Samsung can challenge patents despite agreement, Fed Circ says

The logo of Samsung is seen on a building during the Mobile World Congress in Barcelona, Spain February 25, 2018. REUTERS/Yves Herman

  • Summary
  • Law firms
  • Related documents
  • Non-disclosure agreement signed during talks had forum clause
  • Clause only related to confidentiality, not patent rights
  • Dissent says clause bars PTAB proceeding

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(Reuters) – Samsung Electronics can continue to challenge patents owned by an Australian startup at a U.S. government tribunal despite an agreement they made limiting them to taking their legal disputes to Manhattan courts, the U.S. Court of Appeals for the Federal Circuit said Thursday.

The clause at issue was part of a non-disclosure agreement Samsung and Kannuu Pty Ltd signed during licensing negotiations, which only related to confidentiality and not the patents themselves, U.S. Circuit Judge Raymond Chen wrote for a 2-1 Federal Circuit panel.

Samsung and its attorney Victoria Maroulis of Quinn Emanuel Urquhart & Sullivan didn’t immediately respond to a request for comment, nor did Kannuu or its attorney Perry Goldberg of Progress LLP.

South Korea-based Samsung contacted Kannuu in 2012 about potentially licensing its remote control search and navigation technology, and the parties signed an NDA that said any legal action arising from it or the “transactions contemplated hereby” would be brought in Manhattan. The parties stopped negotiating in 2013, and never agreed to a license.

Kannuu sued Samsung in Manhattan federal court in 2019, accusing Samsung of infringing its patents by incorporating the technology into its smart TVs and Blu-Ray players. Samsung filed five petitions at the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board last year, asking it to find the patents invalid. The board agreed to review two of the petitions.

Kannuu asked the Manhattan court for a preliminary injunction to force Samsung to stop the reviews, arguing they violated the NDA’s forum-selection clause. U.S. District Judge Edgardo Ramos ruled for Samsung in January, finding the PTAB proceedings didn’t implicate the agreement.

Kannuu asked the Federal Circuit to reverse the decision, arguing the district court ignored the ways that the patent-validity issues related to the parties’ discussions.

In what the court called a question of first impression, Chen, joined by Circuit Judge Sharon Prost, said the non-disclosure agreement couldn’t stop Samsung from challenging the patents at the board.

Chen said the connection between the PTAB proceedings and the NDA was “too tenuous” to block them because it was “a contract directed to maintaining the confidentiality of certain disclosed information, and not related to patent rights.”

“Even assuming the parties understood there was a chance they would ultimately enter into a separate intellectual property license agreement down the road, the issues underlying patent infringement and invalidity fall outside the scope of the NDA,” Chen said.

Kannuu argued that the PTAB proceedings relate to the NDA because it could rebut Samsung’s arguments before the tribunal with evidence that Samsung copied its technology, which would show it violated the agreement. But that possibility was “too attenuated” for the NDA to block the PTAB case, Chen said.

In a dissent, Circuit Judge Pauline Newman said the agreement barred the PTAB proceedings because it was “not disputed that the infringement suit is subject to the forum selection clause, and that the patents that Samsung presented to the PTAB are the patents that Samsung is accused of infringing.”

The case is Kannuu Pty Ltd v. Samsung Electronics Co, U.S. Court of Appeals for the Federal Circuit, No. 21-1638.

For Kannuu: Perry Goldberg of Progress LLP, Lewis Hudnell of Hudnell Law Group

For Samsung: Victoria Maroulis of Quinn Emanuel Urquhart & Sullivan

Blake Brittain

Blake Brittain reports on intellectual property law, including patents, trademarks, copyrights and trade secrets. Reach him at blake.brittain@thomsonreuters.com

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