Posts in Litigation

Another light summer week in the patent world saw just 19 new petitions (all inter partes reviews [IPRs]), with 65 new district court cases (roughly average), including 75 newly terminated cases.  Five petitions were denied, with six granted; Peloton appears to have settled their dispute with Ifit (and dismissed the five related IPRs and district court suit); Peloton has been targeted by a few others. Flexiworld expanded its campaign against a number of Chinese and other foreign entities; Zoom was sued again by yet another York Eggleston subsidiary; and, after years of dormancy, more new Empire IP campaigns (AR Designs and Nearby Systems] signal the return of a once-frequent repeat player on the monetization scene.

The U.S. Supreme Court has denied certiorari in American Axle v. Neapco Holdings, Inc., leaving it up to Congress and the U.S. Patent and Trademark Office (USPTO) to restore any semblance of clarity on U.S. patent eligibility law for now. Many expected that the Court would grant the petition after the U.S. Solicitor General in May recommended granting review. The SG’s brief said that inventions like the one at issue in American Axle have “[h]istorically…long been viewed as paradigmatic examples of the ‘arts’ or ‘processes’ that may receive patent protection if other statutory criteria are satisfied” and that the U.S. Court of Appeals for the Federal Circuit “erred in reading this Court’s precedents to dictate a contrary conclusion.”

On June 24, the International Trademark Association (INTA) filed an amicus brief in Vans, Inc. v. MSCHF Product Studio, Inc., a case currently on appeal from the Eastern District of New York to the U.S. Court of Appeals for the Second Circuit. In the brief, INTA urges the Second Circuit to clarify the kinds of “expressive works” to which the Rogers test may be applied, and in such a way that the use of Vans trade dress on sneakers sold by MSCHF Product Studio would be actionable for infringement and not protected by the First Amendment simply because MSCHF claims the sneakers are works of art.

There are not many trademark cases that are of equal interest to high fashion, the art world and cutting-edge tech. The ongoing “MetaBirkin” lawsuit is unusual, however, in that it involves a designer brand and two of the latest, trending topics – non-fungible tokens (NFTs) and the metaverse. In a case that has bagged global attention, luxury design house Hermès is suing artist Mason Rothschild in New York for trademark infringement and dilution, misappropriation of its BIRKIN trademark, cybersquatting, false designation of origin and description, and injury to business reputation.

Today, many companies make the business decision to infringe patented technology instead of paying a royalty to license it—so called efficient infringement. The calculation is that it will ultimately be less expensive to ignore the patent rights of innovations than to take a license in an arm’s length negotiation. Over the last 15 years, that calculus has largely proven correct, with changes to numerous laws and the introduction of additional administrative processes all conspiring to make it easier to challenge issued patents. This means that litigation is often the only way for an innovator to protect valuable intellectual property and to stop infringement. Unfortunately, lacking leverage and financial resources, many patent owners cannot stop infringement—in some instances, even after a jury trial.

The U.S. Court of Appeals for the Federal Circuit (CAFC) today reversed a decision of the U.S. Patent and Trademark Office’s (USPTO’s) Trademark Trial and Appeal Board (TTAB) that had canceled two marks for Thums Up cola and Limca lemon-lime soda owned by Meenaxi Enterprise, Inc. The CAFC held that Coca-Cola had not established a statutory cause of action based on lost sales or reputational injury under Section 14(3) of the Lanham Act and thus reversed the decision. Judge Reyna wrote separately in concurrence but said he would have focused the inquiry on the territoriality principle and the well-known mark exception, rather than lost sales and reputational injury among U.S. consumers, as the majority did.

On June 28, the U.S. Court of Appeals for the Federal Circuit (CAFC) issued a precedential decision in Static Media LLC v. Leader Accessories LLC reversing a contempt finding entered in the Western District of Wisconsin over alleged violations of a protective order from a design patent infringement case between Static and Leader. Circuit Judge Jimmie Reyna authored a brief dissent from the majority opinion, arguing that Leader’s disclosure of certain confidential information with another company sued by Static for the development of a joint defense strategy was a violation of the district court’s protective order.

