Patent – Patently-Ohttps://patentlyo.comAmerica's leading patent law blogen-USThu, 25 May 2017 15:31:20 PDThourly1http://www.mbhb.comhttp://patentlyo.com/media/2014/10/mcdonnell-boehnen-hulbert-berghoff-logo2.pngSponsored by MBHB LLPPatentlyo Bits and Bytes by Anthony McCainhttp://feedproxy.google.com/~r/PatentlyO/~3/gtEwRt08vVI/patentlyo-bits-and-bytes-by-anthony-mccain-33.htmlPatentAnthony McCainThu, 25 May 2017 13:12:30 PDThttps://patentlyo.com/?p=20187
  • Gene Quinn: SCOTUS Reverses Federal Circuit In TC Heartland
  • Shawn Knight: Apple And Nokia Settle Intellectual Property Dispute
  • Vera Ranieri: No Evidence That “Stronger” Patents Will Mean More Innovation
  • Donald Zuhn: Biscotti v. Microsoft
  • Scott Mckeown: Public vs. Private Rights: Another PTAB Distraction
  • John Aquino: Proposals Stress Need To Change Patent Eligibility Law
  • Get a Job doing Patent Law                  

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    Gene Quinn: SCOTUS Reverses Federal Circuit In TC Heartland Shawn Knight: Apple And Nokia Settle Intellectual Property Dispute Vera Ranieri: No Evidence That “Stronger” Patents Will Mean More Innovation Donald Zuhn: Biscotti v. Microsoft Scott Mckeown: Public vs. Private Rights: Another PTAB Distraction John Aquino: Proposals Stress Need To Change Patent Eligibility Law Get a […]https://patentlyo.com/patent/2017/05/patentlyo-bits-and-bytes-by-anthony-mccain-33.html/feed31https://patentlyo.com/patent/2017/05/patentlyo-bits-and-bytes-by-anthony-mccain-33.html
    Chisum on IPR Initiationhttp://feedproxy.google.com/~r/PatentlyO/~3/7gl47msuTL0/20168.htmlPatentDennis CrouchThu, 25 May 2017 03:15:13 PDThttps://patentlyo.com/?p=20168Chisum-MuellerIn an email distribution regarding their upcoming Chisum Patent Academy, Don Chisum and Janice Mueller opine on the upcoming Supreme Court case of SAS v. Lee.

    They write:

    The Court will address, at least indirectly, the PTO’s rule 37 CFR § 42.108(a). The rule allows the Patent Trial and Appeal Board (PTAB) to institute inter partes review (IPR) on (and, implicitly, to adjudicate) only some of the claims of a patent challenged in a petition (and, also, only on some of multiple grounds of unpatentability). . . .

    More likely than not, the Supreme Court will invalidate the practice that rule 108(a) makes possible as contrary to the governing statutes. 35 USC Section 318(a) requires that the PTAB “issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner.” If the PTAB must rule on all claims challenged in a petition in its final decision, it makes no sense to allow the PTAB (per Rule 108(a)) to “institute” review on fewer than all those claims. (NOTE: the statute on institution, 35 USC 314(a), sets a reasonable-likelihood-of-unpatentability “threshold” for “at least 1 of the claims challenged in the petition.” That can easily be read as contemplating that only one of the challenged claims must meet the threshold and that all challenged claims will be carried into a review upon institution, whether or not they met the threshold standard.)

    Briefing in the case will go through the summer.

