IP Law Alert

IP Law Alert

Practical Perspectives on Intellectual Property Legal Developments

Heartburn Relief: AstraZeneca Wins Nexium Antitrust Trial

Posted in Patent

On December 5, 2014, an 11-person jury decided in favor of defendants AstraZeneca PLC and Ranbaxy Laboratories, Inc. in the first pay-for-delay class action trial since the United States Supreme Court in FTC v. Actavis, Inc. opened the door on antitrust suits based on patent settlements. Teva Pharmaceutical Industries, Ltd. was also defending the suit before reaching a settlement shortly before the trial ended. United States District Court Judge William Young of the District of Massachusetts last year permitted certification for the class members, including union health plans and insurance companies, based on an alleged injury of supracompetitive prices for AstraZeneca’s brand name heartburn drug, Nexium®.

During the six week jury trial, the main focus of the arguments centered on the resolution of a lawsuit brought by AstraZeneca against Ranbaxy under the Hatch-Waxman Act regarding Ranbaxy’s Abbreviated New Drug Application (“ANDA”) filed with the Food and Drug Administration (FDA) seeking approval to market a generic version of Nexium®. Ranbaxy was the first generic-drug maker to file an ANDA, but AstraZeneca also brought suits against Teva and Dr. Reddy’s Laboratories, Inc. following receipt of their Paragraph IV certifications stating that they too had filed ANDAs with the FDA seeking approval to launch generic versions of Nexium®. The suits settled with an agreement that AstraZeneca would permit Ranbaxy early market entry on May 2014 – years before the last of the patents covering Nexium® will expire – and the benefit of some exclusivity period. AstraZeneca also settled with Teva and Dr. Reddy’s with license entry onto the market until May 2014, subject to Ranbaxy’s expected 180 day exclusivity period, in return for Teva and Dr. Reddy’s admission that the patents were valid and infringed by their ANDA products. AstraZeneca also forgave the liabilities created by Teva’s at-risk launch of its related generic Prilosec product.

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Lacking A Certain Je Ne Sais Quoi – Federal Circuit Finally Holds Ultramercial’s Patent Does Not Cover Patent Eligible Material

Posted in Patent

On November 12, 2014, the United States Court of Appeals for the Federal Circuit held that Ultramercial, LLC’s patent covering an eleven step process of watching a commercial as a condition of accessing free media content is invalid as covering patent ineligible material. The patent at issue, U.S. Patent No. 7,346,545 (“the ’545 patent”), claimed a method for distributing copyrighted products (such as songs, movies, books) over the Internet where the consumer receives a copyrighted product for free in exchange for viewing an advertisement, and the advertiser pays for the copyrighted content. The Federal Circuit had held the ’545 patent claimed patent eligible subject matter twice before and both times was reversed by the United States Supreme Court. This iteration saw the Federal Circuit uphold the grant of a motion to dismiss claims of infringement by the United States District Court for the Central District of California on the basis of patent-ineligibility.

The Federal Circuit in 2011 applied an expansive view of 35 U.S.C. § 101 and relied, in part, on the restrictions imposed by the complex computer programming required by the ’545 patent claims to hold that, “as a practical application of the general concept of advertising as currency and an improvement to prior art technology, the claimed invention is not so manifestly abstract as to override the statutory language of section 101.” Ultramercial, LLC v. Hulu, LLC, 657 F.3d 1323, 1330 (Fed. Cir. 2011) (“Ultramercial I”) (internal quotation and citation omitted). The Supreme Court vacated that judgment and remanded for further consideration given the decision Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289 (2012) (holding that, because the natural laws recited in the patent claims are not themselves patentable, the claimed processes are not patentable unless they have additional features).

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Attorneys’ Fees, Costs, and an Enhancement! Oh My!

Posted in Patent

We have previously posted on the judiciary’s attempts to address frivolous and unwarranted suits brought by patent holding, non-practicing entities (“NPEs”). To deter such litigation, courts have the power to award attorneys’ fees and costs to defendants subject to such baseless suits. In an October 23 Opinion and Order in Lumen View Tech., LLC v. Findthebest.com, Inc., District Judge Denise Cote, applying 35 U.S.C. § 285 (“Section 285”), not only awarded the defendant its attorneys’ fees and costs, but also applied an enhancement to the awarded fees.

