Fitch Even News Feedhttp://www.fitcheven.com/?t=39&format=xml&stylesheet=rss&directive=0&records=20en-us18 Nov 2017 00:00:00 -0800firmwisehttp://blogs.law.harvard.edu/tech/rssFitch Even Welcomes Attorney Margaret Wojkowski to Chicago Officehttp://www.fitcheven.com/?t=40&an=71823&format=xml<p>Fitch, Even, Tabin &amp; Flannery LLP is pleased to announce that <a href="http://www.fitcheven.com/?t=3&amp;A=13638&amp;format=xml&amp;p=5482">Margaret A. &ldquo;Peggy&rdquo; Wojkowski</a> has joined the firm&rsquo;s Chicago office as an associate. Peggy currently focuses her practice on patent preparation and prosecution, IP litigation, patent post-issuance proceedings, and product clearance and legal opinions.</p> <p>Peggy earned her J.D. from Chicago-Kent College of Law, graduating <i>magna cum laude</i> in May 2017, and holds a B.S. in Chemistry from North Central College. While attending law school, she served as a judicial extern to the Honorable Ann Claire Williams of the U.S. Court of Appeals for the Seventh Circuit. Along with multiple academic awards, Peggy was recognized with several public service awards while at Chicago-Kent for her extensive volunteer work with the Self-Help Web Center at the Cook County Circuit Court and with the Chicago-Kent Patent Hub.</p> <p>We are happy to welcome Peggy to the Fitch Even team!<br /> <br /> &nbsp;</p>Firm News17 Nov 2017 00:00:00 -0800http://www.fitcheven.com/?t=40&an=71823&format=xmlIP Alert: Federal Circuit Declares TC Heartland a “Change of Controlling Law”http://www.fitcheven.com/?t=40&an=71839&format=xml<p>Prior to the U.S. Supreme Court&rsquo;s <a href="http://www.fitcheven.com/?t=40&amp;an=66124&amp;anc=180&amp;format=xml&amp;p=5486">ruling in <i>TC Heartland</i></a>&nbsp;in May of this year, the Federal Circuit repeatedly interpreted 28 U.S.C. &sect;&sect; 1391 and &sect; 1400 (the federal venue statutes) to allow patent lawsuits to be filed in any&nbsp;district court having personal jurisdiction over the accused infringer. The Court&rsquo;s ruling in <i>TC Heartland</i> severely curtailed where patent lawsuits could be commenced by finding that &sect;&nbsp;1391 was not applicable to venue determinations in patent lawsuits. In many cases, defendants currently defending patent lawsuits who did not move for a change of venue before the <i>TC Heartland</i> decision elected to do so afterward. Normally, a party waives the defense of improper venue by failing to raise the defense immediately. The waiver rule, however, will not apply if there has been a change in controlling law. After <i>TC Heartland</i>, there has been some disagreement in the district court as to whether that decision represented a change in the law (thereby allowing defendants to raise the venue defense) or did not represent a change in the controlling law (thereby precluding defendants from raising the venue defense).</p> <p>On November 15, 2017, in <i><a href="http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/17-138.Motion_Panel_Order.11-13-2017.1.PDF">In re Micron Technology, Inc.</a></i>, the Federal Circuit answered this question, holding that the Supreme Court&rsquo;s decision in <i>TC Heartland</i> did indeed change the controlling law regarding venue for patent cases. Because the ruling in <i>TC Heartland</i> represented a &ldquo;change of controlling law,&rdquo; defendants that failed to raise a venue defense prior to the <i>TC Heartland</i> decision are not necessarily prevented from raising it in a timely manner.</p> <p>The facts of the case were straightforward. In June 2016, the plaintiff, President and Fellows of Harvard College (&ldquo;Harvard&rdquo;) filed a patent infringement lawsuit against Micron. Although Micron filed a motion to dismiss under Fed. R. Civ. P. 12(b)(6) for failure to state a claim, &nbsp;Micron did not include an objection to venue under Rule 12(b)(3).</p> <p>In May 2017, the Supreme Court issued its ruling in <i>TC Heartland</i>, which held that under 28 U.S.C. &sect; 1400(b), &ldquo;a domestic corporation &lsquo;resides&rsquo; only in its State of incorporation for purposes of the patent venue statute.&rdquo; Micron subsequently filed a second motion to dismiss, arguing that venue was improper because it is incorporated in Delaware and not in Massachusetts where the case was pending. The district court denied Micron&rsquo;s second motion and held that by not objecting to venue in its first motion to dismiss, Micron had waived its venue defense. Micron then filed a petition for writ of mandamus.