Justia Civil Procedure Opinion Summaries

Defendants produce or sell patented drug products containing the antiviral agent tenofovir alafenamide fumarate (TAF), which is used in the treatment of AIDS. Healthcare provides medical care to persons afflicted with AIDS, including providing antiviral drugs, including the TAF products that Healthcare buys from Defendants. Healthcare sought declarations of invalidity for patents purportedly covering TAF and various combination products so that it could partner with generic makers and purchase generic TAF on the expiration of the five-year New Chemical Entity exclusivity s(21 U.S.C. 355(j)(5)(F)(ii)). Healthcare filed suit two months after the FDA approved Genvoya®—the first TAF-containing product to receive FDA approval; other TAF products were still undergoing clinical trials. No unlicensed source was offering a TAF product or preparing to do so. Healthcare told the court that “none of the generic makers wanted to enter the market because there was the fear of liability.” The court ruled that Healthcare’s actions in encouraging others to produce generic TAF products and interest in purchasing such products did not create an actual controversy under the Declaratory Judgment Act. The Federal Circuit affirmed. The declaratory requirement of immediacy and reality is not met by litigation delay. Healthcare has not otherwise shown that there is a controversy of sufficient immediacy and reality to create declaratory judgment jurisdiction. Liability for inducing infringement requires that there be direct infringement. An interest in buying infringing product is not an adverse legal interest for declaratory jurisdiction. View "AIDS Healthcare Foundation, Inc. v. Gilead Sciences, Inc." on Justia Law

Oil States sued Greene's Energy for infringement of a patent relating to technology for protecting wellhead equipment used in hydraulic fracturing. Greene’s challenged the patent’s validity in court and petitioned the Patent Office for inter partes review, 35 U.S.C. 311-319. The district court issued a claim-construction order favoring Oil States; the Board concluded that Oil States’ claims were unpatentable. The Federal Circuit rejected a challenge to the constitutionality of inter partes review. The Supreme Court affirmed. Inter partes review does not violate Article III. Congress may assign adjudication of public rights to entities other than Article III courts. Inter partes review falls within the public-rights doctrine. Patents are “public franchises” and granting patents is a constitutional function that can be carried out by the executive or legislative departments without “judicial determination.’ Inter partes review involves the same basic matter as granting a patent. Patents remain “subject to [the Board’s] authority” to cancel outside of an Article III court. The similarities between the procedures used in inter partes review and judicial procedures does not suggest that inter partes review violates Article III. The Court noted that its decision “should not be misconstrued as suggesting that patents are not property for purposes of the Due Process Clause or the Takings Clause.” When Congress properly assigns a matter to adjudication in a non-Article III tribunal, “the Seventh Amendment poses no independent bar to the adjudication of that action by a nonjury factfinder.” View "Oil States Energy Services, LLC v. Greene's Energy Group, LLC" on Justia Law

Plaintiff-Appellant Digital Ally, Inc. appealed a district court’s grant of summary judgment in favor of Defendant-Appellee Utility Associates, Inc. The two companies sold in-car video and surveillance systems. Utility owned U.S. Patent No. 6,381,556 (the ’556 patent) by purchasing the patent and other assets in January 2013 from a supplier of in-car mobile surveillance systems. Utility and its CEO, Robert McKeeman, believed that the ’556 patent was potentially valuable and covered existing systems already in commerce. Thereafter, Utility sent letters to potential customers (who were at that time customers of competitors), including Digital Ally, regarding the consequences of purchasing unlicensed and infringing systems. It urged customers to instead purchase systems from Utility because it now owned the ’556 patent. In October 2013, Digital Ally sought a declaratory judgment of non- infringement in Kansas federal district court, but the suit was dismissed for lack of personal jurisdiction over Utility. In May 2013, Digital Ally filed a petition for inter partes review with the Patent Trial and Appeal Board (PTAB) to determine the validity of all claims on the ’556 patent. The PTAB instituted a review of Claims 1– 7 and 9–25 and determined that Claims 1–7, 9, 10, and 12–25 were unpatentable, and that Claim 11 was not shown to be unpatentable. Claim 8 was not reviewed. The Federal Circuit affirmed this decision. On June 4, 2014, Digital Ally filed this suit with the Tenth Circuit Court of Appeals, containing nine counts against Utility, including monopolization, false advertising, tortious interference, bad faith assertion of patent infringement, defamation and product disparagement, and trade secret misappropriation. The district court granted Utility’s motion for summary judgment on all nine counts and denied Digital Ally’s motion for partial summary judgment. The Tenth Circuit, in affirming the district court's judgment, concluded Digital Ally failed to sufficiently argue the issues it sought to appeal, "[t]he failure to do so amounts to a concession as to the proof." View "Digital Ally v. Utility Associates" on Justia Law

