Intellectual Property Bulletin - Winter 2017

Fenwick & West LLP

A Smooth Patch in a Rough Road? Governmental Transition and Intellectual Property

By Emily Bullis and Stuart P. Meyer

Whenever a new Congress convenes, some IP issues come to the fore while others take a back seat. Transition to a new administration in the executive branch brings about even more significant IP change, and this effect is compounded when a new political party takes charge. Understandably, IP issues have not been making headlines in this post-election cycle, being overshadowed by issues such as controversial executive orders, cabinet nominees, and judicial nominations. Nonetheless, there has been a great deal of activity on both the outgoing and incoming sides, and looking at it all in one place may give us a sense of what is likely to come in 2017 and beyond. Let’s start with a sampling of the late 2016 developments.

In December, the House Judiciary Committee published a one-page Reform of the Copyright Office document that was as notable for what it did not contain as it was for what it proposed. Back in October, the press was abuzz with reports that the newly appointed Librarian of Congress essentially fired the head of the Copyright Office (the Register of Copyright) for copyright policy reasons. The Librarian, Dr. Carla D. Hayden, had been appointed by President Obama and replaced James Billington, who held the post from 1987 to 2015. The timing of the new appointment coincided with an effort to make the Office more independent from Congress, with some calling for it to move from the legislative branch to the executive branch. The Judiciary Committee started the document by acknowledging that the current statutory framework for the Office is outdated and that the Office should be able to “provide independent and timely advice to Congress” and “have autonomy over its budget and technology needs.” After that, however, the “reform” suggested by the document seems more intended to prevent the exercise of independence by the Office. First, the Committee reasserted that the Office should remain part of the legislative branch. Next, it advocated that not only the Librarian of Congress, but the Register as well, be subject to nomination/consent, essentially stating that Dr. Hayden should not attempt to name a new Register herself. Further, the Committee suggested that various committees be formed to “advise the Register on critical issues.” In still a further effort to consolidate power, the Committee suggested that a “small claims system” be hosted by the Office to manage both low value infringement disputes as well as bad faith takedown notices under 17 U.S.C. § 512.

Also in December, the executive branch’s Intellectual Property Enforcement Coordinator submitted to Congress a New Joint Strategic Plan on Intellectual Property Enforcement. This 163-page document is styled as a forward-looking enforcement outline for 2017–19. The Joint Strategic Plan is broken down into four sections. The first section contains a highly detailed explanation of the economic aspects of IP, as well as examples of business models that rely on IP infringement. The second section deals with online IP issues, including details regarding practices and policies to curb abusive activities. The third section outlines how the government is seeking to stem illicit trade via counterfeit and pirated products. The final section is focused on bigger-picture issues regarding IP enforcement. Those interested in these topics will find the Joint Strategic Plan contains a great deal of information on piracy and counterfeiting methods that may not otherwise be known to anyone but specialists. For instance, it explains and illustrates what a “game copier” is, a device that takes a software protected video game, bypasses security measures, and creates unauthorized copies. A lower-tech example is an illustration of counterfeit Duracell batteries covered with a plastic wrapper that makes them appear (for border-crossing purposes) to be merely off-brand batteries. Once on-shore, the coverings are removed and the batteries are sold as if they were the legitimate name-brand product. The danger of such goods is illustrated vividly, with exploding, counterfeit hoverboards and counterfeit bicycle helmets that dramatically failed safety tests. The Joint Strategic Plan urges what it terms a “Whole of Government” approach to IP enforcement that goes far beyond standard Customs policies. For example, the Joint Strategic Plan urges that the government, in its own procurement/acquisition activities, promote supply-chain accountability. It suggests that the government undertake policies that encourage the innovation that takes place in universities. And it emphasizes the unique resources the government has to help stem trade secret misappropriation (which the Joint Strategic Plan universally styles as trade secret “theft” for emphasis on its economic impact).