</p> <p>The Federal Circuit noted that the Rule 12 waiver question at issue was whether the venue defense was &ldquo;available&rdquo; to Micron when it filed its first motion to dismiss. The Federal Circuit concluded that the venue objection &ldquo;was not available until the Supreme Court decided <i>TC Heartland</i> because, before then, it would have been improper, given controlling precedent, for the district court to dismiss or to transfer for lack of venue.&rdquo;&nbsp;&nbsp; &nbsp;</p> <p>The Federal Circuit stated that its holding was a &ldquo;common-sense interpretation&rdquo; of Rule 12. Because controlling law precluded the district court from adopting a defense, the Federal Circuit stated that &ldquo;it is natural to say&rdquo; that the defense was not available to Micron. &ldquo;The law of precedent is part of what determines what law controls.&rdquo;</p> <p>The <i>Micron</i> case is of significance principally to parties who were involved in existing litigation as of May of 2017. One point of caution: Although the Federal Circuit held that <i>TC Heartland</i> created a change in the controlling law, it noted that district courts can still determine that the venue defense can be waived in certain circumstances (e.g., if the defense is not timely asserted).</p> <p>For more information about these decisions, please contact Fitch Even partner <a href="http://www.fitcheven.com/?t=3&amp;A=3589&amp;format=xml&amp;p=5482">Eric L. Broxterman</a>, author of this alert.</p> <p>&nbsp;</p> <p><b>Fitch Even IP Alert<sup>&reg;</sup></b></p> IP Alerts17 Nov 2017 00:00:00 -0800http://www.fitcheven.com/?t=40&an=71839&format=xmlThe Ubiquitous Problem of Inherency in Obviousness: <i>Southwire Co. v. Cerro Wire, LLC</i>http://www.fitcheven.com/?t=40&an=71586&format=xml<p>Please join Fitch, Even, Tabin &amp; Flannery LLP for a complimentary webinar, &ldquo;<a href="https://register.gotowebinar.com/register/1177854416883116802">The Ubiquitous Problem of Inherency in Obviousness: <em>Southwire Co. v. Cerro Wire, LLC</em></a>,&rdquo; on Wednesday, November 29, 2017, at 9:00 am PST / 10:00 am MST / 11:00 am CST / 12 noon EST.</p> <p>Obviousness challenges tied to the doctrine of inherency can arise during various stages in the patent life cycle, including patent prosecution, post-issuance proceedings, and litigation. Despite how frequently these challenges occur, the law applicable in this area has been less than clear. While recent case law has helped to provide clarification, the <i>Southwire</i> case illustrates that overcoming inherency-based obviousness arguments does not always result in a win for the applicant or patentee.</p> <p>Our webinar will explore these topics and more:</p> <ul> <li>The nature of obviousness contentions based on inherency</li> <li>Practice pointers in applying the doctrine of <i>Southwire</i> and other recent cases</li> <li>Hypothetical examples showing how to demonstrate patentability</li> </ul> <p>Our speaker will be Fitch Even attorney <a href="http://http://www.fitcheven.com/?t=3&amp;A=8909&amp;format=xml&amp;p=5482">Giles N. Turner</a>. Giles&rsquo;s practice focus is on U.S. and international patent preparation and prosecution, assisting clients working in technical areas including semiconductors, chemical engineering, energy, material science, textiles, biotechnology, and mechanical arts, among others.</p> <p>CLE credit has been approved for California and Illinois and is pending in Nebraska. Other states may also award CLE credit upon attendee request. There is no fee to attend, but please note registration is required.&nbsp;To reserve your place, please <a href="https://register.gotowebinar.com/register/1177854416883116802">REGISTER HERE</a>.<br /> <br /> &nbsp;</p> Upcoming Webinars08 Nov 2017 00:00:00 -0800http://www.fitcheven.com/?t=40&an=71586&format=xmlFitch Even Partner David Gosse Appointed to AIPLA Special Committeehttp://www.fitcheven.com/?t=40&an=70484&format=xml<p>Fitch Even partner <a href="http://www.fitcheven.com/?t=3&amp;A=2585&amp;format=xml&amp;p=5482">David A. Gosse</a> was recently appointed to the newly formed <a href="http://www.aipla.org/Pages/default.aspx">American Intellectual Property Law Association</a> (AIPLA) Special Committee on Education Coordination. Members of AIPLA Special Committees are appointed by the current AIPLA president. Dave will serve on this committee through October 31, 2018.