Justia U.S. Federal Circuit Court of Appeals Opinion Summaries

GNC sued ZTE in the Eastern District of Texas alleging infringement of its patents. ZTE moved to dismiss for improper venue under 28 U.S.C. 1406 and 1400(b). While that motion was pending, ZTE sought transfer to the Northern District of Texas or the Northern District of California under 28 U.S.C. 1404(a). The magistrate concluded that venue was proper in the Eastern District of Texas under the 1404(a) convenience analysis but did not rule on the motion to dismiss for improper venue under section 1406(a). The case was assigned to a new judge and a new magistrate, who denied the motion to dismiss, finding that ZTE failed to show it did not have a regular and established place of business in the Eastern District of Texas as required under the second prong of 28 U.S.C. 1400(b). The magistrate placed the burden on the objecting defendant to show improper venue and determined that ZTE had contracted with a call center in Plano, Texas, operated by another company, which constituted a physical place, and that ZTE transacted business there. The district court agreed. The Federal Circuit granted mandamus relief and remanded. The district court incorrectly assigned the burden of proof on venue and failed to fully consider the factors relevant to the question of whether the call center was that of ZTE. View "In re: ZTE (USA) Inc." on Justia Law

Defendants produce or sell patented drug products containing the antiviral agent tenofovir alafenamide fumarate (TAF), which is used in the treatment of AIDS. Healthcare provides medical care to persons afflicted with AIDS, including providing antiviral drugs, including the TAF products that Healthcare buys from Defendants. Healthcare sought declarations of invalidity for patents purportedly covering TAF and various combination products so that it could partner with generic makers and purchase generic TAF on the expiration of the five-year New Chemical Entity exclusivity s(21 U.S.C. 355(j)(5)(F)(ii)). Healthcare filed suit two months after the FDA approved Genvoya®—the first TAF-containing product to receive FDA approval; other TAF products were still undergoing clinical trials. No unlicensed source was offering a TAF product or preparing to do so. Healthcare told the court that “none of the generic makers wanted to enter the market because there was the fear of liability.” The court ruled that Healthcare’s actions in encouraging others to produce generic TAF products and interest in purchasing such products did not create an actual controversy under the Declaratory Judgment Act. The Federal Circuit affirmed. The declaratory requirement of immediacy and reality is not met by litigation delay. Healthcare has not otherwise shown that there is a controversy of sufficient immediacy and reality to create declaratory judgment jurisdiction. Liability for inducing infringement requires that there be direct infringement. An interest in buying infringing product is not an adverse legal interest for declaratory jurisdiction. View "AIDS Healthcare Foundation, Inc. v. Gilead Sciences, Inc." on Justia Law

Defendants produce or sell patented drug products containing the antiviral agent tenofovir alafenamide fumarate (TAF), which is used in the treatment of AIDS. Healthcare provides medical care to persons afflicted with AIDS, including providing antiviral drugs, including the TAF products that Healthcare buys from Defendants. Healthcare sought declarations of invalidity for patents purportedly covering TAF and various combination products so that it could partner with generic makers and purchase generic TAF on the expiration of the five-year New Chemical Entity exclusivity s(21 U.S.C. 355(j)(5)(F)(ii)). Healthcare filed suit two months after the FDA approved Genvoya®—the first TAF-containing product to receive FDA approval; other TAF products were still undergoing clinical trials. No unlicensed source was offering a TAF product or preparing to do so. Healthcare told the court that “none of the generic makers wanted to enter the market because there was the fear of liability.” The court ruled that Healthcare’s actions in encouraging others to produce generic TAF products and interest in purchasing such products did not create an actual controversy under the Declaratory Judgment Act. The Federal Circuit affirmed. The declaratory requirement of immediacy and reality is not met by litigation delay. Healthcare has not otherwise shown that there is a controversy of sufficient immediacy and reality to create declaratory judgment jurisdiction. Liability for inducing infringement requires that there be direct infringement. An interest in buying infringing product is not an adverse legal interest for declaratory jurisdiction. View "AIDS Healthcare Foundation, Inc. v. Gilead Sciences, Inc." on Justia Law