The IPEC’s FY16 Annual Report on Intellectual Property Enforcement, transmitted to Congress on January 12, 2017, is a 103-page counterpart to the Joint Strategic Plan but looks back on the past year rather than forward. The emphasis in the Annual Report is that the government needs to lead by example (e.g., carefully look for counterfeit products entering the supply chains of the military and the federal government in general). Lest all of IPEC’s activities be viewed as promoting the interests of IP owners, significant consideration is given to the rights of other stakeholders as well. For example, the Annual Report emphasizes the importance of fair use and the exercise of due care so that government enforcement approaches do “not discourage people from building appropriately on the copyrighted works of others.” The Joint Strategic Plan and the Annual Report thus serve as a highly detailed tutorial to help guide the new administration on some of the more important aspects of IP.

Moving from examples of what was done before Inauguration Day to what is likely to happen in the future, we look first to the patent front. While initial reports strongly suggested that Michelle Lee would be replaced as Director of the U.S. Patent and Trademark Office, it now appears that she might remain at her post under the new administration. There has been no official announcement as of yet, and the Department of Commerce leadership webpage lists the position of USPTO Director as “Vacant.” However, several sources, including Representative Darrell Issa (R-CA), confirm that President Trump has decided to keep Lee on as Director. Issa, who holds 37 patents himself, has been a vocal supporter of Lee, calling her “one of the great things to come out of the Obama era” and telling a crowd at January’s Consumer Electronics Show that “we just have to get Michelle to stay on long enough to finish what she started.”

If Lee does not remain at her post, there may well be a gap between appointed directors that could last through the summer, particularly given the federal hiring freeze that the president ordered soon after taking office. Lee herself was not officially sworn in as Director of the USPTO until March 12, 2015 – two years after the last appointed and confirmed Director, David Kappos, resigned and 18 months after the subsequent Acting Director, Teresa Stanek Rea, resigned. With many cabinet and subcabinet positions to fill, recent first-term presidents have taken several months before appointing new USPTO Directors. And who the new administration might tap to replace Lee is anyone’s guess; little was said about the patent system during the campaign, and the new administration has yet to comment publicly on possible successors. Most experts, however, predict a nominee that supports strong IP rights. Rumored successors include former Federal Circuit Chief Judge Randall Rader, Johnson & Johnson’s vice president of IP policy and strategy, Philip S. Johnson (past president of the Intellectual Property Owners Association), Fish & Richardson principal Michael McKeon, and former USPTO Deputy Director Stephen Pinkos. Both Rader and Johnson have confirmed their interest in the position, with Rader saying that his “top priority is to ‘make patents great again’” and Johnson announcing his intention to “continue serving the IP community” when he retires from Johnson & Johnson in February.

Less uncertain in the IP world is the fate of the Trans-Pacific Partnership, President Obama’s signature trade deal. Both major party presidential candidates were highly critical of the TPP during the 2016 campaign, with President Trump calling it a “death blow for American manufacturing.” In keeping with his promise to abandon the trade deal upon entering office, President Trump signed an executive order during his first week in office withdrawing the United States from the negotiating process, calling the move “a great thing for American workers.”

The new administration’s opposition to the TPP is unsurprising given its strong territorial views and protectionist approach to trade, but abandoning the trade agreement will likely have profound implications for IP. Chapter 18 of the TPP addresses the protection and enforcement of IP and contains numerous substantive provisions addressing all areas of IP. The TPP standardizes the term of copyright protection to the life of the author plus 70 years and adopts a two-part fair use analysis that requires member countries to balance the interests of rights holders and users of copyrighted works. With respect to patents, Chapter 18 adopts a 12-month grace period for the applicant’s own disclosures and makes patent term adjustment available for delays in prosecution or market approval for pharmaceuticals. And on the trademark front, Chapter 18 presents a broadening definition of eligible subject matter by expanding the scope of protection to cover sound marks and requiring member countries to make “best efforts” to register scent marks. Finally, it contemplates strong trade secret protection by criminalizing trade secret theft. Though its proponents argue that the TPP’s IP provisions would strengthen protections available to rights holders and boost economic growth in its member countries, the immediate abandonment of the deal suggests that the new administration could take a drastically different approach to trade than President Obama. All that said, the TPP faced an uphill battle even during the Obama administration, so the actual change in policy from abandonment of the TPP proposal is modest at best.

