From our friends at Law.Com: In the growing market for cyber insurance, carriers are trying to compete on price. One carrier, Coalition is offering discounts if your company creates a partnership with a “white hat hacker” and establishes a bug bounty with that hacker. The hacker gets a bounty for finding vulnerabilities. Legal Tech author Rhys Dipshandetails the program in the article at this link: http://tinyurl.com/ydck3nxg
Dipshan reports that “bug bounties” are becoming a popular weapon in combating cyber attacks. “Unsurprisingly” Dipshan reports, “bounty programs are becoming increasingly common in the tech and corporate world, with companies such as Facebook, Microsoft and Uber offering compensation for vulnerability disclosures. They also have caught on in the federal government as well, with the Department of Defense launching its “Hack the Pentagon” and “Hack the Air Force” programs.” Do you need a cyber bounty hunter?
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 firstname.lastname@example.org or 412-288-4013. Website www.psmn.com or www.psmn.law
From “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 ).
By Henry M. Sneath, Esq. – Chair of the Picadio Sneath Miller & Norton, P.C. Intellectual Property Group. Contact him at email@example.com
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
On behalf of our firm, I would like to thank The Pittsburgh Technology Council for hosting such a spectacular event last evening. Also, I would like to congratulate all of the award winners who were recognized by the Council as leaders in technology and innovation within the Pittsburgh area.
The Pittsburgh Technology Council holds an annual Tech 50 awards presentation as a way to honor companies that have demonstrated an ability to grow and succeed as technology-oriented companies in Pittsburgh. The event last evening provided an excellent opportunity for business leaders to come together and recognize and celebrate all of the creative contributions made by these companies on a local, national and global stage. The Tech 50 award winners are as follows:
Calgon Carbon Corporation – Advanced Manufacturer of the Year
Epiphany Solar Water Systems, LLC – Innovator of the Year
ERT, formerly invivodata, inc. – Life Sciences Company of the Year
TrueFit – New Media Company of the Year
Summa Technologies – Solution Provider of the Year
Branding Brand – Start-Up of the Year
ANSYS, Inc. – Tech Titan of the Year
Scott Pearson, Aquion Energy, Inc. – CEO of the Year
Again, congratulations! We wish you and all of the other Pittsburgh tech companies the best.
Pittsburgh has so far escaped any major damage from Sandy. However, as we learn from cable reporters standing in waist deep water and TV logo monogramed wetsuits, we know that many folks in areas along the east coast have not fared so well. In Pittsburgh we have had a lot of rain and will have some river flooding, but perhaps got lucky, while surrounded by major weather issues. There are more people in West Virginia and the midwest who are still to see some nasty weather. We wish all those affected well in the days to come.
As a follow up to Robert Wagner’s post, “Discovery of Facebook Accounts,” I will take a closer look at the analysis by Judge Wettick in Trail v. Lesko, No. GD-10-0172249 (July 3, 2012) for determining what a party needs to establish before Judge Wettick will order disclosure of non-public Facebook, or other social networking, content. I will also provide an update on whether other courts have relied upon Judge Wettick’s opinion.
At the outset, Judge Wettick notes that no appellate court in Pennsylvania has addressed discovery requests for information contained within an individual’s Facebook profile. He reviews the approach of other trial judges in Pennsylvania to date and concludes that most Pennsylvania “courts recognize the need for a threshold showing of relevance prior to discovery of any kind, and have nearly all required a party seeking discovery in these cases to articulate some facts that suggest relevant information may be contained within the non-public portions of the profile. To this end, the courts have relied on information contained in the publicly available portions of a user’s profile to form a basis for further discovery.”
Judge Wettick also found the decisions of other state and federal courts to be largely in line with Pennsylvania case law. As in Pennsylvania, other courts agree that the content posted by someone on Facebook is not privileged, either because communications with “Friends” are not privileged or because, if the communications were privileged, such privilege was waived by sharing the content with others. On the other hand, the courts disfavor “fishing expeditions” and tend to require some evidence suggesting the existence of relevant information prior to ordering access to a person’s non-public social media information. According to Judge Wettick, courts from other jurisdictions have taken more steps than Pennsylvania courts, however, to require more narrowly tailored discovery orders or have even relied on counsel to review his or her client’s profile for relevant information in the first instance.
