Last week, the Supreme Court heard oral arguments in American Broadcasting Companies, Inc., et al., v. Aereo, Inc., No. 12-451, a copyright action whose outcome could dramatically shape the future of television and cloud computing. Aereo is an internet start-up that uses arrays of dime-sized, customer-specific antennas to stream and store on-demand, over-the-air television, likening its technology as an alternative to an individual using, for example, an antenna and DVR to legally capture and record over-the-air content for private viewing. Fearing the loss of their intellectual property rights and lucrative retransmission fees, a consortium of broadcasters promptly sued Aereo for copyright infringement in March 2012 in the Southern District of New York. The broadcasters sought a preliminary injunction against Aereo, arguing that Aereo’s service amounted to thinly veiled public performances, and therefore, constituted copyright infringement. The SDNY, and subsequently the Court of Appeals for the Second Circuit, both ruled in favor of Aereo, citing the 2008 Second Circuit Cablevision case (Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121 (2nd Cir. N.Y. 2008)), which established the legality of using hosted DVRs to store and replay content to individual subscribers.
The Eastern District of Texas continues to lead the way with practical and efficient procedures for patent litigations. On February 25, Chief Judge Leonard Davis implemented General Order 14-3 “Regarding Track B Initial Patent Case Management Order.” This Order provides “additional efficiencies and cost savings” for appropriate patent cases, and is designed to complement the existing and now familiar case management procedures and local rules, or so-called “Track A,” case management schemes.
Two recent District Court decisions provide IP practitioners with guidance about royalty base in patent damages calculations. Last week, in Inventio AG v. Thyssenkrupp Elevator Americas Corp., et. al., 1-08-cv-00874 (D. Del. Dec. 13, 2013), Judge Andrews denied defendants’ motion for summary judgment and motion to strike that plaintiff improperly calculated damages. The defendants argued that plaintiff’s expert incorrectly included revenue from defendants’ service contracts in the damages calculation. However, the court determined that the expert relied on the service contracts to increase the royalty rate not the base. Thus, the court denied the motion. This case provides support that revenue generated outside of the royalty base can still be used to increase the royalty rate, thus potentially achieving higher damages.
As we previously reported, House Judiciary Committee Chairman Bob Goodlatte (R-VA) recently introduced H.R. 3309, entitled “Innovation Act,” (hereafter, “the Goodlatte Bill”). After varying support and challenges to the bill, as well as a competing Senate version, on December 5, 2013, the House passed an amended version of the Goodlatte Bill with a bi-partisan vote of 325-91.
In Energy Heating, LLC, et al. v. Heat On-the-Fly, LLC, et al., 13-cv-00010 (D. N.D.), the District Court for the District of North Dakota recently granted partial summary judgment of noninfringement for the Plaintiffs, who provide portable water heaters in North Dakota. Plaintiffs had brought a declaratory judgment action against Defendants, who had allegedly reported the suspected infringement of their patent to Plaintiffs’ customers.
On Monday, a group of some 60 law school professors from across the country formally joined the debate on the perceived abuses by Patent Assertion Entities (“PAEs”), or so-called patent trolls. The Professors signed a letter to Congress that decries “abusive patent enforcement” by trolls. The result of these litigations, according to the Professors, is the diversion of billions of dollars from employee hiring and retention and product development to “wasteful litigation.”
Last week, House Judiciary Committee Chairman Bob Goodlatte (R-VA) introduced H.R. 3309, entitled “Innovation Act,” a 51-page bill proposing a number of significant amendments to the Patent Act (Title 35 U.S.C.). We reported last month on an earlier proposed draft of this bill. As we noted last month, among the more noteworthy provisions of the bill is a proposed new 35 U.S.C. § 281A, which heightens the pleading requirements for patent cases. Specifically, the proposed new section mandates providing detailed information about the patents alleged to be infringed, identifying each accused product/process, and providing information with “detailed specificity” regarding how the product infringes. This provision also sets forth that, for any required information not disclosed, the plaintiff must establish why such undisclosed information was not readily accessible, and the efforts made by such party to access it.
Recently, House Judiciary Committee Chairman Bob Goodlatte (R-VA) announced a 47-page draft of a bill that proposes various amendments to the Patent Act, Title 35 of the United States Code and the Leahy-Smith America Invents Act. Importantly for IP practitioners, the draft bill would heighten pleading requirements for patent cases under a new 35 U.S.C. § 281A, by requiring detailed information in a complaint, including all the patents alleged to be infringed, an identification of each accused product and information with “detailed specificity” regarding how the product infringes. The proposed revisions would eliminate the current “Form 18,” which is the baseline model for alleging patent infringement.
Last Friday in Lontex Corp. v. Oakley, Inc., 1:13-cv-05459 (DNJ), Lontex sued Oakley in the U.S. District Court for the District of New Jersey for trademark infringement, counterfeiting and unfair competition relating to Lontex’s federally registered mark, SWEAT IT OUT, for sweatbands, headbands and other athletic apparel. In its complaint, Lontex alleges that Oakley is using the exact mark SWEAT IT OUT for a line of sweat-wicking headbands, and attaches exhibits showing that use on Oakely’s on-line store. Lontex further asserts that it has been using its mark for over 20 years, and that Oakley’s conduct violates federal and state trademark and unfair competition laws.