Lumen View Technology, LLC (“Lumen”), brought suit against Findthebest.com, Inc. (“FTB”) on May 29, 2013 in the Southern District of New York, alleging infringement of U.S. patent no. 8,069,073. The complaint against FTB was one of at least twenty substantially similar patent infringement complaints filed by Lumen against other parties between 2012 to 2013.

On November 22, 2013, the court held that the ‘073 patent claimed an abstract idea that was not patentable under 35 U.S.C. § 101, and was therefore invalid. Lumen appealed the decision to the Federal Circuit. The case was stayed, pending the Supreme Court decision in Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014). Following the Supreme Court’s decision in Alice on June 19, 2014, Lumen voluntarily dismissed its appeal to the Federal Circuit.
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Neither Baritsu Nor the Supreme Court Can Stop Sherlock Holmes from Falling Into the Public Domain

Posted in Copyright

We previously reported on the failed attempts by the Conan Doyle Estate, Ltd., to extend the umbrella of United States copyright protection for Sir Arthur Conan Doyle’s pre-1923 Sherlock Holmes-related works. After suffering a setback at the district court level (N.D. Ill.), the Conan Doyle Estate sought a reversal with the U.S. Court of Appeals for the Seventh Circuit. However, the Estate was again denied, with the Seventh Circuit panel unanimously affirming the lower court decision.

The Conan Doyle Estate, in a final leap, filed a Petition for a Writ of Certiorari with the Supreme Court stepping away from its novel copyright argument that literary characters who undergo continued development in later works should remain under copyright protection until the expiration of the copyright of the last work. Instead, the Estate chose to focus on the question of whether federal courts have jurisdiction to issue declaratory judgments of non-infringement when the accused infringing party has not yet provided a concrete work for comparison with the copyright-protected work.

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Recent Case Reveals Effective Strategy for Responding to NPE Suits

Posted in Patent

A recent decision from the United States District Court of the District of Hawaii reveals an effective strategy for responding to non-practicing entity (NPE) suits and obtaining leverage early on in the litigation. This strategy takes into account the business model of some NPEs to name many (unconnected) industry players in one lawsuit and plead only bare allegations of patent infringement.

NPE Plaintiff Broadband iTV, Inc. named Oceanic Time Warner Cable, LLC, Time Warner Cable, Inc., Time Warner Entertainment Company, LP (“TWC”) and Hawaiian Telecom Inc. (HTI) as defendants in a single complaint, alleging that all four entities infringe U.S. Patent 7,631,336 (“the ‘336 patent”). The ‘336 patent is directed to the delivery of video-on-demand content over the Internet. The defendants took several actions in response to this suit.

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The Honorable Grace K. Obermann to Present at NJIPLA’s ETS Seminar on November 6, 2014

Posted in Licensing, Patent, USPTO

On Thursday, November 6, 2014, The Honorable Grace K. Obermann, Lead Administrative Patent Judge, USPTO, PTAB, will present on practicing before the PTAB at the New Jersey Intellectual Property Law Association’s seminar, “Electronics, Telecom & Software Patent Practice Update.” The seminar will also address topics such as licensing guidance, implications of recent Supreme Court decisions, and damages considerations.

Robert E. Rudnick, Past President of the NJIPLA and a Director in the Gibbons Intellectual Property Department, will discuss the Do’s and Don’t’s of Patent Licensing. Thomas J. Bean, also a Director in the Gibbons Intellectual Property Department, will participate in the discussion on PTAB practice with Judge Obermann. For more information or to register, please see the NJIPLA website.

Has Alice Really Changed The §101 Standard for Patentability of Business Method Claims?

Posted in Patent

In the latest Supreme Court case on patentability under §35 U.S.C. 101, Alice Corp. Pty v. CLS Bank Int’l. (“Alice”), the Court addressed business method patent issues, finding that the claims at issue for mitigating settlement risks were drawn to an abstract idea and their generic computer implementation failed to transform the abstract idea into patent-eligible subject matter. 134 S. Ct. 2347 (2014). In its opinion, the Court re-applied the two-step test set forth in Mayo Collaborative Serv. v. Prometheus Lab., Inc., 566 U.S. 1289 (2012):

(i) whether the claims are directed to patent-ineligible matter (e.g., abstract idea); and

(ii) whether the claims contain an inventive concept (e.g., “additional features to ensure that the claim is more than a drafting effort designed to monopolize the abstract idea.”).

