IP Update, Vol. 16, No. 6, June 2013

by McDermott Will & Emery



Supreme Court to Myriad: Isolated DNA Sequences Are Not Patent-Eligible Subject Matter

Federal Circuit Has Appellate Jurisdiction Even Where Damages, Willfulness Have Not Been Determined

Abuse of Discretion for District Court to Deny Permanent Injunction

Patent Claim Terms Are Literally Interpreted

Claim Term Can Have Different Constructions Depending Upon Context

Statements Describing “the Invention” Do Not Limit Claim Scope When Contradicted by Other Statements and Embodiments

**WEB ONLY** Source Code Held to Be Relevant and Essential Discovery

Federal Circuit Finds that Arguments Made When Traversing a Restriction Requirement Can Constitute Prosecution Disclaimer

Federal Circuit Panel Affirms Finding of No Domestic Industry Based on Ongoing Litigation

State Law Claims Involving Allegations of Patent Infringement Do Not Arise Under Federal Patent Law When Purely “Backward-Looking”

No Summary Judgment of Invalidity on Prior Clinical Trials Where Confidentiality Obligations Are Imposed

**WEB ONLY** Generic Versions of AstraZeneca’s Pulmicort Respules Enjoined from Launch Pending Appeal

No Anti-Suit Injunction Where Foreign Arbitration Controls Resolution of Licensing Dispute

**WEB ONLY** Immaculate Conception? It Is in the Eye

Who Has the Burden of Proof?

The Supreme Court to Review the Standard for Standing to Bring Lanham Act False Advertising Claims

USPTO Proposes Rules to Conform with the Patent Law Treaty


First Amendment Defense Fails to Sack Quarterback’s Right-of-Publicity Suit

Second Circuit Revives Trademark Suit Against Oprah Winfrey

This Flea Market Needs a Real Coach


Diagram Constitute Protectable Expression of Ideas

Time Warner Avoids Nexstar’s Broadcasting Retransmission Injunction

Acquiring Bare Right to Sue for Copyright Infringement Is Insufficient to Confer Standing

Trade Secrets

**WEB ONLY**  Use Can be Inferred from Reliance on Trade Secrets in Developing One’s Own Technology

Patents / Patent Eligible Subject Matter

Supreme Court to Myriad: Isolated DNA Sequences Are Not Patent-Eligible Subject Matter
AMP et al. v. Myriad Genetics, Inc.
by William (Bill) Gaede

In a 9–0 decision the Supreme Court of the United States held that “isolated DNA sequence” composition claims do not constitute patent-eligible subject matter under 35 U.S.C. § 101, but that composition claims directed to cDNA do constitute patent-eligible subject matter.  AMP et al. v. Myriad Genetics, Inc., et al., Case No. 12-398, (Supr. Ct., June 13, 2013) (Thomas, J.).  By way of background, the “human gene” claims at issue in this case involve BRCA1 and BRCA2 genes, which have been correlated with susceptibility to breast and ovarian cancer.   Myriad Genetics successfully isolated the BRCA molecules in what has been described as a major breakthrough.  Myriad claims that the isolation of these molecules was a result of significant scientific expertise and financial outlays.

The petitioners contended that the composition claims patented by Myriad cover sequences already existing in nature and therefore do not constitute patent-eligible subject matter.  Myriad countered that it has not patented gene sequences per se (such as, for example, the sequence that naturally exists in a human being), but has instead patented sequences that are “isolated,” for example, in a laboratory.   

The petitioners, however, claimed that the inventive concept in Myriad’s “isolated sequence” composition claims is the sequence information, not the isolation step.  Thus, the petitioners argued that the fact that the claimed compositions cover “isolated” molecules is irrelevant because the claimed compositions in effect pre-empt all BRCA1 and BRCA2 molecules regardless of whether they are in a human body or created in a laboratory as long as the molecule encodes the claimed sequence.  Petitioners argued that this was true for cDNA as well.

In a unanimous decision authored by Justice Thomas, the Supreme Court agreed that “isolated DNA sequences” do not constitute patent-eligible subject matter, characterizing the sequences as products of nature.  The Supreme Court reasoned that Myriad’s contribution was “uncovering the precise location and genetic sequence of the BRCA1 and BRCA2 genes.”  The Supreme Court contrasted this act with the transformed bacterium in its Chakrabarty decision, which contained new and “markedly different characteristics from any found in nature.”  Myriad’s act of “separating a gene from its surrounding genetic material” failed to meet this test. 

Simply discovering the location of the BRCA1 and BRCA2 genes “does not render the BRCA genes ‘new … composition[s] of matter,’ § 101, that are patent eligible.”  In making this determination, the Supreme Court rejected the Federal Circuit’s reasoning that severing the chemical bonds by isolating the sequence from the genomic sequence was sufficient.  The Supreme Court did so because the claims focused on the sequence information itself and did not speak in terms of “chemical changes that result from the isolation of a particular section of DNA.”

Finally, the Supreme Court rejected the argument that the past practice of awarding gene patents by the U.S. Patent and Trademark Office (PTO) is entitled to deference, noting that the United States had argued in the case that isolated DNA was not patent-eligible.

As to the cDNA claims, the Supreme Court held that cDNA “results in an exons-only molecule that is not naturally occurring.”  The Supreme Court found that the lab technician “unquestionably creates something new when cDNA is made.”  As a result, Justice Thomas explained that cDNA is not a product of nature and is patent eligible.

Practice Note:  This is the second time this case is before the Supreme Court.  In its previous appearance, the Supreme Court remanded the case back to the Federal Circuit in light of the Supreme Court decision in Mayo Collaborative Services v. Prometheus Labs (for more information, see IP Update, Vol. 14, No. 6.  The U.S. Court of Appeals for the Federal Circuit, however, retracted the decision it had previously reached before the remand, essentially rendering Prometheus irrelevant to composition claims. 

However, the Federal Circuit struck down the gene correlation method claims.  The panel unanimously found that Myriad’s claims of comparing gene sequences did not constitute patent-eligible subject matter.  Indeed, the court found the claims “indistinguishable” from the method claims struck down in Mayo v. Prometheus, stating that the Supreme Court “made clear that such diagnostic methods in that case essentially claim natural laws not eligible for patent.”  Importantly (and as noted by Justice Thomas), those claims were not before the Supreme Court in the current Myriad decision.

However, the Federal Circuit upheld as patent-eligible subject matter claims directed to a method for screening potential cancer therapeutics via changes in cell growth rates of transformed cells.  As for those claims, the Federal Circuit maintained its previous rejection of Mayo’s argument that the method constituted an abstract idea that preempted the basic scientific principle that a slower growth rate in the presence of a potential therapeutic compound suggests that the compound is a cancer therapeutic.  Instead, the Federal Circuit concluded that the cells were transformed, which reflected the “hand of man,” and thus constituted patentable subject matter.

On the same day that the Supreme Court decision was handed down, the USPTO’s Office of the Deputy Commission for Patent Examination Policy issued a memorandum to the examining corps advising the corps that “claims to isolated DNA are not patent eligible under 35 U.S.C. § 101.”  The memorandum notes that the Myriad decision “significantly changes the Office’s examination policy regarding nucleic acid related technology.” 


Federal Circuit Has Appellate Jurisdiction Even Where Damages, Willfulness Have Not Been Determined
Robert Bosch, LLC v. Pylon Manufacturing Corp.
by Melissa Nott Davis

The U.S. Court of Appeals for the Federal Circuit in a sua sponte, en banc case, has now answered the following questions:

  1. Does 28 U.S.C. § 1292(c)(2) confer jurisdiction on the Federal Circuit to entertain appeals from infringement determinations when a trial on damages has not yet occurred?
  2. Does 28 U.S.C. § 1292(c)(2) confer jurisdiction on the Federal Circuit to entertain appeals from infringement determinations when willfulness issues remain undecided?

The Federal Circuit answered yes to both questions and returned the case to the panel for disposition.  Robert Bosch, LLC v. Pylon Manufacturing Corp., Case Nos. 11-1363, -1364 (Prost, J.) (Moore, J., concurring-in-part, dissenting-in-part) (Reyna, J., concurring-in-part, dissenting-in-part) (O’Malley, J., dissenting). 

In August 2008, Bosch sued Pylon for patent infringement, and Pylon asserted infringement counterclaims against Bosch.  Pylon filed a motion asking to bifurcate liability from damages.  The district court granted Pylon’s request, noting that “bifurcation is appropriate, if not necessary, in all but exceptional patent cases” and that issues related to a damages trial are “a drain on scarce judicial resources.”  The district court went on to find that “willfulness is a damages issue, not a liability issue” and similarly bifurcated that issue.  The district court stayed all discovery on damages and willfulness.  Following a jury trial and post-trial motions, the district court entered judgment on infringement.  Bosch appealed, and Pylon cross-appealed.  Bosch filed a motion to dismiss both its appeal and Pylon’s cross-appeal arguing that the Federal Circuit lacked jurisdiction.  The Federal Circuit denied Bosch’s motion and its motion for reconsideration.  Following oral argument before a panel of the Federal Circuit, the court sua sponte granted a rehearing en banc to determine the jurisdiction issues.

Generally, the Federal Circuit’s jurisdiction is governed by the final judgment rule granting it jurisdiction over any “appeal from a final decision of a district court of the United States.”  Section 1292(c)(2) is a patent-specific exception to the final judgment rule and allows Federal Circuit jurisdiction in a patent case that is final “except for an accounting.”  This case focused on the meaning of “accounting” and whether a trial on damages and determination of willfulness was an accounting for the purposes of § 1292(c)(2).

