And the Survey Says: Nothing?

Order Vacating ITC Invalidity and Infringement Determinations and Remanding for Further Proceedings, Converse, Inc. v. Int’l Trade Commission, (Fed. Cir.) (Oct. 30, 2018) (Judges Dyk, O’Malley, and Hughes)

We’ve previously discussed some of the challenges of obtaining quality consumer survey evidence in trademark litigation in past posts, such as here and here. The persuasiveness and wisdom of a consumer survey was once again called into question, this time by the Federal Circuit in its October 30 opinion in Converse’s long-running trademark litigation against Skechers, New Balance, and others. The appeals court identified a “series of errors” requiring remand, including that the International Trade Commission applied incorrect standards to both invalidity and infringement and erred in its secondary meaning analysis. READ MORE

Disqualifying an Expert: When Is an Expert’s Prior Relationship Prejudicial to the Opposing Party?

Opinion Regarding Disqualification of Plaintiff’s Expert, Tabaian v. Intel Corp., D. Or. (September 22, 2018) (Judge Marco A. Hernandez) 

Expert witnesses play a critical role in patent litigation, particularly where the subject matter is highly technical.  The more specialized the technology, the more common it is for an expert witness to have had some prior relationship with the opposing party.  To determine whether such an expert should be disqualified, courts analyze the relationship under a three-part test: (1) whether the relationship between the expert and the opposing party was confidential; (2) whether the confidential information that the expert obtained under that relationship is relevant to the present lawsuit; and (3) how granting or denying a disqualification motion may prejudice the parties or affect the integrity of the legal process.  A recent opinion from the District of Oregon sheds light on this test. READ MORE

IPR Reply Briefs: Drawing the Line Between “Responsive” and “New”

Ericsson Inc. v. Intellectual Ventures I LLC, Fed. Cir. (Aug. 27, 2018)

37 C.F.R. § 42.23(b) limits a petitioner’s inter partes review (“IPR”) reply papers to arguments raised by the patent owner in its opposition. Under this rule, a petitioner cannot assert new invalidity arguments, cite previously unidentified parts of a prior art reference, or introduce new evidence such as a new prior art reference. The line between this and what is merely responsive, however, can be blurry. The Federal Circuit’s recent decision in Ericsson sheds some light on this line. READ MORE

Judge Boots Foreign Trademark Genericide Defense

Deckers Outdoor Corp. v. Australian Leather Pty Ltd. (N.D. Ill. Sept. 13, 2018)

Last Thursday, a court in the Northern District of Illinois upheld the trademark “UGG” for wool-lined boots against charges of genericide. The plaintiff’s survey evidence showed that U.S. shoe consumers mostly understand “UGG” to refer to a brand rather than a type of boot. The defendant, however, submitted evidence showing that sheep-skin boots were popular with Australian surfers as far back as the 1970s, many of whom referred to them generically as “ugg boots.” The defendant also presented evidence that some American surfers use the term “ugg boots” generically as well, likely due to overlap in the surfing communities. READ MORE

Cryptocurrencies and Online Marketing: Legitimate Business or Pyramid and Ponzi Schemes?

The Internet is a double-edged sword, presenting at once possibilities for business opportunities undreamed of twenty years ago – fast and cheap communications, multitudes of customers, “frictionless” commerce – and possibilities for fraudulent practices on a scale heretofore unimagined – Ponzi, pyramid, and illegal “multi-level marketing” (MLM) schemes that can use the reach of the Internet to victimize tens of thousands of people. Where do cryptocurrencies like Bitcoin (the most popular and well known), Ethereum, and Ripple and efforts to market them fit into this mix of legitimate and fraudulent activities?

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Judicial Reprimand Serves as Cautionary Tale for Litigants Everywhere

Order Denying Motion to Establish Claim Construction Procedure and to Show Cause Re Sanctions, Seven Networks LLC v. Google LLC, E.D. Tex. (July 19, 2018) (District Judge Rodney Gilstrap)

On July 19, 2018, Eastern District of Texas Judge Rodney Gilstrap issued a scathing order in response to a motion by Google LLC to “establish” a procedure for resolving claim construction disputes. Problematically for Google, its motion came nearly two months after the Court issued an order on the procedure for claim construction, three weeks after claim construction briefing began, and only two days before Google filed its responsive claim construction brief. The Court emphasized repeatedly that Google’s motion “demonstrates a serious disregard for [the] Court’s Rules, Orders, and its authority to control its own docket.” The Court also noted that the plaintiff’s actions contributed to the problem and ordered both parties and their counsel to appear on August 7, 2018 to show cause why they should not be sanctioned. The Court’s order is a cautionary tale for litigants and counsel in all cases about the importance of strictly following a court’s rules and procedures, and a reminder that it is the court—not parties or counsel—that controls the case. READ MORE

