Forum selection provisions appear (or are at least proposed) in all types of agreements and often provoke disagreement in negotiations because of the potential for a real or perceived strategic advantage of a particular court or geography. A recent federal circuit decision (Nippon Shinyaku v. Sarepta Therapeutics, 25 F.4th 998 (Fed. Cir. 2022)), however, undid what one party originally likely expected was a big accomplishment at the time of the agreement, finding the language in one such clause also limited that party’s ability to later challenge the other’s patents at the U.S. Patent Office.

The case arises out of a confidentiality agreement, an agreement familiar to all areas of the law and not always even evoking a need to have IP counsel involved. Nippon Shinyaku provides a cautionary tale demonstrating the importance of language that might in some cases be considered boilerplate (even if the terms themselves are negotiated) when patent issues underlie the business deal.

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