The Federal Circuit held that it was “clear from the case law and history of the statute that an accounting includes both the determination of an infringer’s profits as well as a patentee’s damages” and can include a trial on damages.  The Court conducted a historical analysis of the term accounting to determine that the statute was intended to encompass in patent cases both the calculation of defendant’s profits and the plaintiff’s damages.  The Court rejected Bosch’s argument that an accounting was limited to a special master’s determination of damages, finding Bosch’s distinction “manifestly incorrect.”  The Federal Circuit noted that while an accounting was historically available in equity, a trial on damages was within the scope of § 1292(c)(2).  The Court also noted that damages trials are “notoriously complex and expensive” and that “given the substantial reversal rate of liability determinations on appeal, the whole expense of a damages trial is often wasted.”  The Federal Circuit concluded that these exact policy concerns motivated the U.S. Congress to allow jurisdiction over cases that are final except for an accounting.

The Federal Circuit went on to hold that § 1292(c)(2) confers jurisdiction over appeals when willfulness issues remain outstanding and undecided and explained further that an “accounting” included the determination of willfulness. 

The Court noted that the case “does not involve the question of whether the district court has authority to bifurcate the willfulness and infringement issues.  As a general matter it does.”  District courts can decide for reasons of efficiency that bifurcation is, or is not, warranted.  District court judges “are best positioned to make that determination on a case-by-case analysis.”  Similarly, the Court explained that it “did not take this case en banc to determine whether the issues of infringement and willfulness are so interwoven that trying them separately violates the Seventh Amendment.”  The Court found that bifurcation and Seventh Amendment issues were immaterial, because its jurisdiction was set by Congress and included jurisdiction over patent cases that were final save for an accounting.

In dissent, Judge O’Malley’s disagreed with the broad interpretation of § 1292(c)(2) adopted by the majority.  “As an exception to the final judgment rule, § 1292(c)(2) is to be interpreted narrowly. … Because I believe the term ‘accounting’ only applies to a limited class of proceedings before special masters or to those instances in which the trier of fact has decided all matters relevant to a damages determination save the application of those decisions to an undisputed set of numbers.”  The dissent disputed the propriety of the majority’s historical analysis, arguing that, “[w]hat we should ask is not what questions may be considered during the course of an ‘accounting’ but whether the procedure that was an ‘accounting’ as of 1927 … is the same as or encompasses a jury trial on any of those questions.”  The dissent was especially troubled by the majority’s inclusion of willfulness within the “accounting.”  The dissent argued that requiring infringement and willfulness to take place before separate juries may violate the defendant’s Seventh Amendment right to a jury trial.

Practice Note: Although the Federal Circuit did not take a position on the propriety of bifurcating damages and willfulness, to the extent those issues are separate from infringement, a party will now be able to get appellate review of the infringement issues in advance of devoting the time and resources necessary for a determination of damages.

Patents / Permanent Injunction

Abuse of Discretion for District Court to Deny Permanent Injunction
Douglas Dynamics, LLC v. Buyers Products Co.
by Qasim S. Jami

Addressing a request for injunctive relief in a case between two competitors, the U. S. Court of Appeals for the Federal Circuit reversed a lower court’s denial of a permanent injunction to prevent continued infringement by a competitor, noting that patentees often suffer irreparable harm when forced to compete against infringers.  Douglas Dynamics, LLC v. Buyers Products Co., Case Nos. 11-1291, 12-1046, -1057, -1087 and -1088 (Fed. Cir., May 21, 2013) (Rader, C.J.) (Mayer, J., dissenting).

In a suit involving patents relating to snowplow mounting assemblies, the district court granted summary judgment of infringement of two patents, but denied the plaintiff’s motion for an injunction which would have permanently enjoined the defendant from producing and selling its low-end snowplow assemblies.

Distinguishing the facts of two prior Federal Circuit cases, Acumed and i4i Limited, and relying heavily on the evidence presented at trial concerning the plaintiff’s market dominance, the district court found that the plaintiff failed to prove a loss of market share or reputation resulting from the defendant’s infringing activities.  Instead, the court found that the plaintiff was in a “position of power” within its industry.  The plaintiff produced a high-quality product and possessed a 60 percent market share as compared to the defendant’s low-end product that possessed a 5 percent market share.  The court also found that the public would be better served by having a new competitor in the market which offered a lower-cost product option. Douglas appealed.

The Federal Circuit reversed, finding that a patentee’s ability to remain profitable in the face of infringing competition does not automatically rebut a case for irreparable harm.  Rather, a maker of a high-end product that tends not to directly compete with a low-end version may still be harmed by loss of distinctiveness and market lure when the low-end manufacturer can advertise “similar features” in its infringing products “at half the price.”     

The Federal Circuit, giving weight to the plaintiff’s strategic decision not to license the infringed technology, the defendant’s ability to attain a 5 percent market share in just three years and the defendant’s failed first attempt to design around one of the patents, explained that injunctive relief was appropriate.  The Court concluded its irreparable harm discussion with an edict clearly in favor of patentees:  “[t]he public has a greater interest in acquiring new technology through the protections provided by the Patent Act than it has in buying ‘cheaper knockoffs.’” 

Patents / Infringement

Patent Claim Terms Are Literally Interpreted
Alexsam, Inc. v. IDT Corporation
by Gregory S. Rabin

Addressing the issue of patent infringement, the U.S. Court of Appeals for the Federal Circuit held that, if a claim states that a point-of-sale device is “unmodified,” a party alleging infringement must prove that the point-of-sale device is actually unmodified, not simply that no modification is required.  Addressing the issue of patent validity, the Federal Circuit held that in complex cases, a party alleging patent invalidity based on obviousness over a combination of references must present evidence (e.g., expert testimony) that a skilled artisan would be motivated to combine the references.  Alexsam, Inc. v. IDT Corporation, Case No. 12-1063 (Fed. Cir., May 20, 2013) (Dyk, J.) (Mayer, J., dissenting).

Alexsam holds a patent directed to “a multifunction card capable of serving as a prepaid phone card, a debit card, a loyalty card, and a medical information card.”  The claims recite that the card’s number includes a bank identification number (BIN) and that activation makes use of “an unmodified existing standard retail point-of-sale device.”  IDT is a telecommunications company whose products include phone cards and prepaid gift cards.  Some of IDT’s cards are purchased by consumers at retail stores and activated upon purchase, via scanning at the retail counter.  IDT uses one of four systems to activate the cards: Walgreens, EWI, SafeNet or miscellaneous.  After the trial court ruled against IDT as to certain of the card programs, IDT appealed. 

Infringement Issues

The issue on appeal was whether Alexsam met its burden of proof at trial in terms of the “unmodified” device point of sale.  At trial, Alexsam presented expert testimony that the Walgreens and EWI systems of IDT did not require reprogramming of standard retail point-of-sale devices in order to operate.  However, Alexsam did not present evidence regarding whether the Walgreens and EWI systems were actually reprogrammed or modified.  The Federal Circuit held that the trial court erred in denying IDT’s motion for judgment as a matter of law of non-infringement as to the Walgreens and EWI systems, as Alexsam did not present evidence that the point-of-sale devices were actually unmodified, as required by the claims. 

Regarding the miscellaneous system, IDT failed to comply with Alexsam’s discovery request regarding whether the cards activated via the miscellaneous system had BINs.  The trial court issued an evidentiary sanction instructing the jury that the cards activated by the miscellaneous system infringed the claims.  The Federal Circuit concluded that the evidentiary sanction was “just and fair” under U.S. Court of Appeals for the Fifth Circuit law, as the finding of infringement bore a “substantial relationship” to the facts sought to be established by Alexsam through the requested discovery and, therefore, the facts were presumed in favor of Alexsam due to IDT’s failure to comply with its discovery.

Regarding the SafeNet system, the trial court concluded since Alexsam licensed SafeNet to MasterCard, and that license permitted third parties use of the SafeNet system, Alexsam was estopped from alleging infringement by IDT.  The fact that MasterCard failed to make royalty payments was not dispositive, as the license to MasterCard was not conditioned on the royalty payments.  The Federal Circuit affirmed this analysis.

Validity Issues

Regarding validity, at trial IDT introduced expert testimony that the ’608 patent was obvious over a combination of references.  However, IDT failed to introduce expert testimony regarding whether a skilled artisan would have been motivated to combine the references to achieve the claimed invention.  At trial, the patent was found to be not invalid.  On appeal, IDT argued that, under Wyers v Master Lock (IP Update, Vol. 13, No. 8) “expert testimony” is not required when the references and the invention are easily understandable.”  However, the Federal Circuit noted that, its jurisprudence, as explained in Master Lock, is that expert testimony regarding matters beyond the comprehension of laypersons is sometimes essential, particularly in cases involving complex technology.”  Here, the Court concluded that the technology is complex and beyond the understanding of a layperson.  Therefore, IDT could not prove invalidity without providing expert testimony regarding motivation to combine the references introduced by the experts.


Judge Mayer, in his dissent, addressed the issue of patent-eligible subject matter under § 101.  Judge Mayer would have found the claims invalid directed to “nothing more than an abstract idea for making a business run more efficiently.”  Specifically, Mayer argued that, “no new technology is required in order to allow standard point-of-sale devices to activate gift and pre-paid telephone cards… [the] claim … recites that the cards can be activated using unmodified existing standard retail point-of-sale device[s] … during prosecution, [the patentee] asserted… that no ‘custom software’ was required … [the claimed approach] discloses no new hardware or software, but instead relies on the use of unmodified existing terminals for activating gift and pre-paid telephone cards.”  As a result, “the … patent discloses nothing more than the ‘abstract idea’ that it is less expensive and more efficient to activate pre-paid cards on the point-of-sale devices used to process credit cards.”

