Context: Two weeks ago, Samsung brought a declaratory-judgment (DJ) complaint (a pre-emptive defensive lawsuit) against smart ring maker Oura in the Northern District of California (May 31, 2024 ip fray article). Simultaneously, Samsung brought petitions for inter partes or post-grant review with the Patent Trial and Appeal Board (PTAB) of the United States Patent & Trademark Office (USPTO) against the five DJ patents-in-suit, seeking their invalidation.
What’s new: Today, Oura Ring filed a motion to dismiss, arguing that there is no actual controversy because Oura had not specifically threatened Samsung and because Samsung filed the DJ action before even selling its Galaxy Ring in the United States. But Oura does not say that it would never sue Samsung. It may still take a look at the product that actually ships and then decide to sue, though obviously in a different district (presumably the Eastern District of Texas).
Direct impact: The whole purpose of the motion to dismiss is to open the door to a potential infringement litigation. The timing of the motion is also unusual and presumably attributable to that strategy. Oura could have received a routine extension and would have had well over another month before having to respond to Samsung’s complaint. But Oura apparently wants to get rid of the case in San Francisco as soon as possible.
Wider ramifications: This case has the potential to bring some interesting clarification as to (a) the standard for DJ actions, where the 2017 Federal Circuit ruling in Allied Mineral Products v. Osmi is particularly relevant, and possibly also (b) the standard for venue transfer motions in a situation where a motion to dismiss over a case in another district may be pending or where such dismissal may be under appeal at the time that an actual infringement action is brought.
Here’s Oura’s motion:
Oura reasonably explains that there has been no specific threat, not even foreign litigation over related patents (and even that has been deemed insufficient to constitute an actual controversy in the U.S.). Oura is also right that its CEO did not say the smart ring pioneer would necessarily sue Samsung, but just said they would take a look at the actual product as “delivered in the market” and then decide.
Oura sets the record straight that contrary to a representation by Samsung, one of the five DJ patents has not been asserted against anyone yet. And Oura disputes that it sues every competitor as Samsung suggested, pointing to more than 40 smart ring makers that it has not sued. But Samsung may have been right in the sense of Oura suing every major one.
It’s understandable from Oura’s angle that they consider this DJ action unfair. Samsung knows what product it will release and when. Oura could not even bring infringement counterclaims at this stage. It has to see the actual Galaxy Ring first.
But Samsung credibly had a reasonable apprehension that Oura would probably sue. It’s just that this apprehension may fall short of what the law requires for an actual and concrete controversy over which a company can seek declaratory judgment.
Samsung may have brought the DJ action full well aware that it could be dismissed for those reasons. The calculus may be that if the motion to dismiss succeeds, Samsung can appeal, and during the pendency of the appeal Samsung could still try to get any patent infringement lawsuit by Oura transferred to the Northern District of California.
The whole purpose of this DJ action is about venue. It’s not that Samsung would first await a court ruling on its DJ action and then launch its product only if it has judicially-certified freedom to operate. It’s about Marshall, Texas (best for those suing Samsung) or San Francisco, California (best for Samsung).
If Oura were to sue Samsung, by far the most probable district would be the Eastern District of Texas, a venue in which patentees fare better than in the Northern District of California and where Samsung has a substantial presence.
By pointing out that Oura’s CEO merely said they’d take a look at the Galaxy Ring and then decide, and stressing that all prior lawsuits were brought months after the accused products launched, Oura does not rule out suing Samsung. Not at all. They just say this was the wrong time for a DJ complaint.
The timing of Oura’s motion speaks volumes. Normally, they would still have had time to answer, especially since a one-month extension is customary and routinely granted. Instead, they brought this motion to dismiss as fast as they could. They want to get rid of the California case as soon as possible because they want to reserve their options to file an infringement case in Texas that stays in Texas. Otherwise, defendants have no interest in a quick decision: they normally prefer to stall. Oura, however, is a defendant only to the DJ action and would be a plaintiff in an infringement case. They don’t want that infringement case to be moved from Texas to California because Samsung filed first.
This does not mean to say that they might not conclude, after looking at the Galaxy Ring, that there is no infringement. In that case, they won’t sue. But in order for Oura to make that determination, Samsung has to ship the product in the first place.
The tactical situation is clear. Oura would at least want to get a favorable ruling from the district on its motion to dismiss before filing a potential (but not too unlikely) infringement complaint against Samsung, so as to have a strong argument that consolidation with the DJ case in the Northern District of California is not warranted. They know that if the motion to dismiss suceeds (which ip fray considers fairly likely), Samsung will appeal. But if Oura files its infringement action during the pendency of the appeal, it still has a better argument in a venue fight than otherwise. It’s also possible that Oura would wait until the district court’s dismissal has been affirmed on appeal. If they waited that long, we’re talking about an infringement action in 2026 at the earliest (even if Samsung did not file a cert petition with the Supreme Court).
It will also be interesting to see how the courts deal with an evolving situation. Based on Samsung’s plans to launch the Galaxy Ring in the U.S. in or around August, the alternative Oura argument for dismissal (no Galaxy Ring on the market yet) would no longer apply unless the focus remains on what was the situation on the day the DJ complaint was filed.
Meanwhile, the PTAB will look at Samsung’s petitions for inter partes review of the five DJ patents. The PTAB case numbers of the three petitions for inter partes review are IPR2024-00928 for the ‘034 patent, IPR2024-00929 for the ‘833 patent and IPR2024-00930 for the ‘147 patent. For two patents, Samsung requested post-grant review, which is also an inter partes procedure but only for young (granted or reissued during the last nine months) patents. The two post-grant review numbers are PGR2024-00030 for the ‘178 patent and PRG2024-00031 for the ‘179 patent.