United States Court of Appeals for the Federal Circuit
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Nos. 15-1914, 15-1919 In the United States Court of Appeals for the Federal Circuit Altera Corporation and Xilinx, Inc., Plaintiffs-Appellants, v. Papst Licensing GmbH & Co. KG, Defendant-Appellee. Appeals from the United States District Court for the Northern District of California, Judge Lucy H. Koh BRIEF OF PUBLIC KNOWLEDGE AND THE ELECTRONIC FRONTIER FOUNDATION AS AMICI CURIAE IN SUPPORT OF NEITHER PARTY Vera Ranieri Charles Duan Electronic Frontier Foundation Counsel of Record 815 Eddy Street Public Knowledge San Francisco, CA 94109 1818 N Street NW, Suite 410 (415) 436-9333 Washington, DC 20036 [email protected] (202) 861-0020 [email protected] Counsel for amici curiae Rev. b1f7cd29 CERTIFICATE OF INTEREST Pursuant to Rules 29(a) and 47.4 of the Federal Circuit Rules of Practice, coun- sel of record certifies as follows: (1) The full name of every party or amicus represented by counsel to thisbrief is Public Knowledge and the Electronic Frontier Foundation. (2) The above-identified parties are the real parties in interest. (3) The corporate disclosure statement of Rule 26.1 of the Federal Rulesof Appellate Procedure is as follows: There is no parent corporation to or any cor- poration that owns 10% or more of stock in the above-identified parties. (4) The names of all law firms and the partners and associates that haveap- peared for the party in the lower tribunal or are expected to appear for the party in this court are: Charles Duan, Public Knowledge; Vera Ranieri, Electronic Frontier Foundation. Dated: December 21, 2015 /s/ Charles Duan Charles Duan Counsel for amici curiae (i) TABLE OF CONTENTS CERTIFICATE OF INTEREST . i TABLE OF AUTHORITIES . iii INTEREST OF AMICI CURIAE .......................... 1 SUMMARY OF ARGUMENT . 2 ARGUMENT . 4 I. Prior Case Law on Personal Jurisdiction in Declaratory Judgment Patent Cases Creates Problematically Unfair Effects . 4 A. Limitations on Personal Jurisdiction in Declaratory Judgment Cases Have Greatly Aided Forum Shopping by Patent Holders . 5 B. The Resultant and Notorious Forum Shopping Situation HasCre- ated Fundamental Unfairness in Patent Litigation . 7 C. Patent Privateering Strategies Can Take Advantage of These Un- due Personal Jurisdiction Limitations . 15 D. This Jurisdictional Gamesmanship Particularly Harms Small Companies, Innovators, and End Users, with No Corresponding Benefit to Innovation . 17 II. The Justifications for This Narrow View of Personal Jurisdiction Are Irreconcilable with Modern Patent Assertion Practice . 19 A. Recent Decisions Show that Interest in Promoting Settlements Cannot Justify Denial of Personal Jurisdiction . 20 B. Growing Commoditization of Patent Licenses Undercuts Red Wing Shoe’s Assumption that Licenses Are Settlements . 22 III. Complete and Proper Resolution of the Present Case Requires En Banc Overruling of Red Wing Shoe ........................27 CONCLUSION . 29 CERTIFICATE OF COMPLIANCE . 30 CERTIFICATE OF SERVICE . 