Fifth Circuit Ruling May Impact Venue Transfer for Patent Cases in the Western District of Texas

In recent years the Western District of Texas has become an increasingly popular destination for patent litigation, in large part due to the litigant friendly rules propagated by Judge Albright. The Western District of Texas (as well as the Eastern District of Texas, another popular district for patent litigation) is part of the 5th Circuit.

Where venue is proper Defendants have limited options for changing to a different location, one way of doing so is through venue provision 28 U.S.C. 1404(a), which allows for change of venue “for the convenience of parties and witnesses.” However, changing for convenience is not given as a matter of right, and the district judge overseeing the case has significant discretion in determining whether the transfer is allowed. How much discretion the district judge has is a matter of some debate among the district courts, and mandamus petitions for venue cases are not commonly taken up by the 5th circuit. However, the 5th circuit did recently take just such a case in re Planned Parenthood Fedn. On Am., Inc. 52 F.4th 625 (5th Cir. 2022).

The Planned Parenthood case was originally filed in Amarillo (N.D.Tex.), and Planned Parenthood moved for a transfer of venue to Austin (W.D.Tex) as a much more convenient forum. The district court denied the motion and planned parenthood filed a mandamus petition.

The circuit court further denied the petition, citing several grounds. Of particular note the court frequently hit on the broad discretion given to the district court in deciding whether to grant a transfer for convenient venue, for example the court opened by stating “we have often said that a writ of mandamus is an ‘extraordinary remedy’ reserved for ‘extraordinary causes”. Later in the opinion the court further “reiterate[s] that district courts have broad discretion in deciding motions to transfer; they need only grant such a motion where the evidence demonstrates that the destination venue is ‘clearly more convenient’ than the chosen venue. [the court] review that decision ‘only for clear abuses of discretion that produce patently erroneous results.’ The district court carefully considered each of the private and public interest factors, ultimately concluding that they do not weight in favor of transfer. The standard for reversing that holding is high” (emphasis added). While citing that the district judges have broad discretion in these cases is not new, and is taken from the precedent, the frequency and emphasis in which the court repeated this may indicate that the circuit is raising the bar on the showing required to reverse a judge’s denial of transfer.

The Circuit court also noted to other factors that weighed in favor of upholding the district courts denial of transfer, (1) was that the judge for this case had particular familiarity with the law at issue, (2) Amarillo (where the district court was located) is less expensive than Austin (where the case would be transferred to), finally (3) the district court found that the Amarillo Division is less congested than the Austin division. At least the first two points could potentially apply to patent cases under Judge Albright as well, Judge Albright definitely has familiarity with patent law, and Waco (where Judge Albright is located) is cheaper than many other locations that defendants are likely to want to transfer to (for example California, Delaware, Etc.).

One other factor that contributed to the denial as well was Planned Parenthood’s “inexcusable delay” in filing a motion to transfer. Specifically, Planned Parenthood waited until after resolution of an earlier motion to dismiss the case was denied before filing for transfer, so future defendants would be advised to make any planned transfer motions as early as possible.

In total this decision may cement Judge Albright’s (and any other patent friendly judges in districts under the 5th circuit) ability to retain the plethora of patent cases filed in their courts. This may continue to enable patent litigants to take advantage of the friendly rules of these specific Districts.


New Deadlines to Respond to Trademark Office Actions

On December 3, 2022, the United States Patent and Trademark Office will shorten the response deadline for Trademark office actions from 6-months to 3-months. This shortened deadline will apply to all office actions issued on or after December 3, 2022.

There will be an opportunity to file one 3-month extension for an additional fee. The USPTO fee for a 3-month extension will be $125 and the extension request must be filed before the initial 3-month deadline.

The goal of the shortened response deadline is to decrease the time to obtain a registration, while also allowing flexibility to request additional time to respond to more complex office actions.

The new shortened deadline will not apply to applications filed through the Madrid Protocol section 66(a).

The deadline for post-registration office actions will remain unchanged until October 7, 2023.

If a response deadline is missed, it may still by possible to revive the application by filing a petition to revive.

We look forward to assisting our valued clients as we navigate the transition to a 3-month response timeline.


