1. Into the (TC) Heartland of Recent Supreme Court IP Decisions
NAPABA National Conference
2017

2. Into the (TC) Heartland of Recent Supreme Court IP Decisions
Isabella Fu
Associate General Counsel
Microsoft
Panelist
Ching-Lee Fukuda
Partner
Sidley Austin
Program Chair
Krish Gupta
SVP - Intellectual Property
Dell Technologies
Panelist
Khue Hoang
Partner
Hughes Hubbard & Reed
Moderator
Henry Hadad
SVP and Deputy General Counsel
Bristol-Myers Squibb
Panelist
Vaishali Udupa
VP AGC IP Litigation and Policy
Hewlett Packard Enterprise
Panelist

3. Into the (TC) Heartland of Recent Supreme Court IP Decisions
Oil States v. Green’s Energy
Life Tech v. Promega
Q1 2018
February 22, 2017
Teva v. Sandoz
SCA Hygiene v. First Quality Baby Products
January 20, 2015
March 21, 2017
Halo v. Pulse
TC Heartland v. Kraft Foods
June 13, 2016
May 22, 2017
Q1 2015
Q2 2015
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Q3 2016
Q4 2016
Q1 2017
Q2 2017
May 26, 2015
Samsung v. Apple
June 12, 2017
Commil v. Cisco
December 6, 2016
Sandoz v. Amgen
June 20, 2016
Cuozzo v. Lee
May 30, 2017
Impression Products v. Lexmark
The Supreme Court has decided 10 patent cases
in 30 months, with another in the wings.

4. Into the (TC) Heartland of Recent Supreme Court IP Decisions
TC Heartland LLC v. Kraft Foods Group Brands LLC
137 S. Ct (2017)
Whether 28 U.S.C. § 1400(b) is the sole and exclusive provision governing venue in patent infringement actions and is not to be supplemented by 28 U.S.C. § 1391(c)
The amendments to §1391 did not modify the meaning of §1400(b) as interpreted by Fourco. A domestic corporation “resides” only in its State of incorporation for purposes of the patent venue statute.

5. Into the (TC) Heartland of Recent Supreme Court IP Decisions
Application of TC Heartland in District Courts:
Fourco has always been the law – TC Heartland does not amount to intervening change
Reebok Int’l Ltd. v. TRB Acquisitions LLC, WL , at *3 (D. Or. July 14, 2017)
Navico, Inc. v. Garmin Int’l, Inc., WL , at *2 (E.D. Tex. July 11, 2017)
Chamberlain Grp., Inc. v. Techtronic Indus. Co., WL , at *1 (N.D. Ill. June 28, 2017)
- President and Fellows of Harvard College v. Micro Tech., Inc., 2017 WL (D. Mass. Aug. 20, 2017)
TC Heartland represents a “sea change” in venue law
Ironburg Inventions v. Valve Corp., N.D. Georgia (Atlanta Division)(Aug. 3, 2017)
Cutsforth, Inc. v. LEMM Liquidating Co., D. Minn. (Aug. 4, 2017)
The Valspar Corp. et al. v. PPG Indus., Inc., D. Minn. (Aug. 4, 2017)
Smart Wearable Tech., Inc. v. Fitbit, Inc., W.D. Virginia (Aug. 29, 2017)

6. Into the (TC) Heartland of Recent Supreme Court IP Decisions
Application of TC Heartland in District Courts:
28 U.S.C. § 1400(b) prescribes two distinct venues:
i. where the defendant resides (domicile) or
ii. where the defendant has committed acts of infringement and maintains a regular and established place of business (conduct independent of domicile)
What qualifies as a “regular and established place of business”?

7. Into the (TC) Heartland of Recent Supreme Court IP Decisions
What qualifies as a “regular and established place of business”?
Raytheon Co. v. Cray, Inc. (EDTX June 29, 2017) – Four-factor test:
Physical Presence – does the defendant have a “physical presence” (e.g., property, inventory, infrastructure, people) in the district?
Defendant’s Representations – internal and external representations that defendant makes as to whether it has a presence in the district.
Benefits Received – the extent to which defendant derives benefits from its presence in the district, including sales revenue.
Targeted Interactions with the District – the extent to which defendant interacts in a “targeted way” with existing or potential customers, consumers, users, or entities (e.g., customer support, contractual relationships, marketing, etc.)

8. Into the (TC) Heartland of Recent Supreme Court IP Decisions
What qualifies as a “regular and established place of business”?
Glasser v. Barboza et al., (E.D. Va August 11, 2017) - Making a product available online through Amazon is not sufficient to create a regular and established place of business for the purposes of venue.
Prowire LLC v. Apple, Inc., (D. Del. August 9, 2017) - Apple retail store qualifies as an “established place of business.”
Prolacta Bioscience, Inc. v. Ni-Q, LLC, (C.D. Cal August 7, 2017) - Defendant’s CEO’s private residence is insufficient to qualify as a regular and established place of business.

