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Federal Court Rules False Claims Act’s Whistleblower Provisions Are Unconstitutional

Michelle Tanney, Kevin Edgar, Isabelle Sterling, Jamie Reiner Co-Author Article on Election Betting Contracts Case

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<img decoding="async" loading="lazy" class="alignright wp-image-5708" src="https://www.ipintelligencereport.com/wp-content/uploads/sites/11/2021/10/IP-smartphone-abstract-concept-GettyImages-1086309110_1200x630.jpg" alt="" width="438" height="230" />In a recent <a href="http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/21-165.ORDER.9-10-2021_1832131.pdf">decision</a>, In re: OnePlus Technology (Shenzhen) Co., Ltd., Case. No. 21-165, Dkt. 20, the Federal Circuit denied China-based smartphone maker OnePlus’ petition for mandamus seeking to direct a Western District of Texas court (Judge Alan Albright) to dismiss the five underlying patent infringement actions for insufficient service of process. The Federal Circuit instead upheld the district court’s decision allowing plaintiff Brazos Licensing and Development to serve process on OnePlus’ attorneys (who had represented OnePlus in the past) and on OnePlus’ authorized agent in California instead of effecting traditional service on OnePlus through the Hague Convention.
Under the Hague Convention, each member state provides a “central authority” that is responsible for receiving and effecting service from abroad consistent with the member state’s domestic policies. However, as litigants against foreign IP infringers know all too well, service through the Hague Convention is notoriously slow and often expensive, especially in countries such as China, where it can sometimes take up to two years with countless bureaucratic red tape to effectuate service. Citing these roadblocks to serving OnePlus in China, plaintiff Brazos successfully argued to the district court that alternative means of service under Fed. R. Civ. P. 4(f)(3), permitting “other means [of service] not prohibited by international agreement, as the court orders,” were proper here.

On review, the Federal Circuit agreed, holding that the “exceptional remedy” of a writ of mandamus was not warranted and that Judge Albright did not abuse his discretion in approving alternative means of service under Rule 4(f)(3). The Federal Circuit noted that “Rule 4(f)(3) was not meant to displace the other rules of service in every instance in which alternative means of service are seen as more convenient,” which indicates Rule 4(f)(3) workarounds may not be proper under all circumstances. But the court also stated, “Rule 4(f)(3) is not subsumed within … Rule 4(f)’s other subsections [and it] stands independently, on equal footing.”
Thus, it appears that at least the Western District of Texas and the Federal Circuit are beginning to offer solutions to the inefficiencies and red tape created by foreign jurisdictions purporting to effectuate service under the Hague Convention, especially China. While it’s probably too soon to rely completely on informal service means under Rule 4(f)(3) for foreign defendants, the Federal Circuit’s decision here in In re: OnePlus Tech. should prove an important first step to solving the problems that victims of foreign IP infringement typically face in bringing suit, and Rule 4(f)(3) service should increasingly be evaluated when filing against foreign defendants.

Federal Circuit Hints at Easier Service of Process on Foreign Defendants

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