Top Four Stories of 2017

McDonnell Boehnen Hulbert & Berghoff LLP

After reflecting upon the events of the past twelve months, Patent Docs presents its 11th annual list of top patent stories.  For 2017, we identified nineteen stories that were covered on Patent Docs last year that we believe had (or are likely to have) a significant impact on patent practitioners and applicants.  In previous posts, we counted down stories #19 to #15, stories #14 to #10, and stories #9 to #5, and today we count down the top four stories of 2017.  As with our other lists (2016, 2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008, and 2007), links to our coverage of these stories (as well as a few links to articles on related topics) have been provided in case you missed the articles the first time around or wish to go back and have another look.  As always, we love to hear from Patent Docs readers, so if you think we left something off the list or disagree with anything we included, please let us know.  In addition, we will be offering a live webinar on the "Top Patent Law Stories of 2017" on January 17, 2018 from 10:00 am to 11:15 am (CT).  Details regarding the webinar, which will focus on a handful of the most important stories on this year's list, can be found here.

4.  Supreme Court: § 286 Trumps Laches Defense

In March, the Supreme Court vacated the Federal Circuit's affirmance of a District Court decision that a patent infringement suit filed by SCA Hygiene Products Aktiebolag against First Quality Baby Products, LLC was barred by laches (even though SCA brought suit about 7 years after it first notified First Quality regarding its allegations of infringement).  The Supreme Court's decision in SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC was based, in part, on the Court's earlier decision in Petrella v. Metro-Goldwyn-Mayer, Inc., where the Court barred laches as a defense in copyright infringement actions based on a three-year statute of limitations enacted by Congress.  The Federal Circuit, sitting en banc, based its affirmance of the District Court on the reasoning that although Congress had enacted a six-year time limitation on money damages in 35 U.S.C. § 286, the provisions of 35 U.S.C. § 282 made unenforceability, which includes the equitable doctrine of laches, available as a defense.  However, as in Petrella, the Supreme Court determined that there was no basis for the Federal Circuit's decision that laches could contradict the statute of limitations provisions of § 286.  The Court also opined that the doctrine of laches was developed for situations where Congress had not specified a fixed time for bringing suit, and thus was a "gap-filling" doctrine to cure in equity what the law did not expressly provide.  However, when, as here, Congress had provided an express statute of limitations "there is no gap to fill" and thus no purpose for laches.

For information regarding this and other related topics, please see:

• "SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC (2017)," March 21, 2017

3.  Use of Tribal Sovereign Immunity as Shield to PTAB Review

In September, Allergan creatively invoked the protection of sovereign immunity under the Eleventh Amendment to the Constitution by assigning six Orange Book-listed patents protecting Allergan's RESTASIS® (Cyclosporine Ophthalmic Emulsion 0.05%), which is used to treat chronic dry eye, to the St. Regis Mohawk Tribe (SRMT).  The patents had been challenged in inter partes review (IPR) proceedings.  Allergan paid SRMT $13.75 million upon transferring these patents, which SRMT licensed to Allergan for $15 million per year until the patents expire in 2024.  Shortly after the transfer, SRMT filed a motion before the Patent Trial and Appeal Board (PTAB) to have six IPRs involving the patents dismissed based on SRMT's sovereign immunity upon Allergan's assignment of the patents.  In October, Federal Circuit Judge William Bryson, sitting by designation on the bench of the U.S. District Court for the Eastern District of Texas, granted a motion made by Allergan to join SRMT to ANDA litigation as a necessary party, and then found the claims of the Orange Book-listed patents asserted in ANDA litigation to be invalid.  Judge Bryson's decision rendered moot the inter partes review proceedings before the PTAB (insofar as the claims at issue before the District Court and the Board were the same).  Back at the PTAB, the Board was sufficiently vexed over the question of whether SRMT was entitled to have the Board dismiss, on grounds of sovereign immunity, IPRs on patents SRMT licensed from Allergan to solicit amicus curiae briefs on the issue from "interested parties."  However, in December, an expanded panel of the Board issued an order dismissing a sovereign immunity challenge by the State of Minnesota in Ericsson Inc. v. Regents of the University of Minnesota.  The coincidence of these two decisions was curious, particularly because while the scope of sovereign immunity enjoyed by the various recognized Tribes of Native Americans is both uncertain and subject to Congressional abrogation, a State's sovereignty is acknowledged and protected by the Eleventh Amendment.  The Board's decision in Ericsson Inc. provides some insight into not only how the Board may rule on SRMT's motion, but also on how the Board (and the Patent Office) perceives its role and authority to make such decisions, and almost certainly means that tribal sovereign immunity will be making a return trip to our list of top stories next year.

