May 22, 2013

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Tenth Circuit: District Court’s Entry of Default Judgment as Sanctions for Plaintiff’s Discovery Abuses Affirmed

March 28, 2013 by Leave a Comment

The Tenth Circuit published its opinion in Klein-Becker v. Englert on Wednesday, March 27, 2013.

Klein-Becker owned the trademark StriVectin. The StriVectin line of skin care products could only be sold through authorized sellers that Klein-Becker approved and trained. Mr. Englert was never an authorized seller of StriVectin. Nonetheless, Mr. Englert sold StriVectin online without authorization.

Klein-Becker sued Patrick Englert for trademark infringement, copyright infringement, false advertising, and unfair competition under the Lanham Act; false advertising under the Utah Truth in Advertising Act; unfair competition under the Utah Unfair Practices Act; fraud; civil conspiracy; and intentional interference with existing and prospective business relations. Mr. Englert was sanctioned several times for failing to comply with court orders and discovery schedules. The third and final sanction resulted in the entry of default judgment for Klein-Becker on all remaining claims. A bench trial determined damages.

The district court entered judgment in favor of Klein-Becker for Lanham Act damages, fraud damages, stolen property, and copyright damages. The district court later issued a permanent injunction.

Mr. Englert appeals the district court’s (1) entry of default judgment against him on all existing claims as sanctions for his discovery abuses, (2) award of damages to Klein-Becker, (3) determination that Klein-Becker is entitled to a permanent injunction, (4) denial of his demand for a jury trial, and (5) denial of his request to call an unlisted witness.

(1) Entry of Default Judgment on All Claims as Sanctions for Englert’s Discovery Abuses

FRCP 37(b)(2)(A)(vi) allows a district court to issue sanctions, including default judgment against the disobedient party” when a party disobeys a discovery order. To determine if a sanction such as dismissal or default judgment is appropriate, courts should consider “(1) the degree of actual prejudice to the defendant; (2) the amount of interference with the judicial process; . . . (3) the culpability of the litigant.” Ehrenhaus v. Reynolds, 965 F.2d 916, 920 (10th Cir. 1992). Due to Mr. Englert’s continued noncompliance with discovery orders, the district court did not abuse its discretion when it entered default judgment on Klein-Becker’s claims for Englert’s discovery abuses.

Although the Tenth Circuit had not addressed the issue, other circuits have held that a district court may establish personal liability through entry of default judgment. The Tenth Circuit agreed that personal liability may be established through entry of default judgment.

(2) Damages Award

Under the Lanham Act, plaintiffs must show either actual damages or willful action on the part of the defendant as a prerequisite to recover disgorgement of profits. Because the parties agreed that Englert’s sales of StriVectin undermined the reputation and goodwill of the brand and hurt Klein-Becker’s relationships with authorized resellers, as well as their competitiveness in the cosmetics industry, the district court found that Klein-Becker established actual damages. Further, the district court found that Mr. Englert’s use of Klein-Becker’s registered mark was sufficient to support the inference that Mr. Englert acted willfully and in bad faith, entitling Klein-Becker to disgorgement of profits. Finally, equitable considerations favored judgment in favor of Klein-Becker. The district court did not err in its damages award calculation.

(3) Permanent Injunction

The Tenth Circuit agreed with the district court’s analysis of the factors for issuing an injunction: (1) actual success on the merits; (2) irreparable harm unless the injunction is issued; (3) the threatened injury outweighs the harm that the injunction may cause the opposing party; and (4) the injunction, if issued, will not adversely affect the public interest. Absent a permanent injunction barring Mr. Englert from using Klein-Becker’s trademarks or selling its products, Klein-Becker’s interests could continue to be harmed. The Tenth Circuit held that Klein-Becker’s injury outweighed any interest Mr. Englert had in continuing to violate Klein-Becker’s trademarks and found that a permanent injunction was appropriate and necessary to prevent future violations of the law.

(4) Denial of Englert’s Demand for a Jury Trial

Because he never formally objected to the magistrate judge’s ruling on his jury demand, Mr. Englert waived this argument on appeal. See United States v. One Parcel of Real Prop., 73 F.3d 1057, 1060 (10th Cir. 1996).

(5) Denial of Englert’s Request to Call an Unlisted Witness

Because Mr. Englert had not listed the witness on any of the witness lists he had submitted to the court, the Tenth Circuit concluded the district court did not abuse its discretion in denying Mr. Englert’s request to call the witness.

