Minnesota Patent Litigation Wrap-Up: October 2017

Authored by: Conrad Gosen

This post continues our monthly summary of patent litigation in the District of Minnesota, including short summaries of substantive orders issued in pending cases.

In October 2017, there were two notable decisions for pending cases.

Regents of the University of Minnesota v. Gilead Sciences, Inc., No. 16-cv-2915 (Oct. 20, 2017) (Nelson)

• Motion to Dismiss/Transfer for Improper Venue: Granted

Judge Nelson granted Gilead's to transfer venue of pending cases pursuant to the Supreme Court's recent TC Heartland decision and the Federal Circuit's interpretation of that decision in Cray.

The University brought suit against Gilead, alleging that Gilead's hepatitis C treatment drug, sofosbuvir, infringes upon one of the University's patents. Gilead is a Delaware corporation with its principal place of business in Foster City, California, employing only 12 individuals in Minnesota in various sales and marketing positions. However, Gilead does not maintain a physical office in Minnesota. Gilead argued that venue was improper in the District of Minnesota under TC Heartland and Cray because it did not have a regular, established physical location from which it conducts business.

As Gilead is not incorporated in Minnesota, Judge Nelson's analysis focused on the second prong of the venue statute (35 U.S.C. § 1400(b)), which allows suit to be brought where the defendant has a "regular and established place of business." Following the Federal Circuit's Cray test, Judge Nelson ultimately found that the University could not show: 1) that Gilead had a physical place in the district, 2) that is a regular and established place, and 3) that it "is the place of the defendant." Specifically, Judge Nelson concluded that Gilead did not have a physical "place" in this District, because none of Gilead's employees work from "a stand-alone business office in Minnesota, but instead, work in the field." Judge Nelson found the other two requirements lacking for similar reasons, and ordered the case transferred to the Northern District of California.

Polyform A.G.P., Inc. v. Xtreme Insulation Technologies, LLC., No. 17-735 (Oct. 11, 2017) (Tunheim)

• Motion for Preliminary Injunction: Denied

Polyform and Xtreme compete in the market for insulated concrete form products. Polyform moved for a preliminary injunction prohibiting Xtreme's continuing sales of such products, but Judge Tunheim denied the motion, finding that Polyform failed to demonstrate that it is likely to succeed on the merits and failed to demonstrate that it would suffer irreparable harm absent an injunction.

The majority of Xtreme's arguments on the likelihood of success prong related to various claim construction disputes. Although Judge Tunheim rejected some of them, he concluded that the meaning of the phrase "a terminal surface extending transversally and along a portion of" in the asserted claims was sufficiently in doubt so as to defeat Polyform's motion (and that Xtreme would not infringe under its proposed construction). Judge Tunheim also rejected Polyform's doctrine of equivalents argument on this term, finding that Polyform's proposed equivalents were so broad as to capture the prior art.

Judge Tunheim similarly rejected Polyform's allegations of irreparable harm, finding that Polyform's arguments amounted to a generic allegation of lost sales, but no more. In particular, Polyform provided no evidence of lost market share, price erosion, or harm to goodwill. The Court similarly found against Polyform on the balance of harms and public interest factors.