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.

2 Technologies That Would Amaze My Grandparents….

Technology is becoming more and more integrated into our daily lives and undoubtedly companies are seeking related IP protection. It was recently reported that Coupons.com has released its KitchMe app, which works in conjunction with Google Glass. Now, cooks can be sent shopping lists and recipes with step-by-step instructions by merely looking at available ingredients in their kitchens.  Technology is certainly converging with our everyday lives. Here’s another head spinner. Yesterday, it was reported that during a press conference, David Marcus, President of PayPal, discussed the issues associated with trying to pay for things in space.  As companies like Virgin and SpaceX are forging ahead to make space tourism a reality, companies are apparently thinking about how to pay for services rendered in space.  Indeed, PayPal is allegedly developing “PayPal Galactic” as a vehicle to buy things while in outer space.  It will be interesting to see how it tries to implement and protect this technology as there are no IP addresses in space.  These advancements are truly amazing.

What’s “Reasonable” Under Section 273?

The America Invents Act significantly expanded the “Prior Use” defense under 35 U.S.C. § 273 to patent infringement.  Prior thereto, the defense was limited to use against claims of business method patents. Now, a litigant may assert this affirmative defense if it commercially used, in good faith, a process, machine, manufacture, or composition of matter that is asserted to infringe the patent-at-issue. While this sounds good on paper, there is a catch. If it is shown that a defendant failed to have a “reasonable” basis for asserting this defense, the “court shall find the case exceptional for the purpose of awarding attorneys’ fees under section 285.”  35 U.S.C. § 273(f)(emphasis added).  The problem is that the Courts have failed to address what “reasonable” means.  Thus, companies facing patent infringement claims must decide whether it’s worth the risk. If they don’t produce enough information to sustain the defense, they might have to pay the patentee’s attorneys’ fees- a remedy generally available only in instances of willful infringement.

How Will Free Trade With South Korea Impact IP?

Yesterday, it was reported that Congress passed free trade agreements with South Korea, Panama and Columbia.  The agreements are suppose to, among other things, significantly remove duties and phase out tariffs on various U.S. exports.  However, it has also been reported that there are provisions affecting intellectual property law, which must be ratified by the Korean National Assembly.  I agree with Professor’s Crouch’s assessment that this appears to be another step toward harmonizing worldwide patent practice.  As there will be more incentives for U.S. companies to send products to South Korea, it will be interesting to see if there will be an increase in South Korean patent filings.    

The Party’s Over: Fee Hike At USPTO

Each time that I traveled to Asia on business over the last seven years, I was asked as to when the world might expect U.S. patent reform. Well, it’s finally here.  You cannot look at a paper or a blog without some reference to the America Invents Act being signed into law last Friday. One of the more immediate implications of this law was to give the USPTO fee-setting authority.  As such, there will be a 15 percent surcharge on certain patent fees, effective Monday, September 26, 2011.  There is also a newly established “micro-entity” rate that should be reviewed.  All in all, we haven’t seen a rate hike in about three years from the USPTO so it’s better than most industries.

Has The Fat Lady Sung? Is Patent Reform Imminent?

For years, the U.S. has talked about substantially overhauling U.S. patent law so that it conforms with how most of the rest of the world approaches patent rights. Now, it might become a reality. Yesterday, the Senate overwhelmingly passed patent reform legislation, which if signed, will have the greatest effect on patent law in the last fifty years.  See Patently-O’s recent post for a good overview of the legislation. It has been reported that the President is likely to sign the Smith-Leahy America Invents Act into law in the next few days.  The most significant change will be to move from a first-to-invent country toward a first-to-file country.  This change will greatly affect U.S. practitioners’ patent procurement and litigation strategies.  See http://www.patentlyo.com/patentreformbillaspassed.pdf for the language of the Act.

You Can’t Judge A Patent By Its Cover….

We’ve all heard the phrase, “You can’t judge a book by its cover.”  Well, this adage is especially true when looking at an issued patent as there may be valuable information that is not reflected on its face. First, printing errors can occur. Late amendments to the claims of the patent (which define the scope of the protected invention) may not make it into the final version of the patent.  Thus, the claims that you are looking at may appear broader than they actually are.  This is especially important to know when evaluating potential non-infringement positions. Second, the applicant may have given up significant ground to get its patent granted, which is not necessarily reflected in the patent.  For example, the applicant may have distinguished its invention over a prior art system.  This could have been done by making claim amendments and arguing their narrow meaning, or by otherwise convincing the U.S. Patent and Trademark Office Examiner that no amendments were necessary because the claims (as written) were sufficiently narrow to get around the prior art.  Why is this relevant you ask?  Because your company may be practicing a technology that is similar to what the applicant distinguished. In the end, while you should start with the patent, you should read the back and forth correspondence with the U.S. Patent and Trademark Office (known as the “patent prosecution history”) as mistakes can happen and the scope of the patent may not always be as it appears on its face.