Shortly after his inauguration, President Trump announced two new measures that could place significant constraints on the federal IP system: a “one in, two out” order curtailing federal regulations and a plan to defund the National Endowment for the Arts. As to the former, it is unclear for example what rationale might exist for forcing the USPTO to find two regulations to remove if it wants to clarify by regulation some procedure to be used in Patent Trial and Appeal Board proceedings. The result may well be that ambiguities in USPTO practice do not get clarification during this period. As to defunding the NEA, that endowment provides the bulk of funding for volunteer lawyers for the arts programs, such as those recently added as a result of the America Invents Act’s mandate that the USPTO “shall work with and support intellectual property law associations across the country in the establishment of pro bono programs designed to assist financially under-resourced independent inventors and small businesses.” Without funding from the NEA, these organizations could cease to operate and render the USPTO, part of the executive branch, unable to comply with the congressional mandate, and therefore vulnerable to possible legal action.

Even with these changes, the developments in IP policy that are occurring as a result of the November election are not likely to be nearly as dramatic as in other policy areas. Thus, IP practitioners and their clients can find some solace that they need merely continue worrying about such “mundane” issues as subject matter eligibility for patents, whether the USPTO should engage in what some call “censorship” in examining marks for registration, the extent to which three-dimensional scans of objects should be subject to copyright protection, and whether an employee’s LinkedIn contact list constitutes a trade secret of the employer.


Supreme Court Decision Hasn’t Helped to Clarify Standing in Privacy Cases

By Hanley Chew and Tyler G. Newby

In May 2016, the U.S. Supreme Court issued its long-awaited opinion in Spokeo v. Robins, addressing the Article III standing requirement. In Spokeo, the Supreme Court found that, in order to have standing, a plaintiff must allege “a concrete injury even in the context of a statutory violation” and not merely a “bare procedural violation, divorced from any concrete harm.” A “concrete injury” must be “real, and not abstract.” Moreover, a “concrete injury” may be intangible where the alleged harm “has a close relationship to a harm that has traditionally been regarded as providing a basis for a lawsuit.” In the eight months since Spokeo’s issuance, several appellate courts have interpreted and applied the case in the privacy context, arriving at different conclusions.

The U.S. Court of Appeals for the Eleventh Circuit was the first appellate court to apply Spokeo in the privacy context in Church v. Accretive Health, Inc. There, the plaintiff alleged that Accretive Health, Inc., a debt collector for Providence Hospital, had violated the Fair Debt Collection Practices Act when it failed to include certain statutorily required disclosures in a letter that the plaintiff received advising her that she owed a debt to the hospital. The plaintiff did not allege that she suffered actual damages from Accretive’s failure to include the required disclosures. Instead, she alleged that, upon receiving the letter, she was “angry” and “cried a lot.” The district court granted Accretive’s summary judgment motion, which asserted that the FDCPA did not apply to the debt. The Eleventh Circuit affirmed the district court’s decision but first addressed the question of whether the plaintiff had standing under Spokeo. The Eleventh Circuit held that the plaintiff had suffered a concrete injury and had standing because “Congress provided [the plaintiff] with a substantive right to receive certain disclosures and [the plaintiff] has alleged that Accretive Health violated that substantive right.”

The U.S. Court of Appeals for the District of Columbia Circuit, the next appellate court to apply Spokeo in the privacy context, adopted a different approach. In Hancock v. Urban Outfitters, Inc., the plaintiffs alleged that two retail stores had violated the District of Columbia’s Use of Consumer Identification Information Act by requesting that the plaintiffs provide their zip codes before processing the plaintiffs’ credit card purchases. The district court dismissed the complaint with prejudice. The D.C. Circuit vacated the district court’s decision and remanded the case for dismissal based on the plaintiffs’ lack of standing. The D.C. Circuit found that the plaintiffs’ “naked assertion that a zip code was requested and recorded without any concrete consequences” did not constitute a concrete injury sufficient to confer standing.