     

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    In an email distribution regarding their upcoming Chisum Patent Academy, Don Chisum and Janice Mueller opine on the upcoming Supreme Court case of SAS v. Lee. They write: The Court will address, at least indirectly, the PTO’s rule 37 CFR § 42.108(a). The rule allows the Patent Trial and Appeal Board (PTAB) to institute inter partes review […]https://patentlyo.com/patent/2017/05/20168.html/feed69https://patentlyo.com/patent/2017/05/20168.html
    PBS News Hour on Patent Trollshttp://feedproxy.google.com/~r/PatentlyO/~3/SkOSx93XpB8/news-patent-trolls.htmlPatentDennis CrouchWed, 24 May 2017 19:32:30 PDThttps://patentlyo.com/?p=20179

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    Fame is Relative in the Trademark Contexthttp://feedproxy.google.com/~r/PatentlyO/~3/8wpT7L3BLlQ/relative-trademark-context.htmlPatentTrademarkDennis CrouchWed, 24 May 2017 08:37:50 PDThttps://patentlyo.com/?p=20161by Dennis Crouch

    Joseph Phelps Vineyards v. Fairmont Holdings (Fed. Cir. 2017)

    Phelps Vineyards has been selling its INSIGNIA wine for the past 40 years — often at $200+ per bottle. In 2012, Fairmont received its federal registration for the mark ALEC BRADLEY STAR INSIGNIA for cigars.  Phelps Vineyard petitioned for cancellation before the Trademark Trial and Appeal Board (TTAB). Insignia

    Although different market areas, Phelps Vineyards argued that the fame of its mark increased the likelihood of confusion.  However, the TTAB rejected that argument – finding that “Petitioner’s mark is not famous” and thus gave that DuPont factor no weight.  On appeal, the Federal Circuit has vacated that decision – finding that “fame” in the likelihood of confusion analysis is not a binary yes/no consideration but rather “varies along a spectrum” from not famous at all to extremely famous: think Chester Arthur to Donald Trump.   Note here – the DuPont factor of fame is totally different from dilution fame, which is a yes/no question.

    Donald-Trump2220px-20_Chester_Arthur_3x4

    In looking at the facts of the case here, the appellate panel noted substantial evidence that INSIGNIA wine “is renowned in the wine market and among consumers of fine wine. . . . We are perplexed at the Board’s finding that INSIGNIA wine has no ‘fame,’ giving no discernable weight to this factor. . . . The factor of ‘fame’ warrants reasonable weight, among the totality of the circumstances.”

    On remand, the TTAB will take-up the case again and determine whether this change impacts the results in any way.  Of course, a conclusion that INSIGNIA is famous in the wine business certainly does not directly lead to the conclusion that the mark ALEC BRADLEY STAR INSIGNIA is confusingly similar when used to sell cigars.

    StarInsigniaAn interesting aspect of the decision is that it was written as a per-curiam opinion of the court (Judges Newman, Dyk, and Wallach).  However, Judge Newman also penned a concurring opinion noting two additional errors made by the board:

    1. Although the Board found that the wine and cigars are sold in the same channels of trade to the same purchasers, it did not further explore the DuPont factor of “relatedness.”
    2. In considering the likelihood of confusion of the marks, the Board did not consider Fairmont’s actual use of its mark that placed the word INSIGNIA in a dominant format – raising the likelihood of confusion.

    Since these notations are in the concurring opinion, the TTAB is not directly bound to follow Judge Newman’s suggestions, but will do well to given them full consideration on remand.

     

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    by Dennis Crouch Joseph Phelps Vineyards v. Fairmont Holdings (Fed. Cir. 2017) Phelps Vineyards has been selling its INSIGNIA wine for the past 40 years — often at $200+ per bottle. In 2012, Fairmont received its federal registration for the mark ALEC BRADLEY STAR INSIGNIA for cigars.  Phelps Vineyard petitioned for cancellation before the Trademark Trial […]https://patentlyo.com/patent/2017/05/relative-trademark-context.html/feed41https://patentlyo.com/patent/2017/05/relative-trademark-context.html
    The DTSA Giveth But Does Not Taketh Awayhttp://feedproxy.google.com/~r/PatentlyO/~3/rKO_GCHF-sI/dtsa-giveth-taketh.htmlPatentDTSATrade SecretsDennis CrouchWed, 24 May 2017 04:25:06 PDThttps://patentlyo.com/?p=20156Further thoughts on the Defend Trade Secrets Act and inevitable disclosure

    Guest post by Maxwell Goss. Dr. Goss is a business litigator with Rossman Saxe, P.C. in Troy, Michigan. His practice focuses on non-compete, trade secret, intellectual property, and shareholder law and litigation. Dr. Goss blogs at Law and the Creative Economy.