9. Into the (TC) Heartland of Recent Supreme Court IP Decisions
Impression Products, Inc. v. Lexmark International, Inc.
137 S.Ct (2017)
When are a patentee’s rights in an article sold by the patentee exhausted?
Patentee exhausts its patent rights when it sells an item, regardless of any restrictions the patentee purports to impose post-sale.
An authorized sale outside the United States, just as one within the United States, exhausts all rights under the Patent Act.

10. Into the (TC) Heartland of Recent Supreme Court IP Decisions
Patentees may attempt to limit exhaustion by restricting licensee’s rights
In analyzing Impression Products, district courts have noted that a patentee may avoid exhaustion by restricting, through licensing agreements, the types of sales that result in exhaustion of the patentee’s rights under patent law.
Chrimar Systems, Inc. v. Alcaltel-Lucent Enterprise USA, Inc., 2017 WL (E.D. Tex. August 3, 2017) (holding patentee’s patent rights are not exhausted where licensee sells products to an unauthorized purchaser, thereby rendering such sales unauthorized sales of unlicensed products).
MiiCs & Partners America, Inc. v. Toshiba Corp., 2017 WL (D. Del. Aug. 11, 2017) (acknowledging that lack of restriction in licensing language results in exhaustion, but cautioning that such restrictions may be disfavored for policy considerations).

11. Into the (TC) Heartland of Recent Supreme Court IP Decisions
Cuozzo Speed Technologies, LLC v. Lee
136 S.Ct (2016)
Does the America Invents Act bar judicial review of the USPTO’s decision to institute inter partes review?
Does the AIA authorize the USPTO to give a patent claim its broadest reasonable interpretation?
The AIA bars judicial review of the USPTO’s decision as to whether to institute inter partes review, but allows for other potential challenges, including constitutional challenges.
The AIA allows the USPTO to use the “broadest reasonable construction” in determining claim scope during inter partes review; this regulation was a reasonable exercise of rulemaking authority that Congress delegated to the USPTO.

12. Into the (TC) Heartland of Recent Supreme Court IP Decisions
What can a court review with respect to a decision to institute an IPR or CBM?
In the wake of Cuozzo, the Federal Circuit has established a two-part test for determining whether a particular challenge to the decision regarding institution may be reviewed. Husky Injection Molding v. Athena Automation Ltd., 838 F.3d 1236, 1245 (Fed. Cir. 2016)
Whether the challenge at issue is closely tied to the application and interpretation of statutes related to the Patent Office’s decision to initiate inter partes review or if it instead implicates constitutional questions, depends on other less closely related statutes, or presents other questions of interpretation that reach, in scope and impact, well beyond §314(d).
Whether, if, despite the challenge being grounded in a statute closely related to that decision to institute, it is nevertheless directed to the Board’s ultimate invalidation authority with respect to a specific patent; if so, the Court may review the challenge.

13. Into the (TC) Heartland of Recent Supreme Court IP Decisions
Halo Electronics, Inc. v. Pulse Electronics
136 S.Ct (2016)
What is the test for enhanced damages under 35 U.S.C. § 284?
The Federal Circuit’s two-part test for enhanced damages under In re Segate Technology, LLC 497 F.3d 1360 is “unduly rigid.”
“A patent infringer’s subjective willfulness, whether intentional or knowing, may warrant enhanced damages, without regard to whether his infringement was objectively reckless.”
“§ 284 allows district courts to punish the full range of culpable behavior.”
“Seagate’s requirement that recklessness be proved by clear and convincing evidence is also inconsistent with § ‘[P]atent- infringement litigation has always been governed by a preponderance of the evidence standard.’ Enhanced damages are no exception.”

14. Into the (TC) Heartland of Recent Supreme Court IP Decisions
What can potential infringers do to reduce the risk of enhanced damages for willful infringement?
In applying Halo, the Federal Circuit has focused on the timing by with the alleged infringer developed its invalidity and non-infringement positions WBIP, LLC v. Kohler Co., 829 F.3d 1317, (Fed. Cir. 2016)
The Federal Circuit stated “as the Supreme Court explained in Halo, timing does matter.” “Kohler cannot insulate itself from liability for enhanced damages by creating an (ultimately unsuccessful) invalidity defense for trial after engaging in the culpable conduct of copying, or ‘plundering,’ WBIP’s patented technology prior to litigation.”
Before Segate, potential infringers would commonly obtain legal opinions regarding invalidity and non-infringement. Segate reduced the necessity of obtaining competent opinions to defeat willfulness. After Halo, the practice of obtaining these opinions is expected to increase.

