Several weeks ago, the United States Supreme Court granted certiorari in TC Heartland LLC v. Kraft Food Brands Group LLC. This case will force the Supreme Court to decide whether 28 U.S.C. § 1400(b) is the exclusive provision governing venue in patent infringement actions. This resolution of this question could have important ramifications, both for the future of patent litigation and for the future of patent reform.
Ultimately, the question that the petitioner really wants the Supreme Court to decide is if the Eastern District of Texas, home up to one-quarter of all patent infringement litigations, is a proper venue for patent owners to be choosing. The Eastern District of Texas is a popular choice among patent owners because of the perception that the district court has developed a articular specialty in handling patent matters, and because the judges have a reputation of giving patent owners a fair chance…maybe more than a fair chance, depending upon who you listen to.
If the Supreme Court issues a ruling that strikes down current patent venue rules, there would be no need for patent venue reform efforts to continue in Congress. On the other hand, if the Supreme Court were to affirm the Federal Circuit, calls for legislative venue reform would likely become deafening. On yet a third hand, patent reform might look very different than most people expect, even if the Supreme Court were to overrule the Federal Circuit, because a venue ruling that would make it difficult or impossible to bring cases in the Eastern District of Texas would also make it much more difficult for all patent owners to bring infringement cases in courts other than the home court of the defendant. That could be a bridge too far for many, if not most, patent owners, who otherwise might be in favor of at least some venue reform. Thus, there is a chance that whatever the outcome of this case, it will lead to patent reform. See The Politics of Patent Venue Reform.
The statutes in question will be 28 U.S.C. § 1400(b) and 28 U.S.C. § 1391(c). Pursuant to § 1400(b), a “patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.” Pursuant to § 1391(c), a corporation is deemed to be a resident of “any judicial district in which such defendant is subject to the court’s personal jurisdiction…”
In Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222 (1957), the Supreme Court held that § 1400(b) is not to be supplemented by § 1391(c) and that “§ 1400(b) is the sole and exclusive provision controlling venue in patent infringement actions….” While that might seem to end the inquiry on its face, the Federal Circuit has for 25 years ignored the Supreme Court ruling in Fourco Glass, based on the belief that 1988 amendments by Congress “rendered the statutory definition of corporate residence found in § 1391 applicable to patent cases.” Thus, it is the belief of the Federal Circuit that Congress overruled the Supreme Court’s ruling in Fourco Glass, which Congress obviously has the authority to do. See Supreme Court agrees to hear patent venue case with patent reform implications.
The irony is that everyone knows this case is about the Eastern District of Texas, yet the case between TC Heartland and Kraft Food Brands Group was litigated in the District of Delaware. Thus, Kraft is unfortunately caught up in this proxy patent battle to which it really ought not be a party. It is truly unfortunate that the Supreme Court would use a case from Delaware and party that is most certainly not a patent troll to opine about patent trolls running to the Eastern District of Texas. But that is the bizarro world of patent litigation in which we live, some might say.
Beginning in May 2016 with the Federal Court’s decision in Enfish, carrying over into the July decision in BASCOM, and then into the Court’s Fall decision in McRO (sometimes referred to as “the Blue Planet case”), the patent stakeholder community finally started receiving some much-needed guidance with respect to patent eligibility of computer-implemented inventions.
While decisions where claims have been ruled patent eligible have been helpful, decisions finding claims patent ineligible have been at least as informative, at least from a patent drafting standpoint. Indeed, as important as the aforementioned pro-patent-eligible decisions are two decisions where the Federal Circuit found the claims to be patent ineligible. In TLI Communications and then more recently in FairWarning IP, LLC v. Iatric Systems, Inc., the Federal Circuit distinguished the claims at hand from those that have been held patent eligible, which help identifies brighter lines and nuances of software practice.
The Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office (USPTO) recently instituted six separate inter partes reviews (IPRs) against patents owned by Allergan plc (NYSE: AGN), which cover RESTASIS® (Cyclosporine Ophthalmic Emulsion) 0.05%. RESTASIS® is an eye drop that helps increase the eyes’ natural ability to make tears. Mylan Pharmaceutical Inc. says they expect PTAB decisions on the IPRs sometime during the fourth quarter of 2017.
All the challenged patents are set to expire on August 27, 2024 and are listed in FDA’s Orange Guide. The patents being challenged are U.S. Patent Nos. 8,629,111 (the “‘111 patent”), 8,633,162 (the “‘162 patent”), 8,642,556 (the “‘556 patent”), 8,648,048 (the “‘048 patent”), 8,685,930 (the “‘930 patent”), and 9,248,191 (the “‘191 patent”). Hatch-Waxman litigations involving these patents against Mylan and other generic defendants remain pending in the United States District Court for the Eastern District of Texas.
The Obama Administration released a joint strategic plan on intellectual property enforcement for fiscal years 2017 through 2019. The title of the report is Supporting Innovation, Creativity & Enterprise.
The section on patents, which begins on page 134, begins by saying:
Patent-intensive industries are a driving force in the U.S. economy. According to a recent Department of Commerce report, the value added by patent-intensive industries in 2014 was $881 billion, which was 5.1 percent of U.S. gross domestic product. Supporting efficient and predictable patent protection policies that promote investments in research and development is key to the continued growth of innovative economies.
Without effective mechanisms to protect intellectual property rights, including patents and trade secrets, competitors could simply sit back and copy, rather than invest the time and resources required to invent and innovate. Research and development would be even riskier investments, with little to no assurance that such investments would or could be commercially put into use. Simply put, facilitating efficient and predictable patent protection policies harnesses the drive and ingenuity of our innovators and helps ensure that our economy remains innovative and competitive.
The United States Patent and Trademark Office issued a new memorandum to patent examiners on recent software patent eligibility decisions from the Federal Circuit. The memo sent to the patent examining corps from Robert Bahr, Deputy Commissioner for Patent Examination Policy, provides examiners with a discussion of McRo, Inc. v. Bandai Namco Games America and BASCOM Global Internet Services v. AT&T Mobility. What follows is my summary of these two important cases.
BASCOM v. AT&T (Decided June 27, 2016)
The claims generally recited a system for filtering Internet content. The claimed filtering system is located on a remote ISP server that associates each network account with (1) one or more filtering schemes and (2) at least one set of filtering elements from a plurality of sets of filtering elements, thereby allowing individual network accounts to customize the filtering of Internet traffic associated with the account. The patent explains that the advantages of the invention are found in the combination of the then-known filtering tools in a manner that avoids their known drawbacks. The claimed filtering system avoids being “modified or thwarted by a computer literate end-user,” and avoids being installed on and dependent on “individual end-user hardware and operating systems” or “tied to a single local area network or a local server platform” by installing the filter at the ISP server. Thus, the claimed invention is able to provide individually customizable filtering at the remote ISP server by taking advantage of the technical capability of certain communication networks.