Tag Archives: intellectual property

Defend Trade Secrets Act (DTSA) Seminar in Pittsburgh Jun 22, 2016

Posted by Henry M. Sneath, Esq. – Chair of the Intellectual Property Practice Group at Pittsburgh, Pa. law firm Picadio Sneath Miller & Norton, P.C. (PSMN® and PSMNLaw®). Mr. Sneath is also an Adjunct Professor of Law at the Duquesne University School of Law teaching Trade Secret Law, Trademark Law and the Law of Unfair Competition. He may be contacted at hsneath@psmn.com or 412-288-4013. Website www.psmn.com or www.psmn.law

See copy of my Tweet from earlier today: “I’m pleased to be a part of the Federal Bar Association seminar set for Pittsburgh on the new Defend Trade Secrets Act  https://twitter.com/hashtag/DTSA?src=hash   on June 22, 2016. Co-Hosted by the Pittsburgh Intellectual Property Law Association (PIPLA) and the Duquesne University School of Law, where I teach Trade Secret Law as an adjunct Professor of Law. Register at FBA link: http://tinyurl.com/gm8nudj and see my Tweet at
https://twitter.com/PicadioSneath/status/730450574148149248
This is biggest Federal expansion of  #IP  Law since the Lanham Act and when signed by the President (today it appears) – it will provide immediate jurisdiction for  #tradesecret  actions in Federal Court.”
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Big IP NEWS: Defend Trade Secrets Act 2016 (DTSA) Passes Congress – President to sign

EnrolledTitle_114Posted by Henry M. Sneath, Esq. – Chair of the Intellectual Property Practice Group at Pittsburgh, Pa. law firm Picadio Sneath Miller & Norton, P.C. (PSMN® and PSMNLaw®). Mr. Sneath is also an Adjunct Professor of Law at the Duquesne University School of Law teaching Trade Secret Law, Trademark Law and the Law of Unfair Competition. He may be contacted at hsneath@psmn.com or 412-288-4013. Website www.psmn.com or www.psmn.law

The US Congress has passed the landmark Defend Trade Secrets Act of 2016 (DTSA) and it is set for the President’s signature. It will soon be law. See Link to DTSA Legislation here: https://www.congress.gov/bill/114th-congress/senate-bill/1890/text    Trade Secret law has long been the province of the States, more or less exclusively, and except for criminal protections against trade secret theft and economic espionage, there has been no Federal civil law providing a federal damages remedy for such theft.  Amended will be Crimes and Criminal Procedures – Title 18, Chapter 90, Section 1836 and the key provision is as follows:

“(1) IN GENERAL.—An owner of a trade secret that is misappropriated may bring a civil action under this subsection if the trade secret is related to a product or service used in, or intended for use in, interstate or foreign commerce.”

Congress has now added a civil remedy provision to Federal protection of Trade Secrets wherein prior Federal law only provided criminal sanctions. This has been described as a major new development in Federal IP law and will provide federal jurisdiction for Trade Secret Misappropriation cases. The law will NOT preempt nor change State laws and therefore actions will be brought in both federal and state court jurisdictions. Most states (48) have adopted a form of the Uniform Trade Secrets Act (UTSA) and actions can still be brought under those state statutes, but those statutes vary to some degree. The DTSA is very similar to the UTSA based state court statutes, but there will be differences depending on the state jurisdiction from which cases are brought or removed. DTSA will apply to any acts of trade secret misappropriation that take place AFTER the act is signed into law (not retroactive). The Statute of Limitations will be 3 years according to the actual text linked above, but some commentators have stated that it is 5 years (we will need to check to get accurate information on the SOL and will follow up).

The DTSA contains an important and somewhat controversial “Civil Seizure” provision which renders it different from most state laws and which reads:

“(i) APPLICATION.—Based on an affidavit or verified complaint satisfying the requirements of this paragraph, the court may, upon ex parte application but only in extraordinary circumstances, issue an order providing for the seizure of property necessary to prevent the propagation or dissemination of the trade secret that is the subject of the action.”

