United States: Intellectual Property Quarterly Newsletter, September 2007

As we have previously chronicled, the defense of inequitable conduct has been reinvigorated by recent Federal Circuit case law bringing a new vitality to an affirmative defense it previously discouraged as a "plague." In the latest development on this front, McKesson Info. Solutions, Inc. v. Bridge Medical Inc., the Federal Circuit underscored that this sea change in approach is comprehensive, broadly applicable to all aspects of the duty of candor owed to the PTO, and is not contingent on when the conduct at issue occurred. The apparent new regime regarding unenforceability counsels patent litigators and practitioners alike to conform their practices to a more creative outlook on the duty of disclosure.

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Discovering that your trademark registrations are vulnerable to cancellation because they may have been fraudulently obtained is disconcerting, to say the least, but discovering these vulnerabilities in the midst of litigation can be downright disastrous. Yet, this is exactly what is happening with increasing consistency as a result of a string of recent rulings by the PTO’s Trademark Trial and Appeal Board.

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In the last five years, the preemption doctrine of the Uniform Trade Secrets Act (the "UTSA") has become a force to be reckoned with in cases alleging theft of confidential business information. Reported cases addressing UTSA preemption were as scarce as hens’ teeth in the decade following the 1985 adoption of the Uniform Act. A quick Westlaw search revealed 8 reported decisions nationwide between 1985 and 1995. In contrast, there have been approximately 20 reported cases in the last 6 months alone.

This groundswell of judicial activity is no accident. A fundamental disagreement has emerged over the extent to which the UTSA displaces common law and statutory causes of action based upon theft of confidential information.

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eBay Scorecard

by Angela Rella

On May 15, 2006, the Supreme Court changed the landscape of patent cases by striking down the Federal Circuit’s long-standing rule that courts will issue permanent injunctions against patent infringement absent exceptional circumstances and holding that "the traditional four-factor framework that governs the award of injunctive relief" applies to patent cases. eBay Inc. v. MercExchange, L.L.C., 126 S. Ct. 1837, 1841 (2006) ("eBay"). The Supreme Court stated that "the decision whether to grant or deny injunctive relief rests within the equitable discretion of the district courts, and that such discretion must be exercised consistent with the traditional principles of equity, in patent disputes no less than in other cases governed by such standards." Id.

We began tracking courts’ application of eBay in the Spring 2007 inaugural edition of our Intellectual Property Quarterly Newsletter. The second installment of our "eBay Scorecard" tracks the application of such discretion by the district courts, and the review for abuse of that discretion by the Federal Circuit, through June 30, 2007. We hope you find this summary helpful.

*Click here for the list of cases that make up this chart.

The summer awards season has been particularly fruitful for Morrison & Foerster’s Intellectual Property practice. Due to its consistently cutting-edge work, the Intellectual Property practice was recently honored with the following awards:

• National Law Journal

  Defense Hot List

  Award highlights Eastern District of Texas defense victory in Forgent v. EchoStar patent infringement jury trial

• Chambers USA

  Band One: National Leading Law Firm

  Top ranking for the Intellectual Property practice and Life Sciences practice

The Board of Patent Appeals and Interference issued a decision on May 18 granting the motions of Morrison & Foerster client Eiken Chemical Co., Ltd., to deprive Enzo Biochem of its standing as the senior party (first party to file) in an interference involving DNA amplification technology. The result of this decision is to require Enzo to go back over four years from the filing date the Board’s decision gives it in order to show priority of invention. Barry Bretschneider and Peter Davis, with substantial assistance from Takamitsu Fujiu, Laura Santana, and Shantanu Basu, handled the motions for Eiken.

Making this summer’s biggest news, a team of Morrison & Foerster attorneys and their co-counsel won dismissal of a patent infringement case brought against client EchoStar Communication Corp. after a Texas jury took just over an hour to find the plaintiff’s patent invalid. It was only the second time on record that a jury in the Eastern District of Texas had handed down a defense win in a patent case by finding the patent at issue invalid. The unanimous verdict by the eight-person jury was returned in Tyler, Texas, under U.S. District Judge Leonard Davis. Plaintiff Forgent Networks, of Austin, Texas, a patent-holding company, sued major satellite and cable TV companies, including EchoStar, in 2005, claiming that their use of DVR (digital video recorder) technology infringed on a 2001 Forgent patent. All of the major cable operators settled with Forgent a few weeks before trial for $20 million dollars. Satellite TV rival DirectTV reached its own settlement with Forgent just prior to trial for an estimated $8 million. EchoStar decided to fight Forgent’s claims, which exceeded $205 million in alleged damages. Rachel Krevans, a litigation partner in Morrison & Foerster’s San Francisco office who led the trial team together with Otis Carroll of the Tyler, Texas, firm of Ireland, Carroll & Kelley, P.C., said EchoStar did not dispute infringement at trial, but instead argued that Forgent’s patent was invalid. In addition to Ms. Krevans, the Morrison & Foerster attorneys representing EchoStar included Charles Barquist, a litigation partner in the firm’s Los Angeles office; San Francisco litigation partner Jason Crotty; and Scott Llewellyn, a Denver-based litigation partner.

This summer has also been a busy time at Morrison & Foerster for new plaintiff-side patent litigation cases filed in the Eastern District of Texas.

In April, the firm filed a patent infringement lawsuit (Hitachi Plasma Patent Licensing v. LG Electronics, et al.) on behalf of Hitachi against its rival LG Electronics, Inc. Hitachi contends defendants are willfully infringing seven patents covering a range of plasma display features, including full-color surface discharge technology and methods for driving a flat panel. Hitachi is seeking injunctive relief and damages. Leading the trial team are Morrison & Foerster partners Andrew Monach, in the San Francisco office; James Hough, in the New York office; and Alex Chartove, in the Northern Virginia office. Rounding out the litigation team are associates Shane Brun and Francis Ho in the San Francisco office; Rachel Quitkin in the New York office; and Curtis Lowry in the Tokyo office.

More recently, representing Sharp Corp., the firm filed a patent infringement suit (Sharp Corp. v. Samsung Electronics Co. Ltd., et al.) against Samsung and two of its subsidiaries. In the complaint, Sharp alleges direct and indirect infringement of five patents relating to liquid crystal display technology. Barry Bretschneider and A.C. Johnston, partners in the Northern Virginia and Washington D.C. offices, respectively, are leading the trial team. The Washington D.C. team includes Priya Viswanath, associate, while the Northern Virginia team includes Deborah Gladstein, of counsel, and associate Michael Anderson

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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