MVS Filewrapper® Blog: Senate Bill Aimed at Combating Cyber Espionage

Senator Carl Levin (D-MI) has introduced a bill called the "Deter Cyber Theft Act" to the Senate floor that would require the Director of National Intelligence to report annually to congressional committees concerning foreign countries that engage in economic and industrial cyber espionage relating to intellectual property and proprietary information owned by U.S. companies.

 

Under the proposed regime, each report would include:

·         A list of foreign countries engaging in economic or industrial cyber espionage against U.S. entities, including a watch list of the worst offenders;

·         A list of U.S. technologies or proprietary information being targeted, and if possible, a list of the information that has been stolen;

·         A list of items manufactured or services provided as a result of the stolen technologies and information;

·         A list of foreign companies benefiting from such theft;

·         Details of the espionage activities of foreign countries;

·         Actions being taken by U.S. federal agencies to combat cyber espionage.

 

The bill went before the Senate on May 7, 2013 and was referred to the Committee on Finance. Although no action on the bill is currently pending, Senator Levin has stated that his renewed efforts to move this bill through Committee are prompted by recent events concerning cyber espionage.  Senator Levin's complete comments on the bill can be found here. 

MVS Filewrapper® Blog: Bring on the New Year—What is in Store for IP in 2014?

Happy New Year to all of our FilewrapperÒ followers! We hope 2013 was a productive year and wish you the best in 2014. As the New Year quickly approaches we would like to share with you a few predictions for 2014 for you to look forward to and for which to prepare!

·         Increased opportunities for quasi-litigation under AIA.  Various new mechanisms are available to challenge patents under the America Inventors Act (also referred to as “AIA” or “Patent Reform”) many provisions of which took effect in 2013. New strategies are available to challenge patents at the USPTO instead of challenging in court, providing distinct advantages—and some disadvantages.  Inter Partes Review, Post-Grant Review and transitional programs specific for business method patents are quasi-litigation proceedings which are heard by a panel of USTPO administrative law judges.  Ex Parte Reexamination—which has been available since 1981—also remains to allow a patent challenge to be heard by a patent examiner, requiring little from the challenger other than filing required papers with some evidence of patent invalidity.  The cost for ex-parte reexamination has significantly increased, although it remains a far less expensive option than litigation with the courts.

·         (Finally) an international design patent application is available!  Design patents protect a product’s new, original and ornamental design.  Design patents present a smart option for investment in protecting a product, since they cost significantly less than utility patents and are generally granted at a much faster rate.  In addition to these benefits of filing design patents, changes in international design registration under the Hague Agreement may facilitate more effective international protection for your design inventions.  Effective December 18, 2013 a single international application designating a variety of countries for protection can be filed through the International Bureau of WIPO.  This is beneficially a single international application to be filed at one location, which will ultimately be examined by many different Offices thereafter to provide more prompt and cost effective options for design protection.  Over 60 countries and territories—including the European Union—are members of the Hague Agreement.  However, there are various countries that are excluded from this treaty (e.g. Australia, Canada, China, Mexico, Japan, India, and Brazil), which would require a separate application as has been done in the past for foreign design patents.  Nonetheless, the Hague Agreement provides significant improvements for international design protection.

·         (Some USPTO) Fees Decrease January 1, 2014.  In addition to the new classification of “micro-entity” status for Applicants to receive 75% reduction of some USPTO fees that took effect in 2013, the New Year also brings certain fee reductions.  Notably, Issue Fee payments for granted patents are substantially reduced (from $1,780 to $960 for large entity), along with the removal of publication fees and assignment recordation fees.  Reissue patent, design patent and plant patent issue fees are also decreasing.  In addition, in 2014 certain PCT fees will be eligible for payment under small and micro entity status.

