District Court Gatekeeping Responsibility for Expert Witness Testimony to Increase Under Proposed Changes to Federal Rule of Evidence 702

By David Elkins on April 19, 2023 Posted in IP Litigation, Judiciary, Patent Litigation, US

Sister blog Global Investigations and Compliance Review posted a very read-worthy recent blog authored by our colleagues Marisa Darden, Ayako Russell and Jay Thomas. Addressing proposed changes to the Federal Rule of Evidence 702 standards regarding the admissibility of expert witness opinions, the post is a must read for anyone involved in or concerned with IP (or any other civil) litigation in the U.S. The post elucidates the twin goals of the proposed amendments.

First, the amendments clarify that the proponent of expert testimony bears the burden of establishing its admissibility by a preponderance of the evidence. The Advisory Committee deemed doing so necessary because courts have tended to err on the side of admissibility. Second, the amendments are intended to curtail a tendency among district courts to liberally admit expert testimony and then instruct jurors to assign weight to the testimony – instead of rigorously exercising the court’s gatekeeping role.

As the post concludes, the proposed amendments – which would take effect at the end of this year if approved – would have an important impact on trials and counsel’s planning for both direct and cross examination of experts.

China: The New Draft Trademark Law Increases Requirements for Recognition of Well-Known Status

By Paolo Beconcini on April 17, 2023 Posted in China, IP Litigation, Trade Mark, Trademarks

The recently published Draft Amendment to the Chinese Trademark Law is proposing the introduction of important changes to the current trademark system in China. In addition to introducing tighter filing requirements and proof of use to combat trademark theft (see my prior blog), it is proposing amendments to the process for determination of a trademark’s status as well-known. Given that recognition of well-known status plays a critical role in trademark prosecution matters such as opposition and invalidation proceedings, these changes are of great importance to right holders.

Human vs AI Analysis of USPTO Updates – How Does Bard Fare?

By Christopher Adams and Frank Bernstein on April 11, 2023 Posted in Artificial Intelligence, Cybersecurity, Patents, Technology, US, USPTO

Generative Artificial Intelligence is a type of artificial intelligence (AI) that can generate a wide range of content types in response to user prompts. Examples of such content can include text, images, audio and video content, etc. There has been pervasive use of Generative AI over the past few months, to create essays, works of art, music, and even source code for computer programs, as well as to take standardized examinations such as the LSAT, classroom exams, and even bar exams. OpenAI’s ChatGPT and Google Bard are the most recent prominent Generative AI entries.

To evaluate the capabilities of Generative AI, we selected the USPTO’s recent announcement about grants of digital patents as a topic, and compared a blog that we prepared and a blog that Generative AI (here, Google Bard) prepared. The resulting blogs, and our commentary on them, follow.

Rulemaking at the US Patent Office: Does Director Guidance On Discretionary Denials of Review Require Opportunity for Public Comment?

By Tamara Fraizer and Frank Bernstein on March 29, 2023 Posted in IP Litigation, ITC Section 337, Judiciary, Patent Litigation, PTAB, Supreme Court, Technology, US, USPTO

The Federal Circuit has refused to uphold the dismissal of a complaint alleging that the Director of the Patent and Trademark Office (PTO) improperly issued instructions to PTAB judges regarding whether to institute requested patent review proceedings. The complaint alleges that the so-called Fintiv factors – initially set forth in two opinions designated by the former Director as precedential and recently clarified by Director memo and decisions – were improperly issued because they were not promulgated though notice-and-comment rulemaking per 4 U.S.C. § 553. The case, brought by Apple Inc. and other technology companies together with Edwards Lifesciences, was remanded to the district court in the Northern District of California for further proceedings on this issue.

Even though the Federal Circuit did not reach the merits of the claim, its March 13 ruling offers several insights on the contentious issue of discretionary denials and the broader issue of rulemaking at the PTO.

