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Latest Federal Court Cases, 12/10/18

December 10, 2018

Overview

PATENT CASE OF THE WEEK

Jack Henry & Associates, Inc. v. Plano Encryption Technologies LLC, Appeal No. 2016-2700 (Fed. Cir. Dec. 7, 2018)

On Friday, the Federal Circuit reversed a district court’s dismissal of a declaratory judgment action due to improper venue. 

The sole business of patent owner Plano Encryption Technologies LLC (“PET”), a Texas limited liability company, is to “enforce its intellectual property.” In doing so, PET wrote letters to eleven Texas banks identifying PET’s patents, stating that the banks’ mobile apps are believed to be infringing the patents, and inviting non-exclusive licenses.  The letters also enclosed detailed infringement analysis charts for the asserted patents.  All of the banks have principal offices or branches or customers in the Northern District of Texas. 

Jack Henry & Associates, Inc. provides software systems for the banks’ mobile apps, and it is indemnifying the banks for any liability for infringement.  Together with the banks, Jack Henry filed a declaratory judgment action in the Northern District of Texas. 

The district court granted PET’s motion for dismissal for lack of personal jurisdiction, pointing to the Federal Circuit’s decision in Avocent Huntsville Corp. v. Aten Int’l Co., 552 F.3d 1324, 1333 (Fed. Cir. 2008).  However, the district court’s reliance on Avocent was erroneous, as the decision did not establish the generalization that letters charging infringement can never provide specific jurisdiction.  Instead, district courts must adhere to the due process precedent.

In applying the due process analysis, the Federal Circuit found that sending a letter that forms the basis for the claim may be sufficient to establish minimum contacts, and PET did not argue that litigating in the Northern District would be unduly burdensome or unfair.  Thus, PET is subject to personal jurisdiction in the Northern District of Texas, and venue is proper in the Northern District of Texas.

The opinion can be found here.

ALSO THIS WEEK

Novartis AG v. Ezra Ventures LLC, Appeal No. 2017-2284 (Fed. Cir. Dec. 7, 2018)

In an appeal from district court concerning patent term extensions and the interplay with the obviousness-type double patenting doctrine, the Federal Circuit affirmed.   The district court had ruled for Novartis that a patent term extension (PTE) pursuant to 35 U.S.C. § 156 is valid so long as the extended patent is otherwise valid without the extension. The Federal Circuit found that in accordance with statutory construction principals and the court’s holding in Merck & Co. v. Hi-Tech Pharmacal Co., 482 F.3d 1317 (Fed. Cir. 2007), the obviousness-type double patenting doctrine and the court’s holding does not invalidate an otherwise validly obtained PTE under § 156.  This case did not raise the traditional concern with obviousness-type double patenting of a patent owner “extending his exclusive rights to an invention through claims in a later-filed patent that are not patentably distinct from claims in the earlier filed patent.”  Here, it was the earlier-filed, earlier-issued patent that has the later expiration date, due to a statutorily-allowed term extension under § 156, not the later-filed, later-issued patent. As such, the PTE was valid as the extended patent is otherwise valid without the extension.  Thus, the Federal Circuit affirmed the District Court’s final judgment.

The opinion can be found here.

Novartis Pharmaceuticals Corp. v. Breckenridge Pharmaceutical Inc., Appeal Nos. 2017-2173, -2175, -2176, -2178, -2179, -2180, -2182, -2183, -2184  (Fed. Cir. Dec. 7, 2018)

In a separate appeal from the same district court as the other Novartis case this week (see above), the Federal Circuit addressed another issue concerning the law of obviousness-type double patenting.  This case concerned the interplay of the obviousness-type double patenting doctrine and the Uruguay Rounds agreement (URAA) that effectuated a change in patent term in US law.  In this case, the later-filed of the two related patents expired before the term of the earlier-filed patent due to an intervening change in law (the URAA), which changed patent term length from 17 to 20 years.   Specifically, the Federal Circuit reversed the district court’s decision to invalidate a pre-URAA patent for obviousness-type double patenting based on a related post-URAA patent.  The later patent issued after, but expired before, the pre-URAA patent.  The Court held that a post-URAA patent that issues after and expires before a pre-URAA patent cannot qualify as a double patenting reference against the pre-URAA patent because holding otherwise would “abrogate [the patent owner’s] right to enjoy one full patent term on its invention.”  The Court held that the correct framework in this situation is to look to the issuance date as the reference point for obviousness-type double patenting, because “a change in patent term law should not truncate the term statutorily assigned to the pre-URAA ‘772 patent.”

The opinion can be found here.

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