Justia Civil Procedure Opinion Summaries

Articles Posted in US Court of Appeals for the Federal Circuit

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Inspired Development sued KidsEmbrace for breach of contract and other related state law claims in federal district court on the basis of diversity jurisdiction under 28 U.S.C. 1332(a). The dispute involved the purported breach of a patent-licensing agreement by failure to pay outstanding royalties. The district court granted summary judgment in KidsEmbrace’s favor on certain claims. On appeal, the Eleventh Circuit discovered that diversity jurisdiction did not exist. The district court concluded on remand that it retained jurisdiction over the suit based on federal question jurisdiction. The Eleventh Circuit transferred the case to the Federal Circuit, which vacated and remanded for dismissal. The parties’ claims did not arise under the patent laws pursuant to 28 U.S.C. 1338(a). No claims allege a cause of action created by federal patent law. This is a state law contract case for past due royalties. Inspired Development need not demonstrate that KidsEmbrace actually practiced the licensed patents, and the question of infringement is not a “necessary element” of the claim. Finding a federal question here merely because this contract implicates a run-of-the-mill question of infringement or validity would undoubtedly impact the wider balance between state and federal courts. View "Inspired Development Group v. Inspired Products Group, LLC" on Justia Law

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University of Texas System (UT) sued BSC for patent infringement in the Western District of Texas. The patents resulted from research conducted at UT and are directed to implantable drug-releasing biodegradable fibers. BSC is a Delaware corporation with a principal place of business in Massachusetts. BSC does not own or lease any property or maintain a business address in the Western District of Texas but has 46 employees in the District; all maintain home offices and do not work in spaces that are owned or controlled by BSC. UT asserted that venue was proper because UT has sovereign immunity. The district court transferred the case to the District of Delaware. The Federal Circuit affirmed, first holding that it had jurisdiction to hear the appeal under the collateral order doctrine. State sovereignty principles do not grant UT the right to bring suit in an otherwise improper venue; 28 U.S.C. 1400(b) is the sole and exclusive provision controlling venue in patent infringement actions and venue is proper where a defendant resides or has a regular and established place of business. Sovereign immunity is a shield, not a sword. There was no claim or counterclaim against UT that placed it in the position of a defendant. View "Board of Regents of the University of Texas System v. Boston Scientific Corp." on Justia Law

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The University, an agent or instrumentality of the Swiss Confederation, having a place of business in Bern, Switzerland, granted an exclusive license of its 114 patent to the German company LABOKLIN, whose principal place of business is in Bad Kissingen, Germany. Under the License Agreement, LABOKLIN was required to commercialize the invention in North America. LABOKLIN entered into sublicenses in the U.S. PPG, a corporation headquartered in Washington State, offers laboratory services. After obtaining the University’s consent, LABOKLIN sent a cease-and-desist letter to PPG in Spokane, Washington. PPG sued LABOKLIN and the University, requesting a declaratory judgment that the Asserted Claims of the 114 patent are ineligible under 35 U.S.C. 101 for failing to claim patent-eligible subject matter. The Federal Circuit affirmed that the district court had jurisdiction over both LABOKLIN and the University. LABOKLIN had sufficient minimum contacts with the U.S. to comport with due process; the University, a foreign sovereign in the U.S., had engaged in “commercial activity” sufficient to trigger an exception to jurisdictional immunity under 28 U.S.C. 1605(a)(2) by “obtain[ing] a patent and then threaten[ing] PPG by proxy with litigation.” PPG had stipulated to infringement of the Asserted Claims; the courts found those Claims patent-ineligible as directed to patent-ineligible subject matter, namely the discovery of the genetic mutation that is linked to HNPK. View "Genetic Veterinary Sciences, Inc. v. LABOKLIN GMBH & Co. KG" on Justia Law

