DON’T FORGET ABOUT THE WEBSITE

Sometimes, companies spend significant resources trying to develop a particular theme for an advertising campaign while ignoring even more egregious claims being made on their website.  So how does this happen? There is a disconnect between Legal and Marketing.

Legal might approve a particular ad and then Marketing decides that it can use a portion of it in another context because it has been “cleared.”  The problem is that ads are vetted based on the “net impression” that is made on consumers.  As such, taking a claim out of the context of the particular ad can cause an issue.

Often, companies list customer testimonials on their website, which contain atypical performance-related claims. They think that since they are truthful, there isn’t any sort of liability, which is untrue.  Indeed, the performance claims (e.g., saved $1000) may be even more aggressive than the claims being vetted for use in the primary ad campaign. 

Disclaimers are another area of concern. While certain disclaimers may have been approved for use in print advertising, they may not be effective when presented online because consumers can’t see them. 

Simply stated, one size does not fit all when it comes to advertising. As such, companies should take a holistic approach to ensure that claims are being properly presented in all respective media.

NO NEWS IS STILL WORTHY OF AN UPDATE

Lawyers like to have many clients. However, dealing with so many different problems, lawyers sometimes fail to realize the impact that an issue has on a particular client. 

It is like going to the doctor and awaiting test results. You want your doctor to be as concerned about receiving your results as you are. If it is a Friday afternoon, you want your doctor to call you and let you know that s/he is on top of the issue even if there is nothing new to report before you head into the weekend.

It is the same with the law. Clients want to know that you are on top of their issue even when there is new nothing to report. Providing periodic updates will assure clients that you have not forgotten about their issue and will help to ease their anxiety.  And while it is up to you, you might want to provide these non-material updates on a non-billable basis. The goal is to maintain a long-term relationship, not to nickel and dime clients. So, remember that sometimes “no news” is still worthy of an update. Your clients will thank you.

WHAT LAW SCHOOLS DON’T TEACH YOU

I was the first person in my family to become a lawyer so everything was new to me. While law school taught me how to write a brief, it failed to prepare me for law firm life. 

In the past 25 years, I’ve made a lot of mistakes.  However, as a result of these mistakes, I’ve developed a laundry list of lessons, which I will share in the upcoming weeks. Hopefully, they will help you as you navigate your law career.  There are a lot of great lawyers out there competing for work. There are few trusted advisors.

ALL NDAs ARE NOT CREATED EQUAL

Experienced attorneys have learned this lesson the hard way. There is not a “one size fits” all non-disclosure agreement. The language depends on the circumstances. Are you the party disclosing the information or receiving it? If you are disclosing the information, you’ll want to be sure that it captures all of the information and has convenient remedies if there is a breach.

Conversely, if you are receiving confidential information, you’ll want to make sure that the disclosing party clearly marks all “confidential” information so that there is no confusion in the event of a dispute.  This means that if information is orally conveyed, it should be followed up with a written confirmation that memorializes the discussion as “confidential.”

Similarly, the receiving party will want to make sure that it protects its ability to continue to use information already in its possession or learned from another source. As such, there should be carve outs expressly pertaining to these issues.  If you are the disclosing party, you may want to require that the receiving party have prior written evidence of its possession of such information.  However, if you are the receiving party, you may view this as being too onerous, especially if your company is not great about maintaining historical records.

In the patent context, an often overlooked area pertains to “improvements” to the disclosed technology. Technically, whoever invents the “improvement” is the owner. However, the discloser can certainly take the position that but for its disclosure, the improvement would have never happened and as such, it should own any improvements.

In short, there are many potential traps associated with NDAs and enclosed are just a few.  As they don’t need to be too lengthy, NDAs are often overlooked and quickly signed. However, they can be an extremely important tool to protect a company’s rights and as such, should be carefully tailored to meet a company’s needs. Beware. One NDA may not be adequate for all situations.

PATENT PROSECUTORS BEWARE: YOUR BILLS COULD COME BACK TO HAUNT YOU

Not much time is devoted to training lawyers how to record their time. It rarely becomes an issue in litigation so not much thought is given to it until creative litigation counsel pushes the issue.  Last week, a Court in California issued a discovery order seeking the patent prosecutor’s invoices in connection with the opposing party’s patent prosecution laches and inequitable conduct claims.  The Court held that the non-privileged aspects of the patent attorney’s invoices could be relevant as to “when each particular prosecution matter was opened, how long it took between the initial opening and when the application was first filed, what activities occurred during prosecution of each application, when each activity occurred, and how much time was spent on the activity.”  Equally disturbing, the Court found that the amount of annual compensation received by the patent attorney for prosecuting the patents-at-issue was discoverable in connection with the “specific intent to deceive” aspect of the asserted inequitable conduct claim.  The Court also noted that the amount of annual compensation could be relevant to the patent attorney’s credibility. 

Recording time is a daily task that has fallen under the radar for most firms. This case may be an anomaly, but patent prosecutors should take notice.  Most lawyers merely assume that their bills will never make their way into court.  However, in this case, various time entries could create some issues.

WHAT DOES IT TAKE TO FILE A COPYRIGHT CASE?

A perplexing question for litigators is whether copyright owners need to receive their registration before suing. In certain jurisdictions, they could file as long as they had an application on file. In others, they had to wait until a registration issued or action was taken on the application. Finally, the Supreme Court will resolve this looming issue as it agreed to hear the issue in the case of Fourth Estate Public Benefit Corp. v. Wall-Street.com LLC.