    Last week I wrote about the doctrine of “inevitable disclosure” as it relates to the Defend Trade Secrets Act of 2016 (DTSA), the statute that created a general, private cause of action for trade secret misappropriation under federal law. Because inevitable disclosure is of continuing importance and controversy, I wanted to unpack the issues further here. As discussed below, the DTSA leaves room for trade secret plaintiffs to assert inevitable disclosure.

    Trade secret plaintiffs frequently face problems of proof. Gathering evidence that a suspected individual or company has actually misappropriated trade secrets, or legitimately threatens to misappropriate trade secrets, can be a substantial hurdle to getting a lawsuit off the ground.

    Take a typical scenario where an employee of company A goes to work for company B, and A alleges that the employee is using its trade secrets on behalf of B. In some cases, company A will have evidence that the employee swiped its secrets before leaving, perhaps by emailing himself a customer list or downloading technical specifications onto a flash drive. Company A might even have evidence that company B is now using the secrets, perhaps because it is soliciting A’s customers or has launched a product based on A’s specifications. In many cases, though, the activities of the employee and the new employer are a black box. The employee was exposed to trade secrets at Company A, and is now working for Company B, but Company A has not uncovered evidence of specific disclosures to Company B. Company A may have reason to believe the employee must be disclosing secrets to B, or threatens to do so, but has no way to confirm this directly prior to filing suit and obtaining discovery—a catch-22. Is company A without recourse?

    Enter the “inevitable disclosure” doctrine. Under this common-law doctrine, a trade secret plaintiff may base a claim for trade secret misappropriation on a showing that disclosure of trade secrets is “inevitable.” In PepsiCo, Inc. v. Redmond, the landmark Seventh Circuit case on inevitable disclosure, a former employee of PepsiCo went to work for a competing beverage company. Notably, there was no allegation that the employee had stolen specific information and given it to the competitor. Instead, PepsiCo argued that the employee could not help but use the company’s trade secrets to help its competitor “achieve a substantial advantage” and “respond strategically” through his knowledge of PepsiCo’s pricing, distribution, and marketing information. Because his reliance on such information was inevitable, the court affirmed an injunction barring the former employee from assuming his position at the competitor company.

    The doctrine of inevitable disclosure is controversial, and is only recognized in some jurisdictions. One objection is that it essentially allows courts to impose a non-compete on those who never signed a non-compete agreement. Another objection is that it facilitates abusive lawsuits against former employees based on flimsy evidence. Yet another objection is that it can enable a company to obtain an injunction that damages a competitor without any evidence of wrongful conduct by the competitor itself. Unsurprisingly, then, inevitable disclosure was frequently discussed in the lead-up to the passage of the Defend Trade Secrets Act. As enacted, the DTSA did ultimately limit the application of the doctrine. Though the language of the DTSA largely tracks that of the Uniform Trade Secrets Act (UTSA), which has been enacted in some form in nearly all states, the DTSA departs from the UTSA in that it expressly disallows injunctions that “prevent a person from entering into an employment relationship” and prohibits any conditions placed on a person’s employment in an injunction based “merely on the information the person knows.”

    In light of this language, many observers have concluded that inevitable disclosure is a dead letter under the DTSA. For example, one article states that the DTSA “explicitly rejects the inevitable disclosure doctrine under federal law.” To take another example, I recently attended a (very good) presentation in which it was stated that inevitable disclosure is “foreclosed” by the DTSA. And I would be remiss not to mention that I myself declared in a CLE presentation last year that “[t]he DTSA seemingly rejects inevitable disclosure by dictating that conditions on employment in an injunction may not be based merely on information the person knows.”

