Are Inter Partes Reviews “Quintessential” Agency Adjudications?

A superlative or excessive statement is often a dead give-away that the statement may not be true.  In deciding whether the America Invents Act’s inter partes review provisions violate Article III of the Constitution of the United States, the Federal Circuit in MCM Portfolio LLC v. Hewlett-Packard Company, 815 F.3d 1284, 1291 (Fed. Cir. 2015) opined that the Patent Trial and Appeal Board (PTAB)’s involvement was “…the quintessential situation in which the agency is adjudicating issues under federal law.”  The Federal Circuit also concluded that because patent rights derive from an extensive regulatory scheme, they are public rights that may be adjudicated by an agency such as the United States Patent and Trademark Office (“USPTO”) rather than private rights that may be adjudicated only by a court.

The Supreme Court’s recent grant of certiorari in Oil States Energy Services, LLC, v. Greene’s Energy Group, LLC is presumably intended to resolve this issue.    Although three questions were presented in the cert petition, two of which related to revisiting issues decided by the Court in Cuozzo Speed Technologies, LLC v. Lee, 136 S.Ct. 2131 (2016), the Court granted cert only on the question regarding the nature of patent rights, i.e.,

Whether inter partes review—an adversarial process used by the Patent and Trademark Office (PTO) to analyze the validity of existing patents—violates the Constitution by extinguishing private property rights through a non-Article III forum without a jury.

Continue Reading

Webinar: Deciphering and Maximizing Key Benefits of the European Trademark System and the Fallout from Brexit

457214067-296x300.jpgOur Intellectual Property & Technology Practice partners Deborah Lodge (Washington) and Florian Traub (London) will be speaking in a Clear Law Institute webinar on the European Trademark system and Brexit’s impact on trademark rights – Deciphering and Maximizing Key Benefits of the European Trademark System and the Fallout from Brexit scheduled for June 21, 2017 at 1:00 to 2:15 pm EDT.

This interactive program will focus on practical strategies for US companies looking to protect their trademark rights in Europe. Among other topics, the webinar will discuss:

  • The key differences between the US and the European trademark registration systems.
  • The major changes that were recently made to EU trademark law, including those that will be implemented on October 1, 2017.
  • The various options open to US trademark owners for protecting their trademark rights in Europe.
  • Considerations for deciding whether to file trademark applications directly in a European country or in the EU, or through the Madrid Protocol Treaty.
  • Whether trademarks should be registered with Customs in the EU and/or member countries.
  • Brexit: the timeline for the UK’s withdrawal from the EU, and how that is likely to affect the options for US trademark owners. The Brexit discussion follows up on a recently updated white paper concerning the impact of Brexit on IP rights.

Our readers can use the code: SPKR35 to receive a 35% discount on the US$199 registration fee. Register here.

 

Weekly Data Privacy Alert – 5 June 2017

Please click here to read the latest data privacy alert from the Squire Patton Boggs Data Privacy & Cybersecurity team. This week’s alert covers news from France, Germany and the UK.

France

  • CNIL Has Released Further Cookie Guidance

Germany

  • Andrea Voßhoff Presents Activity Report for 2014/2015

UK

  • ICO Wins Case Against Former Claims Company Manager for Making Blagging Calls

For more information on any of these items, or data privacy issues generally, please feel free to call any of the of the following individuals:

Annette Demmel (Germany)

Caroline Egan (Birmingham)

Francesca Fellowes (Leeds)

Stephanie Faber (France)

German Federal Constitutional Court delays UPC

The launch of the Unified Patent Court and Unitary Patent has been dealt a blow from an unexpected corner. Following delays caused by Brexit and the political uncertainty in the UK, the attention suddenly shifts to the ratification process in Germany. It is being reported that the German Federal Constitutional Court (Bundesverfassungsgericht) has asked the German President to hold off bringing into force implementing legislation concerning the Unified Patent Court and Unitary Patent.  This follows a constitutional complaint brought by an unknown individual; the complaint is currently pending before the court (case reference 2 BvR 739/17).

