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Posts in Guest Contributors

Patent Infringement, Antitrust, and the Discovery Rule

On September 20, 2021, Judge John Robert Blakey in the Northern District of Illinois issued an opinion in a Walker Process patent fraud antitrust case denying defendants’ motion for summary judgment on their statute of limitations defense. TCS John Huxley America, Inc. v. Scientific Games Corp., No. 1:19-cv-1846, 2021 WL 4264403 (N.D. Ill. Sept. 20, 2021). The opinion established important principles regarding application of the statute of limitations to the “discovery rule” in a Walker Process antitrust case. The author’s firm, Freeborn & Peters, was one of the firms representing the plaintiffs. The plaintiffs had sued Scientific Games Corp. alleging a violation of Section 2 of the Sherman Act. The complaint alleged that Scientific Games, through its acquired entity, SHFL Entertainment, brought patent infringement litigation in 2009 and 2012 based on fraudulently obtained patents for automatic card shufflers used in licensed casinos.

J.E.M.: The Supreme Court’s Last Expansion of Patent Protection, 20 Years Ago

In 2001, the U.S. Supreme Court ruled for the first time that plants could be protected with utility patents. J.E.M. Ag Supply, Inc., v. Pioneer Hi-Bred International, Inc. 534 U.S. 124. This landmark decision, originating in the agricultural heartland of Iowa, was the last time the Supreme Court effectively increased patent protection for inventors and patent owners. Most, if not all, of the Supreme Court’s patent rulings in the past two decades have not been favorable to patent owners. Rather, these “recent” decisions have restricted patent rights and made it more difficult to enforce these rights against infringers.

Cloudflare Tests Limits of Contributory Copyright Infringement

One recurring thorn in the side of copyright owners is Cloudflare, the San Francisco-based web performance, optimization, and security company. Cloudflare offers many services to its customers, including a content delivery network that utilizes hundreds of servers around the world to cache its customers’ content. When an end user requests content from one of Cloudflare’s customers, it is delivered to that user from the cached copy on the nearest Cloudflare server—not the customer’s own web host server. This saves on bandwidth costs, improves security, and decreases page load times. It also raises important questions about Cloudflare’s liability for contributory copyright infringement when it knowingly allows infringing content to remain on its cache servers. Under Ninth Circuit precedent, web hosting services like Cloudflare can be held contributorily liable for assisting in the infringement under the material contribution theory. However, a recent district court decision misconstrued the case law to conclude otherwise in Mon Cheri v. Cloudflare.

Desperate Heroism and the Thunder of a Quiet Revolution: The Rise of China’s Economy and IP System

On October 16, 2021, as I contemplated lessons from my nine years in China, the Financial Times broke a story that rocked the world—especially the U.S. military: “China tests new space capability with hypersonic missile.” China’s recent launch of a nuclear-capable rocket that circled the globe at high speed “took US intelligence by surprise.” Military experts quickly noticed that Chinese innovation in hypersonic weapons “was far more advanced than US officials realised.” As I’ve seen happen many times in coverage on innovation in China, our mainstream media is now downplaying China’s achievement (“not much of a surprise,” per the New York Times, and nothing but old Russian technology per Foreign Policy). It’s similar to the objections raised for decades about IP and innovation in China: low quality, just copying, nothing to be worried about. Yet in industry after industry, China is taking a leadership position in technology and its international patents that can’t be won by copying. It comes from leading.

Patent Filings Roundup: In a Slow Week, IP Edge Hits Amazon on Cryptographic Keys and Jeffrey Gross-Run Entities Proliferate

Another week, another dearth of any Fintiv denials, which sort of begs the question, if the Patent Trial and Appeal Board (PTAB) has effectively walked back their reliance on the Fintiv factors, does that order’s precedential status merit walking back? In terms of district court and PTAB filings, subdued is the word; just 19 PTAB petitions (all inter partes reviews) with four being apparent joinders by LG Electronics against Gesture Technology Partners, LLC [a Tim Pryor entity] well prior to institution, seeking to join Apple petitions. Previous Pryor entities include Motion Games LLC, PSTP Ttechnologies, Tactile Feedback Technology, LMI Technologies Inc., and Great Lakes Intellectual Property, Ltd]. Gil Hyatt filed yet another suit this week (and has filed one a week, it seems, for some time).

Patenting Trends in Emerging Technologies: Blockchain Patents Grow from Three to 2,660 in Less than Five Years

Blockchain’s history begins in 1991, when Stuart Haber and W. Scott Stornetta published a paper describing a cryptographically secured chain of blocks. It took another 18 years before a developer who called himself Satoshi Nakamoto released a white paper that established the model for a blockchain and then, a year later, implemented the first blockchain as a public ledger for transactions using bitcoin. The engine that runs the bitcoin ledger that Nakamoto designed is called the blockchain; the original and largest blockchain is the one that still orchestrates bitcoin transactions today. Blockchain technology was separated from currency in 2014, and that advance opened the door for using blockchain for applications beyond currency. The standout example is the Ethereum blockchain system, which introduced computer programs in a blockchain format, representing financial instruments such as bonds. These became known as smart contracts.

Alice Insanity (Part Two): How the Dunning-Kruger Effect Influences the Outcome of Federal Circuit Decisions

The Dunning-Kruger effect is often defined as a type of cognitive bias whereby people are prone to vastly misjudge their competence. For example, smart and capable people tend to evaluate their skills and competence downward. That is, they tend to not just understand, but deeply internalize the idea that there’s a lot in life that they don’t understand. Circa 500BC, Confucius coined this wisdom stating, “Real knowledge is to know the extent of one’s ignorance.” Then there’s the flip side, where low ability and/or low knowledge people overestimate their own capabilities while simultaneously being unable to recognize their own incompetence. One-hundred and thirty years (give or take) before David Dunning and Justin Kruger conducted their studies on the issue, Charles Darwin described this effect, stating, “ignorance more frequently begets confidence than does knowledge.”