</p> <p>Dave also currently serves as chair of the Programs Subcommittee of AIPLA&rsquo;s IP Transactions Committee. He was chair of the Law School Outreach Subcommittee of the Education Committee for the past two years and previously played an active role in the New Lawyer Committee.</p> <p>Dave has a diverse IP law practice encompassing both the acquisition and the enforcement of patent rights, including post-grant proceedings before the USPTO Patent Trial and Appeal Board.</p>Professional Activities02 Nov 2017 00:00:00 -0800http://www.fitcheven.com/?t=40&an=70484&format=xmlFitch Even Partner Paul Henkelmann to Moderate Panel at Chicago-Kent PTAB Conferencehttp://www.fitcheven.com/?t=40&an=70134&format=xml<p style="margin: 0in 0in 10pt;"><span style="line-height: 115%;"><a href="https://www.kentlaw.iit.edu/academics/conferences-and-lecture-series/ptab-2017"><font color="#0000ff"><font face="Times New Roman"><font size="3"> </font></font></font></a></span>On October 20, Fitch Even partner <a href="http://www.fitcheven.com/?t=3&amp;A=2587&amp;format=xml&amp;p=5482">Paul B. Henkelmann</a> will moderate a panel during a conference on &ldquo;The Power of PTAB: The New Authority in Patent Law,&quot; presented by Chicago-Kent College of Law at their campus in Chicago. Fitch Even is a sponsor of the conference.</p> <p>The conference will examine the rise of the Patent Trial and Appeal Board as it continues to preside over an ever-increasing number of <i>inter parte</i> reviews. Paul&rsquo;s panel will discuss &ldquo;Reasonable Error Correction or Death Squads &mdash; Is the PTAB&rsquo;s Invalidation Rate Too High or Just Right?&rdquo;</p> <p>For more information, please visit the Chicago-Kent College of Law <a href="https://www.kentlaw.iit.edu/academics/conferences-and-lecture-series/ptab-2017">website.</a></p> <p style="margin: 0in 0in 10pt;"><span style="line-height: 115%;"> </span></p> <p style="margin: 0in 0in 10pt;"><span style="line-height: 115%;"> </span></p> <p style="margin: 0in 0in 10pt;">&nbsp;</p> Professional Activities20 Oct 2017 00:00:00 -0800http://www.fitcheven.com/?t=40&an=70134&format=xmlIP Alert: Significant En Banc Federal Circuit Decision Modifies IPR Practicehttp://www.fitcheven.com/?t=40&an=69165&format=xml<p>Earlier today, the Federal Circuit issued a major <i>en banc</i> decision in <i><a href="http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/15-1177.Opinion.9-28-2017.1.PDF">Aqua Products, Inc. v. Matal</a></i>. The case concerns whether the Patent Trial and Appeal Board (PTAB) may require a patentee seeking to enter a claim amendment in a post-issuance review proceeding (such as an <i>inter partes</i> review proceeding) to prove that the amended claims are patentable. Although the AIA implementing statutes permit patentees to make amendments to the claims of a patent under review, in practice, patentees have found this very difficult because of the high burden of proof imposed by the PTAB.</p> <p>Today, in a series of deeply divided opinions, the <i>en banc </i>court entered the following narrow holdings:</p> <p style="margin-left: 40px;">(1) The PTO has not adopted a rule placing the burden of persuasion with respect to the patentability of amended claims on the patent owner that is entitled to deference; and (2) in the absence of anything that might be entitled deference, the PTO may not place that burden on the patentee.</p> <p>The PTAB must follow this guidance in &ldquo;all pending IPRs&rdquo; for the time being.</p> <p>During the course of an IPR proceeding, the patentee, Aqua, moved to amend the claims of its patent. The PTAB denied Aqua&rsquo;s motion to amend, concluding that Aqua had failed to prove that the substitute claims were patentable. Aqua appealed, arguing that it did not, in fact, bear the burden of proving the patentability of its proposed substitute claims. After an earlier panel decision adverse to Aqua, the Federal Circuit took up the case for <i>en banc </i>review.</p> <p>The case addressed the seemingly simple question of whether the patentee bears the burden of proof, or whether the petitioner bears the burden of proving that the claim amendment should not be entered. Despite the apparent simplicity of this question, the court generated five opinions, spanning nearly 150 pages in total. It appears from the language of the opinions that the question at issue generated a substantial internal dispute at the Federal Circuit. The majority opinion stated that the process of resolving the case &ldquo;has not been easy&rdquo; and was &ldquo;frustrating.