Posts Tagged: "Patent Litigation"

The district court determined that it lacked subject matter jurisdiction because Preston’s state-law claims did not arise under federal law and Nagel’s patent counterclaims did not present a justiciable case or controversy under Article III because the patent dispute was not imminent. Therefore, the district court remanded the case and Nagel timely appealed… The AIA and its strengthening of federal court jurisdiction over patent claims did nothing to override the rule that a district court decision to remand a case to state court is not appealable under §1447(d).

The Court determined that the scope of the arbitration provision did not cover the intellectual property claims before the district court because the arbitration provision only covered the obligations established by the Agreement (the promotion of the plaintiff’s products).

Rothschild sued ADS for patent infringement of Rothschild’s patent related to a home security system. The district court granted Rothschild’s motion to dismiss and denied ADS’s cross-motion for attorney fees, finding that Rothschild did not engage in conduct sufficient to make the action exceptional under 35 U.S.C. § 285. ADS appealed, and the Court reversed and remanded. The Court found that the district court abused its discretion citing three reasons.

In the Federal Circuit case of Checkpoint Systems v. All-Tag Sec, The Federal Circuit held that the district court erred in finding this case exceptional under 35 U.S.C. § 285, and it reversed its award of attorney fees to the defendants. The record showed that the plaintiff’s charge of infringement was reasonable and the litigation was not abusive or brought in bad faith.

Joint-defense groups lower costs and increase efficiencies for all defendants in the groups. Certain prominent patent litigation boutiques and Big Law departments have skillfully made a business of being retained by many of the accused infringers in a single multi-defendant case. Even if counsel is not shared among defendants, the benefits of joint-defense groups inure greatly to small- and medium-sized companies that gain the benefit of top-notch defense teams retained by larger tech companies, without having to pay for them. Joint-defense groups also leverage economies of scale to accomplish more at lower costs for everyone. For instance, filing four or five IPR petitions may be feasible when those costs are spread around a group, but prohibitive for any individual defendant. In short, the pre-TC Heartland framework provided significant cost-savings and efficiencies to defendants, and in particular, small- and medium-sized companies.

The TC Heartland decision strikes me as more anti-business than it is anti-patent. In the wake of the Supreme Court’s decision all patent owners will now be forced to seek remedy for patent infringement where the defendant is incorporated or where the infringing defendant has a significant place of business. In other words, all patent owners will in theory have to fight patent infringement disputes against domestic corporations on the home turf of the infringer… It also seems unlikely that TC Heartland will do anything about any lingering patent troll problem. As long as America’s technology companies continue to pay extortion there will be bad actors. Trolls will be trolls whether it is in the Eastern District of Texas or somewhere else, and it is recklessly naïve for anyone to think otherwise.

We believe that the fallout from the Court’s ruling last week will be less dire for patent owners than most commentators predict. The conventional wisdom is that TC Heartland will cause a mass exodus of patent filings from the Eastern District of Texas and other supposedly plaintiff-friendly venues to Delaware, the Northern District of California and, to a lesser extent, the other states. The assumption underlying this view is that all those plaintiffs will be forced to file in the state where the defendant is incorporated. Yet even post-TC Heartland, patent owners have options and can continue to be strategic about how and where they proceed.

The Court first addressed whether the district court’s decision awarding Halo pre- and post-judgment interest and ordering the parties to either file a stipulation on the amount of interest or file briefs explaining their positions constituted a “final decision” appealable under § 1295(a)(1). The Court noted that the district court had not resolved the parties’ dispute on the calculation of pre- and post-judgment interest before Pulse appealed. As a result and based on Supreme Court precedent, the Court found that the district court’s pre- and post-judgment interest decision was not “final” because the court had not “determine[d], or specif[ied] the means for determining the amount” of interest.

“What we do know is that motion practice will heat up and courts must determine how they want to handle the influx of motions to dismiss and related challenges with no clear instruction from TC Heartland,” Storm said. “Many defendants will likely move to dismiss or transfer venue, and for the latter, may take the step to proactively file in their chosen jurisdiction and then request transfer to such jurisdiction.”

Jenner & Block’s demand in the arbitration was for more than $10.2 million in hourly fees, which amounted to more than 70% of the net recovery obtained by Parallel Networks in the Oracle case and more than 110% of the net recovery obtained by Parallel Networks in the QuinStreet case. Jenner & Block justified this extraordinary amount by claiming that it had expended more than 24,000 billable hours in the Delaware Cases during the 18 months that it had represented Parallel Networks. Accepting Jenner & Block’s claim at face value would mean that Jenner & Block attorneys were purportedly billing Parallel Networks at a rate of nearly 44 hours per day, seven days a week, 365 days per year for the entire 18 months period of the representation. This was a rather startling claim given that the Oracle case was lost at the summary judgement stage and that the QuinStreet case never progressed much beyond the discovery phase.

Bob Stoll: ”And it is the international exhaustion holding that is particularly troubling. Sales abroad act independently from the US patent system and there is no impact from the US patent system on those sales. Yet in this decision, the Supreme Court says that the foreign sale now diminishes patent rights in the US. All sorts of goods, including life-saving pharmaceuticals, are sold at lower prices in poor nations. This decision will encourage powerful foreign groups to gather products up and send them back to the US to get the higher prices. Or, companies will not be able to lower prices and sell their products in those countries. Both the poor in distant lands and the innovators in the US will suffer.”

The Supreme Court determined that when a patent owner sells a product the sale exhausted patent rights in the item being sold regardless of any restrictions the patentee attempts to impose on the location of the sale. In other words, a sale of a patented product exhausts all rights — both domestic and international… Notably, the Supreme Court rejected the Government’s international exhaustion compromise, which would have been to recognize that a foreign sale exhausts patent rights unless those rights are expressly reserved. The Supreme Court found this to be nothing more than public policy, focusing on the expectations between buyer and seller rather than on the transfer of patent rights as required by the patent exhaustion doctrine.

The Eastern District of Texas granted a preliminary injunction against Aurobindo in favor of Mylan in the case of Mylan Institutional LLC v. Aurobindo Pharma Ltd. On appeal at the Federal Ciruit, Aurobindo challenged three district court findings: 1) it was likely that Aurobindo infringed; 2) Aurobindo failed to raise a substantial question of validity; and 3) there was irreparable harm to Mylan. The Federal Circuit found that, while the district court made some errors, it correctly analyzed one of the three Mylan patents, and the preliminary injunction was affirmed.

This marks the third return to the Federal Circuit of a dispute (the 050 case) between the ArcelorMittal Appellants and the AK Steel Appellees… Overall, the Federal Circuit affirmed the judgment invalidating ArcelorMittal’s reissue patent, finding that the district court: (1) possessed subject matter jurisdiction when it granted summary judgment, (2) properly followed the Court’s most recent mandate on remand, and (3) properly exercised its discretion to deny a Rule 56(d) request for new discovery on commercial success… When appropriate given all of the circumstances, a district court may have jurisdiction to consider claims of a reissue patent on remand, although the claims were not asserted at trial, e.g. if the reissue claims are sufficiently connected to the original case and the remand for such consideration is requested. A case or controversy is not moot, and jurisdiction is not avoided, by tendering an unexecuted and conditional covenant not to sue.