Defendants May Proceed with Inter Partes Review Petitions Despite Forum Selection Clause
On July 2, 2019, District Judge Denise Cote (S.D.N.Y.) denied Plaintiff NuCurrent Inc.'s ("NuCurrent") motion for a preliminary injunction seeking to have Defendants Samsung Electronics Co., Ltd. and Samsung Electronics America, Inc. (collectively, "Samsung") withdraw and dismiss its IPR petitions.
NuCurrent specializes in wireless charging solutions and high-efficiency antenna design. Samsung designs and manufactures, among other things, mobile devices with wireless charging capability. On January 13, 2015, NuCurrent and Samsung executed a Mutual Confidentiality Agreement ("MCA") in connection with a potential business relationship involving wireless power technology for Samsung mobile devices. The MCA was effective for a year, at which point the parties entered into a non-disclosure agreement ("NDA"), which became effective on January 15, 2016 and expired on January 15, 2018. The NDA contained the following forum selection clause which NuCurrent argued prohibits Samsung from initiating IPR proceedings before the PTAB:
"Any legal action, suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby must be instituted exclusively in a court of competent jurisdiction, federal or state, located within the Borough of Manhattan, City of New York, State of New York and in no other jurisdiction."
Unlike other provisions, the NDA's forum selection clause was not specifically identified as surviving the expiration of the NDA.
On February 5, 2018—after the expiration of the NDA and before any IPRs were filed—NuCurrent filed claims against Samsung for misappropriation of trade secrets and patent infringement. In Spring 2019, Samsung filed seven IPR petitions challenging the validity all five NuCurrent patents at issue in the litigation. In response, NuCurrent moved for a preliminary injunction.
The Court applied the typical preliminary injunction factors and found that NuCurrent had not shown a likelihood of success on the merits because the NDA, and the forum selection clause with it, expired on January 15, 2018 and before Samsung filed its IPR petitions. While NuCurrent argued that forum selection clauses presumptively survive the expiration of the contracts containing them, the Court found that the presumption was insufficient to overcome the parties' intent, which was evidenced by the parties' election not to include a survivability provision for the forum section clause as it had with other provisions and especially the MCA’s forum selection clause.
The Court further found that NuCurrent had not shown a likelihood of irreparable injury. The Court explained that the PTAB is authorized by law to review and invalidate those patents that should not have issued in the first place and that the cancellation of improvidently issued patents is not the type of injury that weighs in favor of granting the injunction.
The Court also found that NuCurrent had also not shown the balance of hardships tilts in its favor as the issuance of a preliminary injunction would likely completely bar Samsung from pursuing relief before the PTAB in view of the statutory one-year window for filing an IPR petition following service of a complaint for patent infringement.
The Court found that NuCurrent had also not shown the public interest would not be disserved by the issuance of an injunction, in view of the backdrop of Congress' enactment of the America Invents Act in order to provide an efficient system for challenging patents that should not have issued.
Upon finding that each of the four factors weighs against granting a preliminary injunction, the Court denied NuCurrent's motion.
Case: NuCurrent Inc. v. Samsung Elecs. Co., No. 19-cv-798, Dkt. No. 212 (S.D.N.Y. July 2, 2019).