On Thursday, February 23, 2017, the United States Court of Appeals for the Federal Circuit granted a mandamus petition filed by Google, and ordered a Texas federal court to transfer a patent infringement case to a federal court that covers Silicon Valley, as requested by Google. See In re: Google Inc. This extraordinary remedy was delivered in the form of a non-precedential opinion authored by Chief Judge Prost and joined by Judge Lourie. Despite the Federal Circuit’s designation of the decision as non-precedential, the Court should be prepared for the onslaught of mandamus petitions that will now be filed given that they have shown a willingness to step in and re-weigh transfer factors de novo.
This petition for writ of mandamus arose out of a patent infringement suit brought by Eolas Technologies, Inc. against Google and various other defendants involving U.S. Patent No. 9,195,507. On the day this lawsuit was filed against Google, Eolas also filed two related suits in the same district, accusing various Walmart and Amazon entities of infringement. The Walmart and Amazon entities, like Google, sought transfer to the Northern District of California under 28 U.S.C. § 1404(a) for convenience. Weighing the relevant transfer factors, the district court concluded that the Northern District of California was not clearly a more convenient forum than the Eastern District of Texas.
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.
In a non-precedential opinion issued October 18, 2013, the Federal Circuit issued a decision that calls into question the overall utility of forum selection clauses in contractual relationships. In fact, Eli Lilly lost its bid to have its dispute with Genentech and City of Hope heard in the Northern District of California despite a forum selection clause in the governing contract that stated the parties would litigate any dispute in the Northern District of California. See In re Eli Lilly and Co.
Eli Lilly petitioned for a writ of mandamus directing the United States District Court for the Northern District of California to vacate its order transferring this case to the United States District Court for the Central District of California. In its order granting Genentech’s motion to transfer, the district court noted that the trial judge in the Central District of California had presided over four cases involving the same family of patents at issue. The district court further noted that another trial judge in the Northern District of California had recently transferred a case brought by one of Eli Lilly’s business partners that involves the same patent and product to the Central District of California, citing the expertise the trial judge had gained through these prior lawsuits.
Trevor Carter, Partner at Baker & Daniels and Practice Center Contributor, and Dorothy R. Auth, Ph.D., Partner at Cadwalader, Wickersham & Taft, sent in this article reviewing the legal homework of determining jurisdiction and proper venue, and discussing considerations parties must make to select the proper forum and how to keep their patent case there through resolution. Trevor Carter will be speaking at PLI’s 5th Annual Patent Law Institute in San Francisco on Monday, March 21st. Here is an excerpt from the article….
Chapter 87 of the Judicial Code addresses venue for various types of civil actions. There are general venue provisions and special venue provisions.
Venue Statutes – Patent cases: 28 U.S.C. § 1400(b)
Venue for patent infringement cases and copyright cases is addressed under a special venue statute, 28 U.S.C. §1400. In particular, the venue statute for patent cases is §1400(b), which reads:
Any civil action for 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. § 1400(b). (more…)
Written by Brandon Baum (Partner at Mayer Brown and Practice Center Contributor).
The end of the year is the time for top 10 lists. Here, in no particular order, are my top 10 issues for patent litigators in 2011.
10. Microsoft Corp v. i4i Ltd. Partnership., and the clear and convincing evidence standard where the defendant relies on uncited art. Will the Supreme Court decide that a lesser burden of proof is required to show invalidity when art was never considered by the USPTO? If so, this will profoundly change both litigation and prosecution practice. My favorite possible implication – what presumption applies to a mongrel 103(a) combination of cited and uncited art? And will the PTO experience a data dump of prior art, if Microsoft prevails?
9. Global-Tech Appliances v. SEB S.A., and the standard for proving the mental state required for induced infringement. Whatever language the Supreme Court uses to describe the mental state required to show inducement will send everyone scrambling to prove or disprove the existence of that mental state. (more…)