Plaintiffs filed a patent infringement suit in the District of Delaware against HTC, a Taiwanese corporation with its principal place of business in Taiwan, and its wholly owned U.S. based subsidiary, HTC America, a Washington corporation with its principal place of business in Seattle. HTC and HTC America moved to dismiss for improper venue or, in the alternative, to transfer the case to the Western District of Washington pursuant to 28 U.S.C. 1404(a) or 1406(a). The district court found that venue was not proper as to HTC America but was proper as to HTC. Plaintiffs voluntarily dismissed their suit against HTC America without prejudice. HTC filed a mandamus petition seeking dismissal for improper venue. The Federal Circuit denied relief, rejecting HTC’s attempts to characterize the legal issue as “unsettled.” Suits against alien defendants are outside the operation of the federal venue laws. View "In re: HTC Corp." on Justia Law

In returns for 1995, 1996, and 1997, Stephens a shareholder of SF, a subchapter S corporation, reported "passive activity" passthrough income and passive activity losses (deductible from passive activity income) and passive activity credits (claimed against taxes allocable to passive activities). The IRS audited SF’s returns and Stephens’s individual returns for 1995 and 1996; the 1997 return was audited separately. The IRS concluded that Stephens had materially participated in some SF activities, finalized its audit of the 1995 and 1996 returns, and, in 2009, sent Stephens a notice of deficiency, as proposed in 2003 and 2008. Stephens did not contest the notice but made payment and never filed a formal refund claim, allegedly believing he could carry over the disallowed passive activity losses to 1997. The IRS extended the deadline for a 1997 refund claim to 2008. In 2009, Stephens mailed an amended 1997 return, seeking to carry over the 1995 and 1996 passive activity losses. In 2011, Stephens asserted the mitigation provisions, which, in specified circumstances, “permit a taxpayer who has been required to pay inconsistent taxes to seek a refund” otherwise barred by section 7422(a) (requiring that a “claim for refund or credit has been duly filed”) or section 6511(a), specifying the limitations period for refund claims. The IRS proposed to disallow the Stephenses’ refund claim as untimely and rejected an equitable recoupment argument. The Federal Circuit affirmed the dismissal of the Stephenses suit, concluding that a timely refund claim was a “prerequisite for a refund suit.” View "Stephens v. United States" on Justia Law

In returns for 1995, 1996, and 1997, Stephens a shareholder of SF, a subchapter S corporation, reported "passive activity" passthrough income and passive activity losses (deductible from passive activity income) and passive activity credits (claimed against taxes allocable to passive activities). The IRS audited SF’s returns and Stephens’s individual returns for 1995 and 1996; the 1997 return was audited separately. The IRS concluded that Stephens had materially participated in some SF activities, finalized its audit of the 1995 and 1996 returns, and, in 2009, sent Stephens a notice of deficiency, as proposed in 2003 and 2008. Stephens did not contest the notice but made payment and never filed a formal refund claim, allegedly believing he could carry over the disallowed passive activity losses to 1997. The IRS extended the deadline for a 1997 refund claim to 2008. In 2009, Stephens mailed an amended 1997 return, seeking to carry over the 1995 and 1996 passive activity losses. In 2011, Stephens asserted the mitigation provisions, which, in specified circumstances, “permit a taxpayer who has been required to pay inconsistent taxes to seek a refund” otherwise barred by section 7422(a) (requiring that a “claim for refund or credit has been duly filed”) or section 6511(a), specifying the limitations period for refund claims. The IRS proposed to disallow the Stephenses’ refund claim as untimely and rejected an equitable recoupment argument. The Federal Circuit affirmed the dismissal of the Stephenses suit, concluding that a timely refund claim was a “prerequisite for a refund suit.” View "Stephens v. United States" on Justia Law