Patents / Claim Construction

Claim Term Can Have Different Constructions Depending Upon Context
Aventis Pharmaceutical Inc. v. Amino Chemicals Ltd.
by Susan T. Evans

Addressing claim construction of a term used in several different contexts in the asserted patent claims, the U.S. Court of Appeals for the Federal Circuit reversed a stipulated non-infringement judgment entered by a district court after claim construction and explained that the term in dispute (“substantially pure”) could  have different constructions depending upon how the term is used within the claims and specification.  Aventis Pharmaceutical Inc.  v. Amino Chemicals Ltd., Case Nos. 11-1335, -1336 (Fed. Cir., May 20, 2013) (Reyna, J.) (Bryson, J., dissenting). 

The patent at issue concerns methods for making purer forms of piperidine derivatives, which are useful as antihistamines, and covers a method used to produce fexofenadine, the active ingredient in the allergy medicine Allegra®.  The patent is assigned to Albany Molecular Research and exclusively licensed by Aventis.  The defendants in the case, including Amino Chemicals, Dipharma, Mylan and Teva, are generic drug manufacturers.   At issue was the meaning of the phrase “substantially pure” recited in the claims to characterize an intermediate compound formed during the process.  The claims include the step of providing a “substantially pure regioisomer” of a particular structural formula, and then converting the substantially pure regioisomer to a piperidine derivative product.  The term “substantially pure” is not defined in the specification, and the specification fails to attach a numeric value to the substantially pure regioisomer.

The district court concluded that since the patent specification used the phrase “substantially pure” to describe both the regioisomer intermediate as well as the piperidine end product, its meaning must apply equally to both compounds.  In its construction, the district court relied upon statements in the prosecution history (of both the patent and a related patent) which indicated the inventor’s understanding of the term “substantially pure” to equate to a purity of 98 percent, i.e., pharmaceutical-grade purity with respect to all impurities.   Aventis appealed.

The Federal Circuit reversed, explaining that claims must be construed in light of the appropriate context in which the claim term is used.  The Federal Circuit noted that the district court’s construction conflated the purity required for the final product (i.e., for human consumption) with that of the piperidine intermediate. The Court further found that the “one construction throughout the patent” rule adopted by the district court was incorrect, stating that “there is no requirement that a claim term be construed uniformly, particularly if it would lead to a “nonsensical reading”.  The Court further reasoned that the district court improperly decoupled “substantially pure” from “regioisomer” in its construction, recognizing that there was no justification for applying a pharmaceutical-grade purity requirement of an ingested end product to an intermediate formed in the process.  Finally, in turning to the meaning of “substantially pure” in reference to the intermediate, the Court adopted the term’s ordinary and customary definition, citing cases in which “substantially” was interpreted as a non-specific term of approximation that avoids a numerical boundary.

Patents / Claim Construction

Statements Describing “the Invention” Do Not Limit Claim Scope When Contradicted by Other Statements and Embodiments
Creative Integrated Sys., Inc. v. Nintendo of Am., Inc.
by Joseph Speyer

In a non-precedential decision addressing the weight given to a patentee’s statements concerning “the invention,” the U.S. Court of Appeals for the Federal Circuit reversed in part and affirmed in part the district court’s construction and remanded the case, finding that statements about “the invention” are non-limiting where the statements are contradicted by other statements and illustrations.  Creative Integrated Sys., Inc. v. Nintendo of Am., Inc., Case Nos. 12-1579, -1626 (Fed. Cir., June 3, 2013) (Reyna, J.).

The patent-in-suit relates to read only memory (ROM) and, in particular, to the memory cell array that forms one of the ROM’s components.  Memory cell arrays can be thought of as being organized into columns of memory cell blocks.  Metallization lines, such as virtual ground lines, connect these blocks to the main bit line, where the bit can ultimately be read. 

The district court construed claim language describing the metallization lines to require that the lines be connected to each end of each block.  In construing the claims, the district court began with the plain language of the claims, which required only that the plurality of blocks be coupled together by the metallization lines, with no requirement that each end of a single block be coupled to the other. 

Despite the plain language of the claim, the district court found that intrinsic evidence limited the claim scope.  One statement in the specification described the “invention” as having a plurality of contacts connected to the virtual ground lines and main bit line at each end of the block.  A second statement described the virtual ground lines and main bit line as having a contact connected at opposing ends of each block of memory cells.  The district court also relied on a statement the applicant made to the patent office that the metallization lines allow access to each block from either end of the block. Creative appealed.

While noting that statements describing the invention as a whole are more likely to support a limiting definition of claim terms, the Federal Circuit went on to state that “this principle has no application where, as here, the other statements and illustrations make it clear that the limitations do not describe the invention as a whole.”  The specification and drawings in this case described over a dozen improvements to ROM circuitry, and in each of the sections describing these unrelated improvements the particular improvement was identified as “the invention.”

Regarding the prosecution history, the Federal Circuit found that the statement in question was not a “clear and unambiguous disavowal” of claim scope.  The Federal Circuit noted that certain claims were amended to add limiting language directed to metallization lines where each end of each block is connected to the other, while other claims lacked such a limitation.   Thus, the Court concluded that the applicant’s statement described one embodiment of the invention, but did not disavow other embodiments that were not so limited in scope.

The Federal Circuit also found that the canon of claim differentiation provided additional support for the conclusion that the asserted claim was not limited to one of the preferred embodiments.  Specifically, an unasserted claim was limited to blocks where the metallization lines are connected at each end of each of the blocks.  The Federal Circuit found that reading the asserted claim to be similarly limited would render the language of the unasserted claim superfluous.

Patents / Summary Judgment

Source Code Held to Be Relevant and Essential Discovery
Baron Services, Inc. v. Media Weather Innovations LLC
by Melissa Nott Davis

The U.S. Court of Appeals for the Federal Circuit vacated summary judgment as premature finding that the district court should have allowed plaintiff discovery of defendant’s source code.  Baron Services, Inc. v. Media Weather Innovations LLC, Case Nos. 12-1285, -1443 (Fed. Cir., May 7, 2013) (Prost, J.) (Reyna, J. dissenting).

Baron owns a U.S. patent which generally relates to systems and methods for weather reporting and forecasting.  In May 2011 Baron filed suit alleging infringement by MWI’s WeatherCall programs.  The court set a schedule with various deadlines but did not set a schedule for Markman proceedings or for exchanging invalidity or infringement contentions.  Baron served discovery seeking MWI’s source code; MWI sought and received a protective order preventing disclosure of the code.  In response to MWI’s discovery requests, Baron subsequently served a “Disclosure of Asserted Claims and Preliminary Infringement Contentions,” detailing how MWI’s products met the limitations of each asserted claim.  MWI sought summary judgment of non-infringement.  Baron responded and argued that summary judgment was premature pursuant to Rule 56(d), as the court had not construed the patent terms and Baron had not reviewed MWI’s source code.  Baron also filed a motion to compel production of MWI’s code.  The district court granted MWI’s motion for summary judgment of non-infringement.  In denying Baron’s Rule 56(d) motion, the court found that Baron never “asked for more time to complete discovery,” “failed to assert it could not prosecute this action without further discovery” and was simply arguing that “MWI is lying.”  The court also determined that claim construction was unnecessary because Baron had refused to define the terms through discovery and accordingly there were no terms in dispute.  Baron appealed.

The Federal Circuit vacated the grant of summary judgment finding “[t]he opportunity for the reasonable chance to disprove MWI’s position on non­­-infringement was relevant and essential to Baron’s opposition of MWI’s motion for summary judgment.”  The Court noted that MWI had diligently pursued the source code discovery and resorted to motion practice when the parties reached an impasse.  The Court held that the district court had abused its discretion by denying Baron’s Rule 56(d) motion.

In his dissent, Justice Reyna argued “[t]he majority takes the unusual course of vacating a summary judgment determination that is supported by the record evidence based on the premise that the district court failed to manage procedure and discovery in accordance with Baron’s case management expectations which the district court held to be unreasonable and obstructive.”   Justice Reyna posited that “[o]ur standard of review warrants deference to the district court’s characterization of the litigation dynamics.”  While some district courts have imposed local patent rules, the district court was under no obligation to incorporate Baron’s requests concerning the Markman process in to its scheduling order and was not obligated to hold a Markman hearing before summary judgment.  The dissent noted that while the Federal Court has chastised district courts for failing to conduct a rigorous claim construction before trial, claim terms need not be construed before summary judgment.

Practice Note:  While Baron prevailed in this case, parties ought not to expect that they can force a district court to adopt a patent based case management schedule if the district does not require adherence to local patent rules.

Patents / Claim Construction

Federal Circuit Finds that Arguments Made When Traversing a Restriction Requirement Can Constitute Prosecution Disclaimer
Uship Intellectual Properties
by Charles J. Hawkins

Addressing the issue of prosecution disclaimer, the U.S. Court of Appeals for the Federal Circuit affirmed the lower court’s claim construction ruling, finding that arguments made during prosecution to traverse a restriction requirement amounted to a clear and unmistakable disavowal of claim scope.  Uship Intellectual Properties, LLC v. U.S., Case No. 12-5077 (Fed. Cir., May 8, 2013) (Moore, J.).