This provision is controversial because it can be ordered by a court ex-parte. By amendment, the words “but only in extraordinary circumstances” were added to attempt to mollify some critics of this provision. However, there are some strict limitations to the ex-parte injunctions and a couple of them are below:

“(ii) REQUIREMENTS FOR ISSUING ORDER.—The court may not grant an application under clause (i) unless the court finds that it clearly appears from specific facts that—

“(I) an order issued pursuant to Rule 65 of the Federal Rules of Civil Procedure or another form of equitable relief would be inadequate to achieve the purpose of this paragraph because the party to which the order would be issued would evade, avoid, or otherwise not comply with such an order;

“(II) an immediate and irreparable injury will occur if such seizure is not ordered.”

Such ex-parte injunctions must be very specific and the court must go to great lengths not to overreach or to punish through publicity an accused wrongdoer during the period of seizure. There are other typical requirements for injunctions like posting of security and careful management of the seized materials, and the accused wrongdoer has a right of action back against the claimant if the seizure turns out to be wrongful or excessive.

In an action for misappropriation, a court may order injunctive relief and may

“(B) award—

“(i) (I) damages for actual loss caused by the misappropriation of the trade secret; and

“(II) damages for any unjust enrichment caused by the misappropriation of the trade secret that is not addressed in computing damages for actual loss; or

“(ii) in lieu of damages measured by any other methods, the damages caused by the misappropriation measured by imposition of liability for a reasonable royalty for the misappropriator’s unauthorized disclosure or use of the trade secret;

“(C) if the trade secret is willfully and maliciously misappropriated, award exemplary damages in an amount not more than 2 times the amount of the damages awarded under subparagraph (B); and

“(D) if a claim of the misappropriation is made in bad faith, which may be established by circumstantial evidence, a motion to terminate an injunction is made or opposed in bad faith, or the trade secret was willfully and maliciously misappropriated, award reasonable attorney’s fees to the prevailing party.”

It is unclear as to how this bill will be enforced against foreign Trade Secret theft, or if there will even be jurisdiction under this act for such claims. We will follow up on that issue in future posts. See the Senate and House reports below which contain a substantial amount of background legislative history and commentary. Contact us for additional information. We will continue to study this new law and report to our readers.

Here is a link to the US Senate report on the bill: https://www.congress.gov/congressional-report/114th-congress/senate-report/220/1

Here is a link to the US House report on the bill: https://www.congress.gov/congressional-report/114th-congress/house-report/529/1

Sneath, Henry 2012 headshot

Henry M. Sneath, Esquire – 412-288-4013 or hsneath@psmn.com

Follow me on Twitter @picadiosneath and on Google+: http://tinyurl.com/ktfwrah

 

 

Huge CMU v. Marvell Patent Infringement Case Settled in Pittsburgh

 

Posted by Henry M. Sneath, Esq. – Chair of the Intellectual Property Group at Picadio Sneath Miller & Norton, P.C. (PSMN® and PSMNLaw®) in Pittsburgh, Pa. He may be contacted at hsneath@psmn.com or 412-288-4013. Website www.psmn.com or www.psmn.law

marvell_chipFrom “ars technica“* publication: One of the largest patent verdict cases ever was obtained by Carnegie Mellon University (CMU) in Pittsburgh Federal District Court in 2012 in the courtroom of the Hon. Nora Barry Fischer as presiding judge. CMU won a $1.17 billion jury verdict in 2012 and the court enhanced the verdict to $1.54 Billion.  The Federal Circuit cut the win significantly, by reducing the damages and eliminating the enhanced damages award, but kept the main verdict intact. The case was just settled here in Pittsburgh for $750 Million. It will allegedly be the second largest payment ever in a technology patent case. A thorough article on the matter with good links to the case history appears at web publication ars technica*(http://tinyurl.com/zwb26wg ).

