On November 29, 2011, the United States Patent and Trademark Office (USPTO) published a “Request for Comments on Additional USPTO Satellite Patent Offices for the Nationwide Workforce Program.” The full text of the USPTO’s Request can be found here.

In Response to the USPTO Request, the Colorado Bar Association Intellectual Property Section worked closely with the offices of Denver Mayor Hancock, Governor Hickenlooper, Senator Bennet, the Metro Denver Economic Development Corporation and Accelerated Colorado (“the Coalition for a Colorado Satellite Patent Office”) to prepare and submitted Colorado’s proposal to the USPTO on January 27, 2012. Additional letters of support and the signed Joint Resolution 12-008, Concerning the State of Colorado’s support for locating a patent office in the Denver metro area, adopted by the Colorado Assembly during the 2012 legislative session were submitted to the USPTO on January 30, 2012. The IP Section would like thank everybody who submitted comments on and letters in support of a Colorado Satellite Patent Office.

Senator Bennet’s Office is currently running an online petition in support of a Colorado Satellite Patent Office. To date, Senator Bennet’s office has already received 2300 electronic signatures on the petition. The IP Section encourages you to view the petition and electronically sign on if you support it.

Please let the IP Section Leadership know if you have any questions or comments. Otherwise, the Leadership will continue to keep you updated on this Initiative.

The Colorado Supreme Court issued its opinion in Steward Software Co. v. Kopcho on December 12, 2011.

Civil Theft — Jury Instructions.

The supreme court holds that federal copyright law only governs ownership of a copyright in software code, not ownership of a material embodiment of the code. Because Steward Software alleged in this case that Kopcho committed civil theft of a material embodiment of the code, ownership of a copyright in the code is irrelevant. The trial court thus correctly refused to instruct the jury on principles of federal copyright law. The supreme court therefore reverses the judgment of the court of appeals

Summary and full case available here.

The America Invents Act, which was signed into law this fall, is the first major overhaul of our nation’s patent law in almost 50 years. Among its many significant provisions, the Act will change the United States patent system from “first-to-invent” to “first-to-file,” aligning the United States with the international standard. New procedures will be also established for third-party challenges to patent and applications, and changes will be made regarding who can file, when they can file, and what prior art can be used against them.

The Corporate Practice Update Series has been postponed.

The effects of the changes will be of particular importance for corporate counsel and privately held businesses, and will be discussed at a CLE program on December 7, 2011 as part of the Corporate Practice Update Series. Along with these developments, the Privately Held Businesses program will cover other issues, including legal issues in social media, social media policy for a privately-held company, and tax topics for small businesses.

The program is being presented by some of Colorado’s leading business entity experts:

• Fern O’Brien, Esq.
• Henry Smith, Jr., Esq.
• Liane Heggy, Esq.

And, don’t miss the other great sections of the Corporate Practice Update Series, covering the Civil Access Pilot Project, Business Entity Update, Securities, Franchises, M&A, and Ethics.

“Spark the Discussion” is a monthly Legal Connection column highlighting the hottest trends in the emerging field of medical marijuana law. This column is brought to you by Vicente Sederberg, LLC, a full-service, community-focused medical marijuana law firm.

I’ll start with a bold prediction: marijuana reform and same-sex marriage are the two policy areas in which young lawyers will see major movement in their lifetimes. These two “controversial” topics stand at the crossroads of a shift in society, with the younger generation pushing for increased tolerance of alternative lifestyles—whether it’s marriage choice or an individual’s decision to medicate—or recreate—with marijuana—and older Americans increasingly accepting that, at least with these two topics, change is inevitable.

This article will focus on medical marijuana law and policy—a dynamic field that an increasing number of Colorado lawyers are facing in their everyday practice. Currently, sixteen states (and the District of Columbia) have passed statewide medical marijuana laws, and a half-dozen others are poised to take similar action. What started largely as an area within criminal law practice—a small number of lawyers defending medical marijuana patients accused of criminal violations—has expanded into a cottage industry impacting nearly every area of legal practice. This column will highlight some of those areas and discuss the future of this hot topic.

Before reading further, please note that while medical marijuana is legal in Colorado and a growing number of states, and literally thousands of doctors recommend it every year for sick patients, it remains firmly illegal under federal law. Given these conflicting state and federal stances, it’s crucial that lawyers practicing in this area closely follow emerging trends and policies.