&rdquo;</p> <p>Ultimately, the court concluded that the PTAB must assess the patentability of proposed substitute claims without placing the burden of persuasion on the patent owner, and must follow the same practice in &ldquo;all pending IPRs&rdquo; unless and until the USPTO director engages in rulemaking procedures under the Administrative Procedures Act. Should the USPTO adopt new rules, the Federal Circuit might then address whether such rules are valid.</p> <p>We expect this decision to have a major impact on IPR proceedings going forward. Patentees ostensibly will have much more leeway to enter claim amendments and, perhaps, to salvage patents that might otherwise be lost completely upon post-issuance review.</p> <p>For more information, please contact Fitch Even partner <a href="http://www.fitcheven.com/?t=3&amp;A=2589&amp;format=xml&amp;p=5482">Allen E. Hoover</a>, author of this alert, or any member of Fitch Even&rsquo;s preeminent post-issuance team.<br /> &nbsp;</p> <p><b>Fitch Even IP Alert<sup>&reg;</sup></b></p> <br /> <br />IP Alerts04 Oct 2017 00:00:00 -0800http://www.fitcheven.com/?t=40&an=69165&format=xmlIP Alert: Employee’s House Not a “Regular and Established Place of Business” Under <i>TC Heartland</i>http://www.fitcheven.com/?t=40&an=69110&format=xml<p>The Supreme Court&rsquo;s decision in <i><a href="http://www.fitcheven.com/?t=40&amp;an=66124&amp;anc=180&amp;format=xml&amp;p=5486">TC Heartland</a></i>&nbsp;narrowed the possible venues in which a defendant may be sued for patent infringement to those in which a defendant is incorporated or has a regular and established place of business. In the aftermath of <i>TC Heartland</i>, the Federal Circuit in <a href="http://www.cafc.uscourts.gov/sites/default/files/Cray_2017-129_9.21.17_ORDER.pdf"><i>In re Cray Inc.</i></a> rejected a four-factor test developed by the Eastern District of Texas to determine whether a defendant has a regular and established place of business in a venue. In reversing the Texas court&rsquo;s finding of proper venue, the Federal Circuit announced three requirements relevant to that inquiry.</p> <p>In <i>TC Heartland</i>, the Supreme Court significantly narrowed venue choices for a plaintiff filing a patent infringement suit against a defendant. Before <i>TC Heartland, </i>courts typically construed the venue statute to allow defendants to be sued in any district in which they had committed allegedly infringing activities. For companies with nationwide sales, this essentially meant that the company could be sued in every federal court in the nation. In <i>TC Heartland,</i> the Supreme Court ruled that this reading of venue standard was too broad. The court required instead that plaintiffs establish venue over defendants by showing that the defendant is either incorporated in a judicial district or has a regular and established place of business in that district.</p> <p>Since <i>TC Heartland,</i> numerous cases have issued from district courts addressing what it means to have a regular and established place of business in a district. This question is not always easy to answer, and is particularly murky when the location at issue is the residence of one of the defendant&rsquo;s employees.</p> <p>In <em>In re Cray</em>, Raytheon sued its competitor Cray,&nbsp;a well-known manufacturer of supercomputers, for patent infringement in the Eastern District of Texas. Cray is not incorporated in Texas, and Cray moved to transfer the case on the grounds of improper venue. The Texas court set out a four-factor inquiry into what constitutes a regular and established place of business, including (1) physical presence, (2) defendants&rsquo; representations, (3) benefits received, and (4) targeted interactions with the district. Cray has a senior sales employee who lives within the Eastern District of Texas, and that employee works out of his home. Based on this, and applying its four-factor test, the Texas court denied Cray&rsquo;s motion to transfer venue out of Texas. Cray petitioned for writ of mandamus,<i> </i>asking the Federal Circuit to reverse the district court&rsquo;s finding.