Posts in Litigation

In May of 2017, the United States Supreme Court delivered a unanimous decision in TC Heartland LLC v. Kraft Food Group Brands LLC that reversed the Federal Circuit and said that 28 U.S.C. 1400(b) remains the only applicable patent venue statute, that 28 U.S.C. 1391(c) did not modify or amend 1400(b) or the Court’s 1957 ruling in Fourco Glass Co. v. Transmirra Products Corp., and that the term “residence” in 28 U.S.C. 1400(b) means only the state in which a company is incorporated. Since TC Heartland, courts and plaintiffs have struggled to understand the real world application of this decision; most recently, the Federal Circuit in In re Google allowed a case to remain in the Eastern District of Texas because Google had servers there. Thus, while the decision has undoubtedly resulted in a shift away from the heyday of the Eastern District of Texas, the precise parameters of a “physical presence” sufficient to satisfy venue remain murky. To examine the effect TC Heartland has had so far, I recently sat down with Mike Oropallo of Barclay Damon, who has been out there litigating patent cases around the country. Among other observations, Oropallo says that—as usual—it all comes down to the Federal Circuit. Read on for more.

The Federal Circuit recently vacated a district court’s decision dismissing a complaint under Federal Rule of Civil Procedure 12(b)(6). Coda Development S.R.O. v. Goodyear Tire & Rubber Co., No. 2018-1028, 2019 U.S. App. LEXIS 5144 (Fed. Cir. Feb. 22, 2019) (Before Prost, C.J., Wallach, Hughes, J.) (Opinion for the Court, Prost, C.J.) Coda Development and Frantisek Hrabal (collectively “Coda”) sued Goodyear Tire & Rubber Company for trade secret misappropriation and correction of inventorship of 12 Goodyear patents directed to self-inflating tire (SIT) technology. Coda alleged that, during several confidential meetings held between the parties, Goodyear copied Coda’s inventions and filed patent applications based on those inventions without naming Coda as an inventor or co-inventor. The district court dismissed the complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted and denied the Plaintiff’s motion for leave to amend the complaint.

I am sure that the justices of the Supreme Court did not anticipate the confusion they created when they issued their controversial decision in Alice Corporation v. CLS Bank in 2014. That case effectively upended well-established precedence when the Court unanimously held that a computer-implemented scheme for mitigating settlement risk was not patent eligible subject matter because the claims were drawn to an abstract idea, and that merely requiring generic computer implementation fails to transform the claims to eligible subject matter. The Court itself said their holding was to be narrowly construed, but in providing a vague, two-step test to determine whether something is patent eligible, they unleashed a world of hurt on some of our domestic industries seeking patents in cutting-edge technologies. The application of the Alice test to some of our health-related industries is having disastrous effects. On February 6, 2019, in a split decision, the United States Court of Appeals for the Federal Circuit (CAFC) found in Athena Diagnostics v. Mayo Collaborative Services that diagnostic methods are not patent subject matter eligible unless they embody a separate technical improvement beyond the correlation of certain antibodies in bodily fluids to particular diseases. In a footnote, the majority lamented that they felt compelled by Supreme Court precedence to render their decision, but recognized that protection of diagnostic methods would be for good for society. The Athena case does not portend well for the CAFC adoption of the recent USPTO guidance on Section 101. The courts will eventually be able to either put their imprimatur on those guidelines or discard them. The sooner that is done, the better.

The Licensing Executives Society (LES) 2017 High Tech Deal Term & Royalty Rate Survey is a milestone event for at least three reasons. First, it was the third survey since the inaugural survey in 2011, and the three surveys fully covered the time period of a decade—from 2008 to 2017. Second, the 2017 Survey marked the fifth anniversary of Inter Partes Review (IPR) procedure and the third anniversary of the Supreme Court’s ruling in Alice v. CLS Bank. Third, at the time of the Survey, a new USPTO Director was nominated by the Trump Administration, bringing a fresh glut of uncertainties, anxieties, and hopes to the already jittery IP market.

