Last week, the U.S. Court of Appeals for the Federal Circuit issued an opinion in Kannuu Pty Ltd. v. Samsung Electronics Co., Ltd., No. 21-1638 (Oct. 7, 2021), affirming a district court’s denial of a preliminary injunction motion seeking dismissal of petitions for Inter Partes Review (IPR).
In 2012, Samsung and Kannuu entered into a Non-Disclosure Agreement (NDA) while engaged in business discussions. The NDA did not impose an obligation on either party to purchase or license any technology and stated that it did not grant either party a license to the other’s intellectual property. The NDA also included a forum selection clause requiring that any proceeding “arising out of or relating to this Agreement or the transactions contemplated hereby” be brought in New York. The parties’ business discussions concluded with no deal.
Several years later, Kannuu sued Samsung alleging patent infringement and breach of the NDA. Samsung responded by filing multiple IPR petitions, two of which were instituted. Kannuu filed a motion for a preliminary injunction seeking to compel Samsung to dismiss the instituted IPRs based on the forum selection clause of the NDA. The district court denied the motion. Kannuu appealed.
The Federal Circuit affirmed. The Court primarily focused on the likelihood of success on the merits factor. Specifically, the Court agreed with the district court that the IPR proceedings did not “relate” to the NDA: “the Agreement implicates confidentiality and not the intellectual property rights of the parties.” The Court noted that the NDA made clear it did not grant rights of any kind to either party’s intellectual property or impose any obligations on either party to enter into an intellectual property license. The Court explained that precedent relating to forum selection clauses in license agreements was distinguishable; while validity or infringement determinations impact rights under a patent license agreement the same is not true of the NDA at issue in the present case. The Court rejected an argument advanced by Kannuu that judicial estoppel precluded Samsung from arguing that the forum selection clause did not apply. With respect to the remaining three preliminary injunction factors, the Court found that the district court did not abuse its discretion in finding Kannuu’s arguments unpersuasive. Judge Newman dissented.