AFFIRMED.

Filed Under: Case Law Tagged With: , , , , , ,

So You Want to Self-Publish?

March 12, 2013 by Leave a Comment

I’ve read some terrific books written by Colorado lawyers—fiction, non-fiction, and history books. Lawyers are a talented, creative group and many love to write as a hobby, writing even when spare time is limited—finding time at night and on the weekend to fulfill a passion. If you decide to take the plunge to publish a book or even several, it’s time to get serious. Getting a traditional publishing contract can be difficult, however, and self-publishing has become very popular in the past several years.

Jon Tandler, an attorney with Ryley, Carlock & Applewhite, practices corporate, intellectual property, and publishing law. He works extensively in the publishing industry, representing publishers, distributors, agencies, trade associations, authors, and others as to content acquisition, contracts, licenses, and other legal matters. Jon says that there are many considerations to self-publishing, including one that many people fail to do—creating a business plan. A business plan includes researching the market for your publication, setting a publishing schedule, finding assets, and researching sales and distribution channels.

On March 18, Jon is speaking on self-publishing at a CBA-CLE presentation. The program will be a practical tutorial on several business and legal aspects of self-publishing books and other literary content. He’ll also touch on the issue of plagiarism, which seems to be an increasing problem in the industry.

So, if you’ve seriously thought about self-publishing or just want more information, this seminar will provide some critical, concrete steps to take—before you start.

CLE Program: Self-Publishing—Business and IP—Important Things to Know Before You Start

This CLE presentation will take place on Monday, March 18, 2013, at 12:00 p.m. (noon). Click here to register for the live program, and click here to register for the webcast.

Can’t make the live program? Click here to order the homestudy.
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Tenth Circuit: No Copyright Infringement Without Substantial Similarity

December 31, 2012 by Leave a Comment

The Tenth Circuit published its opinion in Blehm v. Jacobs on Thursday, December 27, 2012.

Gary Blehm brought a copyright infringement action against Albert and John Jacobs and the Life is Good Company (collectively “Life is Good”). Blehm is the creator of copyrighted posters featuring cartoon characters called “Penmen.” He alleged that numerous Life is Good depictions of a cartoon character called “Jake” infringed on his copyrighted works. The district court granted Life is Good’s motion for summary judgment, holding that no infringement occurred because the accused works were not substantially similar to the legally protectable elements of the copyrighted Penmen works.

The Tenth Circuit first discussed the idea/expression distinction required by the § 102(b) of the Copyright Act. Because the Act protects expression, not ideas, the court looks at only the protected elements, the expression, to determine if there are substantial similarities to an accused work. The test is “whether the accused work is so similar to the plaintiff’s work that an ordinary reasonable person would conclude that the defendant unlawfully appropriated the plaintiff’s . . . expression by taking material of substance and value.” After comparing the images, the court found them “so dissimilar as to protectable expression that the substantial similarity question need not go to a jury” and affirmed summary judgment for the defendants.

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Legal Writing Pro: The Apple of Our Eye – Scoring the Apple v. Samsung Openings

September 6, 2012 by Leave a Comment

One of the greatest patent cases of all time, Apple v. Samsung, just won Apple a stunning billion-dollar verdict.

But did Apple prevail on the writing front as well? Let’s see how many points each party racked up in the opening paragraph of its trial brief.

Apple’s Opening Paragraph

Samsung is on trial because it made a deliberate decision to copy Apple’s iPhone and iPad. Apple’s innovations in product design and user interface technology resulted in strong intellectual property rights that Samsung has infringed. Try as it might, Samsung cannot deflect attention from its own copying by the patents it has asserted against Apple. To the contrary, the trial will expose how Samsung deceived the international body responsible for creating the UMTS wireless standards to slip its patents into the standard and illegally monopolize technology markets. [Apple’s brief]

Points for Apple

  • The first sentence is short and thematic: Samsung is at once lazy and scheming.
  • The client, associated with “innovations,” is portrayed favorably.
  • “Innovation” is backed up by mentions of product design and interface technology.
  • The opponent, associated with “deception,” is portrayed unfavorably.
  • “Deception” is backed up by mentions of slipping patents into standards and monopolizing markets.

Half-Point Deductions

  • The syntax of the third sentence doesn’t work: You’d deflect attention “by” asserting patents or “through” the patents asserted. But you wouldn’t deflect attention “by” the patents themselves.
  • The final sentence tries to do too much at once, and it doesn’t contrast clearly enough with the preceding sentence to justify “to the contrary.”

