BIO Chimes In: TC Heartland LLC v. Kraft Food Brands Group LLC (Supreme Court)

This is part two of a three part series on BIO’s recently submitted amicus briefs in cases before the Supreme Court as well as the U.S. Court of Appeals for the Federal Circuit.

Spring kicked off yesterday, and with it was the beginning of the confirmation process for U.S. Supreme Court nominee Judge Neil M. Gorsuch. Empty seat or not, SCOTUS has a full plate of decisions to reach this term, patent cases among them.

We’ve already talked about BIO’s position on Impression Products v. Lexmark International (oral arguments begin today), so let’s take a look at another important patent case headed to the Supreme Court next week.

At issue in this case is the determination of venue for patentees and the interpretation of Congress’s venue statute. The court is being asked “whether 28 U.S.C. § 1400(b) is the sole and exclusive provision governing venue in patent infringement actions and is not to be supplemented by 28 U.S.C. § 1391(c).”

28 U.S.C. § 1400(b) limits the venue of patent cases to 1) the judicial district where he defendant resides, or 2) where the defendant has committed acts of infringement and has a regular and established place of business.

28 U.S.C. § 1391(c) broadens the definition of residence for venue to be any judicial district where the defendant is subject to the court’s personal jurisdiction. Since patent defendants are generally subject to nationwide personal jurisdiction, venue would be in any jurisdiction.

Given the broad interpretation of 28 U.S.C. § 1391(c), there has been a significant concentration of patent-infringement suits in the Eastern District of Texas, where more than 40% of patent cases are litigated.

BIO and the Association of University Technology Managers (AUTM) submitted an amicus brief supporting Kraft Food Group (the respondent).

In the brief, BIO argues that while it is not good for the patent system to have a concentration of patent cases come up through a single district, “attempting to resolve [these] issues through this case would do significantly more harm than good.”

If the Supreme Court decides in favor of TC Heartland, the venue regime that prevailed prior to 1988 would return, severely inconveniencing patent owners (particularly small businesses) and increase the amount of patent litigation, “forcing patent holders to brin related claims in multiple separate actions, and would skew litigation in favor of accused infringers.”

BIO’s brief further argues that Congressional reform efforts have “recognized the importance of including venue options tied to locations where the patent owner is or was engaged in activities related to the patent.”

BIO and AUTM argue that reform efforts to combat issues with patent venue should be left to Congress, “rather than legislating an obsolete approach to venue that Congress has not endorsed.”

Oral arguments in this case will take place next Monday, March 27, 2017.

Filed under: Patently BIOtech, Public Policy, , , , , , , , , , , , ,

BIO Chimes In: TC Heartland LLC v. Kraft Food Brands Group LLC (Supreme Court)

This is part two of a three part series on BIO’s recently submitted amicus briefs in cases before the Supreme Court as well as the U.S. Court of Appeals for the Federal Circuit.

Spring kicked off yesterday, and with it was the beginning of the confirmation process for U.S. Supreme Court nominee Judge Neil M. Gorsuch. Empty seat or not, SCOTUS has a full plate of decisions to reach this term, patent cases among them.

We’ve already talked about BIO’s position on Impression Products v. Lexmark International (oral arguments begin today), so let’s take a look at another important patent case headed to the Supreme Court next week.

At issue in this case is the determination of venue for patentees and the interpretation of Congress’s venue statute. The court is being asked “whether 28 U.S.C. § 1400(b) is the sole and exclusive provision governing venue in patent infringement actions and is not to be supplemented by 28 U.S.C. § 1391(c).”

28 U.S.C. § 1400(b) limits the venue of patent cases to 1) the judicial district where he defendant resides, or 2) where the defendant has committed acts of infringement and has a regular and established place of business.

28 U.S.C. § 1391(c) broadens the definition of residence for venue to be any judicial district where the defendant is subject to the court’s personal jurisdiction. Since patent defendants are generally subject to nationwide personal jurisdiction, venue would be in any jurisdiction.

Given the broad interpretation of 28 U.S.C. § 1391(c), there has been a significant concentration of patent-infringement suits in the Eastern District of Texas, where more than 40% of patent cases are litigated.