At this moment, there is a fellow riding a bus in London who will determine the fate of your secrets. To be more precise, he’s on the Clapham bus; but he has no name. In fact, he’s a fictional character originally imagined by 19th Century journalist Walter Bagehot, who thought that “public opinion” was best described as the “opinion of the bald-headed man at the back of the omnibus.” The idea was picked up by the English courts as a metaphor for the “reasonable person” standard that is applied in all sorts of cases, from criminal to personal injury to contract interpretation. It also has special application to trade secrets, which we’ll get to in a minute.

Centripetal Networks will have to start from square one in its long-running case against Cisco after the U.S. Court of Appeals for the Federal Circuit (CAFC) on Thursday vacated a judge’s decision awarding Centripetal enhanced damages and royalties exceeding $2.75 billion. The CAFC ruled that Judge Henry C. Morgan, Jr. of the United States District Court for the Eastern District of Virginia was disqualified from hearing the case after becoming aware of his wife’s ownership of $4,687.99 in Cisco stock, ultimately reversing the district court’s denial of Cisco’s motion for recusal and vacating all orders and opinions of the court, including the final judgment in favor of Centripetal.

One day after the Senate Judiciary Committee’s IP Subcommittee met to discuss the PTAB Reform Act and other ways to improve the Patent Trial and Appeal Board (PTAB), the U.S. House of Representative’s Subcommittee on Courts, Intellectual Property, and the Internet held a similar hearing featuring six witnesses with varying views on the PTAB about how to improve the system. Representative Thomas Massie (R-KY), who last year introduced a bill that would repeal the PTAB entirely, grilled the witnesses about the effects of the PTAB on U.S. investment in innovation and national security, and expressed skepticism that the system has succeeded in its intended goal of providing a cheaper, faster forum, particularly for small businesses and independent inventors.

On June 22, the U.S. Court of Appeals for the Federal Circuit (CAFC) affirmed a decision by the United States District Court for the Southern District of California granting summary judgment in favor of Golden Eye Media USA Inc (GEM) over Evo Lifestyle Products Limited, formerly known as Trolley Bags UK Ltd (TB UK) after holding TB UK’s U.S. Design Patent No. D779,828 (‘828 patent) invalid. The district court held the ‘828 patent to be invalid for reasons of functionality and obviousness.

Earlier today, the U.S. Court of Appeals for the Federal Circuit issued a precedential decision in Novartis Pharmaceuticals Corp. v. Accord Healthcare, Inc. granting a petition for rehearing from appellant HEC Pharm Co., Ltd. In granting HEC’s petition, the panel majority of Chief Judge Kimberly Moore, who authored the decision, and Circuit Judge Todd Hughes vacated a previous January ruling by the Federal Circuit, which had affirmed the District of Delaware’s final judgment that Novartis patent claims covering its Gilenya treatment for multiple sclerosis were not invalid for failing to satisfy the written description requirement under 35 U.S.C. § 112. Senior Circuit Judge Richard Linn authored a dissent arguing that the panel majority had improperly adopted a heightened written description standard and failed to take into account expert testimony from Novartis regarding a negative claim limitation that the district court found was supported by ample evidence.

Juno Therapeutics last week petitioned the U.S. Supreme Court, asking it to review an August 2021 decision of the U.S. Court of Appeals for the Federal Circuit (CAFC) that reversed a jury verdict for Juno and Sloan Kettering Institute for Cancer Research, wiping out a $1.2 billion judgment for the entities. The CAFC found that the jury’s verdict with respect to written description was not supported by substantial evidence.

On June 8, 2022, Senators Leahy, Blumenthal, Klobuchar, Cornyn, Collins and Braun sent a letter to U.S. Patent and Trademark Office (USPTO) Director Kathi Vidal expressing concern about so-called “patent thickets” and requesting that she consider changes to the USPTO regulations and practices to address perceived problems with patent examination. The senators asked the USPTO to issue a notice of proposed rulemaking (which presumably must include new draft regulations) or at a minimum, a public request for comments followed by regulatory action, to address their concern about “the prevalence of continuation and other highly similar patents”.