Preliminary Injunction Upheld To Enforce Forum Selection Clause Where Continuations Of Licensed Patents Are Impliedly Licensed

This article previously appeared in Last Month at the Federal Circuit, August, 2011.

Judges: Linn (author), Schall, Dyk

[Appealed from D.N.M., Judge Browning]

In General Protecht Group, Inc. v. Leviton Manufacturing Co., No. 11-1115 (Fed. Cir. July 8, 2011), the Federal Circuit affirmed the district court's decision to enforce a forum selection clause and found that the district court did not abuse its discretion in granting a preliminary injunction against Leviton Manufacturing Co., Inc.'s ("Leviton") infringement suits brought in other forums.

Leviton and General Protecht Group, Inc. ("GPG") are both manufacturers of ground fault circuit interrupters ("GFCIs"). In 2004 and 2005, Leviton sued GPG in the District of New Mexico, alleging infringement of U.S. Patent Nos. 6,246,558 ("the '558 patent") and 6,864,766 ("the '766 patent"). In 2007, the parties settled the dispute pursuant to a confidential settlement agreement ("Settlement Agreement"). In the Settlement Agreement, Leviton

covenants not to sue (1) Defendants . . . for alleged infringement of the '558 and/or '766 patents based on the [Defendant's] products currently accused of infringement . . . and (2) Defendants . . . for alleged infringement of the '558 patent and/or the '766 patent with respect to an anticipated future new . . . product that Defendant . . . has indicated its intent to market in the U.S. in the future . . . . Slip op. at 3. The Settlement Agreement also included a forum selection clause stating that "[a]ny dispute between the Parties relating to or arising out of this [Settlement Agreement] shall be prosecuted exclusively in the United States District Court for the District of New Mexico." Id. (second alteration in original).

In September 2010, Leviton filed complaints against GPG and its distributors in the ITC and the Northern District of California, alleging infringement of U.S. Patent Nos. 7,463,124 ("the '124 patent") and 7,764,151 ("the '151 patent"), which are continuations of the '558 and '766 patents, and issued after the Settlement Agreement was executed.

GPG informed Leviton that it believed it had a license to practice the asserted patents under the Settlement Agreement. GPG then brought a DJ action in the District of New Mexico asserting noninfringement, invalidity, and breach of contract. GPG also sought a temporary restraining order and preliminary injunction against Leviton's continued litigation of the dispute outside of New Mexico. The district...