*ars technica is a copyrighted publication and the references and links herein are from the website of ars technica (© Ars Technica 1998-2016)

Henry M. Sneath

Sneath Headshot

Ripple Effect from Alice and Mayo Cases Being Felt in Patent World

shutterstock_26396608By: Henry Sneath, Chair of the Intellectual Property practice at Picadio Sneath Miller & Norton, P.C. in Pittsburgh, Pa.  hsneath@psmn.com or 412-288-4013

Sharing a great post from Dennis Crouch and his tremendous blog: Patently-O

New Section 101 Decisions: Patents Invalid

The Supreme Court’s decisions from Alice and Mayo are beginning to really have their impact. A few examples:

  • Walker Digital v. Google (D. Del. September 2014) (data processing patent invalid under 101 as an abstract idea) (Judge Stark).
  • Genetic Tech v. LabCorp and 23AndMe (D. Del. September 2014) (method of predicting human performance based upon genetic testing invalid under 101 as a law of nature) (report and recommendation from Magistrate Judge to Judge Stark)
  • Ex parte Cote (P.T.A.B. August 2014) (computer method and hardware for ‘phase shifting’ design data invalid under 101)
  • Ex parte Jung (P.T.A.B. August 2014) (diagnostic method associated with epigenetic risk factors invalid under 101).” Patently-O.

To view the entire post – please visit Patently-O at this link: http://tinyurl.com/otj6v6n

What Is a Trademark?

By: Joe Carnicella, intellectual property attorney with Picadio Sneath Miller & Norton, P.C. ()

As part of our “What is . . . ?” series, it’s time to find out just what is a trademark / service mark.

PSMN What Is...? SeriesA trademark / service mark is a word, phrase, symbol or design, or a combination thereof, that identifies and distinguishes the goods or services from those manufactured or sold by others and to indicate the source of goods or services, even if that source is unknown.  There are five categories of marks: fanciful, arbitrary, suggestive, descriptive and generic.  A fanciful mark comprises a term that has been invented for the sole purpose of functioning as a trademark or service mark.  These words are either unknown in the language or are completely out of common usage.  Examples of fanciful marks include PEPSI and KODAK.  An arbitrary mark comprises words that are common in language but, when used to identify particular goods or services, do not suggest or describe a significant ingredient, quality or characteristic of the goods or services.  An example of an arbitrary mark is APPLE for computers.  A suggestive mark comprises words that, when applied to the goods or services at issue, require imagination, thought or perception to reach a conclusion as to the nature of those goods or services.  A descriptive mark comprises words that merely describe an ingredient, quality, characteristic, function, feature, purpose or use of the specified goods or services.  Finally, a generic mark comprises words that the relevant purchasing public understands primarily as the common or class name for the goods or services.

Now that you have an understanding of what is a trademark / service mark, the next step is to determine whether you can and should obtain a mark.  An important issue to determine is whether a mark is registrable.  One of the most common grounds for refusal of a registration is that the potential mark causes a likelihood of confusion with an existing mark.  In particular, a likelihood of confusion exists when the marks are similar and the goods or services relate in a way that such consumers would mistakenly believe they come from the same source.  Other grounds for refusal exist as well.  The other important issue to determine is whether the mark is enforceable based on the strength of the mark.  The strongest mark, and thus, the easiest to enforce, is a fanciful mark, and next in line would be an arbitrary mark followed by a suggestive mark.

If you are interested in obtaining a trademark / service mark, you should consult a trademark attorney to advise and to assist you with the federal registration process.       Continue reading

Pittsburgh Business Success Story: “Branding Brand. Com” for Mobile Commerce

Branding Brand LogoBy: Henry Sneath, Chair of the Intellectual Property practice at Picadio Sneath Miller & Norton, P.C.  hsneath@psmn.com or 412-288-4013

I attended the Pittsburgh Technology Council’s breakfast briefing this morning and heard a great presentation by Jeffrey Hennion, President of Pittsburgh based Branding Brand: http://www.brandingbrand.com/ Founded by 3 CMU students, the company is now an industry leader in Mobile Commerce website and application development. They serve some of the largest retailers and businesses who are now true believers in the power of mobile commerce and mobile wallet apps – shopping from a phone. Costco (See Image below), Dicks Sporting Goods, Sephora, Ralph Lauren and countless more retailers have large percentages of sales now flowing through Branding Brand platforms. Starbucks is currently the leader in mobile commerce sales with its QR code based “mobile wallet”, which allows purchases from a scan of your phone screen.  A next big market for these products is the travel industry. As you ride from the airport to the hotel, you use your phone to check into the hotel, you skip the registration desk, open your room with your phone which has been activated with a mobile key. As Jeff described it – these developments are fascinating, but sometimes a little creepy. The percentage of phone driven ordering, and mobile wallet purchased sales is zooming upward and some companies could face loss of significant market share if they don’t keep up.

