The U.S. Court of Appeals for the Federal Circuit, on August 28, 2026, ruled in T-Mobile USA, Inc. v. KAIFI LLC to transfer a dispute over patent licensing royalties to the Fifth Circuit. Citing the 2013 precedent Gunn v. Minton, the court determined that the dispute is fundamentally a state-law contract issue rather than a matter under federal patent law jurisdiction.
Corporate executives often mistakenly assume that any contract dispute involving patent royalties must be governed by patent courts. This ruling clarifies the boundary between patent contracts and patent litigation, establishing that contract breaches remain general commercial disputes even if they involve patents. Companies without U.S. patent licensing operations are unaffected. However, for multinational licensors, this means disputes may be tried in general courts lacking patent expertise, increasing litigation costs.
In-house counsel managing U.S. patent portfolios should take two actions. First, review forum selection clauses to clearly distinguish jurisdiction for contract disputes from patent validity issues. Second, explicitly define royalty adjustment mechanisms in contracts if patent claims are narrowed during post-grant reviews, avoiding costly contract litigation in general courts due to ambiguous terms.