Posts Tagged: "Patent Litigation"

Three of the judicial emergencies, just less than 10 percent of all judicial emergencies in the U.S. federal court system, are in the U.S. District Court for the Eastern District of Texas (E.D. Tex.). With the judicial vacancies in E.D. Tex., the concern is that a growing docket of patent infringement cases could create a bottleneck for the court, greatly increasing the amount of time that it takes the court to issue a decision. Business litigation is typically given a backseat to criminal litigation in district courts as American law upholds a suspected criminal’s right to a speedy trial. The vacancies also naturally result in an increased percentage of U.S. patent infringement cases assigned to Judge Rodney Gilstrap. This January, we reported that Judge Gilstrap could be deciding as much as 20 percent of all patent infringement cases filed in U.S. district courts. The fact that one judge could be deciding as much as one-fifth of the patent infringement docket at the district court level seems a little less than democratic.

Nome, Alaska and San Juan, Puerto Rico are both home to a federal courthouse where, ostensibly, under the recent Acorda Therapeutics holding and subsequent court decisions, a generic pharmaceutical company will be subject to personal jurisdiction if they file an Abbreviated New Drug Application (ANDA) with the Food and Drug Administration (FDA). In Acorda Therapeutics, Inc. v. Mylan Pharmaceuticals, Inc., 817 F.3d 755 (Fed. Cir. 2016), the Federal Circuit held that an ANDA filer opens themselves up to nationwide personal jurisdiction merely by virtue of filing an ANDA application. This is a broad holding that, in effect, subjects a generic company to personal jurisdiction in any forum that has a district court.

The court decided to award enhanced damages in this case because of egregious behavior on behalf of Samsung, including attempts to copy the technology and demonstrably false testimony given by Samsung. For example, Samsung’s representatives testified under oath that they only became aware of Imperium IP’s patents in June 2014, when the infringement action was first brought to court. Depositions and other discovery proved this to be incorrect. One witness who worked at ESS Technologies, the company to which the ‘884 patent was first assigned, testified that Samsung sought specific information on anti-flicker and flash technology. It was also proven that Samsung had previously attempted to purchase the patents-in-suit from Imperium, concealing its identity through a patent broker. Instead of June 2014, the court found that Samsung knew about Imperium’s patents since at least April 2011.

On Wednesday, August 17th, respiratory health device developer ResMed Inc. (NYSE:RMD) of San Diego, CA, announced that it had filed multiple legal actions against Fisher & Paykel Healthcare (NZE:FPH) of Auckland, New Zealand. ResMed is alleging that multiple Fisher & Paykel products are infringing upon multiple patents and is seeking an injunction banning the importation of those products. ResMed filed actions with the U.S. International Trade Commission (ITC) and the U.S. District Court for the Southern District of California (S.D. Cal.) as well as courts in Germany and New Zealand.

Global Interactive Media is attempting to enforce its rights on a patent which has expired. The ‘907 patent originally issued in October 2011, lapsed effective last October because of a failure to pay maintenance fees. Despite the expiration of the patent, Global is able to bring suit because of the six year statute of limitations on patent infringement actions. Because the patent was issued on October 4th, 2011, Global must use that as a starting date for any damage reward for patent infringement and doesn’t benefit from the full six year statute. As well, because the patent expired on October 4th, 2015, Global cannot seek damages for infringement occurring after that date.

A lack of written opinion in the Rule 36 affirmance issued by Federal Circuit wasn’t an issue for PCT’s counsel. “These types of results reflect a wholesale rejection of the laundry list of appellate issues Holland had attempted to raise,” Laurus noted. “Prompt resolution of this is better than some lengthy opinion that might issue months down the road.”

In PCT International, Inc. v. Holland Electronics, LLC, the use of a Rule 36 judgment is particularly disconcerting because the Federal Circuit upheld the issuance of a permanent injunction by the district court. Since the Supreme Court’s decision in eBay v. MercExchange over a decade ago it has become increasingly difficult, indeed at times impossible, for victorious patent owners to enjoy exclusive rights once they have prevailed in a patent infringement litigation. Issuing a Rule 36 judgment where the patent owner was victorious and a permanent injunction stands robs the patent owner community of vital Federal Circuit precedent that could otherwise be used to inform district courts on the appropriateness of this extraordinarily important remedy.

