Posts in District Courts

The Federal Circuit recently affirmed a district court’s award of attorney’s fees under 35 U.S.C. § 285. In particular, the Federal Circuit affirmed the lower court’s decision based on the plaintiff’s inadequate pre-suit investigation of infringement in the related cases. See Thermolife Int’l, LLC v. GNC Corp., Nos. 2018-1657, 2018-1666, 2019 U.S. App. LEXIS 13135 (Fed. Cir. May 1, 2019) (Before Taranto, Bryson, and Stoll, J.) (Opinion for the Court, Taranto, J). Leland Stanford Junior University (Stanford) and Thermolife International, LLC (Thermolife) are the owners and exclusive licensee, respectively, of U.S. Patent Nos. 5,891,459, 6,117,872, 6,646,006, and 7,452,916 directed to methods and compositions involving the amino acids arginine and lysine, to be ingested to enhance vascular function and physical performance. Thermolife, later joined by Stanford, brought suit alleging Hi-Tech, Vital, and multiple companies from the GNC family infringed the aforementioned patents. The parties agreed to bifurcate the proceedings: a consolidated trial on invalidity and enforceability would be held; and if necessary, separate proceedings on infringement would follow. The district court found the asserted claims of all four patents invalid as either being anticipated or obvious.

This week in Other Barks & Bites: Chinese state political advisors suggest changes to the country’s copyright law, including stronger punitive measures for infringement; President Donald Trump bans Huawei telecommunications equipment from use on U.S. networks; Korean IP offices get ready to study inter-Korean IP cooperation; Huawei and Samsung reach a conclusion to their worldwide patent litigation; AbbVie okays a generic Humira treatment in 2023; Disney escapes Pirates of the Caribbean copyright suit unscathed; Guns N’ Roses files a trademark suit over a beer; Qualcomm enters into another worldwide patent license for 5G technology; and Procter & Gamble unveils its largest research and development center after $400 million upgrade to Ohio facility.

The Federal Circuit recently affirmed a district court ruling finding patent infringement after holding that Actavis LLC, Actavis South Atlantic LLC, and Teva Pharmaceuticals USA, Inc. (collectively, “Actavis”) failed to prove by clear and convincing evidence that the claims asserted by Endo Pharmaceuticals and Mallinckrodt LLC (collectively, “Endo”) were invalid. See Endo Pharms., Inc. v. Actavis LLC, No. 2018-1054, 2019 U.S. App. LEXIS 13348 (Fed. Cir. May 3, 2019) (Before Wallach, Clevenger, and Stoll J.) (Opinion for the Court, Wallach, J.) (Dissenting opinion, Stoll, J.). However, the decision was not a unanimous one, with Judge Stoll authoring a dissent that would have reversed the district court. The patent at issue, U.S. Patent No 8,871,779 (the “‘779 patent”), is directed generally to compounds known as “morphinan alkaloids,” which are used for pain relief. More specifically, the ‘779 patent concerned processes for making “highly pure” morphinan products in the form of hydrochloride salts. Actavis claimed that the ‘779 patent was invalid, citing three key references as prior art. The first reference was a scientific article from 1957 by Ulrich Weiss (the “Weiss reference”) discussing a method for producing oxymorphone, a compound within the scope of the asserted claims. The second reference was U.S. Patent Application No. 2005/0222188 (the “Chapman reference”), which disclosed a purification process related to the asserted claims. Finally, the third reference was another article from 1967 by Henry Rapoport et al. (the “Rapoport reference”), which disclosed another purification process for oxycodone. The district court found that none of these references rendered the asserted claims obvious, and Actavis appealed.

This week in Other Barks & Bites, IPWatchdog’s IP news roundup: the House of Representatives passes drug patent legislation, while antitrust legislation targeting patent-related activities is introduced into the Senate and the Trump administration mandates pricing information for pharmaceutical ads; the Patent Trial and Appeal Board (PTAB) issues a pair of precedential decisions on cases with multiple petitions; the USPTO issues marijuana-related trademark guidelines and a notice on modifying patent term adjustment practices; Gilead strikes a settlement with Teva to bring generic Truvada to the U.S. market in 2020; a new music licensing entity is created in Canada; Fourth Circuit rules that bankruptcy can eliminate damages for trade secret violations; and several amicus file briefs asking the U.S. Supreme Court to eliminate the Federal Circuit’s “blocking patent” doctrine.

