wwwdlapipercomip_global | Issue 21 Q1 2014Attorney Advertising

PATENT LITIGATION HEATS UP IN FLORIDA

TOP FRANCHISE CASES OF 2013

SUPREME COURT CORNER

ANNUAL GLOBAL PATENT SYMPOSIUM IN TOKYO

Perspectives bull Analysis bull Visionary Ideas

INTELLECTUAL PROPERTY AND TECHNOLOGY NEWS

UNITED STATES

STAYS PENDING INTER-PARTES REVIEW UNDER THE AIA THE FIRST YEAR

First let me say I am delighted to begin my tenure as editor of IPT News This is our sixth year of publication and we are excited about continuing to bring you the latest issues and changing trends in the world of intellectual property and technology

In IPT News this year we will continue featuring our popular Supreme Court Corner providing analysis and updates on pending Supreme Court cases several of which may have important implications for IPT In this issue we discuss a pending copyright case that could significantly affect the doctrine of laches not only with respect to copyright cases but also possibly in connection with all types of IP cases

Also in this issue we highlight the top franchise cases of the past year discuss the emergence of South Florida as a growing jurisdiction for patent infringement cases and bring you a report on DLA Piperrsquos successful Global Patent Symposium recently held in Tokyo

Our spotlight piece examines the new inter partes review (IPR) procedure an opportunity for parties to challenge the validity of issued patents at the United States Patent and Trademark Office Early indications suggest that the procedure could become a significant weapon for those seeking to invalidate a patent

Finally I would be remiss if I did not extend a big thank you to my colleague Darius Gambino for doing such a great job as last yearrsquos editor

I hope you enjoy this issue of IPT News and that you will take away something new and helpful from it Please feel free to provide me with any suggestions or feedback that you may have so we can continue to make this a publication you look forward to reading

thomaszuticdlapipercom

EDITORrsquoS COLUMN

Thomas ZuticPartner Intellectual Property and Technology

The award-winning Intellectual Property and Technology News is now published in the United States Asia Pacific and EMEA regions Find all current and past editions of the IPT News here wwwdlapipercomipt_news To subscribe to this complimentary publication please email your contact information (including your physical mailing address) to IPTnewsdlapipercom

You are receiving this communication because you are a valued client former client or friend of DLA Piper The information contained in this newsletter is for informational purposes only and should not be construed as legal advice on any matter To unsubscribe from this mailing list send an email to communicationsdlapipercom or send your written request to DLA Piper Attention Marketing Department 401 B Street Suite 1700 San Diego California 92101-4297 USA Copyright copy 2014 DLA Piper llp (us) DLA Piper uk llp and other affiliated entities For questions comments and suggestions email us at IPTnewsdlapipercom or contact Diane Vislisel Senior Marketing Manager T +1 619 699 3541 dianevisliseldlapipercom US Chair ndash Intellectual Property and Technology John Allcock T +1 619 699 2828 johnallcockdlapipercom Editor in Chief Thomas E Zutic T +1 202 799 4141 thomaszuticdlapipercomDirector Intellectual Property and Technology Licia Vaughn T +1 619 699 2997 liciavaughndlapipercomDLA Piper llp (us) 401 B Street Suite 1700 San Diego California 92101-4297 USA | MRs000010652

PATENT LITIGATOR JEREMY ELMAN JOINS DLA PIPERrsquoS MIAMI OFFICE

Bringing extensive experience as lead counsel on South Florida-based intellectual property cases for global companies Jeremy Elman has joined DLA Piperrsquos growing IPT practice as a patent litigation partner in Miami

Jeremy has represented leading companies in the technology consumer electronics gaming and media sectors in courts around the country He also handles trade secret trademark and copyright matters

Because South Florida has become one of the nationrsquos top 10 jurisdictions for US patent litigation Jeremyrsquos significant experience will benefit many of our global clients

Jeremy has been named among the Daily Business Reviewrsquos 2013 Rising Stars a list that recognizes Floridarsquos 40 most promising lawyers under the age of 40

Jeremy Elmanjeremyelmandlapipercom

TOP FRANCHISE FIRM

WWWDLAPIPERCOMIP_GLOBAL | 03

I started doing patent litigation more than 20 years ago Since then I have seen dramatic changes in the patent litigation landscape Today we are again watching two more serious agents of change

One is the change brought by the new Inter Partes Review process As detailed in this edition the advent of IPRs represents a major change to the way patent cases are handled and managed The early results are decidedly defense-oriented We will see how these changes evolve but it will definitely be a different decade ahead ndash affecting ldquotrialsrdquo in the USPTO oftentimes stays in district court and other ways patent matters have been handled