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The Department of Commerce conducted its ninth administrative review of an antidumping duty order on chlorinated isocyanurates from China, 19 U.S.C. 1677(18)(A), and assigned Kangtai, selected by Commerce as a mandatory respondent, a 0% antidumping duty margin. After a tenth review, Commerce assigned Kangtai, again a mandatory respondent, a 35.05% rate. Kangtai filed a complaint, asserting Commerce improperly instructed Customs to assess an anti-dumping duty margin on 18 of Kangtai’s subject merchandise entries at a rate higher than the zero percent rate calculated for Kangtai’s entries in the Review 9 Final Results. The Court of International Trade dismissed the complaint, concluding that it lacked jurisdiction under 28 U.S.C. 1581(i). The Federal Circuit affirmed. The Trade Court’s residual jurisdiction may not be invoked when jurisdiction under another section 1581 subsection could have been available unless the remedy provided under that other subsection would be manifestly inadequate. Kangtai could have sought relief under section 1581(c) because the true nature of Kangtai’s action is a challenge to Commerce’s determination to assess antidumping duties on entries, rather than on sales, made during the relevant period of review. Kangtai did not demonstrate that relief under 1581(c) would have been manifestly inadequate. Not only could Kangtai have challenged Commerce’s decision to assess duties on entries in the Review 9 Results, Kangtai actually did file a complaint contesting the Review 10 Final Results. View "Juancheng Kangtai Chemical Co. v. United States" on Justia Law

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Hymer imported vehicles into the U.S. from Canada. Customs classified them under Harmonized Tariff Schedule of the United States (HTSUS) 8703.24.00, which applies a tariff of 2.5% to “motor vehicles principally designed for transporting persons.” Hymer filed a protest, arguing that the entries were entitled to duty-free treatment under HTSUS 9802.00.50 and North American Free Trade Agreement Article 307, “American Goods Returned,” as qualifying goods that reenter the U.S. customs territory after repairs or alterations in Canada or Mexico. Hymer requested that Customs “suspend action on th[e] protest” until the Court of International Trade (CIT) issued a decision in other cases (Pleasure-Way) addressing whether van-based motorhomes—similar to the Hymer vehicles —qualified for preferential tariff treatment. In Pleasure-Way, the Federal Circuit affirmed that HTSUS 9802.00.50 did not apply; the vehicles were liquidated at 2.5%. While Pleasure-Way was pending, a Customs Import Specialist checked “Approved” on Hymer’s Protest Form, which was sent to Hymer without a refund check or any explanations. Later, an Import Specialist updated Customs’ electronic system to reflect that the protest was suspended. Hymer sought an order directing Customs to reliquidate the entries of the vehicles under HTSUS 9802.00.50, asserting CIT jurisdiction under 28 U.S.C. 1581(i)(1) and (i)(4), on grounds that Customs’ failure to provide a refund check constituted unlawfully withheld action under the Administrative Procedure Act. The Federal Circuit reversed CIT's judgment in favor of the government. CIT’s assertion of residual jurisdiction under 28 U.S.C. 1581(i) was improper because a civil action for contesting the denial of protests could have been available under 28 U.S.C. 1581(a), and the remedy provided under 1581(a) is not manifestly inadequate. View "Erwin Hymer Group v. United States" on Justia Law

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The asserted patents were originally assigned to AMD, which later purported to transfer “all right, title and interest” in the patents to Lone Star, with several limitations. For example, Lone Star agreed to only assert the covered patents against “Unlicensed Third Party Entit[ies]” specifically listed in the agreement. New entities can only be added if both parties agree to add them. If Lone Star sues an unlisted entity, AMD has the right, without Lone Star’s approval, to sublicense the covered patents to the unlisted target. AMD can prevent Lone Star from assigning the patents or allowing them to enter the public domain. AMD and its customers can continue to practice the patents; AMD shares in any revenue Lone Star generates from the patents through “monetization efforts." Lone Star sued parties listed as Unlicensed Third Party Entities in the agreement, asserting infringement and alleging that AMD transferred “all right, title, and interest” in the asserted patents to Lone Star. The district court concluded that Lone Star does not own the patents and could not assert them. The Federal Circuit vacated the dismissal, while agreeing that Lone Star cannot assert the patents on its own. The court should not have dismissed the case without considering whether AMD should have been joined (Federal Rule of Civil Procedure 19. View "Lone Star Silicon Innovations, LLC v. Nanya Technology Corp." on Justia Law

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Presidio's 639 patent describes and claims single-layer ceramic capacitors with certain features. Competitor AVX, which manufactures and sells various electronic components, including capacitors, petitioned for an inter partes review (IPR), under 35 U.S.C. 311−319, of all 21 claims of the 639 patent, asserting obviousness (35 U.S.C. 103). The Patent Trial and Appeal Board instituted a review (35 U.S.C. 314), held claims 13–16 and 18 unpatentable, but held that AVX failed to establish unpatentability of all other claims. Presidio did not appeal the as to the unpatentable claims. AVX appealed as to the upheld claims. Presidio responded to AVX on the merits and argued that AVX lacked Article III standing. The Federal Circuit dismissed the appeal, rejecting AVX’s estoppel and “competitor standing” theories and concluding that AVX lacks standing. A person does not need Article III standing to file an IPR petition and obtain a Board decision, because Article III requirements do not apply to administrative agencies, but AVX has no present or nonspeculative interest in engaging in conduct arguably covered by the patent claims at issue. AVX has not shown that it is engaging in or has nonspeculative plans to engage in, conduct arguably covered by the upheld claims of the patent. View "AVX Corp. v. Presidio Components, Inc." on Justia Law