Plaintiff Uship appealed a ruling of the trial court finding no infringement of two related patents owned by Uship.  The patents are directed to systems and methods of processing packages for shipment.  The preamble of the claims recited a “method of mailing parcels and envelopes using an automated shipping machine,” including the claimed step of “validating receipt of said parcel.”  The central issue on appeal was whether the scope of the claimed “validating” step only covers the step being carried out by an automated shipping machine or whether it covers the step being performed by a human being.

The Federal Circuit found that the “validating” step was limited to an automated shipping machine in view of a disclaimer made during prosecution of the parent application of the asserted patents.  During prosecution of the parent application, the examiner required the applicant to restrict the invention to one of two distinct inventions, a method and an apparatus, covered by the application claims.  The applicant traversed the restriction requirement, arguing that all of the claims were drawn to a single invention because the steps of the method claims all require use of an automated machine, as recited in the preamble of the claims.

The Federal Circuit found this to be a clear and unmistakable disclaimer of claim scope.  The examiner was persuaded by the applicant’s arguments and the restriction requirement was overcome, and, thus, the Court concluded that a competitor would reasonably conclude that the applicant clearly and unmistakably limited all of the method claim steps to performance by an automated shipping machine.  The fact that the applicant may have given up more than was necessary does not render the disclaimer ambiguous, noted the Court.

The Federal Circuit rejected Uship’s argument that prosecution disclaimer only applies when applicants attempt to overcome a claim rejection.  The Court summarized its body of law on prosecution disclaimer by asserting that an applicant’s statements to the U.S. Patent and Trademark Office (PTO) characterizing its invention may give rise to a prosecution disclaimer.  Statements leading to prosecution disclaimer can arise in responses made to claim rejections, but they may also arise in other contexts, such as remarks submitted with an Information Disclosure Statement.  The Federal Circuit held that arguments made in response to a restriction requirement may be a source of prosecution disclaimer.

While siding with the appellees, the Federal Circuit did make a point to reject the appellees’ argument that the appearance of the phrase “using an automated shipping machine” in the preamble raises a presumption that every step of the claimed method must be performed by a machine.  The Court stated that the plain meaning of the phrase does not clarify whether the machine must be used in one, several or all of the steps of the method.

International Trade Commission / Domestic Industry

Federal Circuit Panel Affirms Finding of No Domestic Industry Based on Ongoing Litigation
Motiva, LLC v. U.S. International Trade Commission
by Christopher L. May and Christopher G. Paulraj

The Federal Circuit recently upheld the decision of the U.S. International Trade Commission that Motiva, LLC had failed to satisfy the domestic industry requirement via licensing and, therefore, had failed to show a violation of Section 337 existed in the case of Motiva, LLC v. U.S. International Trade Commission, Case No. 12-1252 (Fed. Cir., May 13, 2013) (Prost,  J.). 

In 2010, appellant Motiva filed a complaint at the International Trade Commission against Nintendo Co., Ltd. and its U.S. subsidiary, alleging that Nintendo’s Wii entertainment system infringed two Motiva patents.  After a five-day hearing, the administrative law judge (ALJ) determined that Motiva had failed to demonstrate that it had established or was in the process of establishing a domestic industry.  The ALJ found that at the time the complaint was filed, the only activity on which Motiva could rely was a district court case that had been filed against Nintendo in 2008, that this litigation was not relevant to the domestic industry analysis because it was not related to the exploitation of the patents, and that earlier manufacturing activities were also not relevant because they had ceased as of 2007, three years prior to filing the complaint with the International Trade Commission (ITC). 

On appeal, the panel affirmed.  The panel agreed with the ITC that the proper date for determining if a domestic industry exists is the date the complaint is filed.  Next the panel found that while Motiva’s district court litigation against Nintendo could satisfy the domestic industry requirement if it was “substantial and directed towards a licensing program that would encourage adoption and development of articles that incorporated Motiva’s patented technology,” Motiva had failed to meet this standard.  The panel found that the presence of the Wii in the market had no effect on Motiva’s commercialization efforts, that Motiva’s only prototype was not market-ready and that Motiva’s litigation was targeted at financial gain instead of adoption of Motiva’s technology.  Finally, the panel found that there was no evidence that its 2007 development activities contributed to a market that existed or was in the process of being created at the time the complaint was filed. 

Practice Note:  The panel ruling continues the Federal Circuit and Commission’s recent trend towards tightening the requirements for proof of domestic industry on the basis of licensing at the ITC.

Patents / Subject Matter Jurisdiction

State Law Claims Involving Allegations of Patent Infringement Do Not Arise Under Federal Patent Law When Purely “Backward-Looking”
Forrester Envtl. Servs., Inc. v. Wheelabrator Techs., Inc.
by Blake Wong

Addressing the question of subject matter jurisdiction over state law tortious interference claims, the U.S. Court of Appeals for the Federal Circuit found that the lower court did not have subject matter jurisdiction over the claims, ruling that the tortious interference claims did not arise under federal patent law because the claims looked backwards, and had no prospects of looking forward.  Forrester Envtl. Servs., Inc. v. Wheelabrator Techs., Inc., Case No. 12-1686 (Fed. Cir., May 16, 2013) (Dyk, J.).

Forrester and Wheelabrator competed in the waste treatment market and, in particular, for the business of a customer named Kobin, a Taiwanese company operating in Taiwan. At times, Kobin bought from Wheelabrator, and at other times, from Forrester. At a time when Kobin was buying from Forrester, Wheelabrator asserted that the Forrester products Kobin was buying infringed Wheelabrator’s patents. Kobin then stopped buying from Forrester and began buying from Wheelabrator. Forrester filed state law tortious interference claims and argued that Wheelabrator’s patent infringement allegations were false.

Although Forrester originally filed its state law claims in state court, Wheelabrator removed the case to a federal district court, which denied Forrester’s motion for remand. The district court granted summary judgment on all claims in favor of Wheelabrator. Forrester appealed to the Federal Circuit, claiming that the district court lacked subject matter jurisdiction over the state law claims.

The central issue on appeal was whether the state law tortious interference claims belonged in state court or federal court. Federal courts have original jurisdiction over civil actions “arising under” federal patent law, and state law claims “arise under” federal patent law if they involve a “substantial question of federal patent law.” Wheelabrator argued that resolving the tortious interference claims required resolving whether Wheelabrator’s statements were false and, because the statements alleged patent infringement, the Court could only determine whether the statements were false after determining whether Forrester had in fact infringed Wheelabrator’s patents. Wheelabrator argued that the question then was whether the underlying patent infringement made the tortious interference claims arise under federal patent law.

Distinguishing the precedent relied upon by Wheelabrator, the Federal Circuit found that the tortious interference claims did not arise under federal patent law because the claims were “backward-looking,” whereas the false statements Wheelabrator’s cases were forward-looking. Those forward-looking statements were similar to Wheelabrator’s—allegedly false allegations of patent infringement—but the difference was in those cases, there was still a future opportunity for patent litigation, which created an opportunity for state courts and federal courts to come to inconsistent conclusions. In those forward-looking scenarios, a state court’s conclusion that the statements were false, and that there was thus no patent infringement, could directly contradict a federal court finding of patent infringement.

In contrast, Forrester’s claims were backward-looking. There was little chance of future patent litigation because Kobin was a Taiwanese company operating only in Taiwan, no facts suggested that any products would be imported into the United States, and Wheelabrator’s patents had expired. Thus, despite the underlying patent infringement question, Forrester’s tortious interference claims did not arise under federal patent law and therefore could not be heard in federal court.

Patents / Public Use Bar

No Summary Judgment of Invalidity on Prior Clinical Trials Where Confidentiality Obligations Are Imposed
Dey, L.P. v. Sunovion Pharmaceuticals, Inc.
by Cynthia Chen, Ph.D.

Addressing whether an alleged infringer’s clinical trial was an invalidating public use, the U.S. Court of Appeals for the Federal Circuit reversed a lower court’s summary judgment ruling, finding that whether a clinical trials constitutes “public use” depends on the extend of confidentiality controls and restrictions imposed by the party conducting the clinical trial.  Dey, L.P. v. Sunovion Pharmaceuticals, Inc., Case No. 12-1428 (Fed. Cir., May 20, 2013) (Bryson, J.) (Newman, J., dissenting).

Both the alleged infringer, Sunovion, and the patentee, Dey, developed pharmaceutical products for treating chronic obstructive pulmonary disease.  Dey owned two families of patents claiming the priority date of July 10, 2003.  Sunovion conducted a clinical trial (Study 50) in February 2002.  The parties stipulated that one of the formulations tested in Study 50, Batch 3501A, was identical to Sunovion’s eventual product, Brovana. The participants in Study 50 were given some information about the study and were subject to certain restrictions.  However, they were not provided with any specific information about the medicine.  They signed a consent form stating that participants must keep dosage logs and return unused medicines.  They were allowed to discuss this study with their doctors and were not prohibited from speaking with others about the study.  The clinical trial administrators were also subject to certain restrictions.  They had to sign a formal confidentiality agreement and were forbidden from disclosing the study protocols or dispensing the medicine to any person who was not a trial subject.  They were instructed to return unused medicines.  Nonetheless, a small fraction of Batch 3501A was lost and never returned.

The district court held that Sunovion was entitled to summary judgment of invalidity because Sunovion’s clinical trial constituted clear and convincing evidence of public use.  In particular, the district court found that confidentiality obligations imposed in Study 50 were so loose that use of Batch 3501A by Study 50 participants was essentially open and free.