Another significant change is the way patent cases are being handled in Europe In 2015 we will see major changes ndash which we will lay out for you in future editions of this publication But we know that across Europe patent laws will be increasingly harmonized and any single country will be given much broader enforcement capabilities to judgments While some of the details are being worked out there is no doubt that the ability to enforce your patents in Europe will become more important than ever

We at DLA Piper are on top of these changes and are here to meet our clientsrsquo needs Our technical bench in the US has never been stronger We are here to help with IPRs and whatever else is needed in connection with your dealings with the USPTO Our team of 70-plus patent attorneys ndash and growing ndash can help you in this and other areas of need Our international practice is strong and getting stronger in anticipation of the changes coming in 2015 in Europe

There is more to come on these topics in coming months ndash DLA Piper is out in front of the legal changes in this area of law Let us know how we can help

johnallcockdlapipercom

CHANGE

John AllcockPartner Global Co-Chair and US Chair Intellectual Property and Technology

DLA PIPER EXPANDS STRATEGIC SOURCING PRACTICE WITH ADDITION OF MANTER AND FRIEDMAN

In a significant expansion of our strong strategic sourcing practice Gregory Manter and Anne Friedman have joined DLA Piper in the US

Gregory Manter joining in February as a partner focuses on technology transactions and strategic sourcing matters including business process and IT outsourcing ERP systems integration and other large-scale information technology transactions He has experience with large transactions in the financial services retail and energy sectors and versatility in working with a variety of cross-border transactions as well as in regulated industries

Gregory has been named to National Law Journalrsquos ldquo40 Under 40 Chicago Rising Starsrdquo list and was ranked by Chambers USA as an ldquoUp and Comingrdquo lawyer

Anne Friedman joining in January as of counsel focuses on constructing and negotiating large-scale strategic sourcing transactions concentrating on international and domestic application development and maintenance infrastructure general information technology and business process outsourcings for Fortune 500 companies

Her practice spans many industries and she has significant experience in the hospitality health care and financial services sectors

Ranked the only Tier 1 firm for Franchise and Distributionndash Chambers USA 2013 and Chambers Global 2013

International Franchise Law Firm of the Year for nine consecutive years ndash International Whorsquos Who 2013

Gregory Mantergregorymanterdlapipercom

Anne Friedmanannefriedmandlapipercom

Patent litigation is on the rise nationally with a record number of cases being filed every year In 2013 over 6800 cases were filed in the United States the highest number ever and about a 10 percent increase from 2012

In our last IPT News we noted the dash to the finish between the District of Delaware and the Eastern District of Texas for the highest number of patent cases in 2013 The winner is the Eastern District of Texas in a tight race that ended with 1512 filings for the EDTX and 1329 for Delaware Those two jurisdictions which alone account for over 40 percent of all patent cases filed in the US are favored by plaintiffs for the expectation of high damages awards high patentee win rates streamlined discovery and knowledgeable judges

Although not yet operating on the scale of the EDTX or Delaware the Southern District of Florida is rising in popularity as a patent jurisdiction In 2013 the Southern District of Florida became the seventh busiest jurisdiction trailing EDTX Delaware the Central Northern and Southern Districts of California and the Northern District of Illinois While most of these districts are well-known patent venues the Southern District of Florida is new to the party ndash so new that since 2009 the district has seen a 400 percent growth in patent cases

The increase in filings is mostly due to the rising number of patent assertion entitiesnon-practicing entities (NPEs) filing in this district Such entities own patents but do not offer products or services embodying the invention ndash they make their money by filing patent lawsuits NPE litigation currently accounts for about 80 percent of the patent litigation in the Southern District of Florida

Because NPEs are sophisticated plaintiffs when it comes to jurisdiction the rise of these filings in the Southern District of Florida is no accident Plaintiffs are filing patent cases in the Southern District of Florida primarily because of the districtrsquos ldquorocket docketrdquo emanating from local Rule 161(a)(2) which mandates that all civil cases be segregated into three tracks 1) expedited (allowing for 90-179 days of discovery) 2) standard (180-269 days) and 3) complex (270 to 365 days) Even the most complex case in this district allows for only one year of discovery and most cases are assigned to the standard track As a result the average patent case is scheduled for trial within 16 months of filing which in most jurisdictions is virtually unheard of As an illustration PwCrsquos 2013 Patent Litigation Study found that the national average time to trial is about 30 months See this page wwwpwccomusenforensic-servicespublications2013-patent-litigation-studyjhtml