District Court Rules Internet Archive’s Open Library Project is Not Fair Use

By Joe Meckes on March 28, 2023 Posted in Copyright, Cybersecurity, Internet, IP Litigation, Social Media, Technology, US

A federal district court in New York held that the Internet Archive’s Open Library project was engaging in copyright infringement by publishing digital copies of millions of books online. Even though the Internet Archive and participating libraries purchased print copies of the books and, for the most part, made them available to borrowers on a one-to-one basis, the court rejected the Internet Archives’ fair use defense. The court refused Internet Archives’ invitation to expand the boundaries of fair use jurisprudence and made it clear that owners of printed works cannot simply digitize them and make them available to the public – even if they limit distribution.

The court engaged in an extensive analysis of whether the purpose and character of Internet Archive’s use was transformative. Ultimately, because Internet Archive simply scanned and distributed to the public complete copies of copyrighted works, the court found the use was not transformative. The court carefully distinguished cases in which defendants had scanned whole copies of books so that online users could search their contents, since in those cases the defendants had only made excerpts available to the public. The court found that simply changing the format of a work was not enough to show a transformative use.

Rare Enforcement Notice Issued by UK Advertising Regulator for “Hot Air” Ads

By Carlton Daniel and Sera Kaplan on March 21, 2023 Posted in Advertising, ASA, Marketing, UK, UK Advertising Standards Authority

On 9 March 2023, the Advertising Standards Authority (ASA) took the rare step of issuing an Enforcement Notice against any advertiser distributing ads for electric plug-in mini-heaters that claim – directly or indirectly – that such products are a viable alternative to central heating.

As noted in our previous blog, the ASA recently banned a number of ads which suggested that electric plug-in mini heaters would save consumers money while quickly and efficiently heating a room. The regulator considers such claims to be materially misleadingly and a clear-cut breach of the mandatory CAP Code that all UK advertisers must comply with. The watchdog has urged all advertisers operating in this area to take immediate action to ensure that all advertising complies with the rules.

The ASA has threatened the use of a referral to its legal backstop: Trading Standards, should any advertiser fail to comply with its requirements. It is very rare for the ASA to refer an advertiser to Trading Standards, such measures being reserved for only the most serious issues of non-compliance where the ‘teeth’ of court fines and criminal penalties are necessary to secure a level playing field for consumers. This is because the ASA itself does not have the power to issue fines or impose criminal sanctions.

The continued focus in this area alongside greenwashing claims, shows that the UK advertising regulators are on the look out to protect consumers during the cost-of-living crisis.

For more information contact the Global Head of our Advertising, Media and Brands practice, partner Carlton Daniel, or associate, Sera Kaplan.

National Advertising Division’s 2022 Annual Report: An Advertising Compliance Roadmap for the Year Ahead

By Katy Spicer, Marisol Mork, Kyle Dull, Eleanor Hagan and Ekaterina Long on March 20, 2023 Posted in Advertising, Data Protection, Healthcare, Internet, Marketing, Privacy, Social Media, US

“[N]o legacy is so rich as honesty”¹ might fairly summarize the Federal Trade Commission (FTC)’s theme to the advertising industry for 2023, as gleaned from the National Advertising Division (NAD) 2022 Annual Report. “FTC leadership,” the NAD Report elaborates, “sent a consistent, strong message that national advertisers should take a hard look at their own advertising” to create marketing from a consumer protection and truth-in-advertising standpoint. Nothing less will do.

The NAD Report makes clear the FTC’s focus on ensuring that advertisers improve consumer trust in their practices going forward. Consistent with this message, the FTC has been busy rulemaking to address data protection and privacy, disclosures, endorsements and reviews, children’s advertising, and health-related product claims. And while this rulemaking is underway, NAD continues to ensure its self-regulatory process is consistent with FTC priorities and the evolving rules of the road.

If you are part of the advertising industry or have been tasked with ensuring your company’s advertising compliance, this post will be useful in highlighting NAD’s guidance to use as roadmap for the year ahead.