• Business Law:
• Colorado and several other states have medical marijuana laws with provisions allowing for retail stores known as dispensaries to sell marijuana to qualifying patients.  Budding entrepreneurs need guidance from attorneys who understand not only medical marijuana laws, but also traditional business law. All facets of corporate law, from drafting  operating agreements to negotiating commercial transactions, come into play with the operation of dispensaries.
• Family Law:
• An increasingly common theme in the family law realm is the presence of medical marijuana in custody battles or divorce proceedings. Often these disputes arise not from actual neglect or abuse, but merely from the presence of marijuana in the home. Patients need solid guidance to keep this—and all medicine—firmly away from children. There is a desperate need for lawyers who understand both medical marijuana law and family law and can advocate appropriately when the two areas overlap.
• Elder Law:
• As medical marijuana patients age they often end up in nursing homes or in-patient hospice care. When Maine’s medical marijuana law changed last November, the state expressly permitted nursing homes and hospice workers to act as registered medical marijuana caregivers for patients. Other states are silent on this issue. Large questions remain about federal funding for this type of care and how one patient’s possession of a federally-illegal substance could place others at legal risk.
• Civil Law:
• Legal medical marijuana businesses have the same problems as other, more mainstream businesses, and partnership disputes by owners of such stores are commonplace in Colorado. Some owners came out of a less-mainstream past, and built a million-dollar business without signing an operating agreement. In these messy situations, civil litigation is often the only remedy.
• Election and Municipal Law:
• The passage of a statewide medical marijuana law is invariably followed by conservative municipalities attempting to ban sales and cultivation within municipal borders. When Colorado passed a dispensary law in 2010, around 50 municipalities put measures on their local ballots to ban these retail shops in their communities. Whether through ballot initiative or action by a government body, there is a real opportunity for lawyers who understand election and municipal law to engage in this area.
• First Amendment:
• The most common complaint from community members about dispensaries is that they have offensive signage. While polls consistently show that roughly 80% of Americans support medical marijuana, most citizens don’t want it shoved in their face. Medical marijuana business owners need lawyers to explain their rights—and encourage discretion.
• Intellectual Property Law:
• “Can we patent the recipe for my marijuana cheesecake?” This question may seem peculiar, but my office gets several calls a week of this nature. As more patients turn to alternate forms of administering medical marijuana, such as through edibles or tinctures, interesting questions arise concerning protecting the manufacturer’s recipes and formulas.
• Criminal Law:
• As long as federal law continues to classify marijuana as a Schedule I Controlled Substance—the most dangerous and addictive class of drugs—there will be work for criminal defense attorneys representing medical marijuana patients and providers in federal court. On the state and local level, authorities continue to zealously target adults for marijuana crimes,  arresting over 750,000 citizens for possession of marijuana annually. That’s the equivalent of arresting every man, woman, and child in the state of Wyoming once a year!

As young attorneys in Colorado, we have an incredible opportunity in the field of medical marijuana law. Unlike property law or criminal law, this area is new and has very little case precedent. The young idealist attorney will fight out these important cases in the courtroom and establish laws that make sense both for the patient and the community.

Many lawyers initially chose this patient-centered line of work because they believed the time had come to pursue a more common-sense approach to marijuana and drug policy in America. Now, as lawyers from a diverse range of practice areas are entering this arena, let’s hope all remain true to the core principles that attracted most of us to this work:

Patients before politics; patients before profits.

The Tenth Circuit Court of Appeals issued its opinion in DISH Network Corp. v. Arch Specialty Ins. Co. on Monday, October 17, 2011.

The Tenth Circuit reversed and remanded the district court’s decision. Petitioner Corporation filed a diversity action in the District of Colorado, seeking a judgment declaring that its insurers had a duty under Colorado law to defend it in a patent infringement suit. The company claiming the infringement “asserted that Dish did so by ‘making, using, offering to sell, and/or selling . . . automated telephone systems, including without limitation the DISH Network customer service telephone system, that allow [Dish’s] customers to perform pay-per-view ordering and customer service functions over the telephone.’” The district court held that the underlying complaint against Petitioner’s insurers did not allege an “advertising injury” under the policies issued to Petitioner and granted the insurers’ motion for summary judgment.

However, the Court found that “the complaint potentially alleges advertising injury arising from the misappropriation of advertising ideas.” While the Court agreed with the district court’s conclusion that “patent infringement may, under certain circumstances, constitute ‘misappropriation of advertising ideas,’ the Court disagreed with its ruling that the patented means of conveying advertising content at issue here could not be ‘advertising ideas’ within the meaning of Dish’s commercial general liability policies.” Regarding the duty to defend, the Court held that the patent infringement complaint “may arguably fall within the polic[ies]” at issue because “it potentially alleged advertising injury arising from Dish’s misappropriation of its advertising ideas, which Dish committed in the course of advertising its goods, products, or services.” The Court therefore reversed the district court’s grant of summary judgment to the Insurers and remanded for further proceedings.