The U.S. Court of Appeals for the Eighth Circuit has adopted both approaches, applying Spokeo inconsistently. In Carlsen v. GameStop, Inc., the Eighth Circuit interpreted Spokeo broadly to expand standing to sue for violations of privacy policies. In Carlsen, the plaintiff, who had subscribed to Game Informer Magazine and the additional online enhanced content available on the Game Informer website, sued GameStop (the owner of Game Informer) for sharing his personal information with Facebook in violation of GameStop’s privacy policy, which stated that GameStop would not share its customers’ personal information with anyone. Specifically, the plaintiff alleged that the Game Informer website transmitted a user’s Facebook ID and browsing history to Facebook if the user logged in to the Game Informer website through Facebook. The plaintiff alleged that, had he known about the sharing of information, he would not have paid as much for his subscription or would have refrained from accessing the online content. The district court dismissed the plaintiff’s complaint for lack of subject matter jurisdiction, holding that the plaintiff had failed to establish that he had suffered a cognizable injury. The Eighth Circuit affirmed the dismissal on the grounds that a user’s Facebook ID and browsing history did not constitute personal information covered by the privacy policy. However, the court found that the plaintiff’s allegation that he suffered damages “in the form of devaluation of his Game Informer subscription in an amount equal to the difference between the value of the subscription that he paid for and the value of the subscription that he received, i.e., a subscription with compromised privacy protections,” constituted an “‘actual’ injury.”

In contrast, in Braitberg v. Charter Communications, Inc., the Eighth Circuit interpreted Spokeo narrowly to reject standing for a technical violation of the Cable Communications Policy Act. In Braitberg, the plaintiff sued Charter Communications for retaining his personal information (i.e., his address, telephone number and Social Security number) after he had canceled his subscription for cable services. The plaintiff alleged that doing so violated the CCPA, which required cable operators to destroy personally identifiable information if the information was no longer necessary for the purpose for which it was collected. The plaintiff alleged that Charter’s retention of his personal information deprived him of the full value of the services for which he paid and violated his federally protected privacy rights. The district court dismissed the complaint, finding that the plaintiff had not alleged a concrete injury sufficient to confer standing. The Eighth Circuit affirmed the dismissal, finding that the plaintiff had alleged only a “bare procedural violation, divorced from any concrete harm.” In particular, the Eighth Circuit noted that the plaintiff had failed to allege that the personal information that Charter had retained had been disclosed or accessed by a third party or that Charter had even used the information itself during the period in question. The plaintiff had failed to identify a “material risk of harm from the retention,” and the “speculative or hypothetical risk” he identified was insufficient.

Just a few days later, the U.S. Court of Appeals for the Sixth Circuit reached the opposite conclusion in a data breach case. In Galaria v. Nationwide Mutual Insurance Co., the plaintiffs sued Nationwide Mutual Insurance Co. for its alleged failure to adopt adequate procedures and measures to protect the plaintiffs’ personal information. The plaintiffs alleged that the Nationwide data breach had created an “imminent, immediate and continuing increased risk” of identity theft and that the plaintiffs had suffered and would continue to suffer both “financial and temporal” costs, such as having to purchase credit reporting services, credit and/or internet monitoring, and/or instituting credit freezes and closing or modifying financial accounts. The district court dismissed the complaints, finding that the plaintiffs lacked Article III standing. The Sixth Circuit reversed the dismissal and remanded the case, concluding that the plaintiffs’ allegations that the theft of their personal information subjected them to a heightened risk of identity theft and caused them to incur mitigation costs, such as credit monitoring, was sufficient to establish standing at the pleading stage. The Sixth Circuit found that “[w]here a data breach targets personal information ... inference[s] can be drawn that the hacker[] will use the victims’ data for ... fraudulent purposes,” and “although it might not be ‘literally certain’ that Plaintiffs’ data will be misused ... there is a sufficiently substantial risk of harm that incurring mitigation costs is reasonable.”

Most recently, the U.S. Court of Appeals for the Seventh Circuit applied Spokeo restrictively to limit standing to bring lawsuits under the Fair and Accurate Credit Transactions Act. In Meyers v. Nicolet Restaurant of de Pere, LLC, the plaintiff alleged that the defendant had violated FACTA because it failed to truncate the credit card expiration data on its receipts. The district court denied the plaintiff’s motion for class certification, finding that the plaintiff failed to establish that classwide issues would “predominate” over issues affecting individual class members. The Seventh Circuit did not address the class certification question. Instead, it vacated the district court’s order and remanded the case with instructions to dismiss. The Seventh Circuit found that the plaintiff had fallen short of the Spokeo standard and failed to allege any harm, or even any “appreciable risk of harm,” arising from the defendant printing credit card expiration dates on its receipts. The plaintiff had only alleged a statutory violation without any actual injury from that violation. Indeed, the Seventh Circuit observed that it was “hard to imagine” how the expiration date on the receipt could have increased the risk of identity theft.