31 (ii) TABLE OF AUTHORITIES Cases 3D Systems, Inc. v. Aarotech Laboratories, Inc., 160 F.3d 1373 (Fed. Cir. 1998) . 23 Alice Corp. Pty. Ltd. v. CLS Bank International, 134 S. Ct. 2347 (2014) . 1 Autogenomics, Inc. v. Oxford Gene Technology Ltd., 566 F. 3d 1012 (Fed. Cir. 2009) . 6 Avocent Huntsville Corp. v. Aten International Co., 552 F.3d 1324 (Fed. Cir. 2008) . 6 Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558 (Fed. Cir. 1994) . 5 Brown v. Crawford County, 960 F.2d 1002 (11th Cir. 1992) . 10 Brulotte v. Thys, Co. 379 U.S. 29 (1964) . 21 Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) . 19, 22 Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991) . 23 Commil USA, LLC v. Cisco Systems, Inc., 135 S. Ct. 1920 (2015) . 5, 24 Creech v. Roberts, 908 F.2d 75 (6th Cir. 1990) . 23 eBay Inc. v. MercExchange, LLC, 547 U.S. 388 (2006) . 5, 24 Eclipse IP, LLC v. Pro-Source Performance Products, Inc. (“Pro-Source”), No. 2:15-cv-363 (E.D. Tex. June 11, 2015) . 13–14 (iii) Eclipse IP LLC v. Alfa Vitamin Labs, Inc., No. 2:15-cv-353 (E.D. Tex. Aug. 25, 2015) . 14 Eclipse IP LLC v. PayByPhone Technologies, Inc. (“PayByPhone”), No. 2:14-cv-154 (C.D. Cal. May 29, 2014) . 12–13 Engineering & Inspection Services v. IntPar, LLC, No. 13-cv-801, 2013 WL 5589737 (E.D. La. Oct. 10, 2013) . 26 Federal Trade Commission v. Actavis, Inc., 133 S. Ct. 2223 (2013) . 20 Google Inc. v. Rockstar Consortium US LP, No. 13-cv-5933, 2014 WL 1571807 (N.D. Cal. Apr. 17, 2014) . 15–17 In re Acer America Corp., 626 F.3d 1252 (Fed. Cir. 2010) . 18 In re Apple, Inc., 581 F. App’x 886 (Fed. Cir. 2014) (per curiam) . 18 In re Biosearch Technologies, Inc., 452 F. App’x 986 (Fed. Cir. 2011) . 18 In re EMC Corp., 677 F.3d 1351 (Fed. Cir. 2012) . 18 In re Genentech, Inc., 566 F.3d 1338 (Fed. Cir. 2009) . 18 In re Google Inc., 588 F. App’x 988 (Fed. Cir. 2014) . 15, 18 In re Google Inc., No. 15-138, 2015 WL 5294800 (Fed. Cir. July 16, 2015) . 18 In re Hoffmann-La Roche Inc., 587 F.3d 1333 (Fed. Cir. 2009) . 18 In re Microsoft Corp., 630 F.3d 1361 (Fed. Cir. 2011) . 18 (iv) In re Morgan Stanley, 417 F. App’x 947 (Fed. Cir. 2011) (per curiam) . 18 In re MPHJ Technology Investments, LLC, 159 F.T.C. 1004 (Mar. 13, 2015) . 25–26 In re Nintendo Co., 544 F. App’x 934 (Fed. Cir. 2013) . 18 In re Nintendo Co., 589 F.3d 1194 (Fed. Cir. 2009) . 18 In re Nintendo of America, Inc., 756 F.3d 1363 (Fed. Cir. 2014) . 18 In re Oracle Corp., 399 F. App’x 587 (Fed. Cir. 2010) . 18 In re Toa Techs, Inc., 543 F. App’x 1006 (Fed. Cir. 2013) . 18 In re Toyota Motor Corp., 747 F.3d 1338 (Fed. Cir. 2014) . 18 In re TS Tech USA Corp., 551 F.3d 1315 (Fed. Cir. 2008) . 18 In re Verizon Business Network Services Inc., 635 F.3d 559 (Fed. Cir. 2011) . 18 In re Zimmer Holdings, Inc., 609 F.3d 1378 (Fed. Cir. 2010) . 18 International Shoe Co. v. Washington, 326 U.S. 310 (1945) . 17, 19 Keeton v. Hustler Magazine, Inc., 465 U. S. 770 (1984) . 22 Kimble v. Marvel Entertainment, LLC, 135 S. Ct. 2401 (2015) . 21 (v) Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120 (2014) . 