Federal Circuit Remands CBM Appeals Under Arthrex, Leaves Forum Selection Dispute for Another Day

NEW VISION GAMING & DEVELOPMENT, INC. V. SG GAMING, INC.

Before Newman, Moore, and Taranto. Appeal from the Patent Trial and Appeal Board.

Summary: The Federal Circuit vacated and remanded two CBM decisions under Arthrex without resolving other issues raised on appeal, including whether a forum selection clause in a license agreement barred the CBM proceedings.

SG Gaming filed covered business method (CBM) review petitions against two patents owned by New Vision Gaming & Development. The Board found all challenged claims patent ineligible under 35 U.S.C. § 101. New Vision appealed, relying on Arthrex, Inc. v. Smith & Nephew, Inc., 941 F.3d 1320 (Fed. Cir. 2019)—which held that the Board’s administrative patent judges were, in the past, unconstitutionally appointed. Agreeing with New Vision, the Federal Circuit vacated and remanded the Board’s decisions for resolution by administrative patent judges whose appointments had become constitutionally valid following Arthrex. The court did not reach any other issue raised on appeal.

Judge Newman dissented in part, arguing that the court should have reached the issue of whether a forum selection clause in a license agreement between New Vision and SG Gaming barred CBM review. The forum selection clause provided that federal and state courts of Nevada would have exclusive jurisdiction over disputes between the parties. The dissent argued that “[i]t is both inefficient and unnecessary to require replacement [Board] proceedings if the new [Board] does not have jurisdiction to proceed.”

Editor: Paul Stewart