By Henry M. Sneath, Esq. – Chair of the Picadio Sneath Miller & Norton, P.C. Intellectual Property Group. Contact him at firstname.lastname@example.org
Last week a Pittsburgh federal court jury found on behalf of local university CMU against hard drive chip maker Marvell (See attached photo) on claims of patent infringement and willfulness. The $1.17 Billion award was huge by any standards and still faces post trial motions which could vacate the verdict or increase it for willfulness, which the jury found. Judge Fischer could grant any number of what will surely be multiple post trial motions including a motion for mistrial, which was made by Marvell counsel during CMU’s closing argument and on which she denied the motion without prejudice to rule on it after the announcement of a verdict. In other words, she could still grant a mistrial and vacate the one month trial and verdict. She could also increase the verdict by as much as threefold based on the willfulness finding. The article attached below indicates that no tech verdict this large has ever stood the test on appeal. Here is one of a number of good descriptions of the case as it has been written about extensively over the last week: http://arstechnica.com/tech-policy/2012/12/jury-slams-marvell-with-mammoth-1-17-billion-patent-verdict/
Here also is an interesting video take on the case. http://www.bloomberg.com/video/david-martin-on-carnegie-mellon-marvell-patent-case-er1U0P~yQXC616MuXqU_Hw.html
For this end-of-the year blog entry, I took a look back at some of the bigger developments in technology and the law in 2012. One of these developments was the ABA’s revisions to its Model Rules of Professional Conduct to address technology. These changes impact lawyers and clients. Highlights of these revisions (Recommendation 105A) include the following:
Rule 1.1 requires that every lawyer shall provide competent representation to a client. Comment 6 of this rule has been amended to clarify that to maintain the requisite knowledge and skill necessary to represent a client, a lawyer must keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology.
Comment 4 to Rule 1.4 Communication, has changed from requiring a lawyer to promptly return telephone calls to requiring a lawyer to promptly respond to or acknowledge client communications, which is more encompassing and which includes e-mail, text messages, or other electronic communications from clients to lawyers.
Rule 1.6 Confidentiality of Information was revised to include a new paragraph (c) which states that “[a] lawyer shall make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client.” New comments addressing paragraph (c) explain that the unauthorized access to or the inadvertent or unauthorized disclosure of information does not constitute a violation of paragraph (c) if the lawyer made reasonable efforts to prevent the access or disclosure. Factors to be considered in deciding if a lawyer took reasonable efforts include, but are not limited to, “the sensitivity of the information, the likelihood of disclosure if additional safeguards are not employed, the cost of employing additional safeguards, the difficulty of implementing the safeguards, and the extent to which the safeguards adversely affect the lawyer’s ability to represent clients (e.g. by making a device or important piece of software excessively difficult to use).” The comment also adds that “[a] client may require the lawyer to implement special security measures not required by this Rule or may give informed consent to forgo security measures that would otherwise be required by this Rule.”
Rule 4.4 was revised to clarify that if a lawyer receives not only a document but also electronically stored information relating to the representation of the lawyer’s client and knows or reasonably should know that the electronically stored information was inadvertently sent, the lawyer has a duty to promptly notify the sender. Comment 2 to Rule 4.4 was revised to explain that “a document or electronically stored information is inadvertently sent when it is accidentally transmitted, such as when an email or letter is misaddressed or a document or electronically stored information is accidentally included with information that was intentionally transmitted.” Moreover, the comment explains that for purposes of this rule, “electronically stored information” includes “email and other forms of electronically stored information, including embedded data (commonly referred to as metadata. . . .)” The comment goes on to state that “[m]etadata in electronic documents creates an obligation under this Rule only if the receiving lawyer knows or reasonably should know that the metadata was inadvertently sent to the receiving lawyer.”
The application and interpretation of these rules will be the big issue. For instance, what does it mean for lawyers and clients that lawyers must keep abreast of the benefits and risks associated with relevant technology? This could mean, for example, lawyers, especially in cases involving the production of large amounts of data, need to understand the benefits and risks of “predictive coding.” It could also mean that lawyers need to know the benefits and risks of “cloud computing” and other relatively recent technological advancements affecting the practice of law. Another important issue is what a lawyer must do to protect client data from being stolen or lost. The model rules give factors to be considered, but these hardly provide all the answers.
While Pennsylvania has not yet adopted these revisions, lawyers in Pennsylvania should be aware of these requirements, should be guided by them and should be learning about technology. Technology has a significant impact on lawyers’ clients and their practice. Lawyers can no longer “hide” from technology.
On December 17, 2012, U.S. District Judge Koh denied Apple’s request for a permanent injunction against Samsung. As a reminder, a jury awarded Apple $1.05 billion in damages in August after finding that Samsung had copied certain features of Apple’s iPhone and iPad. (See our earlier blog post summarizing this verdict). With respect to the court’s most recent ruling, Judge Koh followed the Federal Circuit’s heightened standard that requires patent-holders to show a direct link between lost market-share and a specific infringing feature of a competitor’s product. In fact, in a previous ruling related to another lawsuit between Apple and Samsung over the patented search technology used in Apple’s Siri feature, the Federal Circuit overturned Jodge Koh’s decision to grant a preliminary injunction against Samsung’s Galaxy Nexus phone. In the present matter, Judge Koh found that Apple’s evidence for injunctive relief fell short of the strict “causal nexus” standard because the lawyers did not prove that the copied features specifically drove consumers to buy Samsung devices.