Also speeding such cases ahead is the fact that the Southern District of Florida is one of fourteen participants in the Patent Pilot Program instituted by Congress in July 2011 so that district court judges could develop expertise and efficiencies in patent cases Any Southern District of Florida Judge can transfer a patent case to one of the three judges within the district who have volunteered to be part of the Patent Pilot Program Accordingly nearly 85 percent of patent cases are now assigned to Judges Donald J Middlebrooks Patricia A Seitz and Michael K Moore who are each regularly scheduling trials well within the 16-month average Judge Middlebrooks is leading the way with a default schedule of 8 months to trial from the timing of his initial case scheduling order

Additionally time to trial is short because the Southern District has not adopted local patent rules The lack of local patent rules favors plaintiffs because there are fewer pretrial impediments to derail a patenteersquos case Typically local patent rules require specific times for disclosures and claim construction but in the Southern District of Florida more than 60 percent of the cases that currently have a pending trial date do not have a Markman hearing scheduled Southern District judges have indicated their belief that claim constructions can occur during summary judgment or trial and need not extend the pretrial schedule (although separate Markman hearings do occur regularly when requested)

The enduring popularity of patent case filings in the EDTX and Delaware is founded on sophisticated plaintiffs seeking a favorable forum The same forces are pushing the emergence of Florida as a popular forum Its ascension into the Top 10 appears to be more than a blip Those strategizing about forums should be closely tracking the rise of the Southern District of Florida

Jeremy Elman a partner in DLA Piperrsquos Intellectual Property and Technology group is based in Miami Focusing on IP patent and complex commercial litigation he has tried cases in courts across the US and regularly serves as lead counsel on Florida-based IP litigation Reach him at jeremyelmandlapipercom

PATENT LITIGATION HEATS UP IN THE SOUTHERN DISTRICT OF FLORIDA PRACTICAL IMPLICATIONS FOR BRAND OWNERSJeremy Elman

04 | INTELLECTUAL PROPERTY AND TECHNOLOGY NEWS ndash UNITED STATES

WWWDLAPIPERCOMIP_GLOBAL | 05WWWDLAPIPERCOMIP_GLOBAL | 05

An Illinois appellate court affirmed dismissal of two former Ace franchiseesrsquo statutory and common law fraud claims because in light of cautionary language in the disclaimers the former franchisees could not have reasonably

relied on the alleged misrepresentations and could not establish materiality

In Avon Hardware Co v Ace Hardware Corp former Ace franchisees alleged that Ace manipulated projected sales and revenue figures in pro forma documents and manipulated historical sales figures in disclosure documents After the trial court dismissed all of the former franchiseesrsquo claims they appealed

In affirming the trial courtrsquos dismissal the appellate court agreed with Acersquos argument that the former franchisees could not pursue any claim based on the pro formas because the financial projections

were statements of opinion not fact and therefore not actionable Regarding the historical financial data in Acersquos

disclosure documents the appellate court concluded the documents did not contain false statements because the documents clearly said the historical financial data was not representative of all Ace stores The appellate court

further held that the former franchisees could not have reasonably relied on that information to predict future

performance because of the documentsrsquo cautionary language

Courts have consistently enjoined terminated franchisees from continuing to use their former franchisorsrsquo trademarks if the termination is based on a failure to pay ongoing royalties But can a franchisee use the franchisorrsquos

pre-existing breach to defeat a claim for non-payment of royalties even if the franchisee continues to operate its business under the franchisorrsquos trademarks In Wyndham Hotels amp Resorts LLC v Northstar Mt Olive LLC the court sided with the franchisor

The franchisee hotel operator negotiated a provision under which the franchisor Wyndham Hotels guaranteed a certain level of revenue if the franchisee converted a hotel meeting room into a corporate training facility The franchisee eventually stopped paying royalties citing Wyndhamrsquos failure to fulfill its obligations under this provision Wyndham terminated the franchise agreement and brought suit to enjoin use of Wyndhamrsquos trademarks and to recover unpaid royalties The franchisee did not challenge liability under the Lanham