Federal Circuit Partially Overturns Invalidation of 4 Software Patents Under §101

Inventor Sholem Weisner sued Google LLC for patent infringement of four patents (10,380,202, 10,642,910, 10,394,905 and 10,642,911) in the District Court for the Southern District of New York in 2020. Weisner’s patents all shared the same specification which generally described ways to “digitally record a person’s physical activities and ways to use this digital record.” Google enjoyed an early win when the District Court granted summary judgment finding all claims ineligible under §101. However, on October 13, 2022, the Federal Circuit partially reversed the District Court, specifically finding that the ‘905 and ‘911 patent claims should not have been dismissed for patent ineligibility at this stage. Weisner v. Google LLC, 2021-2228  (Fed. Cir. 2022).

The Federal Circuit found that the District Court correctly dismissed the ‘202 and ‘910 patents for patent ineligibility. The claims in question were directed to the abstract idea of “collecting information on a user’s movements and location history and electronically recording that data.” Specifically, these claims were essentially about “creating a digital travel log”. Weisner argued that the system was an improvement on a computer because it automatically made these recordings and limited “what is recorded to only specific types of interactions that are pre-approved and agreed to by an individual member and a vendor member”. Neither the District Court nor the Federal Circuit found this line of argumentation compelling, noting that “humans have consistently kept records of a person’s location and travel in the form of travel logs, diaries, journals…” purely automating or digitizing a travel log is not sufficient to “bring the claims out of the realm of abstractness.”

With regard to the remaining ‘905 and ‘911 patents the Federal Circuit said, “at step one [of Alice] the district court erred by failing to separately analyze these patents.” While the district court analyzed the remaining patents on the same grounds as the ‘202 and ‘910 the Federal Circuit found that these patents were instead directed to “creating and using travel histories to improve computerized search results” (emphasis added). Specifically, the ‘905 and ‘911 patents recited “a method of enhancing digital search results for a business in a target geographic area using URLs of location histories.” The Federal Circuit still found this was an abstract idea, but much closer than the first two patents.

On Alice step 2 the Federal Circuit found that the ‘905 and ‘911 patents “recite a specific implementation of the abstract idea that purports to solve a problem unique to the internet and that, accordingly, these claims should not have been held ineligible under step two at this stage.” This finding was not based on any new structure or algorithm, in fact Weisner conceded “the patented system uses the same or similar algorithm used by existing search engines.” However, this alone did not “doom the claims”. The allowability was instead found based on “the claims specificity as to the mechanism through which they achieve improved search results”, which was done “through a ‘location relationship’ with a ‘reference individual’ for the ‘905 patent or through the ‘location history of the individual member’ … for the ‘911 patent.” Therefore, the claims recite “a new technique for prioritizing the results of the conventional search,” which in the context of the internet are sufficient to “add significantly more to the abstract idea of using travel histories to improve computerized search results.”

This case, like the Federal Circuits other recent §101 case Cooperative Entertainment v. Kollective Technology, shows that the Federal Circuit is willing to push back on District Court §101 invalidations, especially for software cases where such invalidations are common. Whether this is indicative of a larger trend on how the Federal Circuit views §101 going forward still remains to be seen.


Federal Circuit Overturns Summary Judgment Based on §101 Ineligibility

In a new precedential decision released September 28, 2022, the Federal Circuit overturned a decision from the Northern District of California. The lower court’s decision granted summary judgement for defendant Kollective Technology, finding all claims of plaintiff-complainant Cooperative’s ‘452 patent ineligible under 35 U.S.C. §101.

Cooperative’s ‘452 Patent relates to systems and methods for structuring a peer-to-peer (P2P) dynamic network for distributing large files, namely for videos and video games. The District Court had found that the ‘452 patent failed §101 at step 1 of the Alice test, specifically that the focus of the patent was the abstract idea of “the preparation and transmission of content to peers through a computer-network.” Furthermore, the lower court ruled that the ‘452 patent failed step two of Alice because the patent was “merely implementing the abstract idea of preparing and transmitting data over a computer network with generic computer components using conventional technology.”

The Court of Appeals overturned the lower court rejection on the basis that the ‘452 patent did in fact meet part two of the Alice test on two different bases. The first issue was a matter of claim construction, Cooperative argued that the claims required trace routes to be used in content segmentation, while Kollective argued that the segmentation was optional, and therefore irrelevant for the purposes of determining eligibility. The District Court had not conducted claim construction yet and the Federal Circuit held “under these circumstances we proceed by adopting the non-moving party’s construction”. Since the construction was the only thing at issue for the trace routes, this alone was enough to overturn the dismissal under §101.

