Patent License: The right to ‘Make, Use, and Sell’ a Product Inherently Includes the Right to Have It Made Unless Explicitly Excluded

CoreBrace LLC v. Star Seismic LLC, No. 2008-1502 (Fed. Cir. May 22, 2009):

Holding:

“The right to ‘make, use, and sell’ a product inherently includes the right to have it made by a third party, absent a clear indication of intent to the contrary.” Slip op. at 6.

Venue Transfer: Federal Circuit Ordered Yet Another Case Transferred Out of Eastern District of Texas (Is this a trend now?)

In re Genentech, No. 09-M901 (Fed. Cir. May 22, 2009):

Holding:

When assessing whether a defendant has met its burden of demonstrating the need to transfer by applying the “public” and “private” factors for determining forum non conveniens mandated by the fifth circuit, “the convenience of the witnesses is probably the single most important factor in transfer analysis” and the witnesses need not be key witnesses. Slip op. at 5-7.

Facts:

Sanofi, a German company, filed a patent infringement lawsuit against Genentech, a California company, in E.D. Tex. Genentech filed a DJ action on the same day in N.D. Cal. A substantial number of witnesses reside in California and none in Texas. Genentech then sought to transfer the case to N.D. Cal. under 28 U.S.C. § 1404(a), which the E.D. Tex. court denied. Genetech petitioned for a writ of mandamus, and the Federal Circuit granted.

Comments:

The timeline here is very important. Sanofi filed the lawsuit first in E.D. Tex. and Genentech then filed a DJ action in N.D. Cal. Therefore, this may become a trend for alleged infringers to successfully transfer cases out of E.D. Tex., as probably most of the patent infringement cases in E.D. Tex. do not involved many witnesses, if at all, from Texas.

Winner/Loser Predictions:

Winner: Accused Infringers
Loser: Patent Owners Considering E.D. Tex as a forum

Winner: Expert Witnesses Residing in Texas (to boost the balancing analysis, patentees may retain expert witnesses from Texas from the beginning).

Proper Interpretation of Product-by Process Claims: Process Terms in Product-by-Process Claims Serve as Limitations in Determining Infringement

Abbott Laboratories v. Sandoz, Inc., No. 2007-1400 (Fed. Cir. May 18, 2009):

Holding:

“[P]rocess terms in product-by-process claims serve as limitations in determining infringement.”

Slip op. at 18 (affirming the holding of Atlantic Thermoplastics Co. v. Faytex Corp., 970 F.2d 834 (Fed. Cir. 1992) and rejecting the holding of Scripps Clinic & Research Foundation v. Genentech, Inc., 927 F.2d 1565, 1583 (Fed. Cir. 1991)).

AND

“[A] patentee’s use of the word ‘obtainable' rather than ‘obtained by’ cannot give it a free pass to escape the ambit of the product-by-process claiming doctrine.”

Id. at 24.

Comments:

Here is the excellent reasoning by the Court:

+++
In sum, a patentee’s use of the word “obtainable” rather than “obtained by” cannot give it a free pass to escape the ambit of the product-by-process claiming doctrine. Claims that include such ambiguous language should be viewed extremely narrowly. If this court does not require, as a precondition for infringement, that an accused infringer actually use a recited process, simply because of the patentee’s choice of the probabilistic suffix “able,” the very recitation of that process becomes redundant. This would widen the scope of the patentee’s claims beyond that which is actually invented—a windfall to the inventor at the expense of future innovation and proper notice to the public of the scope of the claimed invention.
+++

Id.

Personal Jurisdiction: What Activities Are Sufficient?

Autogenomics, Inc. v. Oxford Gene Tech. Limited, No. 2008-1217 (Fed. Cir. May 18, 2009):

Holding: “[O]nly enforcement or defense efforts related to the patent rather than the patentee’s own commercialization efforts are to be considered for establishing specific personal jurisdiction in a declaratory judgment action against the patentee.” Slip op. at p. 13 (citing Avocent Huntsville Corp. v. Aten Int’l Co., 552 F.3d 1324, 1328 (Fed. Cir. 2008)).

