Other Barks & Bites for Friday, July 29: Congress Passes CHIPS and Science Act, FTC Sues Meta Over Within Unlimited Acquisition, and Senate Commerce Committee Advances OSTP Director Nominee

This week in Other Barks & Bites: USPTO Director Vidal announces Federal Register notice on duty of disclosure requirements as Senate Judiciary advances a bill to create a USPTO-FDA interagency task force on drug patents; Senator Thom Tillis tells IAM that he will introduce patent eligibility legislation soon; the Federal Circuit affirms an attorneys’ fees award for forum shopping of patent infringement claims to avoid an adverse Section 101 ruling; both houses of Congress pass major semiconductor production legislation in the CHIPS and Science Act; the Sixth Circuit affirms the dismissal of trade secret claims related to a patent application filed covering a hydraulic actuator invention; Big Tech giants Apple and Amazon.com both post beats on quarterly earnings reports; the Federal Trade Commission files a lawsuit against Meta Platforms to prevent that company’s acquisition of VR firm Within Unlimited; the District of Delaware enters a ruling invalidating Xifaxan patent claims, sending Bausch Health stock down by about 50%; and the Senate Commerce Committee votes to advance the nomination of Dr. Arati Prabhakar to serve as the Director of the White House’s Office of Science and Technology Policy.

Bites 

Senate Judiciary Advances USPTO-FDA Collaboration Bill as Vidal Issues Notice on Disclosure Duties – On Thursday, July 28, the U.S. Senate Committee on the Judiciary advanced by voice vote S. 4430, the Interagency Patent Coordination and Improvement Act, toward a full vote on the Senate floor. The bill would establish an interagency task force and processes for sharing information on application evaluation practices at the U.S. Patent and Trademark Office (USPTO) and the U.S. Food and Drug Administration (FDA). The same day, USPTO Director Kathi Vidal announced that the agency would issue a notice in the Federal Register clarifying the duties of disclosure and reasonable inquiry of pharmaceutical patent applicants proceeding before the USPTO and FDA in response to urging by Senators to establish interagency communications to eliminate drug patent thickets.

Tillis Tells IAM He’ll Try Again on 101 Reform – Senator Thom Tillis (R-NC) said in an interview with IAM published Thursday that he plans to introduce a bill titled the “Patent Eligibility Restoration Act of 2022” that will take another stab at reforming U.S. patent eligibility law. Tillis told IPWatchdog following his last effort at reforming Section 101 that, without compromise and cooperation among stakeholders, there is little more the Senate IP Subcommittee can do to fix the problems. Even now, although he told IAM he has been speaking with a diverse group of stakeholders over the last year and has presumably reached some kind of consensus, he admitted in the interview that it is not likely any bill on eligibility will be passed within the next two years, and that it will likely be more like four to six.

Senator Wicker Urges Commerce Committee to Take Up House Data Privacy Legislation – On Thursday, July 28, Senator Roger Wicker (R-MS), Ranking Member of the U.S. Senate Committee on Commerce, Science, & Transportation, made remarks during an executive session of the Senate Commerce Committee urging committee members to take up a version of the American Data Privacy Protection Act (ADPPA) recently advanced by the U.S. House of Representatives Energy and Commerce Committee. Passage of such legislation would help promote data privacy of Americans while creating a single national framework for governing the design and operation of covered platforms.

Seventh Circuit Affirms SJ Ruling Nixing Trade Secret Claims Over Actuator Patent Application – On Thursday, July 28, the U.S. Court of Appeals for the Seventh Circuit issued a decision in REXA, Inc. v. Chester in which the appellate court affirmed a summary judgment ruling entered in the Northern District of Illinois dismissing trade secret misappropriation claims filed against Chester by REXA, the successor-in-interest to Chester’s former employer Koso. The Seventh Circuit found that Chester did not misappropriate a 2002 actuator design developed for Koso in a 2014 patent application filed by Chester for a new actuator. The Seventh Circuit did, however, vacate the district court’s award of attorneys’ fees to Chester as REXA’s litigation conduct, while “disturb[ing],” was insufficient to support a finding of litigation misconduct.

CHIPS and Science Act Passes Both Senate and House of Representatives – On Thursday, July 28, the U.S. Senate voted 64 to 33 in favor of passing the Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act, which earmarks nearly $250 billion in federal funding for various investments into domestic semiconductor production as well as basic science and technology research in critical areas of emerging technology including artificial intelligence, quantum computing and cybersecurity. On the same day, parallel legislation passed in the U.S. House of Representatives by a 243 to 187 vote, sending the bill to the White House for President Joe Biden to sign into law.