Samsung’s Opening Paragraph

In this lawsuit, Apple seeks to stifle legitimate competition and limit consumer choice to maintain its historically exorbitant profits. Android phones manufactured by Samsung and other companies — all of which Apple has also serially sued in numerous forums worldwide — offer consumers a more flexible, open operating system with greater product choices at a variety of price points as an alternative to Apple’s single, expensive and closed-system devices. [Samsung’s brief]

Points for Samsung

  • The first sentence is thematic: Apple is at once greedy and anti-consumer. The Gordon Gekko of technology, it would appear.
  • Apple, with its “serial suits,” is also portrayed as an aggressor, and Samsung as its latest victim.
  • Samsung, by contrast, is portrayed as consumer-friendly (“More Choices, More Price Points”—not quite “Great
    Taste . . . Less Filling!” but effective all the same).
  • Samsung sets up a clean and even memorable contrast (“flexible and open” versus “single, expensive, and closed”).
  • Samsung subtly sounds its legal theme: that the products are much less similar than their outward appearance suggests.

Half-Point Deductions

  • The “to maintain” in the first sentence is confusing. Avoid having “to” twice in the same clause if one “to” means “in order to.” Here, for example, it sounds as if “to maintain” belongs with “stifle.” Maybe we should cut the self-evident “in this lawsuit” and move “to maintain” to the front: “To maintain its historically exorbitant profits, Apple seeks to stifle legitimate competition and limit consumer choice.”
  • The second sentence contains a common typo: the two hyphens after “worldwide” are meant to be a dash. (Hint: When you want to make a dash by typing two hyphens, you need to hit the space bar after the word that follows.)

You Win

Despite Apple’s victory on the merits, then, I’ll call this writing fight a draw. The real winner could be you, however. After all, few attorneys score any points at all in their opening paragraphs, let alone the five we’ve seen for each party here. So whether you prefer an iPhone or a Droid, see how many of these five points you can score in your next opening:

  1. A short, thematic first sentence.
  2. A sense of what the dispute involves.
  3. A key fact that puts your client in a positive light.
  4. A key fact that puts your opponent in a negative light.
  5. A clear and even memorable contrast that you can return to throughout your brief—what former Third Circuit Chief Judge Ruggero Aldisert calls the “flashpoint of controversy.”

Ross Guberman is the founder and president of Legal Writing Pro, an advanced legal-writing training and consulting firm. He has conducted more than a thousand programs on three continents for many of the largest and most prestigious law firms and for dozens of state and federal agencies and bar associations. Ross is also a Professorial Lecturer in Law at The George Washington University Law School, where he teaches an advanced seminar on drafting and writing strategy. When you see the logo, you’re reading an article from Legal Writing Pro, where the article originally appeared.

Filed Under: Practice Management Tagged With: , , , , ,

Tenth Circuit: Agreement Did Not Grant Exclusive Right to Spring Water Trademark

August 6, 2012 by Leave a Comment

The Tenth Circuit Court of Appeals published its opinion in Eureka Water Co. v. Nestle Waters North America, Inc. on Friday, August 3, 2012.

The Tenth Circuit affirmed in part and reversed in part the district court’s decision. “Eureka Water Company, Respondent, contends that a 1975 agreement grants it the exclusive license in 60 Oklahoma counties to sell spring water and other products using the Ozarka trademark. It sued Nestle Waters North America, Inc., Petitioner, the current owner of the Ozarka trademark, to obtain a declaratory judgment of that right and to obtain monetary relief under several theories, including breach of contract, tortious interference with business relations, unjust enrichment, and promissory estoppel. A jury found for Eureka on its contract and tortious interference claims, and the district court entered a judgment declaring that the 1975 agreement granted Eureka the exclusive right that it claimed in the Ozarka mark. In a postverdict ruling, the district court denied as duplicative Eureka’s equitable claims based on unjust enrichment and promissory estoppel.”

“After the district court denied Nestle’s postverdict motion for judgment as a matter of law (JMOL), Nestle appealed. Nestle argues on appeal that it is entitled to JMOL on the contract claim because the unambiguous terms of the 1975 agreement do not cover Ozarka spring water and that it is entitled to JMOL on the tortious-interference claim because its conduct was privileged and justified as a matter of law. In the alternative it seeks a new trial because the district court admitted a prejudicial privileged document, and a new trial or judgment in its favor because the district court erred in admitting testimony of Eureka’s damages expert. On cross-appeal Eureka argues that the district court erred in denying relief on its unjust-enrichment and promissory-estoppel claims.”

