hot developments in patent, trademark, and copyright law sprint nextel corporation november 12, 2007

Hot Developments in Patent, Trademark, and Copyright Law

Sprint Nextel Corporation

November 12, 2007

Recent Cases and Events in Patent Litigation

Relaxed Standards for Declaratory Judgment Jurisdiction MedImmune, Inc. v. Genentech, Inc.

Limitations on Waiver of Attorney Client Privilege and Willfulness Requirements

In Re Seagate Technology, L.L.C

Stricter Requirements for Joint or Divided Direct Infringement BMC Resources, Inc. v. Paymentech, L.P

Elimination of “Automatic” Permanent Injunction after Infringement Verdicts

eBay, Inc. v. MercExchange, L.L.P

Restrictions on Patentable Subject Matter In re Nuijten

Relaxed Standards for Declaratory Judgment Jurisdiction MedImmune, Inc. v. Genentech, Inc., 127 S.Ct. 764

(2007) United States Supreme Court

Decided January 9, 2007 MedImmune entered into a license agreement with

Genentech covering an existing patent and pending application (which later issued)

Relaxed Standards for Declaratory Judgment Jurisdiction MedImmune believed the later issued patent was

invalid To avoid a possible willfulness and treble damages

verdict, if found to infringe, MedImmune paid royalties “under protest and with reservation of all of [its] rights”

MedImmune filed declaratory judgment suit while still complying with license.

Relaxed Standards for Declaratory Judgment Jurisdiction Supreme Court scrapped “reasonable

apprehension” test used by CAFC Paying royalties under compulsion of an injunction

creates no more apprehension of imminent harm than paying royalties for fear of treble damages

Held: Licensee is not required to breach license before seeking a declaratory judgment that patent is invalid, unenforceable, or not infringed

Relaxed Standards for Declaratory Judgment Jurisdiction What Does Create Declaratory Judgment

Jurisdiction? Under all of the circumstances, is there a substantial

controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant a declaratory judgment?

Other Notes: Analysis extends beyond patents May allow for patent challenge clauses to avoid

controversy

Limitations on Waiver of Attorney Client Privilege In Re Seagate Technology, L.L.C, 497 F.3d 1360

(Fed. Cir. 2007) (en banc) Court of Appeals for the Federal Circuit

Decided August 20, 2007 Discovery Dispute surrounding the request and

disclosure of communications and work product related to opinions of counsel

Limitations on Waiver of Attorney Client Privilege Seagate was sued by Convolve, Inc. and MIT for

infringement of three patents Seagate obtained three written opinions covering

non-infringement, invalidity and unenforceability Seagate relied upon the opinions in defending

against willful infringement Convolve sought to compel disclosure of any

communications and work product of Seagate’s counsel, including separate trial counsel

Limitations on Waiver of Attorney Client Privilege Appeals Court revamped scope of Attorney/Client

and Work Product privileges Waiver of attorney/client and work product stemming

from opinion counsel does not extend to trial counsel Trial counsel and opinion counsel provide

“significantly different functions” Explicitly declined to address in-house counsel

Leaves many questions in light of in-house roles with both opinion and trial counsel

Limitations on Waiver of Attorney Client Privilege Court creates a new standard for willfulness

Now must show objective recklessness by infringer Mere negligence is not enough

Objective Recklessness: Clear and convincing evidence that infringer acted despite

an objectively high likelihood that its actions were infringing Must show the objectively-defined risk was known or so

obvious it should have been known

Limitations on Waiver of Attorney Client Privilege Notes to take away from Seagate:

In-house counsel and scope of waiver Very high standards to find willfulness

Rule 11 concerns – alleging willfulness in complaint Preliminary Injunctions – patentee who fails to ask for (and

receive) preliminary relief makes it likely the conduct of infringement (post-filing) will not give rise to willfulness

No adverse inferences for not obtaining or producing opinions of counsel

Stricter Requirements for Joint or Divided Direct Infringement BMC Resources, Inc. v. Paymentech, L.P, Case

No. 061503p Fed.Cir (2007) Court of Appeals for the Federal Circuit

Decided September 20, 2007 BMC sued Paymentech alleging infringement of

method patents which permitted different actors to perform the steps of the process

Stricter Requirements for Joint or Divided Direct Infringement BMCs patents claim a method for processing debit

transactions over a phone The claims required actions from 4 parties

The payee’s agent, an ATM network, a financial institution and the caller

Paymentech processes financial transactions for clients as a third party Does not complete some of the steps of the claims

(done by other parties based on information provided by Paymentech)

Stricter Requirements for Joint or Divided Direct Infringement BMC alleged Paymentech should be directly liable

for participating in and coordinating the performance of the method

Court held there to be no direct infringement by Paymentech To create liability for direct infringement, a single

party must perform all the steps or control or direct the other parties to complete the remaining steps

Stricter Requirements for Joint or Divided Direct Infringement Divided Infringement Going Forward:

Indirect Infringement still a possibility Contributory infringement or Inducement to infringe may still

be found IF a direct infringer is found

Claim Drafting: Court acknowledged that claims could have been drafted

towards a single actor

Elimination of “Automatic” Permanent Injunction After Infringement Verdicts eBay, Inc. v. MercExchange, L.L.P, 126 S.Ct. 1837