Act but argued that Wyndhamrsquos breach of the revenue guaranty clause excused it from making royalty payments Wyndham invoked the Third Circuitrsquos holding in SampR Corp v Jiffy Lube which held a franchisorrsquos right to terminate a franchise agreement based on a franchiseersquos breach and enforce its post-termination Lanham Act rights exists independently of any claim the franchisee might have against

the franchisor

The district court found that by continuing to operate the hotel using Wyndhamrsquos trademarks with knowledge of the franchisorrsquos breach the franchisee continued to reap the benefits of the franchise relationship and therefore

could no longer use the franchisorrsquos pre-existing breach as an affirmative defense The court thus granted summary

judgment to Wyndham on its claim for unpaid royalties but noted that the former franchisee could still maintain a claim against Wyndham based on the pre-existing breach of the revenue guaranty provision

For more than 30 years partner Barry Heller based in Northern Virginia focuses on resolving franchise disputes Reach him at barryhellerdlapipercom

Partner John Hughes based in Chicago concentrates on franchise litigation in forums throughout the US Reach him at johnhughesdlapipercom

Of Counsel John Dwyer based in Northern Virginia focuses on litigating franchise and trade regulation cases Reach him at johndwyerdlapipercom

In Hanley v Doctors Express Franchising LLC a former franchisee of the Doctors Express franchise system sued Doctors Express the franchisor and Rhino 7 a broker involved in the franchise sale asserting that the disclosure documents contained

misrepresentations and nondisclosures regarding required initial investment initial operating capital requirements physician credentialinghealth insurance reimbursement process and projected earnings

In their motion to dismiss Doctors Express argued numerous disclaimers barred the former franchisee from relying on any statements outside of the documents and that its reliance was thus unreasonable The former franchisee argued that the Maryland Franchise Law voided such disclaimers

by prohibiting a franchisor from conditioning a franchise sale on the prospective franchiseersquos release of any persons from liability The district court agreed but recognized the disclaimers could eventually establish that reliance on the alleged statements was unreasonable

Rhino 7 moved to dismiss arguing that Maryland Franchise Law imposed liability only on a franchisor defined as ldquoa person who grants a franchiserdquo Because Rhino 7 was merely a broker it claimed it did not ldquograntrdquo the franchise Rejecting this argument the court interpreted the law as applying to agents involved in the franchise sales process but noted

Rhino 7 would have available to it the defense that it ldquodid not know and in the exercise of reasonable care could not have

known of the untruth[s] or omission[s]rdquo

TOP FRANCHISE CASES OF 2013

DO NOT

DISTURB

WWWDLAPIPERCOMIP_GLOBAL | 05

DLA Piper lawyers Barry Heller John Hughes and John Dwyer are conducting a webinar reviewing 2013rsquos top franchise decisions Three significant 2013 cases are summarized below

While it may be too early to identify general trends ndash especially given the differences among districts ndash a few observations are worth noting

A common theme among courts granting stays was the predictability in the length of time for IPR resolution The 12-month deadline was a significant factor in many decisions

Another prominent issue in decisions granting stays was the estoppel effect that attaches to prior art used in the IPR precluding that art from being used again in district court The ldquoestoppel effectrdquo caused many courts to conclude that the IPR process would simplify issues to be decided in litigation even if it did not eliminate the need for trial altogether

Decisions often focused on the overlap among claims subject to IPR and asserted in the litigation the more complete the overlap the more likely a stay would be granted

By John Guaragna and Melissa Marrero

The America Invents Act adopted in September 2011 introduced the new inter partes review (IPR) procedure providing an opportunity to challenge the validity of issued patents at the US Patent and Trademark Office Thus far these IPR procedures are proving to be quite popular Since IPRs became available in September 2012 more than 800 have been requested What can we learn from looking at use of the new procedures

Among those who can seek IPRs are defendants accused of infringing particular patents asserted in litigation Frequently defendants seeking IPRs will attempt to stay concurrent litigation pending resolution of the IPR Given the streamlined nature of the new IPR procedures this can bring significant cost savings For example the IPR procedures are typically faster (12-month deadline) than district court litigation and involve only limited discovery and motion practice If the IPR results in a determination of invalidity district court action can be avoided entirely

Although a stay of litigation pending IPR is not mandatory early numbers suggest district courts are quite willing to exercise their discretion in staying litigation pending IPR Since the adoption of the AIA up to December 31 2013 a total of 70 contested motions to stay district court cases pending IPR have been decided throughout the US Of those 70 45 were granted and 25 were denied ndash a success rate of 64 percent The chart to the right provides a district-by-district breakdown During that same period another 40 cases were stayed pending IPR by agreement of the parties Adding the cases stayed by stipulation to the total the rate at which cases are being stayed pending IPR (when requested) jumps to about 80 percent In the first two months of 2014 (through February 25) it appears that decisions are becoming more evenly split with 10 of 20 contested motions to stay pending IPR granted