Spokeo provides only limited guidance concerning the standard for Article III standing in actions in which statutory violations or damages are alleged, which is often the situation with privacy and data breach cases. As illustrated above, this lack of specific direction by the Supreme Court has led to varying applications of Spokeo in different circuits. Definitive guidance on the requirements of standing in the privacy context may not be possible unless and until the Supreme Court provides further guidance on the issue.


Quick Updates

Is the Lanham Act About to Face the Music? Justices Skeptical in Lee v. Tam Argument

By Eric Ball and Eric D. Dunn

On January 18, 2017, the U.S. Supreme Court heard argument in Lee v. Tam, a closely watched case that pits the Lanham Act against the First Amendment. Overall, the justices seemed skeptical that the law could withstand scrutiny, but also appeared uncertain about how Tam prevailing would affect trademark law.

In 2011, Simon Tam applied to register THE SLANTS as a trademark for his band to “‘take ownership’ of Asian stereotypes.” The U.S. Patent and Trademark Office denied his application under its authority to refuse registration for trademarks that might disparage people, institutions, beliefs or national symbols. See 15 U.S.C. § 1052(a). Tam appealed that decision to the U.S. Court of Appeals for the Federal Circuit, which held en banc that the denial violated Tam’s First Amendment rights.

In its opinion, the Federal Circuit acknowledged that, even without registration, The Slants would be able to say whatever they want about Asian stereotypes, which makes this case unique. But the court held that denying Tam the benefits of registration because his mark was “disparaging” subjected him to an “unconstitutional condition” that, if imposed directly, would violate the First Amendment. This set up a battle between Tam and the government, against the backdrop of another high-profile trademark dispute involving the REDSKINS trademark, over how the government defines who is eligible for what Justice Ginsburg called the “extra benefits” of trademark registration.

At oral argument, Justice Kennedy and Justice Alito quickly put the government on the defensive by forcing it to concede that copyright registration could not be denied on the same basis that Tam had been denied his trademark registration. But it was Justice Kagan that offered the sharpest skepticism. After asking the government to defend its denial of Tam’s trademark as viewpoint neutral, Justice Kagan finally remarked that the government was simply arguing that “it does so much viewpoint-based discrimination that it becomes alright.”

Justice Sotomayor offered the toughest questions to Tam’s counsel, arguing that he was “asking the government to endorse” offensive messages and questioning whether Tam’s speech had been burdened at all. The remaining justices seemed more concerned, however, with sorting out when and how the government might regulate disparagement in other contexts even if it could not do so here.

At the close of oral argument, Justice Kagan touched on why Lee v. Tam has attracted so much attention—and more than 30 amicus briefs—in suggesting that victory for Tam could call into question other parts of the Lanham Act that allow the USPTO to deny registration for marks that are scandalous, descriptive or confusingly similar to existing marks. These determinations often involve the types of content-based and even viewpoint-based judgments that courts rarely permit in other areas of the law. Even Tam’s counsel admitted that some of these provisions would inevitably be struck down if the Court holds that the government cannot deny registration to “disparaging” marks. The extent to which they survive Lee v. Tam will be closely watched.

What’s in Store for Copyright in 2017?

By Nicholas A. Plassaras and Jennifer Stanley

2017 promises to be an exciting year for copyright law. Here are some of the most cutting-edge cases to keep on your radar.

Oracle America, Inc. v. Google Inc., No. 17-1202 (Fed. Cir.), could have a major impact on the future of software development and interoperability. In 2010, Oracle sued Google for using application programming interfaces from Oracle’s Java code in Google’s Android platform. Google argued that the APIs were not entitled to copyright protection. In 2014, the U.S. Court of Appeals for the Federal Circuit disagreed, holding that Google’s use infringed Oracle’s copyrights in the APIs. But last May, a jury in a trial on remand held that Google’s use of the APIs was protected by fair use—a defense to copyright infringement. The case is now headed back to the Federal Circuit, where the court will decide whether there was sufficient evidence to support the finding of fair use.