Those who practice in the field of patents tend to focus almost exclusively upon developments in patent law and pay less attention to developments in other areas of law. This is to be expected; patent cases don’t usually overlap with issues such as employment law or criminal law; so why bother reading up on those subjects? And yet, it can actually be useful to keep abreast of Supreme Court decisions that on their faces do not pertain to patent law. A few days ago, IPWatchdog Founder and CEO Gene Quinn discussed one such case. Though that case was not patent-related, he felt the decision may be of interest to patent practitioners, especially those dealing with patent eligibility under section 101. In that same vein, following is a discussion of a (less recent) decision from the United States Supreme Court, Elgin v. Department of the Treasury, 567 U.S. 1 (2012), that patent practitioners may have overlooked. On its face, the case deals with employment law, but it includes aspects of federal administrative practice that can affect patent practitioners.

Justice Ruth Bader Ginsburg delivered the opinion for a unanimous Supreme Court in Fourth Estate v. Wall-Street.com, et. al. Monday morning, March 4, holding that copyright registration occurs—and thus, an infringement action can only be brought—once the Copyright Office officially registers a copyright. The case considered whether “registration of [a] copyright claim has been made” within the meaning of Section 411(a) of the Copyright Act “when the copyright holder delivers the required application, deposit, and fee to the Copyright Office, as the Fifth and Ninth Circuits have held, or only once the Copyright Office acts on that application, as the Tenth Circuit and, in the decision below, the Eleventh Circuit have held.” In the end, the Court unanimously agreed that registration is a requirement to commence suit, but, once granted, the copyright owner can sue for infringement that occurred both before and after registration.

On Monday, March 4, Justice Brett Kavanaugh issued the decision for a unanimous Supreme Court in Rimini Street, Inc. v. Oracle USA, Inc., which asked whether the meaning of “full costs” under 17 U.S.C. § 505 of the U.S. Copyright Act extends to damages outside of the six categories of costs that U.S. district courts can award against a losing party as outlined in 28 U.S.C. § 1821 and 28 U.S.C. § 1920. In siding with petitioner Rimini Street, the Supreme Court held that “full costs” in the copyright litigation context are limited to Sections 1821 and 1920, reversing the Court of Appeals for the Ninth Circuit’s decision to award $12.8 million to Oracle covering litigation expenses outside of the statutory schedule of costs.

Surveys to prove or disprove trademark infringement or likelihood of confusion have been used by attorneys for many years. Unfortunately, many attorneys using surveys can weaken a survey’s impact by failing to avoid some crucial pitfalls. Here are 10 important things to avoid and correct when developing surveys for litigation purposes.

This week in Other Barks and Bites: the Senate Judiciary Committee plans to go after drug patents to promote access to generic medications; Apple faces another patent suit in the Eastern District of Texas in the midst of attempts to remove its business presence from the district; China enacts a code of conduct for patent agents; Samsung and Huawei enter into an agreement to terminate their multi-year legal battle in the Android sector; the makers of Fortnite face yet another copyright suit over dance moves; Warner Bros. strikes down a Kickstarter campaign intending to distribute edited versions of The Departed; and a Delaware jury upholds cholesterol treatment patents owned by Amgen.

Earlier this month, the Federal Circuit dismissed an appeal from the Patent Trial and Appeal Board (Board) where the Board upheld the patentability of a biologics patent. After Momenta Pharmaceuticals petitioned the Board for an inter partes review (IPR) of the patentability of Orencia® (abatacept), the Board sustained patentability and Momenta appealed. During the course of the appeal, Momenta ceased development of an abatacept biosimilar. The Federal Circuit held that the cessation of potential infringement mooted the injury and removed Momenta’s standing to maintain the appeal. Momenta Pharm., Inc. v. Bristol-Myers Squibb Co., No. 2017-1694, 2019 U.S. App. LEXIS 3786 (Fed. Cir. Feb. 7, 2019) (Before Newman, Dyk, and Chen, Circuit Judges) (Opinion for the Court, Newman, Circuit Judge).