STAYS PENDING INTER-PARTES REVIEW

UNDER THE AIA THE FIRST YEAR

John Guaragna is a patent litigation partner in DLA Piperrsquos Austin office You may reach him at johnguaragnadlapipercom

06 | INTELLECTUAL PROPERTY AND TECHNOLOGY NEWS ndash UNITED STATES

WWWDLAPIPERCOMIP_GLOBAL | 07

COURTSTOTAL MOTIONS

TO STAYGRANTED DENIED

CD Cal 7 5 2

ND Cal 10 7 3

SD Cal 2 0 2

D Del 10 8 2

MD Fla 3 2 1

SD Fla 1 0 1

D Haw 1 0 1

ND Ill 4 3 1

D Kan 1 1 0

WD Ky 1 1 0

D Mass 1 0 1

ED Mich 2 1 1

D Minn 3 2 1

SD Miss 1 0 1

DNJ 1 0 1

NDNY 1 0 1

SDNY 1 1 0

ND Ohio 1 1 0

SD Ohio 2 1 1

ED Pa 2 2 0

WD Pa 1 1 0

WD Tenn 2 1 1

ED Tex 3 2 1

SD Tex 3 3 0

WD Tex 4 2 2

WD Wash 1 1 0

WD Wis 1 0 1

TOTAL 70 45 25

DATA ON CONTESTED MOTIONS TO STAY PENDING INTER PARTES REVIEW based on data through 123113

STAYS PENDING INTER-PARTES REVIEW

UNDER THE AIA THE FIRST YEAR

The timing of the request was central to the stay analysis Generally the earlier the stay request was made the more likely a stay would be granted with stays requested close to trial the most likely to be denied Several courts declined to grant stays early in cases when the IPR had not yet been initiated In some of those cases the decisions were without prejudice to raising again if the IPR was instituted

New IPR procedures are having a significant impact on patent litigation The simple fact that more than 800 have already been requested tells the tale IPR has quickly become a popular mechanism to challenge the validity of patents including those asserted in litigation In many cases courts have been willing to stay patent cases pending IPRs These early statistics suggest that the AIArsquos new IPR process will continue to shape the patent litigation landscape

Melissa Marrero is a law clerk in DLA Piperrsquos Austin office

08 | INTELLECTUAL PROPERTY AND TECHNOLOGY NEWS ndash UNITED STATES

DLA Piper has a long history of serving Asian clients in complex patent matters all over the globe Historically our clients have included Ricoh Kyocera Toray Toshiba Sony and JFE Steel Since the opening of DLA Piperrsquos Tokyo Office in 2005 DLA Piper has focused on enhancing our patent-related services to global Japanese corporations As part of that effort Henry Koda joined DLA Piper in 2010 as our Tokyo-based Intellectual Property Group Manager Henry has served as a Professor at Soka University Law School

In 2013 our efforts to serve Japanese corporations took several major steps forward In May our practice was joined by intellectual property litigation partners Paul Steadman and Matthew Satchwell who collectively have nearly three decades of experience representing global Japanese corporations in US and cross-border patent and trade secret litigation Paul Matt and Henry ndash together with US Patent Prosecution Chair Daniel Christenbury ndash developed a seminar series to serve clients in the critical intellectual property litigation procurement and management market On November 6 2013 DLA Piper launched its first Annual Global Patent Symposium in Tokyo attended by 120 guests including intellectual property and technology decision-makers from top Japanese companies

Speakers presented a live demonstration of proprietary patent procurement software discussed how to build and maintain a strong global patent portfolio and commented on strategies for tackling patent trolls and litigating before the International Trade Commission (ITC) Dan Christenbury (Philadelphia) spoke first giving a live demonstration of Genius Notetrade software new software for preparing computer-based provisional patent applications created by a partnership between DLA Piper and

Mekiki Genius Notetrade software will soon be rolled out in Japan and elsewhere to make our clientsrsquo filing process both easier and more cost-effective Next Dale Lazar (Northern Virginia) spoke about strategies for building a strong international patent portfolio Paul Steadman (Chicago) explained a number of new and efficient approaches for defending against and defeating NPE claims and several new NPE threats on the horizon Intellectual Property and Technology Global Co-Chair and US Chair John Allcock (San Diego) and Matthew Satchwell (Chicago) gave an in-depth view of strategies for dealing with litigation at the ITC

