Some of the most significant current issues in patent litigation have been percolating for years: patent eligibility, venue, and inter partes review proceedings. In this post, we consider guidance on patent eligibility; recent developments in where patent cases can be properly filed; and insight into contractual tools for managing IPR risks.
Which Inventions Are Patentable?
Certain inventions—such as laws of nature—are not patentable. Where the line was drawn for several decades favored patent eligibility following the United States Supreme Court’s 1980 decision in Diamond v. Chakrabarty, which had proclaimed “everything under the sun invented by man” is eligible for patent protection, assuming other patentability requirements are met. The Supreme Court drastically altered the framework, primarily through two decisions in 2012/2014 (Alice and Mayo). Fast-forward through years of turmoil and difficult-to-reconcile decisions about whether an invention is even eligible for patent protection, to an order from the U.S. Court of Appeals for the Federal Circuit late last year:
There is very little about which all twelve of us [judges] are unanimous, especially when it comes to § 101. We were unanimous in our unprecedented plea for guidance.
This comes in connection with a pending request (cert petition) that the Supreme Court revisit its past decisions in American Axle & Manufacturing Inc. v. Neapco Holdings LLC.
In a similar vein, Judge Newman wrote, “[t]he court’s rulings on patent eligibility have become so random as to have a serious effect on the innovation incentive of the patent system in all fields of technology. The victim is not only the instant inventor of a now-copied improvement in driveshafts for automotive vehicles; the victims are the national interest in an innovative industrial economy, and the public interest in the fruits of technological advance.”
The American Axle petition represents an opportunity for the Supreme Court to correct the patent eligibility framework. Yet the petition is languishing as it awaits belated input from the Acting Solicitor General. Specifically, the petition requesting Supreme Court review has been pending since December 2020. In May 2021, the Court took a step indicating that it is considering taking up the issue, invited the Acting Solicitor General to file a brief expressing the views of the United States. This request, however, is still outstanding. Even if the Acting Solicitor General urges the Court to take up the issue, Supreme Court review is not guaranteed. In 2020, the Court took a similar step in another petition, but ultimately decided not to take the issue up, even after the Solicitor General had recommended that it do so.
In the end, the primary question in many inventor and patent litigators’ minds is whether the Supreme Court taking up the issue again would ultimately be beneficial to the patent system or create more uncertainty.
We continue to wait, and as we do, consider perusing the amicus brief filed by a U.S. Senator, a former Federal Circuit judge, and a former Patent and Trademark Office Director in support of Supreme Court review.
Where Can Patent Cases Be Filed?
Another issue that is not going away in 2022 is venue. In 2021, regular challenges continued on the question of whether certain defendants in patent litigation cases belong in U.S. district courts located in (most often) the Eastern or Western Districts of Texas. In patent infringement cases, a specific venue statute, 28 U.S.C. § 1400(b), controls where cases can be properly brought. Section 1400(b) states that patent infringement suits can be brought in the judicial district (1) where the defendant resides or (2) where the defendant has committed acts of infringement and has a regular and established place of business. One mechanism for challenging venue is to seek a transfer to another district court pursuant to 28 U.S.C. § 1404(a).
Following a series of cases that ordered the transfer from the Western District of Texas to other districts, In re Apple Inc., In re Atlassian Corp. PLC, and In re Google LLC, the Federal Circuit more recently has denied a mandamus petition requesting transfer from the Western District of Texas in In re Medtronic and denied a mandamus petition requesting relief from a transfer to the Western District of Texas from the District of New Jersey in In re Amperex Technology Ltd.
More petitions for mandamus are pending before the Federal Circuit and further decisions are expected throughout 2022.
Contractually Manage IPR Challenges?
Two recent Federal Circuit cases support that parties may use forum selection clauses to manage IPR risks. These decisions also demonstrate the necessity of precise language evidencing that such a bargain has been struck. Specifically, the Federal Circuit found the parties had contractually bargain away their right to file an inter partes review (“IPR”) petition through use of forum selection clause in Nippon Shinyaku Co, Ltd. v. Sarepta Therapeutics, Inc.
In contrast, the Federal Circuit concluded that a different forum selection clause in Kannuu Pty Ltd. v. Samsung Electronics Co., was not effective to do so.
The confidentiality agreement in Kannuu addressed actions “arising out of or relating to this Agreement or the transactions contemplated hereby.” The Court concluded that the agreement itself related to confidentiality and not the intellectual property rights of the parties, such that filings of IPR petitions were not encompassed by forum selection clause. In Nippon, however, the agreement—which was also a confidentiality agreement—clearly stated “the Parties agree that all Potential Actions arising under U.S. law relating to patent infringement or invalidity, and filed within two (2) years of the end of the Covenant Term, shall be filed in the United States District Court for the District of Delaware,” and further expressly defined Potential Actions” as including “any patent or other intellectual property disputes . . . filed with a court or administrative agency [i.e., Patent and Trademark Office].