The U.S. Supreme Court announced its ruling in TC Heartland v. Kraft Foods Group Brands LLC on May 22, 2017, a patent infringement case that has garnered national attention for its implications on venue. This case originated with a motion to transfer an action filed in the District of Delaware to the Southern District of Indiana, where the Defendant accused of patent infringement is headquartered. However, the national attention has focused on the possibility that a significant amount of other patent litigation may now shift to the District of Delaware. The U.S. Supreme Court granted certiorari at the end of last year and heard oral arguments in March to address the question of “where proper venue lies for a patent infringement lawsuit brought against a domestic corporation.” The Court has now provided a response to this key question, although a few issues still remain.
Serge Subach is an Associate based in the firm’s Boston office. His intellectual property practice focuses on patent litigation, and his experience spans broad technical fields including software, consumer electronics, and medical devices. Before joining Mintz Levin, Serge worked for TomTom, Inc., where he interfaced between product management and engineering departments in coordinating beta testing of both software and hardware products.
On Monday, March 27, 2017, the U.S. Supreme Court heard oral argument in TC Heartland v. Kraft Foods Group Brands LLC, a case that could have a profound impact on where patent infringement cases may be litigated.
Although this case has focused a lot of attention on the Eastern District of Texas – a hotbed of patent litigation – it wasn’t even filed in that district. TC Heartland moved to transfer a patent infringement action that Kraft Foods filed in the District of Delaware (a distant second to the Eastern District of Texas in terms of the volume of patent litigation) to the Southern District of Indiana, where TC Heartland is headquartered. After that motion was denied, TC Heartland appealed to the Federal Circuit, arguing that the patent venue statute (28 U.S.C. §1400(b)), not the general venue statute (§1391(c)), sets forth the requirements for venue in patent cases, a position that would limit the venues available to plaintiffs in most infringement actions. In denying TC Heartland’s petition, the Federal Circuit reaffirmed its long-standing view that patent suits may be filed in any judicial district in which the defendant sells an allegedly infringing product. But the U.S. Supreme Court granted certiorari on the appeal, perhaps signaling the Court’s willingness to overturn almost 30 years of practice.
The Federal Circuit has again addressed which types of patents are eligible for Covered Business Method (“CBM”) review before the Patent Trial & Appeals Board. Approximately one week after issuing the recent Unwired Planet v. Google decision clarifying the proper standard to determine whether a patent is a CBM patent, the Federal Circuit issued a decision in Ameranth, Inc. v. Agilsys, Inc., which demonstrates the great deal of deference the Federal Circuit may give the Board in determining what constitutes a CBM patent.
A threshold issue for CBM review is whether the challenged patent is a CBM patent and thus eligible for CBM review. As the Federal Circuit explained last week, a CBM patent is statutorily defined as “a patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions.” To fall within the “technological inventions” exception to CBM patents under 37 C.F.R. §42.301(b), the claimed subjected matter as a whole must satisfy two requirements: (1) it must recite a technological feature that is novel and unobvious over the prior art; and (2) it must solve a technical problem using a technical solution.
“You sued them. They stay, period.” This is the conclusion a Texas trial court came to when asked to exclude the designated representative of a party from a hearing where an employee of the other party, a direct competitor, would disclose his employer’s trade secrets. In a case involving misappropriation of trade secrets between direct competitors M-I Swaco (“M-I”), a subsidiary of Schlumberger, and National Oilwell Varco (“NOV”), the trial court held that to exclude NOV’s designated representative from hearing a disclosure of M-I’s trade secrets would be a “total violation of due process.” On May 20, 2016, the Texas Supreme Court disagreed. See In re M-I L.L.C., No. 14-1045, 2016 Tex. LEXIS 389 (May 20, 2016).
M-I and NOV complete in the business of providing mesh screen filters that filter out solid matter in drilling fluid used in oil drilling, a business area known as solid-control. The dispute at issue originated when Jeff Russo, M-I’s former business development manager, accepted a new position with NOV. M-I alleges that Mr. Russo had in-depth knowledge of M-I’s solid-control business, bidding strategies, pricing information, customer preferences, solid-control systems, and deployment strategies. M-I sought injunctive relief, and during an August 28, 2014 hearing on an application for a temporary injunction, it requested to exclude everyone from the courtroom except the parties’ respective counsels, experts, and testifying witness. NOV’s designated representative, Federico Mezzatesta, would be included in the group to be excluded. The trial court denied the request, and M-I petitioned the court of appeals for a writ of mandamus, which was denied. M-I then petitioned the Texas Supreme Court for mandamus relief challenging the trial court’s refusal to exclude Mr. Mezzatesta from the temporary injunction hearing.
It has become a patent litigation trope, discussed at every Silicon Valley water cooler, that patent litigation is broken because all patent cases are tried in the plaintiff-friendly Eastern District of Texas. While this reputation is arguably undeserved, the Eastern District of Texas does end up with the majority of patent cases.
On Friday, March 11, 2016, U.S. Circuit Judges Kimberly A. Moore, Richard Linn, and Evan J. Wallach heard arguments in In re: TC Heartland, LLC, 16-105. The underlying case involves an allegation of patent infringement by Kraft Foods Group Brands LLC, and TC Heartland appeals the denial of a motion to transfer from the District of Delaware to the Southern District of Indiana, where it is headquartered and incorporated. TC Heartland’s appeal centers on the issue of whether 28 U.S.C. § 1400(b) or § 1391(c) should control venue in patent cases. Section 1400(b), which TC Heartland argues should control, states that venue in patent litigation is appropriate only (a) where the defendant resides or (b) has committed acts of infringement and has a regular and established place of business. Section 1391(c) states that venue is appropriate wherever the defendant is subject to personal jurisdiction.
A controversial section of the Lanham Act, which prohibits the registration of immoral, scandalous, or disparaging marks, may be unconstitutional under the First Amendment. The Federal Circuit has now decided to consider this question en banc and revisit a long-standing precedent that Section 2(a) is not an unconstitutional restriction of free speech. For full details on the Federal Circuit’s review of In re Shiao Tam, please see our full post on our Copyright & Trademark Matters blog.