In November 2014, the Board of Veterans’ Appeals denied Bly’s request for service connection for bilateral hearing loss. Bly appealed to the Veterans Court. After his opening brief was filed, Bly and the government filed a joint motion for partial remand. The Veterans Court granted the motion, citing to Rule 41(b) of the Veterans Court’s Rules of Practice and Procedure, and noting that “this order is the mandate of the Court.” Bly applied for attorneys’ fees and expenses under the Equal Access to Justice Act (EAJA), 28 U.S.C. 2412, 31 days later. Remand orders from the Veterans Court may entitle veterans to EAJA fees and expenses. Under 28 U.S.C. 2412(d)(1)(B), such EAJA applications must be made “within thirty days of final judgment in the action.” The Veterans Court reasoned that its judgment became final immediately because the order remanded the case on consent and stated that it was the mandate of the court. The Federal Circuit vacated the denial of his application, reasoning that the consent judgment at issue became “not appealable” 60 days after the entry of the remand order under 38 U.S.C. 7292(a). View "Bly v. Shulkin" on Justia Law

Xitronix filed, in the U.S. District Court for the Western District of Texas, a “Walker Process” monopolization claim under section 2 of the Sherman Act and sections 4 and 6 of the Clayton Act based on the alleged fraudulent prosecution of a patent. The parties believed that the Federal Circuit had jurisdiction over an appeal under 28 U.S.C. 1295(a)(1). The Federal Circuit transferred the case to the Fifth Circuit, citing the Supreme Court’s 2013 decision, Gunn v. Minton. The Xitronix complaint alleges that KLA “engaged in exclusionary conduct by fraudulently prosecuting to issuance the [’]260 patent” and its conduct “was and is specifically intended to monopolize and destroy competition in the market” and alleges KLA intentionally made false representations to the Patent Office on which the examiner relied during prosecution. On the face of the complaint, no allegation establishes “that federal patent law creates the cause of action.” The only question is whether the monopolization allegation “necessarily depends on resolution of a substantial question of federal patent law, in that patent law is a necessary element of one of the well-pleaded claims.” There is nothing unique to patent law about allegations of false statements. View "Xitronix Corp. v. KLA-Tencor Corp." on Justia Law

The 1995 agreement, arising from a research collaboration that resulted in the antibody adalimumab, the active ingredient in the drug Humira, is governed by British law. The agreement licensed AbbVie to practice the 516 patent but AbbVie does not presently practice it. The agreement required AbbVie to pay royalties on certain sales “until the last to expire of [certain] Patents or the expiry of fifteen years from the date of First Commercial Sale of a Product by [AbbVie’s predecessor] . . . (whichever is later).” The last of those patents to expire is the 516 patent, with an expiration date in June 2018. The first commercial sale occurred in January 2003. AbbVie’s obligation to pay royalties either ceased in January 2018 (based on the first commercial sale) or will cease in June 2018 (based on the patent’s expiration date). AbbVie sought a declaratory judgment that the patent is invalid, arguing that a declaration of invalidity would constitute expiration under the contract, but did not seek the contract’s interpretation. The Federal Circuit affirmed dismissal the complaint. AbbVie does not practice the patent and is not at risk of an infringement suit. Even if AbbVie had standing, interpretation of the agreement would implicate the rights of the British government, which jointly owns the patent through one of its research councils. Deciding the invalidity question would not resolve the parties’ ultimate dispute and would raise concerns about foreign law and sovereign immunity. View "AbbVie Inc. v. MedImmune Limited" on Justia Law

Ebanks sought veterans benefits for service-connected posttraumatic stress disorder, hearing loss, and arthritis. His claim for an increased disability rating was denied by the VA Regional Office (RO) in October 2014; in December he sought Board of Veterans Appeals review, with a video-conference hearing (38 U.S.C. 7107). Two years later, the Board had not scheduled a hearing. Ebanks sought a writ of mandamus. The Veterans Court denied relief. While his appeal was pending, the Board held his hearing in October 2017. The Federal Circuit vacated, finding the matter moot so that it lacked jurisdiction. The delay is typical and any Board hearings on remand are subject to expedited treatment under 38 U.S.C. 7112. Congress has recently overhauled the review process for RO decisions, so that veterans may now choose one of three tracks for further review of an RO decision, Given these many contingencies, Ebanks has not shown a sufficiently reasonable expectation that he will again be subjected to the same delays. Even if this case were not moot, the court questioned “the appropriateness of granting individual relief to veterans who claim unreasonable delays in VA’s first-come-first-served queue.” The “issue seems best addressed in the class-action context,.” View "Ebanks v. Shulkin" on Justia Law