Trail v. Lesko was a personal injury case arising from a motor vehicle accident which was allegedly caused by defendant’s drunk driving. Judge Wettick indicated that he was basing his rulings on Pennsylvania Rule of Civil Procedure 4011(b), which provides that “[n]o discovery or deposition shall be permitted which . . . (b) would cause unreasonable annoyance, embarrassment, oppression, burden or expense to the deponent or any person or party . . . .” Judge Wettick reasoned that a court order that gives an opposing party access to another’s non-public Facebook page “is intrusive because the opposing party is likely to gain access to a great deal of information that has nothing to do with the litigation and may cause embarrassment if viewed by persons who are not “Friends.” Because such discovery is intrusive, it is protected by Rule 4011 “where the party seeking discovery has not shown a sufficient likelihood that such discovery will provide relevant evidence, not otherwise available, that will support the case of the party seeking discovery.”
However, Judge Wettick did acknowledge that the level of intrusiveness for a Facebook page, containing information made available to others who have no obligation to keep it confidential, is likely to be low. Therefore, someone seeking to obtain such information will only need to show that the discovery “is reasonably likely to furnish relevant evidence, not available elsewhere, that will have an impact on the outcome of the case.”
Applying this reasoning to the facts of the case before him, Judge Wettick found that neither party had shown sufficient need for discovery of each other’s non-public Facebook pages. Plaintiff was not entitled to the information because defendant had already made admissions in response to requests for admissions that made the request for Facebook content unnecessary, and defendant was not entitled to the information because the photos from plaintiff’s public page did not contain any information that suggested plaintiff’s personal injury claims were called into question.
With this opinion, Judge Wettick is informing litigators that while he is not opposed to permitting discovery of non-public social media, parties need to show that the social media that a person otherwise assumes is directed solely to a limited audience, i.e. their “friends,” is reasonably likely to be relevant to the claims in the case and is not available elsewhere. In short, Judge Wettick attempts to balance a person’s privacy interests with those of a party seeking to prove or defend his or her case.
So far, no other courts have cited Judge Wettick’s opinion. We will continue to watch for Pennsylvania court opinions following or rejecting Judge Wettick’s approach and for any rulings from the Pennsylvania appellate courts on the issue of discovery of social media.
With the incredible rise of social networking websites (an estimated half of Americans use these sites), litigators are beginning in earnest to seek discovery of parties’ social networking accounts and postings (such as Facebook, LinkedIn, MySpace, Twitter). Frequently, statements made or photographs shown on a person’s “wall” or page made be relevant to issues in a lawsuit. For example, in a personal injury action where a plaintiff claims to be disabled or physically restricted because of an accident, a photograph showing the plaintiff engaged in a physical activity after the injury, such as skiing or running, may shed light on the true extent of his or her injuries. Litigators want to obtain access to these social networking sites as part of the discovery process.
The question facing Courts is whether to allow such access and, if so, are there limits on what must be revealed. Senior Judge R. Stanton Wettick, Jr. of the Court of Common Pleas of Allegheny County (which includes Pittsburgh) recently issued an opinion where he extensively discusses the case law surrounding when a litigant is entitled to access an individual’s social networking site and what must be produced if it is. Because Judge Wettick handles most discovery disputes in Allegheny County, this decision is particularly important for practitioners in Pittsburgh and Pennsylvania state courts.
In his opinion, he notes that information from an individual’s social networking site is not protected by any privileges, either because there is no basis for the privilege or it has been waived by sharing the information with others. Despite that, he concludes that the information is not per se discoverable. Rather, the party seeking the discovery must make some threshold showing that there is likely to be relevant information on the social network site before it is entitled to discovery. He concludes that such a test adequately balances the need for relevant discovery with the intrusion of giving access to a great deal of personal information that is unrelated to the issues in the lawsuit.
As reported earlier, the United States District Court for the Western District of Pennsylvania was chosen to be one of 14 District Courts nationwide to participate in a 10-year Patent Pilot Program to study the effects of providing specialized patent judges on patent litigation. On October 12, 2011, the Court issued an order setting forth the procedures it will use in implementing this program. Among other things, the Court identified four judges who are designated as the official Designated Patent Judges for the Court:
Under the Court’s guidelines, patent cases are still randomly assigned to all Judges in the District, regardless of whether they are Designated Patent Judges. However, a non-Designated Patent Judge has the option of declining the case. If he or she does so, the case will be randomly reassigned to one of the Designated Patent Judges.
Since the Court’s implementing order, it has added twonew Designated Patent Judges:
On June 8, 2011, Chief Judge Gary L. Lancaster announced that the Administrative Office of the U.S. Courts selected the U.S. District Court for the Western District of Pennsylvania to be one of 14 Districts Courts to participate in a 10-year Patent Pilot Program. As part of this program, the Courts will funnel the majority of patent cases to designated patent judges in each district with the intention of providing litigants with Judges that have special training and interest in hearing these cases. As the U.S. Court press release stated:
“In the pilot program, patent cases filed in participating district courts are initially randomly assigned to all district judges, regardless of whether they have been designated to hear such cases. A judge who is randomly assigned a patent case and is not among the designated judges may decline to accept the case. That case is then randomly assigned to one of the district judges designated to hear patent cases.”
