Further to our ongoing coverage of post-TC Heartland patent litigation, in a recent development from the Northern District of Illinois, the court granted counterclaim defendants’ motion to dismiss for improper venue.  In Shure Incorporated v. ClearOne, Inc., 1-17-cv-03078 (ILND March 16, 2018, Order), the court was blunt in dismissing the plaintiff’s argument regarding the applicability of purported “ancillary” venue.  Plaintiff argued that the doctrine of ancillary venue, where parties are added in conjunction with a compulsory counterclaim are within the court’s supplemental jurisdiction, does not require an independent basis for venue.  The court disagreed, and did not mince words: “[t]his argument is rejected. ClearOne cites no authority for the proposition that the doctrine of ancillary venue (whatever that really is) can override the clear terms of the patent venue statute.”

In properly assessing venue, the court analyzed whether venue was proper under the first part of 28 U.S.C. § 1400(b), which permits a patent infringement action to be brought in the judicial district where the defendant “resides.”  Here, the court dismissed counterclaim defendants’ because both defendants lacked a regular and established place of business in the district.  One defendant was incorporated in Delaware, and the other was based out of California.  The court determined that neither company could be deemed to “reside” in the Northern District of Illinois.

Continue Reading Doctrine of “Ancillary Venue” Does Not Trump <i>TC Heartland</i>

map_2951165992On Monday, January 9, 2017, the U.S. Supreme Court denied, without comment, Mylan Pharmaceuticals’ petition for certiorari to reverse an opinion by the Court of Appeals for the Federal Circuit, which affirmed a broad scope of personal jurisdiction over generic ANDA filers in patent infringement suits under the Hatch-Waxman Act.

Continue Reading Supreme Court Declines to Revisit Broad Personal Jurisdiction Over ANDA Filers

On March 31, 2016, in a blow to the software and entertainment industries, the Federal Circuit denied the International Trade Commission’s (“ITC”) request for a rehearing en banc of the Federal Circuit’s November 10, 2015 decision in ClearCorrect Operating, LLC v. ITC, in which the Federal Circuit found that the ITC’s jurisdiction was limited to “material things” and did not include the ability to bar digital imports.  No. 2014-1527, Slip Op. at 3 (Fed. Cir. Nov. 10, 2015).

Align Technology instituted an ITC investigation in April 2012 claiming that Respondents ClearCorrect Pakistan and ClearCorrect Operating LLC infringed patents relating to technology for repositioning teeth. ClearCorrect made models of the U.S. patients’ teeth which were then scanned and converted into digital data sets, which were then transmitted to Pakistan. In Pakistan the data sets were manipulated and adjusted data sets were sent back to ClearCorrect in the United States.  No physical articles were imported – only a digital data set. In April 2014, the ITC found that ClearCorrect infringed the patents, and issued exclusion and cease and desist orders barring ClearCorrect from importing the data sets.

The case was appealed to the Federal Circuit, and (as we previously discussed here) the panel overturned the Commission’s decision that it had jurisdiction to exclude digital transmissions and items imported digitally. The ITC then petitioned for an en banc rehearing of the case.

Continue Reading Federal Circuit Decides Not to Rehear ClearCorrect Operating, LLC v. ITC, Finding the ITC Does Not Have Jurisdiction over Digital Imports

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On Friday, March 18, the Court of Appeals for the Federal Circuit affirmed two District of Delaware rulings that non-resident defendant generic ANDA filer, Mylan, is subject to personal jurisdiction in two Hatch-Waxman suits filed in the state.  (See Acorda Therapeutics Inc. v. Mylan Pharmaceuticals Inc., No. 14‐935‐LPS (D. Del. Jan. 14, 2015); AstraZeneca AB v. Mylan Pharmaceuticals Inc., No. 14‐696‐GMS (D. Del. Nov. 5, 2014).  For coverage of the oral argument in these appeals, see our prior blog post.)  The Federal Circuit found that specific personal jurisdiction exists over Mylan in Delaware because Mylan’s ANDA filings reliably indicate its intent to engage in actions that will harm plaintiffs’ patent rights in the jurisdiction.  The court did not reach the issue on appeal of whether Mylan’s compliance with Delaware’s registration statute established consent to general personal jurisdiction in the state, an issue on which the lower court opinions split.  However, Judge Kathleen M. O’Malley, concurring in the majority’s judgement, would also have found Mylan consented to general personal jurisdiction in light of Delaware’s interpretation of its registration statute.