In a decision published in redacted form on January 29, Judge Beth Labson Freeman of the Northern District of California denied ASUSTek Computer Inc.’s and ASUS Computer International’s (collectively, ASUS’s) motion for summary judgment that InterDigital, Inc.’s (InterDigital’s) standard essential patent (SEP) licensing practices breached its FRAND obligations. The court also granted-in-part and denied-in-part InterDigital’s motion for summary judgment, rejecting a request to dismiss ASUS’s Sherman Antitrust Act claim but granting summary judgment as to issues relating to judicial and promissory estoppel and as to a California competition law claim. ASUS Computer Int’l v. InterDigital, Inc., Case No. 5:15-cv-01716-BLF, ECF No. 367 (N.D. Cal. Jan. 29, 2018). The court’s ruling comes as the case is progressing toward a jury trial, presently scheduled for May 2019. Several of the issues addressed are fact-specific to the case, but the rulings relating to breach of contract, most favorable licensees, and the Sherman Act are of particular interest for SEP licensing and illustrate how the legal landscape continues to evolve.

Mozilla, Mapbox, Medium, Patreon, Etsy, and Wikimedia have filed an amicus brief in support of Google in its case against Oracle at the U.S Supreme Court. The platforms disagree with the Federal Circuit’s March 27, 2018, ruling that Google’s use of Oracle’s Java application programming interface (API packages) was not fair as a matter of law, reversing the district court’s decision on the matter. The brief is the latest of 14 that have been filed in the last week in support of granting the petition.

The United States Court of Appeals for the Federal Circuit recently issued a ruling reversing a district court’s grant of summary judgment of non-infringement and invalidity for failure to satisfy the written description requirement. See CenTrak, Inc. v. Sonitor Techs., Inc., 2019 U.S. App. LEXIS 4442 (Fed. Cir. Feb. 14, 2019) (Before Reyna, Taranto, and Chen, Circuit Judges) (Opinion for the Court, Chen, Circuit Judge). The Court said the written description requirement does not require that the specification provide either examples or an actual reduction to practice. Instead, a constructive reduction to practice may be sufficient if the specification identifies the claimed invention in a definite way.

On February 1, Amazon.com, Inc. filed a Form 10-K annual report with the U.S. Securities and Exchange Commission. Along with reporting its year-end earnings for the 2018 fiscal year, this particular SEC filing was notable because Amazon officially acknowledged to shareholders that the company’s online sales platforms face the risk of being found liable for fraudulent or unlawful activities of sellers on those platforms. This includes the company’s first-ever concession that Amazon may be unable to prevent sellers trafficking counterfeit and pirated goods. “The law relating to the liability of online service providers is currently unsettled,” Amazon’s Form 10-K filing reads. Along with the specter of counterfeit sales, Amazon noted that its seller programs may render the company unable to stop sellers from collecting payments when buyers never receive products they ordered or when products received by buyers are materially different than the sellers’ description of those products at the point of purchase. While information regarding a corporation’s potential risk of liability is a regular feature of SEC filings, news reports indicate that this is the first time that Amazon used the word “counterfeit” in an annual report.

The United Stated Court of Appeals for the Federal Circuit recently held that a district court erred in its claim construction and vacated the district court’s judgment of noninfringement, which the parties stipulated to based on the erroneous construction. See Continental Circuits LLC v. Intel Corp., No. 2018-1076, 2019 U.S. App. LEXIS 3920, 2019 WL 489069 (Fed. Cir. Feb. 8, 2019) (Before Lourie, Linn, and Taranto, J.) (Opinion for the court, Lourie, J.). The Court highlighted that the first step in claim construction should always be to determine the plain and ordinary meaning of the claims. Further, the specification should serve to limit the plain and ordinary meaning only when it includes a definition for a claim term or a clear disclaimer or disavowal of claim scope.