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

Diem and Express filed patent infringement suits against BigCommerce in the Eastern District of Texas. BigCommerce is incorporated in Texas and lists Austin, Texas, where it is also headquartered, as its registered office. Austin lies in the Western District of Texas. BigCommerce has no place of business in the Eastern District. During the discovery phase of the cases, the Supreme Court issued its 2017 decision, “TC Heartland,” which reaffirmed that a domestic defendant corporation “resides” under 28 U.S.C. 1400(b) only in its state of incorporation. BigCommerce moved to dismiss Diem’s case and transfer Express’s case, arguing that it resides only in the Western District. The court denied the motion. The Federal Circuit disagreed, holding that a domestic corporation incorporated in a state having multiple judicial districts “resides” for purposes of the patent-specific venue statute, 28 U.S.C. 1400(b), only in the single judicial district within that state where it maintains a principal place of business, or failing that, the judicial district in which its registered office is located. View "In re: BigCommerce, Inc." on Justia Law

InvestPic’s patent describes and claims systems and methods for performing statistical analyses of investment information. The Federal Circuit previously construed key claim terms and partly vacated the Patent Board’s cancellations of various claims in two reexamination proceedings involving issues of anticipation and obviousness under 35 U.S.C. 102 and 103. SAP subsequently sought a declaration that the patent’s claims are invalid because their subject matter is ineligible for patenting under 35 U.S.C. 101. The district court granted SAP judgment on the pleadings. The Federal Circuit affirmed. Even if the techniques claimed are “[g]roundbreaking, innovative, or even brilliant,” that is not enough for eligibility. Nor is it enough for subject-matter eligibility that claimed techniques be novel and non-obvious in light of prior art, passing muster under 35 U.S.C. 102 and 103. The claims here are nothing but a series of mathematical calculations based on selected information and the presentation of the results of those calculations (in the plot of a probability distribution function). No matter how much of an advance in the finance field the claims recite, the advance lies entirely in the realm of abstract ideas, with no plausibly alleged innovation in the non-abstract application realm. View "SAP America, Inc. v. Investpic, LLC" on Justia Law

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

M-I Drilling, a U.K. company owns five U.S. patents; M-1 LLC, a U.S. company, is an exclusive licensee of the patents, which are claimed to cover pneumatic conveyance systems installed around oil drilling rigs and used to transfer drill cuttings from the oil rigs to ships. DAL, organized under the laws of and with its principal place of business in Brazil, is a subsidiary of Dynamic, a Minnesota corporation. The Brazilian state-owned oil company Petrobras requested proposals for the installation of pneumatic conveyance systems on ships. DAL won the bid and designed, manufactured, and operated conveyance systems from offshore oil drilling rigs onto two U.S.-flagged ships. M-I sued DAL in the District of Minnesota, alleging infringement. The court dismissed the case, finding that, although the alleged infringing activities took place on U.S.-flagged ships that are U.S. territory, the contract between Petrobras and DAL did not identify the ships on which DAL would make installations, so DAL did not purposefully avail itself of the privilege of conducting activities within the U.S. The Federal Circuit reversed. The district court erroneously focused on the contract between Petrobras and DAL. Even if the contract directed where the systems were installed and operated, DAL controlled the specifics of its continued performance. DAL kept the systems operating on the ships. Such deliberate presence of DAL and its systems in the U.S. enhance its affiliation with the forum and “reinforce the reasonable foreseeability of suit there.” View "M-I Drilling Fluids, U.K. Ltd. v. Dynamic Air Ltda." on Justia Law

