In Ohio Willow Wood Co. v. Alps South, LLC, No. 2012-1642 (Nov. 15, 2013) the Federal Circuit reversed a district court’s summary judgment ruling of no inequitable conduct and suggested in its decision that the patentee committed inequitable conduct before the USPTO. In Ohio Willow, the patentee allegedly withheld evidence and misrepresented testimony when appealing an examiner’s finding of invalidity to the Board of Patent Appeals and Interferences (“BPAI”). This case demonstrates the importance of accurately representing the factual record before the USPTO. It also reflects how effective the tools of discovery can be in uncovering any inaccuracies or inconsistencies in statements made to the USPTO. Ohio Willow Wood Co. (“OWW”) sued Alps South, LLC (“Alps”) for infringement of U.S. Patent No. 5,830,237 (“the ’237 patent”), which is directed to a cushioning device to go over an amputated limb to make prosthetics more comfortable. Alps then initiated an ex parte reexamination with the USPTO, which led to a stay in the litigation. Alps’ primary prior art reference was a product manufactured by Silipos, Inc. (“Silipos”) called the Silosheath. After the Examiner rejected all challenged claims based on this reference, OWW argued that, unlike the Silosheath, the ’237 patent claimed gel liners that excluded any gel on the exterior surface of the fabric. The Examiner allowed OWW to overcome the rejection by amending the claims to clarify that the gel coating of their invention was only on the interior of the fabric. After this amendment, a reexamination certificate issued.
Before bringing an action for Copyright infringement in Federal Court, a Copyright holder must first register their Copyright with the U.S. Copyright Office. See 17 U.S.C. § 411. This is true even though a Copyrighted work is automatically entitled to Copyright protection upon creation. See 17 U.S.C. § 102(a). However, whether registration has occurred for the purposes of complying with 17 U.S.C. § 411 is a point of disagreement amongst the U.S. Circuit Courts of Appeal. Some Circuits follow the “application approach,” holding that receipt of an application for registration by the Copyright office is sufficient. Others follow the more stringent “registration approach,” requiring that the Copyright Office issue a certificate of registration prior to filing suit.
A recent decision of the Middle District Court in Tennessee, Schenk v. Orosz, Case No. 3:13-CV-0294, 2013 U.S. Dist. LEXIS 160690 (M.D. Tenn. Nov. 7, 2013), demonstrates the importance of knowing which approach applies in a particular jurisdiction, and makes clear that statutes that otherwise impose deadlines for filing a Copyright infringement suit, such as the Digital Millennium Copyright Act (DMCA) won’t otherwise excuse the “registration” requirement.
As the size, complexity, and interconnectedness of modern companies’ IT infrastructures has increased, so too has the risk of corporate espionage and cyber attacks targeting companies’ intellectual property. In-house and outside counsel must be ready to deal with the risk that their clients’ confidential information will be stolen, potentially undermining the company’s trade secret assets. Recently, DuPont’s large share of the world’s multi-billion-dollar-a-year titanium dioxide market was threatened by the alleged theft of its trade secret manufacturing techniques by overseas competitor Pangang Group. See United States v. Pangang Group Co. (N.D. Cal. Case No. 11-0573). Similarly, Chinese wind turbine manufacturer Sinovel was indicted this past June for misappropriation of trade secrets valued at $1 billion from Massachusetts-based energy company AMSC. See United States of America v. Sinovel Wind Group Co., Ltd. et al (W.D. Wis. Case No. 13-084). Theft of trade secrets can occur on a smaller scale as well. All it takes is an employee who unwittingly plugs a flash drive with spyware into a company computer, or a disgruntled IT staff member with access to sensitive databases.
Preventative measures abound, including hiring cyber security experts, removing USB ports from corporate computers, enforcing bring-your-own-device policies that govern the use of personal devices for work purposes, and requiring employees to use “clean” loaner laptops when traveling abroad. But what should counsel do when they learn that those measures have failed, and that trade secret information has already been stolen? Worse yet, what if it is discovered that the stolen information has been obtained by a competitor outside of the United States? Once a trade secret is out the door, preventing further dissemination or misappropriation will likely require litigation, and certain prudent options such as those outlined below should be considered.
The Federal Circuit recently denied a request for rehearing en banc in the matter of Commil USA, LLC v. Cisco Sys., Inc., in a 6-5 vote of the participating judges. 2013 U.S. App. LEXIS 21713 (Fed. Cir. Oct. 25, 2013) (“Commil II”). The result is that evidence of a good faith belief of invalidity of a patent is relevant to rebut an allegation of induced infringement, which was the holding of a three judge panel earlier in the year. See Commil USA, LLC v. Cisco Sys., Inc., 720 F.3d 1361, 1368 (Fed. Cir. 2013) (“Commil I”). Despite the protest of five of the Federal Circuit’s judges, that decision will not be reheard and reconsidered by the entire Federal Circuit. Furthermore, because the Federal Circuit has previously held that a good faith belief of non-infringement of a patent is relevant to rebut induced infringement allegations, the combination of these holdings means that opinions of counsel may be more important than ever, at least in cases with induced infringement allegations.
A recent decision of the Federal Circuit in Convolve, Inc. v. Compaq Computer Corp., No. 2012-1074, 2013 U.S. App. LEXIS 13612 (Fed. Cir. July 1, 2013), highlights the need to monitor compliance with non-disclosure agreements (NDAs).
Trade secret cases often involve parties whose attempted joint venture or joint development never came to fruition. These cases may be brought when one of the parties to the failed venture is successful in marketing a product the other believes incorporates confidential information provided under an NDA.