The highlight of the seminar was hearing from our clients Tokyo Intellectual Property Group Manager Henry Koda moderated a panel in Japanese featuring former Patent Office Commissioner and IP Analyst Hisamitsu Arai former President of the Japanese IP Association and current Takeda Pharmaceutical Company General Manager of IP Yoichi Okumura Tokyo University Professor Katsuya Tamai and Meijo University Professor of Law and DENSO Corporation General Manager of IP Hirohiko Usui This panel examined ldquoMonetization of Japanese IP rightsrdquo Many Japanese corporations have built huge patent portfolios and top management eager to generate profits from hidden assets has recently begun to pay closer attention to those portfolios The panelists exchanged views and strategies for patent monetization goals

The themes and topics discussed at the seminar are applicable to more than just our Japanese clients Others who may wish to benefit from the seminar may be able to access video and written presentation materials upon request by emailing Paul Steadman Matt Satchwell or Dan Christenbury whose contact information is below

For more information about patent issues in Japan please email Paul Steadman at paulsteadmandlapipercom Matt Satchwell at

matthewsatchwelldlapipercom or Dan Christenbury at danchristenburydlapipercom

DLA PIPER LAUNCHES ANNUAL GLOBAL PATENT SYMPOSIUM IN TOKYO

WWWDLAPIPERCOMIP_GLOBAL | 09

Left to right Dale Lazar Matthew Satchwell former Patent Office Commissioner and IP Analyst Hisamitsu Arai Daniel Christenbury Henry Koda John Allcock former President of the Japanese IP Association and current Takeda Pharmaceutical Company General Manager of IP Yoichi Okumura Paul Steadman Tokyo University Professor Katsuya Tamai Meijo University Professor of Law and DENSO Corporation General Manager of IP Hirohiko Usui

Left to right Matthew Satchwell and John Allcock present ldquoStrategies for Winning at the ITCrdquo

The audience of 120 guests attending DLA Piperrsquos First Global Patent Symposium in Tokyo

American Broadcasting Companies Inc v Aereo Inc

Copyright Status cert grantedIssue Does a company ldquopublicly performrdquo a copyrighted television program when it retransmits a broadcast of that program to paid subscribers over the Internet

Aereo provides to its subscribers antennae permitting users to watch and record over-the-air broadcast TV programs Applying Cartoon Network LP v CSC Holdings Inc 536 F3d 121 (2d Cir 2008) the Second Circuit found no public performance because each Aereo subscriber received an individual transmission of the program Petitioners (several members of the broadcast television industry) argue that Aereorsquos transmissions are public performances under the Copyright Act and that the transmissions could harm the broadcast industry

SUPREME COURT CORNER

RECENT DECISIONS

CASES TO WATCH

10 | INTELLECTUAL PROPERTY AND TECHNOLOGY NEWS ndash UNITED STATES

Medtronic Inc v Mirowski Family Ventures LLC

Patent Decided January 22 2014Holding When a licensee seeks declaratory judgment of noninfringement against a patentee the patentee bears the burden of persuasion

Medtronic licensed the patenteersquos invention but sought a declaration that its newly developed technology does not infringe Justice Breyer writing for a unanimous Court first held that a licenseersquos non-infringement declaratory judgment (DJ) action ldquoarises underrdquo the patent law and confers appellate jurisdiction in the Federal Circuit The Court found that whether a DJ action ldquoarises underrdquo depends on ldquothe nature of the threatened action in the absence of the DJ suitrdquo which in this case was a patent ndash not contract ndash action

Next the Court found a patentee has the burden of persuasion on infringement reasoning that the declaratory judgment act is procedural and does not alter a claimrsquos substantive aspects Thus although the licensee brought suit and the license agreement barred the patentee from bringing suit the patentee retains the burden of persuasion Accordingly licensees now have a lesser burden when challenging infringement

Petrella v Metro-Goldwyn-Mayer Inc

Copyright Argument January 21 2014Issue Is the equitable defense of laches available in a copyright claim filed within the Copyright Actrsquos three-year statute of limitations

Petrella owner of the copyrighted screenplay to the 1980 movie Raging Bull brought a copyright infringement suit against MGM in 2009 She argues that the equitable defense of laches cannot apply because copyrights are entitled to a three-year statute of limitations Justice Kagan asked Petrella why a copyright owner should be permitted to delay bringing suit ldquoto maximize her own gainrdquo The governmentrsquos approach under which laches could bar equitable relief but not legal relief drew challenging questions During MGMrsquos argument the Justices questioned the Ninth Circuitrsquos test which presumes laches if a copyright owner brought suit more than three years after the first act of infringement

