same patent and underlying technology” and, as the district court noted, Microsoft and Yahoo! plan on calling at least some of the same witnesses. In re Vistaprint Ltd., 628 F.3d 1342, 1347 (Fed. Cir. 2010); In re Volkswagen of Am., Inc., 566 F.3d 1349 (Fed. Cir. 2009); Regents of the Univ. of Cal. v. Eli Lilly & Co., 119 F.3d 1559 (Fed. Cir. 1997).

Among other influential elements in the analysis, the Court noted that: (i) “Microsoft’s accused technology apparently underlies at least one of Yahoo!’s products at issue.”; (ii) Microsoft contradicted itself on the question of judicial economy and efficiency by admitting these interests were served in light of its “indemnity relationship with defendant Yahoo!”; and (iii) Yahoo! did not file a petition seeking transfer.

Judge Lourie concluded as follows:

Although judicial economy cannot dominate the § 1404(a) analysis, which generally calls for transfer where the convenience factors strongly weigh in favor of the transferee forum, the district court’s conclusion did not rest entirely on judicial economy. It noted that any documentary sources of proof and employee witnesses of PersonalWeb would reside in the Eastern District of Texas. It further found that the Western District of Washington had no authority to compel a non-party witness to testify. Under these circumstances and the relatedness of the suits against Microsoft and Yahoo!, it is not entirely self-evident that the transferee venue is more convenient and that transfer would be in the interest of justice. We therefore cannot say that Microsoft has met the demanding standard for mandamus relief.

The order in the case, In re: Microsoft Corp., No. 14-00123, U.S. Court of Appeals for the Federal Circuit, is available HERE.

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It is rarely in doubt that a drug-maker has the right to bar generic entry into an exclusive market when the drug-maker’s patent is found valid and infringed by a generic applicant, or when such a finding is deemed reasonably likely by the court.

For this reason, it is somewhat surprising that Chief Judge Roberts denied drug-maker Teva’s request to reinstate an injunction against generic entry against its Copaxone® drug product to treat multiple-sclerosis. Notably, all of Teva’s patents-at-issue will expire at least by September 2015. While the length of remaining patent term could have been a factor in the denial of the request, it is difficult to know. The ruling itself is less than 200 words.

The Chief Justice acknowledged that Teva has shown “a fair prospect of success on the merits,” the prong of the analysis that often trips a patentee’s application for injunctive relief. Instead, this relief was denied because the alleged availability of money damages for past patent infringement was found adequate. Thus, the Chief Justice explained, “the extraordinary relief that Teva seeks is unwarranted.”

While it is very rare for the Supreme Court to reinstitute (rather than continue) a commercial injunction pre-hearing, this decision may spur a certiorari challenge to the long-standing view that drug-makers are typically entitled to injunctive relief against generic entry through patents found valid and infringed, or likely so.

Teva’s “fair prospect of success on the merits” is perhaps more interesting because it suggests the Supreme Court agrees with the original premise of Teva’s petition for certiorari, and will reverse the Federal Circuit’s de novo review standard for at least some matters of claim construction.

The case is Teva Pharmaceuticals USA Inc. et al. v. Sandoz Inc. et al., case number 13-854, in the U.S. Supreme Court.

Click HERE to see the order denying the injunction.

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In Microsoft Corporation v. DataTern, Inc., the Federal Circuit made clear that conditional counterclaims and conditional statements of infringement alleged against a declaratory judgment plaintiff are insufficient to establish declaratory judgment jurisdiction. The Court noted, “[a] declaratory judgment plaintiff must plead facts sufficient to establish jurisdiction at the time of the complaint, and post-complaint facts cannot create jurisdiction where none existed at the time of filing.” The Court further noted that, even if post-complaint facts could be considered in evaluating DJ jurisdiction, the defendant/patentee’s conditional allegations and a refusal to grant a covenant not to sue are not the type of facts to support DJ jurisdiction. …

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The Federal Circuit has issued its highly-anticipated decision in Lighting Ballast Control LLC v. Philips Electronics North America Corp., 2012-1014 (Fed. Cir. Feb. 21, 2014). The en banc decision of Chief Judge Rader and Judges Newman, Lourie, Dyk, Prost, Moore, O’Malley, Reyna, Wallach, and Taranto holds that the de novo standard of review should continue to apply to claim construction issues. As the Court summarized:

“[W]e apply the principles of stare decisis, and confirm the Cybor standard of de novo review of claim construction, whereby the scope of the patent grant is reviewed as a matter of law. After fifteen years of experience with Cybor, we conclude that the court should retain plenary review of claim construction, thereby providing national uniformity, consistency, and finality to the meaning and scope of patent claims. The totality of experience has confirmed that Cybor is an effective implementation of Markman II, and that the criteria for departure from stare decisis are not met.”