Continue Reading

Germany Acts to Curb Tax Effects of Patent/IP Box Regimes

Both houses of the German parliament have recently passed a bill limiting the tax effects of royalty and licence fees paid to patent boxes. The essence of the new rule is that royalties will not be tax deductible for German businesses if the effective tax rate of such royalties in the hands of the recipient falls below 25%. The lower the tax rate, the higher the non-deductible percentage will be on a sliding scale: 0% rate − royalties completely non-deductible; 5% rate − 80% non-deductible; 10% rate − 60% non-deductible; 15% rate − 40% non-deductible; and so on. Further conditions include the following:

  • Royalties include all fees paid for the use of a wide range of intellectual property
  • Only intra-group royalties are affected, whereby, branches are deemed to be intra-group
  • Intra-group back-to-back or flow-through arrangements are also captured
  • Effective date will be January 1, 2018

Continue Reading

Weekly Data Privacy Alert – 29 May 2017

Please click here to read the latest data privacy alert from the Squire Patton Boggs Data Privacy & Cybersecurity team. This week’s alert covers news from Germany and the UK.

Germany

  • Hessen and Bavaria Publish Information and Complaint Forms for Data Subjects Concerning “Privacy Shield”
  • Bavarian Data Protection Authority Sends Inspection Questionnaire to 150 Companies

UK

  • Council Fined by ICO Over Publication of Sensitive Personal Data in Online Planning
  • High Court Orders BBC to Reveal Source of Information Regarding Planned Raid on Home of Sir Cliff Richard

For more information on any of these items, or data privacy issues generally, please feel free to call any of the of the following individuals:

Annette Demmel (Germany)

Caroline Egan (Birmingham)

Francesca Fellowes (Leeds)

 

Uncharted Waters: ITC Administrative Law Judge Recommends $37 Million Penalty For Prohibited Fish-Finder Sales

In an enforcement proceeding stemming from the ITC’s December 2015 decision in Certain Marine Sonar Imaging Devices, Inv. No. 337-TA-921, ALJ David Shaw has found that the ITC’s cease and desist order was violated by continued infringing sales of imported products and has recommended that respondent Garmin be assessed a civil penalty of $37 million.  The May 25th decision (made public on June 5th) is subject to review by the Commission, but if adopted would be the largest penalty ever imposed by the ITC for violation of a cease and desist order.  Yet, according to the ALJ, the penalty was less than the ITC Staff had recommended and less than half of the potential penalty that could have been imposed under law.

By way of background, in June 2014, Navico Inc. (Oklahoma) and Navico Holding AS (Norway) filed a complaint under Section 337 (19 USC 1337) alleging patent infringement by Garmin International, Inc. and other related entities of certain Navico patents relating to marine sonar imaging (“fish-finder”) devices.  On December 1, 2015, the ITC issued its final determination finding that the Garmin respondents had violated Section 337 based on the importation and sale of products that infringed claims of two of those patents.  On the same date, the Commission issued a limited exclusion order barring the Garmin products from entry into the U.S. and cease and desist orders prohibiting the further sale of infringing products within the U.S.  The Commission may issue such orders in lieu of or in addition to an exclusion order where it has been shown that there exists commercially significant inventory in the U.S.  The statute permits the Commission to impose penalties of “not more than the greater of $100,000 or twice the domestic value of the articles entered or sold” in the event an order is violated. Continue Reading

Weekly Data Privacy Alert – 22 May 2017

Please click here to read the latest data privacy alert from the Squire Patton Boggs Data Privacy & Cybersecurity team. This week’s alert covers news from the EU, France and the UK.

European Union

  • European Commission to Form Another Expert Group to Support the Application of the GDPR

France

  • French Data Protection Expert Appointed to the French Government

UK

  • Survey Reveals That 84% of SMEs Are Unaware of the Forthcoming GDPR
  • ICO Publishes Its Information Rights Strategic Plan for the Next Four Years

For more information on any of these items, or data privacy issues generally, please feel free to call any of the of the following individuals:

Caroline Egan (Birmingham)

Francesca Fellowes (Leeds)

Stephanie Faber (France)

In Safetech IoT Settlement, New York Attorney General Outlines Reasonable Security Program

In the first state Attorney General action against a wireless security company for failing to implement adequate security in its Internet of Things (IoT) devices, the New York Attorney General recently settled with wireless lock company Safetech.  According to the settlement, there were alleged security shortcomings despite the fact that the company promised “Privacy When You Want It, Security When You Need It” and represented that its locks protected belongings by securing areas.  The Attorney General alleged that the security deficiencies and representations that Safetech made ran contrary to New York state laws that prohibit deceptive acts or practices and false advertising, and that give the Attorney General power to enjoin repeated fraudulent or illegal acts.

The settlement mirrors similar enforcement actions taken by the Federal Trade Commission in the IoT space, such as the D-Link case, ASUS case, and TRENDnet case.  These increasingly frequent regulator enforcement actions indicate that IoT device manufacturers should carefully think about security when designing devices.