The Court agreed with most of Nestle’s principal arguments. First, the Court reversed “the district court’s denial of Nestle’s motion for JMOL on the contract claim because the 1975 agreement unambiguously does not cover spring water and under Oklahoma contract law (which applies because the agreement does not come under the Uniform Commercial Code) extrinsic evidence on the contract’s meaning was inadmissible.” The Court’s construction of the contract also required it to vacate the district court’s declaratory judgment. Second, the Court reversed “the denial of JMOL on the tortious-interference claim because Eureka failed to show that Nestle’s decision to charge Eureka what it charged other vendors for bottled water was not privileged or justified.” Third, the Court affirmed “the denial of Eureka’s unjust enrichment claim because the claim is based on the false premise that Eureka’s license to use the Ozarka trademark covers spring water.” However, the Court reversed “the denial of Eureka’s promissory-estoppel claim, remanding that claim for further consideration by the district court.”

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Colorado’s Proposal for a USPTO Satellite Patent Office and Online Petition

February 13, 2012 by Leave a Comment

On November 29, 2011, the United States Patent and Trademark Office (USPTO) published a “Request for Comments on Additional USPTO Satellite Patent Offices for the Nationwide Workforce Program.” The full text of the USPTO’s Request can be found here.

In Response to the USPTO Request, the Colorado Bar Association Intellectual Property Section worked closely with the offices of Denver Mayor Hancock, Governor Hickenlooper, Senator Bennet, the Metro Denver Economic Development Corporation and Accelerated Colorado (“the Coalition for a Colorado Satellite Patent Office”) to prepare and submitted Colorado’s proposal to the USPTO on January 27, 2012. Additional letters of support and the signed Joint Resolution 12-008, Concerning the State of Colorado’s support for locating a patent office in the Denver metro area, adopted by the Colorado Assembly during the 2012 legislative session were submitted to the USPTO on January 30, 2012. The IP Section would like thank everybody who submitted comments on and letters in support of a Colorado Satellite Patent Office.

Senator Bennet’s Office is currently running an online petition in support of a Colorado Satellite Patent Office. To date, Senator Bennet’s office has already received 2300 electronic signatures on the petition. The IP Section encourages you to view the petition and electronically sign on if you support it.

Please let the IP Section Leadership know if you have any questions or comments. Otherwise, the Leadership will continue to keep you updated on this Initiative.

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Colorado Supreme Court: Federal Copyright Law Only Governs Ownership of Copyright in Software Code, Not of Material Embodiment of the Code

December 15, 2011 by Leave a Comment

The Colorado Supreme Court issued its opinion in Steward Software Co. v. Kopcho on December 12, 2011.

Civil Theft — Jury Instructions.

The supreme court holds that federal copyright law only governs ownership of a copyright in software code, not ownership of a material embodiment of the code. Because Steward Software alleged in this case that Kopcho committed civil theft of a material embodiment of the code, ownership of a copyright in the code is irrelevant. The trial court thus correctly refused to instruct the jury on principles of federal copyright law. The supreme court therefore reverses the judgment of the court of appeals

Summary and full case available here.

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[UPDATED] Corporate Practice Update: Patent Reform, Social Media Policy, and Tax Topics for Privately-Held Businesses

November 29, 2011 by Leave a Comment

The America Invents Act, which was signed into law this fall, is the first major overhaul of our nation’s patent law in almost 50 years. Among its many significant provisions, the Act will change the United States patent system from “first-to-invent” to “first-to-file,” aligning the United States with the international standard. New procedures will be also established for third-party challenges to patent and applications, and changes will be made regarding who can file, when they can file, and what prior art can be used against them.

The Corporate Practice Update Series has been postponed.

The effects of the changes will be of particular importance for corporate counsel and privately held businesses, and will be discussed at a CLE program on December 7, 2011 as part of the Corporate Practice Update Series. Along with these developments, the Privately Held Businesses program will cover other issues, including legal issues in social media, social media policy for a privately-held company, and tax topics for small businesses.

The program is being presented by some of Colorado’s leading business entity experts:

  • Fern O’Brien, Esq.
  • Henry Smith, Jr., Esq.
  • Liane Heggy, Esq.

