“Gamemanship” versus “Sandbagging”: who will win the last transfer case on the federal circuit?

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This article is adapted from Scott Graham’s Skilled in the Art IP newsletter.

Last month on the Patently-o blog, law professors Paul Gugliuzza and Jonas Anderson highlighted the next big mandamus battle over transfer motions out of the Western District of Texas. Samsung Electronics and LG Electronics to pretend that patent owner Ikorongo Technology LLC poorly designed a location in the districts of east and west Texas by creating a separate LLC and granting it exclusive rights to several patents in those districts.

Lo and behold, U.S. District Judge Alan Albright dismissed petitions from technology companies to transfer to the Northern District of California in March on the grounds that lawsuits could never have been brought there because no alleged breaches had been committed there. . Under 130 Supreme Court precedent, Ikorongo Texas LLC can only sue for infringement that occurs in the specified geographic region, Albright reigned. Law professors call it a “brazen and transparent attempt to manipulate the place” that will create a roadmap for all other NPEs seeking to protect themselves from transfer motions out of Texas.

The plot has since thickened. The Ikorongo LLC fought back at the Federal Circuit on June 7, claiming it was Samsung and LG who were playing with the system. The companies waited more than a month after Albright’s order denying the transfer – and until he rendered an adverse decision on the construction of the claim – before petitioning the federal circuit. “Samsung and LG apparently ransacked the district court,” Ikorongo argues in opposition signed by Howard Wisnia of Wisnia PC. They “waited to see which way the wind blows, committing the resources of the district court to a Markman hearing and order, before seeking redress.

In addition, according to Wisnia, tech companies like Samsung and LG engage in a myriad of corporate structures to achieve various benefits. “Yet they accuse Ikorongo of ‘the spirit of the game’,” he wrote. Nix Patterson and Sorey Law Firm also represent the Ikorongo entities.

Samsung and LG are represented by O’Melveny & Myers. They argue in a folder signed by partner Brad Garcia that Ikorongo “does not dispute that he subdivided the rights to the claimed patents in order to defeat the transfer requests they expected from the petitioners.” And taking a month to file a petition for extraordinary relief is “typical of motions this court has granted,” Garcia writes.

The Computer and Communications Industry Association has chipped in an amicus support technology companies. If the Federal Circuit approves the strategy of “geographic shell sublicensing” to manipulate the venue, it will further increase competition between courts to attract patent litigants, which will create “the impression that the judges involved are not involved. not neutral referees but are in fact biased, ”the CCIA said. Joshua Landau writes.

I asked Michael Tomasulo, partner of Winston & Strawn, collaborator of WacoWatch Blog for its catch. “You can certainly distribute your patents geographically,” he said. “If you’re doing this just for the purpose of making a place of production,” that could be problematic. He suggested that a solution in this scenario might be to separate the local case only and maintain it while letting the rest of the country case unfold.

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