Court Declines to Exercise Pendent Venue Over a Patent Case and Denies Section 1400(b) Discovery

Olivia Garden, Inc. v. Stance Beauty Labs, Inc., et al., N.D. Cal (July 12, 2017) (Judge Haywood S. Gilliam, Jr.)

In a June 12, 2018, order, Judge Haywood S. Gilliam, Jr. granted the motion of defendant Stance Beauty Labs (“Stance”) to dismiss for improper venue, rejecting plaintiff Olivia Garden’s request that the court exercise pendent venue over its claims.  The court found that pendent venue was unavailable for patent claims, despite being brought alongside related claims that the plaintiff brought against a codefendant.

Specifically, Olivia Garden brought claims against Stance (represented by Orrick) and codefendant Burlington Coat Factory of Texas (“Burlington Texas”) alleging design patent infringement, trade dress infringement and unfair competition based on certain of the defendants’ brush products.  Stance subsequently moved to dismiss based on improper venue.  In opposition, Olivia Garden acknowledged that Stance was incorporated in Connecticut and that it lacked facts sufficient to show proper venue under the second prong of 28 U.S.C. § 1400(b). READ MORE

How to Shoot for the Stars: Federal Circuit Clarifies EMVR Requirements

Power Integrations, Inc. v. Fairchild Semiconductor International, Fed. Cir. (July 3, 2018)

Patent damages law can be fairly complex—so much so that Daubert motions against damages experts are filed in nearly every case.  These motions often accuse damages experts of overreaching by failing to properly apportion damages or misapplying the entire market value rule (“EMVR”).  On Tuesday, the Federal Circuit’s opinion in Power Integrations, Inc. v. Fairchild Semiconductor International attempted to clarify these aspects of the patent damages analysis, vacating the jury’s $139.8 million damages award in the form of a reasonable royalty.

A patentee seeking damages for the sale of a multicomponent (or multifunction) product must typically take several steps to ensure that any alleged damages have been properly apportioned to exclude the value provided by the product’s noninfringing aspects.  First, the royalty base has to be determined on the smallest saleable patent practicing unit.  Second, that reduced royalty base needs to be apportioned to reflect only the value attributable to the patented technology.  A royalty based on the value of the entire multicomponent product will likely yield much higher damages, but such a royalty can be recovered only if the plaintiff satisfies the very strict requirements of the EMVR.

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Seven Months’ Delay Too Much for Venue Transfer After TC Heartland…. Or Is It?

Order Granting Defendant’s Motion to Transfer for Improper Venue or, Alternatively, to Dismiss, Blue Rhino Global Sourcing, Inc. v. Best Choice Products a/k/a Sky Billiards, Inc., M.D.N.C. (June 20, 2018) (Judge Loretta C. Biggs) and Adrian Rivera v. Remington Designs, LLC, C.D. Cal. (June 19, 2018) (Judge John A. Kronstadt)

Courts continue to work through the backlog of venue motions created by the combo of TC Heartland and In re Micron Tech. rulings. In a pair of almost concurrently issued opinions two courts reached differing conclusions as to whether a seven month delay was sufficient to deem a venue transfer motion waived. READ MORE

Are Early Motions to Dismiss Under § 101 No Longer a Natural Phenomenon?

Illulmina, Inc. v. Natera, Inc., Case No. 18-cv-01662-SI (N.D. Cal. June 26, 2018 Order Denying Motion to Dismiss).

Confirming that the difficulty in interpreting 35 U.S.C. § 101 in order to determine which subject matter is patentable is not limited to abstract ideas, Judge Illston of the Northern District of California grappled with the problem of identifying unpatentable natural phenomena.

Pursuant to the two-step test established by the Supreme Court in Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 70 (2012) and enshrined in Alice Corp. Pty. v. CLS Bank Int’l, 134 S. Ct. 2347, 2354 (2014), a patent claim is unpatentable if it is both directed to a patent-ineligible concept and fails to recite additional elements that transform the nature of the claim into a patent-eligible application by reciting an inventive concept. READ MORE