</p> <p>The Federal Circuit determined that the district court&rsquo;s four-factor test was not sufficiently tethered to the statutory language of the venue statute, 28 U.S.C. 1400(b). The court then revealed three general requirements relevant to the inquiry: &quot;(1) there must be a physical place in the district; (2) it must be a regular and established place of business; and (3) it must be the place of the defendant.&quot; According to the court, if any of these requirements are not satisfied, venue is not proper.</p> <p><b>Factor 1&mdash;A <i>physical</i> place in the district</b>. The Federal Circuit found that the district court erred as a matter of law in holding that a fixed physical location in the district is not a prerequisite to proper venue. The Federal Circuit acknowledged that &ldquo;place&rdquo; need not be formal office or store, but there must still be a physical location in the district from which the business of the defendant is carried out. According to the Federal Circuit, examples of physical place include a location in which literature, documents, and products may be stored, a distribution center, or a location from which administrative or secretarial services are performed.</p> <p><b>Factor 2&mdash;The place must be a <i>regular and established</i> <i>place of business</i></b>. The Federal Circuit found that a business may be regular if it operates in a steady, uniform, orderly, and methodical manner; sporadic activity from a location is insufficient to support venue. The Federal Circuit noted that while a business can move its location, it must, for a meaningful time period, be stable and established. The Federal Circuit further noted that if an employee is free to move his or her home out of a venue without the approval of the employer, then the employee&rsquo;s home is not considered a place of business of the defendant.</p> <p><b>Factor 3&mdash;A place of the <i>defendant</i></b>. The Federal Circuit emphasized that the place must be a place of the defendant and not solely a place of the employee. Relevant considerations include whether the defendant owns or leases the place, whether the employer conditioned employment on the employee&rsquo;s continued residence in the venue, or whether the employer&rsquo;s materials are stored at the employee&rsquo;s residence so that they can be distributed or sold from that place.</p> <p>Applying these three requirements, the defendant&rsquo;s presence in the district was too attenuated. While the plaintiff argued that a sales employee&rsquo;s home in the Eastern District of Texas satisfied venue in the district, the Federal Circuit found that the employee&rsquo;s home was not listed in any business directories or websites, that he did not maintain product literature or products at his home, and that he was the only employee within the district. In addition, the defendant paid no part of the employee&rsquo;s home or rent and it stored nothing there. Those facts did not support a finding that the employee&rsquo;s home was a regular and established place of business of the defendant.</p> <p>Although this case definitively rejected the Eastern District of Texas&rsquo;s test for venue, it still leaves open many questions in the venue analysis. At a high level, the type of analysis needed to evaluate the three requirements set forth by the Federal Circuit is fact-intensive. In many cases, a venue analysis will require venue discovery.</p> <p>Another nuance in the Federal Circuit&rsquo;s decision was that it relied heavily on an over 30-year-old case in providing examples of what it meant to have a physical location in a district. The court pointed to facts such as literature and documents in a location, or distribution centers, inventory, and secretarial services located in the location. That approach may not provide useful guidance for modern businesses whose product literature may be distributed online instead of in physical form, or that may not even have a product conductive to being stored in a location, e.g., a software business. Moreover, the use of secretarial and administrative services is much less prevalent today than it was 30 years ago. In addition, it is unclear why the Federal Circuit relied so heavily on the locations of documents and inventory, instead of focusing on the location of the company&rsquo;s employee. It might be argued that an employee is every bit as much an asset of the company as are its documents and products, which can just as easily be moved.