    But the doctrine of inevitable disclosure lives on under the DTSA, albeit in a diminished form. As explained in my previous post, the court in Molon Motor and Coil Corp. v. Nidec Motor Corp. recently held that a plaintiff had successfully stated a claim for trade secret misappropriation under the DTSA where it had pled allegations supporting an inference that a former employee who went to work for a direct competitor would inevitably have disclosed the plaintiff’s trade secrets to the competitor during the period in which the DTSA has been in effect. The court added: “Of course, further discovery could upend any or all of this, but at this stage, continued use beyond the May 2016 effective date [of the DTSA] is plausible.” Notably, the court then ordered the parties to discuss a “discovery plan on the trade secret claims.” In short, the plaintiff’s allegations of inevitable disclosure entitled it to move forward on both its federal and state trade secret claims.

    It would be easy to dismiss Molon as dealing only with a narrow issue of limited importance. The Court’s principal concern, after all, was how the DTSA applies where the alleged theft at issue preceded its passage—an issue relevant in only a few and declining number of cases. But the ruling should not be dismissed so quickly. In reaching its holding, an essential part of the Court’s analysis was that was that inevitable disclosure can in fact support a DTSA claim. This conclusion has at least two potential implications applicable beyond the specific procedural posture of the case.

    First, the DTSA could be used to secure jurisdiction in federal court and then state law could be used to secure an injunction based on inevitable disclosure. Consider companies A and B again. Company A wants to sue an employee of company B in federal court—for instance, because of perceived advantages in bringing the case before a federal judge or because of the streamlined process for obtaining discovery across state lines under the federal rules. But suppose the parties are citizens of the same state. Prior to passage of the DTSA, unless there had been some hook other than diversity jurisdiction for bringing the case in federal court, company A would have been forced to bring the case in state court. Under the DTSA, diversity of citizenship does not matter. Company A can bring the case in federal court regardless of the parties’ citizenship.

    If company A goes this route, is it stuck with the DTSA’s strict limitations on injunctive relief, including the prohibition of injunction based “merely on the information the person knows”? Very arguably not. By its own terms, the DTSA does not preempt state trade secret law, and state law claims will nearly always be available in cases where the DTSA applies. Assuming the applicable state law permits injunctive relief based on inevitable disclosure, company A could file a concurrent claim for trade secret misappropriation under state law and obtain an injunction based on an inevitable disclosure theory. In such a case, the DTSA would be used to obtain federal court jurisdiction while state law would be used to obtain the desired relief.

    Second, the DTSA stops well short of barring all injunctive relief based on inevitable disclosure. The limitations on injunctions under the statute apparently extend only to employment relationships: An injunction may not “prevent a person from entering into an employment relationship,” and any conditions on employment must be based on “evidence of threatened misappropriation and not merely on the information the person knows.” This suggests that an injunction that does not impact employment may still be based on inevitable disclosure.

    For example, if company A can offer evidence that an employee who departed for company B will inevitably disclose A’s trade secrets to B, a court conceivably might grant an injunction prohibiting B from using or disclosing A’s trade secrets. For companies that believe their trade secrets are being misused but cannot get into the “black box” of the competitor’s activities prior to discovery, this could be a major advantage. More controversially, a court could grant an injunction directly against the employee based on inevitable disclosure, provided the injunction does not prevent the employee from working for company B or impose conditions on his or her employment.

    If the Molon opinion is any indication, the DTSA giveth but the DTSA does not taketh away. That is, a trade secret owner can use the DTSA to bring its case in federal court, and can avail itself of the distinctive benefits and relief available under the DTSA, without losing its ability to assert inevitable disclosure in jurisdictions recognizing the doctrine under state law. Of course, it is unknown how other courts would address similar issues. (As far as I can determine, while a few opinions have made passing reference to inevitable disclosure in DTSA cases, Molon is the first to directly address the applicability of the doctrine under the DTSA.) At a minimum, though, the opinion indicates that rumors of the demise of inevitable disclosure are greatly exaggerated.

