“Pre-Suit Investigation by Patentee’s Attorney Does Not Compel Arbitration Despite Website TOS”

“The question presented to Chief Judge Colleen McMahon was, essentially, whether the pre-filing investigations by an attorney for a patent owner worked to compel arbitration?” This was the issue facing the court, as explained by Gene Quinn of IPWatchdog, Inc., in this article discussing the Southern District’s decision in Perry Street Software, Inc. v. Jedi Technologies, Inc., Case 1:20-cv-04539-CM.

As Mr. Quinn explains, “an attorney for patent owner Jedi Technologies, accessed the defendant’s website in order to engage in pre-filing due diligence, as is both prudent and legally required pursuant to FRCP Rule 11…signed up and viewed [the defendant’s app] as a part of this investigation. The …Terms of Service (TOS) included a boilerplate arbitration clause that purported to prevent users from filing claims in any court of competent jurisdiction, and instead compelling arbitration.”

Spoiler alert…. Judge McMahon held this action by plaintiff’s counsel was insufficient to constitute an agreement to arbitrate.

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