Comments:

This case gives a nice summary of related rules from previous personal jurisdiction cases:

1. “‘[C]ease-and-desist letters alone do not suffice to justify personal jurisdiction’ in a declaratory judgment action.” Id. at p. 10.
2. “[A]ttempts at ‘extra-judicial patent enforcement’ by harming plaintiff’s business activities in forum state is a sufficient additional factor to justify the exercise of personal jurisdiction.” Id. at p. 11.
3. “[E]ntry into an exclusive license with an entity in the forum state is sufficient extra activity to establish jurisdiction.” Id.
4. Personal jurisdiction exists when a patentee contracted with an exclusive distributor to sell the patented products in the forum state where the agreement was “analogous to a grant of a patent license.” Id.
5. Personal jurisdiction exists when a party “initiated a suit seeking to enforce the same patent that is the subject of this suit against other parties, unrelated to this action, in the same district court.” Id.
6. “[E]xclusive licensing of the accused infringer’s competitor in the forum state constituted the required ‘additional activity’ beyond sending warning letters.” Id.

The Safe Harbor Statute of 35 U.S.C. § 271(e)(1) Applies to Process Patents in Actions Under Section 337 (ITC)

Amgen, Inc. v. United States International Trade Commission, No. 2007-1014 (Fed. Cir. Apr. 30, 2009)

Holding:

“[T]he safe harbor statute applies to process patents in actions under Section 337 when the imported product is used for the exempt purposes of § 271(e)(1).”

Comments:

Is this opinion inconsistent with Kinik v. United States International Trade Commission, 362 F.3d 1359 (Fed. Cir. 2004)? In Kinik, the Court held that § 271(g) provided a new right and remedy in the district court, but held that the Tariff Act remedy of exclusion based on practice of a patented process was unchanged, and that the exceptions set forth in § 271(g) did not apply in Section 337 cases.

The Federal Circuit did not overturn Kinik, but if the distinction merely lies on the Court’s interpretation of legislative history behind § 271(g) versus § 271(e), it does not seem right.

In my opinion, Kinik should be overturned, because it is inconsistent with GATT. I have copied my earlier analysis on Kinik from June 2004 below.

+++

The Federal Circuit held that defenses under § 271(g) do not apply to the ITC proceedings under § 1337(a)(1)(B)(ii). Id. at 1362-63. Although the text of the statutes, the legislative history, and precedent clearly support this interpretation, § 271(g), added in 1988, may have been outdated by the General Agreement on Tariffs and Trade (GATT)’s 1994 national treatment rule. This rule requires that ITC procedures in § 1337 investigations treat imported goods no less favorably than the procedures in district courts. GATT, art. III: 4, T.I.A.S. No. 1700, 55 U.N.T.S. 187.

Congress amended § 1337 in 1994 to “ensure that U.S. procedures for dealing with alleged infringements by imported products comport with GATT 1994 ‘national treatment’ rules.” Uruguay Round Agreements Act, Pub. L. 103-465, 108 Stat. 4809, §§ 321(a)(5)(A) (codified as amended at 19 U.S.C. § 1337 (1994)); H.R. Rep. No. 103-826, pt. 1, at 142 (1994). This amendment was preceded by a 1989 GATT Panel Report finding that § 1337 was inconsistent with the national treatment rule. United States - Section 337 of the Tariff Act of 1930, GATT Doc. L/6435 - 35S/345 (Nov. 7, 1989) (“1989 GATT Panel Report”).

Because courts had never decided the applicability of defenses under § 271(g) to ITC actions, the 1989 GATT Panel Report did not address defenses under § 271(g). The Federal Circuit’s interpretation in Kinik prevents makers of imported goods in § 1337 ITC actions from raising defenses available in district court infringement proceedings. Therefore, this rule appears inconsistent with the GATT’s national treatment rule. It remains to be seen, however, whether other countries will raise this inconsistency through a GATT panel.

+++