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    Further thoughts on the Defend Trade Secrets Act and inevitable disclosure Guest post by Maxwell Goss. Dr. Goss is a business litigator with Rossman Saxe, P.C. in Troy, Michigan. His practice focuses on non-compete, trade secret, intellectual property, and shareholder law and litigation. Dr. Goss blogs at Law and the Creative Economy. Last week I wrote […]https://patentlyo.com/patent/2017/05/dtsa-giveth-taketh.html/feed23https://patentlyo.com/patent/2017/05/dtsa-giveth-taketh.html
    Written Description’s Shifting Focus to the Accused Embodimenthttp://feedproxy.google.com/~r/PatentlyO/~3/XgTeQBRrew8/descriptions-shifting-embodiment.htmlPatentWritten DescriptionDennis CrouchTue, 23 May 2017 14:35:06 PDThttps://patentlyo.com/?p=20144US08720320-20140513-D00004by Dennis Crouch

    Rivera v. ITC and Solofill (Fed. Cir. 2017)

    After conducting an investigation, a divided majority of commissioners of the USITC found no-violation of Adrian Rivera’s U.S. Patent No. 8,720,320 directed toward a re-usable K-cup that work with coffee pods. Investigation No. 337-TA-929.  In particular, the decision found all asserted claims invalid for lack of written description. On appeal, the Federal Circuit has affirmed — finding substantial evidence supported the Commission’s holding.

    The original set of claims focused on a cup (brewing chamber) designed to hold a “pod” using a “pod adaptor assembly.” However, during prosecution, the patentee cancelled those original claims and replaced them with ones more broadly directed to a “container . . . adapted to hold brewing material.”  The expansion captured within its scope competitors who created reusable K-cups that hold loose grounds (instead of pods) that include a filter integrated into the cup.

    Section 112 of the Patent Act requires the patentee to submit “a written description of the invention.”  Timing-wise, this Written Description Requirement is been interpreted require the full description at the time of filing of the application.  The difficulty for many patent applicants is that the scope of the claimed invention can change significantly during prosecution through the amendment process.  Problems arise both when patentees attempt to narrow claims to overcome prior art and also (as here) expand claim scope to capture market developments.  During prosecution, a written description problem is usually identified as improper “new matter” and is correctable.  During infringement litigation, however, a claimed invention lacking sufficient description in the specification will be found invalid and unenforceable.

    The test for written description is an objective inquiry that considers whether the original specification “shows that the inventor actually invented the invention claimed.” Ariad Pharm., Inc. v. Eli Lilly & Co., 598 F.3d 1336, 1351 (Fed. Cir. 2010) (en banc).  The Federal Circuit considers written description a question of fact. This means that the appellate court gives deference to the lower court/agency determination on appeal.

    Focus on the Infringement: At the litigation stage, courts (including the Federal Circuit) considering the written description requirement have a tendency to shift its gaze from the claims and instead also include the accused device in the analysis.  Here, the court looked at the accused Solofill cups that include the particular differences from Rivera’s original disclosure: (1) Solofill cups use loose grounds rather than coffee-pods; and (2) Solofill cups include a filter integrated into the cup itself.

    Taking this infringement-focused approach, the claimed “container . . . adapted to hold brewing material” can only work with loose grounds if the container includes a filter of its own.  And, the patent specification does not indicate that configuration is part of the invention.  As such, the claims fail the written description requirement and therefore are invalid.

    The outcome here is similar to that of ICU Medical v. Alaris Medical System (Fed. Cir. 2009) and Liebel-Flarsheim v. Medrad (Fed. Cir. 2007) (though an enablement case).

    Not Enablement: One of Rivera’s failed arguments is that a person of skill in the art could quite easily make the integrated filter since they were already known in the art.  On appeal, the Federal Circuit rejected that argument — holding that this argument goes toward enablement, which is separate and distinct from written description. For its part, the purpose of the written description requirement is to prove that the inventor actually possessed the invention – and thus requires disclosure in the specification.

