Forum Selection Clause in NDA Does Not Bar IPR

Forum Selection Clause in Agreement at Issue Did Not Apply to Patent Invalidity Challenges

The Federal Circuit affirmed the denial of a preliminary injunction that would have precluded Samsung from pursuing inter partes review of patents owned by Kannuu Pty Ltd.

At issue was an agreement between Samsung and Kannu, which the majority (Judges Prost and Chen) considered to be an "NDA to exchange information in furtherance of some sort of business relationship," and the dissent by Judge Newman regarded as an NDA "to consider the possible licensing to Samsung of Kannuu’s technology and patents." A forum selection clause in the agreement stated, "Any legal action, suit, or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby must be instituted exclusively in" New York and "and in no other jurisdiction." The question presented was, "Does the forum selection clause in the non-disclosure agreement between the entities prohibit Samsung from petitioning for inter partes review of Kannuu’s patents at the Board?" 

 The majority adopted the district court's view that the "transactions contemplated hereby" were transactions relating to maintaining the confidentiality of information. From there, the majority found the relationship between inter partes review and maintaining the confidentiality of information to be too attenuated. The dissent viewed the "transactions contemplated hereby" to include the potential patent license. From there, the dissent felt that a challenge to the validity of a patent would be covered by the forum selection clause.

More specificity in the NDA could have helped Kannau avoid inter partes review, as the majority stated in dicta, "Had Kannuu and Samsung entered a contract which applied to inter partes review proceedings, a forum selection clause in that hypothetical contract might permit Kannuu to avoid inter partes review and its inherent features."