CAFC Affirms Attorneys’ Fees to Netflix for Forum-Shopping of Patent Infringement Claims – On Wednesday, July 27, the U.S. Court of Appeals for the Federal Circuit issued a precedential decision in Realtime Adaptive Streaming LLC v. Netflix, Inc. in which the appellate court affirmed the Central District of California’s entry of an attorneys’ fees award to Netflix after finding that Realtime’s decision to voluntarily dismiss a pair of infringement lawsuits filed in Delaware after a magistrate judge recommended invalidating the asserted patent claims under 35 U.S.C. § 101 constituted sanctionable gamesmanship in forum shopping. Circuit Judge Jimmie Reyna authored a partial dissent concurring in the majority’s decision to affirm the attorneys’ fees award but arguing that the district court was correct to consider Realtime’s voluntary dismissals as conferring prevailing party status upon Netflix for purposes of 35 U.S.C. § 285.

FTC Sues to Block Meta’s Acquisition of Within Unlimited – On Wednesday, July 27, the Federal Trade Commission (FTC) filed a lawsuit in the Northern District of California asserting violations of the FTC Act in an attempt to prevent the acquisition of virtual reality (VR) firm Within Unlimited, including its fitness app Supernatural, by social media and VR giant Meta Platforms, which already markets an Oculus Move VR fitness app and could allegedly create a monopoly within the VR fitness app market through its planned acquisition of Within Unlimited.

Senate Commerce Committee Advances Dr. Prabhakar for OSTP Director – On Wednesday, July 27, the U.S. Senate Committee on Commerce, Science, & Transportation voted to advance the Biden Administration’s nomination of Dr. Arati Prabhakar to serve as Director of the White House Office of Science and Technology Policy (OSTP). The favorable vote for Dr. Prabhakar follows about a week after a previous nomination hearing during which Senator Roger Wicker raised questions about Dr. Prabhakar’s business ties to former Google CEO Eric Schmidt.

Second Circuit Find Clear Legal Error in SDNY’s Injunction in “RISE” Trademark Case – On Friday, July 22, the U.S. Court of Appeals for the Second Circuit issued a decision in RiseandShine Corp. v. PepsiCo., Inc. in which the appellate court reversed a preliminary injunction entered by the Southern District of New York against Pepsi’s Mtn DEW Rise Energy beverage. The Second Circuit found that the district court committed clear legal error by failing to acknowledge the logical association between “RISE,” the mark at issue, and energy and coffee drinks, and that several differences in type font and beverage packaging between Pepsi’s beverage and RiseandShine’s RISE-branded coffee drinks undercut the district court’s finding that the marks were confusingly similar.

Barks

Derrick Brent Introduced as USPTO Deputy Director – On Thursday, July 28, the U.S. Patent and Trademark Office announced that Derrick Brent, formerly Chief Counsel for former Senator Barbara Boxer (D-CA) and recognized as “a respected authority on 2011’s America Invents Act,” would serve the agency as Deputy Director effective August 1. 

Bausch Stock Dips 50% Following Judge Andrews Partial Invalidation of Xifaxan Patent Claims – On Thursday, July 28, U.S. District Judge Richard G. Andrews of the District of Delaware entered an oral order directing both Norwich Pharmaceuticals, a subsidiary of American pharmaceutical firm Alvogen, and Salix Pharmaceuticals, a wholly-owned subsidiary of Canadian pharmaceutical firm Bausch Health, to file a joint proposed final judgment proceeding on the assumption that certain Salix patent claims covering the use of the brand-name drug Xifaxan to treat adults suffering from irritable bowel syndrome with diarrhea. Shares of Bausch Health dropped about 50% in value on the news of Judge Andrews’ order. 

Copyright Office Issues New Web Resources for Registering Non-Photographic Databases – On Thursday, July 28, the U.S. Copyright Office announced that the agency had launched a new web page including resources and general guidance for copyright applicants seeking to register automated databases that do not primarily consist of photographs, including registration options for either an individual version of a database or group registrations of up to three months of database updates.

Judge Silva Grants Parler’s Motion to Dismiss Stylized “P” Trademark Claims – On Wednesday, July 27, U.S. District Judge Cristina D. Silva of the District of Nevada issued a ruling granting social media firm Parler’s motion to dismiss trademark infringement claims brought by 46 Labs, which offers a user interface for communication infrastructure branded as Peeredge. Judge Silva found that 46 Labs did not plead facts showing that 46 Labs and Parler compete with similar services.

