On Nov. 16, 2017, the USPTO issued new procedures for cases remanded from the Federal Circuit. The Standard Operating Procedure (SOP) provides guidance for panels in preparing for remand meetings and guidance to parties on remand procedures. The potential topics for such remand meetings may include the procedural history, issues on remand, any contemplated procedures for the proceedings on remand, and policy considerations. The SOP suggests parties in remanded trial cases are to contact the Board within 10 days and encourages parties to seek agreement on, among others, additional briefing, length of briefing, subject matter limitations on briefing, and briefing schedule. Full text is available here.
On November 15, 2017, the Federal Circuit ruled that the U.S. Supreme Court's decision in TC Heartland was an intervening change in the law that excuses waiver of venue objection. In re Micron Tech., Inc., No. 2017-138 (Fed. Cir. Nov. 15, 2017). Harvard College filed a patent infringement suit against Micron and Micron filed a 12(b)(6) motion to dismiss for failure to state a claim but failed to object to venue under 12(b)(3). Subsequent to the TC Heartland decision, Micron filed a 12(b)(3) motion for improper venue. The federal district court of Massachusetts denied the motion concluding that under FRCP 12(g)(2) and (h)(1)(A), Micron had waived its venue defense and TC Heartland was not a change of law that would make the waiver rules inapplicable. Micron filed a writ of mandamus to the Federal Circuit requesting reversal of the district court's order, dismissal of the suit for improper venue or transfer to the Delaware or Idaho.
In granting Micron's petition, the Federal Circuit concluded that TC Heartland was an intervening change of law and therefore, the waiver rules were inapplicable. The Court reasoned that for FRCP 12(g)(2) to apply, and for the unmade venue defense to be waived under FRCP 12(h)(1)(A), the venue defense had to be "available" to the defendant at the time the 12(b) motion is filed, and such venue objection was unavailable until TC Heartland.
ALJ McNamara recently granted Respondent ARRIS' motion to compel deposition of Complainant Sony's corporate witnesses in the U.S. Certain Digital Cable and Satellite Products, Inv. No. 337-TA-1049, Order No. 10. ALJ acknowledged the problem of having the depositions in Japan, particularly the law prohibiting the taking of testimony via telephone that prevented Staff's participation. Sony requested clarification or in the alternative, for interlocutory review of the order. Sony offered other locations for deposition including Hong Kong, Guam, and Hawaii. ARRIS requested the location to be Washington, DC or any reasonably accessible East Coast location. In granting ARRIS' request, ALJ explained that Sony's position is inconsistent with prior argument that Order 10 marked a "significant departure from well-established Commission practice." Order No. 14. ALJ McNamara's order limiting the deposition location to Washington, DC or other East Coast location for Japanese witnesses may impact how overseas depositions are handled in ITC matters.
On Nov. 14, 2017, the USPTO issued a final rule revising certain patent fees including increasing the fees for inter partes review. The IPR review request fee for up to 20 claims will be $15,500 and IPR post-institution fee for up to 15 claims will be $15,000.
On Nov. 7, 2017, the USPTO issued a final rule, set to take effect on December 7, 2017, on attorney-client privilege for PTAB trials. Under the rule, communications between a client and a USPTO patent practitioner/foreign jurisdiction patent practitioner will be privileged just as attorney-client communications. 37 CFR 42.57.
There are numerous IP related review requests before the Supreme Court as its 2017-2018 term begins on October 2, 2017. Several petitions seeking review of IP issues have been filed with the Court. The Court will be hearing oral arguments in the upcoming term on the constitutionality of AIA trials in Oil States Energy Services, LLC v. Greene's Energy Group, LLC, No. 16-712. For more on the list, please click here.
On September 21, 2017, the Federal Circuit vacated the Eastern District of Texas court's denial of a motion to transfer holding that venue is proper under 28 USC 1400(b) only if all three requirements are satisfied--a physical place in the district, which is a regular and established place of business, and it's the place of the defendant. In re Cray Inc., No. 2017-129 (Fed. Cir. Sept. 21, 2017). According to the court, the "place" of business need not be a formal office or store but there must be a "physical, geographical location in the district from which the business of the defendant is carried out."