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Service of Discovery Also Subject to New Deadline in Delaware Federal Court

Posted in Intellectual Property, Patent

We previously posted on the new deadline of 6:00 p.m. Eastern Time for all filings other than initial pleadings in the U.S. District Court for the District of Delaware. On October 15, 2014, Chief Judge Leonard Stark of the District of Delaware issued a letter addressing certain questions about the new rule. Chief Judge Stark reiterated that filings and service must be completed by 6:00 p.m. Eastern Time, and further indicated that this rule applies to all filing and service deadlines — including service of discovery materials — in every case in the District of Delaware, other than initial pleadings or those cases in Bankruptcy Court.

Chief Judge Stark explained clearly that “the 6:00 p.m. deadline applies to the exchange among parties of discovery requests and discovery responses, and it applies even if such requests or responses are made by hand delivery.” The rule cannot be altered by both parties’ consent in specific cases, but rather only by judicial relaxation of the rule, a “discretion [that] will be exercised rarely (most likely during trial).” A judge’s discretion to relax the deadline is even further limited to only the deadline for a “particular paper.” The Chief Judge noted that the local chapter of the Federal Bar Association was forming a new committee “to explore work-life balance issues” and suggested that the committee’s recommendations to the Court could result in further rule changes.

Gibbons will continue to monitor the local rules of the District of Delaware and other district courts.

Christopher Viceconte is a Director in the Gibbons Business & Commercial Litigation Department. Gianna Cricco-Lizza, an Associate in the Gibbons Business & Commercial Litigation Department, co-authored this post.

Put Away that Midnight Oil: New Rule in the District of Delaware

Posted in Intellectual Property, Patent

On October 2, 2014, Chief Judge Leonard Stark of the U.S. District Court for the District of Delaware announced a new deadline of 6:00 p.m. Eastern Time for all filings other than initial pleadings. As of October 16, 2014, “[a]side from initial pleadings, all electronic transmissions of documents (including, but not limited to, motions, briefs, appendices, and discovery responses) must be completed by 6:00 p.m. Eastern Time, in order to be considered timely filed and served that day.” Initial pleadings which are filed before midnight will still be considered timely.

Chief Judge Stark’s standing order modifies section (F) of the Court’s Revised Administrative Procedures Governing Filing and Service by Electronic Means and presents a significant change from the familiar practice of filing up until 11:59 p.m. The new rule applies to pending as well as future matters. The District of Delaware is second only to the Eastern District of Texas in the number of patent cases filed; both of which have nearly three times the number of patent cases as the third busiest district, the Central District of California. Accounting for over 40% of the patent cases filed in the United States, Texas and Delaware have become favorites of plaintiff-patent holders due to, among other things, the jurisdictions’ streamlined pre-trial processes and skilled judges. Given Delaware’s ranking as the second most active district court in number of filings (788 to date for 2014) and parties (2395 to date for 2014), the nationwide patent litigators who represent clients in the District of Delaware should ensure that their Delaware counsel are provided pleadings and discovery materials sufficiently in advance of the new deadline to ensure timely filing and service.

Gibbons will continue to monitor other district courts’ local rules to see if other courts adopt a similar rule.

Christopher Viceconte is a Director in the Gibbons Business & Commercial Litigation Department. Gianna Cricco-Lizza, an Associate in the Gibbons Business & Commercial Litigation Department, co-authored this post.

Second Circuit Issues Decision in Gucci America, Inc. et. al. v. Li et. al.

Posted in Privacy

On September 17, 2014, the Second Circuit issued its long awaited decision in Gucci America, Inc. et. al. v. Li et. al., 2014 WL 4629049 (Appeal Nos. 11-3934 & 12-4557). In its decision, the Court vacated and remanded an August 2011 order compelling nonparty Bank of China (BOC) to comply with a document subpoena and asset freeze provision in an injunction and a May 2012 order denying the bank’s motion to reconsider. The court also reversed a November 2012 decision holding the bank in contempt for non-compliance with the court’s August 2011 order and imposing civil penalties.

The asset freeze purported to enjoin banks with notice of the injunction from transferring money out of defendants’ bank accounts, while the subpoena sought records concerning the defendants and their accounts at the bank. BOC had sought reconsideration of the court’s August 2011 order, arguing that Chinese law prohibited commercial banks in China from freezing accounts or turning over account records pursuant to foreign court orders.

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