The analysis of unique patent numbers asserted each year surprisingly suggested a decline since 2010. This is an important measure, because it shows that the rise in the number of lawsuits reported by many studies is the result of only a few players (plaintiffs) who had to file many cases due to AIA and joinder rules. Additionally, although it was assumed by many experts that the number of patents per case will increase over time in order to reduce the risk of invalidation through IPR, that number has not changed significantly. In fact, it dropped last year.

Renowned patent litigator and champion of independent inventors, Raymond P. Niro, has passed away while traveling in Italy. Throughout his career he was a champion for the inventor facing long odds due to widespread patent infringement by large multinational corporations. So loathed by some was Niro that he was the one originally referred to as “the patent troll” by the media due to his representation of innovators against giant technology companies.

There is simply no reason for so many patent cases to wind up in a district with so little relation to those cases. Basic principles of equity and justice don’t vanish just because a patent is involved. The court hearing a patent case should have a real interest in the case, just like any tort or contract case. The Eastern District of Texas has literally created a local industry of patent litigation, intentionally or not. Even local businesses acknowledge it and exploit it. Patent venue reform is long overdue, and it’s something that Congress can and should get done.

During 2016’s second quarter, plaintiffs filed a total of 1,282 patent infringement cases in U.S. district court. This is a 33 percent increase in the 958 patent cases filed during the first quarter but data suggests that the second quarter tends to see the highest level of infringement cases over all other quarters according to Lex Machina data scientists Brian Howard. “We would expect a jump up from the first quarter,” he said. The first quarter was also a trough for patent infringement cases after last November’s massive number of 847 patent cases, just more than 100 cases less than the entire docket for this year’s first quarter. “The rise we’ve seen puts this year on track with 2011 or 2012 rather than the last two years,” Howard said.

Primo’s response of the ‘427 patent is evidence of a dismissive attitude towards someone else’s intellectual property right. Again not shocking, but what is interesting is that this London based company has financial backing from an investor with a name very familiar to those following the American high tech industry: Zuckerberg. Randi Zuckerberg, the sister of Facebook Inc. (NASDAQ:FB) CEO Mark Zuckerberg, is listed under “Investors & Advisors” in the press room section of Primo Toys’ website. A frequent member of our Companies We Follow series, Facebook obtains a great many patents, 374 U.S. patents in 2015 alone. There’s no clear direct link between the two companies.

On one hand, LifeTech argues that the Federal Circuit ruling was in conflict with the text and structure of the Patent Act as well as the presumption of extraterritoriality. Expanding the reach of the extraterritoriality in patent law, it claims, would distort the incentives for multinational companies to supply components from facilities in the United States, potentially causing long-term economic damage and disrupting the international system of national patents. On its side were the Solicitor General and amici curiae who also believe that if the ruling were upheld, it would likely interfere with modern global supply logistics and disproportionately burden U.S. manufacturers with global operations.

This case arrived at the Federal Circuit on an appeal brought by BASCOM from the district court’s decision to grant a motion to dismiss under Rule 12(b)(6). In the majority opinion Chen made much of the civil procedure aspects of a 12(b)(6) motion, as well he should. Frankly, it is about time that the Federal Circuit notice that these patent eligibility cases are reaching them on motions to dismiss. This should be overwhelmingly significant in virtually all cases given that a motion to dismiss is an extraordinary remedy in practically every situation throughout the law. Simply put, judges are loath to dismiss cases on a motion to dismiss before there has been any discovery or any issues are considered on their merits. That is, of course, except when a patent owner sues an alleged infringer.

The waters surrounding Section 101 of the Patent Act are as muddied as they come. The statute sets forth only in broad strokes what inventions are patentable, leaving it to the courts to create an implied exception to patentability for laws of nature, natural phenomena, and abstract ideas. It has been difficult for lower courts to determine whether an invention falls within one of these excluded categories, and the U.S. Supreme Court has refused to provide a definition of what constitutes an “abstract idea.” Nonetheless, the Court in recent years has laid several foundation stones in Bilski, Mayo, Myriad and Alice for a bridge over these troubled waters. Trying to build upon these, the Federal Circuit issued two recent opinions dealing with Section 101: Enfish, LLC v. Microsoft Corporation and In re: TLI Communications LLC Patent Litigation. However, these decisions only create more confusion and cannot provide a safe means of passage over the turbulent waters of patent eligibility.