    Omitted Element: This case is similar to other omitted element cases. In his email, Prof Wegner writes: “The patented claims were broader than all disclosed embodiments:  The claims omitted one of the features common to all embodiments of the patent application as filed.”

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    by Dennis Crouch Rivera v. ITC and Solofill (Fed. Cir. 2017) After conducting an investigation, a divided majority of commissioners of the USITC found no-violation of Adrian Rivera’s U.S. Patent No. 8,720,320 directed toward a re-usable K-cup that work with coffee pods. Investigation No. 337-TA-929.  In particular, the decision found all asserted claims invalid for lack of written […]https://patentlyo.com/patent/2017/05/descriptions-shifting-embodiment.html/feed76https://patentlyo.com/patent/2017/05/descriptions-shifting-embodiment.html
    Supreme Court Reins In Patent Venuehttp://feedproxy.google.com/~r/PatentlyO/~3/r31LMmcVjus/supreme-court-reins-patent.htmlPatentSupreme CourtVenueDennis CrouchMon, 22 May 2017 07:52:08 PDThttps://patentlyo.com/?p=19655by Dennis Crouch

    In TC Heartland LLC v. Kraft Foods Group Brands LLC, the Supreme Court has significantly shifted the balance away from the geographically fringe Eastern District of Texas – holding that the residence requirement of 28 U.S.C. § 1400(b) refers only to a defendant’s State of Incorporation for patent infringement venue purposes.

    Read the Decision: 16-341_8n59.

    The short (10-page) unanimous opinion authored by Justice Thomas reaffirms the court’s prior decision in Fourco Glass Co. v. Transmirra Products Corp., 353 U. S. 222, 226 (1957) — holding again that “for purposes of §1400(b) a domestic corporation ‘resides’ only in its State of incorporation” and rejecting the notion that a much broader definition of venue (found in §1391) applies.

    Although the Supreme Court law appears continuous.  The Federal Circuit created a major blip in its 1990 decision of VE Holding Corp. v. Johnson Gas Appliance Co., 917 F. 2d 1574 (1990).  In that case, the appellate court held that patent infringement venue is proper in any court having personal jurisdiction over the defendant.  That expansive change allowed for the rise of patent-focused venues such as the Eastern District of Texas where the majority of infringement lawsuits have been filed over the two decades (heat map below). PatentLawPic984

    What next:  Section 1400(b) limits patent cases to the judicial district (1) “where the defendant resides,” or (2) “where the defendant has committed acts of infringement and has a regular and established place of business.”  This means a likely large boost of lawsuits in Delaware.  National retailers will still be amenable to suit essentially everywhere, but many would-be defendants will be able to avoid E.D.Texas at least. There will also be new litigation on the implications for foreign companies with no established place of business in the US.  The decision here expressly refuses to address that question other than noting that it did previously decide that foreign corps can be an exception to 1400(b). Although possible, it is unlikely the court will adapt the “established place of business” to include the internet, although that portion of 1400(b) has not been explored since the e-tailing explosion.  With less concentrated venue, I we can also expect a rise in multi-district litigation.  For more, consider Prof Janicke’s article on the Imminent Outpouring from the Eastern District of Texas.

     

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    by Dennis Crouch In TC Heartland LLC v. Kraft Foods Group Brands LLC, the Supreme Court has significantly shifted the balance away from the geographically fringe Eastern District of Texas – holding that the residence requirement of 28 U.S.C. § 1400(b) refers only to a defendant’s State of Incorporation for patent infringement venue purposes. Read the Decision: 16-341_8n59. The short […]https://patentlyo.com/patent/2017/05/supreme-court-reins-patent.html/feed142https://patentlyo.com/patent/2017/05/supreme-court-reins-patent.html
    SAS Institute v. Lee: Partial Institution of Inter Partes Reviewhttp://feedproxy.google.com/~r/PatentlyO/~3/h_h3bOIt79U/institute-institution-decision.htmlPatentAIA TrialsIPRSupreme CourtDennis CrouchMon, 22 May 2017 06:39:25 PDThttps://patentlyo.com/?p=19609by Dennis Crouch