However Cooperative also claimed that the patent was inventive because the ‘452 patent required a dynamic P2P network wherein multiple peer nodes consume the same content and are configured to communicate outside the CDN’s. Kollective argued that all components used in this feature are routine and well known, and this is simply a rearrangement of existing components. Cooperative did not dispute that the components themselves were well known in the art, but rather that it was the arrangement and structure of these components that was itself inventive, and therefore patent eligible. The Federal Circuit agreed with Cooperative, “we conclude that claim 1 recites a specific technical solution … it recites a particular arrangement of peer nodes for distributing content … which did not exist in the prior art”.

The Federal Circuit therefore completely overturned the lower courts decision on both points, stating “at a minimum, the district court should have denied the motion to dismiss because Cooperative’s allegations in the complaint regarding the claims and the ‘452 patent’s written description create a plausible factual issue regarding the inventiveness of the dynamic P2P configuration of claim 1.”

This case could have larger implications on §101 policy going forward. Software patents like the one at issue in this case have been notoriously susceptible to §101 rejections, but the Federal Circuit’s decision here is a win for software patents.


USPTO Transitions to New Online Search Tool, Patent Public Search

On September 30, 2022, the United States Patent and Trademark Office (USPTO) consolidated and replaced four legacy search tools with a single Patent Public Search tool. The new tool is intended to streamline the search process for users and to incorporate new, useful features.

The legacy tools that were phased out include:

  • Public-Examiner’s Automated Search Tool (PubEAST)
  • Public-Web-based Examiner’s Search Tool (PubWEST)
  • Patent Full-Text and Image Database (PatFT), and
  • Patent Application Full-Text and Image Database (AppFT).

The new Patent Public Search tool can be accessed here.


Stephen Kunin Named Go To Lawyer for Intellectual Property Law by Virginia Lawyer’s Weekly

Maier & Maier partner, Stephen Kunin, has again been named by Virginia Lawyer’s Weekly as a Go To Lawyer for Intellectual Property Law. The selected attorneys were nominated by their colleagues and chosen by a panel from Lawyers Weekly. The full list and individual profiles can be read here.


Overcoming Sect. 101 Rejections: USPTO Guidance, Recent Decisions to Meet Sect. 101 Patent Eligibility Requirements

Maier & Maier is pleased to announce that distinguished partner, Stephen Kunin, presented a Strafford webinar, “Overcoming Sect. 101 Rejections: USPTO Guidance, Recent Decisions to Meet Sect. 101 Patent Eligibility Requirements” on Tuesday, August 16.  The webinar is available for purchase on the Strafford website: Here.

The USPTO has dramatically increased rejections under 35 USC 101 since the Supreme Court’s decision in Alice Corp. v. CLS Bank (2014). The panel reviewed case law, USPTO guidance, and offered response strategies for overcoming Section 101 rejections.

We encourage anyone interested in Section 101 issues at the USPTO to view the webinar.


Decentralized Autonomous Organizations Create Legal Uncertainty and Opportunity

As Decentralized Autonomous Organizations become an increasingly popular means to bring global networks together, the legal uncertainties create opportunities for improvement and advancement. 

Blockchain technology has been an ever-growing development in creating shared data networks that verify and save various transactions. The newest development, Decentralized Autonomous Organizations (DAO), takes blockchain tech a step further by establishing an expansive, transparent, and objective rules-based structure. A DAO allows members to vote on how the organization will function: its rules, its finances, its objectives. Based on the DAO’s code, it will perform certain actions when a threshold vote (for example 50%) is met. Instead of a small group running the operations and making the decisions for the whole, the entire DAO membership has a voice in the day-to-day functions of the organization. Essentially a DAO executes its actions via code rather than behind closed doors.[1]

Membership into a DAO requires purchasing DAO tokens, like a cryptocurrency. Though a user must be authenticated, most DAOs are open to all and do not require authorization. Once inside, a member uses their purchased tokens to vote on proposals, options, and decisions based on the DAO’s objectives.[2] Some DAOs have been used to purchase sport teams or pieces of property. Others have been used as a means of financial investment. While others raise funds to support causes, like the war in Ukraine.  