Nautilus Inc v Biosig Instruments Inc

Patent Status cert grantedIssue Does the Federal Circuitrsquos ldquoinsolubly ambiguousrdquo standard for indefiniteness comport with the statutory requirement of ldquoparticularrdquo and ldquodistinctrdquo patent claims

The patent at issue claims electrodes in a ldquospaced relationshiprdquo According to Nautilus the patent does not explain the magnitude of such spacing The district court held the claims indefinite On appeal the Federal Circuit found the claim language amenable to construction by reasoning that a person of ordinary skill in the art would understand ldquospaced relationshiprdquo and could determine such relationship as ldquopertaining to the functionrdquo intended to be performed by the claimed invention Nautilus argues that such a standard violates the statutory requirement that claims particularly point out and distinctly claim an invention

Alice Corporation Pty Ltd v CLS Bank Intrsquol

Patent Argument March 31 2014Issue Are claims to computer-implemented inventions directed to patent-eligible subject matter within the meaning of 35 USC sect101

Petitioner Alice Corporationrsquos patent claims at issue include computerized systems computerized methods and computer-readable media for creating and exchanging financial instruments A divided Federal Circuit sitting en banc affirmed the trial courtrsquos finding that the asserted claims are not directed to eligible subject matter under sect101 but could not agree on the applicable test Judge Lourie proposed that if the trial court finds the claims preempt an abstract idea the claims are still sect101 eligible if they include an ldquoinventive conceptrdquo or human contribution to the abstract idea and thus found them not sect101 eligible because the computer did not meaningfully add to the claims Chief Judge Rader dissented in part finding the analysis should focus on determining whether the claim ldquoas a wholerdquo covers merely an abstract idea and finding the system claims patent eligible because they cover a computer specifically programmed to solve a problem

On appeal the petitioner argues the claims at issue are patent eligible and must be read as a whole as in Diehr and Bilski Respondent argues the Federal Circuitrsquos decision should be affirmed because the ldquogeneric computerrdquo cited in the claims adds nothing to patent eligibility

Octane Fitness v Icon Health amp Fitness

Patent Argument February 26 2014Issue Whether the Federal Circuitrsquos two-part test for determining whether a case is ldquoexceptionalrdquo under 35 USC sect 285 ndash that it was ldquoobjectively baselessrdquo and brought in ldquosubjective bad faithrdquo ndash contravenes the statute and Supreme Court precedent

Highmark Inc v Allcare Management Systems Inc

Patent Argument February 26 2014Issue Whether a district courtrsquos finding that a case was ldquoexceptionalrdquo under 35 USC sect 285 is entitled to deference on appeal

We will review these cases in the Q2 2014 IPT News

Stan Panikowski a partner in DLA Piperrsquos Patent Litigation group and based in San Diego focuses on IP antitrust appeals and other areas of business litigation Reach him at stanleypanikowskidlapipercom

Brian Biggs an associate based in Wilmington Delaware is developing his patent litigation practice representing clients across many technical fields Reach him at brianbiggsdlapipercom

Andrew Stein an associate based in Washington DC focuses on patent litigation in federal district courts and sect337 investigations Reach him at andrewsteindlapipercom

WWWDLAPIPERCOMIP_GLOBAL | 11

Medtronic Inc v Mirowski Family Ventures LLC

Patent Decided January 22 2014Holding When a licensee seeks declaratory judgment of noninfringement against a patentee the patentee bears the burden of persuasion

Medtronic licensed the patenteersquos invention but sought a declaration that its newly developed technology does not infringe Justice Breyer writing for a unanimous Court first held that a licenseersquos non-infringement declaratory judgment (DJ) action ldquoarises underrdquo the patent law and confers appellate jurisdiction in the Federal Circuit The Court found that whether a DJ action ldquoarises underrdquo depends on ldquothe nature of the threatened action in the absence of the DJ suitrdquo which in this case was a patent ndash not contract ndash action

Next the Court found a patentee has the burden of persuasion on infringement reasoning that the declaratory judgment act is procedural and does not alter a claimrsquos substantive aspects Thus although the licensee brought suit and the license agreement barred the patentee from bringing suit the patentee retains the burden of persuasion Accordingly licensees now have a lesser burden when challenging infringement

