Latest Federal Court Cases - February 2020 #3

Schwabe, Williamson & Wyatt PC

PATENT CASE OF THE WEEK

In re: Google LLC, Appeal No. 2019-126 (Fed. Cir. Feb. 13, 2020)

In this week’s Case of the Week, the Federal Circuit granted mandamus to dismiss or transfer a patent infringement suit for improper venue. At issue was whether the presence of defendant Google’s computer servers in the forum district, housed in space leased from local internet service providers (ISPs), created a “regular and established place of business” under 28 U.S.C. § 1400(b).

Applying the test articulated in In re Cray, Inc., 871 F.3d 1355, 1360 (Fed. Cir. 2017), the Court agreed that leased shelf space or rack space can constitute “a physical place in the district,” holding that the “physical place” factor does not require the defendant to have a real property ownership or leasehold interest in the district.

However, on the facts presented, the Court found that the server facilities were not Google’s “regular and established place of business,” which “requires the regular, physical presence of an employee or other agent of the defendant conducting the defendant’s business.” In this case, there were no Google employees conducting business at the server facilities, and the Court’s determination turned on whether the local ISPs could be considered Google’s agents for purposes of the venue statute.

Focusing on Google’s contracts with the ISPs, the Court found that the ISPs’ provision of internet services was insufficient to establish an agency relationship, and that their one-time server installation services did not comprise the conduct of a “regular and established” business. The Court also found the ISPs’ obligation to perform occasional maintenance activities at Google’s direction did not give rise to an agency relationship for venue purposes, because such maintenance activities “are merely connected to, but do not themselves constitute, the defendant’s conduct of business in the sense of production, storage, transport, and exchange of goods or services.”

Because Google had no employee or agent regularly conducting its business at the alleged “place of business” within the district, the Court found that Google lacked a “regular and established place of business” there, and directed the district court to dismiss or transfer the suit.

The opinion can be found here.

ALSO THIS WEEK

Serta Simmons Bedding, LLC v. Casper Sleep Inc., Appeal Nos. 2019-1098, -1159 (Fed. Cir. Feb. 13, 2020)

The Federal Circuit vacated the District Court for the Southern District of New York’s summary judgement order of non-infringement in favor of Casper. The district court’s summary judgement order issued two days after the parties had filed a Joint Notice of Settlement and Motion to Stay. On appeal, Casper argued the stipulated protective order was executory so the district court was entitled to refuse to enforce the agreement. The Court was not persuaded, “conclud[ing] that a binding settlement agreement generally moots the action even if the agreement requires future performance.” Accordingly, the district court lacked jurisdiction over the matter as moot. The Court also rejected Casper’s request for pre-settlement fees and costs as precluded by the terms of the settlement agreement. Serta can sleep easy knowing the parties will be held to the terms of the settlement agreement.

The opinion can be found here.

Acoustic Technology, Inc. v. Itron Networked Solutions, Inc., Appeal Nos. 2019-1059, -1060, -1061 (Fed. Cir. Feb. 13, 2020)

In two related appeals from the Patent Trial and Appeal Board (PTAB), the Federal Circuit addresses issues relating to the time bar in inter partes review (IPR) proceedings. Shortly after the two IPRs were instituted, the original petitioner agreed to merge with Itron, and the merger was completed in the middle of the IPR proceedings. Due to a previous lawsuit filed by Acoustic against Itron involving the same patents, Itron would have been time-barred from filing the IPRs. The PTAB ultimately issued a final written decision that the patents were invalid. On appeal, Acoustic, for the first time, argued that the IPRs were time-barred due to the merger activities because Itron should have been named a real party in interest. The Court held that Acoustic waived its time bar argument and affirmed the PTAB’s final written decisions.

The opinions can be found here and here.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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