February 07, 2017 Articles

The Timing for Removal of a Patent-Related Counterclaim Post-AIA

A defendant must be diligent in acting to remove before the 30-day window closes

By Michael A. Oropallo and Jason C. Halpin

To remove or not to remove? That is a question pondered by many federal court litigators. It has been particularly critical in cases involving patent license disputes. But until recently, even though patent law issues may have permeated the dispute, with rare exception removal was not permitted. That changed when the much-heralded Leahy-Smith America Invents Act (AIA) took effect in 2013, though many are unaware of the specifics as they relate to removal jurisdiction.

The typical scenario involves a dispute over the terms of a license agreement, usually having to do with the amount or satisfaction of royalty payments. A breach of contract action ensues, most likely in state court, and often involves issues of patent invalidity or whether royalties are owed, but without allegations of infringement.

In the past, a would-be defendant seeking to remove the contract action to federal court was often met with a remand by the federal court because the grounds for removal based on the "arises under" standard were narrowly construed. Since the effective date of the AIA, removal jurisdiction is not so limited.

This article summarizes the AIA's removal statute, how it has changed the grounds for removal in patent-related licensing disputes, and what triggers the time for filing a notice of removal.

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