Posts in Litigation

The Federal Circuit recently denied a petition by BioDelivery Sciences International, Inc. (BioDelivery) for a rehearing en banc following a refusal by the Patent Trial and Appeal Board (PTAB) to apply the Supreme Court’s decision in SAS Institute Inc. v. Iancu, 138 S. Ct. 1348 (2018). See BioDelivery Scis. Int’l, Inc. v. Aquestive Therapeutics, Inc., Nos. 2019-1643, 2019-1644, 2019-1645, 2020 U.S. App. LEXIS 1030 (Fed. Cir. Jan. 13, 2020) (Before Prost, Chief Judge, Newman, Lourie, Dyk, Moore, O’Malley, Reyna, Wallach, Taranto, Chen, and Hughes, Circuit Judges) (Opinion for the Court, Lourie, Circuit Judge) (Dissenting opinion, Newman, Circuit Judge). The petition for rehearing arrived at the Federal Circuit following a decision by the PTAB to disregard a remand order by the Federal Circuit ordering the PTAB to apply the Supreme Court’s holding in SAS Institute and decide all of the claims and grounds challenged in an inter partes review. Rather, the PTAB, on remand, withdrew all of its past actions as to the proceedings at issue and denied the petition in its entirety. BioDelivery then petitioned the Federal Circuit for a rehearing en banc, but the Federal Circuit voted to deny the rehearing, with Circuit Judge Newman offering the only dissenting opinion.

The Court of Justice of the European Union has provided reassurance to European trademark owners in its judgment today in the SkyKick case. (Case C?371/18 Sky plc, Sky International AG, Sky UK Limited v SkyKick UK Limited, SkyKick Inc.) The case involves questions referred from the UK in a dispute over SkyKick’s alleged infringement of five of Sky’s EU and UK national trademarks. Sky is a well-known broadcaster and telecoms services provider, and SkyKick is a cloud services provider. The Court stated that “a lack of clarity and precision of the terms designating the goods or services covered by a trade mark registration cannot be considered contrary to public policy, within the meaning of those provisions” and that therefore the lack of clarity and precision in a specification is not a ground for invalidity: “a Community trade mark or a national trade mark cannot be declared wholly or partially invalid on the ground that terms used to designate the goods and services in respect of which that trade mark was registered lack clarity and precision.”

The U.S. Supreme Court today denied two petitions for certiorari filed by Trading Technologies and one by ChargePoint, Inc. asking the Court to review their cases related to the patent eligibility of their inventions. Trading Technologies’ inventions relate to graphical user interface tools, while ChargePoint’s invention is for a vehicle charging station. The denials are not surprising following the High Court’s refusal to allow a number of other petitions dealing with Section 101 earlier this month, including Athena Diagnostics v. Mayo Collaborative Services and HP Inc. v. Berkheimer. Athena was thought to have the best chance of being granted, especially after the United States Office of the Solicitor General (SG) in December weighed in on the petition in Hikma Pharmaceuticals v. Vanda Pharmaceuticals, recommending against granting cert in that case in favor of hearing one like Athena instead.

Outlined below is the story of how the America Invents Act (AIA) of 2011 made a novel 2002 invention obvious in 2018. I’m the first named inventor of the 7058524 patent, which was filed on October 25, 2002. The title of the patent is “Electrical Power Metering System”. Unfortunately, I was never able to produce, let alone market the meter. There were many barriers to entry for my essentially hardware-based invention. I was working full time and had a growing family to be concerned with. Following retirement in 2013, I decided to attempt to license the ‘524’ technology. In early fall 2014, I partnered with a Non-Practicing Entity (NPE). I received an up-front sum and had an agreement with the NPE to share (fairly in my view) in any ‘back-end’ licensing revenue. After extensive investigation and attempts at licensing, in 2016 the NPE asserted against Duke Energy in Delaware. We believed Duke’s new smart meters, particularly those using Itron’s OpenWay Riva technology, were infringing the ‘524 patent. Ultimately, we were Rule 36ed by the Federal Circuit. In my opinion, the key broken piece in the system is the way the AIA removed the probability of a jury trial from the patent holder by creating a post-grant system that allows for abuse and delay of other proceedings.