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Google Books Program Considered Fair Use

By: Joe Carnicella, intellectual property attorney at Picadio Sneath Miller & Norton, P.C. ()

On November 14, 2013, the United States District Court for the Southern District of New York held that Google’s Books Program constituted fair use under Section 107 of the Copyright Act, 17 U.S.C. 107.

Since 2004, Google has scanned more than twenty million books as part of its two digital book programs, the “Partner Program” and the “Library Project” (collectively referred to as “Google Books”).  Almost 93% of the books scanned are non-fiction while the remaining 7% are fiction.  The Partner Program, which is designed to help publishers sell books and to help books become discovered, consists of Google hosting and displaying material provided by book publishers or other rights holders with the permission of the rights holders.  The Library Project involves the digital scanning of books in the collections of numerous libraries without the permission from the copyright holders.  Pursuant to an agreement with Google, participating libraries can download a digital copy of each book scanned from their collections.  Google also creates more than one copy of each book it scans and maintains digital copies on its servers and back-up tapes.

Plaintiffs, the legal or beneficial owners of various books, commenced this action alleging that Google committed copyright infringement by scanning copyrighted books and making them available for search without permission of the copyright holders.  Google’s primary defense was fair use.  According to Section 107 of the Copyright Act, the fair use of a copyright work , . . . for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright.  In determining whether the use made of a work in any particular case is a fair use, the factors to be considered shall include — (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.  The court analyzed each of these factors as general guidance to determine whether Google infringed on the rights of the copyright holders.

First, with respect to the purpose and character of use, a key consideration is whether the use of the copyrighted work is “transformative,” that is, whether the new work merely supersedes or supplants the original creation or whether it instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message.  The court determined that Google’s use of the copyrighted works was highly transformative.  Google Books digitizes books and transforms expressive text into a comprehensive word index that helps readers, scholars, researchers and others find books.  Google Books helps librarians and cite-checkers to identify and find books.  The court found that the use of book text to facilitate search through the display of snippets was transformative.  The court also found Google Books to be transformative in that it has transformed book text into data for purposes of substantive research, including data mining and text mining in new areas, thereby opening up new fields of research.  Moreover, the court concluded that Google Books does not supersede or supplant books because it is not a tool to be used to read books.  Finally, even though Google is a for-profit company and Google Books is a commercial enterprise, and despite the fact that a commercial use tends to weigh against a finding of fair use, the court found fair use because Google does not engage in direct commercialization of copyrighted works, i.e. Google does not sell the scans it has made of the books, does not sell the snippets that it displays, and does not run ads on the pages that contain snippets.

With respect to the second factor, the court considered certain facts (e.g. that the majority of the books are non-fiction and that the books at issue are published and available to the public), and concluded that such considerations favor a finding of fair use.

With respect to the third factor, the court noted that Google scans the full text of books and it copies verbatim expression.  The court noted that, as one of the keys to Google Books is its offering of full-text search of books, full-work reproduction is critical to the functioning of Google Books.  Even though Google limits the amount of text it displays in response to a search, the court concluded that the third factor weighed slightly against a finding of fair use.

Finally, with respect to the fourth factor, the plaintiffs argued that Google Books would negatively impact the market for books and that Google’s scans would serve as a “market replacement” for books.  The court disagreed with this argument because Google does not sell its scans, and the scans do not replace the books.  The plaintiffs also argued that users could put in multiple searches, varying slightly the search terms, to access an entire book.  Again, the court disagreed and found it highly unlikely that someone would take the time and energy to input countless searches to try and get enough snippets to comprise an entire book.  According to the court, not only is that not possible as certain pages and snippets are blacklisted, the individual would have to have a copy of the book in his possession already to be able to piece the different snippets together in coherent fashion.  To the contrary, the court found that Google Books would only enhance the sales of books to the benefit of copyright holders and determined that Google Books provides a way for authors’ works to become noticed, much like traditional in-store book displays.