Petrella v Metro-Goldwyn-Mayer Inc

Copyright Argument January 21 2014Issue Is the equitable defense of laches available in a copyright claim filed within the Copyright Actrsquos three-year statute of limitations

Petrella owner of the copyrighted screenplay to the 1980 movie Raging Bull brought a copyright infringement suit against MGM in 2009 She argues that the equitable defense of laches cannot apply because copyrights are entitled to a three-year statute of limitations Justice Kagan asked Petrella why a copyright owner should be permitted to delay bringing suit ldquoto maximize her own gainrdquo The governmentrsquos approach under which laches could bar equitable relief but not legal relief drew challenging questions During MGMrsquos argument the Justices questioned the Ninth Circuitrsquos test which presumes laches if a copyright owner brought suit more than three years after the first act of infringement

Nautilus Inc v Biosig Instruments Inc

Patent Status cert grantedIssue Does the Federal Circuitrsquos ldquoinsolubly ambiguousrdquo standard for indefiniteness comport with the statutory requirement of ldquoparticularrdquo and ldquodistinctrdquo patent claims

The patent at issue claims electrodes in a ldquospaced relationshiprdquo According to Nautilus the patent does not explain the magnitude of such spacing The district court held the claims indefinite On appeal the Federal Circuit found the claim language amenable to construction by reasoning that a person of ordinary skill in the art would understand ldquospaced relationshiprdquo and could determine such relationship as ldquopertaining to the functionrdquo intended to be performed by the claimed invention Nautilus argues that such a standard violates the statutory requirement that claims particularly point out and distinctly claim an invention

Alice Corporation Pty Ltd v CLS Bank Intrsquol

Patent Argument March 31 2014Issue Are claims to computer-implemented inventions directed to patent-eligible subject matter within the meaning of 35 USC sect101

Petitioner Alice Corporationrsquos patent claims at issue include computerized systems computerized methods and computer-readable media for creating and exchanging financial instruments A divided Federal Circuit sitting en banc affirmed the trial courtrsquos finding that the asserted claims are not directed to eligible subject matter under sect101 but could not agree on the applicable test Judge Lourie proposed that if the trial court finds the claims preempt an abstract idea the claims are still sect101 eligible if they include an ldquoinventive conceptrdquo or human contribution to the abstract idea and thus found them not sect101 eligible because the computer did not meaningfully add to the claims Chief Judge Rader dissented in part finding the analysis should focus on determining whether the claim ldquoas a wholerdquo covers merely an abstract idea and finding the system claims patent eligible because they cover a computer specifically programmed to solve a problem

On appeal the petitioner argues the claims at issue are patent eligible and must be read as a whole as in Diehr and Bilski Respondent argues the Federal Circuitrsquos decision should be affirmed because the ldquogeneric computerrdquo cited in the claims adds nothing to patent eligibility

Octane Fitness v Icon Health amp Fitness

Patent Argument February 26 2014Issue Whether the Federal Circuitrsquos two-part test for determining whether a case is ldquoexceptionalrdquo under 35 USC sect 285 ndash that it was ldquoobjectively baselessrdquo and brought in ldquosubjective bad faithrdquo ndash contravenes the statute and Supreme Court precedent

Highmark Inc v Allcare Management Systems Inc

Patent Argument February 26 2014Issue Whether a district courtrsquos finding that a case was ldquoexceptionalrdquo under 35 USC sect 285 is entitled to deference on appeal

We will review these cases in the Q2 2014 IPT News

Stan Panikowski a partner in DLA Piperrsquos Patent Litigation group and based in San Diego focuses on IP antitrust appeals and other areas of business litigation Reach him at stanleypanikowskidlapipercom

Brian Biggs an associate based in Wilmington Delaware is developing his patent litigation practice representing clients across many technical fields Reach him at brianbiggsdlapipercom

Andrew Stein an associate based in Washington DC focuses on patent litigation in federal district courts and sect337 investigations Reach him at andrewsteindlapipercom

WWWDLAPIPERCOMIP_GLOBAL | 11

As privacy and data security issues escalate around the globe DLA Piper is here to help guide you through the complex array of compliance issues

Our free resource Data Protection Laws of the World offers a high-level snapshot of national data protection laws in 72 jurisdictions globally

Find it here wwwdlapiperdataprotectioncom

Follow our popular blog wwwtechnologyslegaledgecom for the latest legal developments

DLA Piper ranked as a Tier 1 firm for Data Protection and Privacy ndash Legal 500 USA 2013

wwwdlapipercom

PROTECTING YOUR DATA AROUND THE WORLD