    The Supreme Court has agreed to hear a new AIA-trials case: SAS Institute v. Lee

    The inter partes review appeal focuses on the procedural question of whether the America Invents Act permits the USPTO to partially institute IPR proceedings – as it has been doing. SAS argues instead that the statute requires a full up/down vote on a petition and, if granted, the Patent Trial and Appeal Board (PTAB) must then pass final judgment on all petitioned claims:

    Whether 35 U.S.C. § 318(a) … requires [the] Board to issue a final written decision as to every claim challenged by the petitioner, or whether it allows that Board to issue a final written decision with respect to the patentability of only some of the patent claims challenged by the petitioner, as the U.S. Court of Appeals for the Federal Circuit held.

    As I previously wrote,

    The basic setup here is that SAS argues that the PTO cannot partially institute IPR proceedings since the statute requires that PTO “shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner.” 35 U.S.C. § 318(a)

    Although a somewhat sideline issue, it will likely have its biggest impact on estoppel resulting from AIA trials and, as a result, may also shift filing strategy.

    AIA Trial Docs:

     

     

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    by Dennis Crouch The Supreme Court has agreed to hear a new AIA-trials case: SAS Institute v. Lee The inter partes review appeal focuses on the procedural question of whether the America Invents Act permits the USPTO to partially institute IPR proceedings – as it has been doing. SAS argues instead that the statute requires a full up/down vote […]https://patentlyo.com/patent/2017/05/institute-institution-decision.html/feed27https://patentlyo.com/patent/2017/05/institute-institution-decision.html
    Guest Post: Where we Stand with Trade Secret Enforcement in Federal Courtshttp://feedproxy.google.com/~r/PatentlyO/~3/ZCEZCXzZmUo/secret-enforcement-federal.htmlPatentAIA TrialsDTSAEnablementPGRTrade SecretsThu, 18 May 2017 09:09:29 PDThttps://patentlyo.com/?p=16697Guest Post by Prof. David Opderbeck (Seton Hall), originally published on his blog The CyberSecurity Lawyer.

    Introduction

    Trade secrets are important to cybersecurity because many data breaches involve trade secret theft.  The Defend Trade Secrets Act of 2016 (DTSA) amended the Espionage Act of 1996 to provide a federal private right of action for trade secret misappropriation.   Some commentators opposed the DTSA in part because it seems redundant in light of state trade secret law and could lead to unnecessary litigation and restrictions on innovation.  Now that the DTSA has been in effect for nearly a year, I conducted an empirical study of cases asserting DTSA claims (with the able help of my research assistant, Zach Hansen).  This post summarizes the results of that study.

    Methodology

    We ran keyword searches in the Bloomberg Law federal docket database to identify cases asserting DTSA claims in federal courts.  It is not possible to search only on the Civil Cover Sheet because there is no discrete code for DTSA claims.  Our search ran from the effective date of the DTSA (May 26, 2016) through April 21, 2017 (just prior to our symposium on the DTSA at Seton Hall Law School).  After de-duping, we identified 280 unique Complaints, which we coded for a variety of descriptive information.  Our raw data is available online.

    Findings

    This chart shows the number of filings by district:

    We were not surprised to see that the Northern and Central Districts of California, Southern District of New York, or District of Massachusetts were among the top five.  We were surprised, however, to see the Northern District of Illinois tied for first.  This could reflect the influence of the financial services industry in Chicago, but further research is required.

    The next chart shows the number of filings by month:

    It is interesting to note the decline in filings following the initial uptick after the May 26, 2016 effective date.  Perhaps this reflects a slight lull during the summer months.  Filings then remained relatively steady until March, 2017, when they increased significantly.  This could have something to do with the quarterly business cycle or bonus season, since many of the cases (as discussed below) involve employment issues.  Or, it could reflect a random variation given the relatively small sample size.