Co-Sponsored by the CBA Intellectual Property Section

The America Invents Act, which was signed into law by the president last week, is the first major overhaul of our nation’s patent law in almost 50 years. Among its many significant provisions, the Act will change the United States patent system from “first-to-invent” to “first-to-file,” aligning the United States with the international standard. New procedures will be also established for third-party challenges to patent and applications, and changes will be made regarding who can file, when they can file, and what prior art can be used against them.

Other provisions of the Act affect hot-topic issues, like false marking cases, business method and tax strategy patents, and joinder of unrelated parties by so-called trolls. These and other changes raise a host of questions for IP attorneys and their clients.  When and how should clients disclose their inventions?  How should clients think about the new options for challenging their competitors’ patents?  What tactics can clients use in anticipation of future derivation or post-grant proceedings?

A post by David Donoghue, patent attorney and Rocky Mountain IP Institute faculty member, reveals a few key elements of the legislation, but we invite you to learn everything you need to know about the fundamental changes to Intellectual Property and Patent Law at our CLE event on October 5, The America Invents Act – A Discussion of the Significant Changes in US Patent Law. Be the best advocate for your client by attending and making sure you know all the ins and outs of the new legislation.

The patent blogs are abuzz with detailed analysis of cloture votes, this month’s Senate hearings and the Senate’s overwhelming passage of the America Invents Act (the “AIA”).  With the AIA signed into law by President Obama last week, I am beginning a series of posts looking at its key provisions. This is the first of those posts.  It is based upon a post from earlier this week at my Retail Patent Litigation Blog.

Here are four key provisions of the AIA for patent litigators and litigants:

1. Smaller Patent Troll Suits: The most immediate impact on patent litigation will be Section 19, limiting joinder in a single suit of unrelated parties. This is not the more extreme restrictions on venue or joinder that many had hoped for. But it will have some positive impact on patent troll litigation. For suits filed on or after the date of enactment, plaintiffs will only be able to join related parties in a single suit — for example, multiple manufacturers, distributors or resellers of an identical product. And while cases against unrelated parties could still be joined for discovery, they will not be able to be joined for trial. At first glance, this is not much of a barrier to entry for patent trolls. Very few defendants get to trial, and cases may still be consolidated for discovery purposes at the court’s discretion. Where a troll today could pay one $350 filing fee and sue 100 unrelated defendants, after enactment that same troll would have to file 100 suits and pay $35,000 in filing fees. $35,000, however, is dwarfed by the settlement demands in many cases. The hassle of filing the extra suits and the related filing fees, however, may be enough to prevent suits against some of the much smaller entities that almost always end up in these suits. And the requirement of separate suits will allow defendants a much greater ability to seek transfer to an appropriate venue. So, while this is not the sea change that many sought, it is a real benefit to retailers who are tired of being sued in Texas and want a better shot at transferring cases. This Section only applies to cases filed after enactment, not pending cases. So, existing cases will not be impacted.
2. Post-Grant Review: The AIA establishes a brief window for post-grant and inter partes review in Section 6. Third parties may challenge the validity of any claim of a patent for nine months after a patent is granted or issuance of a reissued patent. But you cannot seek post-grant review after filing a suit involving the patent. And when post-grant review ends in a final Board decision, you give up the right to use the arguments used in post-grant review or arguments that could reasonably have been used, in a later ITC proceeding or district court litigation.
3. False Marking Restrictions: Private citizens that file false marking claims will be required to prove competitive injury and their damages will be limited to the injury. Additionally, Section 16(b) excludes marking with an expired patent from the false marking statute. Furthermore, Section 16 applies to all cases pending when the AIA is enacted, as well as cases filed thereafter. Section 16 will clear out many of the existing false marking cases, but leaves considerable room for competitor false marking cases.
4. First to Invent: One of the most publicized changes to the U.S. patent laws is the move to a first-to-file patent system, the system used by most of the rest of the world. The first-to-file system incentivizes filing patents as quickly as possible to avoid an earlier filing by a competitor. Section 3 softens the first-to-file system providing for a proceeding between patent owners if the junior patent holder can show that the senior patent holder’s invention was derived from the junior patent holder’s invention. These “derivation proceedings” will replace the current, seldom-used interferences.

Of course, there is much more to the AIA, but these key changes are a good way to start digging into it. If there are other provisions you view as on par with these four from a litigation perspective, I would love to hear about them. Future posts will look at some of the other provisions of the AIA.

