On May 22, the U.S. Supreme Court issued an important and long-awaited Opinion in TC Heartland LLC v. Kraft Foods Group Brands LLC, a case that centered on where a patent infringement suit can be filed. In a resounding 8-0 decision, the Supreme Court put an abrupt end to the decades-old practice of forum shopping in patent cases.
For almost 30 years, patent venue law allowed patent owners to file infringement suits in federal judicial districts in which the accused infringer is subject to the district court’s personal jurisdiction. This flexibility opened the doors to a patent owner’s home court and to distant courts that are perceived to be friendly to patent owners. Observers believe that this flexibility was being abused, especially by non-practicing entities or “patent trolls.” Non-practicing entities generate revenue by licensing and enforcing their patents as opposed to making or selling their own products.
If you have ever gone apple picking in late season, you may recall seeing more apples on the ground than on trees. As you begin picking apples, you realize why. You haphazardly grab and yank an apple off a branch and the branch sways, sending many ripe apples to the ground. What a waste!
Harvesting innovation is no different. Without a proper strategy, potentially valuable fruits of R&D may never make it into your IP basket. Today, we explore various strategies your organization can implement to better foster and capture innovation.
If you’ve filed for patents in any industry – be it biotech, high tech, manufacturing, or another sector altogether – you’ve likely been faced with a decision on whether to file a “continuation” application at the US Patent and Trademark Office (USPTO). In simple terms, a “continuation” application is a new patent application allowing one to pursue additional claims based upon the same description and priority date(s) as a pending “parent” application. Continuation applications are a flexible tool, useful for furthering numerous business objectives.
The Hon. F. Dennis Saylor, IV of the U.S. District Court for the District of Massachusetts recently denied a petitioner’s request under 28 USC § 1782 to take discovery related to patent inventorship in connection with an Opposition proceeding pending before the European Patent Office (EPO). The court, in exercising its discretion under the U.S. Supreme Court’s so-called Intel factors set forth in Intel Corp. v. Advanced Micro Devices, Inc., 542 US 241, 264 (2004), denied the petitioner’s request for discovery because the EPO generally does not allow the type of discovery requested by the petitioner in an Opposition proceeding, thus the petitioner’s requested discovery would have no place in an EPO Opposition.
- This case illustrates the need for inventors to be familiar with patent laws, procedures, and proceedings in foreign jurisdictions.
- The District of Massachusetts will focus on Intel’s discretionary factors when making decisions about whether to allow discovery for use in foreign tribunals under 28 USC § 1782.
Changes may be coming to Patent Trial and Appeal Board (PTAB) proceedings. The United States Patent and Trademark Office (USPTO) announced recently that it is launching an initiative to reform PTAB proceeding rules. The announcement stated that the USPTO will use nearly five years of historical data and user experiences to improve PTAB trials. In addition to input already received, the USPTO is seeking feedback from the public (ideas for reforming PTAB proceedings can be submitted via email to PTABProceduralReformInitiative@uspto.gov).
Defendants in patent litigation frequently mount an invalidity defense under 35 U.S.C. § 101 by arguing that asserted claims are directed to abstract ideas, which are not eligible for patent protection under the first step of the Alice test. Often, these defendants fail to account for significant aspects of the asserted claims, resulting in an oversimplification that doesn’t accurately articulate what the claims are actually directed to. This was precisely the government’s error in Thales Visionix Inc. v. United States (Fed. Cir. 2017), where the Federal Circuit found, contrary to the government’s characterization of the claims (which the Claims Court adopted), the asserted claims were not directed to an abstract idea.
On March 27, 2017, the U.S. Supreme Court heard oral argument in TC Heartland v. Kraft, a case that centers on where patent infringement lawsuits can be filed.
- If the Supreme Court sides with TC Heartland, patent infringement hotbeds like the Eastern District of Texas would likely see a drastic reduction in filings because cases would be limited to the state of incorporation of the defendant, or where the defendant has committed acts of infringement and has a regular and established place of business.
- Because many corporations select Delaware as their state of incorporation, a ruling in favor of TC Heartland would likely cause a sharp increase in patent infringement filings in that district.
- Switching the heavy patent infringement case load from the Eastern District of Texas to the District of Delaware will not solve TC Heartland’s concern about one judicial district handling a disproportionate majority of patent infringement cases.
- If the Supreme Court sides with Kraft Foods, the status quo will be maintained and patent owners will have flexibility in selecting venue for infringement actions.
Today the U.S. Supreme Court issued an opinion, SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC, in which it held that laches cannot be used as a defense to a claim of patent infringement. The opinion had been anticipated ever since the Court’s decision in Petrella v. Metro-Goldwyn-Mayer, Inc., 572 U.S. ___ (2014) struck down the defense in copyright cases, using reasoning that appeared to apply to all federal actions involving causes of action subject to statutes of limitations.
Q: Why is the technology industry following TC Heartland v. Kraft so closely?
Paul Cronin: The Supreme Court recently agreed to take up TC Heartland, a case that will address the issue of where patent infringement lawsuits can be filed. The tech industry wants the Supreme Court to end the practice of “forum shopping,” or filing lawsuits in venues that are historically favorable to patent owners. The technology industry wants the law changed so patent infringement lawsuits must be filed in the accused infringer’s state of incorporation or where its headquarters is located. If this change occurs, “home court” advantage will shift from the patent owner to the accused infringer. Software, smart phones, and other technology companies have been among the hardest hit in terms of fighting patent litigation. The industry is looking to shut down the patent-friendly venues by forcing patent owners to file suit in the home district of the accused infringer.
When would a company undergo intellectual property due diligence?
Konstantin Linnik: Any corporate transaction involving IP assets necessitates diligence: merger, acquisition, IPO, investment (such as a venture capital financing), in-license, partnering, co-development, or distribution agreements. The buyer who is evaluating the Target could be a licensee, business partner, investor, banker, or underwriter. IP due diligence analyzes patent issues, trade secrets, trademarks, copyrights, freedom to operate, IP litigation, licensing, reps, warranties, disclosures, and even employment agreements. The process will examine the Target’s IP, such as how well the existing and potential IP protects the Target, what projected revenues will be based on the exclusivity period and geographic scope, and the current and projected expenses, including prosecution, maintenance, royalties, and enforcement. Because the diligence is expensive and is typically charged off as the overall transactional cost, the diligence is conducted as close to pre-closing as possible.
Maximizing the protection and value of intellectual property assets is often the cornerstone of a business's success and even survival. In this blog, Nutter's Intellectual Property attorneys provide news updates and practical tips in patent portfolio development, IP litigation, trademarks, copyrights, trade secrets and licensing.