BIO and the Association of University Technology Managers (AUTM) submitted an amicus brief supporting Kraft Food Group (the respondent).

In the brief, BIO argues that while it is not good for the patent system to have a concentration of patent cases come up through a single district, “attempting to resolve [these] issues through this case would do significantly more harm than good.”

If the Supreme Court decides in favor of TC Heartland, the venue regime that prevailed prior to 1988 would return, severely inconveniencing patent owners (particularly small businesses) and increase the amount of patent litigation, “forcing patent holders to brin related claims in multiple separate actions, and would skew litigation in favor of accused infringers.”

BIO’s brief further argues that Congressional reform efforts have “recognized the importance of including venue options tied to locations where the patent owner is or was engaged in activities related to the patent.”

BIO and AUTM argue that reform efforts to combat issues with patent venue should be left to Congress, “rather than legislating an obsolete approach to venue that Congress has not endorsed.”

Oral arguments in this case will take place next Monday, March 27, 2017.

Filed under: Patently BIOtech, Public Policy, , , , , , , , , , , , ,

BIO Chimes In: Impression Products v. Lexmark International (Supreme Court)

This is a three part series on BIO’s recently submitted amicus briefs in cases before the Supreme Court as well as the U.S. Court of Appeals for the Federal Circuit.

Included in our cases to watch post were some upcoming IP cases on the agenda this term for the Supreme Court.  BIO, with Croplife International, has subsequently submitted an amicus brief in one of those cases. Let’s take a look:

BIO and Croplife’s brief addressed two questions facing the Supreme Court directed at patent exhaustion: the territoriality principle of U.S. patent law and the question of conditional sales.

International sales, they argued, should not exhaust patent rights. The Supreme Court has held since the 1857 decision in Brown v. Duchesne that “no infringement occurs when a patented product is made and sold in another country.” The Federal Circuit’s en banc opinion rested on this precedent, supported for over 150 years in other cases including Boesch v. Graff (1890) in which the Court held that a sale authorized by another international law did not permit “defiance of the rights of patentees under a United States patent.”

The Federal Circuit’s decision had affirmed prior holding in previous cases including Jazz Photo Corp. v. International Trade Commission and supported the Supreme Court’s existing precedent “confirming the territoriality of the U.S. patent system and furthering important public policy.”

For BIO and Croplife, who support holders of U.S. patents, “the territorial limitation on patent exhaustion advances public policy and economic efficiency…[and] permits innovators to sell patented products internationally at locally-driven market prices.”

Addressing the question of conditional sales, the brief supports the Federal Circuit’s decision affirming prior holding in Mallinckrodt, Inc. v. Medipart, Inc., which held that conditional sales of patented products do not exhaust patent rights:

“Mallinckrodt rests on longstanding precedent recognizing the right of a patent owner to convey only a portion of the patent right without giving away the rest. The Court should reaffirm this precedent, on which industry members have relied for decades to structure their businesses and to establish the value of rights and products they convey through licenses and sales contracts.”

The Supreme Court has reaffirmed this foundational principle of patent law and consistently recognized that “a patent owner may grant a license for restricted use.”

“The Federal Circuit’s decision in Mallinckrodt built on fundamental principles spanning over a hundred years of Supreme Court precedent and held that unless a conditional sale ‘violate[d] some other law or policy … private parties retain the freedom to contract concerning conditions of sale.’976 F.2d 700, 708 (Fed. Cir. 1992).”

In the closing paragraph of their brief, BIO and Croplife affirmed the following:

“The current legal regime has long ensured certainty and efficiency in the market. Petitioner’s request to overrule Mallinckrodt and disrupt the way patented products have been and continue to be sold should be rejected. To do otherwise would fundamentally alter the market for many patented products: disrupting pricing strategies, restricting access to innovative products, 37 and creating obstacles to further innovation as well as the country’s economic growth.”

Oral arguments will be held March 21, 2017.

Filed under: Patently BIOtech, Public Policy, , , , , , , , , , ,