Anacor’s patent, entitled “Boron-containing Small Molecules,” is directed to the use of 1,3-dihydro-5- fluoro-1-hydroxy-2, 1-benzoxaborole, also known as tavaborole, to topically treat fungal infections that develop under fingernails and toenails. The patent teaches that tavaborole can be used to treat onychomycosis, a fungal infection that is responsible for approximately half of all nail disorders in humans. On inter partes review, the Patent Board found all of the claims of the patent unpatentable for obviousness. The Federal Circuit affirmed. Anacor was not denied its procedural rights with respect to the theory of obviousness the Board adopted or any evidence it relied on. The Board understood that the petitioner’s theory was “not based on structural similarities alone,” but was “based on the combination of structural similarity and functional similarity” and agreed with the petitioner that “a person of ordinary skill in the art would have expected that tavaborole, which shares functional activity with the compounds of Brehove, would have shared other activities as well, such as the inhibition of additional fungi responsible for onychomycosis.” View "Anacor Pharmaceuticals, Inc. v. Iancu" 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

By 2000, Altaire was manufacturing R-phenylephrine hydrochloride products, used to dilate patients’ pupils. In 2011, Altaire and Paragon agreed to pursue FDA approval. Paragon submitted a new drug application (NDA). The FDA recommended that Paragon consider adding a chiral purity test. Altaire measured the optical rotation of Lots 11578 and 11582, 2.5% and 10% phenylephrine hydrochloride ophthalmic solution products. Paragon submitted a supplementary NDA, which was FDA-approved. Altaire also conducted high-performance liquid chromatography testing on the two lots (TMQC-247). Paragon proposed an amendment to the Agreement to address filing a patent application. Altaire responded that: “the formulation, processes[,] and controls ... were developed solely by [Altaire’s Chief Executive] … and are . . . the proprietary and confidential information of Altaire”; the Agreement “does not contemplate ... a patent application.” Paragon did not respond but filed a patent application, entitled “Methods and Compositions of Stable Phenylephrine Formulations.” While the application was being prosecuted, Paragon requested “all the work [Altaire] ha[s] on chiral purity” for its annual FDA report. Altaire provided a report. Altaire later sued, alleging that Paragon breached a nondisclosure agreement; Paragon counterclaimed. Altaire sought a declaratory judgment of invalidity of the patent and sought post-grant review, arguing that the Asserted Claims would have been obvious over Lots #11578 and #11581. The Patent Board rejected the argument. The Federal Circuit reversed. The Board erred in refusing to consider a declaration by Altaire’s Chief Executive concerning the TMQC-247 and optical rotation test data. View "Altaire Pharmaceuticals, Inc. v. Paragon Bioteck, 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

Income earned by Americans typically is taxed in the U.S., regardless of where it is earned. European countries only tax income earned within their borders. To address possible “double taxation” the U.S. generally provides credits for taxes paid to foreign governments; European systems typically exempt from taxation income earned abroad. Congress, believing that the exemption method puts American companies at a trade disadvantage, has enacted various tax regimes, then received push-back from its European trading partners, who claimed each was an effective export subsidy.The 2000 ETI Act, intended to ease the burden of the tax revisions on domestic producers, was rejected in the World Trade Organization (WTO). Congress responded with the 2004 American Jobs Creation Act (AJCA), 118 Stat. 1418. Section 101 repeals the ETI provision that excluded extraterritorial income from taxation, effective for “transactions after December 31, 2004.” Section 101(d), provides: In the case of transactions during 2005 or 2006, the amount includible in gross income by reason of the amendments made by this section shall not exceed the applicable percentage of the amount which would have been so included but for this subsection. In 2005, WTO found that the ACJA improperly maintained prohibited ETI subsidies through transitional and grandfathering measures. Congress repealed section 101(f), effective for “taxable years beginning after” May 17, 2006. It did not repeal or revise section 101(d).Pursuant to a 2006 Agreement, DWA recognized qualifying extraterritorial income for 2006, invoked section 101(d), and excluded 60% from gross income. The IRS allowed the exclusion. DWA subsequently sought refunds for 2007-2009, claiming the section 101(d) exclusion. The Federal Circuit, disagreeing with the IRS and the Claims Court, held that section 101(d) unambiguously provides transitional relief for all extraterritorial income received from transactions entered into in 2005 and 2006, even income received in later years. View "DWA Holdings LLC v. United States" on Justia Law