END OF AN ERA FOR TEXAS? SUPREME COURT RULES ON PATENT VENUE

Today, in the long-awaited case of TC Heartland v. Kraft Foods Group Brands, the US Supreme Court unanimously determined where a   domestic corporation “resides” for purposes of establishing proper venue in patent cases.  In short, a domestic corporation “resides” only in its State of incorporation. 

Why is this relevant? And will this have any effect on patent infringement cases going forward?

For years, if it could be shown that a company was subject to personal jurisdiction in that district, then it “resided” in that district and venue was proper.  As such, many plaintiffs brought cases in pro-plaintiff jurisdictions, like Marshall, TX, even though defendants’ principal places of business were elsewhere. 

Going forward, in patent infringement lawsuits, there will be two choices to bring cases: (1) where the US defendant is incorporated or (2) where “the [US] defendant has committed acts of infringement and has a regular and established place of business.” 28 U.S.C.§ 1400(b)(emphasis added).  The focus may now shift to where companies have their “regular and established place of business.”  States, like Delaware (where many companies are incorporated) or California and New York (where companies have established businesses), could become the new forums of choice.

Akamai Lesson: Craft Claims For Single Party Infringement

By now, you have undoubtedly received ten thousand E-mails informing you of the Federal Circuit’s recent decision in Akamai Technologies, Inc. v. Limelight Networks, Inc. in which the Court continued to wrestle with the notion of divided infringement under 35 U.S.C.§ 271.   In short, the Court refused to extend a new joint tortfeasor approach to direct infringement under 35 U.S.C. § 271(a), noting that to do so would make the other indirect infringement provisions of §§ 271(b) and (c) redundant.  Instead, the Court reiterated that for direct infringement under §271(a) to occur, all steps of a method claim must be performed by or attributable to a single entity.   

When can the combined acts of multiple parties be “attributed” to a single party?  Yet again, the Court pointed to a “mastermind” theory in which one party exercises “direction or control” over the entire process to the point that every step is attributable to the controlling party. 

The Court also outlined when vicarious liability might trigger direct infringement under §271(a): (1) principal-agent relationships; (2) contractual relationships; and (3) joint enterprises.  The most interesting was “joint enterprise,” which occurs when there is an agreement between members sharing a “community of pecuniary interest” in a “common purpose,” with each having an “equal right to voice direction of the enterprise,” thereby giving “equal right of control.”  What’s important to note is that none of these scenarios involved arms-length seller-customer relationships. 

Since the Supreme Court last decided Akamai, the safest bet for patent prosecutors has been to craft claims to capture infringing activity by a single party. The Federal Circuit’s comments that “the claim drafter is the least cost avoider of the problem of unenforceable patents due to joint infringement” only reinforce this approach. Claiming the acts of your customers is rarely beneficial and, in light of the Federal Circuit’s recent decision, will not make your infringement case any easier.

Chances Were Slim to None: Shapewear Claims Fall Short

Just when you thought that you heard it all, the FTC announced yesterday that it settled with marketers of caffeine-infused “shapewear” over unsubstantiated weight loss claims.  According to the FTC, marketers urged consumers to wear a fabric that was allegedly infused with, among other things, caffeine for metabolizing fat.  The caffeine was supposed to dehydrate fat cells, making the wearer appear slimmer and firmer.  Claims like “[t]ake up to 2” off hips,” “[i]nstant trimming when you wear them,” and “works with your body to eliminate cellulite” came under attack by the Commission. The FTC was critical of the studies that had been offered as alleged substantiation.  Besides being uncontrolled and unblinded, the studies revealed average reported hip reductions of less than of fractions of an inch. Outlier results were not persuasive.  In the end, the companies entered into proposed Consent Orders requiring over $1.5 million to be refunded to consumers. Once again, companies have been pursued when the Commission felt that they distorted results and made outlandish claims.  Consumers continue to search for quick fixes for weight loss and the FTC continues to hold companies accountable.  This sector has been a priority for the Commission for years due to the inherent health-related concerns associated with specious weight loss claims. Any company operating in this domain should err on the side of caution in its advertising.

Copyright Office Does Not Monkey Around

Selfies (self-portrait photographs) appear daily on the Internet. However, you don’t often see them taken by a monkey. There has been a lot of recent press about the ownership rights associated with a macaque monkey’s “selfie” created with a British photographer’s camera.  The monkey allegedly swiped the photographer’s camera back in 2011 while he was trekking in an Indonesian forest.  Wikimedia Commons got a hold of the photo and made it available for free, public use.  Arguing that the monkey was akin to his assistant, the photographer claimed that the photo had been misappropriated and that he had lost tens of thousands of dollars in revenue associated with this photograph that went viral. Rarely does the government react so quickly to resolve private disputes, but on Tuesday, the U.S. Copyright Office updated its Compendium of U.S. Copyright Office Practices and addressed this very issue.  The Office clarified that it “will not register works product by nature, animals or plants. . . Examples: A photograph taken by a monkey….”  In case there was any doubt, “[a] mural painted by an elephant” is also not protected. While it’s generally not advisable to take someone else’s work, for now, the works of the animal kingdom are fair game.