Posts in Business

What You Need to Know About Trade Secrets in 2021

Last year at this time we thought we had been through the worst of it and, with the new vaccines arriving, that life would return to normal in 2021. Hahaha, how naïve we were! But take heart; some things hold steady through the storm, such as the popular sport of trade secret litigation. Unlike most patent and copyright cases, every dispute is guaranteed to unfold as a morality play—a story of good guys and bad guys. Let’s now look back on the year when remote work dug in to become a permanent fixture, and remind ourselves of the broad sweep of trade secret law by looking at some of the more instructive and interesting opinions issued by the courts – and one inexplicable decision by our government.

As Policymakers Say They Want to Rein in Big Tech, Others Seek to Give It Even More Power

Over the past several years, Congress has raised a long overdue microscope to Big Tech and its worst practices and as a result, the relationship between Washington, DC and Silicon Valley has changed tremendously. Rather than being feted by policymakers, Big Tech is now being forced to answer tough questions. Elected officials are now more aware of Big Tech’s reach and impact on our elections, security, and data collection – and they are not liking what they see.  These companies have intruded on nearly every aspect of American lives and have avoided any responsibility or accountability.

When Your Trademark Licensor is in Financial Distress

Your company and its business have been built around the strength of a trademark license from a third-party licensor. You have invested heavily in the brand. Now, however, your trademark licensor is in financial distress. Bankruptcy is not beyond the realm of possibility. Perhaps the licensor has asked to renegotiate the terms of the trademark license or threatened to terminate the license once a chapter 11 bankruptcy case is filed. What are the respective rights of the distressed trademark licensor and your company, as trademark licensee, in this situation? Is your company at risk of losing everything invested in reliance on the license?

Good Sports: Cleveland MLB and Roller Derby Teams Share GUARDIANS Name

The MLB baseball team formerly known as the Cleveland Indians has a new name that pays homage to the history of Cleveland. The team last rebranded in 1915, when it left behind its former name, the “Naps” (short for “Napoleons”) in favor of the “Indians.” Now, over a century later, the team has joined other sports franchises in retiring Native American names, mascots, and imagery imbued with negative and racist connotations. With the help of actor and Cleveland Indians fan Tom Hanks, the baseball team announced on July 23, 2021 that it would adopt a new name: the Cleveland Guardians.

Mechanisms, Governance, and Policy Impact of SEP Determination Approaches

Standard Essential Patents (SEPs) are on the rise; the number of newly declared patents per year has almost tripled over the past five years. There were 17,623 new declared patent families in 2020, compared to 6,457 in 2015 (see Figure 1). The 5G standard alone counts over 150,000 declared patents since 2015. Similarly, litigation around SEPs has increased. One of the driving factors of recent patent litigation is the shift in connectivity standards (eg, 4G/5G, Wi-Fi) that in the past were mostly used in computers, smartphones and tablets, but are now increasingly implemented in connected vehicles, smart homes, smart factories, smart energy and healthcare applications. Another reason why litigation may rise further is the belief that large SEP owners such as Huawei, ZTE or LG Electronics may soon sell parts of their SEP portfolios, which may likely end up in the hands of patent assertion entities (PAEs). One way or another, it is anticipated that the majority of patent holders will actively monetize their SEPs covering standards such as 5G, Wi-Fi 6 or VVC in this fast-moving, high-investment environment. Any company adopting these standards must decrease operational risk and expense exposure by taking a proactive strategy towards SEPs rather than a reactive one.

Now More Than Ever, IP Practitioners Need to Be Better Business Partners

If you’ve worked in-house, you’ve probably been told at some point to “do more with less.” Initially a response to the Great Recession, business scrutiny over legal budgets persists: according to a recent survey of general counsels performed by EY and Harvard Law, GCs expect 25% greater workloads in the next three years while 88% of them plan simultaneous budget cuts. At the same time, research also shows that legal productivity is stagnating. Eighty-one percent of GCs surveyed by Gartner reported legal cost as a percent of company revenue increased or stayed the same during the past two years. These trends obviously put practitioners in a tough spot: how do you deliver on your value proposition while workloads are increasing, resources are constrained, and productivity is stagnating?

Live, Work and Play in a Legal Metaverse: Preparing for a New Online Existence

Companies spend billions and invest heavily in technologies that offer greater telepresence and enable an individual’s digital life. Will humans interact with each other via avatars in a three-dimensional virtual space?  The “Metaverse” has ramifications for everything people do to live, work and play together digitally. The Metaverse is a digital shared space where everyone can seamlessly interact in a fully immersive, simulated experience. The Metaverse increases the permeability of the borders between various digital environments and the physical world. In the Metaverse, you can interact with virtual objects and real-time information. A place where people join together to create, work, and spend time together in an environment that mixes what is virtual and what is real.

When the Secret Enables the Brand: The Long-Lasting Listerine License

Question: how do you make money from a secret formula for a product that smells and tastes horrible and that no one wants? Answer: you make everyone believe they have a medical problem that only this stuff can solve. Back in 1879, Joseph Lawrence, a St. Louis doctor, was experimenting with surgical disinfectants. This was a new thing. In the 1860s, a British surgeon named Joseph Lister was the first to perform surgery antiseptically, using carbolic acid as a disinfectant. Inspired by Lister, Lawrence came up with a compound of alcohol and essential oils that seemed to kill whatever bugs it touched. To honor Lister (and presumably to take advantage of his fame), Lawrence named the concoction “Listerine.”