On Dey’s appeal, the Federal Circuit reserved.  The Federal Circuit found that the use of Batch 3501A during Sunovion’s clinical trial was not “open and free” and the restrictions imposed by Sunovion rendered the use anything but “unfettered.”  The Court explained that the fact that some small fraction of the medicine was lost, or that participants were allowed to self-administer at home, would not preclude a reasonable jury from concluding that the use of Batch 3501A was sufficiently controlled and restricted.

The Federal Circuit found that confidentiality obligations imposed in Study 50 were not so loose to justify a summary judgment.  Although participants were under no obligation of confidentiality, they did not have sufficient information to reveal the composition of the medication they received.  In contrast, clinical trial investigators, who did have knowledge of the nature of the medication, were under a confidentiality obligation.

The Federal Circuit concluded that, in view of the confidentiality controls imposed by Sunovion, a reasonable jury could conclude that Study 50 was conducted with “a reasonable expectation of confidentiality” as to the nature of the formulations being tested and thus, summary judgment on the issue of public use was inappropriate.

In dissent, Judge Newman, while agreeing with the majority that Sunovion’s clinical trial did not constitute an invalidating “public use,” found that there were no pertinent facts remaining in dispute and would have entered judgment in favor of Dey on the existing record.

Patents / Injunctions Pending Appeal

Generic Versions of AstraZeneca’s Pulmicort Respules Enjoined from Launch Pending Appeal
AstraZeneca LP et al. v. Breath Ltd.
by Charles J. Hawkins and David Mlaver

In a non-precedential opinion addressing a request for injunctive relief in the context of generic pharmaceuticals, the U.S. Court of Appeals for the Federal Circuit granted an injunction to prevent generic versions of AstraZeneca’s PULMICORT RESPULES® (budesonide inhalation suspension) from launching, pending AstraZeneca’s appeal of a judgment of invalidity of one patent and non-infringement of another and on the condition of posting a $72 million bond.  AstraZeneca LP et al. v. Breath Ltd., Case Nos. 13-1312, -1352 (Fed. Cir., May 24, 2013) (Linn J.).

AstraZeneca sought to enjoin Breath Limited, Watson Laboratories, Inc., Apotex Corp., Apotex, Inc. and Sandoz, Inc. (collectively, the Generics) from launching their accused generic products during the pendency of this appeal. Breath Limited, Watson Laboratories, Inc. and Sandoz, Inc. opposed.  Teva Pharmaceuticals USA, Inc., a licensee of AstraZeneca, moved without opposition for leave to file an amicus curiae brief regarding the motion for an injunction.

The Federal Circuit, relying on Rule 8(a)(2) of the Federal Rules of Appellate Procedure for authority to grant an injunction pending appeal, considered the four factors from Hilton v. Braunskill in determining whether to grant the injunction: (1) whether AstraZeneca would be irreparably harmed without the injunction; (2) whether the defendant-appellees would be substantially harmed by the grant of the injunction; (3) whether AstraZeneca is likely to succeed on the merits; and (4) the public interest.

The Federal Circuit found that AstraZeneca had established that it was entitled to the relief of enjoining the Generics from launching their accused generic products during the pendency of AstraZeneca’s appeal.  The Court granted AstraZeneca’s motion on the condition that AstraZeneca post a $72 million bond with the district court within seven days of the date of the order.  The Federal Circuit also granted Teva’s motion for leave to file an amicus curiae brief.

In the briefing, AstraZeneca argued that it would be irreparably harmed by the “premature” launch of the generic products. Teva Pharmaceuticals, AstraZeneca’s sole licensee, made the same argument in its motion for leave to file an amicus curiae brief. Breath and Watson argued that the harm to AstraZeneca would be small and, in any event, quantifiable.

AstraZeneca further argued in its brief that the defendant-appellees would not be harmed by the injunction, pointing specifically to Apotex’s failure to oppose the motion, Sandoz’s lack of FDA approval for its generic and the protection afforded to the other appellees by a bond. Watson counter-argued that it is substantially harmed because it is ready to launch and is missing out on a lucrative opportunity to participate in a market that currently only has two players.

AstraZeneca argued that it has a high likelihood of success on the merits because the district court misapplied the obviousness standard in finding invalidity and erred in finding non-infringement after misconstruing the term “heat sterilized.”

Finally, AstraZeneca’s public interest argument focused on the need for strong patent protection to encourage pharmaceutical innovation. Breath and Watson responded by arguing that the purpose of Hatch-Waxman is “to get generic drugs into the hands of patients at reasonable prices-fast.”

Patents / Remedies

No Anti-Suit Injunction Where Foreign Arbitration Controls Resolution of Licensing Dispute
Sanofi-Aventis Deutschland GmbH v. Genentech, Inc.
by Shane G. Smith, Ph.D.

In a case addressing a request for an anti-suit injunction relating to a foreign contract arbitration, the U.S. Court of Appeals for the Federal Circuit upheld a lower court’s denial of an anti-suit injunction sought by Genentech in its feud with Sanofi-Aventis over viral replication patents, finding that the foreign contract arbitration raised different issues than the parallel patent infringement litigation in district court.  Sanofi-Aventis Deutschland GmbH v. Genentech, Inc., Case No. 12-1454 (Fed. Cir., May 10, 2013) (Reyna, J.) (Dyk, J., concurring).

Sanofi-Aventis, a German company, owns patents covering the use of viral enhancer sequences to augment recombinant protein production.  Genentech licensed those patents under a 1992 agreement that named German law as the law governing its terms.  The agreement further required disputes arising under it to be settled by arbitration in accordance with the rules of the International Chamber of Commerce (ICC).

In 2008, a dispute did in fact arise when Sanofi-Aventis accused Genentech of failing to identify Genentech’s Rituxan and Avastin drugs as “licensed products” for which royalties were due under the agreement.  When a Sanofi-Aventis predecessor initiated ICC arbitration in Germany, Genentech terminated the agreement.  It next sought and won a declaratory judgment of non-infringement in a U.S. district court, which the Federal Circuit affirmed.  Genentech then moved the district court to enjoin Sanofi-Aventis from pursuing the ICC arbitration.  After the district court denied that request, Genentech appealed.

The Federal Circuit, applying U.S. Court of Appeals for the Ninth Circuit law, affirmed.  Citing E. & J. Gallo Winery v. Andina Licores S.A., the Court applied a three-factor test turning, in this instance, on the second-half of its first prong:  “[W]hether or not the first action is dispositive of the action to be enjoined.”  Non-identical issues that are still “functionally the same such that the result in one action is dispositive of the other” satisfy this criterion.

Genentech, however, could not meet this standard, as the parties had chosen to arbitrate license disputes in foreign proceedings governed by ICC rules and German substantive law.  So while the Federal Circuit acknowledged that Genentech did not infringe the licensed patents as a matter of U.S. patent law, the foreign arbitrator was free to adopt a definition of “licensed product” under the agreement that differed from American standards of patent infringement.  And indeed, as the Court noted, the foreign arbitrator had concluded as a matter of German law that Genentech could infringe the patents by using the enhancer sequences in its manufacturing process even though the enhancer was not within the final product.  The arbitrator had also concluded that Genentech may infringe even if the patents were invalid.  These departures signaled that the issues to be settled by the ICC arbitration differed from those resolved in district court.  Genentech’s request for an anti-suit injunction thus failed on the first Gallo factor.

The Federal Circuit then analyzed the final two Gallo factors, finding that U.S. policies favoring forum selection clauses—and holding parties to them—would not be frustrated and in fact enhanced judicial comity.  These findings further weighed against an injunction. 

In his concurrence, Judge Dyk explained that the first Gallo prong, consideration of the controlling issues, should be given substantial weight in the analysis.  Citing 9th Circuit precedent, Judge Dyk cautioned litigants from reading the majority’s evaluation of each Gallo factor as an indication that they should be considered on equal footing.  The first prong, he wrote, presents a “threshold consideration.”

Patents / Conception

Immaculate Conception? It Is in the Eye
Dawson v. Dawson and Bowman
by Bhanu K. Sadasivan

Addressing the standard of conception of an invention, the U.S. Court of Appeals for the Federal Circuit affirmed a decision of the U.S. Patent and Trademark Office Board of Patent Appeals and Interferences (Board), finding that to show conception an inventor must demonstrate “conceiving a way to make an idea operative” although the inventor need not know “that a completed invention will work for its intended purpose.” Dawson v. Dawson and Bowman, Case Nos. 12-1214, -1215, -1216,; -1217 (Fed. Cir., Mar. 25, 2013) (Bryson, J.) (Reyna, J. dissenting).

The case stems from a patent interference instituted by the University of California, San Francisco (UCSF) with respect to two patents issued to Dr. Chandler Dawson and Dr. Lyle Bowman and assigned to InSite Vision (InSite).  UCSF provoked the interference by filing a patent application naming Dr. Dawson as the sole inventor and generally copying the specification and claims of the two patents.  Dr. Dawson had previously worked for UCSF before joining InSite.  The Board ruled that UCSF had failed to prove sole conception by Dr. Dawson and the Federal Circuit affirmed.

To prove sole conception by Dr. Dawson, UCSF proffered two documents relating to Dr. Dawson’s presentation on the topical use of azithromycin, an azalide antibiotic, to control eye infection.  Dr. Dawson had given that presentations at a World Health Organization (WHO) meeting in the summer of 1997 while still an employee of UCSF.  In an unusual posture, UCSF chose not proffer any testimony from Dr. Dawson himself.  UCSF also argued that a 0.5 percent azithromycin ointment prepared by Dr. Charles Leiter for Dr. Kenneth Chern, a colleague of Dr. Dawson, and Dr. Chern’s testing of the ointment further corroborated Dr. Dawson’s solo invention. 