The court weighed the competing factors and found Google’s use to be a fair use.  According to the court, Google Books provides significant public benefits by advancing the progress of the arts and sciences, by maintaining respectful consideration for the rights of authors and by not adversely impacting the rights of copyright holders.  Also, Google provides the libraries with the technological means to make digital copies of books that they already own, wherein the libraries then use the digital copies in transformative ways by creating their own full-text searchable indices of books, maintaining copies for purposes of preservation, and making copies available to print-disabled individuals.

Supreme Court Decides Gunn v. Minton Patent Legal Malpractice Case – State Court It Is

Authored by Henry M. Sneath, Esq.  – Chair of the Intellectual Property Practice Group at Picadio Sneath Miller & Norton, P.C. , Pittsburgh, Pa.

Sneath, Henry 2012 headshotToday – The US Supreme Court in Gunn v. Minton decided that a patent legal malpractice case is properly brought in state court. The court held that even though the “case within a case” standard would require interpretation of a patent and other typically Federal Issues, that “case within a case” is a hypothetical case, that does not need to be in Federal Court.  Further the court wrote:

“Because of the backward-looking nature of a legal malpractice claim, the question is posed in a merely hypothetical sense: If Minton’s lawyers had raised a timely experimental-use argument, would the result in the patent infringement proceeding have been different? No matter how the state courts resolve that hypothetical “case with a case,” it will not change the real-world result of the prior federal patent litigation. Minton’s patent will remain invalid.

Nor will allowing state courts to resolve these cases undermine “the development of a uniform body of [patent] law. … Congress ensured such uniformity by vesting exclusive jurisdiction over actual patent cases in the federal district courts and exclusive appellate jurisdiction in the Federal Circuit. … In resolving the non-hypothetical patent questions those cases present, the federal courts are of course not bound by state court case-within-a-case patent rulings. … In any event, the state court case-within-a-case inquiry asks what would have happened in the prior federal proceeding if a particular argument had been made. In answering that question, state courts can be expected to hew closely to the pertinent federal precedents. It is those precedents, after all, that would have applied had the argument been made.”

We previously reported on this case and will follow for any interesting cases which actually try one of these malpractice cases in state court. Here is the opinion delivered by Chief Justice Roberts: http://tinyurl.com/a474okm

Federal Circuit Ruling: Any Argument Supported by the Record Should be Considered by the PTO Board

By: Joseph Carnicella, intellectual property attorney with Picadio Sneath Miller & Norton, P.C.

On January 23, 2013, the Federal Circuit in Rexnord Industries LLC v. Kappos (2011-1434) determined that the USPTO Board of Patent Appeals and Interferences (the “PTO Board”) erred when it declined to consider arguments that were made to the patent examiner but not raised on appeal to the PTO Board.

Habasit Belting, Inc. filed a patent infringement suit against Rexnord Industries LLC with respect to U.S. Patent No. 6,523,680 (the ‘680 patent), wherein Rexnord requested inter partes reexamination of the ‘680 patent.  On reexamination, the examiner held all of the claims in the ‘680 patent unpatentable for anticipation and obviousness based on four prior art references cited by Rexnord.  However, on appeal by Habasit (the appellant regarding the reexamination decision), the PTO Board held the claims patentable.  As a result of the PTO Board’s reversal, Rexnord (the appellee regarding the reexamination decision) requested rehearing and argued that the PTO Board overlooked a portion of the examiner’s analysis in rejecting the claims.  The PTO Board denied the rehearing request.

Rexnord subsequently appealed the PTO Board’s decision and its refusal to review all of the arguments raised by Rexnord regarding the unpatentability of the ‘680 patent.  On this appeal, the PTO argued that the PTO Board need not consider other grounds that had been presented during the reexamination if those arguments were not raised on the appeal to the PTO Board.  However, the Federal Circuit concluded that Rexnord presented the prior art references to the examiner and that the references did not relate to a patentability issue again until after the PTO Board reversed the examiner.  The Federal Circuit held that the correctness of the decision appealed from can be defended by the appellee on any ground that is supported by the record, whether or not the appellant raised the argument.  In this matter, the Federal Circuit determined that Rexnord requested on rehearing that the PTO Board consider the other grounds in support of the examiner’s decision, and that the PTO Board erred in declining to consider the references presented for reexamination and in declining to consider Rexnord’s arguments in support of the examiner’s decision.