On Wednesday, the USPTO held the first of three scheduled hearings prompted by the Study of Underrepresented Classes Chasing Engineering and Science (SUCCESS) Act, which requires the USPTO Director to provide Congress with a report on publicly available patent data on women, minorities, and veterans, and to provide recommendations on how to promote their participation in the patent system. The hearing featured emotional testimony from five inventors, one of whom has recently joined Debtors Anonymous as a result of her patent being invalidated in the Southern District of New York. The SUCCESS Act was signed into law by President Trump on October 31, 2018 and gave the USPTO a one-year period to study representation of women, minorities, and veterans groups in patents. The Office released a report in February which showed that the number of women named as inventors had not been increasing at the same rate as the number of women who were now in STEM professions. Deputy USPTO Director Laura Peter said at the hearing on Wednesday that the Office is seeking input from industry, lawyers, and academics at the public forums, the next two of which are scheduled in Detroit on May 16 and San Jose on June 3. “We’re looking for concrete ideas and action plans to increase the numbers of these groups applying,” Peter said, before explaining that she would be unable to stay for the remainder of the hearing.

Jenna Close is a freelance commercial photographer and owner of a small business that licenses still images and videos to both domestic and international clients. She and her partner work 60-80 hours a week booking work, shooting, billing, accounting, marketing, and continuing to develop and maintain their skills. Jenna’s images are widely infringed online. She’s found exact reproductions of her work on competitors’ websites, on websites falsely advertising that the photographs are free to use, and she’s even come across instances where companies have photoshopped their own products into her images. Despite the brazen misuse of her images that she frequently encounters, Jenna does not generally pursue claims against her infringers because it is too expensive and time consuming to do so. It’s just not worth the cost—even though she registers at least some of her images for copyright protection, and so would be entitled to statutory damages and attorneys’ fees with respect to those images in case of a court victory. Unfortunately, Jenna’s story is not unique. For countless individual artists and small businesses, combating the unauthorized use of their creative works online is a source of enduring frustration. The frequency and ease with which photographs, sound recordings, videos, and other works of authorship are shared on the Internet leaves those without significant time and resources little recourse when they encounter infringement. But now, after years of advocacy by creators like Jenna, new legislation promises long-overdue support for these marginalized groups in the ongoing fight against overwhelming infringement in the digital age.

On May 1, Representatives Hakeem Jeffries (D-NY) and Doug Collins (R-GA) officially reintroduced H.R. 2426, the Copyright Alternative in Small-Claims Enforcement (CASE) Act, into the U.S House of Representatives. The bill was originally introduced in 2017 during the 115th Congress but expired after committee review. Along with the House bill, S. 1273, the U.S. Senate version of the bill, has been introduced by another bipartisan group including Senators John Kennedy (R-LA), Thom Tillis (R-NC), Dick Durbin (D-IL) and Mazie Hirono (D-HI). The proposed legislation seeks to establish an alternative forum for resolving disputes involving small claims of copyright infringement. If passed, the CASE Act would create the Copyright Claims Board, which is served by three full-time officers and two full-time attorneys who are appointed by the Register of Copyrights. The Board would be able to render determinations on copyright infringement, declarations of non-infringement or claims for misrepresentation in association with claimed infringement, and would also be able to award damages up to $30,000 to aggrieved parties. The bulk of the bill’s language deals mainly with how the Board will operate as an alternative forum to U.S. district court, with final determinations ultimately reviewable by district court.

This week in IP news: the CASE Act, which would create a small claims system for copyright claims, is reintroduced in both houses of Congress; Qualcomm earns a massive $4.5 billion payment from its settlement with Apple; the U.S. Supreme Court seeks input from the Solicitor General on Oracle v. Google; and China amends its trademark law, increases copyright actions, and earns more than one-third of all 5G SEPs.

Now that Apple and Qualcomm have made peace it would be easy to allow the case and the issues to recede into the background. That is likely what Apple would prefer, and almost certainly why Apple made the decision to settle with Qualcomm rather than proceed with trial. The case presented an existential threat for Qualcomm, which would have required the San Diego tech company to fight as if the company depended on victory–because it did.  What is most shocking is how successful Apple was in its coordinated effort to manipulate the licensing market and effectively extinguish any reasonable notion of a fair, reasonable, and non-discriminatory rate (FRAND) in the process. Meanwhile, fabricated licensing rates wholly unrelated to the Qualcomm portfolio were used by Apple to dupe regulators into chasing Qualcomm across the world for committing phantom antitrust violations.