Cloudflare Tests Limits of Contributory Copyright Infringement

One recurring thorn in the side of copyright owners is Cloudflare, the San Francisco-based web performance, optimization, and security company. Cloudflare offers many services to its customers, including a content delivery network that utilizes hundreds of servers around the world to cache its customers’ content. When an end user requests content from one of Cloudflare’s customers, it is delivered to that user from the cached copy on the nearest Cloudflare server—not the customer’s own web host server. This saves on bandwidth costs, improves security, and decreases page load times. It also raises important questions about Cloudflare’s liability for contributory copyright infringement when it knowingly allows infringing content to remain on its cache servers. Under Ninth Circuit precedent, web hosting services like Cloudflare can be held contributorily liable for assisting in the infringement under the material contribution theory. However, a recent district court decision misconstrued the case law to conclude otherwise in Mon Cheri v. Cloudflare.

Desperate Heroism and the Thunder of a Quiet Revolution: The Rise of China’s Economy and IP System

On October 16, 2021, as I contemplated lessons from my nine years in China, the Financial Times broke a story that rocked the world—especially the U.S. military: “China tests new space capability with hypersonic missile.” China’s recent launch of a nuclear-capable rocket that circled the globe at high speed “took US intelligence by surprise.” Military experts quickly noticed that Chinese innovation in hypersonic weapons “was far more advanced than US officials realised.” As I’ve seen happen many times in coverage on innovation in China, our mainstream media is now downplaying China’s achievement (“not much of a surprise,” per the New York Times, and nothing but old Russian technology per Foreign Policy). It’s similar to the objections raised for decades about IP and innovation in China: low quality, just copying, nothing to be worried about. Yet in industry after industry, China is taking a leadership position in technology and its international patents that can’t be won by copying. It comes from leading.

Senate Judiciary Committee Hearing: E-Commerce Platforms Have Curbed Infringement, But Counterfeits and Safety Problems Persist

The full Senate Judiciary Committee convened today for a hearing titled, “Cleaning Up Online Marketplaces: Protecting Against Stolen, Counterfeit, and Unsafe Goods,” in which witnesses explained the continuing challenges of policing stolen and counterfeit products in online marketplaces. The panelists included small business owners, internet platform advocates, academics and retail store representatives.

Claim Construction in Bankruptcy Court? Revisiting Vacatur in Patent Litigation

While many patent litigators have no plans to litigate in bankruptcy court, it is a possibility if the infringer of a client’s patent files for bankruptcy. The United States Bankruptcy Court for the Eastern District of Wisconsin recently conducted a Markman hearing. How did that happen?  After being sued for patent infringement in district court, the alleged infringer sought refuge in the bankruptcy court, staying the district court litigation. The plaintiff then filed a claim in the defendant’s bankruptcy case, which ultimately triggered the bankruptcy court’s jurisdiction. While rare, other bankruptcy courts have conducted claim construction proceedings. As discussed herein, the bankruptcy court ultimately granted a joint request for vacatur, prompting us to revisit the doctrine of vacatur.

Is Your Corporate IP Department a Trick or a Treat? Beware of Spooky Costume Choices

CEOs, general counsels, and other senior leaders in a corporation often take a hands-off approach to IP strategy and execution, heavily delegating these functions to in-house IP counsel and related team members. This isn’t surprising given the esoteric nature of many IP matters and the extraordinary demands on senior leaders coming from all corners. The trust placed in corporate IP departments may be substantial, carrying with it largely unfettered discretion to set the IP agenda. Unfortunately, those outside the IP field may feel ill-equipped to verify that such trust is well placed. The worst-case result may be misaligned IP and business strategies, enormous spend, and missed opportunities.

Acquisition Contamination: The Mythology of the ‘Clean Team’

Have you ever shopped for something dangerous? Back in the 1950s, my mother wanted to buy a pressure cooker to make dinner faster (and use cheaper cuts of meat). That wasn’t an easy decision, because the early models had a reputation for occasionally exploding (there was no Consumer Product Safety Commission then). My father, a self-taught steam engineer, was skeptical that a kitchen appliance could safely contain double the normal atmospheric pressure. But Mom did her homework, researching what the problems were (usually a single pressure valve prone to clogging) and finding cookers with redundant pressure relief systems. It worked for years, and no one went to the hospital. Companies shopping to buy other companies, or to acquire a license to their technology, also entertain risk. That’s because in the process of interviewing potential targets they can become exposed to highly valuable trade secrets. If any particular transaction doesn’t go forward, but the shopper implements similar technology, the disappointed seller may file a lawsuit claiming misappropriation.

Financial Institutions Face Fork in Patent Road

Large banks have a reputation for being slow to change. However, in the past decade, the financial services industry has seen the wholesale adoption and implementation of new technology as firms realize that consumers and businesses are increasingly demanding a strong digital experience. In 2007, Bank of America was one of the first financial institutions to offer a mobile banking application and since then, the rest of the industry has followed suit. Now, consumers could not go without their banking apps ­– imagine going to the bank to deposit a check.