    We next examined other claims filed along with the DTSA counts in these Complaints:

    We excluded from this chart related state law trade secret claims.  Not surprisingly, nearly all the cases included claims for breach of contract.  As noted above, trade secret claims often arise in the employment context in connection with allegations of breach of a confidentiality agreement or covenant not to compete.  Another finding of note was that a fair number of cases assert Computer Fraud and Abuse Act claims, although the number is not as high as expected.  Most trade secret cases today involve exfiltration of electronic information, but perhaps many cases do not involve hacking or other access techniques that could run afoul of the CFAA.

    We also noted a smaller but not insignificant number of cases asserting other intellectual property claims, including trademark, copyright and patent infringement.  Since many documents taken in alleged trade secret thefts are subject to other forms of intellectual property — particularly copyright — this may show that some lawyers are catching on to the benefit of asserting such claims along with DTSA claims.

    Finally, our review of case status revealed the following:

    • 198 cases in various pre-trial stages
    • 61 cases dismissed
    • 5 preliminary injunctions
    • 4 final judgments, including 2 permanent injunctions
    • 3 default judgments
    • 1 case sent to compulsory arbitration
    • 8 undetermined / miscellaneous

    At first blush, the number of cases dismissed seems high, given that none of the cases have been pending for more than a year.  We assume the vast majority of these cases settled, though further investigation is required.  In contrast, the number of preliminary injunctions granted seems very low.  Again, further investigation is required, but so far it does not seem that the DTSA is resulting in the kind of preliminary injunction practice we expected to see under a federal trade secret statute.

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    Guest Post by Prof. David Opderbeck (Seton Hall), originally published on his blog The CyberSecurity Lawyer. Introduction Trade secrets are important to cybersecurity because many data breaches involve trade secret theft.  The Defend Trade Secrets Act of 2016 (DTSA) amended the Espionage Act of 1996 to provide a federal private right of action for trade secret misappropriation. […]https://patentlyo.com/patent/2017/05/secret-enforcement-federal.html/feed4https://patentlyo.com/patent/2017/05/secret-enforcement-federal.html
    SAS Institute Inc. v. Lee: Challenging Partial Institutionhttp://feedproxy.google.com/~r/PatentlyO/~3/uQxVkfvqfxE/institute-challenging-institution.htmlPatentAIA TrialsIPRSupreme CourtDennis CrouchThu, 18 May 2017 08:14:45 PDThttps://patentlyo.com/?p=16694The Supreme court has relisted SAS Institute Inc. v. Lee, 16-969 – an important step in the progress toward grant of certiorari.  The inter partes review case presents the following question:

    Whether 35 U.S.C. § 318(a) … requires [the] Board to issue a final written decision as to every claim challenged by the petitioner, or whether it allows that Board to issue a final written decision with respect to the patentability of only some of the patent claims challenged by the petitioner, as the U.S. Court of Appeals for the Federal Circuit held.

    The basic setup here is that SAS argues that the PTO cannot partially institute IPR proceedings since the statute requires that PTO “shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner.”

    Although the Department of Justice has sided with the PTO’s approach here, in a prior filing the DOJ argued that the PTO erred in “picking and choosing some but not all of the challenged claims in its Decision.” See Department of Justice v. Discovery Patents, LLC, Case IPR2016-01041 (Patent Trial & Appeal Bd., Nov. 29, 2016).

    The outcome of a rule-change here  is unclear – while the patent challenger (SAS) is petitioner here.  Patentees may prefer the all-or-nothing approach that would hopefully result in final judgments confirming patentability as well as the resulting estoppel.

     

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    The Supreme court has relisted SAS Institute Inc. v. Lee, 16-969 – an important step in the progress toward grant of certiorari.  The inter partes review case presents the following question: Whether 35 U.S.C. § 318(a) … requires [the] Board to issue a final written decision as to every claim challenged by the petitioner, or whether it allows that Board to […]https://patentlyo.com/patent/2017/05/institute-challenging-institution.html/feed11https://patentlyo.com/patent/2017/05/institute-challenging-institution.html