And, don’t miss the other great sections of the Corporate Practice Update Series, covering the Civil Access Pilot Project, Business Entity Update, Securities, Franchises, M&A, and Ethics.

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Spark the Discussion: Medical Marijuana Law and Policy

October 19, 2011 by Leave a Comment
“Spark the Discussion” is a monthly Legal Connection column highlighting the hottest trends in the emerging field of medical marijuana law. This column is brought to you by Vicente Sederberg, LLC, a full-service, community-focused medical marijuana law firm.

I’ll start with a bold prediction: marijuana reform and same-sex marriage are the two policy areas in which young lawyers will see major movement in their lifetimes. These two “controversial” topics stand at the crossroads of a shift in society, with the younger generation pushing for increased tolerance of alternative lifestyles—whether it’s marriage choice or an individual’s decision to medicate—or recreate—with marijuana—and older Americans increasingly accepting that, at least with these two topics, change is inevitable.

This article will focus on medical marijuana law and policy—a dynamic field that an increasing number of Colorado lawyers are facing in their everyday practice. Currently, sixteen states (and the District of Columbia) have passed statewide medical marijuana laws, and a half-dozen others are poised to take similar action. What started largely as an area within criminal law practice—a small number of lawyers defending medical marijuana patients accused of criminal violations—has expanded into a cottage industry impacting nearly every area of legal practice. This column will highlight some of those areas and discuss the future of this hot topic.

Before reading further, please note that while medical marijuana is legal in Colorado and a growing number of states, and literally thousands of doctors recommend it every year for sick patients, it remains firmly illegal under federal law. Given these conflicting state and federal stances, it’s crucial that lawyers practicing in this area closely follow emerging trends and policies.

  • Business Law:
  • Colorado and several other states have medical marijuana laws with provisions allowing for retail stores known as dispensaries to sell marijuana to qualifying patients.  Budding entrepreneurs need guidance from attorneys who understand not only medical marijuana laws, but also traditional business law. All facets of corporate law, from drafting  operating agreements to negotiating commercial transactions, come into play with the operation of dispensaries.
  • Family Law:
  • An increasingly common theme in the family law realm is the presence of medical marijuana in custody battles or divorce proceedings. Often these disputes arise not from actual neglect or abuse, but merely from the presence of marijuana in the home. Patients need solid guidance to keep this—and all medicine—firmly away from children. There is a desperate need for lawyers who understand both medical marijuana law and family law and can advocate appropriately when the two areas overlap.
  • Elder Law:
  • As medical marijuana patients age they often end up in nursing homes or in-patient hospice care. When Maine’s medical marijuana law changed last November, the state expressly permitted nursing homes and hospice workers to act as registered medical marijuana caregivers for patients. Other states are silent on this issue. Large questions remain about federal funding for this type of care and how one patient’s possession of a federally-illegal substance could place others at legal risk.
  • Civil Law:
  • Legal medical marijuana businesses have the same problems as other, more mainstream businesses, and partnership disputes by owners of such stores are commonplace in Colorado. Some owners came out of a less-mainstream past, and built a million-dollar business without signing an operating agreement. In these messy situations, civil litigation is often the only remedy.
  • Election and Municipal Law:
  • The passage of a statewide medical marijuana law is invariably followed by conservative municipalities attempting to ban sales and cultivation within municipal borders. When Colorado passed a dispensary law in 2010, around 50 municipalities put measures on their local ballots to ban these retail shops in their communities. Whether through ballot initiative or action by a government body, there is a real opportunity for lawyers who understand election and municipal law to engage in this area.
  • First Amendment:
  • The most common complaint from community members about dispensaries is that they have offensive signage. While polls consistently show that roughly 80% of Americans support medical marijuana, most citizens don’t want it shoved in their face. Medical marijuana business owners need lawyers to explain their rights—and encourage discretion.
  • Intellectual Property Law:
  • “Can we patent the recipe for my marijuana cheesecake?” This question may seem peculiar, but my office gets several calls a week of this nature. As more patients turn to alternate forms of administering medical marijuana, such as through edibles or tinctures, interesting questions arise concerning protecting the manufacturer’s recipes and formulas.
  • Criminal Law:
  • As long as federal law continues to classify marijuana as a Schedule I Controlled Substance—the most dangerous and addictive class of drugs—there will be work for criminal defense attorneys representing medical marijuana patients and providers in federal court. On the state and local level, authorities continue to zealously target adults for marijuana crimes,  arresting over 750,000 citizens for possession of marijuana annually. That’s the equivalent of arresting every man, woman, and child in the state of Wyoming once a year!