Capitol Records, LLC v. Vimeo, LLC, No. 16-771 (U.S.), could change how the Digital Millennium Copyright Act shields technology companies from infringement liability for user-uploaded content. In 2009, several music publishing and record companies sued Vimeo, the online video-sharing platform, for copyright infringement over user-uploaded videos that allegedly contained sound recordings owned by the plaintiffs. Many of those sound recordings were recorded before 1972 and, thus, not entitled to federal copyright protection. Last June, the U.S. Court of Appeals for the Second Circuit held that the DMCA—federal law—shields DMCA-compliant internet service providers from state law copyright claims regarding pre-1972 sound recordings. The U.S. Supreme Court has not yet decided whether it will hear the music companies’ appeal.

Lenz v. Universal Music Corp., No. 16-217 (U.S.) (a.k.a. the “Dancing Baby Case”),could raise the bar for rights holders who send DMCA takedown notices to internet service providers. In 2007, Stephanie Lenz uploaded a 29-second video of her baby dancing to Prince’s “Let’s Go Crazy.” Universal sent a DMCA takedown notice to YouTube, and the video was removed. After sending two counter-notices claiming fair use and getting her video reposted, Lenz sued Universal for misrepresenting to YouTube that her video was infringing. In 2015, the U.S. Court of Appeals for the Ninth Circuit held that copyright owners had to subjectively believe a use was infringing before sending a DMCA takedown notice. Lenz’s pending appeal to the Supreme Court goes one step further, arguing that a copyright holder needs an objectively reasonable belief that a use is infringing before it can send a DMCA takedown notice. The Supreme Court has not yet decided whether it will hear the appeal.

Star Athletica, LLC v. Varsity Brands, Inc., No. 15-866 (U.S.), could alter the copyright protections afforded to fashion designs. Varsity Brands, one of the country’s largest suppliers of cheerleading equipment, sued rival Star Athletica for copying its uniform designs. Courts have long considered apparel a “useful article” too utilitarian in nature to warrant copyright protection. Varsity Brands, however, argues that the decorative elements of its uniforms are conceptually separable from the underlying garments, making those elements eligible for copyright protection. The case is currently pending before the Supreme Court. If the justices agree with Varsity Brands’ interpretation of the conceptual separability doctrine, the decision could have far-reaching implications for the use and display of certain fashion designs in other media, such as movies or video games.

Federal Circuit Denies Appeal of IPR Brought by Non-Practicing Entity for Lack of Standing

By Lauren E. Whittemore

After the Patent Trial and Appeal Board found claims of ImmunoGen Inc.’s U.S. Patent No. 8,337,856 nonobvious, non-practicing entity Phigenix, Inc. appea​led to the U.S. Court of Appeals for the Federal Circuit. The Federal Circuit dismissed the appeal, finding that Phigenix lacked standing to appeal because it had not established it had suffered an injury in fact.

Prior to filing its inter partes review petition, Phigenix was engaged in litigation with a third company, Genentech, Inc., over a Phigenix patent, U.S. Patent No. 8,080,534. Phigenix asserted that the ’534 patent covered Genentech’s manufacture and sale of a drug, Kadycla. Genentech produces the drug under a “worldwide exclusive license” from ImmunoGen for the ’856 patent. As part of its efforts to commercialize its own patent portfolio, Phigenix filed the petition for inter partes review of the ’856 patent, alleging claims 1–8 were invalid as obvious over various prior art references.

After the PTAB issued a final written decision finding the claims nonobvious, Phigenix filed a Notice of Appeal to the Federal Circuit. ImmunoGen filed a motion to dismiss the appeal for lack of standing before Phigenix filed its opening brief. After Phigenix filed its opening brief, Judge Wallach denied the motion to dismiss, ordering ImmunoGen to address the standing issue in its response brief.

