IP Law Alert

IP Law Alert

Practical Perspectives on Intellectual Property Legal Developments

Washington Redskins Must Wait Their Turn for High Court

Posted in Entertainment

On October 3, 2016, the U.S. Supreme Court announced that it would not take up an appeal by the Washington Redskins regarding the constitutionality of a Lanham Act provision that prevents registration of trademarks that disparage “persons, living or dead, institutions, beliefs, or national symbols.” See 15 U.S.C. §1052(a).

The Court denied the extraordinary request for “certiorari before judgment” presented by Pro-Football Inc. (“Pro-Football”) – the name of the Washington Redskins’ corporate entity – who sought to join a pending litigation, Lee v. Tam (Case No. 15-1293) regarding the government’s ban on offensive trademarks. Had the U.S. Supreme Court granted the request, it would have allowed Pro-Football to leap directly to the high court even though the Fourth Circuit has yet to rule on the appeal in this case.

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The Supreme Court Weighs in on PTAB’s Claim Construction Standard for IPR Proceedings

Posted in Patent

In a recent decision, the Supreme Court affirmed the Federal Circuit’s ruling that the Patent Trial and Appeal Board (PTAB) was within its authority to give a patent claim “its broadest reasonable construction” during an inter partes review (IPR) proceeding. The Court found that the PTAB was authorized to apply this standard because 35 U. S. C. §316(a)(4) granted the Patent Office authority to issue “regulations . . . establishing and governing inter partes review under this chapter.”

As previously discussed, this time last year the Federal Circuit in a contentious 6-5 vote denied en banc review on this issue. The dissenting judges argued that the “broadest reasonable construction” standard during IPR proceedings should be reconsidered because IPR proceedings were designed to be akin to district court adjudications of patent validity and IPR proceedings, unlike prosecution, do not allow for a “back-and-forth between the patentee and examiner.”

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U.S. District Court Limits So-Called “Piggyback” Discovery

Posted in Patent

The United States District Court for the District of Nevada recently issued an Order casting doubt on a litigant’s ability to obtain blanket discovery from an adversary’s prior patent litigation without a specific showing of relevance. Anyone opposing overbroad discovery requests seeking “all documents” from a prior patent litigation should read a series of decisions in the case captioned Racing Optics v. Aevoe Corporation (“Racing Optics”).

In Racing Optics, the plaintiff asserted four patents related to transparent films applied to touch sensitive screens for impact and/or scratch protection including U.S. Patent Nos. 9,104,256 (“the ‘256 patent”) and 8,974,620 (“the ‘620 patent”). The defendant counterclaimed for non-infringement, invalidity, and in particular, unenforceability of the ‘620 and ‘256 patents on the ground that claims of these patents were allegedly copied or substantially copied from the defendant’s U.S. Patent No. 8,044,942 (“the ‘942 patent”) and patent applications, without informing the USPTO.

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Brexit Raises Questions About the Future of the Unitary Patent and Unified Patent Court

Posted in Patent, Pharmaceuticals

Recently, the UK voted to leave the EU. However, that has not happened yet for several reasons. The first reason is that the referendum actually needs to be voted on by Parliament, adopting the results of the referendum vote. A second reason is that withdrawal from the EU occurs when Article 50 of the Lisbon Treaty is enacted. Neither one of these two items has occurred. If Parliament agrees to follow the referendum outcome and votes to leave the EU, and if the UK gives notice under Article 50, then many trade agreements and treaties will need to be negotiated in a two-year period from date of notification.

Amongst the items to be considered in this time period is the effect on intellectual property. Currently, the UK is a member of the European Patent Convention that operates independently from the EU. The European Patent Convention has established a system of common laws and procedures for the contracting states to file, prosecute, and grant a European Patent. Currently, once a European Patent is granted and survives certain post grant challenges, it is ratified in each national country selected by the patent applicant. This is likely not to change with the Brexit vote. It is likely that the UK will remain a contracting state and that European patents will be nationally ratified in the UK.

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Federal Circuit Overturns Supplemental Jurisdiction Over Claims of Breach of Fiduciary Duty

Posted in Patent, Pharmaceuticals

In a recent decision from the Federal Circuit in AngioScore, Inc. v. TriREME Medical LLC et al. the court found that a plaintiff’s claim for patent infringement and breach of fiduciary duty did not have the requisite “common nucleus of operative fact” for the district court to maintain supplemental jurisdiction over breach of fiduciary duty claims. In particular, this decision provided the Federal Circuit a rare opportunity to review the jurisdiction limits of a district court in a case involving federal patent infringement claims and state law claims for breach of fiduciary duty aiding and abetting and unfair competition by an independent director and companies he co-founded which developed a competitive product to a product marketed by the plaintiff corporation AngioScore, Inc.

The defendant, director Eitan Konstantino, had been a cofounder of AngioScore to develop and market an angioplasty balloon he had invented. However, over the years, his role at AngioScore had diminished until he was an independent director focused on representing the minority investors. His attention turned to another company he had co-founded, TriReme Medical, LLC, which was involved initially in bifurcation stents, a different technology than angioplasty balloons. However, Konstantino’s inventive juices flowed again and he came up with an improved angioplasty balloon device code named “Chocolate,” rights to which he assigned to a TriReme affiliate.

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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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