Patent Litigation

To be a successful trade secret litigant at the ITC, it is critical to be mindful of unique substantive and procedural aspects of Section 337 litigation.  These differences offer both promise and peril for complainants.

Opponents of the use of Section 337 by Standard Essential Patent (SEP) holders claim that the threat of ITC exclusion orders lends itself to patent hold-up. These opponents, however, can point to no instance in which an ITC respondent has successfully made its case for “patent holdup” to the Commission. Section 337 investigations have many opportunities for respondents to actually prove that the Complainant is abusing the process by seeking royalties on something other than fair and reasonable terms. The absence of any such successful showing by a respondent speaks for itself.

On March 16, 2022, U.S. District Judge William Alsup of the Northern District of California certified two of the hot button issues splitting district courts on the standard for pleading willful infringement, holding that:

• The complaint itself is insufficient to provide the requisite knowledge of the asserted patents and alleged infringement; and
• Patent owners need not otherwise allege egregious infringing behavior as part of a willful infringement claim.

Recognizing the split among district courts on these issues, the court certified its decision for interlocutory appeal to the Court of Appeals for the Federal Circuit under 28 U.S.C. § 1292(b). Thus, the Federal Circuit may soon have an opportunity to resolve this long-standing split among districts, which, according to Judge Alsup, has consumed a “vast amount of resources” in litigation around the country.

Speed and efficiency have long been Amazon’s hallmarks, and its dispute resolution system for patent infringement claims is no exception.  Amazon’s Utility Patent Neutral Evaluation (“UPNE”) proceeding is quickly emerging as an efficient and powerful dispute resolution tool, especially in the consumer goods industry, where sellers rely on Amazon for a significant portion of their sales.  So efficient, in fact, that sellers who have either ignored or not taken a UPNE seriously have found their products suddenly banned from Amazon’s website, leaving them with no recourse other than to file a declaratory judgment action in federal court and request relief that is typically far from quick or certain.

The key to success as a Complainant in the ITC is careful preparation, long before the complaint is filed. Nowhere is this more important than in preparing and planning a Complainant’s domestic industry case. The so-called “technical prong” of the domestic industry requirement is a much more common point of failure for ITC complainants than the “economic prong.” The “technical prong” requirement is essentially the same as for infringement: an ITC complainant must “show that there is a domestic industry product that actually practices” at least one claim of the asserted patent. Microsoft, 731 F.3d 1354 at 1361.  (Fed. Cir. 2013). It is unfortunately not uncommon at the ITC for Complainants to prepare meticulous infringement proofs for the accused products but then to fail to show that the domestic industry products practice a claim of the asserted patents.

Since the passage of the Defend Trade Secrets Act (DTSA), trade secret owners have been able to use allegations of trade secret misappropriation under the DTSA to support civil claims under the Racketeer Influence and Corrupt Organizations Act (RICO). Specifically, DTSA violations that qualify as predicate acts can be used to show a pattern of racketeering activity, which may allow a trade secret owner to state civil claims under RICO, and thus take advantage of the substantial remedies that the RICO statute provides, including the potential for treble damages and attorney’s fees. 

In two recent decisions, both issued on February 4, 2022, the United States Court of Appeals for the Federal Circuit (the “CAFC”) erased two huge patent damages awards because the underlying expert opinion on damages was untethered to the specific facts of each case.

In its analysis of Cont’l Auto. Sys., Inc. v. Avanci, L.L.C.,, the Fifth Circuit made several interesting findings: (1) that potential pass-through non-FRAND royalties are too speculative to create an injury in fact; (2) that SEP holders can fulfill their obligations to SSOs, with respect to suppliers, by actively licensing SEPs to downstream OEMs; and (3) that not all implementers are intended beneficiaries entitled to FRAND licenses.

Inter partes reviews have a very high institution rate. And worse, once instituted IPRs result in invalidated claims at an inordinately high rate. The best defense against an IPR petition is to convince the Patent Trial and Appeal Board to deny institution. In this post, the Mintz IPR team put together out top six tips for avoiding IPR institution.

On January 26, 2022, in what appears to be a case of first impression, U.S. District Court Judge John Z. Lee of the United States District Court for the Northern District of Illinois denied a biosimilar applicant defendant’s motion to dismiss patent infringement claims brought in the second phase of the parties’ Biosimilar Price Competition and Innovation Act (“BPCIA”) litigation. In so doing, Judge Lee held that the reference product sponsor (“RPS”) plaintiff is not limited to only declaratory judgment actions in the second phase of litigation under the BPCIA.

Last week, the Federal Circuit issued a decision holding that parties can contractually bargain away their rights to file petitions for Inter Partes Review (“IPR”) at the Patent Trial and Appeals Board (“the Board”). This precedential case is the first to hold that a forum selection clause can forfeit the right to challenge a patent’s validity by IPR. The takeaway from this case is that when entering into any type of patent related agreement, be careful to ensure that your right to file IPR petitions is not stripped away, particularly by way of a forum selection clause which is “prima facie valid and should be enforced” in the words of the Federal Circuit.