The Federal Circuit disagreed. The Court found that UCSF failed to provide evidence to suggest a complete conception of that specific formulation, i.e., “0.01% to 1.0% of an azalide antibiotic,” and other such requirements in the interference count.  The Court concluded that Dr. Dawson’s idea to develop a product that was ‘like’ another product did not establish that Dr. Dawson had a specific, settled idea or particular solution for his invention.

The Federal Circuit rejected UCSF’s argument that an inventor did not need to know that his invention would work to satisfy conception but needed only to have conceived that his topical use of azithromycin would be effective.  The Court explained that part of the conception inquiry asks whether the inventor possessed an operative method of making the invention. So while “an inventor need not know that his invention will work for conception to be complete, there is a critical difference between conceiving a way to make an idea operative and knowing that a completed invention will work for its intended purpose.” 

Judge Reyna dissented.  “To demonstrate conception, the law does not require that Dr. Dawson develop a working physical embodiment of his innovative idea. . . . While conception […] requires ‘the formation, in the mind of the inventor, of a definite and permanent idea of the complete and operative invention,’ it does not require reduction to practice.”  Judge Reyna described the work done at InSite as commercialization and cautioned against changing the law of inventorship.

Cert Alert

Who Has the Burden of Proof?
Medtronic Inc. v. Boston Scientific Corp.
by Paul Devinsky

On May 20, 2013, the U.S. Supreme Court agreed to review a U.S. Court of Appeals for the Federal Circuit decision (IP Update, Vol. 15, No. 10) that in an action for a declaratory judgment of non-infringement, a patent licensee bears the burden of proof in those cases where the license remains in effect, notwithstanding the declaratory judgment challenge; i.e., if the patent owner has essentially no infringement counterclaim it can bring. Medtronic Inc. v. Boston Scientific Corp., U.S., No. 12-1128, May 20, 2013.

The question presented for certiorari is as follows:

In Medlmmune, Inc. v. Genentech, Inc., 549 U.S. 118, 137 (2007), this Court ruled that a patent licensee that believes that its products do not infringe the patent and accordingly are not subject to royalty payments is “not required … to break or terminate its … license agreement before seeking a declaratory judgment in federal court that the underlying patent is … not infringed.”

The question presented is whether, in such a declaratory judgment action brought by a licensee under MedImmune, the licensee has the burden to prove that its products do not infringe the patent, or whether (as is the case in all other patent litigation, including other declaratory judgment actions), the patentee must prove infringement.

Cert Alert

The Supreme Court to Review the Standard for Standing to Bring Lanham Act False Advertising Claims
Lexmark International Inc. v. Static Control Components Inc.
by Charles J. Hawkins

On June 3, 2013, the U.S. Supreme Court agreed to review a U.S. Court of Appeals for the Sixth Circuit decision (IP Update, Vol. 10, No. 5) that standing for a false advertising claim could be based on a showing of a “reasonable interest,” and was not limited only to direct competitors. Lexmark International Inc. v. Static Control Components Inc., Case No. 12-873 (Supr. Ct., June 3, 2013).

The question presented for certiorari is as follows:

Whether the appropriate analytic framework for determining a party’s standing to maintain an action for false advertising under the Lanham Act is the factors set forth in Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters (AGC), 459 U.S. 519, 537-45 (1983), as adopted by the U.S. Court of Appeals for the Third, Fifth, Eighth, and Eleventh Circuits; the categorical test, permitting suits only by an actual competitor, employed by the U.S. Court of Appeals for the Seventh, Ninth, and Tenth Circuits; or a version of the more expansive “reasonable interest” test, either as applied by the 6th Circuit in this case or as applied by the U.S. Court of Appeals for the Second Circuit in prior cases.

Patents / Proposed Rulemaking

USPTO Proposes Rules to Conform with the Patent Law Treaty
by Bernard P. Codd

The U.S. Patent and Trademark Office (USPTO) recently proposed new rules to conform with the Patent Law Treaty (PLT) and the Patent Law Treaties Implementation Act of 2012 (PLTIA).  78 Fed. Reg. 1788 (April 11, 2013).  Among the proposed rule changes, there are three notable changes pertaining to  the filing date requirements for a patent application, the restoration of patent rights via the revival of abandoned applications and acceptance of delayed maintenance fee payments and the restoration of the right of priority to a foreign application or the benefit of a provisional application.

Under the proposed rules, a claim is no longer required to obtain a non-provisional utility application filing date.  In addition, a non-provisional application can be filed without a specification and drawings by making reference to a previously filed application.  An application filed either way will be treated in a similar manner as a current application that is missing parts.  The applicant will be given a period of time to file a claim and/or a copy of the missing specification and drawings, or the application will be abandoned.  If such an application is abandoned it will be treated as if it were never filed, unless the application is subsequently revived.  The USPTO is further proposing a reduction in patent term adjustment if an application is not in condition to be examined within eight months of filing or commencement of the national phase.

It is proposed that unavoidable delay as a basis for reviving an abandoned application or making a late payment of a maintenance fee be eliminated.  Instead all petitions to revive an application or accept late payment of a maintenance fee would be determined solely on the basis of unintentional delay.  Furthermore, the 24-month time limit for asserting an unintentional delay would be eliminated under the proposed rules.

Priority to a prior-filed foreign application or the right to benefit of a prior-filed provisional application can be restored within two months from the expiration of the 12-month period (six-month period for a design application) under the proposed rules if the delay in filing was unintentional.  The Office may require additional information from the petitioner if there is a question whether the delay was unintentional. 

The proposed petition fee for reviving an abandoned application, acceptance of a late maintenance fee payment and restoration of priority to an earlier-filed foreign application or benefit to an earlier-filed provisional application is $1700 and $850 for a small entity (there is no micro-entity fee).

Trademark / Right of Publicity

First Amendment Defense Fails to Sack Quarterback’s Right-of-Publicity Suit
Ryan Hart v. Electronic Arts, Inc.
by Mary Hallerman

Addressing for the first time the proper test for analyzing right-to-publicity claims in its circuit, the U.S. Court of Appeals for the Third Circuit reversed a lower court summary judgment decision that a company’s unauthorized use of a college football player’s likeness in a popular sports video game was protected under the First Amendment.  Ryan Hart v. Electronic Arts, Inc., Case No. 11-3750 (3d Cir., May 21, 2013) (Greenway, Jr., J.) (Ambro, J., dissenting).

Ryan Hart, a quarterback at Rutgers University from 2002 to 2005, brought a putative class action lawsuit against Electronic Arts (EA) for using college football players’ likenesses in EA’s popular NCAA Football video game.  NCAA Football included a digital avatar that played on the game’s Rutgers football team that closely resembled Hart in both appearance and biographical information.  Because the 3d Circuit and the U.S. District Court for the District of New Jersey had not expressly adopted a test for analyzing right-to-publicity claims, the trial court analyzed the case under two tests—the Transformative Use Test, commonly used in copyright law, and the Rogers Test, commonly used in trademark claims.  According to the district court, both tests yielded the same result:  EA’s First Amendment defense trumped Hart’s right-to-publicity claim, due in part to a game player’s ability to modify certain characteristics (height, weight, hairstyle, face shape, body size and complexion).  Hart appealed. 

The 3d Circuit explained that the proper test for analyzing right-of-publicity claims in that circuit is the Transformative Use Test because of that test balances the right of publicity against First Amendment rights.  Under the Transformative Use Test, a court first examines whether the work is primarily the creator’s own expression or the individual’s likeness.  In applying the test, the 3d Circuit observed that EA’s digital avatar closely resembled Hart’s physical likeness and included Hart’s identical biographical information.  The court also determined that the context in which the avatar appears—a football game—did not transform the digital avatar’s identity in any way.  Indeed, the court observed that the digital Ryan Hart does exactly the same thing the actual Ryan Hart did while at Rutgers. 

With respect to a player of NCAA Football’s ability to change the avatar’s appearance, the 3d Circuit noted that this interactive feature, without more, cannot satisfy the Transformative Use Test.  If a game player chose to make these modifications to an avatar, the court observed such changes would be superficial and thus not a transformative use of a college football player’s likeness.  The court thus reversed the trial court’s grant of summary judgment to EA and remanded for further proceedings.

In dissent, Judge Ambro agreed with the 3d Circuit’s decision to employ the Transformative Use Test, but contended that the court had wrongly applied the test in this case.  Judge Ambro argued that the court had improperly limited its inquiry solely to Hart’s likeness rather than the other features of NCAA Football.  In Judge Ambro’s view, the numerous creative elements in NCAA Football as a whole transformed Hart’s likeness and therefore entitled the work to First Amendment protection. 

EA petitioned for rehearing en banc on June 4, supported by amici media companies.  IP Update will monitor this case and update readers on any developments as they become available.  

Trademarks / Fair Use

Second Circuit Revives Trademark Suit Against Oprah Winfrey
Kelly-Browne et al. v. Winfrey et al.
by Sarah Bro

Vacating a district court’s grant of a motion to dismiss a trademark infringement claim against defendants Oprah Winfrey, Harpo, Inc. and Harpo Productions, Inc. (collectively, Harpo), the U.S. Court of Appeals for the Second Circuit disagreed with the lower court’s holding that defendants demonstrated fair use of plaintiff’s mark and also held that plaintiff is not required to make a threshold showing that defendants used the phrase at issue as a “trademark in commerce” in order to state a claim for infringement under the Lanham Act.  Kelly-Browne et al. v. Winfrey et al., Case No. 12-1207-cv (2d Cir., May 31, 2013) (Straub, J.) (Sack, J., concurring).