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PDIC’s patent allegedly covers encoding digital images in the JPEG format. PDIC licensed the patent to Adobe, promising not to sue Adobe or Adobe’s customers for claims arising “in whole or part owing to an Adobe Licensed Product.” PDIC sued Adobe customers, alleging that encoding JPEG images on the customers’ websites infringed its patent. Adobe was allowed to intervene to defend nine customers, asserting that PDIC breached its license agreement. PDIC dismissed the actions in which Adobe had intervened. Adobe unsuccessfully sought "exceptional case" attorneys’ fees, 35 U.S.C. 285, and FRCP 11 sanctions. The court concluded that it could not determine the prevailing party nor "say that PDIC’s pre-suit investigation was inadequate or that any filing was made for any improper purpose.” The court denied in part PDIC’s motion for summary judgment, finding that a reasonable juror could find "that PDIC’s infringement allegations . . . cover the use of Adobe products,” and violated the agreement; it held that Adobe could only collect fees incurred in defending its customers in suits that violated the agreement but could not recover fees incurred in the affirmative breach-of-contract suit. After failed attempts to identify "purely defense fees,” Adobe requested judgment in favor of PDIC. The court reiterated “that there are purely defensive damages that can be proven,” but entered the judgment. The Federal Circuit dismissed an appeal for lack of jurisdiction. There was no final ruling barring recovery on Adobe’s breach claim. Under New Jersey law, actual damages are not a required element of a breach of contract claim. View "Princeton Digital Image Corp. v. Office Depot Inc." on Justia Law

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PET, a Texas LLC registered to do business throughout Texas, has its registered address in Plano, which is in the Eastern District of Texas. The Banks all have their principal offices or branches or customers in the Northern District of Texas. PET's “sole business is to enforce its intellectual property.” PET’s CEO wrote to each of the Banks, identifying PET’s patents, stating that the Banks are believed to be infringing the patents, and inviting non-exclusive licenses. All the Banks conduct banking business in the Northern District of Texas. All the letters from PET referred to PET’s pending lawsuit against Citizens National Bank in the Eastern District. The Northern District of Texas dismissed the Banks’ declaratory judgment action, reasoning that PET’s contacts with the Northern District did not subject it to personal jurisdiction. The Federal Circuit reversed, finding that PET is subject to personal jurisdiction in the Northern District under 28 U.S.C. 1391: Venue in a multidistrict state. PET “purposefully directed” its charges of infringement to banks conducting banking business in the Northern District. The charges “arise out of or relate to” PET’s patent licensing activities in the Northern District. PET has met the minimum contacts requirement without offense to due process. View "Jack Henry & Associates, Inc.. v. Plano Encryption Technologies, LLC" on Justia Law

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Maxchief has its principal place of business in China and distributes one of the plastic tables it manufactures (UT-18) exclusively through Meco, which is located in Tennessee. Meco sells the UT-18 tables to retailers. Wok competes with Maxchief in the market for plastic folding tables, and also has its principal place of business in China. Wok owns patents directed to folding tables. Wok sued Maxchief’s customer, Staples, in the Central District of California, alleging that Staples’ sale of Maxchief’s UT-18 table infringed the Wok patents. Staples requested that Meco defend and indemnify Staples. Meco requested that Maxchief defend and indemnify Meco and Staples. The Staples action is stayed pending the outcome of this case. Maxchief then sued Wok in the Eastern District of Tennessee, seeking declarations of non-infringement or invalidity of all claims of the Wok patents and alleging tortious interference with business relations under Tennessee state law. The district court dismissed the declaratory judgment claim for lack of personal jurisdiction. With respect to the state law tortious interference claim, the district court concluded it lacked subject matter jurisdiction. The Federal Circuit affirmed. Wok lacked sufficient contacts with the forum state of Tennessee for personal jurisdiction as to both the declaratory judgment claim and the tortious interference claim. View "Maxchief Investments Ltd. v. Wok & Pan, Ind., Inc." on Justia Law