IPR and Forum Selection Clauses

A forum selection clause in a contract could bar a party from initiating an inter partes review (“IPR”) challenging a patent.

In Dexcom, Inc. v. Abbott Diabetes Care, Inc., No. 23-1795, — F.4th — (Fed. Cir. Jan. 3, 2024), the Federal Circuit found that a license’s forum selection clause stating that the District of Delaware “shall have exclusive jurisdiction over any dispute arising from or under or relating to this Agreement, to the extent permitted by law” did not prohibit the filing of an IPR because the contract expressly allowed IPR challenges during a specific period of time which the forum selection clause also covered.

It necessarily follows that because the forum selection clause governs both during and after the Covenant Period, the clause cannot operate to prohibit the filing of IPRs after the Covenant Period if it allowed them during the Covenant Period.

The Federal Circuit also cited Delaware case law, such as Martin Marietta Materials, Inc. v. Vulcan Materials Co., 68 A.3d 1208 (Del. 2012), that provisions of a contract should be harmonized and given effect if possible.

Prior Federal Circuit decisions which had held that the specific forum selection clauses at issue in those cases prohibited filing a proceeding outside the stipulated forum were distinguished on the basis that those cases did not involve a contract that “allowed the filing of IPR petitions under certain circumstances notwithstanding the existence of the forum selection clause.”

For example, in Texas Instruments Inc. v. Tessera, Inc., 231 F.3d 1325 (Fed. Cir. 2000); the parties’ license agreement required that “any litigation . . . relating to this Agreement shall take place in California”; and in the field of patent law, which was relevant to the license contract at issue, “‘litigation’ does not exclude ITC proceedings under section 337.” Id. at 1330.

And in General Protecht Group, Inc. v. Leviton Mfg. Co., 651 F.3d 1355 (Fed. Cir. 2011), the forum selection clause stated that “[a]ny dispute between the Parties relating to or arising out of this [Settlement Agreement] shall be prosecuted exclusively in the United States District Court for the District of New Mexico.” The Federal Circuit affirmed the grant of a preliminary injunction preventing litigation in the Northern District of California or at the ITC because the dispute indisputably “relate[d] to or ar[o]se[] out of” the settlement agreement. Id. at 1359.

Accordingly, the Federal Circuit affirmed the denial of a preliminary injunction.

 

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