Failure to Provide an Unconditional Covenant Not to Sue Kept Case and Controversy Alive

In ArcelorMittal v. AK Steel Corp., [2016-1357] (May 16, 2017), the Federal Circuit affirmed the summary judgment invalidating claims 24 and 25 of U.S. Patent No. RE44153.

On appeal, ArcelorMittal argued it never asserted claim 24 and 25, noting that ArcelorMittal never contested defendant’s statements that the validity of claims 24 and 25 was at issue.  The Federal Circuit found this tacit acceptance of Defendants’ representations about the litigation status of claims 24 and 25 reflected ArcelorMittal’s continued attempt to assert those claims.

ArcelorMittal also argued that the dispute became moot when ArcelorMittal conditionally tendered its covenant not to sue to Defendants.  The Federal Circuit said that although a patentee’s grant of a covenant not to sue a potential infringer can sometimes deprive a court of subject matter jurisdiction,the patentee “bears the formidable burden of showing” “that it ‘could not reasonably be expected’ to resume its enforcement efforts against” the covenanted, accused infringer.  The Federal Circuit said that this that requires ArcelorMittal to show that it
actually granted a covenant not to sue to Defendants, and that the covenant enforceably extinguished any real controversy between the parties related to infringement of the RE’153 patent.  The Federal Circuit found that at no time before the court entered summary judgment did ArcelorMittal unconditionally assure Defendants and their customers that it would never assert RE’153 claims 24 and 25 against them.  The Federal Circuit noted that this result was entirely within ArcelorMittal’s control — it could have, but never did delivered an unconditional, executed covenant not to sue.

Turning to the merits of the case, the Federal Circuit found that the district court correctly implemented its mandate by limiting the analysis to noninfringement and commercial success of RE’153 claims 24 and 25.

 

Applicant Cannot Bypass the PTAB to get to Federal Circuit

In In re Arunachalam, [2016-1560] (May 27, 2016), the Federal Circuit dismissed  Arunachalam direct appeal to the Federal Circuit from the final rejection of his claims in prosecution following a new ground of rejection entered by the PTAB.

Under 28 U.S.C. § 1295(a)(4)(A), the Federal Circuit has exclusive jurisdiction over an appeal from a “decision” of the Board.  The Federal Circuit has held that § 1295(a)(4) should be read to incorporate a finality requirement.  Thus the Federal Circuit concluded that it lacked jurisdiction to hear a non-final appeal from the Patent Office.  Pursuant to § 134(b), Dr. Arunachalam may appeal the Examiner’s decision to the Board, and only after the Board issues a final decision can the Federal Circuit exercise jurisdiction to review the Board’s decision.

If You Want to Contest Jurisdiction, Don’t File a Counterclaim

In Microsoft Corporation v, GeoTag, Inc., [2015-1140] (April 1, 2016), the Federal Circuit affirmed the district court’s exercise of jurisdiction (although on different grounds) and affirmed summary judgment of non-infringement.

In response to suits against their customers in the Eastern District of Texas, Microsoft and Google brought a declaratory judgment action against GeoTag for a declaration that U.S. Patent No. 5,930,474 is invalid and not infringed.  GeoTag filed a motion to dismiss and an answer and counterclaim for infringement of the ‘474 patent, arguing that the infringement action was a compulsory counterclaim which could not confer jurisdiction on the original declaratory judgment action. The district court, applying Third Circuit law, found jurisdiction because the counterclaim was not a compulsory counterclaim.  The Federal Circuit agreed that there was jurisdiction, but applying Federal Circuit, rather than Third Circuit law, and finding jurisdiction based upon GeoTag’s counterclaim, regardless of whether or not it was compulsory.  The Federal Circuit found that the district court retained subject matter jurisdiction over GeoTag’s patent infringement counterclaims pursuant to § 1338(a), such that it need not determine whether the District Court properly found that it had jurisdiction over Google’s First Amended Complaint.

ANDA Filings Create Personal Jurisdiction Everywhere

In Acorda Therapeutics, Inc. v, Mylan Pharmaceutical Inc., [2015-1460) (March 18, 2016), the Federal Circuit affirmed that Mylan was subject to specific personal jurisdiction in the District of Delaware,  The Federal Circuit said that under Fed. R. Civ. P. 4(k)(1)(A), the district court had personal jurisdiction over Mylan if Mylan would be “subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located,” and there is no dispute that Mylan would be subject to Delaware courts’ jurisdiction under Delaware’s long-arm statute, Del. Code Ann. tit. 10, § 3104, as long as Delaware’s exercise of personal jurisdiction over Mylan would be consistent with the Fourteenth Amendment’s Due Process Clause.

The Federal Circuit noted that Mylan had taken the costly, significant step of applying to the FDA for approval to engage in future activities—including the marketing of its generic drugs— that will be purposefully directed at Delaware (and, it is undisputed, elsewhere). The Federal Circuit said that if Mylan had already begun its deliberate marketing of these drugs in Delaware, there is no doubt that it could be sued for infringement in Delaware. The Federal Circuit concluded that the minimum-contacts standard is satisfied by the particular actions Mylan has already taken—its ANDA filings—for the purpose of engaging in injury-causing and allegedly wrongful marketing conduct in Delaware.

 

While a Nice Place, Canada is not the Best Place to Litigate U.S. IP

In Halo Creative & Design Limited v. Comptoir des Indes Inc., [2015-1375] (March 14, 2016), the Federal Circuit reversed the Northern District of Illinois’ dismissal of Halo’s complaint for copyright, trademark and U.S. design patent infringement for forum non conveniens grounds because the Federal Court of Canada would be a superior forum.

Forum non conveniens, allows a court to dismiss a suit over which it would normally have jurisdiction if trial in a foreign forum would best serve the convenience of the parties and the ends of justice.  Whether dismissal would promote convenience and justice should be determined by weighing private and public interest factors. Private interest factors include the relative ease of access to sources of proof; availability of compulsory process for attendance of unwilling, and the cost of obtaining the attendance of unwilling, witnesses.  Public interest factors include congestion of the courts; the burden of jury duty imposed upon a community which has no relation to the litigation; a local interest in having localized controversies decided at home; and the potential for a conflict of laws.  The Federal Circuit found that Comptoir des Indes failed to meet its burden to show that Canada is a more appropriate forum for Halo’s claims of infringement of copyrights, trademarks, and patents in the United States.