Last week, the Federal Circuit Court of Appeals decided a case that sheds further light on a relatively new phenomenon associated with the term “reverse patent troll.” (Phigenix, Inc. v. ImmunoGen, Inc., January 9, 2017.) The notion of “abusive patent litigation” in the language of the Patent Office has existed for more than a decade. Often, the perpetrators are shell companies who sue or threaten legal action against others and who enjoy relative impunity, as it is difficult to recover fees or assert counterclaims against them. In the traditional sense, an abusive patent litigant is a company that obtains patents – even weak ones that never should have been granted over prior art in the first place – and uses them to extract settlements from companies that sell a product or provide a service. In this newest iteration, however, the victim is the one who owns a patent. The “play” here is that the aggressor will challenge the company’s patent if its demands are not met.
In the case last week, the patent owner was ImmunoGen, Inc. It licensed its patent over a cancer-fighting antibody to Genentech. The challenger was Phigenix, Inc., the new owner of a patent it had acquired only recently, which it claimed overlapped with the ImmunoGen patent. Phigenix threatened to challenge the ImmunoGen patent unless an agreement to license its newly acquired patent was Continue reading Abusive Patent Litigants Find a New Angle
By Matt Lubozynski
Yesterday, in a unanimous opinion, the United States Supreme Court broadened what can be considered an “article of manufacture” for design patent infringement. See Samsung Electronics Co. v. Apple Inc., No. 15-777, — S. Ct. —, 2016 WL 7078449 (Dec. 7, 2016). “Patent protection is available for a ‘new, original and ornamental design for an article of manufacture.’” Id. at *2 (quoting 35 U.S.C. §171(a)). This is often referred to as a design patent. A design patent is “infringed if, in the eye of an ordinary observer, giving such attention as a purchaser usually gives, two designs are substantially the same.” Id. (citation and quotation omitted). Damages for design patent infringement are permitted under 35 U.S.C. § 289. §289 states that an infringer “shall be liable to the owner to the extent of his total profit, but not less than $250[.]” 35 U.S.C. § 289. The Supreme Court provided a two-part test for “[a]rriving at a damages award under §289[.]” Id. at *4. “First, identify the ‘article of manufacture’ to which the infringed design has been applied. Second, calculate the infringer’s total profit made on that article of manufacture.” Id.
In the current case, Apple sued Samsung in 2011 for infringing three of its design patents relating to its iPhone. Id. at *4. The design patents at issue covered a black rectangular front face with rounded corners, a rectangular front face with Continue reading Supreme Court Broadens “Article of Manufacture” for Design Patent Infringement, Declines to Do Anything Else
Matt Lubozynski, member of Wyatt’s Intellectual Property Protection & Litigation Service Team, wrote an article that was recently published in the Memphis Daily News. The article, “Patent-holders Feel More Secure Thanks to Patent-Infringement Lawsuit Ruling,” discusses how the Supreme Court’s decision in Halo Electronics, Inc. v. Pulse Electronics, Inc. has helped ease the rigid standards required to collect enhanced damages against a patent infringer.
Please click here to read the full article.
By Matt Lubozynski
On Monday, the United States Supreme Court, in a unanimous ruling, “eschew[ed] any rigid formula for awarding enhanced damages under § 284,” abandoned the prior “unduly rigid” Seagate test laid out by the Federal Circuit, and instead left the award of enhanced damages simply to the discretion of the district court. Halo Electronics, Inc. v. Pulse Electronics, Inc., No. 14-1513, slip. op. at 12 (June 13, 2016). This decision should serve to make it much easier, although not automatic, for a patentee to receive enhanced damages after a finding of infringement.
Under 35 U.S.C. § 284, a court “may increase the damages up to three times the amount found or assessed.” The Federal Circuit, in a prior ruling, had adopted a two-part test to allow for the award of such damages. This test, known as the Seagate test, required first, proof by “clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent.” Id. at 5 (citation omitted). The state of mind of the accused infringer was not taken into account at this step, and further, this objective recklessness could not be found if the accused infringer came up with a “substantial question as to the validity or noninfringement of the patent” during the infringement action itself. Id. (citation and punctuation omitted). If this objective recklessness were established, then “a patentee must show – again by clear and convincing evidence- that the risk of infringement was either known or so obvious that it should have been known to the accused infringer.” Id. (citation and punctuation omitted). If, and only if, both of these are satisfied, could a court then decide whether to actually award enhanced damages. Id. Continue reading Beware Ye Willful and Wanton Pirates
Written by Kate Van Namen, with contribution from Ryan Chambers
If a software company makes a free tool available online, can competing developers use it without the company’s permission? According to a California jury, the answer is yes, so long as the developers’ actions constitute fair use under The Copyright Act.