The Administrative Office selected Courts with an established history and interest in patent litigation and those with local patent rules already in place (the Western District of Pennsylvania implemented its local patent rules back on April 1, 2005). The fourteen District Courts selected by the Director of the Administrative Office of the United States Courts were:
Eastern District of New York
Southern District of New York
Western District of Pennsylvania
District of New Jersey
District of Maryland
Northern District of Illinois
Southern District of Florida
District of Nevada
Eastern District of Texas
Northern District of Texas
Western District of Tennessee
Central District of California
Northern District of California
Southern District of California
The Western District of Pennsylvania’s participation in this pilot program, along with its local patent rules already in place, reinforces that Pittsburgh is an attractive venue for litigants wishing to resolve patent disputes.
The Patent Reform Act of 2011 portends yet another problem for small business folks trying to develop technology, and more importantly trying to enforce it. We have written about the pending legislation in prior posts. If it passes the US Congress, and if the “first to file” patent rule is therefore adopted by the USPTO as the law, patents will go to those with superior resources, in-house legal departments and the wherewithal to file patents on a moment’s notice. Gone will be the rule that “invention” is the starting point. It will be the result of a race to the PTO.
This is only part of the current IP problem for small businesses however, and the bigger problem is litigation cost. Small businesses simply cannot afford to bring or defend intellectual property lawsuits. If they are the plaintiff, it is likely that they have been given advice by counsel on the anticipated expense of patent or trademark enforcement litigation. Legal fee costs, expert witness costs, deposition costs, demonstrative evidence for trial costs and lost opportunity time for employees can add up quickly and it is important for the client and counsel to set a budget and to discuss each phase of the litigation with a projection of costs. Sadly this cost discussion is often ignored and we have received calls from potential clients who have exhausted their litigation budgets and who are nowhere near a settlement or trial. Frustrated they seek new counsel, but often new counsel is hampered by the inability to properly fund the ongoing litigation.
More difficult perhaps is the plight of the small business (or individual) defendant in an IP suit. These litigants are often ill-prepared for the costs and rigor of defending litigation in Federal Court. Having never been sued before, but having read about the high cost of lawsuits, they frequently seek legal counsel with the plea: “Can we end this quickly as I can’t afford to be in a lawsuit?” When Plaintiff is seeking to shut down production and sale of the new defendant’s chief product line, the answer to this question may not be easy. I tell them sure – we can end it early – all you need to do is stop making the product that is your main source of revenue, agree never to make it again, pay the plaintiff money for their alleged damages and pay all of their legal fees. These legal fees are generally not insignificant and may have been generated by one or more large law firms at enormous billing rates.
The client, who may even have solid defenses, is then faced with a difficult choice between: 1) Ignore the defenses and cave in quickly with all of the resultant cost and loss of income; 2) Engage in some litigation to try to establish some leverage for a favorable settlement or 3) Take the chance that expensive litigation will, over time, allow a favorable result and perhaps even an award of attorney’s fees to repay the defendant for the litigation cost. It is option 2 which poses the problem of delicate balancing by lawyer and client. How much litigation and cost is enough to create favorable settlement leverage? The client needs to balance the revenue/profit of the allegedly offending product or mark, against the phased cost of litigation. We can project that phase one (investigation, pleadings, Federal Rule initial disclosures, status conference before the court etc) might cost “x” dollars. The client can decide whether that cost is appropriate against the revenue stream attributable to the product or mark, and determine when to make the settlement move. There is never, of course, any guarantee that the settlement option will work and therein lies the balancing act problem. The client may get stuck in long litigation and need to simply fight its way out. Good communication between lawyer and client is critical to making these decisions.
Our Law Firm: Houston Harbaugh in Pittsburgh, Pa. Business Litigation. Pittsburgh Strong.®
Contact our Pittsburgh Intellectual Property, Data Security, Trade Secret, DTSA and Technology Attorneys at Houston Harbaugh, P.C. through IP Section Chair Henry M. Sneath at 412-288-4013 or firstname.lastname@example.org. Some posts herein were published by the law firm Picadio Sneath Miller & Norton, P.C. (PSMN®) which has merged with HoustonHarbaugh, P.C. and are used by permission. DTSALaw® is a federally registered trademark. See Firm Website at: www.hh-law.com