Despite the scope of the DAOs, there are serious concerns that undermine their credibility. In 2016, a German startup created “The DAO” to generate support for an investment campaign. Less than two months later, it raised over $150 million from its members. Unfortunately, due to gaps in The DAO’s code, hackers were able to steal over $50 million from the fund. Though users were refunded their money and the account was frozen, the attack undermined the credibility of the code and the system.[3]

However, the technology has only improved in the last six years. So much so that several international and national legislative systems have recognized the legal structure of DAOs. The Marshall Islands became the first country to recognize DAOs as a legal entity. In the U.S., both Tennessee and Wyoming have enacted statutes to simplify incorporation for a DAO and for formation of the organizations as legal groups.[4] These developments implicate the future of DAOs and their legal possibilities. 

 Following the hacking of The DAO and the ongoing legislative action, the legal system has developed alongside the technology. For example, the SEC recognized DAO tokens and currency as a security and the IRS treats the tokens as a virtual currency. However, there are still serious holes in the legal system when it comes to DAOs.  

 For instance, because DAOs do not have a legal framework to operate within, their business operations are without boundaries. This creates problems when DAOs merge and combine as the organizations can contract without legal guidelines. This is exactly what happened when two financial DAOs merged and integrated their tokens. Without the legal structure to dictate the merger, users in the minority of the decision were left with little protection and security. Despite approval by DAO members, the agreement was open-ended and uncertain.[5]

Likewise, because ownership of a DAO is essentially non-existent, legal liability on an infringing DAO becomes unclear. It would be difficult to assert IP protection over all the users in a DAO, let alone to find all of those members. On the other hand, ownership over the intellectual property of a DAO’s code and software also becomes uncertain. This creates serious concerns when asserting and defending ownership over a DAO. Given hacks and leaks in the past, this lack of a legal ownership structure, though appealing, can pave the way for endless infringing.[6]

Nonetheless, some in the industry view the enforcement of intellectual property rights by a DAO as a healthy development for decentralized finance and a sign that DAOs have entered the economic mainstream.[7]

 As DAOs continue to become more widespread and far reaching, the law will be forced to adapt and grow with them. Despite the development of DAOs since their inception, there are still serious concerns and implications that need to be addressed before true decentralization and transparency can be reached. 


[1] https://www.thomsonreuters.com/en-us/posts/legal/daos-business-structure/

[2] https://www.bakerbotts.com/thought-leadership/publications/2022/may/intellectual-property-report

[3] https://www.forbes.com/sites/cathyhackl/2021/06/01/what-are-daos-and-why-you-should-pay-attention/?sh=4f91ae277305

[4] https://fedsoc.org/commentary/fedsoc-blog/the-legal-status-of-decentralized-autonomous-organizations-do-daos-require-new-business-structures-some-states-think-so

[5] https://www.mayerbrown.com/en/perspectives-events/publications/2022/02/decentralized-autonomous-organizationswhen-code-mirrors-law

[6] https://www.ropesgray.com/-/media/Files/articles/2022/04/20220414_Bloomberg_DAO_Article.pdf?la=en&hash=658041824B53B872F7A3554798E1971418EDA41E

[7] https://cointelegraph.com/news/daos-prepare-to-face-off-would-vigorous-ip-battles-be-good-for-defi


Prior Contract Clause Precludes IPR in Nippon Shinyaku Co., Ltd. v. Sarepta Therapeutics, Inc.

The Federal Circuit Court enforced the plain language of a confidentiality agreement to prevent an IPR proceeding from going before the PTAB.

In the summer of 2020, Nippon Shinyaku Co., Ltd. and Sarepta Therapeutics, Inc. entered into a mutual confidentiality agreement relating to a potential partnership for a Duchenne Muscular Dystrophy therapy. As a part of the deal, the parties settled on a two-year covenant not to bring any lawsuits relating to the treatment and its intellectual property. The agreement also included a forum-selection clause that required the parties to bring suits, including any patent disputes, to the District Court of Delaware following the two-year period.

Immediately following the conclusion of the two-year covenant, Sarepta filed seven inter partes review (IPR) petitions with the Patent Trial and Appeals Board (PTAB) in protest of Nippon’s patents. An IPR petition allows the challenger to protest the validity of a patent. In response, Nippon filed suit in the District of Delaware for patent infringement, breach of contract, and requested a preliminary injunction against Sarepta filing the IPR petitions.