·         The search continues for a test to determine patentable subject matter under §101.  The Supreme Court will hear CLS Bank v. Alice in 2014 after the Federal Circuit’s en banc decision in 2013 found many software patents to be ineligible.  The Supreme Court will again try to define an abstract idea in considering whether claims to a computerized method (using a computer-readable medium and a computer to implement instructions) is patentable subject matter.  Both the Federal Circuit and patentees are still searching for a test under §101 that is “consistent, cohesive, and accessible [to provide] guidance and predictability for patent applicants and examiners, litigants, and the courts.”

·         We may receive further guidance on Claim Indefiniteness.  The Supreme Court is expected to grant certiorari on Nautilus v. Biosig Instruments involving indefiniteness under §112, second paragraph to determine whether claims having multiple reasonable interpretations are too ambiguous and would render a patent unenforceable for lack of written description.

·         Protecting American from “Patent Trolls.”  As previously reported on FilewrapperÒ, there is legislative movement in the House and Senate to limit lawsuits which can be filed by non-practicing entities (NPEs or Patent Trolls).  There seems to be great energy around limiting “frivolous” lawsuits in our court system.  In early 2014, the Senate will consider a companion bill to Senate 1720 ("Patent Transparency and Improvements Act of 2013"), which is said to already have support from the White House.  If legislation passes the Senate, then the House and Senate bills will need to be reconciled before being sent to the President.

·         New Patent Director.  Stay tuned for further administrative changes at the USPTO as the new Director, Michelle Lee, takes office January 13, 2014. The former Google executive has been made deputy director of the USPTO, and in that capacity will take on the duties of acting director.  Lee has issued statements planning to “attack” the backlog of unexamined patents (remains at more than 500,000) and improve patent quality with improved inter partes review.

MVS Filewrapper® Blog: Unitary Patent—The New European Patent Regime

Starting in 2014, the European Union will provide another option for obtaining patent protection throughout the European Union and a more streamlined approach to enforcing or invalidating patents throughout the EU.  In 2012 the European Parliament and European Council approved the “EU unitary patent package,” which establishes the European Unitary Patent and the Unified European Patent Court.  The Unitary Patent is scheduled to be effective January 1, 2014 or from the date of the entry into force of the Agreement on a Unified Patent Court, whichever is later. 

Unitary Patent

Patent protection in Europe is currently obtained by individually applying for patents in the desired European countries, or by applying for a patent through the European Patent Office (EPO) and subsequently validating in individual countries after examination.  Both of these options ultimately require a decision regarding in which individual European countries you desire patent protection.  The Unitary Patent will alter this regime by allowing applicants to obtain a single “European” patent that is valid—has a unitary effect—in all 25 EU countries that are contracting members of the Unitary Patent.  The Unitary Patent can be applied for by filing an application through the EPO and opting for the unitary patent.  It will not alter the EPO’s current search and examination procedures or standards for granting a patent.  A further benefit of the Unitary Patent is that it will reduce the need for applicant-validated translations for individual countries—under the Unitary Patent, machine translations of the application into each EU-contracting country’s language will eventually be utilized once machine translation technology is sufficiently improved.  However, until machine translations in all contracting member languages are possible, the requirement will be that the patent is published in two languages.  Thus, only one translation is required.  Applications provided in English can be translated into any contracting member country’s language.  Applications provided in French or German will be translated into English.  It is expected that the first unitary patents may issue as early as April 2014. 

Unified Patent Court

The Unified Patent Court will provide a judicial body with jurisdiction over European patents and Supplementary Protection Certificates.  Currently, European patents must be litigated separately in each country where a patent has been validated and is in effect.  Under the Unified Patent Court, the contracting countries transfer their jurisdiction over European patents and Supplementary Protection Certificates to the Unified Patent Court.  This should alleviate the need for parallel litigation both with respect to validity and infringement.  Under the Unitary Patent Court Agreement, the Unitary Patent will provide the “right to prevent direct use of the invention” and the “right to prevent indirect use of the invention.”  The Agreement specifically exempts “acts done privately and for non-commercial purposes,” “acts done for experimental purposes relating to the subject matter of the patented invention,” “the use of biological material for the purposes of breeding, or discovering and developing other plant varieties,” “the extemporaneous preparation by a pharmacy, for individual cases, of a medicine in accordance with a medical prescription,” and actions exempted in previous Directives or Trade Agreements.  Particular Courts will be set up in local and regional divisions and based on technology:  London will house the Central Division for Life Sciences and Chemistry; Paris will house the Central Division for Physics and Materials; Munich will house the Central Division for Mechanical and Engineering; and the Court of Appeals for the Unified Patent Court will be located in Luxembourg.  It is expected that the Unitary Patent Courts will be operable by 2015.