Editor’s Note: Recent patent reform is the subject of a CLE program on Wednesday, October 5, entitled The America Invents Act – A Discussion of the Significant Changes in U.S. Patent Law. The event is being co-sponsored by the CBA Intellectual Property Section and presented by Daniel J. Sherwinter, Esq. Click here to register for the program or the live webcast.

The Tenth Circuit Court of Appeals issued its opinion in ClearOne Communications, Inc. v. Biamp Systems on Monday, August 8, 2011.

The Tenth Circuit affirmed in part and reversed in part the district court’s decision. Respondent filed suit against Petitioner alleging that Petitioner misappropriated its trade secrets by licensing products from another company that illegally incorporated those trade secrets. After a jury trial, the jury found in Respondent’s favor on all of its claims. The district court assessed damages for lost profits and unjust enrichment, awarded Respondent exemplary damages, and also ordered Petitioner to pay Respondent’s attorney fees and nontaxable expenses. Petitioner now appeals.

The Court affirmed all aspects of the district court’s judgment except for the lost profits and exemplary damages awards which constituted improper additur; “the district court’s interpretation of the jury’s verdict amounted to an improper additur because, due to the wording of the verdict form, it is entirely possible that the jury intended to find that [Respondent] suffered a total of $956,000 in lost profits.” As to those portions of the judgment, the Court reversed and remanded with directions to enter judgment against Petitioner for the original $956,000 jury verdict in lost profits, jointly and severally with the other defendants, and $853,334 in exemplary damages individually.

The Tenth Circuit Court of Appeals issued its opinion in ClearOne Comm’cns, Inc. v. Bowers on Friday, July 8, 2011.

The Tenth Circuit affirmed the district court’s decision. The case stems from the same facts as the case decided by the Tenth Circuit on June 27, 2011. Here, Petitioner contends that the district court erred in four respects: 1) in holding him in contempt of its injunctive orders; 2) in determining that it could exercise personal jurisdiction over him; 3) in directing him to appear in person at the July 31, 2009 show cause hearing, and in turn denying him the opportunity to present evidence and cross-examine ClearOne’s witnesses due to his failure to appear in person at that hearing; and 4) in refusing to recuse from the underlying case prior to trial and/or prior to the commencement of post-judgment proceedings.

The Court concluded that the district court did not err in any of these regards. Petitioner “was found by the district court to have been in active concert or participation with the WideBand defendants in violating the district court’s restraining and injunctive orders by producing and selling products that utilized the misappropriated trade secret. Consequently, it was unnecessary for [Respondent] to establish the essential elements of a trade secret misappropriation claim against him. Instead, all Respondent had to establish was that Petitioner violated the terms of the district court’s injunctive orders,” which it did, and there is no error in the district court’s determination. Additionally, the district court properly exercised personal jurisdiction over Petitioner for the purpose of entering contempt orders; the record establishes that Petitioner had actual notice of the district court’s injunctive orders and violated those injunctive orders in concert with a party. By doing so, Petitioner submitted himself to the district court’s jurisdiction. The Court also found Petitioner’s failure to seek a continuance of the hearing or voice any objections, and in turn choosing to attend the hearing via telephone, served as an acceptance of the terms outlined in the district court’s order and was not a violation of Petitioner’s due process rights. Lastly, the district court judge need not have recused herself from the case, as there was no evidence to show that her husband had an interest in the case.

The U.S. House has approved H.R. 1249 with strong bipartisan support. The Senate passed a similar measure, S. 23, in a 95-5 vote in March. The House bill, approved at the end of last month, has to be reconciled with the Senate version before it can be sent to the White House for President Obama’s signature. However, reconciliation is likely still a ways off since the Senate is out of session the week of July 4.

The House bill covers who can get a patent, how patents are reviewed and whether some types of ideas are eligible for protection. Central to the bill is language regarding the collection and spending of usage fees by the U.S. PTO. Under the bill, a special fund will be established and the U.S. PTO will have to submit spending plans to Congress to access the funds. Thus, it does not look like the final bill will include a guarantee of full funding of user fees for the U.S. PTO.

The bill also included provisions that would grant patents to the first inventor to file an application, create a new process to review patents after they’ve been issued, and establish a special type of review of patents for finance-related business methods. Other provisions would limit lawsuits in which a manufacturer is accused of putting expired patent numbers on packaging; limit patents on tax-avoidance strategies; allow for third parties to submit information that could be used in the review process; and establish satellite offices the agency could set up nationwide to tap into local workforces.

To access the full text of the bill, please go to: http://thomas.loc.gov/ and enter H.R.1249 in the search area.