Posts Tagged: "Dodocase VR v MerchSource"

Forum Selection Clauses May Bar an IPR

Almost anyone can, by statute, request an inter partes review (IPR) of an issued patent, but may limit their right to do so contractually, such as through licensing agreements or non-disclosure agreements (NDAs). These agreements may contain clauses that limit the forum in which any dispute between the parties can be litigated. The Patent Trial and Appeal Board (PTAB) itself has consistently declined to enforce such forum selection clauses, finding that it lacks authority to enforce contracts between the parties, and, in any case, its jurisdiction is statutory and not limited by private agreements between the parties. However, in Nippon Shinyaku Co. v. Sarepta Therapeutics, Inc., the U.S. Court of Appeals for the Federal Circuit recently held that a petitioner was barred from bringing an IPR as a result of a contractual agreement with the patent owner.

Federal Circuit to decide if licensing agreement can prevent validity challenge at PTAB

The Federal Circuit has agreed to expeditiously hear an appeal from Dodocase VR, Inc. v. Merchsource, LLC No. 17cv7088 (N.D. Cal.) (“Dodocase”) in which the district court determined that a forum selection clause could not be overridden to allow a patent validity challenge at the PTO without breaching the contract containing the clause.  The court issued a preliminary injunction ordering the withdrawal of the petitions MerchSource had filed with the Patent Trial and Appeal Board (PTAB).  Dodocase at 24.  In its arguments, MerchSource strongly relied on the public’s interest in permitting the PTO to correct its mistakes.  This interest, however, was not found to outweigh the policy favoring enforcing parties’ agreed upon selection of a forum.  Id. at 17.

Doubling Down on Double Adjudication – the MerchSource post-issuance review model

Imagine this: you become aware of a patent that might cover your products, so you reach out to the patentee to secure a license agreement. After negotiating and entering the agreement, you later decide you’d like to pay less or no royalties. So you threaten to file some IPR and PGR petitions, and when that fails to secure more favorable terms, you breach the contract. If you find yourself sued for patent infringement you protest to the court that as the agent of public interest, you must be allowed to simultaneously challenge the validity of the patents not only before that court, but also before the PTAB. On the same grounds. At the same time. This is what at least one licensee is trying, and the Federal Circuit may soon provide guidance on the viability of this double-adjudication-for-the-public-good-tactic.