Who Will Inherit Your Digital Music–Bruce Willis to Sue Apple?

by: Robert Wagner, intellectual property attorney at Picadio Sneath Miller & Norton, P.C. ()

Earlier this week, an interesting story emerged that Bruce Willis was considering suing Apple over whether his children could inherit his iTunes collection after his death. The story turned out to be a hoax, but the questions it raises regarding ownership and rights in this digital age are very interesting.

Decades ago, music, movies, and books were exclusively purchased in a tangible form—records or CDs, videotapes or DVDs, and paperback or hardback books. While these formats are still largely available, more and more people are purchasing this type of content in an intangible digital format through services like Apple’s iTunes and Amazon’s Kindle stores.

In the past, the purchase of a tangible product like a record or book made transferring the product easy. Under the first sale doctrine, one simply could give or sell the record or book to another without any constraints. Thus, inheriting the record or the book did not pose any problems from an intellectual property or legal perspective. (Whether anyone wanted grandma’s or grandpa’s record or book collection is another matter).

When one purchases a song from iTunes or a book for Amazon’s Kindle store, the issue gets more complicated. One is actually purchasing a limited license to listen to the song or read the book on a limited number of devices. No physical, tangible products are purchased. Normally, the license is limited to the purchaser and is arguably valid only during the lifetime of the purchaser (assuming there are no other restrictions, as there sometimes are with video “purchases”). Thus, there is nothing tangible to give to another. Indeed, the licenses often explicitly restrict the giving or selling of the product to another.

Getting back to the situation that Bruce Willis was supposedly concerned about—what would happen to all of the music he purchased after he died? Most of the time, families will likely not be particularly concerned about whether they inherit grandpa’s music collection, but not always. For instance, what if the father or mother dies prematurely, and everything that the family was listening to or watching on a regular basis was purchased through that person’s iTunes account? The shift to a digital medium could have a very real and expensive consequence (in addition to whatever emotional trauma the family has to deal with from the untimely death).

I think a more concerning issue is the potential effect on a family’s photographs and letters, which can be some of the most treasured possessions a family has. With the shift to storing photographs on-line and corresponding through e-mail rather than letters, we are moving some of our most prized possessions and memories from tangible forms that can easily be preserved and given to others to an intangible form that may have unexpected and unanticipated restrictions. For example, if an individual stores all of his or her photographs on-line, what happens when that person dies? Will the account be closed and all the files deleted once the annual payments stop? Even if it is not, who will be allowed to access it, especially if the passwords were never written down or are lost?

We are still in the infancy of the digital age in many respects and questions like these are only beginning to be considered, and many companies’ terms and conditions are simply not designed to deal with circumstances like these. So, what should one do?

Where possible and when the ability to transfer the item to your spouse, children, or others is important, then efforts should be made to make sure the item is in a tangible form or resides on a computer in a way that is accessible regardless of whether you are alive or whether you fail to make an annual payment to a particular cloud service. In the case of pictures, that could mean having them printed out or storing them in a folder on your hard drive (instead of in the cloud). The same is true of e-mails. If there are particularly important e-mails, make sure that they have been saved on your hard drive, instead of leaving them in the cloud, or print them out.

Finally, it is a good practice to leave instructions as to what important on-line accounts you have (e-mail, Facebook, iTunes, cloud storage, banking, etc.) and how to access them so that others can get access to these accounts where appropriate if you are no longer able to. Given the important nature of these accounts, you should only leave this information with people you trust or in a location that is secure (e.g., a bank box).

It will be interesting to see how companies respond to issues like the one that Bruce Willis supposedly raised (even though he didn’t actually). The cloud provides many great conveniences, but as is often true with new technologies and ways of doing things, there are many unexpected issues that emerge. Hopefully, people, companies, and the law will find solutions to preserve those family treasures without too many hassles.