forum selection clause

Forum Selection Clause Precludes PTAB Review of Validity

A recent Federal Circuit decision provides an important lesson for patent owners:  forum selection clauses may bar an accused infringer from petitioning the Patent Trial and Appeal Board (PTAB) to review a patent’s validity under the America Invents Act. 

Dodocase Vr, Inc. v. Merchsource, LLC (Fed. Cir. 2019) affirmed an injunction granted by a district court requiring the defendant to withdraw three petitions for review it had filed with the PTAB, based on a forum-selection clause between the parties.

The case was a dispute between a patent owner and its licensee (who had stopped making royalty payments and claimed the patents were invalid).

But the parties’ license agreement contained a forum-selection clause that required all disputes to be resolved in a court located in certain counties in California.  That meant that the claims of invalidity had to be raised in one of those courts, not the PTAB.

PTAB reviews are generally considered to be disadvantageous to patent owners, both for procedural and substantive reasons. 

Given the Dodocase Vr decision, patent owners are well advised to include forum-selection clauses in any agreements concerning their patents. 

And, if a petition for review is filed by a party with whom the patent owner had some sort of contractual relationship, review the contract terms closely to determine whether a forum selection clause might not be applicable.