Spell Out Percentages in Your Stipulated Judgments

By Joseph Grasser on March 9, 2023 Posted in Copyright, IP Litigation, US

An all too typical fact pattern involves a small-time ne’er-do-well infringing on the rights of a much bigger corporation. When the corporation is forced to bring a lawsuit, the “little guy” infringer cries poverty and seeks a settlement. An oft-used tactic of corporations is to settle the matter quickly (and before too much in attorneys’ fees has been incurred) for a relatively modest sum (or even no money at all) while also including a mechanism by which any breach of the settlement agreement triggers the filing of an agreed judgment for a large sum of money.

A recent Ninth Circuit decision, In Re Richard L. Priddis, 2023 WL 2203562 (9th Cir. 2023) (Unpub.), highlights an under-examined issue with those judgments – specifically, the ability of the judgment holders to enforce them via involuntary bankruptcy when there are multiple plaintiffs/claimants.

Too Good a Deal? JC Penny Hit with Class Action Suit Over False Reference Pricing

By Marisol Mork and Eleanor Hagan on March 6, 2023 Posted in Advertising, Consumer Law, e-Commerce, Internet, Social Media, Technology, US

Competition in the world of online sales is intense, but companies that used inflated original prices to lure customers face consequences.

JC Penny, for example, has been hit with a class action lawsuit in the Southern District of California over its alleged advertising practice of using “false reference pricing.” The three-count complaint claims the nationwide retailer violated California’s Unfair Competition Laws, False Advertising Laws, and Consumer Legal Remedies Act because of its supposed sale pricing practices. Do the claims have merit?

The plaintiff, Maria Carranza, contends that JC Penny is engaging in a scheme to fabricate false “original” (or “reference”) prices before offering products for sale at a supposed “discount.” Carranza claims that JC Penny falsely advertises its products on its e-commerce website by listing a high reference price and the corresponding sale price. The issue? The products, Carranza claims, were never sold at the listed reference price as advertised. Rather, as stated in the Complaint, the “original” prices are “false or severely outdated reference prices, utilized only to perpetuate Defendant’s false discount scheme.” JC Penny faced a similar “price anchoring” class action suit in 2015. Part of that proposed settlement provided for “improvements” to the retailer’s price comparison advertising policies and practices, including “periodic monitoring and training programs” designed to ensure compliance with California’s advertising laws.

Beware Trademark Squatters: The New Draft of the Chinese Trademark Amendment Aims at You!

By Paolo Beconcini on February 27, 2023 Posted in China, Trade Mark, Trademarks

Is this the time we can really see a change in the fight against Chinese trademark squatters, or are we just adding burdens to legitimate right holders?

The China National Intellectual Property Association (CNIPA) has recently published a draft amendment to the Chinese Trademark Law. The document is still under examination and has been disclosed to the public for comments. If adopted in its current version and without further modifications, this amendment would have a considerable impact on many aspects of trademark law and practice in China. One of those aspects is the never-ending fight against trademark squatters.

Trademark squatters are Chinese individuals or companies that hoard the trademarks of others without their consent. Relying on the online database of the Chinese IPO (online since 2005) and the first-to-file principle where prior use does not grant trademark rights in China and the first-to-file wins the right, they have built a huge industry based on theft and blackmail. Various attempts have been made in the past versions of the Chinese Trademark law to reduce the impact of this phenomenon. Among them are: the recognition of trademark hoarding as a ground for invalidation, the non-use of the stolen mark as a defense against possible trolling, the increase of recognition of bad faith in opposition proceedings, just to name the most relevant. However, none of them was able to reduce the level of squatted filings.

Now, with this amendment, the CNIPA seems to take a closer aim at trademark squatting by introducing revolutionary legal concepts in the trademark filing and maintenance process, such as actual or imminent use at the time of filing an application and proof of use to maintain a registration.