MVS Filewrapper® Blog: USPTO Proposes Rule Changes for International Design Applications

The U.S. Patent and Trademark Office is seeking comments on it proposed rules for implementing the provisions of Title I of the Patent Law Treaties Implementation Act of 2012.  The law is the implementing legislation for the 1999 Geneva Act of the Hague Agreement Concerning the International Registration of Industrial Designs (“the Hague Agreement”).  The rules proposed rule changes under the law will allow applicants to file a single international design application; U.S. applicants will be able to file a single application, potentially seeking protection of an industrial design in more than 40 territories.

Under the proposed rules, international design applications could be filed by U.S. applicants in the USPTO as an office of indirect filing, meaning that the USPTO would transmit the international design application to the International Bureau of the World Intellectual Property Organization (“WIPO”).  The International Bureau would review the application for compliance with the applicable formal requirements under the Hague Agreement. Where these requirements have been met, the International Bureau would register the industrial design in the International Register and, subsequently, publish the international registration and send a copy of the publication to each designated office. Since international registration would only occur after the International Bureau finds that the application conforms to the applicable formal requirements, examination before the Office would generally be limited to substantive matters.

According to the USPTO proposal, the “major changes to U.S. practice in title I of the PLTIA pertain to: (1) Standardizing formal requirements for international design applications; (2) establishing the USPTO as an office through which international design applications may be filed; (3) providing a right of priority with respect to international design applications; (4) treating an international design application that designates the United States as having the same effect from its filing date as that of a national design application; (5) providing provisional rights for published international design applications that designate the United States; (6) setting the patent term for design patents issuing from both national design applications under chapter 16 and international design applications designating the United States to 15 years from the date of patent grant; (7) providing for examination by the Office of international design applications that designate the United States; and (8) permitting an applicant's failure to act within prescribed time limits in an international design application to be excused as to the United States under certain conditions.”

Additional information, including the specific proposed rules and information on how to submit comments, is available here.

MVS Filewrapper® Blog: New and Useful - January 31, 2013

·       In Soverain Software LLC v. Newegg Inc. the Federal Circuit vacated in part and reversed in part an Eastern District of Texas decision finding Newegg Inc. liable for infringement of U.S. Patent Nos. 5,715,314, 5,909,492, and 7,272,639, all relating to electronic commerce.  The Federal Circuit offered clarifying insight on the obviousness doctrine.  The background facts are as follows:  Soverain Software purchased three software patents through bankruptcy proceedings and then proceeded to sue seven different entities for infringing the patents.  Six of the defendants settled and entered paid up license agreements with Soverain.  The seventh defendant, Newegg, refused to settle and argued that the asserted patents are all invalid and even if valid, Newegg’s system is different and non-infringing.  At trial, the district court refused to permit Newegg to present its obviousness argument to the jury and ruled that the patents were valid as a matter of law.  The jury found that Newegg had infringed two of the patents but not the third; the district court, however, entered judgment as a matter of law that Newegg infringed the third patent.  Newegg appealed and the Federal Circuit found all three patents obvious.  The federal circuit had three major discussion points:  (1) each element of the disputed claims was found in the prior art, (2) combining those elements would be obvious to one of skill in the art, and (3) licenses entered in settlement to a lawsuit do not constitute evidence of commercial success. 

