New Vision Gaming v. Sg Gaming, Inc.

N
Case: 20-1399   Document: 99    Page: 1   Filed: 05/13/2021




   United States Court of Appeals
       for the Federal Circuit
                 ______________________

   NEW VISION GAMING & DEVELOPMENT, INC.,
                  Appellant

                           v.

    SG GAMING, INC., FKA BALLY GAMING, INC.,
                     Appellee

   ANDREW HIRSHFELD, PERFORMING THE
    FUNCTIONS AND DUTIES OF THE UNDER
       SECRETARY OF COMMERCE FOR
 INTELLECTUAL PROPERTY AND DIRECTOR OF
 THE UNITED STATES PATENT AND TRADEMARK
                   OFFICE,
                   Intervenor
             ______________________

                  2020-1399, 2020-1400
                 ______________________

     Appeals from the United States Patent and Trademark
 Office, Patent Trial and Appeal Board in Nos. CBM2018-
 00005, CBM2018-00006.
                  ______________________

                 Decided: May 13, 2021
                 ______________________

     MATTHEW JAMES DOWD, Dowd Scheffel PLLC, Wash-
 ington, DC, argued for appellant. Also represented by
 ROBERT JAMES SCHEFFEL; DAVID E. BOUNDY, Cambridge
 Technology Law LLC, Newton, MA.
Case: 20-1399     Document: 99     Page: 2    Filed: 05/13/2021




 2                       NEW VISION GAMING   v. SG GAMING, INC.




    NATHAN K. KELLEY, Perkins Coie LLP, Washington,
 DC, argued for appellee. Also represented by GENE WHAN
 LEE, New York, NY.

    DANA KAERSVANG, Appellate Staff, Civil Division,
 United States Department of Justice, Washington, DC, ar-
 gued for intervenor. Also represented by JEFFREY B.
 CLARK, MELISSA N. PATTERSON; KAKOLI CAPRIHAN, SARAH
 E. CRAVEN, THOMAS W. KRAUSE, FARHEENA YASMEEN
 RASHEED, Office of the Solicitor, United States Patent and
 Trademark Office, Alexandria, VA.

    ROBERT GREENSPOON, Flachsbart & Greenspoon, LLC,
 Chicago, IL, for amicus curiae US Inventor, Inc.
                   ______________________

     Before NEWMAN, MOORE, and TARANTO, Circuit Judges.
      Opinion for the court filed by Circuit Judge MOORE.
 Opinion concurring in part and dissenting in part filed by
                 Circuit Judge NEWMAN.
 MOORE, Circuit Judge.
      New Vision Gaming & Development, Inc., appeals two
 covered-business method review final-written decisions. In
 those decisions, the Patent Trial and Appeal Board held
 that all claims of U.S. Patent Nos. 7,451,987 and 7,325,806,
 as well as proposed substitute claims, are patent ineligible
 under 35 U.S.C. § 101. New Vision requests that we vacate
 and remand the Board’s decisions in light of Arthrex, Inc.
 v. Smith & Nephew, Inc., 

941 F.3d 1320

(Fed. Cir. 2019).
 Because Arthrex issued after the Board’s final-written de-
 cisions and after New Vision sought Board rehearing, New
 Vision has not waived its Arthrex challenge by raising it for
 the first time in its opening brief before this Court. See
 C.A. Casyso GmbH v. HemoSonics LLC, No. 20-1444 (Oct.
 27, 2020) (non-precedential order) (vacating and
Case: 20-1399    Document: 99       Page: 3   Filed: 05/13/2021




 NEW VISION GAMING   v. SG GAMING, INC.                     3



 remanding in analogous circumstances). Thus, we vacate
 and remand for further proceedings consistent with Ar-
 threx, and we need not reach any other issue presented in
 this case.
                VACATED AND REMANDED
                            COSTS
 Each side shall bear its own costs.
Case: 20-1399    Document: 99      Page: 4   Filed: 05/13/2021




   United States Court of Appeals
       for the Federal Circuit
                  ______________________

   NEW VISION GAMING & DEVELOPMENT, INC.,
                  Appellant

                              v.

