IP Law Alert

IP Law Alert

Practical Perspectives on Intellectual Property Legal Developments

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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Because I Said So: Courts’ Inherent Powers to Impose Fees for Bad Faith, Vexatious, or Wanton Litigation

Posted in Patent

Fee shifting has been a recent theme in patent litigation, with judges, legislators, and state attorney generals alike attempting to curb abuses of the patent system by creating new penalties. One judge has fallen back on the long-standing inherent powers of the judiciary to do so. This appealing new method of punishing patent litigation abusers comes from the U.S. District Court of the District of Delaware, one of the nation’s busiest patent dockets. Judge Richard G. Andrews’ well-reasoned opinion awards attorneys’ fees to the defendant on the basis of the court’s inherent powers to penalize those who act in “bad faith, vexatiously, wantonly, or for oppressive reasons.” Parallel Iron LLC v. NetApp Inc., No. 12-769, Slip Op. at 15 (D.Del. Sept. 12, 2004).

The court examined first the defendant’s request for fees under 35 U.S.C. § 285 of the Patent Act. Fees under this provision are awarded to a “prevailing party” in exceptional cases. Despite noting the Supreme Court’s recent redefinition of “exceptional” to merely a case that stands out from others, the court concentrated its analysis on the issue of prevailing party. The court noted that to be a prevailing party required some “material alteration of the legal relationship of the parties.” Id. at 5. Here, the case, along with several other cases involving the same patents, settled through a license granted to one party, that included a sublicense to the defendant. Id. at 3-4. The court noted that it had “made no finding regarding any substantive issue in the case,” having neither construed any terms of the patents, nor resolved either motions to dismiss or for summary judgment. Id. at 7. Accordingly, the court held that a bona fide licensing agreement achieved after litigation began without substantive favorable decision by the court would be insufficient to establish a defendant had been the prevailing party in the litigation pursuant to Section 285. Id. at 8.

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New Jersey Assembly Advances Bill To Address Bad-Faith Patent Infringement Actions

Posted in Patent

We have previously posted on proposed federal and state legislation aimed at addressing the toll of “patent troll” litigation by non-practicing entities on the U.S. economy. The Gibbons IP Law Alert has previously posted regarding such issues on August 26, 2014June 25, 2014March 10, 2014, and  December 13, 2013. Continuing the trend, the New Jersey General Assembly panel recently advanced bill A-2462  to address so called “Patent Troll” litigation. Consistent with other recent efforts at curbing patent litigation abuses, this bill attempts to identify wrongdoers and penalize specific abuses through monetary sanctions.

The proposed bill is aimed to “protect New Jersey businesses from abusive and bad faith assertions of patent infringement.” The bill specifically refers to Patent Assertion Entities (“PAEs”) and defines them as entities that “focus on aggressive litigation” employing tactics such as:

  1. suing thousands of companies at once;
  2. bringing suit without specific evidence of infringement;
  3. creating shell companies that make it difficult to identify the actual asserting entity; and
  4. bringing infringement allegations on technologies “not imagined” at the time the asserted patents were granted.

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