Great Inventors are Industry Outsiders and Must be Protected

Every once in a while, a new invention changes an industry and sometimes even the world. In grade school, we all learned about some of these great inventions – the cotton gin, the lightbulb, the telephone, etc. Today, like no time in history, we are witnessing an explosion of innovation in every facet of life. Many of these inventions change the way we live our lives. But most of today’s great inventions are hidden behind touch screens or in the bowel of data centers. They are often not well understood, nor well known.

Brazil Has Begun Accepting Applications for Position Trademarks

The Brazilian Patent and Trademark Office (BPTO) began accepting applications for position trademarks on October 1, 2021. Position marks are trademarks characterized by the particular spot in which they are placed on a product. While position marks were previously acknowledged by the BPTO and by the courts, they had yet to qualify for separate trademark registration; most brand owners registered them as figurative or three-dimensional marks. 

Patent Filings Roundup: IP Edge Files Another 50, Comprising 13% of all District Court Litigation; Hawk Hit with Declaratory Judgment For Asserting Already-Invalid Patent

It was another banner week in district court complaints, led primarily by a deluge of new IP Edge complaints—49 in all, by my count—including newer subsidiaries (like Wiesblatt Licensing or Hickory IP) and old mainstays like Moxchange and Tunnel IP (over a dozen entities in total). At this point in 2021, IP Edge has filed at least 519 known suits via non-practicing entity (NPE) vehicles (more by various counts); it is by far the highest aggregate filer of all time, and of this year. To date, there have been 4,001 patent complaints filed (per Unified’s portal, based on publicly available PACER docket data); IP Edge thus has again filed upwards of 10% (so far, 13+%) of all U.S. patent litigation in 2021, up from last year. It also, for the first time, went to trial on one of its many patent assertions, though overwhelmingly vast majority of them remain file-and-settle affairs.

As Raimondo Takes the Helm on Council for Inclusive Innovation, Inventors Have an Unresolved Ask

In a letter provided last week to members of the National Council for Expanding American Innovation (NCEAI), Secretary of the U.S. Department of Commerce Gina Raimondo announced her role as Chair of the Council for Inclusive Innovation (CI2). I congratulate the Secretary for this extremely important role. Innovation should have no barriers, and both of these—a) innovation and b) the breaking down of unjust barriers—stand at the root of America’s success and identity. To aid the CI2 and all who create and execute innovation policy in our government, underrepresented inventors have an unresolved ask, and it involves breaking down a barrier identified by the very people who the CI2 and Congress desire to help. That ask is this: remedy the inventor’s second prong.

Copyright and Translated Content: Who is the Creator?

Copyright law protects artistic works. That includes literary pieces like novels, poems and other literary pieces. The original author is the one who owns the copyright of the piece. Translation raises an interesting question when it comes to copyright. Who will own the copyright of the translated work? Does it belong to the individual translator, the translation company, or to the author of the original work? Because copyright laws protect original works, translations occupy a gray area. Many would consider it to be a creative process, like the translation of poetry and other literary pieces. But then again, there are those who would contend that translation is not a creative process at all, or at least not at the same level as writing a novel. The main ideas of the work are already in place and it just has to be expressed in a different language.

Claim Construction in Bankruptcy Court? Revisiting Vacatur in Patent Litigation

While many patent litigators have no plans to litigate in bankruptcy court, it is a possibility if the infringer of a client’s patent files for bankruptcy. The United States Bankruptcy Court for the Eastern District of Wisconsin recently conducted a Markman hearing. How did that happen?  After being sued for patent infringement in district court, the alleged infringer sought refuge in the bankruptcy court, staying the district court litigation. The plaintiff then filed a claim in the defendant’s bankruptcy case, which ultimately triggered the bankruptcy court’s jurisdiction. While rare, other bankruptcy courts have conducted claim construction proceedings. As discussed herein, the bankruptcy court ultimately granted a joint request for vacatur, prompting us to revisit the doctrine of vacatur.

It’s Time to Address ‘Patent Mercenaries’—and the USPTO Already Has the Tools

In response to intense lobbying for patent litigation reform, Congress was convinced that a substantial amount of district court patent litigation involved “poor quality” patents that were clearly invalid. Images of extortionist patent trolls were widely portrayed as a primary threat to U.S. innovation. The high cost of patent litigation, years to reach a judicial resolution and reliance on lay juries to determine highly technical issues were cited as evidence of a broken system. In response, Congress passed the Leahy-Smith America Invents Act (AIA) in 2011…. The current IPR system as implemented has caused severe damage to an important segment of our innovation community. Congress instructed the USPTO Director, in 35 USC§ 316(b), to “consider the effect of any such regulation on the economy, the integrity of the patent system, the efficient administration of the Office, and the ability of the Office to timely complete proceedings instituted under this chapter.” It is time for the Director to reevaluate the effect of IPRs.

The Use of ‘For the Avoidance of Doubt’ in IP License Agreements: Please Stop!

The phrase “for the avoidance of doubt” must be a Microsoft Word shortcut that comes standard in some legal IT package. Why do we say that? Well, we recently received an IP licensing agreement from an attorney working at a large law firm located in a large city, serving a large client, and presumably charging a large hourly fee. It seemed as though every 50th word in the agreement was “for the avoidance of doubt.” Now, this is not a personal attack on this particular attorney or law firm. We have seen the phrase used way too often and do not understand why. Perhaps this is just a phrase that makes agreements sound more legalese or maybe the attorneys in question think it makes certain provisions in the agreement more “airtight?” Nonetheless, we ask all of you to please stop!