Unwillingness of Plaintiff to Test Merits of Claims Tests Court’s Patience

Shipping and Transit, LLC v. Hall Enterprises, Inc., C.D. Cal. (July 5, 2017) (Judge Andrew J. Guilford)

Plaintiff Shipping & Transit, LLC (“S&T”) is a non-practicing entity that filed hundreds of patent lawsuits in 2016 alone, alleging infringement of three patents directed to monitoring and reporting the location of a vehicle. One of these patents was asserted in more than 400 cases, and the other two patents were asserted in more than 90 cases. However, S&T would routinely settle or dismiss a case with prejudice prior to a ruling on the merits where a defendant challenged the validity of the patents.

In this case, Defendant Hall Enterprises, Inc. asked S&T to voluntarily dismiss the case due to perceived patent validity issues. After S&T refused, Hall Enterprises moved for judgment on the pleadings arguing that all of the claims asserted against it were invalid under 35 U.S.C. § 101 due to ineligible subject matter. Only then did S&T move to dismiss its own claims with prejudice. READ MORE

Venue in the Eastern District of Texas Post-TC Heartland

Raytheon Company v. Cray, Inc., E.D. Tex. (June 29, 2017) (Judge Rodney Gilstrap)

On June 29, 2017, Judge Gilstrap of the Eastern District of Texas issued an opinion analyzing the factors to consider when determining whether, in the absence of “residence” in the district, a defendant “has committed acts of infringement and has a regular and established place of business” there for purposes of satisfying the venue statute.  This is an issue that the Federal Circuit has not touched since 1985, leaving litigants and courts to review numerous, not always consistent, regional court decisions.

This particular patent case concerns technologies allegedly incorporated into a Cray XC40 supercomputer installed at the University of Texas Austin’s campus (which is not in the Eastern District of Texas).  While this case has been pending since 2015, Cray had timely filed a motion to dismiss for improper venue early in the action. READ MORE

TC Heartland – One Month Later Delaware, Texas, California and Illinois Courts Most Popular Venues

We previously reported on the early impact of the Supreme Court’s decision in TC Heartland based on the first few weeks of new filings. (For a summary of the TC Heartland opinion and its implications, click here.) It has now been one month, and based on the filing data for the month since TC Heartland as well as historical data since the beginning of 2016, we now have a better sense of how things have changed and how things may look in the future. Using data obtained from Docket Navigator, we compared filings in the month since TC Heartland came down on May 22 with filings earlier this year and also for all of 2016. READ MORE

Patent Reviews Get Supreme Court Review

In a move that could have major implications for patent litigation in the Northern District of California as well as every other District, the U.S. Supreme Court has decided to take up the issue of whether inter partes reviews and certain other America Invents Act proceedings are unconstitutional because they can result in invalidation of a patent without a jury trial.  We invite you to read a full account, written by our colleague Don Daybell, on Orrick’s website here.

Determination on Indirect Infringement Requires Factual Record, Warranting Denial of Motion to Dismiss

Order Denying Motion to Dismiss, The Regents of the University of California v. Boston Scientific Corporation, Case No. 16-cv-06266-YGR (Judge Yvonne Gonzalez Rogers)

Ever since the abolition of form complaints in patent cases (see our previous reporting here, here, and here), patent defendants have been incentivized to file motions to dismiss, and many have succeeded. But as Judge Gonzalez Rogers’ recent Order in this case reminds us, even after Twombly and Iqbal, Rule 12(b)(6) still offers a relatively lenient pleading standard and, in many cases, requires development of a factual record before dismissal can be considered.  READ MORE

The Northern District of California Shoots to Second Place After TC Heartland

It’s been just over two weeks since the Supreme Court decision in TC Heartland.  (For a summary of the opinion and its implications, click here.)  As plaintiffs and the courts now struggle to deal with venue in patent cases (and patent litigators brush up on venue law), we looked at recent filings to see what effect the decision had on where patent complaints are being filed.  Using data obtained from Docket Navigator, we compared filings in the sixteen days since TC Heartland came down on May 22 with filings earlier this year between March 1-May 21.  READ MORE

Printer Cartridges Set the Tone for Patent Exhaustion

Impression Products, Inc. v. Lexmark International, Inc., Supreme Court (June 1, 2017)

 On May 30, 2017, the U.S. Supreme Court overturned an en banc decision of the Court of Appeals for the Federal Circuit (CAFC) and decided that a patentee’s authorized sale of a product—whether within or outside of the United States—exhausts all of the patent rights in that product, regardless of any post-sale restrictions the patentee places on that product.  The decision was unanimous as to exhaustion arising from a domestic sale, and 7-1 as to exhaustion arising from a foreign sale, with Justice Ginsburg the sole dissenter.  This decision will affect how companies enforce post-sale license rights and will provide accused infringers with another potential means to defeat patent infringement claims.

Lexmark concerned the sale of printer toner cartridges.  Lexmark sells toner cartridges and owns various patents that protects its intellectual property rights in them.  Lexmark gives its customers a choice when purchasing its cartridges: They can buy regular cartridges at full price with no restrictions, or they can buy cartridges at a 20% discount through Lexmark’s Return Program by agreeing (1) to use each cartridge only once and (2) not to send used cartridges to anyone but Lexmark.  Impression Products acquired spent toner cartridges, including both Return Program and regular cartridges, from within the United States, then proceeded to refill and resell these cartridges to domestic consumers.  Impression Products also imported, without Lexmark’s permission, both Return Program and regular cartridges from outside the United States for sale in the United States. READ MORE

A “Virtual” Home Is Not a Home: Court Sanctions Plaintiffs for “Reckless Disregard” in Deciding the Proper Forum for Their Litigation

Usually, one benefit of being a plaintiff is deciding in what forum to pursue litigation.  Generally, even a foreign-based plaintiff may pursue litigation in a U.S. forum where a defendant may be found or in which there is a substantial connection to the litigation.  There are, however, limits on a plaintiff’s choice of forum, and a recent decision in Tapgerine LLC v. 50Mango, Inc. demonstrates that pushing those limits may result in sanctions. READ MORE

Copyright Assertion – Wait, or Don’t?

Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC et al., 11th Cir. (May 18, 2017)

Copyright protection can be a critical part of a company’s IP strategy, especially when that company generates time-sensitive news stories and other writings. But, as this 11th Circuit decision demonstrates, it remains unclear whether a copyright lawsuit can be filed on a work the Copyright Office has not yet officially registered.

By statute, a party can’t file suit on a copyright until after “registration.” Although the copyright registration process is relatively straightforward, it does not happen instantly. In a situation where a content creator is rapidly producing new writings, it may wish to sue a copier prior to completion of registration by the Copyright Office. READ MORE

Inadequate Disclosures Preclude Monetary Damages Recovery in Trademark Infringement Suit

Order Granting in Part and Denying in Part Defendant’s Motion for Summary Judgment, Sazerac Co., Inc., et al. v. Fetzer Vineyards, Inc., Case No. 3:15-cv-04618-WHO (Judge William H. Orrick)

As any practitioner who has sought to establish trademark infringement already knows, likelihood of confusion is difficult to prove at trial. Nonetheless, a recent Order in Sazerac Co., Inc., et al. v. Fetzer Vineyards, Inc. demonstrates that plaintiffs still retain certain inherent advantages at the summary judgment stage in proving that there exists a likelihood of confusion, given the high hurdle for defendants to convince a court that no genuine issues of fact exist and that summary judgment is warranted.  But as this case also demonstrates, that does not mean that plaintiffs can “sleep at the wheel,” so to speak, when disclosing infringement or damages theories during discovery. READ MORE