 

·       In Rexnord Industries, LLC v. Kappos the Federal Circuit reversed a BPAI decision holding claims for a mechanical conveyor belt patentable.  The patent in question was asserted by Habasit Belting, Inc. against Rexnord Industries in an infringement suit in Delaware district court.  Rexnord filed a request for inter partes reexamination.  The examiner in the reexamination found all of the claims to be unpatentable for anticipation or obviousness. Habasit appealed the examiner’s findings, and the BPAI reversed, concluding that the claims of the patent were not anticipated by any of the references cited in the reexamination, and were unobvious over the cited references.  Rexnord appealed the BPAI decision to the Federal Circuit, arguing that the BPAI erroneously refused to review all of the arguments that Rexnord had presented as grounds for unpatentability.  The PTO countered that the BPAI only needed to consider the issue raised by Habasit on appeal, and had no obligation to consider other grounds that had been presented during reexamination, relying on a BPAI rule that “bars the presentation of new arguments outside appellant’s opening brief.”  The Federal Circuit noted that Rexnord was not the appellant before the BPAI since Habasit appealed the examiner’s decision, and concluded that the alternative bases for obviousness raised in the reexamination were properly raised on appeal to the Federal Circuit because they were fully raised in the reexamination and were not an issue for patentability until after the Board reversed the examiner.  The court then found the claims obvious on these additional grounds.

       

·       In Hall v. Bed Bath & Beyond, the Federal Circuit affirmed a Southern District of New Your district court’s dismissal of counts against Bed Bath & Beyond (BB&B) executives and counterclaims filed by BB&B, but concluded that the district court’s dismissal of Hall’s design patent infringement, unfair competition, and misappropriation claims for failure to state a claim on which relief can be granted under Federal Rule of Civil Procedure 12(b)(6).  BB&B argued in its motion to dismiss, and the district court agreed, that the complaint was insufficient because if failed to include any claim construction, but the Federal Circuit held the complaint met the requirements for pleading design patent infringement previously set out by the court in Phonometrics, Inc. v. Hospitality Franchise Systems, Inc.  Specifically, the court found the complaint (i) alleged ownership of the patent, (ii) named each defendant, (iii) cited the patent that was allegedly infringed, (iv) stated the means by which the defendant allegedly infringed, and (v) pointed to the sections of the patent law invoked, and in doing so met its burden to withstand a motion to dismiss under Rule 12(b)(6), Twombly and Iqbal. 

 

·       In LG Display Co. v. Obayashi Seikou Co., 2013 U.S. Dist. LEXIS 10785 (D.D.C. 2013) The district court for the District of Columbia issued a ruling in a case between LG and Obayashi Seikou Co., LTD that goes back nearly a decade, centering on LG’s allegations that a former employee stole proprietary information and passed it along to Obayashi Seikou Co., who then obtained several patents on the technology.  Prior to the U.S. litigation, the parties had entered into a settlement agreement, and after the settlement failed, litigated the settlement agreement in the Korean courts.  In the Korean litigation LG secured a judgment from Korea’s highest court holding that the settlement agreement was valid, and the defendants were required to transfer their patents to LG, under the terms of the agreement.  LG then filed suit in the District of Columbia seeking recognition of the Korean judgment, as well as claiming misappropriation of trade secrets, conversion, and unjust enrichment.  The district court granted in part LG’s motion for partial summary judgment, recognizing the Korean judgment, but concluded that ownership of two related patents involved factual disputes and was not ready for summary judgment. 

Digital Britain: The UK Government's vision for a 21st century digital economy

Last month, the UK Department for Culture, Media, and Sport released Digital Britain, a report regarding the future of communications infrastructure in the UK, how to deal with challenges of a digital economy (such as copyright infringement), and containing policy recommendations regarding how to move forward.  Click below for our thoughts on the report and associated documents.