Xitronix filed, in the U.S. District Court for the Western District of Texas, a “Walker Process” monopolization claim under section 2 of the Sherman Act and sections 4 and 6 of the Clayton Act based on the alleged fraudulent prosecution of a patent. The parties believed that the Federal Circuit had jurisdiction over an appeal under 28 U.S.C. 1295(a)(1). The Federal Circuit transferred the case to the Fifth Circuit, citing the Supreme Court’s 2013 decision, Gunn v. Minton. The Xitronix complaint alleges that KLA “engaged in exclusionary conduct by fraudulently prosecuting to issuance the [’]260 patent” and its conduct “was and is specifically intended to monopolize and destroy competition in the market” and alleges KLA intentionally made false representations to the Patent Office on which the examiner relied during prosecution. On the face of the complaint, no allegation establishes “that federal patent law creates the cause of action.” The only question is whether the monopolization allegation “necessarily depends on resolution of a substantial question of federal patent law, in that patent law is a necessary element of one of the well-pleaded claims.” There is nothing unique to patent law about allegations of false statements. View "Xitronix Corp. v. KLA-Tencor Corp." on Justia Law

Xitronix filed, in the U.S. District Court for the Western District of Texas, a “Walker Process” monopolization claim under section 2 of the Sherman Act and sections 4 and 6 of the Clayton Act based on the alleged fraudulent prosecution of a patent. The parties believed that the Federal Circuit had jurisdiction over an appeal under 28 U.S.C. 1295(a)(1). The Federal Circuit transferred the case to the Fifth Circuit, citing the Supreme Court’s 2013 decision, Gunn v. Minton. The Xitronix complaint alleges that KLA “engaged in exclusionary conduct by fraudulently prosecuting to issuance the [’]260 patent” and its conduct “was and is specifically intended to monopolize and destroy competition in the market” and alleges KLA intentionally made false representations to the Patent Office on which the examiner relied during prosecution. On the face of the complaint, no allegation establishes “that federal patent law creates the cause of action.” The only question is whether the monopolization allegation “necessarily depends on resolution of a substantial question of federal patent law, in that patent law is a necessary element of one of the well-pleaded claims.” There is nothing unique to patent law about allegations of false statements. View "Xitronix Corp. v. KLA-Tencor Corp." on Justia Law

The 1995 agreement, arising from a research collaboration that resulted in the antibody adalimumab, the active ingredient in the drug Humira, is governed by British law. The agreement licensed AbbVie to practice the 516 patent but AbbVie does not presently practice it. The agreement required AbbVie to pay royalties on certain sales “until the last to expire of [certain] Patents or the expiry of fifteen years from the date of First Commercial Sale of a Product by [AbbVie’s predecessor] . . . (whichever is later).” The last of those patents to expire is the 516 patent, with an expiration date in June 2018. The first commercial sale occurred in January 2003. AbbVie’s obligation to pay royalties either ceased in January 2018 (based on the first commercial sale) or will cease in June 2018 (based on the patent’s expiration date). AbbVie sought a declaratory judgment that the patent is invalid, arguing that a declaration of invalidity would constitute expiration under the contract, but did not seek the contract’s interpretation. The Federal Circuit affirmed dismissal the complaint. AbbVie does not practice the patent and is not at risk of an infringement suit. Even if AbbVie had standing, interpretation of the agreement would implicate the rights of the British government, which jointly owns the patent through one of its research councils. Deciding the invalidity question would not resolve the parties’ ultimate dispute and would raise concerns about foreign law and sovereign immunity. View "AbbVie Inc. v. MedImmune Limited" on Justia Law

