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No Escaping ED-Tex for Google, Intel, BMW

It's been 15 months since the Supreme Court issued its TC Heartland decision, but the venue wars are still raging.

U.S. District Judge Rodney Gilstrap ruled earlier this summer that Google servers hosted at ISPs in the Eastern District of Texas constitute a “regular and established place of business.” Google has responded with a furious push for mandamus review at the Federal Circuit, backed by Hogan Lovells partner Neal Katyal and amicus support from prominent tech industry players.

One of the amici, Intel, is candidly seeking to use the case to topple an August ruling it suffered from U.S. Magistrate Judge Roy Payne. Intel had argued in vain that it closed one of its two offices in the Eastern district and sold the other. “A number of courts, including those in the Eastern District of Texas, have continued to test the maximum permissible breadth of the patent venue statute,” Intel complains in its amicus brief, signed by Kirkland & Ellis partner Paul Clement.

I think the tech companies make some good points. Their problem is the Federal Circuit seemed to swear off mandamus review of venue disputes back in May, saying they can usually wait until after trial.

With that backdrop, I was prepared to be skeptical this week when I heard Judge Gilstrap ruled that BMW North America also has a regular and established place of business in the Eastern District based on independent auto dealers who sell BMW vehicles there. After all, as BMW pointed out, auto manufacturers are prohibited by Texas law from operating their own dealerships in the state.

But after reading Gilstrap's opinion in Blitzsafe Texas v. Bayerische Motoren Werke, I think he got this one right.

Though they're independently operated, BMW presents the dealerships to the public as BMW properties, the judge reasoned. They have names like “BMW of Beaumont” and they prominently display the BMW logo without disclaimers such as “authorized dealer.”

Further, Gilstrap pointed out that consumers can go to BMW's website and search inventory at those dealerships, schedule a test drive there, and order a vehicle for purchase. BMW North America “ratifies the BMW Centers in this District as places of its business, going so far as to solicit orders on its own website for its BMW Centers,” Gilstrap wrote.

Brown Rudnick and McKool Smith had the winning argument for Blitzsafe Texas. Brown Rudnick partner Alfred Fabricant signed the briefs. BMW is represented by Finnegan, Henderson, Farabow, Garrett & Dunner.

IPR Petition Was Timely, but Too Late

The nation's rocket dockets got a boost Wednesday from the Patent Trial and Appeal Board.

The PTAB declined to institute IPR proceedings against patent owner Intri-Plex Technologies, in part on the ground that Intri-Plex's district court suit in the Northern District of California is scheduled to go to trial first.

Petitioner NHK Spring Co. brought its IPR petition within the one-year statutory period following Intri-Plex's suit, though just barely. Meanwhile, the district court case has been zipping along before U.S. District Judge Edward Chen and is scheduled for trial in March—six months before a final written decision from the PTAB would be forthcoming. NHK Spring is relying on the same prior art in each proceeding.

“Patent Owner argues persuasively that instituting a trial under the facts and circumstances here would be an inefficient use of Board resources,” Administrative Patent Judge Michelle Ankenbrand wrote for the PTAB. That wasn't the only reason for declining to institute, but future petitioners are now on notice.

“This has particular ramifications for IPRs filed with parallel district court cases pending in fast-moving jurisdictions, such as ED-Tex and ED-Va,” Dechert partner Noah Leibowitz, part of Intri-Plex's trial team, said in an emailed statement. Even in other jurisdictions, petitioners may want to think twice about waiting right up to the one-year deadline to file their IPRs.

Intri-Plex also was represented before the PTAB by Haley Guiliano. NHK Spring was represented by Sughrue Mion.

Amazon Gets Bargain Deal in Cloud Patent Suits

In its annual report last year, Amazon.com listed five patent infringement actions that could materially affect its bottom line. You can cross one of them off the books, and it appears Amazon didn't pay a penny.

Software company Kaavo sued Amazon over cloud computing patents in 2014 and 2015. U.S. District Judge Leonard Stark found the first patent, No. 8,271,974, ineligible under Section 101 in June of this year. But the newer patent, No. 9,043,751, survived a similar challenge. It's now under reexamination at the PTO.

Kaavo and Amazon notified the court last week that Kaavo agreed to dismiss the newer case in exchange for Amazon's agreement not to seek its costs in the older case, which Kaavo “did not appeal and will not appeal.”

Amazon was represented by a Fisch Sigler team led by Alan Fisch and Morris, Nichols, Arsht & Tunnell attorneys including partner Karen Jacobs. Kaavo was represented by Stamoulis & Weinblatt.

Judge O'Malley Sets the Tone for DQ Fight

On Wednesday, I had the blow-by-blow of a big disqualification fight at the Federal Circuit. Valeant Pharmaceuticals International and Finnegan Henderson are trying to knock Katten Muchen Rosenman off three appeals the firm is litigating for Mylan Pharmaceuticals. The reason: Katten also represents Valeant subsidiary Bausch & Lomb, creating divided loyalties. Or, if you prefer Katten's version: Valeant's naked tactical opportunism.

I've got details from the argument, the backdrop of the dispute, and Valeant's engagement letter, which sets out special rules for “key external firms” that bill more than $1 million a year. You can find all of it here.

One thing I didn't mention in the article: Federal Circuit Judge Kathleen O'Malley has a way of establishing a tone right at the top of an argument.

When Katten general counsel Michael Verde took the lectern, Judge Alan Lourieasked if he was representing his firm or Mylan. “Mylan,” Verde responded. “Because I have familiarity with the Rules of Professional Conduct, it made sense, I do the argument.”

“Let's hope everybody in the firm has familiarity with the Rules of Professional Conduct,” O'Malley replied.

Levenfeld Adds to Its Brand (Practice)

Trademark lawyer Paula Jill Krasny is toddling to Chicago's Levenfeld Pearlstein.

The McDermott and Baker & McKenzie alum, who most recently practiced at virtual firm Culhane Meadows, focuses on building, protecting and monetizing global brands and other IP assets.

“We are thrilled to welcome an international branding expert like Paula into our growing IP team,” Robert Romanoff, chairman and managing partner at 60-lawyer Levenfeld, said in a written statement.

“I look forward to working with LP's clients, from an array of industries, to ensure that their IP assets are protected and can be leveraged successfully to help grow their businesses,” Krasny said.