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Today in Matal v. Tam, the Supreme Court unanimously affirmed that the restriction on registration of disparaging marks violates the First Amendment's right of free speech. Justice Alito, writing for the majority, noted that the "vagueness of the disparagement test and the huge volume of applications has produced a haphazard record of enforcement" to date. Justice Kennedy, in a concurring opinion along with four other justices, noted that disparaging trademarks is "viewpoint discrimination" by the federal government. While the reasoning behind the decision is widespread, the immediate result is clear--the USPTO will begin to allow registration of disparaging marks and will no longer cancel any marks because they are disparaging. For the full case and opinion: https://www.supremecourt.gov/opinions/16pdf/15-1293_1o13.pdf.

The Supreme Court in Impression Products v. Lexmark reversed the CAFC decision regarding the scope of the patent exhaustion doctrine, holding that patent rights are exhausted completely for an authorized sale of a patented article to a purchaser, regardless of whether this occurs in the US or internationally. In other words, all patent rights on a patented article are exhausted upon its sale anywhere in the world. In reaching this conclusion, the Court noted that "nothing in the text or history of the Patent Act shows that Congress intended to confine that borderless common law principle to domestic sales", and rather, patent exhaustion "remains an unwritten limit on the scope of the patentee’s monopoly." For the full case and opinion -- https://www.supremecourt.gov/opinions/16pdf/15-1189_ebfj.pdf

Monday, 22 May 2017 18:42

Supreme Court Limits Patent Venue

Today, in TC Heartland LLC v. Kraft Food Brands Group LLC, the Supreme Court unanimously reversed a long standing practice which permitted venue over domestic corporations. Traditionally, venue was permissible wherever the court had personal jurisdiction over the defendant corporation. Going forward, however, "residence" as defined in the patent venue statute in 28 U.S.C. § 1400(b) will only refer to the State of incorporation. For the full opinion -- https://www.supremecourt.gov/opinions/16pdf/16-341_8n59.pdf.

In Mavrix Photographs, LLC v. LiveJournal, Inc. the 9th Circuit recently found that service providers are ineligible for Section 512 DMCA protection, where their agents acted as moderators for user submitted content. In this case, a three-judge panel reversed the lower court's finding, because the infringing materials at issue were not stored "at the direction of a user". The court noted that this question turned on the "role of the moderators in screening and posting users' submissions and whether their acts may be attributed to LiveJournal", the service provider. In aiding this determination, the court held that the common law of agency applies under the Supreme Court's Reid framework, noting that as applied to the DMCA -- "a service provider is liable for the acts of its agents, including its employees". This is in contradiction to a 10th Circuit decision in BWP Media USA, Inc. v. Clarity Dig. Grp. (10th Cir. 2016), holding that contractors and employees can also be "users". The case has been remanded for further fact finding at this point, and will likely turn to how the moderation was carried out, i.e. whether it was directed to "enhancing the accessibility of the posts", i..e screening for spam, trolling, or pornography, or whether the review was more extensive ("the fact finder should determine whether LiveJournal's manual, substantive review process went beyond the automatic processes we have approved as accessibility-enhancing activities such that the posts were still at the direction of the user").

President Trump recently signed Executive Order 13785, instructing the Commissioner of U.S. Customs and Border Protection (CPB) to develop and implement a strategy and plan for combating violations of United States trade and customs laws. The CPB is instructed to "take all appropriate steps, including rulemaking if necessary", to ensure that all intellectual property rights holders are notified of any information to determine whether there has been an intellectual property infringement or a violation of a US trade law. This order mirrors authority already provided by the 2015 amendment to the Tariff Act of 1930 (19 USC 1628a). https://www.gpo.gov/fdsys/pkg/FR-2017-04-05/pdf/2017-06967.pdf

Today, the Supreme Court in SCA Hygiene Prods. v. First Quality Baby Prods. (2017) held that the defense of laches cannot be invoked in patent cases to prevent legal damages within the 6-year statutory limitation set forth by 35 U.S.C. 286. In the overwhelming majority opinion authored by Justice Alito, the Court reiterated that laches is a judicial doctrine designed as an equitable relief, where there is no statute of limitations enumerated by law, or in other words, that laches is "a gap-filling doctrine, and where there is a statute of limitations, there is no gap to fill", but rather, "applying laches within a limitations period specified by Congress would give judges a 'legislation overriding' role that is beyond the Judiciary's power." For the full opinion -- https://www.supremecourt.gov/opinions/16pdf/15-927_6j37.pdf

In a drastic reversal, the Supreme Court in Life Tech. v. Promega Corp. decided to limit the scope of infringement under 35 U.S.C. 271(f)(1). 271(f)(1) provides for infringement for exporting "all or a substantial portion of the components of a patented invention". The Court ruled that the "supply of a single component of a multicomponent invention for manufacture abroad does not give rise to 271(f)(1) liability".

In a recent Federal Circuit opinion in Personal Web Technologies LLC v. Apple Inc., the court reiterated that a determination of patent invalidity based on 35 U.S.C. 103 "obviousness" requires not only a mere explanation that a person of ordinary skill could combine the cited prior art references, but must also explain how he or she would do so. On this basis, the lower PTAB decision was vacated and remanded, noting that the case lacked “a clear, evidence-supported account of the contemplated workings of the combination” to adequately explain and support the conclusion that a relevant skilled artisan would have been motivated to make the combination and reasonably expect success in doing so.

Wednesday, 15 February 2017 18:02

Oculus Breach of NDA Results in $500m to ZeniMax

Often clients and attorneys question the value of an extensive NDA, given that its enforceability may be questionable and its cost of enforcement high, as such a case often devolves down to a situation of "he said, she said". However when the stars and the facts align, a properly executed and well defined NDA may prove to be a valuable tool against unauthorized disclosures of confidential information. Case in point, earlier in the month, a jury awarded ZeniMax a $500 million award for copyright infringement, false designation, and breach of a non-disclosure agreement executed between ZeniMax and Oculus co-founder Palmer Luckey. This was less than the $4 billion award ZeniMax originally asked for, but is a substantial judgment against Oculus, especially given that $200 milliion of that award were for the NDA breach alone, where trade secret theft was not found. 

The U.S. District Court Northern District of California has updated its local patent rules. The latest local rules were approved on January 17, 2017 and becomes effective immediately, and can be found at http://cand.uscourts.gov/localrules/patent. A redline version showing the changes is also available. Notably, damage contentions at section 3-8 is now required for any party asserting infringement no later than 50 days of invalidity contentions. Civil local rule 3-15 has also been amended to require the disclosure of non-party interested entities or persons funding the prosecution of any claim or counterclaim.

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