Initially, the District Court of Delaware heard the case and rejected Nippon’s request for a preliminary injunction. It determined that the contract intended to preserve the ability to file IPR petitions because the forum-selection clause referred to federal district court litigation, not IPR proceedings. Rather, including IPR petitions in the forum-selection clause would time-bar the ability to file the petitions. In the interest of policy and public interest, the district court concluded that Sarepta should be allowed to file IPR petitions with the PTAB.

However, the Federal Circuit disagreed. In reversing the district court’s decision, the federal circuit held that the plain language of the agreement prevented filing outside the District of Delaware. The forum selection clause clearly provided the terms of the disputes. Because patent disputes were included in the forum requirement, they too had to filed with the District of Delaware. The court justified it decision based on past cases that upheld the ability for parties to waive their right to file an IPR petition. It concluded by noting that the policy factors actually weighed in favor of Nippon because Sarepta would otherwise have multiple opportunities to invalidate Nippon’s patent.

The opinion was precedential, and the court distinguished its decision from cases like Kannuu v Samsung based on the specific language of the agreement. And the decision will undeniably impact future contracts involving patent and intellectual property agreements. On one hand, the court’s decision benefits patents owners by increasing the burden of proof when arguing the invalidity of a patent. In district courts, the burden of proof requires the higher, “clear and convincing evidence” standard to find invalidity. However, the PTAB requires only a “preponderance of the evidence” to find a patent invalid, an easier standard to meet.[1] Patent owners who contract for a forum-selection clause in district courts will be better off when defending the validity of their patents.

The decision creates clear implications for contractual concerns when negotiating around intellectual property. Parties will have to be more aware of their agreements and the ease at which they can contract away their rights, even with a simple forum-selection clause. The Court has made clear that the plain language of a contract dominates. Parties should be intentional and considerate when negotiating their rights and agreements going forward considering that certain filings are not guaranteed and can be bargained away.

[1] https://www.jdsupra.com/legalnews/federal-circuit-rehearing-denial-in-6183834/


The West’s Use of Intellectual Property to Stifle Russia’s Commercial and Private Aircraft

As technology and innovation have progressed, war has transformed close behind, generating new types of weapons and threats. Russia’s invasion of Ukraine demonstrates the use of this development, including everything from Molotov cocktails to nuclear warfare. Though the West has not entered the fight, it has contributed to Ukraine’s efforts by not only supplying technology but by stifling it.

The United States Department of Commerce announced March 18, 2022, that it was imposing a new license requirement on aircrafts made in the United States or manufactured with more than 25% of its parts in the United States. Additionally, any action taken to assist these aircrafts, including refueling, maintenance, or repair, is prohibited. 1 In essence, the action has grounded 100 planes that arrived in Russia. The new rules have forced Russian airlines to start looking for alternatives to the ineffective and banned parts so their planes can fly without violating Western protocols. 2

This is a part of a larger effort by the Department of Commerce to cut economic and technological ties with Russia. The United States Patent and Trademark Office and the European Patent Office cut ties with both Russia’s intellectual property agency and the Eurasian Patent Organization. The USPTO will also not grant requests for Russian patents for entrance into the Global Patent Prosecution Highway, which allows expedited processing once approved in the originating patent office.3 In response, Russia issued a decree that prevents patent holders from “unfriendly countries” to receive any compensation for the invention.4 On top of that, the Chinese National Intellectual Property Administration has expanded entrance for Eurasian patent holders into its Patent Prosecution Highway program.5 Both sides are attempting to stronghold their enemies’ patents while supporting its allies. Clearly, as war and violence progress in Ukraine, the fight will continue among the soldiers but also among the countries’ patent offices.

1 https://www.commerce.gov/news/press-releases/2022/03/commerce-department-identifies-commercial-and-private-aircraft-exported
2 https://www.reuters.com/world/exclusive-us-targets-abramovich-plane-99-others-over-russia-export-violations-2022-03-18/
 3 https://www.uspto.gov/about-us/news-updates/uspto-statement-engagement-russia-and-eurasian-patent-organization
3 https://www.jdsupra.com/legalnews/united-states-halts-work-with-russian-1849952/
3 https://www.epo.org/news-events/news/2022/20220301a.html
4 https://www.natlawreview.com/article/russia-suspends-compulsory-license-payments-some-non-russians?amp
5 https://www.natlawreview.com/article/uspto-cuts-ties-eurasian-patent-organization-china-national-intellectual-property