Plaintiff, Simone Kelly-Brown, is the owner of Own Your Power Communications and the federally registered OWN YOUR POWER trademark (registered in 2008), under which she offers services including workshops and seminars in the fields of entrepreneurship and personal awareness. In 2011, Kelly-Brown sued Harpo for trademark infringement, reverse confusion and false designation of origin after she discovered that Oprah Winfrey’s October 2010 issue of O Magazine featured the “Own Your Power” phrase on its cover, in addition to Harpo’s use of the phrase in connection with an array of online content, as well as the production of an “Own Your Power” event, which was later re-capped in other issues of the magazine and on Oprah’s website. Kelly-Brown also brought suit for vicarious and contributory trademark infringement against several corporate sponsors of Harpo’s “Own Your Power” event, such as Wells Fargo, Estee Lauder and Clinique Laboratories, but the 2d Circuit affirmed the district court’s dismissal of those claims.

The district court granted Harpo’s motion to dismiss in its entirety, finding that Harpo’s use of “Own Your Power” constituted fair use.  The defense of fair use requires proof that the use of a mark is made other than as a trademark, in a descriptive sense and in good faith. The district court reasoned that Harpo’s use of the phrase was non-trademark use because observers of the website, magazine and/or the “Own Your Power” event would not believe that they were affiliated with Kelly-Brown and her company. The district court also found that Harpo’s use of the phrase was descriptive because it “described an action that it hoped that [m]agazine readers would take after reading the [m]agazine.” Finally, the district court also held that Harpo did not exhibit bad faith in using the mark. Kelley-Brown appealed.

On appeal, the 2d Circuit found that Harpo had used the “Own Your Power” phrase “in commerce” because it was used on and in connection with goods and services, namely, the O Magazine and sponsored website content.  Accordingly, the court declined to adopt the rule that a plaintiff must show that a defendant was using allegedly confusingly similar content “as a mark,” i.e., “as a symbol to attract public attention,” in order to establish consumer confusion.  The court then reviewed the three fair use requirements to determine if Harpo met its defensive burden.

With respect to trademark use, the Court agreed with Kelly-Brown’s claims that the repetitive use of the “Own Your Power” phrase across various platforms indicated that Oprah Winfrey and Harpo were attempting to build a new segment of Oprah’s media empire around the catchphrase.  Accordingly, the court rejected Harpo’s claims under the Packman v. Chicago Tribune Co. decision that any use of the phrase on Oprah’s website, or for the event that followed the original use of the mark on the 2010 O Magazine cover, was only incidental to, or derivative of, that original use.

As to Harpo’s claims that use of “Own Your Power” was in a descriptive sense, the court found that Harpo did not meet its burden of proof because use of the mark on the O Magazine cover did not appear to describe the contents of a particular item in the magazine. Finally, because there were disputed factual issues regarding Harpo’s knowledge of Kelly-Brown’s OWN YOUR POWER mark, the court held that the district court erred in finding that Harpo conclusively demonstrated good faith in its use of the phrase.

Because Harpo did not meet its burden to establish a fair use defense, the court vacated the district court’s motion to dismiss and remanded Kelly-Brown’s trademark infringement, false designation of origin and reverse confusion claims.  The court also reinstated her related state law claims. 

Judge Sack contributed a concurring opinion indicating that the majority’s opinion should have emphasized the fact that the alleged attempt by Harpo to create a connection between Oprah Winfrey and the “Own Your Power” phrase through the repeated used of the phrase in varying contexts and across media platforms was reason to reject the fair use defense and not solely because of the use of the mark on the O Magazine cover.  In particular, Sack voiced concern that the court’s opinion could be “misconstrued to suggest a general limitation upon the ability of a publisher in any medium to use a trademarked term, in good faith, to indicate the contents of its own communication—whether by magazine cover, newspaper headline, ‘blog’ heading, or otherwise.”   

Trademark / Contributory Infringement

This Flea Market Needs a Real Coach
Coach Inc. v. Frederick Goodfellow
by Shon Lo

The U.S. Court of Appeals for the Sixth Circuit affirmed liability of a flea market operator for contributory trademark infringement for failure to stop the sale of counterfeit goods at the market despite numerous warnings.  In doing so, the Sixth Circuit has followed the example of the U.S. Court of Appeals for the Seventh, Ninth and Second Circuits.  Coach Inc. v. Frederick Goodfellow, Case No. 12-5666 (6th Cir., May 31, 2013 (McKeague, J.). 

Plaintiff Coach filed suit under the Lanham Act against Goodfellow who owned and operated a Memphis-area flea market after Goodfellow failed to take action in response to letters from Coach and the local district attorney informing him that counterfeit sales of Coach products were occurring at the flea market.  Numerous counterfeit Coach products were seized during raids on the flea market both before and after the lawsuit was filed.  Goodfellow admitted knowing that vendors were selling counterfeit Coach products, but did not take any effective remedial measures.

The district court granted partial summary judgment to Coach on the issue of contributory liability after viewing the record in the light most favorable to Goodfellow, despite his failure to respond to Coach’s motion.  Goodfellow moved to set aside the order based on attorney error, alleging the motion had been misplaced by his attorney, but made no argument on the merits.  A jury awarded Coach just over $5 million dollars in damages based on willful infringement of 21 of Coach’s marks.  The district court awarded Coach attorneys’ fees and costs, finding the case exceptional based on Goodfellow’s failure to litigate liability, and the jury finding of willful infringement.  Goodfellow appealed.

On appeal, the 6th Circuit noted that because Goodfellow failed to contest Coach’s motion for partial summary judgment, he had effectively forfeited his right to appeal liability.  Nonetheless, the court exercised its discretion and addressed the merits of Goodfellow’s case.  After de novo  review, the 6th Circuit found no clear error in the district court’s ruling because Goodfellow “continued to rent spaces at his flea market to vendors that he know, or should have known, were engaging in infringing activity,” and the facts of the case were sufficient to support a finding of contributory liability.  In particular, the court noted Goodfellow’s failure to undertake reasonable remedial measures after receiving actual notice of ongoing infringing activity.  The court also affirmed the district court’s award of attorneys’ fees and costs.

In its decision, the 6th Circuit relied on the Inwood Labs. v. Ives Labs, a 1982 Supreme Court decision, as well as circuit court decisions from the Seventh, Ninth and Second Circuits applying Inwood and finding flea market operators subject to liability for trademark infringement by vendors. 

Copyright / Merger Doctrine

Diagram Constitute Protectable Expression of Ideas
Enterprise Management Ltd. v. Warrick
by Ulrika E. Mattsson

The U. S. Court of Appeals for the Tenth Circuit of Appeal reversed an award of a summary judgment to a defendant who was accused of infringing a diagram illustrating organizational concepts, stating that the merger doctrine did not prevent copyright protection because the ideas embodied in the diagram could have been expressed in other original ways.  Enterprise Management Ltd. v. Warrick,  Case No. 12-1135 (10th Cir., May 21, 2013).

Organizational management expert Mary Lippitt licensed use of certain materials, including a diagram about reasons for failures to effect organizational change, to Enterprise Management Ltd.  The work, and the changes to the work, were registered with the U.S. Copyright Office in 1987, 2000 and 2003, respectively. 

A professor at the University of Colorado, Donald W. Warrick, who offered management consulting services, obtained a copy of Lippitt’s diagram from a student and then used the diagram both for teaching his classes and for providing management services.  

Enterprise and Lippitt sued Warrick, alleging copyright infringement.  Warrick argued that the plaintiffs could not prove that Lippitt held a valid copyright on the diagram because she could not produce the diagram copyrighted in 1987 to show its similarity to Warrick’s work.  Warrick also argued that the plaintiffs’ diagram was not copyrightable and that his diagram did not infringe on any protected expression in plaintiffs’ diagram.  The district court granted summary judgment in favor of Warrick.  

Copyright law protects the expression of ideas rather than the underlying ideas themselves.  While “pictorial, graphic, and sculptural works” are generally copyrightable, the protection does not “extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery,” 17 U.S.C. §102(a)(5)and (b).  When a work expresses an idea in the only way it can be expressed, courts deny copyright protection to those expressions under the “merger doctrine” to avoid giving the author a monopoly over the underlying idea.  

On Lippitt’s appeal, the 10th Circuit reversed and remanded the case for further proceedings.  As explained by the court, in this instance the merger doctrine did not preclude copyright protection because even though the plaintiffs’ diagram expressed certain ideas, Warrick could have expressed those ideas differently.  Because there are many ways to express the ideas illustrated in Lippitt’s diagram, the expression did not “merge” with the underlying ideas. 

The 10th Circuit also rejected Warrick’s argument that the elements of Lippitt’s diagram are not eligible for copyright protection and that the diagram lacks the minimal degree of creativity necessary to qualify for copyright protection.  “Any copyrightable work can be sliced into elements unworthy of copyright protection.” Here, the court concluded that the arrangement and choice of expression in Lippitt’s diagram is copyrightable.

Lastly, the 10th Circuit rejected Warrick’s argument that the plaintiffs could not prove that Lippitt held a valid copyright on the diagram because she could not produce the version of the diagram first registered with the Copyright Office.  The Court said that the plaintiffs need only produce proof of the registration itself.

