In our continuing coverage of the post-TC Heartland landscape, the Federal Circuit recently clarified that venue is proper in only one district per state in In re BigCommerce, Inc., 2018-122 (Fed. Cir. May 15, 2018) (slip op.). Last year, the Supreme Court held in TC Heartland that a company resides where it is incorporated. Among the many unresolved questions flowing from that decision involved the treatment of patent venue in states with multiple districts. Specifically, no appellate court had determined whether a domestic corporation incorporated in a multi-district state “resides” only in the single judicial district where it maintains a principal place of business or registered office, or whether venue could be proper in all judicial districts within that state.
In a May 10, 2018 ruling, discussed earlier on this blog, Magistrate Judge Payne affirmed the jury’s willfulness finding largely on the ground that TCL did not proffer any evidence that it held a subjective, good faith belief that it did not infringe the patent-in-suit or that the patent was invalid. The fact that TCL filed over a dozen petitions for inter partes review of the asserted patents did not mean, as a matter of law, that TCL held such a subjective, good faith belief. The ruling demonstrates the importance, post-Halo, of alleged infringers performing their own investigation of allegations against them – mere pleadings taking non-infringement or invalidity positions may not suffice to defeat a willfulness allegation. Continue Reading Willfulness Finding in EDTX Ruling in TCL v. Ericsson Illustrates the Risk to Accused Infringers of Failing to Investigate Allegations
On May 10, 2018, Magistrate Judge Payne reconsidered his previous March 2018 order which had vacated a jury award, and granted plaintiff Ericsson’s motion for reconsideration. The May ruling makes clear that the accused infringer bears the burden of production for royalty-stacking and other mitigatory arguments on damages. Whereas the March ruling excluded Ericsson’s damages expert for failing to account properly for the royalty stack on the accused products that his damages theory implied, the May ruling scrutinized the record and found that TCL had failed to submit any evidence into the record that would support even a jury instruction on royalty stacking. The decision underscores the importance of developing an affirmative record in support of each element of a damages theory or counter-theory.
The ruling also stands in stark relief to Judge Selna’s 2017 ruling in the Central District of California case between the parties. There, Judge Selna determined that approximately $20 million would represent a fair, reasonable, and non-discriminatory (FRAND) royalty for TCL’s infringement of Ericsson’s worldwide portfolio of patents declared essential to various telecommunications standards (SEPs) – thousands of patents that, the parties agreed, represented a significant share of the value of the technology in those standards.
Further to our ongoing coverage of post-TC Heartland patent litigation, in a recent case in the Western District of Wisconsin, the court granted defendants’ motion to transfer for improper venue. In doing so, it rejected the plaintiff’s contention that venue can be proper where one corporation “works closely” with another corporation resident in the jurisdiction.
In Unity Opto Technology Co. Ltd. v. Lowe’s Home Centers LLC and LG Sourcing, Inc., 18-cv-27-jdp (W.D. Wis.) (May 4, 2018), co-defendant Lowe’s Home Centers has a place of business in the district, namely a physical store located in Plover, Wisconsin. However, co-defendant LG Sourcing does not own, lease, maintain, or operate any facilities in the district, nor does LG Sourcing employ any residents that reside in the district either.
On Tuesday, May 8, 2018, the International Trade Commission (“ITC” or the “Commission”) published the final changes to its rules of practice and procedure. The Commission stated that the changes are intended to both modernize and simplify Commission practice as well as to increase the speed and efficiency of investigations. In total, the Commission provided eleven amendments/additions to its current rules of practice and procedure, which take effect beginning on June 7, 2018. Going forward, the new rules will apply only to those Section 337 investigations instituted after that date; any investigations currently pending or filed before June 7 will proceed under the current rules. Of these changes, several may have a lasting impact on practice in Section 337 investigations, while other changes are minor but still require practitioners to take note.
The U.S. Patent and Trademark Office announced a propose change to the standard for construing both unexpired and amended patent claims in Patent Trial and Appeal Board (PTAB) proceedings under the America Invents Act (“AIA”). The change would replace the current Broadest Reasonable Interpretation (“BRI”) standard with the standard articulated in Phillips v. AWH Corp. 415 F.3d 1303 (Fed. Cir. 2005) (en banc). This change would harmonize the claim construction standard applied in inter partes review, post-grant review, and covered business method patent proceedings before the PTAB with the one used by federal district courts and the International Trade Commission. The proposed amendment would also allow the PTAB to consider any prior claim construction determination concerning a term of the involved claim in a civil action, or an ITC proceeding, that is timely made of record in an AIA proceeding.
The Federal Circuit recently overturned a decision estopping the plaintiff from pursuing its infringement claims in the United States District Court for the Eastern District of Arkansas, and clarified the effect of reexamination on equitable estoppel and laches. In John Bean Technologies Corporation v. Morris & Associates, Inc., the Federal Circuit held that District Court abused its discretion applying equitable estoppel to bar John Bean Technologies Corp.’s (“John Bean”) infringement action without considering the impact of an intervening ex parte reexamination on the claims of the asserted patent.
As we noted in our blog post last week, the USPTO held its “Chat with the Chief on SAS” webinar on April 30, 2018, to advise the public on the implications of the Supreme Court’s opinion in SAS Institute for practice before the Board going forward. The panelists were Chief Judge David Ruschke, Vice Chief Judge Tim Fink, and Vice Chief Judge Scott Weidenfeller.
The panelists noted that out of approximately 800 cases currently pending before the Board, about 18-20% have been instituted on fewer than all challenged claims. (The percentage of petitions instituted on only a subset of all challenged grounds was not available as of the date of the webinar.)
The Federal Circuit’s decision in Vanda Pharm. Inc. v West-Ward Pharm. Intl. Ltd. (2016-2707, 2016-2708 April 13, 2018) provided some good news on the subject matter eligibility front for innovators and other stakeholders in the personalized medicine space, as discussed in a previous post. So there is some hope for getting issued claims that will withstand a validity challenge under the Mayo/Alice framework. But what about enforcement? How does one prove infringement of claims that require various discreet steps that can, and typically are, performed by separate actors?
On Tuesday, the U.S. Supreme Court issued two important patent law opinions that relate to the inter partes review procedure introduced by the America Invents Act: Oil States Energy Servs., LLC v. Greene’s Energy Grp., LLC, which upholds the constitutionality of inter partes review, and SAS Institute, Inc. v. Iancu, which requires the Patent Trial and Appeal Board to adjudicate the validity all patent claims challenged in a petition for inter partes review if the Board decides to adjudicate the validity of any claim challenged in that petition. Yesterday, the PTO issued a memo describing how pending trials will be conducted and how new petitions will be addressed in light of SAS Institute, but important questions remain.