While there have been some adverse decisions from individual administrative law judges at the US International Trade Commission in recent years, final decisions coming from the commission since January 2019 have largely affirmed that complainants have satisfied the domestic industry (DI) requirement.

On February 8, 2022, U.S. District Court Judge Maryellen Noreika of the United States District Court for the District of Delaware granted the plaintiff’s motion to exclude defendant’s expert testimony for being “based on an erroneous legal theory” in a suit alleging defendants’ proposed generic Abbreviated New Drug Application (“ANDA”) product would infringe Exela’s patents under the Hatch-Waxman Act. Judge Noreika’s decision in this case reinforces the Federal Circuit’s holding in Sunovion and serves as a reminder that ANDA product infringement is primarily assessed by comparing the asserted claims with the ANDA specification, rather than other ANDA submission materials further describing the ANDA product.

The Federal Circuit decision in Uniloc USA, Inc. et al. v. Apple, Inc., where a 2-1 panel ruled that the district court had abused its discretion by refusing to seal certain patent-licensing documents provided by plaintiffs, Uniloc USA, Inc. and Uniloc Luxembourg, S.A., demonstrates the Federal Circuit’s recognition of the importance of keeping certain patent licensing and other trade secret materials confidential.

We previously discussed which portions of an artificial intelligence/machine-learning (“AI/ML”) platform can be patented.  Under what circumstances, however, is it best to keep at least a portion of the platform a trade secret? And what are some best practices for protecting trade secrets? In this post, we explore important considerations and essential business practices to keep in mind when working to protect the value of trade secrets specific to AI/ML platforms, as well as the pros and cons of trade secret versus patent protection.

On January 18, 2022, U.S. District Judge R. Gary Klausner of the Central District of California sided with the majority of divided district courts, dismissing claims of willful and induced infringement that based the defendants’ required knowledge of the asserted patents on its receipt of the original complaint for patent infringement. Ravgen Inc. v. Quest Diagnostics Inc., No. 21-cv-09011 (C.D. Cal. Jan. 18, 2022) ECF 146 - Order dismiss willful infringement

The Federal Circuit recently provided strategic guidance for defending software claims against Alice challenges that claims recite ineligible patent subject matter under 35 U.S.C. § 101. In Mentone Solutions LLC v. Digi International Inc., defendants alleged that representative claim 5 of U.S. Patent No. 6,952,413, directed towards allocating data channels using shifted uplink status flags in cellular mobile stations, claimed only an abstract idea. The District Court agreed and dismissed. On appeal, the Federal Circuit reversed, holding that claim 5 is not directed to an abstract idea because the claim improved the functionality of a computer.

A recent order from the Northern District of California in Edwards Lifesciences Corp. v. Meril Life Sciences Pvt. Ltd., No. 19-cv-06593 (Jan. 27, 2022) (“Edwards”), provides guidance regarding the ability (or inability) to use a prior Daubert ruling to discredit an expert witness at trial when such a ruling arose within the context of a different case. In addition, the order highlights a pitfall that can arise when an opposing party produces deficient damages-related discovery but is not pressed to supplement its discovery through a motion to compel.

The U.S. International Trade Commission (the “ITC”), in an important new opinion, recently extended a series of final determinations that complainants had satisfied the “economic prong” of Section 337’s domestic injury requirement.  This decision reinforces the Commission’s critical role in defending U.S. intellectual property rights and bodes well for patent owners.  In Certain Percussive Massage Devices, Inv. No. 337-TA-1206, the Commission found that complainant Hyperice Inc. proved it had “significant” domestic industry investments in labor, notwithstanding that all of the domestic industry devices were manufactured overseas.  Indeed, thus far in 2022, the Commission has found the economic prong of the domestic industry requirement satisfied in all four public final determinations.  In 2021 and 2022 combined, the Commission found the economic prong of the domestic industry requirement satisfied in 80% of all patent-based investigations that resolved on the merits, demonstrating that Complainants with well-organized, substantiated domestic industry cases continue to meet with success at the ITC.

Last year, the U.S. District Court for the Southern District of New York addressed an issue of first impression concerning what constitutes “misappropriation” under the Defend Trade Secrets Act (DTSA) in a decision potentially relevant to cases involving allegations of trade secret misappropriation under the DTSA against a former employee. This case is worthy of note for any trade secret practitioner and is an important reminder that when pleading alleged trade secret misappropriation, it is not only important to describe the trade secret with sufficient particularity, but also to sufficiently describe the alleged misappropriation so as to illustrate the alleged acquisition of the trade secret by improper means or disclosure of the trade secret without consent.