The Copyright Act, 17 U.S.C. §§ 101, et. seq. gives copyright holders exclusive rights to copyrighted material. However, fair use is a limitation on those rights and can provide a powerful defense to copyright infringement. Fair use is an exception to the rule that no one may use copyrighted material without permission from the owner, and allows copying for limited purposes such as criticism, comment, news reporting, teaching, scholarship, and research. If any given use qualifies as fair use, then no infringement has occurred. There are four factors which must be considered when evaluating whether the use of copyrighted material is fair: (1) the purpose of character of the use, including whether such use is Continue reading The Fair Use Doctrine’s Impact on the Future of Software Development
By Matthew M. Lubozynski
The Federal Circuit recently made an important ruling concerning the proper venue for patent infringement suits. The decision by the Federal Circuit did not change the current interpretation of the venue statutes and companies will continue to be brought into court in such locations as the Eastern District of Texas, despite having minimal contacts with such locations.
In re TC Heartland LLC, — F.3d —, 2016 WL 1709433 (Fed. Cir. Apr. 29, 2016), the Plaintiff, Kraft Foods Group Brands LLC, brought a patent infringement suit against Defendant, TC Heartland LLC (“Heartland”), in the United States District Court for the District of Delaware. Heartland moved to dismiss the case or transfer venue to the Southern District of Indiana.
In support of its motion, Heartland argued that it is an Indiana limited liability company with its headquarters in Indiana. Id. at *1. Heartland further argued that it had a minimal presence in Delaware, including that it was not registered to do business in Delaware, and that only 2% of sales of the Continue reading Venue Stays the Same in Patent Cases
Steve Hall and Matt Williams, members of Wyatt’s Intellectual Property Protection & Litigation Service Team, were quoted in Louisville Business First. The article, “Intellectual Property Law Has a Real-World Impact on Businesses,” describes changes in Intellectual Property Law and their effect on companies and individuals alike.
Please click here to read the full article.
By Kacey L. Faughnan, Byron N. Brown, IV, and Sean G. Williamson
Businesses now have an additional weapon with which to protect their trade secrets. Effective May 11, 2016, the Defend Trade Secrets Act (“DTSA”) was signed into law. The DTSA provides a federal cause of action for the protection of trade secrets related to products or services used, or intended for use, in interstate or foreign commerce. Traditionally, trade secrets have not enjoyed the same protections under federal law as other forms of intellectual property, like patents, trademarks, and copyrights. Instead, owners of trade secrets had to rely upon a patchwork of state laws and various adoptions of the Uniform Trade Secrets Act to safeguard their innovations. The DTSA only broadens trade secret protection, leaving intact the parallel remedies available under state law. Yet, the implementation of the DTSA will help to alleviate the uncertainty and inconsistent results that previously occurred in some cases as a result of state-by-state variations in trade secret law.
The enactment of the DTSA provides increased forum choices for businesses taking legal action to protect trade secrets. Prior to the DTSA, federal courts were only available as a forum in limited cases. The new law also increases the amount of Continue reading The Defend Trade Secrets Act: What Employers Need to Know
By Will Gibbons
Few college football coaches can claim both a legendary record and a unique choice of headwear in the way the late University of Alabama football coach Paul “Bear” Bryant can. The question circulating the legal community of late, however, revolves around the extent to which the University can assert that uniqueness in the form of trademark protection for the houndstooth design emblazoned on Bryant’s signature fedora hat, as well as the right of an administrative court not to conform to the ruling of a District Court.
The case of the Board of Trustees of the University of Alabama and Paul W. Bryant, Jr. v. Houndstooth Mafia Enterprises, LLC, et al. is currently working its way through the federal courts. Before filing suit, the University and Bryant had opposed the Houndstooth Mafia’s trademark registration, which included a logo with a plentiful amount of houndstooth. The Trademark Trial and Appeal Board (“TTAB”), however, found that the Continue reading The University of Alabama Throws a Penalty Flag on the Use of Houndstooth Logo
Bob Craddock and Graham Matherne, Partners in the Firm’s Litigation & Dispute Resolution Service Team, wrote an article that was recently published in the Memphis Daily News. The article, “Trade Secrets and the Inevitable Disclosure Doctrine,” explains the Tennessee Uniform Trade Secrets Act and how it can prevent a former employee from stealing a company’s trade secrets.
Please click here to read the full article.