</p> <p>The court&rsquo;s reliance on the lack of presence of any product or inventory in the district is also interesting. Cray is a manufacturer of supercomputers that do not physically lend themselves to storage in an employee&rsquo;s home. It is unclear how a court would address that factor where there either is no inventory or the inventory could not feasibly be stored in a location within the district.</p> <p>The court also based its analysis on whether an employee can move his or her home out of the district without the approval of the defendant. This factor would seem to rely heavily on the employee&rsquo;s employment contract and appears to focus more on some prospective fact, i.e., whether the employee <i>could</i> move out of the district, instead of whether the employee is actually in the district.</p> <p>The court also relied heavily on the fact that the employee&rsquo;s home was not paid for or leased by the defendant. Of course, another relevant fact may be whether the employee&rsquo;s compensation was somehow adjusted upward because the employee was working out of his home rather than requiring the defendant to lease office space.</p> <p>How the Federal Circuit&rsquo;s three-requirement test will play out remains to be seen. Nevertheless, this is an important decision in the rapidly evolving law of venue in patent cases.</p> <p>For more information, please contact Fitch Even partner <a href="http://www.fitcheven.com/?t=3&amp;A=2603&amp;format=xml&amp;p=5482">Joseph F. Marinelli</a>, author of this alert.<br /> <br /> <strong><br /> Fitch Even IP Alert</strong><sup><strong>&reg;<br /> </strong></sup></p>IP Alerts03 Oct 2017 00:00:00 -0800http://www.fitcheven.com/?t=40&an=69110&format=xmlPresenting <i>Alice</i>-Friendly Patent Claims: Is <i>McRO</i> Worth a Second Look?http://www.fitcheven.com/https://attendee.gotowebinar.com/register/4148303825535405569&format=xml<p>Please join Fitch, Even, Tabin &amp; Flannery LLP for a complimentary webinar, &ldquo;Presenting <em>Alice</em>-Friendly Patent Claims: Is <em>McRO </em>Worth a Second Look?,&rdquo; on Wednesday, October 25, 2017, at 9:00 am PDT / 10:00 am MDT / 11:00 am CDT / 12 noon EDT.</p> <p>While the Federal Circuit has identified small precedential islands of relative safety, the court has yet to chart a veritable Northwest Passage through which one can safely navigate the risks and concerns presented by the Supreme Court&rsquo;s <i>Alice</i> decision.</p> <p>Or have they?</p> <p><i>McRO, Inc. v. Bandai Namco Games America, Inc., et al.</i> is sometimes considered for its rather tepid and, to date, somewhat inconsequential consideration of preemption issues. <i>McRO</i>&rsquo;s analysis and holding regarding abstractness, however, is perhaps more valuable to those writing and prosecuting patent applications than has been generally acknowledged to date.</p> <p>During this webinar, Fitch Even partner <a href="http://www.fitcheven.com/?t=3&amp;A=2610&amp;format=xml&amp;p=5482">Steven G. Parmelee</a> will explore these questions:</p> <ul> <li>Whether <i>McRO </i>presents a new two-step abstractness analysis that offers useful and practical opportunities</li> <li>If so, whether such an opportunity is &ldquo;more than a drafting effort designed to monopolize the [abstract idea] itself&rdquo;</li> </ul> <p>He will also share these insights, among others:</p> <ul> <li>Anecdotal <i>McRO </i>prosecution experience at the USPTO</li> <li>Claim and specification drafting tips</li> </ul> <p><a href="http://www.fitcheven.com/?t=3&amp;A=2610&amp;format=xml&amp;p=5482">Steve Parmelee</a> has extensive experience in complex patent preparation and prosecution in the U.S. and abroad. He has assisted clients with patent portfolio management, freedom-to-operate issues, and transactions for over 40 years.</p> <p>A recording of this webinar is available through October 24, 2018.<br /> &nbsp;</p>Past Webinars26 Sep 2017 00:00:00 -0800http://www.fitcheven.com/https://attendee.gotowebinar.com/register/4148303825535405569&format=xmlIP Alert: Delaware District Court Sets New Venue Guidelines in the Aftermath of <i>TC Heartland</i>http://www.fitcheven.com/?t=40&an=68995&format=xml<p>On September 11, 2017, Leonard Stark, the Chief Judge of the District of Delaware, issued two opinions that provide guidance regarding the applicability of the patent venue statute, 28 U.S.C. &sect; 1400(b), in the aftermath of the Supreme Court&rsquo;s decision in <em><a href="http://www.fitcheven.com/?t=40&amp;an=66124&amp;anc=180&amp;format=xml&amp;p=5486">TC Heartland</a></em>. The patent venue statute permits patent infringement suits to be brought &ldquo;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.