IP Law Alert

IP Law Alert

Practical Perspectives on Intellectual Property Legal Developments

Supreme Court’s Adoption of Proposed Amendments to the Federal Rules of Civil Procedures Will Require Heightened Pleading Standards in Patent Infringement Actions

Posted in Patent

Recently, the Supreme Court adopted proposed amendments to the Federal Rules of Civil Procedure, that barring any modification by congressional action, may eliminate the difference in pleading standards between patent infringement actions and all other federal actions. However, such standardization of pleading requirements may be short lived in view of the reintroduction of the Innovation Act, H.R. 9, in the House of Representatives, which proposes heightened pleading standard for patent infringement actions.

By way of background, the question of how much fact must be contained in a complaint for it to withstand a Rule 12(b)(6) motion to dismiss was seemingly laid to rest in 2007 when the Supreme Court, in Bell Atlantic Corp. v. Twombly, clarified that “a plaintiff’s obligation to provide the grounds of his entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” However, it was not until the high Court’s decision in Ashcroft v. Iqbal, that the Supreme Court further clarified that its decision in Twombly — the heightened pleading standard to state more than merely the theory of the claim — applied to all federal civil actions.

But not exactly all federal civil actions. The Federal Rules of Civil Procedures append a number of sampling pleading forms, including under Rule 84, Form 18, “Complaint for Patent Infringement.” While a Form 18 Complaint sufficiently serves as a “notice pleading,” some have advocated that it fails to state a “plausible” claim for relief as required by Twombly and Iqbal and does not meet the heightened pleading requirement established by the Supreme Court. Nonetheless, in 2012, the Federal Circuit in R&L Carriers v. Driver Tech LLC, held that “to the extent . . . that Twombly and its progeny conflict with the forms and create differing pleadings requirements, the forms control.” Thus, the Federal Circuit provided that federal civil patent infringement complaints need not meet the heightened pleading standard set forth in Twombly/Iqbal.
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101 Gaining Importance in Local Patent Rule Submissions After Alice

Posted in Patent

A recent district court decision has held that patent eligibility arguments not raised in invalidity contentions served pursuant to local patent rules are waived. In Good Technology Corporation v. MobileIron, Inc., No. 5:12-cv-5826, the United States District Court for the Northern District of California denied Defendant MobileIron, Inc.’s motion for judgment on the pleadings based on patent eligibility arguments that were not disclosed in either original or amended invalidity contentions.

The United States Supreme Court’s decision in Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014) has encouraged parties to challenge patent claims purporting to claim abstract ideas under 35 U.S.C. §101. Under Section 101, “[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent[.]” Alice emphasizes that §101 is subject to “‘an important implicit exception: Laws of nature, natural phenomena, and abstract ideas are not patentable.’” As summarized in a prior Gibbons IP Law Alert, a court applying Alice evaluates whether the claims at issue are directed to one of those patent-ineligible concepts and, if so, whether additional elements transform the nature of the claim into patent-eligible subject matter.

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Offering Compassionate Care While Alleviating Ethical Concerns: How Some Pharmaceutical Companies Are Meeting Both Demands

Posted in Pharmaceuticals

In recent years, families and friends of terminally ill patients have launched highly visible social media campaigns to secure access to potentially life-saving medicine, before those experimental drugs are approved. Pharmaceutical companies that are developing these investigational medicines often face difficult ethical and business relations dilemmas: there are limited exceptions for non-approved drug dissemination and the costs and consequences attendant on the exceptions can make either choice unpalatable. Companies and caregivers alike have struggled with how to fairly provide access to experimental drugs without negatively impacting long term drug development or approval.