As young attorneys in Colorado, we have an incredible opportunity in the field of medical marijuana law. Unlike property law or criminal law, this area is new and has very little case precedent. The young idealist attorney will fight out these important cases in the courtroom and establish laws that make sense both for the patient and the community.

Many lawyers initially chose this patient-centered line of work because they believed the time had come to pursue a more common-sense approach to marijuana and drug policy in America. Now, as lawyers from a diverse range of practice areas are entering this arena, let’s hope all remain true to the core principles that attracted most of us to this work:

Patients before politics; patients before profits.
Brian Vicente, Esq., is a founding member of Vicente Consulting, LLC, a law firm providing legal solutions for the medical marijuana community. He also serves as executive director of Sensible Colorado, the state’s leading non-profit working for medical marijuana patients and providers. Brian is the chair of the Denver Mayor’s Marijuana Policy Review Panel, serves on the Colorado Department of Revenue Medical Marijuana Oversight Panel, and coordinates the Colorado Bar Association’s Drug Policy Project.
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Tenth Circuit: Patent Infringement May Constitute Misappropriation of Advertising Ideas Within Meaning of Commercial Insurance Policies

October 18, 2011 by Leave a Comment

The Tenth Circuit Court of Appeals issued its opinion in DISH Network Corp. v. Arch Specialty Ins. Co. on Monday, October 17, 2011.

The Tenth Circuit reversed and remanded the district court’s decision. Petitioner Corporation filed a diversity action in the District of Colorado, seeking a judgment declaring that its insurers had a duty under Colorado law to defend it in a patent infringement suit. The company claiming the infringement “asserted that Dish did so by ‘making, using, offering to sell, and/or selling . . . automated telephone systems, including without limitation the DISH Network customer service telephone system, that allow [Dish’s] customers to perform pay-per-view ordering and customer service functions over the telephone.’” The district court held that the underlying complaint against Petitioner’s insurers did not allege an “advertising injury” under the policies issued to Petitioner and granted the insurers’ motion for summary judgment.

However, the Court found that “the complaint potentially alleges advertising injury arising from the misappropriation of advertising ideas.” While the Court agreed with the district court’s conclusion that “patent infringement may, under certain circumstances, constitute ‘misappropriation of advertising ideas,’ the Court disagreed with its ruling that the patented means of conveying advertising content at issue here could not be ‘advertising ideas’ within the meaning of Dish’s commercial general liability policies.” Regarding the duty to defend, the Court held that the patent infringement complaint “may arguably fall within the polic[ies]” at issue because “it potentially alleged advertising injury arising from Dish’s misappropriation of its advertising ideas, which Dish committed in the course of advertising its goods, products, or services.” The Court therefore reversed the district court’s grant of summary judgment to the Insurers and remanded for further proceedings.

Filed Under: Case Law Tagged With: , , ,

The America Invents Act – A Discussion of the Recent Significant Changes in U.S. Patent Law

September 22, 2011 by Leave a Comment

Co-Sponsored by the CBA Intellectual Property Section

The America Invents Act, which was signed into law by the president last week, is the first major overhaul of our nation’s patent law in almost 50 years. Among its many significant provisions, the Act will change the United States patent system from “first-to-invent” to “first-to-file,” aligning the United States with the international standard. New procedures will be also established for third-party challenges to patent and applications, and changes will be made regarding who can file, when they can file, and what prior art can be used against them.

Other provisions of the Act affect hot-topic issues, like false marking cases, business method and tax strategy patents, and joinder of unrelated parties by so-called trolls. These and other changes raise a host of questions for IP attorneys and their clients.  When and how should clients disclose their inventions?  How should clients think about the new options for challenging their competitors’ patents?  What tactics can clients use in anticipation of future derivation or post-grant proceedings?

A post by David Donoghue, patent attorney and Rocky Mountain IP Institute faculty member, reveals a few key elements of the legislation, but we invite you to learn everything you need to know about the fundamental changes to Intellectual Property and Patent Law at our CLE event on October 5, The America Invents Act – A Discussion of the Significant Changes in US Patent Law. Be the best advocate for your client by attending and making sure you know all the ins and outs of the new legislation.