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In Atlantic Marine Const. Co., Inc. v. U.S. Dist. Court for Western Dist. of Texas, 571 U. S. _ (2013), 2013 WL 6231157 (December 3, 2013), the Supreme Court not only reiterated that a valid forum selection clause must be given controlling weight, with rare exception – when considering a transfer motion under a 1404 analysis – but unamimously held that the analysis in those rare exceptions may give no weight to plaintiff’s choice of forum and may only consider counterveiling public-interest factors. “When parties agree to a forum-selection clause, they waive the right to challenge the preselected forum as inconvenient or less convenient for themselves or their witnesses, or for their pursuit of the litigation. A court accordingly must deem the private-interest factors to weigh entirely in favor of the preselected forum.”

Recognizing the applicability of Atlantic Marine to a forum selection clause in a patent license, yesterday the Supreme Court vacated and remanded a Federal Circuit decision refusing to enforce a forum-selection clause in an EDTX patent suit that, by the agreement, should have been filed in New York. See Broadcom Corporation v. USDC ED TX, et al., case number 12-1475.

Atlantic Marine settles a circuit split in authority. In the Third Circuit, guidelines for the applicability of a forum selection clause were established by Jumara v. State Farm Ins. Co., 55 F.3d 873, 883 (3d Cir.1995). Atlantic Marine, revises Jumara‘s guidance. It appears now that a forum selection clause is entitled to more than the “substantial consideration” – called for by Jumara – in a 1404 transfer analysis. It further appears that one may no longer rely on Jumara’s reasoning that a forum selection clause is but “one facet of the convenience-of-the-parties consideration.” Private-interest factors, as noted above, must now “weigh entirely in favor of the preselected forum.”

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The Federal Circuit Advisory Council announced today its adoption of a Model Order Limiting Excess Patent Claims and Prior Art. The Council offered the Model Order “to aid trial courts in the exercise of their discretion in crafting orders tailored to the facts and circumstances of each case.” In adopting the Order, the Council considered several key issues, such as:

What. What should be limited—number of claims, number of prior art references, number of invalidity theories, number of terms for claim construction, number of accused products, or some combination?

Timing. When should the limits on asserted claims and prior art references
take effect? Should the limits be applied only once, or should a phased
approach gradually narrowing the scope of the case be followed? How
should the need for discovery be balanced against the value of early
streamlining?

Limitations. How should limits be formulated? Should the limits on
number of claims apply per case or per patent? How should the limits be
adjusted based on the variety of case-specific factors that courts have
considered? How can the due process rights of litigants be protected?

Effect. What effect does the judgment have on non-elected patent claims
and prior art references?

The Council concluded that “default numerical limits on the number of asserted patent claims and prior art references are workable.” And, a “phased implementation” of numerical limits would “balance the need for discovery against the benefits of early streamlining.”

The Model Order is attached below.

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Today the Federal Circuit held that the Court has jurisdiction to entertain appeals from determinations on patent infringement liability where damages and/or willfulness issues have yet to be decided due to bifurcation. Robert Bosch, LLC v. Pylon Manufacturing Corp., No. 2011-1363, -1364, at 26-27 (Fed. Cir. June 14. 2013). As discussed here, the Federal Circuit decided sua sponte to grant a rehearing en banc on these issues in August 2012.

The Court explained that this case “does not involve the question of whether the district court has the authority to bifurcate the willfulness and infringement issues. As a general matter, it does.” Id. at 22. It “ma[d]e clear that district courts, in their discretion, may bifurcate willfulness and damages issues from liability issues in any given case.” Id. at 26. The Court did observe, with regard to its holding on bifurcation of liability and damages, that “[m]odern patent damages trials, with their attendant discovery, are notoriously complex and expensive. . . . Given the substantial reversal rate of liability determinations on appeal, the whole expense of a damages trial is often wasted. Accordingly, those policy concerns that motivated Congress to grant jurisdiction over cases that are final except for an accounting [of damages] support our holding today.” Id. at 20.