Part I of this series covered (1) Food Marketing Institute v. Argus Leader Media, 139  S.Ct. 2356 (2020) in which the Supreme Court held that commercial or financial information that is customarily and actually treated as private by its owner and provided to the government under an assurance of privacy is “confidential” under exemption 4 to the Freedom of Information Act and is therefore shielded from disclosure; (2) trade secret cases dismissed on the statute of limitations; (3) improper acts for unclean hands doctrine must be related to the misappropriation claim; (4) the Department of Justice’s continued and increasing focus on theft of trade secrets involving a Chinese connection; and (5) award of “head start” damages. In Part II, we will look at some additional important 2019 trade secret decisions and trends.

VirnetX on Wednesday filed its brief in opposition to Apple’s petition for certiorari to the Supreme Court, which asks the High Court to review the Federal Circuit’s January 2019 decision sustaining a $440 million award for VirnetX. In October 2019, the Federal Circuit issued a formal mandate in VirnetX, Inc. v. Cisco Systems and Apple, Inc., making its January 15, 2019 Rule 36 judgment against Apple final. The mandate came after the Court’s denial on October 1 of Apple’s motions to stay and vacate the August 1 decisions affirming-in-part, vacating-in-part, and remanding a decision of the Patent Trial and Appeal Board (PTAB), and separately denying Apple’s August 1 request for rehearing and rehearing en banc in its appeal from the U.S. District Court for the Eastern District of Texas ruling awarding VirnetX nearly $440 million.

Information technology giant IBM recently announced that it had agreed to join the LOT Network, a nonprofit patent risk management consortium designed to immunize its members from lawsuits filed by patent assertion entities (PAEs). The move brings an additional 80,000 patents and patent application under the aegis of the LOT Network, which currently offers its members immunity to 2.3 million global patent assets should those patents ever be sold to companies that make more than half of their gross revenue from patent assertions. Since the IBM announcement last week, LOT Network has added a few new members, including Japanese carmaker Toyota, which just announced today that it has agreed to join the consortium. Since we last covered LOT Network in August 2018, the organization has more than doubled in size from about 275 companies up to 623 companies. Since it was founded in 2014, LOT Network’s membership has increased by a compound annual growth rate of 115%.

In a landmark ruling, the Supreme Court finally unequivocally answered the question about whether copyright owners need to receive a Registration Certificate from the Copyright Office before filing suit for infringement and thus resolved a difference of opinion among various regional circuit courts. (Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC. Since this decision was issued, federal district courts have cited it in at least 63 decisions. What should artists, writers, and businesses do now to protect their creative work? How should attorneys alter the standard advice they give their clients? Let’s start with a review of what the ruling actually says.

Two things are true about the world of trademarks—it is rarely boring, and something is always on the horizon. The following are some of the significant trademark decisions of 2019, as well as two critical cases to watch as 2020 begins: 1. The Supreme Court’s ruling in Iancu v. Brunetti rejected the Lanham Act’s ban on offensive marks on the grounds that such a ban violates the First Amendment Right of Free Speech. The case involved clothing brand FUCT, which stands for “Friends You Can’t Trust,” and its founder, Erik Brunetti, who sought to register the brand’s name with the U.S. Patent and Trademark Office (USPTO). The USPTO refused to register the name, determining it was immoral and scandalous. Brunetti argued to the Trademark Trial and Appeal Board (TTAB) that the mark was not vulgar, and that Section 2(a) of the Lanham Act was unconstitutional because it violated the First Amendment. However, the TTAB affirmed the USPTO’s refusal and Brunetti appealed to the U.S. Court of Appeals for the Federal Circuit (CAFC).