Raytheon, a Washington corporation, sued Cray for patent infringement in ED Texas. Cray filed a motion to transfer arguing that it did not "reside" in the district under TC Heartland and didn't have a "regular and established place of business" in the district as it had only two employees in the district and both worked remotely from their homes. The district court denied the motion concluding that the activities of Cray's sales executive were similar to the In re Cordis employees and therefore, Cray had a regular and established place of business in the district and venue was proper under 1400(b). Cray filed a writ of mandamus with the Federal Circuit.
On appeal, the panel vacated the district court's denial on the motion to transfer finding that the district court had misapplied the venue statute without considering the statutory language of 1400(b). Writing for the panel, Judge Lourie acknowledged that the "regular and established place of business" has been addressed only in In re Cordis in the context of a writ of mandamus. According to the court, "regular and established place of business" depends on the facts of the case and all three requirements--a physical place in the district, which is a regular and established place of business, and it's the place of the defendant--must be satisfied. While a formal office or store is not required, the term "place" means that there must be a physical, geographical location in the district from which the defendant carries out its business. The term "regular and established" refers to a stable and permanent location for a meaningful time period. An employee's home doesn't satisfy the requirement if the employee can move home out of the district without employer's approval. The place of business must be of the defendant, i.e., whether the defendant owns or leases the place, whether the defendant conditioned employment on employee's continued residence in the district, whether defendant is using it as a distribution center for storing inventory, whether defendant's literature, marketing or advertisements are stored in the location. Considering these factors, the Court concluded that Raytheon failed to prove that the home of Cray's sales executive was a regular place of business of Cray.
Order granting the writ of mandamus and directing transfer of the case from ED Texas to WD Wisconsin is available here.
On September 8, 2017, Allergan created a stir in the media when it announced that it had transferred all the patents for its eye drug Restasis to the Native American tribe Saint Regis Mohawk Tribe, which then granted Allergan back an exclusive license. As part of the deal, the tribe will get $13.75 million and potentially $15 million in annual royalties. The move by Allergan enables the tribe to raise sovereign immunity as a defense against IPR petitions filed against the Restasis patents. It also brings to focus the controversy surrounding the inter partes review (IPR) and the constitutionality of such IPRs. Although the Allergan-St. Regis deal was widely reported in the press, several parties have successfully used sovereign immunity as a shield against IPRs.
The Eleventh Amendment, as interpreted by the U.S. Supreme Court, grants immunity to the States against certain adjudicative proceedings brought against them by private parties. The defense of sovereign immunity has already been raised in cases where the patent owner is a state university. The PTAB upheld a defense of sovereign immunity asserted by the University of Florida and dismissed three IPR petitions filed by Covidien. Covidien LP v. Univ. of Florida Research Foundation Inc., IPR2016-01274, -01275, -01276 (PTAB Jan. 25, 2017). In its determination that sovereign immunity defense applies to IPRs, the Board relied on the Supreme Court's decision in Fed. Mar. Comm'n v. South Carolina State Ports Auth., 535 U.S. 743 (2002) and concluded that the University was an "arm of the State" under Manders v. Lee, 338 F.3d 1304 (11th Cir. 2003). Subsequently, a different PTAB panel reached the same conclusion and found that the University of Maryland could raise the sovereign immunity defense to the IPR proceeding even though it exclusively licensed the patents to a commercial entity. NeoChord, Inc. v. Univ. of Maryland, IPR2016-00208 (PTAB May 23, 2017).
USPTO released the PTAB statistics end of July 2017. The data reveals that a total of 7,306 petitions were filed under AIA and 92% of those petitions were IPRs. A total of 1,650 petitions were filed thus far this year and the majority of those petitions were in electrical/computer (60%), and mechanical and business methods (21%). Institution of the petitions was at an all time low of 63% with the highest rate of institution in the art area of mechanical and business methods (70%), closely followed by electrical/computer arts (69%). Fourteen percent (14%) of the petitions settled prior to institution and twenty-three percent (23%) after institution. In the 1,674 final written decisions, 65% of all instituted claims were found to be unpatentable.
Detailed report is available here.
The US Patent and Trademark Office released a testing version of the Citation List, as part of the Global Dossier Initiative, a service that provides a list of relevant citations in related applications that share a common priority claim. The Citation List can also be used to view all references cited in the patent family of an application.
Disclaimer: The content in this blog is solely for informational purposes and does not constitute legal advice.