Knobbe Martens litigation partner Ben Shiroma spoke with Law360 for the story, “‘Creative’ Settlement Path For EPRs Shows Wording Risks.” The article focuses on a case, T-Mobile US, Inc. v. Kaifi LLC, that highlights a settlement structured around ex parte reexaminations, and a risk that can come with that approach.
As the U.S. Patent and Trademark Office has narrowed access to inter partes review, the article notes that patent challengers have increasingly turned to ex parte reexaminations (EPRs), a proceeding the requester cannot control, participate in meaningfully, or withdraw once filed. In view of this uncertainty, T-Mobile and Kaifi tied a contingent additional payment from T-Mobile to Kaifi triggered by whether “any asserted claim survives the EPR.” When the claims emerged intact, the parties disagreed over what ”survive[d]” really meant, and the Federal Circuit held in a precedential August 28 opinion that the dispute belonged in the Fifth Circuit because it was a matter of contract interpretation rather than patent law.
Shiroma told Law360 that parties hoping to keep such disputes before the Federal Circuit should think carefully about how patent issues are expressly written into the agreement itself. “If the parties really wanted to ensure that this remained at the Federal Circuit,” he said, “one factor that might weigh in their favor is [if] they more expressly incorporated the patent law issue into the agreement, so there wasn’t [an] alternative reading of the settlement that didn’t require the reviewing court to address the patent law issue.” Patent practitioners are accustomed to the Federal Circuit’s expertise, he added, but “a settlement agreement, regardless of what kind of litigation, regardless of the particular terms that get incorporated into it, is a contract matter, which is decided under ordinary principles of contract law.”
Shiroma also pointed to a broader shift in how parties may approach resolution as EPR filings climb. Because a reexamination request cannot be pulled back once filed, he observed that more parties may look for an off-ramp earlier. “One thing we might see,” Shiroma commented, “is a lot more discussion between parties of, ‘Hey, maybe we resolve this matter before we file an EPR petition.'”
View the full Law360 article, “‘Creative’ Settlement Path For EPRs Shows Wording Risks”, here (subscription required).
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