    SG GAMING, INC., FKA BALLY GAMING, INC.,
                     Appellee

   ANDREW HIRSHFELD, PERFORMING THE
    FUNCTIONS AND DUTIES OF THE UNDER
       SECRETARY OF COMMERCE FOR
 INTELLECTUAL PROPERTY AND DIRECTOR OF
 THE UNITED STATES PATENT AND TRADEMARK
                   OFFICE,
                   Intervenor
             ______________________

                   2020-1399, 2020-1400
                  ______________________

     Appeals from the United States Patent and Trademark
 Office, Patent Trial and Appeal Board in Nos. CBM2018-
 00005, CBM2018-00006.
                    ______________________

 NEWMAN, Circuit Judge, concurring in part, dissenting in
 part.
     I agree that Arthrex, Inc. v. Smith & Nephew, Inc., 

941
F.3d 1320

(Fed. Cir. 2019) applies, and that it is appropri-
 ate to vacate the decision of the unconstitutional Patent
Case: 20-1399    Document: 99     Page: 5    Filed: 05/13/2021




 2                      NEW VISION GAMING   v. SG GAMING, INC.



 Trial and Appeal Board (“PTAB” or “Board”). 1 However, in
 this case a threshold issue requires resolution, for the Ar-
 threx remand may be unnecessary and unwarranted.
 There may be no basis for any PTAB proceeding at all, for
 the parties to this dispute had agreed to a different forum,
 and New Vision Gaming & Development, Inc. asks for com-
 pliance with that agreement.
     New Vision and SG Gaming, Inc. 2 mutually agreed, in
 their patent license agreement, that if “any dispute” arose,
 jurisdiction would be “exclusive” in the appropriate federal
 or state court in the state of Nevada. The agreement pro-
 vides:
     § 4.f. Governing Law and Forum. This Agreement
     shall be construed and enforced in accordance with
     the laws of the State of Nevada, without giving ef-
     fect to the principles of conflicts of laws. This
     Agreement shall be deemed to be a contract made
     and entered into in the State of Nevada. In the
     event of any dispute between any of the parties
     that cannot be resolved amicably, the parties agree
     and consent to the exclusive jurisdiction of an ap-
     propriate state or federal court located within the



     1   Bally Gaming, Inc. v. New Vision Gaming & Dev.,
 Inc., No. CBM2018-00005, Paper 19 (P.T.A.B. June 22,
 2018) (“Institution Dec.”) (J.A. 86–120); Bally Gaming, Inc.
 v. New Vision Gaming & Dev., Inc., No. CBM2018-00006,
 Paper 19 (P.T.A.B. June 22, 2018) (J.A. 206–40). See also
 Bally Gaming, Inc. v. New Vision Gaming & Dev., Inc., No.
 CBM2018-00005, 

2019 WL 2527364

(P.T.A.B. June 19,
 2019) (“Board Op.”); Bally Gaming, Inc. v. New Vision
 Gaming & Dev., Inc., No. CBM2018-00006, 

2019 WL
2527169

(P.T.A.B. June 19, 2019).
     2   SG Gaming, Inc. was formerly known as Bally
 Gaming, Inc. at the time of the agreement.
Case: 20-1399     Document: 99      Page: 6    Filed: 05/13/2021




 NEW VISION GAMING   v. SG GAMING, INC.                       3



     State of Nevada, Clark County, to resolve any such
     dispute.
 J.A. 802.
      Dispute arose, and New Vision eventually filed suit in
 the federal district court in Nevada. SG Gaming then filed
 these petitions in the PTAB. The Board refused to respect
 the forum selection agreement, and proceeded to final de-
 cision of the petitions. In view of Arthrex, we must vacate
 that Board’s decision. Our usual action is to remand to the
 PTAB, for redetermination by a new, properly constituted
 Board. However, the forum question requires resolution,
 for if the parties are committed to a Nevada forum instead
 of the PTAB, there is no basis for new PTAB proceedings
 on remand. Thus the question of forum warrants attention
 before we require a new trial by a new Board.
      The PTAB declined to apply the parties’ agreed forum,
 stating that it “[does] not discern, nor has Patent Owner
 pointed to, any portions of chapter 32 or § 18 of the AIA, or
 authority otherwise, that explicitly provide for a contrac-
 tual estoppel defense.” Institution Dec. at 10–11; see also
 Board Op. at *3 (“[W]e observed that Patent Owner had not
 identified any controlling authority—such as by statute,
 rule, or binding precedent—that would require the Board
 to deny institution of a covered business method patent re-
 view based on contractual estoppel.”). However, precedent
 requires respecting an agreed selection of forum. See M/S
 Bremen v. Zapata Off-Shore Co., 

407 U.S. 1

, 9–10 (1972)
 (“Forum-selection clauses . . . are prima facie valid and
 should be enforced unless enforcement is shown by the re-
 sisting party to be ‘unreasonable’ under the circum-
 stances.”); see also Powertech Tech. Inc. v. Tessera, Inc., 

