Background
Kannuu Pty Ltd., an Australian media technology startup, entered into a non-disclosure agreement (NDA) with Samsung Electronics in 2012. The parties were exploring a potential business deal involving Kannuu’s technology, including its patents. No deal was ever reached — the negotiations fell apart and the NDA governed a confidentiality period while the companies exchanged information.
Years later, Kannuu sued Samsung for infringing five of its patents. Samsung responded by filing inter partes review (IPR) petitions at the Patent Trial and Appeal Board (PTAB) to challenge the validity of those patents. The PTAB instituted review on two of the five patents. Kannuu moved in district court to enjoin Samsung from pursuing the IPRs, arguing that the NDA’s forum selection clause barred Samsung from bringing the validity disputes anywhere other than New York courts. The forum selection clause stated that any legal action “arising out of or relating to” the NDA or “the transactions contemplated” by it must be brought exclusively in specified New York courts. The district court denied the injunction, and Kannuu appealed.
The Court’s Holding
The Federal Circuit affirmed, holding that the forum selection clause did not preclude Samsung’s IPR petitions. The court applied contract interpretation principles to determine whether the IPR proceedings arose out of or related to the NDA. It concluded that the connection was too tenuous to bring the IPRs within the clause’s scope.
The court reasoned that the NDA was simply a confidentiality agreement — it did not itself contemplate, license, or otherwise address Kannuu’s patents in any substantive way. The parties never reached any intellectual property licensing agreement, so there was no “transaction” contemplated by the NDA that involved the patents. The IPR proceedings were a challenge to patent validity initiated by Samsung as a defendant in a separate infringement lawsuit — not a dispute arising from the NDA relationship. The mere fact that Samsung learned about Kannuu’s technology through the NDA negotiation was insufficient to bring the IPRs within the forum selection clause.
Judge Newman dissented vigorously, arguing that the majority’s interpretation was too narrow. In Newman’s view, because the NDA was entered into to facilitate discussions about potentially licensing Kannuu’s patents — which are the same patents now subject to IPR — the disputes over those patents were reasonably “related to” the NDA. Newman would have enforced the forum selection clause to bar the PTAB proceedings.
Key Takeaways
- A standard non-disclosure agreement’s forum selection clause does not automatically bar a signatory from later filing IPR petitions challenging patents that were discussed during NDA-covered negotiations.
- For a forum selection clause to reach an IPR proceeding, the clause must clearly cover patent validity disputes, and there must be a substantive connection between the agreement and the patents at issue — mere exposure to the technology during negotiations is not enough.
- Companies seeking to prevent counterparties from using IPR to challenge patents should explicitly address post-grant proceedings in their NDAs or licensing agreements, rather than relying on general “arising out of or relating to” language.
- The decision leaves open the question of whether a more specifically worded forum selection clause — or one embedded in an actual IP license rather than an NDA — could successfully preclude PTAB proceedings.
Why It Matters
Companies routinely sign NDAs before entering into patent licensing discussions or technology partnerships, and forum selection clauses are standard in those agreements. Kannuu v. Samsung establishes that those clauses do not function as automatic shields against later PTAB challenges if a deal falls through. Patent owners who want to protect against IPR filings by former counterparties must be proactive: they need contract language that explicitly addresses post-grant proceedings if they want those commitments to have teeth.
The case is also notable for Judge Newman’s sharp dissent. Newman’s view — that IPR filings by a party that gained access to the technology through an NDA should be subject to the NDA’s forum clause — may reflect a broader concern that the PTAB has become a strategic tool for defeating patents in ways that ordinary commercial agreements were not designed to anticipate. The majority’s narrower reading controls, but the underlying tension the case highlights is likely to recur.