Argument Preview / Panel Activity

One patent case being argued next week, Kannuu Pty Ltd. v. Samsung Electronics Co., attracted amicus briefs. In this case, Kannuu appeals an adverse decision in the United States District Court for the Southern District of New York. On appeal, Kannuu argues that inter partes review proceedings brought by Samsung should have been enjoined due to a forum selection clause in a contractual agreement among the parties. Kannuu contends that the district court erroneously denied its related motion for a preliminary injunction. The arguments regarding the forum selection clause in the parties’ contract attracted dueling amicus briefs. This is our argument preview.

Kannuu argues in its opening brief that “the Court should reverse the district court’s order denying Kannuu’s motion to enjoin Samsung from pursuing the IPRs because the district court erroneously concluded that Samsung’s validity challenges are not ‘related to’ the parties’ discussions” under the relevant contract, a non-disclosure agreement. That agreement, Kannuu contends, required “that Samsung bring any disputes relating to the NDA or ‘transactions contemplated’ by the parties’ discussions under the NDA in the federal or state courts of New York ‘and in no other jurisdiction.’” Kannuu maintains that an agreement of this type “does not contravene public policy.” Kannuu seeks to have the Federal Circuit “order the district court to enter the injunction because no further weighing by the district court of the issues raised below by Samsung could change the outcome.”

In its response brief, Samsung argues the district court was correct in “denying a preliminary injunction based on its conclusion that Kannuu failed to satisfy any of the four factors required for an injunction.” Further, Samsung contends, “[d]espite Kannuu’s arguments that . . . federal patent policy interests allow agreements to waive the right to pursue IPR proceedings, federal patent policy is clear that, at a minimum, it requires a clear statement of the parties’ intent to foreclose such rights to IPR proceedings.”

In its reply brief, Kannuu maintains that “Samsung’s argument . . . is directly at odds with controlling New York law.” It explains that, “[u]nder New York law, ‘relating to’ is interpreted broadly as equivalent to ‘associated with’ and as much broader than ‘arising out of.’” As a result, Kannuu argues, “the district court’s ruling is clearly erroneous and must be reversed.” Kannuu also argues that “Samsung has abandoned the public policy arguments that it made below and instead is advocating for a ‘clear statement’ rule.” Accordibg to Kannuu, this “new argument fails for numerous independent reasons, including that Samsung has waived the argument, it would not make sense to apply the clear statement rule to forum-selection clauses, and the FSC meets the rule anyway.”

A first set of law professors filed an amicus brief in support of Kannuu. They argue “the Court should reverse the district court’s decision and grant the preliminary injunction based on the presumptively valid and enforceable forum-selection clause in the parties’ agreement.” In addition to the appellant’s arguments, they first argue that “the district court did not give proper legal weight to the importance of a privately negotiated agreement to direct patent challenges to federal district court.” They next argue that “the district court incorrectly generalized . . . a sweeping and unprecedented public-policy rule” that would “prohibit any agreement between private parties to have all patent validity challenges decided in federal court.”

A different group of intellectual property law professors filed an amicus brief in support of Samsung Electronics. They argue that “[e]xtending forum selections in NDAs to presumptively foreclose inter partes review is not only bad law; it is also bad policy.” The result, they argue, would “both limit the ability to file socially valuable IPR petitions and conflict with the America Invents Act.” Also, the professors argue, “because parties sign NDAs as part of their information-gathering processes, allowing forum selection clauses in NDAs to bar IPR proceedings would also cut off . . . access [to the Patent Trial and Appeal Board] for the businesses best suited to challenge patent validity.” 

This case will be argued on Thursday, July 8. We will keep track of it and report on developments.