In its decision, the court noted that the Federal Circuit did not yet have a legal standard for demonstrating standing in an appeal from a final agency action. In order to establish a standard, the court considered (1) the burden of production; (2) the evidence an appellant must produce to meet that burden; and (3) when the appellant must produce that evidence.

Based on the U.S. Court of Appeals for the District of Columbia Circuit’s interpretation of Lujan v. Defenders of Wild​life et al., as well as the Federal Circuit’s interpretation of other U.S. Supreme Court decisions, the court concluded that the summary judgment burden of production applies in cases where an appellant seeks review of a final agency action. Regarding what evidence the appellant must produce, the court noted that the D.C. Circuit has held that in cases where the appellant is the object of the agency action, standing will be self-evident. However, where the appellant’s standing is not self-evident, the appellant must submit “arguments and any affidavits or other evidence” sufficient to show standing. Finally, the court found that the appellant must produce the evidence at the appellate level at the earliest possible opportunity, whether in opposing a motion to dismiss or in its opening brief.

Having established the standard, the court reviewed Phigenix’s evidence and found it lacking. As a non-practicing entity focused on licensing, Phigenix was unable to argue that it could be harmed by a finding of infringement. Instead, Phigenix argued that it had suffered actual economic injury because the ’856 patent increased competition between itself and ImmunoGen for licensees and that at least a portion of the licensing revenue received by ImmunoGen would have flowed to Phigenix instead. Phigenix did not rely on any evidence developed in the inter partes review and instead submitted two declarations.

The court found the declarations insufficient. Despite asserting that Phigenix had suffered economic harm due to ImmunoGen’s licensing of the ’856 patent, neither declaration provided evidence sufficient to show that any company had obtained a license to Phigenix’s ’534 patent or that any company had licensed both Phigenix’s ’534 patent and ImmunoGen’s ’856 patent. Therefore, there was simply no actual evidence of harm.

Phigenix’s argument that it suffered an injury because 35 U.S.C. § 141(c) provides a statutory basis for appeal from a PTAB final written decision was also unavailing. The court noted that Phigenix did successfully file for appeal, but because it could not establish standing, the appeal was properly dismissed.

Beyond affirming that 35 U.S.C. § 141(c) does not by itself establish standing, this case demonstrates the challenge for non-practicing entities in appealing adverse PTAB rulings. A party must be able to show actual or imminent injury, for example, by a “lost sale” of a license to a competitor. While the Federal Circuit has provided some guidance here, it remains unclear how much evidence the non-practicing entity would have to marshal in order to establish standing. Lack of ability to appeal an adverse PTAB ruling will no doubt encourage non-practicing entities to more carefully consider whether an inter partes review is worth the time and expense.

Supreme Court Allows the ITC to Continue Addressing Overseas Trade Secret Misappropriation

By Sapna S. Mehta and Patrick E. Premo

The U.S. Supreme Court denied a petition for writ of certiorari in Sino Legend (Zhangjiagang) Chemical Co. Ltd. v. International Trade Commission & SI Group, Inc., thereby rejecting an attempted challenge to the U.S. International Trade Commission’s authority to adjudicate complaints based on trade secret misappropriation that occurs abroad.

Section 337 of the Tariff Act of 1930 confers authority on the ITC to investigate unfair competition in connection with articles imported into the United States. See 19 U.S.C. § 1337(a)(1)(A). If the ITC determines that such unfair competition occurred, it may, among other remedies, order the infringing articles “excluded from entry into the United States” and impose civil penalties for violations of that order. The U.S. Court of Appeals for the Federal Circuit interprets the statute as permitting the ITC “to investigate and grant relief based in part on extraterritorial conduct insofar as it is necessary to protect domestic industries from injuries arising out of unfair competition in the domestic marketplace.” See TianRui Group Co. v. Internationa​l Trade Commission​.