USPTO Director Vidal Announces Innovation Internship, First-Time Filer Inclusivity Initiatives – On Wednesday, July 27, a blog post published on USPTO’s Director’s Blog and authored by Director Kathi Vidal announced new initiatives developed with input from the USPTO’s Council for Inclusive Innovation (CI²) to increase inclusivity in the U.S. innovation systems. Those initiatives include a new paid internship program for community college and university students as well as a fast-track program providing expedited examination of patent applications from first-time micro entity filers.

USITC Issues General Exclusion Order in Section 337 Investigation on Battery Technology – On Monday, July 25, the U.S. International Trade Commission terminated a Section 337 investigation into certain battery products and components thereof imported into the U.S. for sale by a series of 13 Chinese entities based on a complaint for patent infringement filed by One World Technologies and Techtronic Power Tools Technology. The USITC found Section 337 violations committed by the respondents and entered a general exclusion order prohibiting the importation of patent infringing battery technologies.

CAFC Announces Minor Revision to Internal Operating Procedures – On Friday, July 22, the U.S. Court of Appeals for the Federal Circuit announced that the court had made a minor stylistic alteration to Internal Operating Procedure #14(2)(e), which governs a panel majority’s ability to make substantive changes to an issued decision before a majority of active judges vote to grant a petition for rehearing en banc.

EUIPO to Launch New Electronic Trademark Filing Form in August – On Wednesday, July 20, the European Union Intellectual Property Office (EUIPO) announced that beginning on August 1, the agency would begin accepting trademark registration applications via a new electronic form designed to be more user-friendly including new customization options and contextual guidance for applicants.

This Week on Wall Street

Apple Posts Quarterly Earnings Beat on Revenue and EPS – On Thursday, July 28, consumer device giant Apple reported earnings for the third quarter of the 2022 fiscal year showing that the firm beat analyst expectations both on revenue ($83 billion vs. $82.81 billion expected) and earnings per share ($1.20 per share vs. $1.16 per share expected), helping Apple shares rise by about 3% in extended trading.

Amazon Earnings Beat Estimates Thanks to 33% Increase in Cloud Revenues – On Thursday, July 28, e-commerce giant Amazon.com issued its earnings report for the second quarter of the 2022 fiscal year showing that revenues for the company’s cloud computing sector increased by 33% during the recent quarter to $19.74 billion, beating analyst expectations of $19.56 billion in cloud revenues, although operating income for Amazon Web Services only reached $5.72 billion, below expectations of $6.04 billion in operating income for Amazon’s cloud division.

Quarterly Earnings – The following firms identified among the IPO’s Top 300 Patent Recipients for 2021 are announcing quarterly earnings next week (2020 rank in parentheses:

• Monday: Innolux Corp. (267th); On Semiconductor Corp. (t-170th); Sumitomo Chemical Co. (182nd); TDK Corp. (81st)
• Tuesday: Advanced Micro Devices, Inc. (t-197th); Daikin Industries, Ltd. (t-236th); Eaton Corp. plc (t-141st); Fresenius SE & Co. KGaA (t-239th); Honda Motor Co., Ltd. (30th); Paypal Holdings, Inc. (131st); Zimmer Biomet Holdings. Inc. (283rd)
• Wednesday: Bayerische Motoren Werke AG (t-129th); Borgwarner Inc. (t-281st); Casio Computer Co., Ltd. (t-277th); Infineon Technologies AG (65th); Mitsubishi Chemical Group Corp. (t-205th); Qorvo, Inc. (t-295th); Ricoh Co., Ltd. (56th); Sumitomo Electric Industries Ltd. (62nd); Wistron Corp. (t-272nd); Yamaha Corp. (209th)
• Thursday: Bayer AG (84th); Becton Dickinson and Co. (133rd); Merck KGaA (212th); Nikon Corp. (t-254th); Nippon Steel Corp. (181st); Novo Nordisk A/S (300th); Schaeffler AG (t-186th); Softbank Group Corp. (76th); Toyota Motor Corp. (8th)
• Friday: Berkshire Hathaway Inc. (230th); Carl Zeiss Meditec AG (143rd); Novatek Microelectronics Corp. (t-289th); Sharp Corp. (50th); Shimadzu Corp. (180th); Western Digital Corp. (57th)

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