CLE Program: The America Invents Act – A Discussion of the Significant Changes in US Patent Law

This CLE presentation will take place on Wednesday, October 5. Participants may attend live in our classroom or watch the live webcast.

If you can’t make the live program or webcast, the program will also be available as a homestudy in two formats: video on-demand and mp3 download.
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David Donoghue: 4 Key Provisions of the Patent Reform Act for Patent Litigators

September 19, 2011 by 1 Comment

The patent blogs are abuzz with detailed analysis of cloture votes, this month’s Senate hearings and the Senate’s overwhelming passage of the America Invents Act (the “AIA”).  With the AIA signed into law by President Obama last week, I am beginning a series of posts looking at its key provisions. This is the first of those posts.  It is based upon a post from earlier this week at my Retail Patent Litigation Blog.

Here are four key provisions of the AIA for patent litigators and litigants:

  1. Smaller Patent Troll Suits: The most immediate impact on patent litigation will be Section 19, limiting joinder in a single suit of unrelated parties. This is not the more extreme restrictions on venue or joinder that many had hoped for. But it will have some positive impact on patent troll litigation. For suits filed on or after the date of enactment, plaintiffs will only be able to join related parties in a single suit — for example, multiple manufacturers, distributors or resellers of an identical product. And while cases against unrelated parties could still be joined for discovery, they will not be able to be joined for trial. At first glance, this is not much of a barrier to entry for patent trolls. Very few defendants get to trial, and cases may still be consolidated for discovery purposes at the court’s discretion. Where a troll today could pay one $350 filing fee and sue 100 unrelated defendants, after enactment that same troll would have to file 100 suits and pay $35,000 in filing fees. $35,000, however, is dwarfed by the settlement demands in many cases. The hassle of filing the extra suits and the related filing fees, however, may be enough to prevent suits against some of the much smaller entities that almost always end up in these suits. And the requirement of separate suits will allow defendants a much greater ability to seek transfer to an appropriate venue. So, while this is not the sea change that many sought, it is a real benefit to retailers who are tired of being sued in Texas and want a better shot at transferring cases. This Section only applies to cases filed after enactment, not pending cases. So, existing cases will not be impacted.
  2. Post-Grant Review: The AIA establishes a brief window for post-grant and inter partes review in Section 6. Third parties may challenge the validity of any claim of a patent for nine months after a patent is granted or issuance of a reissued patent. But you cannot seek post-grant review after filing a suit involving the patent. And when post-grant review ends in a final Board decision, you give up the right to use the arguments used in post-grant review or arguments that could reasonably have been used, in a later ITC proceeding or district court litigation.
  3. False Marking Restrictions: Private citizens that file false marking claims will be required to prove competitive injury and their damages will be limited to the injury. Additionally, Section 16(b) excludes marking with an expired patent from the false marking statute. Furthermore, Section 16 applies to all cases pending when the AIA is enacted, as well as cases filed thereafter. Section 16 will clear out many of the existing false marking cases, but leaves considerable room for competitor false marking cases.
  4. First to Invent: One of the most publicized changes to the U.S. patent laws is the move to a first-to-file patent system, the system used by most of the rest of the world. The first-to-file system incentivizes filing patents as quickly as possible to avoid an earlier filing by a competitor. Section 3 softens the first-to-file system providing for a proceeding between patent owners if the junior patent holder can show that the senior patent holder’s invention was derived from the junior patent holder’s invention. These “derivation proceedings” will replace the current, seldom-used interferences.

Of course, there is much more to the AIA, but these key changes are a good way to start digging into it. If there are other provisions you view as on par with these four from a litigation perspective, I would love to hear about them. Future posts will look at some of the other provisions of the AIA.

Editor’s Note: Recent patent reform is the subject of a CLE program on Wednesday, October 5, entitled The America Invents Act – A Discussion of the Significant Changes in U.S. Patent Law. The event is being co-sponsored by the CBA Intellectual Property Section and presented by Daniel J. Sherwinter, Esq. Click here to register for the program or the live webcast.

R. David Donoghue is a trial attorney and a partner in Holland & Knight’s Intellectual Property Group focusing upon intellectual property litigation and particularly upon patent disputes. He was a faculty member at the 9th Annual Rocky Mountain Intellectual Property and Technology Institute. David blogs at the Chicago IP Litigation Blog, where this post originally appeared on September 9, 2011.
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