The Safetech enforcement action started after independent researchers reported in August 2016 that Safetech did not encrypt its users’ passwords when transmitted from a smartphone to the locks.  Moreover, the researchers revealed that Safetech did not force users to reset default passwords, which could be discovered easily by brute force attacks.  The Attorney General subsequently investigated the company and its practices, ultimately alleging that the security deficiencies discovered by the independent researchers could leave consumers susceptible to hacking and physical theft.  According to the settlement, Safetech must now implement a comprehensive security program.  The outline of that program sheds light on what the New York Attorney General may consider “reasonable security” for IoT devices. Continue Reading

Exhausted: The Supreme Court Takes The Federal Circuit To Task (Again)

On May 30, 2017, the U.S. Supreme Court continued its recent string of decisions reversing Federal Circuit holdings on fundamental issues of patent law.  Taking on patent exhaustion in Impression Products, Inc. v. Lexmark Int’l, Inc., No. 15-1189, the Court unanimously held that that “a patentee’s decision to sell a product exhausts all of its patent rights in that item, regardless of any restrictions the patentee purports to impose or the location of the sale.”  Slip Op. at 2.  The decision precludes patent owners from using patent law to impose post-sale restrictions on covered products.  As important, the decision unambiguously provides that exhaustion applies on a global basis:  a product’s first sale overseas exhausts the patent owner’s U.S. patent rights in the product in the same manner as if the sale had taken place in the U.S.

Reaching back to centuries-old English law, the Court noted exhaustion’s “impeccable historic pedigree.”  Id. at 6.  The “well-established” exhaustion doctrine is a check on the “limited monopoly” that a patent grant provides and “marks the point where patent rights yield to the common law principle against restraints on alienation [of chattels].”  Id.  Criticizing the Federal Circuit’s en banc decision below for “dismissively” viewing this principle as limited to 17th Century England, the Court noted that “Congress enacted and has repeatedly revised the Patent Act against the backdrop of hostility toward restraints on alienation.  That enmity is reflected in the exhaustion doctrine.”  Id. at 7.

Despite the obvious differences in commerce between the times of England’s Lord Coke and today, the Court recognized that “advances in technology, along with increasingly complex supply chains,” only “magnify” the potential burdens placed on commerce by patentees’ unchecked restrictions on the sale of covered products.  Id. at 8.  “Allowing patent rights to stick remora-like to [an] item as it flows through the market would violate the principle against restraints on alienation.”  Id. at 18.

The Court relied on the same principle in holding that exhaustion applies to sales overseas:

Exhaustion is a separate limit on the patent grant, and does not depend on the patentee receiving some undefined premium for selling the right to access the American market.  A purchaser buys an item, not patent rights.  And exhaustion is triggered by the patentee’s decision to give that item up and receive whatever it decides is appropriate “for the article and the invention which it embodies.”  Id. at 15 (citation omitted).

Lexmark confirms that patent exhaustion is “uniform and automatic.  Once a patentee decides to sell—whether on its own or through a licensee—that sale exhausts its patent rights, regardless of any post-sale restrictions the patentee purports to impose, either directly or through a licensee.”  Id. at 13.  To the extent that a patent owner wishes to impose limitations on sales of patented items, it must rely on contract law, not patent law.

Beyond pronouncing patent exhaustion as “uniform and automatic,” Lexmark is notable for its explicit and implicit criticism of the Federal Circuit’s decision below.  The Supreme Court implicitly took the Federal Circuit to task for failing to recognize the high court’s “well-settled line of precedent” that “allows for only one answer”: namely, that Lexmark’s patent rights were exhausted.  Id. at 9.  Switching to explicit criticism, the Court explained that “[t]he Federal Circuit reached a different result largely because it got off on the wrong foot.”  Id.  The Federal Circuit made a “misstep in … logic” by viewing exhaustion as a “presumption about the authority that comes along with a sale” and not as “‘a limit on the scope of the patentee’s rights.’”  Id. at 10 (citation omitted).

Lexmark follows by only eight days the Court’s decision in TC Heartland, overruling thirty years of Federal Circuit precedent regarding patent venue.  The two decisions continue the Court’s vastly increased tendency to weigh in on key Federal Circuit holdings, including on obviousness, patentable subject matter, indefiniteness, inducement, inequitable conduct, and willful infringement.  Expect that trend to continue.

LexBlog