(2006) Supreme Court

Decided May 15, 2006 MercExchange sued eBay for infringing its business

method patent winning an infringement verdict, but was denied a permanent injunction

Elimination of “Automatic” Permanent Injunction After Infringement Verdicts MercExchange appealed citing Federal Circuit

“general rule” of injunctions upon infringement findings Federal Circuit reversed granting an injunction

eBay appealed to Supreme Court Supreme Court rejected “general rule”

Emphasized traditional 4 factor test Irreparable harm, inadequate remedy at law, balance of

hardships and public policy

Elimination of “Automatic” Permanent Injunction After Infringement Verdicts Permanent Injunctions no longer automatic

Compulsory license Subsequent case:

Paice v. Toyota, Case No. 06-1610 (Fed. Cir 2007) October 17, 2007 “On-going royalty” v. compulsory license

Looks like a duck, walks like a duck…

Effect on Patent Holding Companies (Trolls) May be less likely to get injunction

Irreparable harm and adequate remedy

Restrictions in Patentable Subject Matter

In Re Nuijten, 84 USPQ2d 1495 (Fed. Cir. 2007) Court of Appeals for the Federal Circuit

Decided September 29, 2007 Rejected patent claiming a technique for reducing

noise in electronic signals having watermarks A signal is not patentable Signal does not fit within 4 categories of patentable

subject matter (process, machine, manufacture, composition of matter

Restrictions in Patentable Subject Matter

In Re Nuijten, 84 USPQ2d 1495 (Fed. Cir. 2007) May have implications on Telecom related patents

and applications Rehearing by en banc Federal Circuit has been

requested No decision on rehearing yet

Future Concerns

Supreme Court has recently shown much more interest in patent cases Average 2-3 cases per term

Landscape of patent litigation is still being refined after landmark decisions

Copyright, Trademark, and Related Issues of 2007 Google and DMCA Safe Harbors

Viacom v. Google Premier League v. Google Filtering Controversy

Communications Decency Act Developments Fair Housing Council v. Roommate.com, LLC Chicago Lawyers’ Committee v. Craigslist, Inc.

Trademarks and Trade Dress RIM v. Samsung RIM v. LG Electronics iPhone, Shadow

Google and DMCA Safe Harbors

Viacom, Paramount and others sue Google in Southern District of NY, Civil Action No. 1:07-02103 March 13, 2007 $1.5 billion damages for enabling and participating in

“massive infringement” Direct copyright infringement – performance, display,

reproduction rights Inducement (Grokster) Contributory Vicarious

Premiere League and Bourne Co. Sue YouTube and Google in Southern District of NY, Civil Action No. 1:07-3582, May 4, 2007 Class Action Joined by others; National Music Publishers’

Assocation, Robert Tur, UK Rugby Football League, Knockout Entertainment Limited

Direct copyright infringement Contributory Vicarious Inducement

Does §512 of the DMCA protect Google? passive enough? repeat infringer policy? effective notice and takedown? failure to adopt technical measures? willful blindness

Technical Solutions YouTube’s proposed identification technology,

October 15, 2007 controversy

Communications Decency Act

§230 (c) (1):“No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”

§230 (c) (2): “No provider or user of an interactive computer service shall be

held liable on account of – (A) any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected; or (B) any action taken to enable or make available to information content providers or others the technical means to restrict access to material described in paragraph (1).”

Zeran v. America Online, Inc., 129 F.3d 327 (4th Cir., 1997) cert. denied, 118 S.Ct. 2341 (1998) and progeny Broad scope

Pre-emption Perfect 10, Inc. v. CC Bill LLC, 481 F.3d 751 (9th Cir., 2007) state

intellectual property covered Fair Housing Council v. Roommate.com LLC, 489 F. 3d 921 (9th Cir. 2007)

possible reduction of scope of protection non-publisher acts rehearing en banc, scheduled for Dec. 12, 2007

Chicago Lawyers’ Committee v. Craigslist, Inc., 461 F. Supp. 2d 681 (N.D. Ill. 2006) Dismissal, but narrowing of scope in dicta Acknowledges “near-unanimous” decisions Seventh Circuit appeal; briefing to be completed early December, 2007

Importance of CDA in a User Generated Content Environment

Trademarks and Trade Dress

RIM v. Samsung, Civil Action No. 2006-07797 (C.D. CA), Dec. 8, 2006 Blackberry Pearl v. Blackjack

Settled February 8, 2007 continued sales withdrawal of trademark application

Black Carbon suit continues

Trademarks and Trade Dress (cont.)

RIM v. LG Electronics, Civil Action No. 07-7323 (C.D. CA), Nov. 7, 2007 BLACKBERRY v. BLACKLABEL

Chocolate Handsets Black Cherry Strawberry

Trademarks and Trade Dress (cont.)

Handsets – Carrier Services iPhone – designed by Apple

Trademark issues Shadow – designed by T-Mobile CEO?

Future directions, joint development, shifting of liability

Additional Questions? Please contact us at: john.cotter@klgates.com

david.byer@klgates.com

marc.martin@klgates.com

Thank you for your time and attention!

K&L Gates