Recently, I met with a potential client to discuss key points that developers and management should keep in mind in taking the first steps to begin developing a patent portfolio. One aspect of the presentation was public disclosures that began the one-year grace period for filing for patent protection. As I was preparing examples, a practical concern emerged; specifically, whether storing source code in a third-party code repository amounted to a public disclosure or a printed publication. My research revealed that there are certain instances where uploading source code to a third-party repository amounted to a public disclosure or a printed publication, but there were precautions that developers and companies could take to prevent the inadvertent public disclosure of their code.

On April 15, U.S. District Judge William Conley of the Western District of Wisconsin issued an opinion and order in Raytheon Company v. Cray, Inc. granting summary judgment of non-infringement to defendant Cray on two supercomputer patents that had been asserted by Raytheon. The order is the likely conclusion to a case that became an important part of the debate on proper venue in patent cases after the U.S. Supreme Court’s decision in TC Heartland, and aspects of how this case played out after venue was transferred point to the importance of that particular decision on U.S. patent litigation.

On March 21, Personalized Media Communications, LLC (PMC), owner of 98 patents covering networked equipment technologies, filed patent lawsuits in the Eastern District of Texas against major tech firms Netflix, Google, and Akamai. The lawsuits claim that the defendants infringed upon intellectual property that covers a major part of the adaptive streaming capabilities for each of the three businesses. In the lawsuits, PMC is asserting claims from six patents it has earned between 2010 and 2017, each titled Signal Processing Apparatus and Methods.

On April 8, the Court of Appeals for the Federal Circuit issued a precedential decision in Omega Patents, LLC v. CalAmp Corp. that reversed and vacated a district court’s ruling that CalAmp had directly infringed certain patent claims asserted by Omega. While the Federal Circuit did affirm that CalAmp directly infringed one of the asserted claims, it vacated and remanded on a number of the district court’s other findings. The decision was issued by a panel including Chief Judge Sharon Prost and Circuit Judges Timothy Dyk and Evan Wallach. Omega’s allegations of patent infringement centered on CalAmp’s sale of Location Messaging Unit (LMU) products that assist businesses and government entities by tracking fleets of vehicles and retrieving vehicle information such as battery health and speed for remote monitoring. A jury verdict in the Middle District of Florida held that all asserted claims were not invalid, were infringed, and that CalAmp had committed willful patent infringement. The jury awarded compensatory damages of $2.98 million and the judge trebled that damages award and added attorney’s fees, damages for sales subsequent to the jury verdict and pre-judgment interest, increasing the monetary award to about $15 million with an ongoing royalty rate of $12.76 per sale of infringing unit by CalAmp.

A company must be strategic in any business decision it makes in order to ensure that it takes the necessary measures to avoid liability for its actions. With respect to patent infringement, and specifically willful patent infringement, the different approaches to determining which measures to take and when to take such measures have been repeatedly challenged in light of a number of court decisions in recent years. To set the scene, the Federal Circuit held in Underwater Devices Inc. v. Morrison-Knudsen Co., 717 F.2d 1380 (1983) that a potential infringer has an affirmative duty to exercise due care to determine whether or not he or she is infringing. This placed the burden on the potential infringer to seek competent counsel and obtain either a non-infringement opinion or invalidity opinion prior to undertaking the possible infringing activities. This would prevent a finding of willful infringement and treble damages.

This week in other IP news, recently released data shows that worldwide revenues for music copyright exceeded $28 billion in 2017, up $2 billion over 2016; reports surface about the  “reverse patent trolling” issue in China; Google retains Williams & Connolly for Supreme Court battle with Oracle despite Shanmugam exit; the Copyright Office holds roundtable discussions on detecting online copyright infringement; Twitter takes down a tweet from President Donald Trump after a copyright complaint; “KINKEDIN” trademark for computer dating site successfully opposed in the UK by LinkedIn; EU antitrust regulators are petitioned to look into Nokia patent licensing practices; and loss of patent exclusivity leads to major job cuts at Gilead Sciences.