Copyrights / Injunctions and Contractual Terms

Time Warner Avoids Nexstar’s Broadcasting Retransmission Injunction
Nexstar Broadcasting, Inc. v. Time Warner Cable, Inc.
by Donna M. Haynes

The U.S. Court of Appeals for the Fifth Circuit affirmed a lower court’s ruling denying a content provider/broadcaster’s motion for a preliminary injunction and a temporary restraining order to prevent a cable company from retransmitting copyrighted broadcasts to non-local markets, finding that petitioner was not likely to succeed on the merits of its breach of contract or copyright infringement claims.  Nexstar Broadcasting, Inc. v. Time Warner Cable, Inc., Case No. 12-10935 (5th Cir., May 30, 2013) (Jolly, J.).  

Nexstar produces and distributes copyrighted broadcast television signals.  Time Warner operates systems to distribute those signals to television viewers.  Nexstar and Time Warner entered into a Retransmission Consent Agreement (RCA) that permitted Time Warner to retransmit certain television signals owned by Nexstar.  Nexstar brought suit against Time Warner alleging that Time Warner breached various provisions of the RCA by retransmitting Nexstar’s copyrighted signals outside of an agreed upon geographic area (non-local).  Further, Nexstar alleged that Time Warner’s breach constituted copyright infringement that could not be excused since Time Warner was not entitled to a statutory copyright license.

In the U.S. District Court for the Northern District of Texas, Nexstar moved for a preliminary injunction and a temporary restraining order.  In response to Nexstar’s motions, Time Warner argued that the RCA provided broad retransmission rights that were not geographically restricted and, thus, Time Warner did not infringe any copyright owned by Nexstar.  The district court denied Nexstar’s motions, finding that Nexstar was not likely to succeed on the merits of its claims.  Applying Texas law, the district court held that Time Warner did not breach the RCA because “[n]owhere in the RCA d[id] Nexstar limit its retransmission consent” to only local markets. Because Nexstar’s copyright infringement claims were contingent upon breach of the RCA, Nexstar’s copyright infringement claims were also unlikely to succeed on the merits.  Nexstar sought interlocutory appeal.

The 5th Circuit affirmed, reiterating the district court’s reasoning and concluding that the RCA granted Time Warner the ability to retransmit Nexstar signals over every Time Warner system, including non-local markets.  According the court, the RCA only described what Time Warner must retransmit, but was silent as to what it may retransmit.  Indeed, the language of the RCA as a whole demonstrated that the parties “knew how to insert geographic limitations when relevant,” but simply did not do so. 

As for Nexstar’s copyright infringement claim, the 5th Circuit relied on a slightly different rationale than the district court, reasoning that under the RCA and the Federal Communications Act, Time Warner was permitted to retransmit Nexstar’s signals notwithstanding their copyright status, so long as Time Warner later paid Nexstar a royalty.  The court recognized provisions under which Nexstar could exercise non-retransmission rights by notifying Time Warner of its intent to do so—but found that Nexstar never provided such notice.  Thus, the court found that Time Warner was eligible for a statutory copyright license.  

Practice Note:  Practitioners should be aware that affirmative directives in agreements may not have the effect of excluding, sub silento, all other options.  If intended, practitioners should include a clarifying statement in such agreements expressly prohibiting specific directives from morphing into permissive options, i.e., to show that the intent of the parties as to what one party “must” do, does not include (silent) permission as to what that party “may” do.

Copyright / Standing

Acquiring Bare Right to Sue for Copyright Infringement Is Insufficient to Confer Standing
Righthaven LLC v. Hoehn
by Elisabeth (Bess) Morgan

In a case of substance triumphing over form, the U.S. Court of Appeals for the Ninth Circuit held that a company who was effectively assigned the “bare right” to sue for copyright infringement of newspaper articles did not, in fact, have standing to sue, because the company did not acquire any of the exclusive rights under copyright in the works.  Righthaven LLC v. Hoehn, Case Nos. 11-16751; 16776 (9th Cir., May 9, 2013) (Clifton, J.).

Plaintiff Righthaven LLC (Righthaven) identifies infringements of third party copyrighted works and receives a limited grant of rights to such copyrighted works from the owner in order to take action against the alleged infringers.  In separate lawsuits, Righthaven sued Wayne Hoehn and Thomas DiBiase for posting on the internet without authorization articles from the Las Vegas Review-Journal.  After identifying the infringements, Righthaven executed assignment agreements with the copyright owner of the articles, Stephens Media, giving to Righthaven “all copyrights requisite to have Righthaven recognized as the copyright owner of the Work[s] for purposes of Righthaven being able to claim ownership as well as the right to seek redress for … infringements of the copyright … in and to the Work[s].”  Righthaven and Stephens had also executed a Strategic Alliance Agreement (SAA) that articulated limitations on Righthaven’s rights to any copyrights it was assigned.  In both cases, the district courts dismissed the copyright infringement claims on the grounds that Righthaven lacked standing.  In Hoehn, the district court granted summary judgment on the grounds of fair use as an alternative basis of decision.  Righthaven appealed.

Consolidating the cases on appeal, the 9th Circuit agreed with the lower courts’ conclusion that Righthaven lacked standing to sue for infringement of the articles.  Under the Copyright Act, only the owner of an exclusive right articled under § 106 of the Copyright Act has standing to sue for infringement.  Notwithstanding the broadly worded language in the copyright assignments, the substance of the transactions between Righthaven and Stephens showed that Stephens effectively retained all of the exclusive rights to the copyrighted works.  Stephens had “unfettered and exclusive ability” to exploit the copyrights, while Righthaven had no right to exploit, reproduce, distribute or collect royalties from the exploitation of the copyrighted works.  The court reasoned that Righthaven’s contracts with Stephens only truly conveyed the right to sue for infringement, which is insufficient to confer standing.  Righthaven’s attempt to argue that   the parties’ intent was to convey all rights necessary for it to sue was unsuccessful, as the court found the contracts clearly gave Stephens the right to control the copyrights.  Lastly, the court held that an amended SAA executed by the parties after the lawsuits were initiated was of no consequence, because generally standing is based on the property interests at the time of filing  and because the amended SAA did not materially change Righthaven’s rights.

The 9th Circuit affirmed the district courts’ dismissal of each case based on lack of standing.  The court vacated the portion of the order in Hoehn granting summary judgment based on fair use, on the grounds that the Court lacked jurisdiction to rule on the merits of the claim.

Trade Secrets / Misappropriation

Use Can be Inferred from Reliance on Trade Secrets in Developing One’s Own Technology
Wellogix, Inc. v. Accenture, LLP
by D. Jeremy Harrison

Finding sufficient evidence to support a jury’s verdict, the U.S. Court of Appeals for the Fifth Circuit affirmed a $45 million trade secret misappropriation award.  Wellogix, Inc. v. Accenture, LLP, Case No. 11-20816 (5th Cir., May 15, 2013) (Higginson, J.).

In an attempt to modernize construction of oil and gas wells, Wellogix developed software that allows companies to plan, procure and pay for complex well construction services online.  The software featured dynamic templates able to adjust costs and supply estimates based on “intelligence” built into underlying source code.  Wellogix was the only company offering such software from 2000 to 2005, but required the assistance of other companies for core accounting functions and promotion of the product.  To fill these needs, Wellogix entered into agreements with SAP America and Accenture and provided its source code to both parties under confidentiality agreements. 

In the meantime, Wellogix participated in pilot projects with various oil companies using its complex services software, including a 2004 “eTrans” pilot that provided BP America access to the source code.  BP subsequently discontinued the eTrans project and instructed Accenture to select a software provider for a new BP project.  Both Wellogix and SAP pitched their integrated software for that project.  However, without notifying Wellogix, Accenture and SAP began developing the complex services component of the software for BP.  In doing so, Accenture and SAP apparently accessed a confidential online eTrans portal that contained Wellogix’s flow diagrams, design specifications and source code.In 2008, Wellogix sued Accenture, SAP and BP in Texas state court for misappropriation of trade secrets.  SAP was dismissed for lack of venue, and Wellogix and BP agreed to arbitrate.  Wellogix’s misappropriation suit against Accenture proceeded to trial, and the jury awarded Wellogix compensatory damages of $26 million and punitive damages of $68 million (the punitive award was later reduced to $19 million).  Accenture appealed.

The 5th Circuit affirmed the verdict finding first that Wellogix indeed possessed a trade secret, notwithstanding Accenture’s contention that Wellogix disclosed its technology to the public in various patent documents.  These documents, however, were not entered into evidence by either party, and Accenture was unable to demonstrate that the patents destroyed those trade secrets. 

In determining that Accenture used Wellogix’s trade secrets, the Court concluded that “use” can be found if Accenture relied on Wellogix’s trade secrets to assist or accelerate research or development of its own complex services templates.  Evidence of such reliance included Accenture’s ability to access the trade secrets via the eTrans portal, an Accenture document discussing the “creation of … complex service templates” that contained the statements “[u]se Wellogix content” and “better deliver similar or better functionality than Wellogix or we may have a problem” and a statement from a BP employee advising Wellogix to sue Accenture for utilizing Wellogix’s confidential information.  Although circumstantial, the Court concluded that this evidence was enough for a jury to legitimately infer that Accenture used Wellogix’s templates to develop its own. 

Notably, the Court stated that “[h]ad we sat in the jury box, we may have decided otherwise.”  Nevertheless, it determined that the jury’s findings were supported by the record and therefore affirmed the verdict and upheld the damages awards.


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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JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at www.jdsupra.com) (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

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Privacy Officer
JD Supra, LLC
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JD Supra, LLC
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