Some attorneys believe that Apple’s main objective was to block Samsung’s sale of its products and not to obtain a financial remedy. In this regard, attorneys are of the opinion that the record verdict was a mere slap on the wrist to Samsung, which generates approximately $100 billion in annual revenues. Nonetheless, this recent ruling has a significant impact on the parties’ leverage in the mobile patent litigation arena.
On November 30, 2012, the United States Supreme Court granted certiorari in Association for Molecular Pathology v. Myriad Genetics (No. 12-398) to decide whether human genes are patentable. The case arises out of a declaratory judgment action brought by various researchers and institutions that certain claims in patents held by Myriad Genetics relating to isolated genes associated with a predisposition to breast and ovarian cancer are invalid because the subject matter of the patents is not eligible to be patented under 35 U.S.C. § 101.
What Subject Matter Can Be Patented?
The Patent Act provides that “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor . . . .” 35 U.S.C. § 101.
The question in this case is whether human genes fall within the scope of Section 101, or whether they are natural phenomena that are ineligible to be patented.
Split Decision at the Federal Circuit
In deciding this issue, the Federal Circuit panel (comprised of Circuit Judges Lourie, Moore, and Bryson) each wrote separate opinions endorsing different rules to decide this issue. Judge Lourie (writing for the majority) found that human genes are patentable, reasoning that the isolated DNA molecules at issue in the claims of the patents are not found in that form in nature. Because they are different from natural materials and isolated through the product of human ingenuity, they are eligible to be patented.
Judge Moore agreed that the claims are patent eligible, but for a different reason. She noted that human genes have been patented for years and are specifically allowed by the US Patent Office. She also noted that if she was writing on a blank slate, she might reach a different conclusion.
Finally, Judge Bryson dissented, finding the claims were not patent eligible. He found that the isolated genes performed the same function as they do inside the full DNA sequence. Thus, there was no transformation, and the genes are nothing more than an extraction of a naturally-occurring phenomena.
The researchers and institutions petitioned the Supreme Court for a writ of certorari, which the Supreme Court granted on the limited question of “Are human genes patentable?”
Numerous Amici Have Weighed in
Given the importance of this issue, both to researchers and pharmaceutical companies, a number of parties have weighed in with the Supreme Court, urging that the standard for patent eligibility for human genes be clarified. Their briefs can be read here.
It will be interesting to follow this case and its briefing in the coming months to see how the Supreme Court decides this issue or whether it leaves it to Congress to decide.
Last week, an intellectual property law group, the American Intellectual Property Law Association (“AIPLA”), argued before the U.S. Supreme Court that state court, rather than federal court, is the appropriate venue to hear legal malpractice claims involving patents. AIPLA was arguing in support of an amicus brief, or “friend of the court” brief that it filed in an effort to further aid and educate the Court in the matter of Gunn v. Minton. AIPLA did not represent or have any connections to the parties in the case.
By way of background, AIPLA is a national bar association of approximately 14,000 members engaged in private and corporate practice, in government service, and in the academic community. AIPLA represents individuals, companies and institutions involved directly or indirectly in the practice of patent, trademark, copyright and unfair competition laws, as well as other fields of law affecting intellectual property.
AIPLA took the position that the Federal Circuit, which has jurisdiction over patent cases, has taken an overly broad approach to subject matter jurisdiction. AIPLA states that the Federal Circuit has been routinely finding federal jurisdiction over state law claims that raise patent law issues based upon Christianson v. Colt Indus. Operating Corp., 486 U.S. 800 (1988). The Federal Circuit, according to AIPLA, has interpreted Christianson, as supporting the existence of jurisdiction any time a state law claim makes it necessary to resolve a federal patent issue.
AIPLA argued that this interpretation is wrong because Christianson did nothing to alter prior U.S. Supreme Court precedent that provided that a federal court may exercise jurisdiction over a state law claim raising a federal issue only when it is necessary, disputed and substantial. This only occurs, according to AIPLA, when a claim creates a controversy as to significant patent law issues, such as a controversy regarding the validity of a patent, the construction or effect of a patent statute or a principle of patent law. The Federal Circuit has combined these separate considerations, “necessary, disputed and substantial,” into a single question of whether any patent issue is “necessary” to the state law claim.
AIPLA also argued that by asserting subject matter jurisdiction over malpractice claims involving patents, the Federal Circuit is disturbing the Congressionally approved balance of federal and state judicial responsibilities. Further, allowing federal courts to exercise jurisdiction over various state law claims merely because those claims raise a patent law issue diminishes the right of litigants to select a forum based on the traditional well-pleaded complaint rule. This rule states that the plaintiff is “the master of its complaint” and may have its cause heard in state court by avoiding claims based on federal law. However, the Federal Circuit’s exercise of jurisdiction over such claims forces litigants to litigate in federal court, even if the case involves local disputes involving local interests, simply because the dispute raises an issue relating to patent law.
For more information, the entire amicus brief of the AIPLA can be found here and a Law360 article can be found here (subscription required).