Sino Legend, a resin manufacturer in China, challenged that interpretation after the ITC entered a 10-year exclusion order against it. A U.S. competitor, SI Group, filed a complaint against Sino Legend alleging that two former employees of SI Group’s Chinese affiliate misappropriated SI Group’s trade secrets after leaving to work for Sino Legend. SI Group had unsuccessfully pursued the matter through proceedings in China before bringing a complaint before the ITC. The ITC determined that misappropriation occurred with respect to some protectable trade secrets and found sufficient injury and threat of injury to the domestic industry for rubber resins. Accordingly, it issued an exclusion order for Sino Legend’s infringing products. See In the Matter of Certain Rubber Resins & Processes for Manufacturing Same. Sino Legend appealed, but the Federal Circuit affirmed the ITC’s determination without a written opinion and subsequently denied en banc review. See Sino Legend (Zhangjiagang) Chemical Co. v. International Trade Commission.

In its petition to the Supreme Court, Sino Legend argued that the Federal Circuit incorrectly interpreted § 337—more specifically, that its interpretation of the statute was inconsistent with Supreme Court jurisprudence regarding extraterritoriality of statutes and that the policy implications of the U.S. adjudicating foreign conduct further counsels against its interpretation. Signaling the importance of the issue, the Chinese government’s trade agency—which had also appeared to urge en banc review by the Federal Circuit—filed an amicus brief stressing the importance of comity and China’s sovereignty. The ITC, in opposition to further review, noted that the statute focuses on importation into the United States and resulting domestic effects, even if the actual trade secret misappropriation occurred abroad.

The Supreme Court’s denial of Sino Legend’s petition for review leaves the Federal Circuit’s TianRui decision, and trade secret owners’ resulting recourse against misappropriation abroad, intact. Moreover, the Defend Trade Secrets Act of 2016 created a private right of action—with the ability to obtain damages—for trade secret misappropriation occurring abroad, in certain circumstances. See 18 U.S.C. §§ 1836, 1837 (conferring jurisdiction over conduct outside the United States if the offender is a person or entity in the U.S., or if an act in furtherance of the offense was committed in the U.S.). Accordingly, trade secret owners maintain the option and forum to determine which enforcement avenue best suits their respective needs.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

How do we use this information?

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

  • Operate our Website and Services and publish content;
  • Distribute content to you in accordance with your preferences as well as to provide other notifications to you (for example, updates about our policies and terms);
  • Measure readership and usage of the Website and Services;
  • Communicate with you regarding your questions and requests;
  • Authenticate users and to provide for the safety and security of our Website and Services;
  • Conduct research and similar activities to improve our Website and Services; and
  • Comply with our legal and regulatory responsibilities and to enforce our rights.

How is your information shared?

  • Content and other public information (such as an author profile) is shared on our Website and Services, including via email digests and social media feeds, and is accessible to the general public.
  • If you choose to use our Website and Services to communicate directly with a company or individual, such communication may be shared accordingly.
  • Readership information is provided to publishing law firms and authors of content to give them insight into their readership and to help them to improve their content.
  • Our Website may offer you the opportunity to share information through our Website, such as through Facebook's "Like" or Twitter's "Tweet" button. We offer this functionality to help generate interest in our Website and content and to permit you to recommend content to your contacts. You should be aware that sharing through such functionality may result in information being collected by the applicable social media network and possibly being made publicly available (for example, through a search engine). Any such information collection would be subject to such third party social media network's privacy policy.
  • Your information may also be shared to parties who support our business, such as professional advisors as well as web-hosting providers, analytics providers and other information technology providers.
  • Any court, governmental authority, law enforcement agency or other third party where we believe disclosure is necessary to comply with a legal or regulatory obligation, or otherwise to protect our rights, the rights of any third party or individuals' personal safety, or to detect, prevent, or otherwise address fraud, security or safety issues.
  • To our affiliated entities and in connection with the sale, assignment or other transfer of our company or our business.

How We Protect Your Information

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at privacy@jdsupra.com.

Children's Information

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to privacy@jdsupra.com. We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to privacy@jdsupra.com.

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at: privacy@jdsupra.com.

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at www.jdsupra.com) (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit legal.hubspot.com/privacy-policy.
  • New Relic - For more information on New Relic cookies, please visit www.newrelic.com/privacy.
  • Google Analytics - For more information on Google Analytics cookies, visit www.google.com/policies. To opt-out of being tracked by Google Analytics across all websites visit http://tools.google.com/dlpage/gaoptout. This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

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