For information regarding this and other related topics, please see:

• "PTAB Decides Patent Infringement Lawsuit Waives Eleventh Amendment Sovereign Immunity to Inter Partes Review, December 19, 2017
• "More Instances of Tribal Sovereign Immunity Shielding Patents from PTAB Invalidation," November 1, 2017
• "District Court Allows Mohawk Tribe to Join ANDA Litigation, Finds Patents at Issue Invalid," October 16, 2017
• "Mohawk Nation Exercises Sovereign Immunity in Inter Partes Review," September 25, 2017
• "Allergan Avails Itself of Sovereign Immunity," September 13, 2017

2.  Supreme Court to Decide Constitutionality of Post-Grant Review Proceedings

In November, the Supreme Court heard oral argument in Oil States Energy Services, LLC v. Greene's Energy Group, LLC, where the sole question being considered by the Court is:

1.Whether inter partes review––an adversarial process used by the Patent and Trademark Office (PTO) to analyze the validity of existing patents––violates the Constitution by extinguishing private property rights through a non-Article III forum without a jury.

Ultimately, Oil States Energy Services, LLC may come down to the Court's decision in the 1898 case of McCormick Harvesting Machine v. Aultman.  In that case, the patentee had sought to add claims via reissuance, but the Examiner found that at least some of the issued claims were invalid and sought to revoke the patent right.  The Supreme Court at the time determined that the Patent Office did not have the authority to do so, with the McCormick Harvesting Machine Court stating that:

It has been settled by repeated decisions of this court that when a patent has received the signature of the secretary of the interior, countersigned by the commissioner of patents, and has had affixed to it the seal of the patent office, it has passed beyond the control and jurisdiction of that office, and is not subject to be revoked or canceled by the president, or any other officer of the government.  It has become the property of the patentee, and as such is entitled to the same legal protection as other property.

The only authority competent to set a patent aside, or to annul it, or to correct it for any reason whatever, is vested in the courts of the United States, and not in the department which issued the patent.

Regardless of how the Supreme Court comes down with respect to the question presented, this case will no doubt appear on our top stories list again next year.

For information regarding this and other related topics, please see:

• "Is a Patent a Private or Public Right? -- Supreme Court Hears Oral Arguments in Oil States Energy Services, LLC. v. Greene's Energy Group, LLC," November 30, 2017
• "Oil States Energy Services, LLC v. Greene's Energy Group, LLC -- Positions Taken in Selected Amicus Curiae Briefs," November 27, 2017
• "Oil States Preview Take II -- Just What Did the Supreme Court Hold in McCormick Harvesting Machine v. Aultman?" November 21, 2017
• "Supreme Court Preview -- Oil States Energy Services, LLC v. Greene's Energy Group, LLC," November 15, 2017

1.  Supreme Court Narrows Venue Options for Patentees

In May, the Supreme Court, in TC Heartland LLC v. Kraft Foods Group Brands LLC, reversed the Federal Circuit and held that the word "resides" in the patent venue statute (28 U.S.C. § 1400(b)), "refers only to the State of incorporation" of the alleged infringer.  The case stemmed from a lawsuit brought by Kraft Foods Group Brands LLC against TC Heartland, LLC and Heartland Packaging Corp. in the U.S. District Court for the District of Delaware.  TC Heartland is incorporated in Indiana, and has its headquarters in Carmel, Indiana.  As a result, it moved to either dismiss the action on venue grounds (among others) or transfer venue to the Southern District of Indiana.  The District Court denied the motion, and TC Heartland petitioned the Federal Circuit for a writ of mandamus to either dismiss or transfer the case, which the Federal Circuit denied.  In reversing the Federal Circuit's decision, the Supreme Court looked at whether Congress had changed the meaning of § 1400(b) (the patent venue statute) when it amended 28 U.S.C. § 1391 (the general venue statute) in 1988 -- the Court had previously determined, in Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222 (1957), that the general venue statute does not override the patent venue statute, and therefore that the residence of an accused infringing corporation was its place of incorporation.  In answering the above inquiry in the negative, the Court pointed out that Congress ordinarily provides a clear indication of its intent in the text of the amended provision, and that this clear indication was missing from § 1391.

For information regarding this and other related topics, please see:

• "More on Venue -- Plexxikon v. Novartis Pharmaceutical Corp. (N.D. Cal. 2017)," December 13, 2017
• "More Views on Venue -- Federal Circuit Addresses In re Micron Fallout," December 12, 2017
• "In re Micron Technology, Inc. (Fed. Cir. 2017)," November 22, 2017
• "Does the Federal Circuit's In re Cray Decision Suggest a New Business Model for Savvy Infringers?" October 1, 2017
• "Views on Venue -- Take Two: Did the District of Delaware Get It Right?" September 24, 2017
• "In re Cray Inc. (Fed. Cir. 2017)," September 21, 2017
• "Views on Venue -- District of Delaware Provides Some Guidance on Venue in ANDA Cases Post-TC Heartland," September 19, 2017
• "TC Heartland LLC v. Kraft Foods Group Brands LLC (2017)," May 22, 2017
• "TC Heartland LLC v. Kraft Foods Group Brands LLC -- 98 Professors Chime In," March 26, 2017
• "Supreme Court Preview -- TC Heartland LLC v. Kraft Foods Group Brands LLC," March 23, 2017
• "Xilinx, Inc. v. Papst Licensing GmbH & Co. KG (Fed. Cir. 2017)," February 19, 2017

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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