IP Law Alert

IP Law Alert

Practical Perspectives on Intellectual Property Legal Developments

Federal Circuit Finds Internet-Based Claims Directed to an Abstract Idea Still Patent-Eligible

Posted in Patent

In the aftermath of the Supreme Court’s 2014 decision in Alice Corp. Pty. Ltd. v. CLS Bank International, the U.S. Court of Appeals for the Federal Circuit (CAFC) has rarely found Internet-based patent claims challenged under 35 U.S.C. § 101 and Alice to be patent-eligible. The Court’s recent decision in BASCOM Global Internet Servs., Inc. v. AT&T Mobility LLC marks just the third such occurrence.

Bascom initially sued AT&T for infringement of U.S. Patent No.5,987,606 (“the ‘606 Patent”) in the U.S. District Court for the Northern District of Texas. The District Court granted a motion by AT&T to dismiss the suit by finding that the ‘606 Patent was invalid as a matter of law under 35 U.S.C. § 101. Bascom appealed the District Court decision to the CAFC.

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Supreme Court Review Sought on Federal Circuit’s Standard for Appellate Review of Damages Awards

Posted in Patent

Recently, the Commonwealth Scientific and Industrial Research Organization (CSIRO) filed a petition requesting the Supreme Court to review a Federal Circuit decision that vacated a $16 million award against Cisco Systems Inc. Supreme Court Docket No. 15-1440 CSIRO states that the case really revolves around a set of “rigid rules about damages awards in patent infringement cases.” The consequences of these rigid rules, according to CSIRO, is that trial judges in effect are stripped of their ability to determine damages.

The patent infringement action surrounding this appeal to the Supreme Court dates back to July 2011, when CSIRO filed suit against Cisco for infringement of its patent related to wireless local area networks. In the action, Cisco did not dispute infringement, and the only issue in the case rested on the damages amount. In February 2014, a bench trial with US District Judge Leonard Davis presiding, resulted in a damages award of $16 million, plus interest. This was subsequently appealed to the Federal Circuit.

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Defend Trade Secrets Act of 2016: Signed into Law

Posted in E-Commerce, Privacy

On May 11, 2016, President Obama signed the Defend Trade Secrets Act (“DTSA”) into law. President Obama publicly supported this legislation and efforts generally directed to strengthen trade secret protections within the U.S. economy.

As we previously reported on May 3, 2016 and November 24, 2015, trade secret misappropriation was formerly treated exclusively as a matter of state law, governed by varied versions of the Uniform Trade Secrets Act as enacted in most states. A lack of uniform enactment of this Act resulted in differences in the application of the law between states, which presented difficulties for trade secret owners seeking to enforce their rights in the general commerce.

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IRS’ Aggressive Position Challenging the Treatment of a License Agreement as a Sale of a Capital Asset Rejected on Summary Judgment

Posted in Patent

We previously reported that the Internal Revenue Service (the “IRS”) took an aggressive position in challenging the treatment of a license agreement as a sale of a capital asset in the Tax Court case Mylan Inc. & Subsidiaries v. Commissioner of Internal Revenue (Docket Nos. 16145-14 and 27086-14). Recently, Tax Court Judge Laro denied the IRS’s Motion for Summary Judgment in Mylan’s challenge of the IRS’s determination that Mylan’s 2008 amendment to the contract with Forest Labs was not a sale of its interest in rights to a certain drug product but merely an extension of the parties’ 2006 license agreement, giving rise to ordinary income to Mylan.

In its Tax Court petition, Mylan argued that it sold “all substantial rights” to a drug named Nebivolol and sought a redetermination of tax deficiencies related to proceeds from the sale which Mylan treated as capital gain. The IRS argued that Mylan had to treat the transaction as a license agreement generating ordinary income.

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Defend Trade Secrets Act of 2015 Passes House, Heads to President Obama’s Desk

Posted in E-Commerce, Privacy

On April 27, 2016, the Defend Trade Secrets Act (“DTSA”) passed the House of Representatives with a 410-2 vote. The two no votes were from Rep. Justin Amash (R-MI) and Rep. Thomas Massey (R-KY). Earlier this month, on April 4, the Senate passed the DTSA by a unanimous vote of 87-0. Now, the DTSA heads to President Obama’s desk for his signature.

As we previously reported, the DTSA will authorize a private civil action in federal court for the misappropriation of a trade secret that is related to a product or service used in, or intended for use in, interstate or foreign commerce. Trade secret misappropriation was formerly treated exclusively as a matter of state law, governed by versions of the Uniform Trade Secrets Act in most states. However, the Act was not enacted uniformly throughout all states. States adopted different definitions of trade secrets and different burdens of proof for misappropriation, resulting in a legal maze for one seeking to bring a trade secret misappropriation action impacting multiple jurisdictions.

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New Jersey Follows Federal Circuit in Finding Jurisdiction Over Hatch-Waxman Defendants

Posted in Patent, Pharmaceuticals

We recently reported on the Federal Circuit’s holdings in Acorda Therapeutics, Inc. v. Mylan Pharm. Inc. and AstraZeneca AB v. Mylan Pharm., Inc., where it held that Mylan was subject to jurisdiction in Delaware because “Mylan’s ANDA filings constitute formal acts that reliably indicate plans to engage in marketing of the proposed generic drugs.” Earlier this month, the first decision from the District of New Jersey District applying the Federal Circuits ruling was rendered. In Helsinn Healthcare S.A., et al. v. Hospira, Inc., No. 15-2077 (MLC), 2016 U.S. Dist. LEXIS 45826 (D.N.J. April 5, 2016), Judge Mary L. Cooper held that that Hospira’s filing of an ANDA seeking to market a generic version of Helsinn’s Aloxi® provided sufficient minimum contacts to establish specific jurisdiction particularly because, if approved, the marketing of the generic product will take place in New Jersey.