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The U.S. Supreme Court’s much anticipated decision in Association for Molecular Pathology, et al. v. Myriad Genetics, Inc., et al., 569 U.S. ___, issued June 13, 2013. In short, the Supreme Court analyzed whether an isolated DNA sequence is patent eligible in light of the fundamental principle that laws of nature, natural phenomena, and abstract ideas are not patentable. The Supreme Court held that mere isolation of an otherwise naturally occuring genetic sequence of DNA is not patent eligible but that a non-naturally occuring DNA sequence may be subject matter eligible for patenting, so long as the other conditions for patenting are met (e.g., novelty, non-obviousness, written description).

While many divergent views are forming on the impact this decision will have on the biotech industry, its impact on patent litigation in Delaware is broadly predictable. In appropriate circumstances, new patent validity challenges can be anticipated against DNA sequence claims asserted in this District and new litigation may flow from the entry of several new competitors expected to offer genentic tests for various diagnostics, some of which will undoubtedly be the subject of a patent controversy within Delaware’s jurisdiction.

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Today, the Federal Circuit announced that the appeal from Judge Robinson’s decision in Robert Bosch LLC v. Pylon Mfg. Corp., C.A. No. 08-542 (D. Del. 2012) (the Court’s post-trial opinion is discussed here), will be heard en banc to determine whether the Federal Circuit has jurisdiction “to entertain appeals from patent infringement liability determinations when a trial on damages has not yet occurred[,]” and “when willfulness issues are outstanding and remain undecided[.]” In recent years, absent unusual circumstances, Judge Robinson has bifurcated liability and damages in all patent infringement cases before her, such that a trial on damages will commence after the issue of liability is fully adjudicated on appeal.

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The Federal Circuit recently issued a decision applying In re Link_A_Media Devices Corp. and denying a writ of mandamus directing the Judge Stark of the District of Delaware to transfer a patent infringement case to the Northern District of California. The case involved two Delaware limited liability companies as plaintiffs and four Delaware corporations as defendants. Because the defendants were all headquartered on the west coast, they moved for transfer under 28 U.S.C. § 1404(a), but Judge Stark denied their motions. See Intellectual Ventures I LLC, et al. v. Altera Corp., C.A. No. 10-1065-LPS (D. Del. Jan. 23, 2012).

Three of the defendants sought a writ of mandamus from the Federal Circuit, and the Federal Circuit denied their petition. In re Altera Corp., et al., Misc. Doc. No. 121, at 5 (Fed. Cir. Jul. 20, 2012) (slip op.). In its opinion, the Federal Circuit noted that under Link_A_Media it “has jurisdiction to issue a writ of mandamus to correct a denial of transfer, but only to the extent that the trial court’s analysis amounted to a clear abuse of discretion.” Id. at 3 (citing In re Link_A_Media Devices Corp., 662 F.3d 1221, 1223 (Fed. Cir. 2011)). The Court went on to explain that “the district court afforded the respondents’ choice of forum substantial weight . . . [and] concluded that the convenience of [potential] witnesses was entitled to little weight.” Id. at 2-3.

These were proper considerations according to the Federal Circuit: “[S]tatus as Delaware corporations is not entitled to controlling weight insofar as no office or employees are located in Delaware. Still, the relevant inquiry is broad enough to include the Delaware court’s interest in resolving disputes involving its corporate citizens . . . .” Id. at 3. “Moreover, the decision to deny transfer draws support from the fact that numerous potential non-party witnesses having knowledge related to the engineering and sales of the accused products appear to be located close to Delaware. In light of these circumstances, a rational basis existed for denying transfer of this case.” Id. at 4.

The Court also distinguished Altera from Link_A_Media, noting that Link_A_Media “did not go so far as to limit the trial court’s discretion to deny transfer in this case.” Id. The Court held that Altera was “clearly distinguishable; in it thorough opinion, the district court endeavored to evaluate each of the forum non conveniens factors . . . and there is no clear indication that the court failed to meaningfully consider the merits of the transfer motion. Moreover . . . there are rational grounds for denying transfer given that all of the parties . . . had incorporated in Delaware and some witnesses would potentially find Delaware more convenient.” Id.

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