STLR Link Round-Up – Feb. 13, 2015

Intra District split further complicates personal jurisdiction in Patent Law.

The United States District Court for the District of Delaware has been the latest jurisdiction to become a patent litigation hotbed, with patent law in general surging over the last decade.  The district has long been home to corporations, with over 50% of all publicly traded companies in the United States incorporating in Delaware today.  Housing such a diverse and large number of companies in one state has its disadvantages, primarily in determining jurisdiction when a plaintiff sues a non-resident defendant with limited contacts to Delaware.

Delaware district courts have argued over the interpretation of Delaware’s long-arm statute, and whether the statute embraces the “stream of commerce” theory of personal jurisdiction.  Proponents of the theory claim that jurisdiction exists when a defendant displays “an intent to serve the Delaware market” while the detractors contend that interpretation of the long-arm statute should “flow from the statutory language” and that “partial satisfaction” of the statute is insufficient to meet the statutory requirements for jurisdiction.
Given the non-uniform application of Delaware’s long arm statute (see Graphics Properties Holdings, Inc. v. ASUS Computer International; Round Rock Research v. ASUSTek Computer Inc.), the outcome of contesting jurisdiction under Delaware’s long-arm statute will be a case-by-case basis.

 

Internal Quality Assurance efforts by USPTO revealed.

While the patent office’s Sensitive Application Warning System (SAWS) program has been in place at the USPTO since 2006, the details behind the system were substantiated only by rumors and former members of the USPTO until recently.  A number of law firms filed Freedom of Information Act (FOIA) requests related to the SAWS program and in December 2014, the patent office released a short description of the program on its website.

The patent office describes the SAWS programs intention to “ensure that only the highest quality patents are issued by the Agency.”  The program has multiple levels of checkpoints for specific patents that qualify for the program but the USPTO states that they only flag less than one half of one percent of patent applications.  The only issue is that SAWS may not be the only “internal” program with this type of function within the USPTO.

This program could be construed as a selective limbo for certain patents by the USPTO, but overall it gives us a glimpse as to why certain patents remain in the system for far too long, and gives us a starting place to look at potential reforms within the USPTO

 

Addition to the Innovation Act could further heighten pleading requirement for patent infringement actions.

The Innovation Act has recently been updated to include a new Section 281A that will alter the pleading requirements for patent infringement actions in a manner that could clog litigation efficiency, not improve it.  The Innovation Act was created for the purpose of curbing patent litigation abuse by “patent trolls,” who clog up patent dockets with baseless lawsuits.

When Innovation Act was originally introduced to the House of Representatives on November 20, 2013, the bill had been the most comprehensive patent reform bill proposed, and was passed by the House of Representatives December 5, 2013.  The original form of the act already increased pleading standards by placing limitations on patent discovery and providing cost-shifting mechanisms meant to deter patent trolls from litigation.  The new potential addition of Section 281A would amend the previous standards by including infringement contentions that require the disclosure of infringement contentions earlier in the discovery phase.

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