Filing an ANDA Satisfies the Minimum Contacts Requirement of Specific Personal Jurisdiction

The court held that “the particular actions Mylan has already taken–its ANDA filings–for the purpose of engaging in that injury-causing and allegedly wrongful marketing conduct in Delaware” satisfy the minimum contacts with Delaware required to establish specific personal jurisdiction.  The court began by observing that, if Mylan had already begun the generic drug marketing activities for which it seeks permission by filing an ANDA, “there is no doubt that it could be sued for infringement in Delaware,” and elsewhere that it seeks to market the generic ANDA products.  Mylan’s ANDA filings, in turn, are “formal acts that reliably indicate plans to engage in” that same infringing activity.  Thus, the ANDA filings, like the contemplated marketing acts they seek approval for, establish personal jurisdiction over Mylan in Delaware.

Continue Reading Federal Circuit Finds Personal Jurisdiction over Mylan in Two Hatch-Waxman Appeals

shutterstock_114454435The Federal Circuit rejected an attempt by accused infringers of U.S. intellectual property rights to have claims litigated in a foreign country in Halo Creative & Design Ltd. v. Comptoir Des Indes, Inc., No. 15-1375 (Fed. Cir. Mar. 14, 2016).  The unanimous panel decision expressed a strong preference for U.S. courts over foreign courts to resolve disputes over U.S. IP infringement, particularly where the alleged infringing acts occurred in the United States.

Plaintiff Halo, a Hong Kong company, sued a Canadian company and a Canadian resident in federal district court for infringement of U.S. design patents, U.S. trademark rights, and U.S. copyrights, all related to Halo’s furniture designs. The district court dismissed the case on forum non conveniens grounds, finding the defendants’ home country of Canada a “superior forum” to resolve the dispute.

Continue Reading Maintaining a Wall Around U.S. Intellectual Property: Federal Circuit says Disputes over U.S. Patents, Trademarks and Copyrights should be Decided by U.S. Courts

EDTXIt 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.

Continue Reading Could the Eastern District of Texas’s Reign Come to an End?

On Monday, January 4, the Court of Appeals for the Federal Circuit heard oral argument in two appeals that may determine what effect the Supreme Court’s Daimler AG v. Bauman decision will have on the exercise of personal jurisdiction over generic pharmaceutical manufacturers in Hatch-Waxman litigation.

Decisions Below Denying Motions to Dismiss for Lack of Personal Jurisdiction
Generic ANDA filer Mylan appealed from denial of its motion to dismiss in AstraZeneca AB v. Mylan Pharmaceuticals Inc., No. 14‐696‐GMS (D. Del. Nov. 5, 2014). Judge Gregory M. Sleet found specific personal jurisdiction over the foreign corporate defendant in Delaware based on Mylan’s sending a Paragraph IV notice letter to AstraZeneca in Delaware. Judge Sleet also found, citing the Supreme Court’s recent holding in Daimler AG v. Bauman, 134 S. Ct. 746 (U.S. 2014), that Mylan’s registration to do business in Delaware did not constitute consent to personal jurisdiction, and thus general personal jurisdiction, in Delaware.

On Monday Mylan also argued its appeal of the denial of a similar motion to dismiss in Acorda Therapeutics Inc. v. Mylan Pharmaceuticals Inc., No. 14‐935‐LPS (D. Del. Jan. 14, 2015). In that case, Chief Judge Leonard P. Stark found specific personal jurisdiction exists over Mylan in Delaware based on Mylan’s sending a Paragraph IV notice letter to the Delaware-incorporated Acorda, even though the notice letter was not mailed to Delaware. Judge Stark, unlike Judge Sleet, also found general personal jurisdiction over Mylan because Mylan consented to personal jurisdiction in the state by voluntarily registering to do business there.