&rdquo; In cases brought by Boston Scientific Corp.&nbsp;and Bristol-Myers Squibb Co., Judge Stark wrote that a company has a &ldquo;regular and established place of business&rdquo; in Delaware if it does business &ldquo;through a permanent and continuous presence there.&rdquo; The court held that&nbsp;while a company need not have a formal office or store in Delaware, some physical presence is required.&nbsp;</p> <p>In the first of the two opinions, <a href="http://www.ded.uscourts.gov/sites/default/files/opinions/lps/2017/september/15-980_0.pdf"><em>Boston Scientific Corp. et al.&nbsp;v. Cook Group Inc. et al.</em>, </a>defendant Cook, an Indiana corporation, is a competitor of plaintiff Boston Scientific in the endoscopic hemostatic clip market. In response to Boston Scientific&rsquo;s lawsuit alleging that defendant infringed three of its patents, Cook filed a motion alleging improper venue. In analyzing defendant&rsquo;s motion, the court addressed two main disputes: (1)&nbsp;Did the&nbsp;defendant waive its venue objection, and (2) did the defendant have &ldquo;a regular and established place of business&rdquo; in Delaware.&nbsp;</p> <p>In regard to the first dispute, there was no question that Cook failed to previously raise the venue defense, but Cook alleged that this failure was excusable. &ldquo;The question before the [c]ourt is whether the Supreme Court&rsquo;s decision in <em>TC Heartland</em> qualifies as an intervening change in the controlling law, so as to create an exception to the rule of waiver.&rdquo; The court answered this question in the affirmative, noting that the Supreme Court&rsquo;s decision in <em>TC Heartland</em> (1) decided for the first time that the amendments to &sect; 1391, which were adopted in 1988 and 2011, did not change the meaning of &sect; 1400(b); and (2) overruled the Federal Circuit&rsquo;s 1990 decision in <em>VE Holding Corp. v. Johnson Gas Appliance Co.</em>, which controlled patent venue law for the 27 years leading up to <em>TC Heartland</em>. Based on this, the court held that &ldquo;<em>TC Heartland</em> changed the venue landscape, and the [c]ourt will not require defendants to have foreseen this change in order to preserve a venue challenge.&rdquo; While noting that a number of opinions have fallen on both sides of the fence, the court concluded that <em>&quot;TC Heartland</em> did effect an intervening change in the law, creating an exception to the general rule of waiver.&rdquo; &nbsp;</p> <p>Turning to the merits of Cook&rsquo;s venue challenge, the court first observed that venue could not lie under the first prong of &sect; 1400(b) because Cook did not &ldquo;reside&rdquo; in Delaware. The court then evaluated whether Cook has &ldquo;a regular and established place of business in Delaware.&rdquo; The court observed that Cook has no facilities, corporate offices, or employees in Delaware. Also, although Cook sells products in Delaware and has sales representatives who visit Delaware customers, these sales representatives do not live in the state. The court therefore determined that venue was not proper over Cook. In reaching its decision, the court relied heavily on an earlier Federal Circuit decision, <em>In re Cordis</em>, saying it &quot;understands <em>Cordis</em> to mean that while no fixed space in the sense of a formal office or store is necessary, some <em><strong>physical</strong></em> presence is nevertheless required.&rdquo; So if a company is only &ldquo;registered to do business here, or only maintains a website that is accessible in Delaware, or simply ships goods to unaffiliated individuals or third-party entities here, then this District is an improper venue for the lawsuit.&rdquo; Because Cook did not appear to have a presence in Delaware, let alone a permanent and continuous one, the court determined the defendants had met their burden to demonstrate that venue&nbsp;was improper&nbsp;and granted Cook&rsquo;s motion to transfer.&nbsp;</p> <p>In the second opinion issued by Judge Stark, <a href="http://www.ded.uscourts.gov/sites/default/files/opinions/lps/2017/september/17-379.pdf"><em>Bristol-Myers Squibb Co. et al. v. Mylan Pharm. Inc.</em></a>, Bristol-Myers Squibb alleged that Mylan Pharmaceuticals Inc.