The U.S. District court for the Northern District of Texas, Dallas Division, overturned a $10.1 million jury verdict on January 17 against Japanese gaming giant Nintendo under the Supreme Court’s Alice test, which the High Court recently declined to clarify amidst confusion. In August of 2017, a Texas jury entered a verdict against Nintendo, finding that the company had infringed upon a patent asserted by Texas-based medical tech firm iLife Technologies Inc. The jury agreed that iLife proved that it was owed $10.1 million in a lump sum royalty for the sales of a series of games for Nintendo’s Wii U console. The jury also found that Nintendo didn’t prove invalidity of the asserted patent. In its analysis overturning the jury verdict, the district court reasoned that “[a]t its core, Claim 1 is directed to the abstract idea of ‘gathering, processing and transmitting…information.’”

The primary purpose of the Defend Trade Secrets Act (DTSA) is to provide federal remedies to individuals and companies that have had their trade secrets misappropriated. That is not, however, its sole purpose. One of the DTSA’s more controversial provisions actually protects certain alleged misappropriators by precluding DTSA liability when an individual discloses trade secrets in the context of “whistleblowing” activity. Indeed, the DTSA’s immunity provision dictates that a whistleblower may not be held criminally or civilly liable for disclosing a trade secret, provided that the disclosure satisfies certain requirements. 18 U.S.C. § 1833. This immunity provision creates serious risk for companies: A whistleblower could expose a company to civil and criminal penalties stemming from the company’s alleged misconduct and simultaneously reveal valuable trade secrets, and the company would have no recourse. Fortunately, the immunity provision itself and the applicable case law, which is still in its infancy, can be used to develop a strategy for trade secret holders to avoid and/or mitigate this risk.

On January 13, the U.S. Court of Appeals for the Federal Circuit (CAFC) issued a precedential decision affirming the District Court’s judgment of invalidity as to the asserted claims of U.S. Patent No. 8,720,320 (the ‘320 patent) and the award of attorney’s fees. The CAFC also affirmed the ruling of infringement as to the asserted claims of U.S. Patent No. 8,707,855 (the ‘855 patent). Adrian Rivera and Adrian Rivera Maynez Enterprises, Inc. (ARM), owner of the ‘320 patent, initiated the lawsuit against Eko Brands LLC (Eko), owner of the ‘855 patent. ARM claimed Eko infringed claims 5-8 and 18-20 of the ‘320 patent.

Google v. Oracle America, a case pending before the United States Supreme Court, is a seemingly never-ending battle, since 2010, between two Silicon Valley behemoths. But now that battle may finally be nearing its conclusion. On January 7, the first of the amicus briefs were filed, signaling that both sides are marshaling their arguments for one final push toward the…

A case now pending before the Ninth Circuit, LTTB LLC v. Redbubble, Inc., Docket No. 19-16464, has the potential to clarify the controversial doctrine of aesthetic functionality. Aesthetic functionality has puzzled courts for decades. Particularly before the U.S. Supreme Court issued its modern guidance on functionality in Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844 (1982); TrafFix Devices v. Mktg. Displays, Inc., 532 U.S. 26 (2001), and Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159 (2d Cir. 2009), courts struggled with how to apply the aesthetic functionality doctrine and issued opinions that, in some instances, muddied the already murky aesthetic functionality waters. Perhaps the most notorious aesthetic functionality case is International Order of Job’s Daughters v. Lindeburg & Co., 633 F.2d 912 (9th Cir. 1980), a case that many observers believed to be abrogated by subsequent Supreme Court and Ninth Circuit opinions but that has recently continued to wreak havoc on trademark law.

On Tuesday, the Supreme Court heard oral arguments in Romag Fasteners v. Fossil, Inc., Fossil Stores, I. Inc., Macy’s Inc, and Macy’s Retail Holdings, Inc. to decide whether a successful trademark plaintiff must establish that infringement was willful as a hard prerequisite to an award of the infringer’s profits, rather than being just one of multiple factors to be weighed when determining entitlement to a profits award. Under the latter scheme, profits may be awardable even if the infringement was not willful. Taking the Justices’ comments at face value, it seems likely that Romag will prevail and profits may be disgorged for less-than willful infringement.