15. Into the (TC) Heartland of Recent Supreme Court IP Decisions
SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC
137 S.Ct. 954 (2017)
Defendant asserted laches as a defense against damages
Laches cannot be invoked as a defense against a claim for damages brought within § 286’s 6-year limitations period.
Reasoning in Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S.Ct. 1962, regarding Copyright Act’s 3-year statute of limitations applies equally to § 286: “A statute of limitations reflects a congressional decision that timeliness is better judged by a hard and fast rule instead of a case- specific judicial determination. Applying laches within a limitations period specified by Congress would give judges a ‘legislation-overriding’ role that exceeds the Judiciary's power.”

16. Into the (TC) Heartland of Recent Supreme Court IP Decisions
Teva Pharmaceuticals USA v. Sandoz, Inc.
135 S.Ct. 831 (2015)
What standard of review is to be applied to claim construction determinations that resolves subsidiary factual matters, where generally claim construction is a legal question subject to de novo review by the Federal Circuit?
When reviewing a district court’s resolution of subsidiary factual matter while construing patent claims, the Federal Circuit must apply the clear error standard.

17. Into the (TC) Heartland of Recent Supreme Court IP Decisions
How the Federal Circuit has applied Teva:
The Federal Circuit has applied Teva narrowly; a District Court hearing evidence during a Markman hearing and/or trial is not enough.
In Shire Development, LLC v. Watson Pharmaceuticals, 787 F.3d 1359, (Fed. Cir. 2015), the Federal Circuit discussed the Supreme Court’s Teva holding: “The Court did not hold that a deferential standard of review is triggered any time a distinct court hears or receives extrinsic evidence…Here, there is no indication that the district court made any factual finding that underlie its constructions.”
Because the District merely “heard” extrinsic evidence related to claim construction, but did not affirmatively reference any extrinsic evidence, the Federal Circuit reviewed the claim constructions de novo.

18. Into the (TC) Heartland of Recent Supreme Court IP Decisions
Commil USA, LLC v. Cisco Systems, Inc.
135 S.Ct (2015)
Can a Defendant’s asserted belief that the asserted patent was not valid defeat a claim of induced infringement?
A Defendant’s belief regarding patent validity is not a defense to a claim of induced infringement.
“Because induced infringement and validity are separate issues and have separate defenses under the Act, belief regarding validity cannot negate § 271(b)’s scienter requirement of ‘‘actively induce[d] infringement,’’ i.e., the intent to ‘‘bring about the desired result’’ of infringement, Global-Tech Appliances, Inc. v. SEB S.A., 131 S.Ct. 2060, 2065 (2011). When infringement is the issue, the patent’s validity is not the question to be confronted.”

19. Into the (TC) Heartland of Recent Supreme Court IP Decisions
Life Technologies Corp. v. Promega Corp.
137 S.Ct. 734 (2017)
Does a single component constitute a “substantial portion” of the components that can give rise to liability under 35 U.S.C. § 271(f)(1)?
In determining “substantial portion” a quantitative measurement rather than a qualitative measurement is used when determining whether an alleged infringer has supplied the so-called “substantial portion” of the components of a patented invention for combination abroad, as basis for liability for active inducement.
Using a quantitative measurement, a single component of a multicomponent invention cannot constitute a substantial portion of the components.

20. Into the (TC) Heartland of Recent Supreme Court IP Decisions
Samsung Electronics Co., Ltd., v. Apple Inc.
137 S.Ct. 429 (2016)
What is the permissible “article of manufacture” for the purpose of calculating damages of the infringement of a design patent under 35 U.S.C. § 289?
The Federal Circuit held that because consumers could not separately purchase components of the smartphones, the entire smartphone was the only permissible “article of manufacture.”
Reversing, the Supreme Court held term “article of manufacture,” as used in § 289, encompasses both a product sold to a consumer and a component of that product.

21. Into the (TC) Heartland of Recent Supreme Court IP Decisions
Sandoz Inc. v. Amgen Inc.
137 S.Ct (2017)
Disputes as to parts to the Biologics Price Competition and Innovation Act of 2009 (BPCIA)
BPCIA’s requirement that an applicant provide the sponsor with its application and manufacturing information is not enforceable by an injunction under federal law.
A biosimilar applicant is not required to wait to provide notice of commercial marketing to the sponsor until after the FDA licenses its biosimilar; the biosimilar applicant need only have FDA approval before actual marketing occurs.

22. Into the (TC) Heartland of Recent Supreme Court IP Decisions
Oil States Energy Services, LLC v. Greene’s Energy Group, (certiorari granted)
Petitioner’s Position
Inter partes review violates Article III and the Seventh Amendment. Suits to invalidate patents must be tried before a jury in an Article III forum, not in an agency proceeding.
Even if inter partes review were constitutional, its application by the Board violates both this Court's and Congress's directives concerning the rights of patent holders to protect their property rights through the amendment process.
The Board's application of the broadest reasonable interpretation standard has created intolerable confusion in the Federal Circuit. Different panels have reached different conclusions about how this standard interacts with traditional principles of claim construction. drafted.