In supporting her decision, Judge Cooper emphasized the similarity of the facts in this case to those present in the Acorda case before the Federal Circuit:

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Alabama District Court Orders TTAB to Vacate Precedential Decision

Posted in Trademark, USPTO

Last year’s Supreme Court’s decision in B&B Hardware raised the stakes in opposition proceedings when it stated that TTAB rulings may have preclusive effects in subsequent federal district court litigation. As litigants and practitioners are still assessing the consequences of that landmark decision, an unexpected confrontation took place between the Board and the Federal District.

The quarrel happened only a few months after B&B Hardware, and stemmed from the TTAB’s refusal to uphold an order to vacate a previous decision of the Board, in response to a request submitted by the Board of Trustees of the University of Alabama (the “Alabama BOT”). The Alabama BOT’s request was filed pursuant to a final consent judgment entered by the Alabama District Court. The TTAB’s refusal to vacate its prior decision was not taken well.

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Interesting Trends in Establishing Personal Jurisdiction in Hatch-Waxman/ANDA Litigations

Posted in Patent, Pharmaceuticals

Last week the Federal Circuit handed down one of its more anticipated decisions regarding jurisdiction in cases brought under 35 U.S.C. § 271(e)(2) (aka Hatch-Waxman or ANDA litigation). In its holding, the Federal Circuit stated that a “[defendant’s] ANDA filings and its distribution channels” are enough to “establish that [the defendant’s] plans to market its proposed [ANDA product in the forum state]” are enough to meet the minimum-contacts requirement to establish jurisdiction. It further held “there is no substantial argument that considerations of unfairness override the minimum-contacts basis for [the forum state’s] exercise of specific personal jurisdiction over” the defendants. This holding is much broader than the underlying district court rulings and limited the analysis to specific jurisdiction without addressing the underlying general jurisdictional questions.

Stemming from the Supreme Court’s 2014 decision in Daimler AG v. Bauman in which held that “minimum contacts” and thus, general jurisdiction, required not merely “continuous and systematic” in-forum contacts, but “continuous and systematic” in-forum contacts so as to “render [it] essentially at home in the forum state,” generic drug manufacturers began challenging jurisdiction in Hatch-Waxman cases. The two underlying cases involved the same defendant, Mylan Pharmaceuticals, Inc. (“Mylan”), a West Virginia incorporated worldwide producer of generic pharmaceuticals, in the same District Court, Delaware. Chief Judge Stark, in Acorda Therapeutics, Inc. v. Mylan Pharm. Inc., 78 F. Supp. 3d 572, 583-92 (D. Del. 2015) held that compliance with a state’s registration statute and appointment of a registered agent for service of process constitutes consent to general personal jurisdiction. Judge Sleet, in AstraZeneca AB v. Mylan Pharm., Inc., 72 F. Supp. 3d 549, 558-60 (D. Del. 2014) found jurisdiction on the bases that Mylan sent its paragraph IV certification to the plaintiff in the forum state, Delaware. The panel’s decision did not rely on either of these bases to establish jurisdiction, but instead, found specific jurisdiction on the basis that “Mylan’s ANDA filings constitute formal acts that reliably indicate plans to engage in marketing of the proposed generic drugs.”

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Long Lost Wright Brothers’ Patent File Found

Posted in Patent

On Sunday, The Washington Post published an interesting article explaining how the long lost Wright brothers’ patent file for the “Flying Machine” was finally found in March. The government had been searching for this file for the last 16 years. The file, which was last seen in 1980, was thought to be stored in a vault at the National Archives. But, in 2000, when an official commemoration was being planned, they realized it was missing. Ultimately, they were able to locate it in a limestone storage cave in Lenexa, Kansas. Although there was concern that the important record was stolen, the conclusion now is that it was probably just misfiled. The article indicates that the National Archives was able to identify this file as a part of a larger effort to locate missing documents.

This episode certainly reinforces the appreciation practitioners have for the USPTO’s efforts to digitize and make its records available to the public.

Christopher H. Strate is a Director in the Gibbons Intellectual Property Department.

U.S. Copyright Office Seeks Public Comment and Holds Public Roundtables Concerning DMCA Safe Harbor Provisions

Posted in Copyright

The United States Copyright Office recently published a notice in the Federal Register (“the Notice”) seeking public comment in connection with a study it is conducting to evaluate the impact and effectiveness of the DMCA safe harbor provisions contained in 17 U.S.C. § 512 (“Section 512”). Comments, due on Friday April 1, 2016, could pave the way for a Congressional amendment to the DMCA and in particular, to the safe harbors relied upon by service providers to avoid liability for copyright infringement by users.

According to the Notice, Section 512 was enacted at a time when “less than 5% of the world’s population used the internet.” Yet today, according to the Notice, “nearly one-quarter of all internet bandwidth in North America, Europe, and Asia is devoted to hosting, sharing, and acquiring infringing material” and service providers receive over a million notices of alleged infringement on a daily basis. In light of these changed circumstances, the Copyright Office is evaluating the effectiveness of the current statutory requirements in section 512 and their impact on those who rely upon them. Among other topics of inquiry, the Copyright Office has sought comments on (i) the notice-and-takedown process under section 512(c)(3); (ii) the requirement for service providers to reasonably implement a repeat infringer policy under section 512(i); and (iii) counter-notifications under section 512(g)(3).

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