In 2016, Harvard filed a patent-infringement case against Micron, which is incorporated in Delaware and has its principal place of business in Idaho, alleging that venue in the District of Massachusetts was proper under 28 U.S.C. 1391(b); 1400. Micron moved to dismiss for failure to state a claim, but did not object to venue under Rule 12(b)(3). Months later, the Supreme Court interpreted 28 U.S.C. 1400(b) (TC Heartland decision): “a domestic corporation ‘resides’ only in its State of incorporation for purposes of the patent venue statute.” Micron then moved to dismiss or to transfer the case. The district court denied the motion, reasoning that, under Rule 12(g)(2) and (h)(1)(A), Micron had waived its venue defense by not objecting to venue in its first motion to dismiss. The Federal Circuit vacated and remanded. TC Heartland changed the controlling law: at the time of the initial motion to dismiss, the venue defense now raised by Micron was not “available,” making the waiver rule of Rule 12(g)(2) and (h)(1)(A) inapplicable. That waiver rule, however, is not the only basis on which a district court might reject a venue defense for non-merits reasons, such as by determining that the defense was not timely presented. A less bright-line, more discretionary framework applies even when Rule 12(g)(2) and hence Rule 12(h)(1)(A) does not. View "In re: Micron Technology, Inc." on Justia Law

Raytheon filed a patent infringement action against Cray in the Eastern District of Texas. Cray is a Washington corporation with its principal place of business there. It also maintains facilities in Minnesota, Wisconsin, California, and Texas. Although Cray does not rent or own any property in the Eastern District of Texas, it allowed Harless, a sales executive, and Testa, a senior territory manager, to work remotely from their homes in that district. Harless provided price quotations to customers, in communications that identified his home telephone number as his “office” telephone number with an Eastern District of Texas area code. Cray never paid Harless for the use of his home nor advertised or otherwise indicated that his home was a Cray place of business. Cray moved to transfer the suit. The district court denied a transfer. The Federal Circuit directed the transfer of the case, citing the Supreme Court’s 2017 holding, “TC Heartland, effectively reviving Section 1400(b) as the focus of venue in patent cases.” Section 1400(b) provides that “[a]ny civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.” Cray does not maintain a regular and established place of business in the district. View "In re: Cray, Inc." on Justia Law

Inselberg is the inventor systems by which audiences interact with live events, such as concerts and football games. In 2010, his company received a $500,000 loan from Bisignano, who received security interest in the patents.Federal authorities brought criminal charges against Inselberg. He defaulted on the loan. Inselberg and Bisignano entered into an agreement that purported to convey the patent portfolio to Bisignano. , Bisignano became the CEO of First Data. In 2014, Inselberg began claiming that the assignment was invalid.and that First Data was infringing. Bisignano granted First Data a royalty-free license and sought a federal declaratory judgment regarding the validity of the license agreement and ownership of the patents, to preempt "an inevitable infringement action. Inselberg filed a complaint in New Jersey Superior Court, asserting only state law claims. Bisignano and First Data filed an answer with counterclaims, seeking declaratory judgments of noninfringement and invalidity, then removed the action to federal court. The Federal Circuit affirmed a dismissal for lack of jurisdiction. Inselberg’s claims were all state law property rights claims; the alleged patent law issues were “incidental and contingent.” It did not become a patent case merely because some of the damages might be measured based on “forgone royalties. Bisignano remains the owner of the patents unless a state court invalidates the assignment; the district court did not have jurisdiction to consider the matter. View "First Data Corp. v. Inselberg" on Justia Law

AIA sued Avid for infringement of patents directed to research technologies stemming from the discovery of a genetic mutation that is associated with early-onset familial Alzheimer’s disease. Mullan is named as the sole inventor of both patents. Avid responded that AIA lacked standing to assert the patents and that Sexton, AIA’s founder, and Mullan orchestrated a scheme to appropriate for themselves inventions from Imperial College in London and the University of South Florida. AIA claimed that Dr. Mullan was properly named as sole inventor and that his employer, USF, waived any ownership rights. The district court held a jury trial on standing, in which 12 witnesses testified and over 200 exhibits were introduced. The jury determined that USF did not knowingly and intentionally waive its ownership rights and that Dr. Hardy was a co-inventor; the court found AIA lacked standing and entered judgment for Avid. The Federal Circuit summarily affirmed. Avid sought attorney’s fees. The district court allowed the parties to submit briefing, evidence, and declarations and held a hearing, then awarded Avid $3,943,317.70 in fees. The Federal Circuit affirmed, rejecting AIA’s argument that the Seventh Amendment requires a jury trial to decide the facts forming the basis to award attorney’s fees under Patent Act section 285. The district court did not err by making factual findings not foreclosed by the jury’s verdict on standing; AIA’s due process rights were not violated. View "AIA America, Inc. v. Avid Radiopharmaceuticals" on Justia Law