IP Newsflash

The Eastern District of Texas recently addressed two significant issues related to fair, reasonable and non-discriminatory (FRAND) negotiations under French law; namely, whether: (1) an implementer is entitled to damages resulting from a standard essential patent (SEP) holder’s bad faith; and (2) an SEP holder can unilaterally discharge its FRAND obligations in view of an implementer’s bad faith.

In a recent order, the Eastern District of Texas declined to preclude a defendant from raising prior art system references despite patentee’s argument that similar printed publications could have been raised in earlier inter partes review (IPR) petitions.

The Eastern District of Texas has rejected a plaintiff’s argument that if a patent owner concedes in an inter partes review (IPR) that a prior art reference discloses all elements of a patent claim, the reference necessarily subsumes all other prior art disclosing those elements. In the IPR preceding the court’s decision, patent owner conceded the disclosure in a printed prior art reference of all the elements of the challenged independent claims. In the district court, plaintiff filed a motion for partial summary judgment of validity on grounds of IPR estoppel, asserting that any prior art system that disclosed the conceded claim elements (in the IPR) is subsumed in the printed prior art reference and estopped under 35 U.S.C. § 315(e)(2). The court denied plaintiff’s motion as an attempt to impermissibly expand the scope of estoppel.

Judge Gilstrap in the Eastern District of Texas has denied defendants’ motion to stay the post-trial phase of a patent infringement litigation pending ex parte reexamination where the request for reexamination was filed four months after the jury returned a $400 million verdict in favor of plaintiff.

Chief Judge Rodney Gilstrap of the Eastern District of Texas issued a decision addressing motions to stay a patent infringement case under the “customer-suit exception” to the general first-to-file rule. Judge Gilstrap largely focused the opinion on his conclusion that granting a stay would have been inequitable under the circumstances, and thus would have contravened the fundamental purposes underlying the customer-suit exception. In particular, he found that the defendant’s decision to pursue parallel inter partes review (IPR) proceedings “violates the express policy and purpose of the customer-suit exception,” namely, to relieve the customer of the burdens of litigation. But he also reasoned that, regardless of the movant’s decision to pursue parallel IPR proceedings, the defendant was not entitled to a stay under the exception, or under the general factors courts normally consider when deciding stay motions.

Chief Judge Gilstrap of the Eastern District of Texas held that the litigation conduct of defendants Huawei Device USA, Inc. and Huawei Device (Shenzhen) Co., Ltd. (collectively, “Huawei”), in a patent infringement action, merited a finding of exceptional case status and an award of attorneys’ fees to the plaintiff patent holders.

The Patent Trial and Appeal Board has rejected a patent owner’s argument that a forum selection clause found in a Non-Disclosure Agreement (NDA) barred the Board from instituting a petition for inter partes review (IPR).

For nearly two decades, the Eastern District of Texas has been a hotbed of patent litigation. Even after the Supreme Court’s 2017 TC Heartland decision narrowed a plaintiff’s venue options, the Eastern District of Texas still sees more patent infringement cases than almost any other jurisdiction. It has controlled its docket by, among other things, adopting local patent rules that require early disclosure of Infringement and Invalidity Contentions. For example, Patent Rule 3-3 requires each party opposing a claim of patent infringement to serve Invalidity Contentions detailing the party’s allegations that each challenged claim is invalid under 35 U.S.C. §§ 102, 103 or 112. Last month, Chief Judge Gilstrap augmented this rule with a standing order that requires a party to serve “Eligibility Contentions” if the party intends to allege that any claim is directed to unpatentable subject matter.