Pharmaceutical companies’ development of new drugs is highly regulated, as is approval of drugs for marketing by the Food and Drug Administration (“FDA”). Moreover, investigational medicines are frequently in limited supply, and are only provided to tightly controlled clinical trials after satisfying limited safety and efficacy minimums. In restricted circumstances, the FDA permits distribution of as-of-yet unapproved drugs for compassionate use, which is defined as “a pathway for patients to gain access to investigational drugs, biologics, and medical devices for serious diseases or conditions. Such investigational drugs have not yet been approved by the FDA and they have not been proven to be safe and effective.” The exceptions include expanded access for individual patients, including for emergency use; expanded access for intermediate-size patient populations; and expanded access for widespread treatment use. A treating physician must submit an individual new drug request, which the FDA then reviews and considers if the patient or patients to be treated have a serious or immediately life-threatening disease or condition before approving or denying the request.

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White House Backs Recently Introduced Patent Reform Bill Known as PATENT Act

Posted in Patent, USPTO

On April 29, 2015, Senators Grassley, Leahy, Corny, Schumer, Lee, Hatch, and Klobuchar introduced another patent reform bill known as the Protecting Talent and Entrepreneurship Act of 2015 (“PATENT Act”). This bill includes many provisions similar to the previously introduced Innovation Act of 2015, but takes a slightly different approach on some key issues.

Further, this bill has received bipartisan support and even support from the White House. Last week, Press Secretary Josh Earnest said in a statement, “The Protecting American Talent and Entrepreneurship (PATENT) Act, introduced by a bipartisan group of members, represents an important step toward answering the President’s call for common-sense legislation that will help deter abusive conduct and promote an efficient and strong patent system.”

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Another Patent Reform Bill Targets Frivolous Demand Letters

Posted in Patent, USPTO

Last week, the House Energy and Commerce Committee approved yet another patent reform bill to curtail misleading and frivolous demand letters sent by patent assertion entities (also known as “patent trolls”). The legislation, approved by a vote of 30 to 20, is known as the Targeting Rogue and Opaque Letters Act, or TROL Act (H.R. 2045). This bill aims to protect businesses from frivolous demands while preserving the ability of patent holders to legitimately protect their intellectual property. The overall goal is to curtail “certain bad faith communications in connection with the assertion of a United States patent [that] are unfair or deceptive acts or practices, and for other purposes.”

The key provisions of the bill are:

Bad Faith Communications Defined – Section 2 of the bill enumerates several instances in which a sender may commit a bad faith communication. Such instances include when a senders represents: (1) he has patent rights, but does not; (2) he has filed a patent infringement action against the recipient or other persons; and (3) he will take legal action soon. Additionally, it includes instances in which the senders unrightfully attempts to obtain compensation from the recipients, such as when a sender seeks compensations for a patent claim that has been held to be unenforceable due to inequitable conduct, invalid or otherwise unenforceable or when sender asserts an expired patent. Lastly, bad faith communications may take place when the sender fails to provide sufficient information about itself, the rightful patent owner (or licensees), the asserted patents and the infringing products.

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The Hurdles to Register a Scent as a Mark

Posted in Trademark

Registrations of non-traditional trademarks are uncommon, and often discussed only among legal scholars and in academic papers. A recent Wall Street Journal article, however, called attention to a growing trend in trademark law: registration of scents and fragrances. The article describes the efforts of CESI Chemical, Inc., a producer of solvents for the fracking industry, which filed an application to register the orange scent imbued in its chemical additives for its hydraulic fracturing fluid.

Although only a small number of registrations for scents exist in the United States, applications are on the rise. Examples include yarn fragranced with plumeria flowers, piña colada scented ukuleles, flowery musked mobile phone outlets, and flip flops that smell like bubble gum. While non-traditional trademarks can be a creative way to differentiate a brand, they face increased scrutiny during the registration process. The United States Supreme Court has interpreted the potential realm of trademark broadly: “Since human beings might use as a ‘symbol’ or ‘device’ almost anything at all that is capable of carrying meaning, this language, read literally, is not restrictive.” Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159, 162 (1995). However, at a minimum, a trademark must “act as a symbol that distinguishes a firm’s goods and identifies their source, without serving any other significant function.” Id. at 166. Thus, the Trademark Act does not preclude registration of a scent or other non-traditional marks such as sound, color, shape, taste, texture, and motion.