Continue Reading Federal Circuit Hears Argument on Personal Jurisdiction in Two Hatch-Waxman Appeals

On December 17, 2015, Judge Rodney Gilstrap of the Eastern District of Texas (EDTX) ruled that, in light of Alice Corporation Pty. Ltd. v. CLS Bank International, 134 S. Ct. 2347 (2014) (“Alice”), a plaintiff’s position on the validity of the patent-in-suit under § 101 was “objectively unreasonable” and that the harm to the defendants was compounded by the plaintiff  litigating in “an unreasonable manner[,]” meriting an award of attorneys’ fees under 35 U.S.C. § 285. eDekka LLC v. 3balls.com, Inc.et al., C.A. Nos. 2:15-cv-541 and 2:15-cv-585 (Dec. 17, 2015).  Judge Gilstrap, who presides over the busiest patent docket in the country, found “a clear need to advance considerations of deterrence” in light of eDekka’s “unreasonable § 101 positions and vexatious litigation strategy.”

The ruling provides useful guidance on what constitutes an “exceptional case” under § 285, particularly in the wake of Alice and its progeny. Practitioners in EDTX should pay particular attention, given that up until now, judges in EDTX have found a low proportion of software patents invalid under § 101 and have granted few exceptional case motions.

Continue Reading Judge Gilstrap awards Section 285 fees where Plaintiff’s Section 101 positions cross the “threshold of exceptionality.”

On November 10, 2015, the Federal Circuit issued its opinion in ClearCorrect Operating, LLC v. ITC, and struck a blow to both the ITC and the entertainment and software industries by overturning the ITC’s opinion and finding that “[t]he Commission’s decision to expand the scope of its jurisdiction to include electronic transmissions of digital data runs counter to the ‘unambiguously expressed intent of Congress’” and stating that the ITC’s jurisdiction is limited to “material things.” No. 2014-1527, Slip Op. at 3 (Fed. Cir. Nov. 10, 2015).

In an ITC investigation instituted in April 2012, Align Technology claimed that Respondents ClearCorrect Pakistan and ClearCorrect Operating LLC infringed claims of seven patents relating to a system and methods for repositioning teeth.  ClearCorrect made models of the U.S. patients’ teeth which were then scanned and converted into digital data sets, which were then transmitted to Pakistan.  In Pakistan the data sets were manipulated, and the adjusted data sets were sent back to ClearCorrect in the United States, where they were used to create the aligners used by the patents via 3D printing.  Thus, no physical articles were imported – the only item imported was a digital data set.  In April 2014, the ITC found that ClearCorrect infringed the patents, and issued exclusion and cease and desist orders barring ClearCorrect from importing the data sets. The case received a great deal of attention because of its potential implications for the breadth of the ITC’s jurisdiction and the entertainment and software industries. As much of music, software, and film piracy occurs via transmission or download rather than physical importation, the Commission decision gave the entertainment and software industries a powerful tool to fight piracy.  In addition, the opinion reassured patentees that infringers could not bypass ITC jurisdiction by using 3D printing to create products in the United States.  The decision was appealed to the Federal Circuit. Continue Reading Federal Circuit Rules That ITC Does Not Have Jurisdiction Over Digital Imports

1 yearThe Federal Circuit has again held that it lacks jurisdiction to review certain decisions of the U.S. Patent Trial & Appeal Board in Inter Partes Reviews, continuing the Court’s apparent “hands off” approach to reviewing PTAB decisions in IPRs. This time, the Federal Circuit determined that it lacks jurisdiction to review a PTAB Board’s determination as to whether to initiate an Inter Partes Review proceeding based on the one year time bar of 35 U.S.C. § 315(b), “even if such assessment is reconsidered during the merits phase of proceedings and restated as part of the Board’s final written decision.”  Achates Reference Publishing, Inc. v. Apple, Inc., No. 2014-1767, at 13 (Fed. Cir. Sept. 30, 2015).

Section 315(b) establishes a one year time bar prohibiting PTAB from instituting an IPR challenging the validity of a U.S. patent “if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.” When Apple filed petitions for Inter Partes Review of two Achates patents, Achates argued that Apple’s IPR petitions were time-barred under 35 U.S.C. § 315(b) because, according to Achates, Apple was in privity with one or more defendants who had been served with a complaint alleging infringement of those Achates patents more than a year prior to Apple’s petitions. Achates also argued that Apple’s IPR petitions were time-barred because those earlier defendants were real parties-in-interest to the petitions. Continue Reading Federal Circuit Holds That It Lacks Jurisdiction To Review PTAB’s § 315 Time-Bar Determination