&rsquo;s planned generic version of the blood thinner Eliquis infringes its patents. This lawsuit is a Hatch-Waxman lawsuit, wherein the filing of an Abbreviated New Drug Application (ANDA) constitutes an act of infringement under 35 U.S.C. &sect; 271(e)(2) even when the defendant has not yet physically manufactured or sold any drug products. Mylan moved to dismiss for improper venue.&nbsp;</p> <p>The court noted that the issue of whether a defendant in a Hatch-Waxman case &ldquo;has committed acts of infringement&rdquo; under the patent venue provision is one of first impression. After conducting a thorough analysis of the statutory language in 28 U.S.C &sect; 1400(b) and 35 U.S.C &sect; 271(e)(2), the court held that it must consider &ldquo;future&rdquo; acts of the defendants when evaluating the &ldquo;acts of infringement&rdquo; that the ANDA filer will commit. Accordingly, the court held that because Mylan&rsquo;s &ldquo;ANDA filings and its distribution channels establish that [Mylan] plans to market its proposed drugs in Delaware . . . this [c]ourt considers [Mylan&rsquo;s] ANDA submission to be an &lsquo;act of infringement&rsquo; that &lsquo;has [been] committed&rsquo; in Delaware for purposes of application of &sect; 1400(b).&rdquo; &nbsp;&nbsp;</p> <p>Moving to the second prong of &sect; 1400(b), the court followed the same guidelines as discussed above in <em>Boston Scientific</em>. The court noted that Mylan&rsquo;s &ldquo;business model is in large part predicated upon participating in a large amount of litigation&rdquo; challenging the validity of patents on drugs of which it makes generic versions. The court also noted that much of that litigation takes place in the District of Delaware, stating, &ldquo;In the court&rsquo;s view, this business reality is a pertinent consideration in assessing whether [Mylan] has a regular and established place of business in Delaware. The fact is that a great deal of activity that appears to be key to [Mylan&rsquo;s] business does occur&mdash;regularly, in an established manner, continuously and seeming permanently&mdash;in this District.&rdquo;</p> <p>That being said, the court held that it could not say &quot;that [Mylan] does <em><strong>not</strong></em> have a regular and established place of business in Delaware&rdquo; and therefore could not make a final decision on venue until Bristol-Myers Squibb was allowed to take discovery on how the generic drug industry operates and the activities of Mylan&rsquo;s sales representatives. Accordingly, the court denied Mylan&rsquo;s motion without prejudice.</p> <p>These cases provide insight and guidance regarding how district courts are likely to analyze the patent venue statute in the aftermath of the Supreme Court&rsquo;s ruling in <em>TC Heartland</em>. As evidenced by these two cases, district courts,&nbsp;particularly in Delaware, are going to require that the defendants have some physical presence in the district.&nbsp;</p> <p>For more information about these decisions, please contact Fitch Even partner <a href="http://www.fitcheven.com/?t=3&amp;A=3589&amp;format=xml&amp;p=5482">Eric L. Broxterman</a>, author of this alert.<br /> <br /> <br /> <strong>Fitch Even IP Alert<sup>&reg;</sup></strong><br /> &nbsp;</p> IP Alerts25 Sep 2017 00:00:00 -0800http://www.fitcheven.com/?t=40&an=68995&format=xmlFitch Even Congratulates AABA Chicago on 30 Years of Servicehttp://www.fitcheven.com/?t=40&an=68815&format=xml<p>Fitch Even is pleased to be a sponsor of the Asian American Bar Association of Greater Chicago's 30<sup>th</sup> Annual Installation Ceremony and Awards Reception being held tonight at MingHin Cuisine in Chicago. We commend AABA Chicago for its three decades of service to Asian American legal professionals and community members throughout Chicagoland.</p> <p><a href="http://www.aabachicago.org/">AABA Chicago</a> was founded in 1987 as an affiliate of the National Asian Pacific American Bar Association. The organization strives to promote the professional growth of its members; mentor law students and new lawyers; serve and educate the local community; partner with other minority organizations on common matters of concern; and offer policy recommendations on legal, social, political, and economic interests.</p> <p>&nbsp;</p> <p>&nbsp;</p>Professional Activities14 Sep 2017 00:00:00 -0800http://www.fitcheven.com/?t=40&an=68815&format=xml