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Hot Developments in Patent, Trademark, and Copyright Law
Sprint Nextel Corporation
November 12, 2007
Recent Cases and Events in Patent Litigation
Relaxed Standards for Declaratory Judgment Jurisdiction MedImmune, Inc. v. Genentech, Inc.
Limitations on Waiver of Attorney Client Privilege and Willfulness Requirements
In Re Seagate Technology, L.L.C
Stricter Requirements for Joint or Divided Direct Infringement BMC Resources, Inc. v. Paymentech, L.P
Elimination of “Automatic” Permanent Injunction after Infringement Verdicts
eBay, Inc. v. MercExchange, L.L.P
Restrictions on Patentable Subject Matter In re Nuijten
Relaxed Standards for Declaratory Judgment Jurisdiction MedImmune, Inc. v. Genentech, Inc., 127 S.Ct. 764
(2007) United States Supreme Court
Decided January 9, 2007 MedImmune entered into a license agreement with
Genentech covering an existing patent and pending application (which later issued)
Relaxed Standards for Declaratory Judgment Jurisdiction MedImmune believed the later issued patent was
invalid To avoid a possible willfulness and treble damages
verdict, if found to infringe, MedImmune paid royalties “under protest and with reservation of all of [its] rights”
MedImmune filed declaratory judgment suit while still complying with license.
Relaxed Standards for Declaratory Judgment Jurisdiction Supreme Court scrapped “reasonable
apprehension” test used by CAFC Paying royalties under compulsion of an injunction
creates no more apprehension of imminent harm than paying royalties for fear of treble damages
Held: Licensee is not required to breach license before seeking a declaratory judgment that patent is invalid, unenforceable, or not infringed
Relaxed Standards for Declaratory Judgment Jurisdiction What Does Create Declaratory Judgment
Jurisdiction? Under all of the circumstances, is there a substantial
controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant a declaratory judgment?
Other Notes: Analysis extends beyond patents May allow for patent challenge clauses to avoid
controversy
Limitations on Waiver of Attorney Client Privilege In Re Seagate Technology, L.L.C, 497 F.3d 1360
(Fed. Cir. 2007) (en banc) Court of Appeals for the Federal Circuit
Decided August 20, 2007 Discovery Dispute surrounding the request and
disclosure of communications and work product related to opinions of counsel
Limitations on Waiver of Attorney Client Privilege Seagate was sued by Convolve, Inc. and MIT for
infringement of three patents Seagate obtained three written opinions covering
non-infringement, invalidity and unenforceability Seagate relied upon the opinions in defending
against willful infringement Convolve sought to compel disclosure of any
communications and work product of Seagate’s counsel, including separate trial counsel
Limitations on Waiver of Attorney Client Privilege Appeals Court revamped scope of Attorney/Client
and Work Product privileges Waiver of attorney/client and work product stemming
from opinion counsel does not extend to trial counsel Trial counsel and opinion counsel provide
“significantly different functions” Explicitly declined to address in-house counsel
Leaves many questions in light of in-house roles with both opinion and trial counsel
Limitations on Waiver of Attorney Client Privilege Court creates a new standard for willfulness
Now must show objective recklessness by infringer Mere negligence is not enough
Objective Recklessness: Clear and convincing evidence that infringer acted despite
an objectively high likelihood that its actions were infringing Must show the objectively-defined risk was known or so
obvious it should have been known
Limitations on Waiver of Attorney Client Privilege Notes to take away from Seagate:
In-house counsel and scope of waiver Very high standards to find willfulness
Rule 11 concerns – alleging willfulness in complaint Preliminary Injunctions – patentee who fails to ask for (and
receive) preliminary relief makes it likely the conduct of infringement (post-filing) will not give rise to willfulness
No adverse inferences for not obtaining or producing opinions of counsel
Stricter Requirements for Joint or Divided Direct Infringement BMC Resources, Inc. v. Paymentech, L.P, Case
No. 061503p Fed.Cir (2007) Court of Appeals for the Federal Circuit
Decided September 20, 2007 BMC sued Paymentech alleging infringement of
method patents which permitted different actors to perform the steps of the process
Stricter Requirements for Joint or Divided Direct Infringement BMCs patents claim a method for processing debit
transactions over a phone The claims required actions from 4 parties
The payee’s agent, an ATM network, a financial institution and the caller
Paymentech processes financial transactions for clients as a third party Does not complete some of the steps of the claims
(done by other parties based on information provided by Paymentech)
Stricter Requirements for Joint or Divided Direct Infringement BMC alleged Paymentech should be directly liable
for participating in and coordinating the performance of the method
Court held there to be no direct infringement by Paymentech To create liability for direct infringement, a single
party must perform all the steps or control or direct the other parties to complete the remaining steps
Stricter Requirements for Joint or Divided Direct Infringement Divided Infringement Going Forward:
Indirect Infringement still a possibility Contributory infringement or Inducement to infringe may still
be found IF a direct infringer is found
Claim Drafting: Court acknowledged that claims could have been drafted
towards a single actor
Elimination of “Automatic” Permanent Injunction After Infringement Verdicts eBay, Inc. v. MercExchange, L.L.P, 126 S.Ct. 1837
(2006) Supreme Court
Decided May 15, 2006 MercExchange sued eBay for infringing its business
method patent winning an infringement verdict, but was denied a permanent injunction
Elimination of “Automatic” Permanent Injunction After Infringement Verdicts MercExchange appealed citing Federal Circuit
“general rule” of injunctions upon infringement findings Federal Circuit reversed granting an injunction
eBay appealed to Supreme Court Supreme Court rejected “general rule”
Emphasized traditional 4 factor test Irreparable harm, inadequate remedy at law, balance of
hardships and public policy
Elimination of “Automatic” Permanent Injunction After Infringement Verdicts Permanent Injunctions no longer automatic
Compulsory license Subsequent case:
Paice v. Toyota, Case No. 06-1610 (Fed. Cir 2007) October 17, 2007 “On-going royalty” v. compulsory license
Looks like a duck, walks like a duck…
Effect on Patent Holding Companies (Trolls) May be less likely to get injunction
Irreparable harm and adequate remedy
Restrictions in Patentable Subject Matter
In Re Nuijten, 84 USPQ2d 1495 (Fed. Cir. 2007) Court of Appeals for the Federal Circuit
Decided September 29, 2007 Rejected patent claiming a technique for reducing
noise in electronic signals having watermarks A signal is not patentable Signal does not fit within 4 categories of patentable
subject matter (process, machine, manufacture, composition of matter
Restrictions in Patentable Subject Matter
In Re Nuijten, 84 USPQ2d 1495 (Fed. Cir. 2007) May have implications on Telecom related patents
and applications Rehearing by en banc Federal Circuit has been
requested No decision on rehearing yet
Future Concerns
Supreme Court has recently shown much more interest in patent cases Average 2-3 cases per term
Landscape of patent litigation is still being refined after landmark decisions
Copyright, Trademark, and Related Issues of 2007 Google and DMCA Safe Harbors
Viacom v. Google Premier League v. Google Filtering Controversy
Communications Decency Act Developments Fair Housing Council v. Roommate.com, LLC Chicago Lawyers’ Committee v. Craigslist, Inc.
Trademarks and Trade Dress RIM v. Samsung RIM v. LG Electronics iPhone, Shadow
Google and DMCA Safe Harbors
Viacom, Paramount and others sue Google in Southern District of NY, Civil Action No. 1:07-02103 March 13, 2007 $1.5 billion damages for enabling and participating in
“massive infringement” Direct copyright infringement – performance, display,
reproduction rights Inducement (Grokster) Contributory Vicarious
Premiere League and Bourne Co. Sue YouTube and Google in Southern District of NY, Civil Action No. 1:07-3582, May 4, 2007 Class Action Joined by others; National Music Publishers’
Assocation, Robert Tur, UK Rugby Football League, Knockout Entertainment Limited
Direct copyright infringement Contributory Vicarious Inducement
Does §512 of the DMCA protect Google? passive enough? repeat infringer policy? effective notice and takedown? failure to adopt technical measures? willful blindness
Technical Solutions YouTube’s proposed identification technology,
October 15, 2007 controversy
Communications Decency Act
§230 (c) (1):“No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”
§230 (c) (2): “No provider or user of an interactive computer service shall be
held liable on account of – (A) any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected; or (B) any action taken to enable or make available to information content providers or others the technical means to restrict access to material described in paragraph (1).”
Zeran v. America Online, Inc., 129 F.3d 327 (4th Cir., 1997) cert. denied, 118 S.Ct. 2341 (1998) and progeny Broad scope
Pre-emption Perfect 10, Inc. v. CC Bill LLC, 481 F.3d 751 (9th Cir., 2007) state
intellectual property covered Fair Housing Council v. Roommate.com LLC, 489 F. 3d 921 (9th Cir. 2007)
possible reduction of scope of protection non-publisher acts rehearing en banc, scheduled for Dec. 12, 2007
Chicago Lawyers’ Committee v. Craigslist, Inc., 461 F. Supp. 2d 681 (N.D. Ill. 2006) Dismissal, but narrowing of scope in dicta Acknowledges “near-unanimous” decisions Seventh Circuit appeal; briefing to be completed early December, 2007
Importance of CDA in a User Generated Content Environment
Trademarks and Trade Dress
RIM v. Samsung, Civil Action No. 2006-07797 (C.D. CA), Dec. 8, 2006 Blackberry Pearl v. Blackjack
Settled February 8, 2007 continued sales withdrawal of trademark application
Black Carbon suit continues
Trademarks and Trade Dress (cont.)
RIM v. LG Electronics, Civil Action No. 07-7323 (C.D. CA), Nov. 7, 2007 BLACKBERRY v. BLACKLABEL
Chocolate Handsets Black Cherry Strawberry
Trademarks and Trade Dress (cont.)
Handsets – Carrier Services iPhone – designed by Apple
Trademark issues Shadow – designed by T-Mobile CEO?
Future directions, joint development, shifting of liability
Additional Questions? Please contact us at: [email protected]
Thank you for your time and attention!
K&L Gates