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Senate Introduces STRONG Patents Act and Focused Patent Reform

Posted in Patent, USPTO

Recently, Senators Chris Coons, Dick Durbin, and Mazie Hirono introduced an alternative patent reform legislation to the Innovation Act of 2015. This bill, known as the as Support Technology and Research for Our Nations Grown Patents Act (“STRONG Patents Act”), aims to strengthen the rights of patent holders.

According to Sen. Coons, “[t]he STRONG Patents Act includes targeted thoughtful reforms to combat abuse where it’s prevalent while ensuring our rich innovation ecosystem remains vibrant.” The goal is to “move past the false premise that the only way to deter ‘patent troll’ abuses is to enact sweeping reforms that weaken patent protections for everyone . . . . and [instead we aim] to narrowly target and deter abusive troll behavior while preserving the ability of legitimate patent holders to protect their innovation,” said Senator Durbin.

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Case Highlight: California District Court Refuses to Stay Civil Case Pending Resolution of Potential Criminal Prosecution

Posted in Trademark, Trademark Counterfeiting

In Sanrio, Inc. v. Ronnie Home Textile Inc., the U.S. District Court for the Central District of California recently refused to stay a civil case pending completion of a parallel criminal counterfeiting investigation.

In Sanrio, the plaintiffs sued a corporation and two alleged principals for trademark infringement and other claims. The case was filed after law enforcement seized allegedly counterfeit goods offered for sale by the defendants and related evidence. The defendants argued that the civil case should be stayed because the seizure left them without means to substantively defend themselves. They further argued that allowing the civil case to go forward would implicate the individual defendants’ Fifth Amendment rights, though criminal charges had not been brought against them.

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Case Update: CryoLife Appeals Preliminary Injunction to Declaratory Judgment Defendant in Patent Case

Posted in Patent

CryoLife, Inc. has appealed the preliminary injunction recently issued against it in the United States District Court for the District of Delaware barring sales of its PerClot Topical blood-clotting powder product. CryoLife Inc. v. C.R. Bard Inc. et al., Dkt. Entry No. 121, Notice of Appeal. CryoLife has asked United States Court of Appeals for the Federal Circuit to review the district court’s grant of a preliminary injunction based on CryoLife’s failure to present (1) an alternative non-infringement argument based on Medafor, Inc.’s proposed claim construction and (2) expert analysis to support its invalidity contentions. As security, Medafor has agreed to pay CryoLife $100,000 if the injunction is overturned.

CryoLife originally sought a declaratory judgment that PerClot, brought to market in Fall 2014, did not infringe on Medafor’s Arista, approved in 2006. Both products are powders used to control bleeding. In turn, Medafor sought a preliminary injunction. As we discussed last month, the district court sided with Medafor, enjoining CryoLife’s sale of PerClot—a rare event in a patent case.

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Congress Reintroduces Innovation Act in Hopes to Curb Frivolous Patent Litigation

Posted in Patent, USPTO

Recently, House Judiciary Committee Chairman Robert Goodlatte reintroduced a patent reform bill, known as the Innovation Act of 2015 (H.R. 9) (“The Act”). This reintroduced bipartisan bill is substantially similar to its predecessor, Innovation Act of 2013. The Innovation Act of 2013 had received overwhelming support by the House of Representatives, but was ultimately tabled, along with other patent reform bills, due to bipartisan disputes.

According to Rep. Goodlatte, the objective of the Innovation Act is to prevent the use of the patent system as “a playground for litigation extortion and frivolous claims.” The bill aims to curb the exponential increase in the use of weak or poorly granted patents by patent assertion entities to file numerous patent infringement lawsuits.

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