1 Network Protection Sciences, LLC v. Fortinet, Inc., No. 12-cv-1106, 2013 WL 4479336 (N.D. Cal. Aug. 20, 2013) . 7 Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc., 148 F.3d 1355 (Fed. Cir. 1998) . 2–4, 6–7, 11, 16–17, 19–22, 25–29 Rockstar Consortium US LP v. Samsung Electronics Co., No. 2:13-cv-894, 2014 WL 2965880 (E.D. Tex. July 1, 2014) . 15 Shute v. Carnival Cruise Lines, 897 F.2d 377 (9th Cir. 1990), rev’d on other grounds sub nom. Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991) . 23 Silent Drive, Inc. v. Strong Industries, Inc., 326 F.3d 1194 (Fed. Cir. 2003) . 19 Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709 (Fed. Cir. 2014) . 1 VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed. Cir. 1990) . 5 Statutes 28 U.S.C. § 2201 . 5 35 U.S.C. § 101 . 13 ——— § 271(a) . 23 Fed. R. Civ. P. 12, 26, 56 & 83 . 10 Fed. R. Civ. P. 26(b)(1) . 11 Fed. R. Civ. P. 26(b)(2)(C) . 11 Federal Trade Commission Act § 5(a), 15 U.S.C. § 45(a) (2012) . 26 (vi) Other Sources Acacia Research Corp., Annual Report (Form 10-K) (Feb. 27, 2015) . 24 Charles W. Adams, The Court of Appeals for the Federal Circuit: More than a National Patent Court, 49 Mo. L. Rev. 43 (1984) . 3 J. Jonas Anderson, Court Competition for Patent Cases, 163 U. Pa. L. Rev. 631 (2015) . 6, 9 Jeff Bounds, Patent Suits Flood East Texas Court, Dallas Morning News, Dec. 13, 2015, http://www.dallasnews.com/business/headlines/20151213- patent-suits-flood-east-texas-court.ece . 8 Jorge L. Contreras, FRAND Market Failure, Proc. Ninth Int’l Conf. on Stan- dardization & Innovation Info. Tech. (Oct. 6, 2015), available at http://web. law.columbia.edu/sites/default/files/microsites/law-economics-studies/ 20150902_jorge_contreras_frand_market_failure.pdf . 25 Docket Control Order, Eclipse IP LLC v. Alfa Vitamin Labs, Inc., No. 2:15- cv-353 (E.D. Tex. Aug. 24, 2015) . 14 Docket Control Order (July 6, 2015), http://www.txed.uscourts.gov/page1. shtml?location . 10 Lisa A. Dolak, Declaratory Judgment Jurisdiction in Patent Cases: Restoring the Balance Between the Patentee and the Accused Infringer, 38 B.C. L. Rev. 903 (1997) . 5 Emergency Motion of Plaintiff Eclipse IP LLC to Strike Defendant Pro- Source Performance Products, Inc.’s Motion to Dismiss, Eclipse IP, LLC v. Pro-Source Performance Prods., Inc. (“Pro-Source”), No. 2:15-cv-363 (E.D. Tex. June 24, 2015) . 14 Paul R. Gugliuzza, Patent Trolls and Preemption, 101 Va. L. Rev. 1579 (2015) . 25 Brian C. Howard, 2015 First Half Patent Case Filing Trends, Lex Machina (July 14, 2015), https://lexmachina.com/2015-first-half-patent-case-filing- trends/ . 8 (vii) Brian C. Howard, Lex Machina 2014 Year in Review (2014), available at http://pages.lexmachina.com/rs/lexmachina/images/2014%20Patent% 20Litigation%20Report.pdf . 8, 10 Daniel Klerman & Greg Reilly, Forum Selling, 2015 S. Cal. L. Rev. (forth- coming), http://ssrn.com/abstract=2538857 . 7, 9, 11 Megan La Belle, Demand Letters, DJ Actions, and Personal Jurisdiction, Patently-O (Apr. 2, 2014), http://patentlyo.com/patent/2014/04/actions- personal-jurisdiction.html .