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Supreme Court of Canada tightens obviousness standard

The Supreme Court of Canada recently made significant changes to its obviousness standard for patentability. The case addressed a dispute arising between the brand-name pharmaceutical manufacturer, Sanofi, and the Canadian generic manufacturer, Apotex.  The decision by the Supreme Court of Canada brings its obviousness standard closer to the standard recently set forth by the U.S. Supreme Court in KSR v. Teleflex. However, the Canadian obviousness standard still appears to be less stringent than the U.S. obviousness standard.  

More on Apotex, Inc. v. Sanofi-Synthelavo Canada after the jump.

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Ninth Circuit: First sale doctrine doesn't apply to goods purchased abroad and imported to US

In a decision last week, the Ninth Circuit reversed a district court's grant of summary judgment to a copyright defendant on the basis of the "first sale" doctrine, codified at 17 U.S.C. § 109(a).  The defendant obtained the products bearing the copyright from a third party who legally purchased them outside the United States.  The court held that the first sale doctrine did not insulate this action from liability under 17 U.D.C. § 602(a), which states unauthorized importation is a violation of the copyright holder's distribution right. 

In doing so, the court held there was no clear inconsistency with its precedents allowing a defendant in a copyright infringement action to claim the "first sale doctrine" as a defense only where the disputed copies of a copyrighted work were either made or previously sold in the United States with the authority of the copyright owner, and the Supreme Court's decision in Quality King Distributors, Inc. v. L'anza Research International, Inc..  There, the issue was whether copies produced in the United States, shipped abroad, and then ultimately re-imported and sold without consent constituted infringement; the Court held it did not.  Here, it was undisputed the copies were manufactured and obtained abroad, thus taking them outside the decision in Quality King.  As a result, the defendant could not use the first sale doctrine as a defense to avoid liability for infringement.
 
More concerning Omega S.A. v. Costco Wholesale Corp. after the jump.

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Fifth Circuit passes on eBay's applicability in trademark cases

In a decision last week, the Fifth Circuit affirmed a district court's conclusion it had subject matter jurisdiction over a trademark case, as well as its grant of a preliminary injunction.  While the activities giving rise to the claim of trademark infringement took place in Mexico, they had a "substantial effect" on United States commerce, and thus were within the court's subject matter jurisdiction.  

After ruling on subject matter jurisdiction, the court moved on to the issue of preliminary injunction.  The Fifth Circuit affirmed the preliminary injunction, stating the district court did not abuse its discretion concluding the plaintiff would likely prevail on the issue of likelihood of confusion, and that the likelihood of confusion would lead to an irreparable injury.  Unfortunately for practitioners, however, the court did not address the potential applicability of the Supreme Court's eBay decision to the commonly-applied presumption of irreparable harm in trademark cases, making it the second circuit court to pass on the issue (the Eleventh Circuit did likewise last month).

More concerning Paulsson Geophysical Servs., Inc. v. Sigmar after the jump.

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Elements of infringement claim not jurisdictional; "sale" occurs at location of buyer and seller

In a decision yesterday, the Federal Circuit affirmed a district court's denial of the defendant's motion to dismiss for lack of subject matter jurisdiction.  The court also denied the defendant's post-verdict motion for judgment as a matter of law.  The defendant contended that because it shipped its allegedly infringing products f.o.b. from its place of business in Canada, it did not sell or import the product in the United States, and thus there was no subject matter jurisdiction over the plaintiff's infringement claims.  Alternatively, the defendant argued these same facts in support of its motion for judgment as a matter of law.

The Federal Circuit noted that the district court had erred in considering the issue of whether allegedly infringing products had been sold or imported in the United States as an issue implicating the court's subject matter jurisdiction.  Instead, this issue was simply an element of the claim to be proven that did not affect the court's ability to hear the case.  On the merits, the Federal Circuit rejected the contention that because legal title to the products changed in Canada that there was not a "sale" in the United States as contemplated by § 271(a), given that the customer was in the United States and the products were shipped there.  As a result, the court affirmed the finding of infringement.

More detail of Litecubes, LLC v. N. Light Prods., Inc. after the jump.

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