660
F.3d 1301

, 1310 (Fed. Cir. 2011) (stating that where man-
 datory “shall” language is used to designate the proper fo-
 rum, “the forum selection clause should be enforced”).
    New Vision states that forum selection was a contract
 condition, as is understandable, for it affects the standard
Case: 20-1399     Document: 99      Page: 7    Filed: 05/13/2021




 4                       NEW VISION GAMING    v. SG GAMING, INC.



 of proof of invalidity. See O’Gorman & Young, Inc. v. Hart-
 ford Fire Ins. Co., 

282 U.S. 251

, 267 (1931) (“That the right
 to contract about one’s affairs is a part of the liberty of the
 individual protected by [the Constitution] is settled by the
 decisions of this court and is no longer open to question.”);
 Gen. Protecht Grp., Inc. v. Leviton Mfg. Co., 

651 F.3d 1355

,
 1359 (Fed. Cir. 2011) (“[S]uch a forum selection clause
 would be meaningless because . . . the merits would have
 been litigated in a forum other than that which was bar-
 gained for.”).
     Both sides have briefed the forum selection question in
 this administrative context. New Vision cites Dodocase
 VR, Inc. v. MerchSource, LLC, 767 F. App’x 930 (Fed. Cir.
 2019) to illustrate removal from the PTAB based on an
 agreed choice of forum. SG Gaming states that the Board’s
 rejection of the choice of forum is an unreviewable “institu-
 tion” decision, citing Thryv, Inc. v. Click-To-Call Technolo-
 gies, LP, 

140 S. Ct. 1367

(2020). These aspects require
 resolution now, rather than after a full PTAB proceeding
 on remand.
     The Director of the Patent and Trademark Office has
 intervened in this appeal to argue that this court has no
 jurisdiction to review this action because it is “final and
 nonappealable” under 35 U.S.C. § 324(e). However, the
 Board’s rejection of the parties’ choice of forum is indeed
 subject to judicial review, for § 324(e) does not bar review
 of Board decisions “separate . . . to the in[stitu]tion deci-
 sion.” Facebook, Inc. v. Windy City Innovations, LLC, 

973
F.3d 1321

, 1332 (Fed. Cir. 2020). Appeal is barred as to “a
 determination ‘whether a substantial new question of pa-
 tentability affecting any claim of the patent is raised,’” Bel-
 kin Int’l, Inc. v. Kappos, 

696 F.3d 1379

, 1382 (Fed. Cir.
 2012), but not as to “the Board’s ‘conduct’ of the review.”
 St. Jude Med., Cardiology Div., Inc. v. Volcano Corp., 

749
F.3d 1373

, 1375 (Fed. Cir. 2014).
Case: 20-1399    Document: 99      Page: 8    Filed: 05/13/2021




 NEW VISION GAMING   v. SG GAMING, INC.                     5



     Here, the Board’s “conduct” in declining to adhere to
 the parties’ contracted forum warrants our review before
 remanding to a fresh Board for post-grant litigation. New
 Vision cites cogent authority of the Administrative Proce-
 dure Act as in SAS Institute, Inc. v. Iancu, 

138 S. Ct. 1348

,
 1359 (2018) and in Cuozzo Speed Technologies, LLC v. Lee,
 

136 S. Ct. 2131

, 2142 (2016). SG Gaming argues that the
 license agreement “did not bar SG Gaming from pursuing
 CBM reviews” because the Agreement concerned disputes
 “relating to the Agreement.” SG Gaming Br. 10. However,
 as explained by this court in Texas Instruments Inc. v. Tes-
 sera, Inc., 

231 F.3d 1325

, 1331 (Fed. Cir. 2000): “Patent in-
 fringement       disputes    do    arise     from     license
 agreements. . . . Thus, the governing law clause . . . in any
 patent license agreement, necessarily covers disputes con-
 cerning patent issues.” I agree that there are niceties, but
 they require resolution as a predicate to any remand after
 vacatur.
     My colleagues decline to reach this question, and
 simply hold that Arthrex requires vacatur and remand.
 However, the question of forum selection is not thereby re-
 solved; it is merely postponed to determination by a new,
 constitutionally organized Board. It is both inefficient and
 unnecessary to require replacement PTAB proceedings if
 the new PTAB does not have jurisdiction to proceed.
    Thus, while I agree that the Board’s decision must be
 vacated under Arthrex, I respectfully dissent from our re-
 mand without resolving the issue of forum selection.

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