Justia Patents Opinion Summaries

Articles Posted in Business Law
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Glaxo Group Limited and Human Genome Sciences, Inc. (collectively, “GSK”) owned patents covering Benlysta, a lupus treatment drug. GSK filed a patent application with the United States Patent and Trademark Office (“PTO”) claiming a method for treating lupus. Biogen Idec MA Inc. (“Biogen”) held an issued patent covering a similar method for treating lupus. When parties dispute who was first to discover an invention, the PTO declares an interference. Rather than suffer the delay and uncertainty of an interference proceeding, the parties agreed to settle their differences through a patent license and settlement agreement (“Agreement”). GSK ended up with its issued patent. The PTO cancelled Biogen’s patent, and Biogen received upfront and milestone payments and ongoing royalties for Benlysta sales. Under the Agreement GSK agreed to make royalty payments to Biogen until the expiration of the last “Valid Claim” of certain patents, including the lupus treatment patent. The Agreement defined a Valid Claim as an unexpired patent claim that has not, among other things, been “disclaimed” by GSK. GSK paid Biogen royalties on Benlysta sales. After Biogen assigned the Agreement to DRIT LP - an entity that purchased intellectual property royalty streams - GSK filed a statutory disclaimer that disclaimed the patent and all its claims. GSK notified DRIT that there were no longer any Valid Claims under the Agreement and stopped paying royalties on Benlysta sales. DRIT sued GSK in the Superior Court for breach of contract and breach of the implied covenant of good faith and fair dealing for failing to pay royalties under the Agreement. The court dismissed DRIT’s breach of contract claim but allowed the implied covenant claim to go to a jury trial. The jury found for DRIT, and the court awarded damages. On appeal, GSK argued the superior court should have granted it judgment as a matter of law on the implied covenant claim. On cross-appeal, DRIT claimed that, if the Court reversed the jury verdict on the implied covenant claim, it should reverse the superior court’s ruling dismissing the breach of contract claim. The Delaware Supreme Court found the superior court properly dismissed DRIT’s breach of contract claim, but should have granted GSK judgment as a matter of law on the implied covenant claim. Thus, the superior court's judgment was reversed. View "Glaxo Group Limited, et al. v. DRIT LP" on Justia Law

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Ezaki, a Japanese confectionery company, makes and sells “Pocky,” thin, stick-shaped cookies that are partly coated with chocolate or flavored cream. The end of each is left partly uncoated to serve as a handle. In 1978, Ezaki started selling Pocky in the U.S. and began registering U.S. trademarks and patents. It has two Pocky product configurations registered as trade dresses and has a patent for a “Stick Shaped Snack and Method for Producing the Same.” In 1983, the Lotte confectionery company started making Pepero stick-shaped cookies partly coated in chocolate or flavored cream. Pepero “looks remarkably like Pocky.”In 1993-1995, Ezaki sent letters, notifying Lotte of its registered trade dress and asking it to cease and desist. Ezaki took no further action until 2015, when it sued, alleging trademark infringement and unfair competition, under the Lanham Act, 15 U.S.C. 1114, 1125(a)(1)(A). Under New Jersey law, it alleged trademark infringement and unfair competition. The Third Circuit affirmed summary judgment in favor of Lotte, holding that because Pocky’s product configuration is functional, it is not protected as trade dress. Trade dress is limited to features that identify a product’s source. Patent law protects useful inventions, but trademark law does not. View "Ezaki Gliko Kabushiki Kaisha v. Lotte International America Corp." on Justia Law

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After ATOM filed for bankruptcy, plaintiff and ATOM initiated an adversarial proceeding against Petroleum Analyzer, alleging claims of misappropriation of trade secrets, unfair competition, and civil theft. On the bankruptcy court's recommendation, the district court withdrew the reference to the bankruptcy court and asserted jurisdiction under 28 U.S.C. 1334, and entered partial summary judgment for plaintiff and ATOM. Four years later, the district court held a bench trial and entered judgment in favor of Petroleum Analyzer and later awarded attorneys' fees to Petroleum Analyzer.The Fifth Circuit held that the district court did not clearly err by finding that Petroleum Analyzer did not use plaintiff's trade secrets in Petroleum Analyzer's sulfur-detecting excimer lamp called a MultiTek. Furthermore, the district court did not ignore the "law of the case" doctrine. The court also held that the district court did not err by awarding Petroleum Analyzer attorneys' fees under the Texas Theft Liability Act. The court remanded to allow the district court to make the initial determination and award of appellate attorneys' fees to Petroleum Analyzer. View "ATOM Instrument Corp. v. Petroleum Analyzer Co., LP" on Justia Law

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In this dispute regarding the commercialization of a patent covering a method for pooling insurance policies the Court of Chancery granted Defendants’ motion for judgment on the pleadings in which they argued that they did not owe any of the contractual or fiduciary obligations that Plaintiff sought to enforce, holding that Defendants were entitled to judgment as a matter of law.Plaintiff brought this action asserting claims for breach of contract and breach of fiduciary duties related to Defendants’ business development of a patent-holding entity and Defendants’ failure to provide certain information to Plaintiff. The Court of Chancery granted Defendants’ motion for judgment on the pleadings, thus mooting Plaintiff’s motion to compel and motion for default judgment, holding That Defendants carried their burden to show that Plaintiff could prove no set of facts in support of his claims that would entitle him to relief and that Defendants were entitled to judgment as a matter of law. View "Ross v. Institutional Longevity Assets LLC" on Justia Law

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Maxchief has its principal place of business in China and distributes one of the plastic tables it manufactures (UT-18) exclusively through Meco, which is located in Tennessee. Meco sells the UT-18 tables to retailers. Wok competes with Maxchief in the market for plastic folding tables, and also has its principal place of business in China. Wok owns patents directed to folding tables. Wok sued Maxchief’s customer, Staples, in the Central District of California, alleging that Staples’ sale of Maxchief’s UT-18 table infringed the Wok patents. Staples requested that Meco defend and indemnify Staples. Meco requested that Maxchief defend and indemnify Meco and Staples. The Staples action is stayed pending the outcome of this case. Maxchief then sued Wok in the Eastern District of Tennessee, seeking declarations of non-infringement or invalidity of all claims of the Wok patents and alleging tortious interference with business relations under Tennessee state law. The district court dismissed the declaratory judgment claim for lack of personal jurisdiction. With respect to the state law tortious interference claim, the district court concluded it lacked subject matter jurisdiction. The Federal Circuit affirmed. Wok lacked sufficient contacts with the forum state of Tennessee for personal jurisdiction as to both the declaratory judgment claim and the tortious interference claim. View "Maxchief Investments Ltd. v. Wok & Pan, Ind., Inc." on Justia Law

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TAOS and Intersil were both developing ambient light sensors for electronic devices. Ambient light sensors use a silicon- or other semiconductor-based photodiode that absorbs light and conducts a current. The resulting photocurrent is detected by a sensor, and measurements of the current, a function of the ambient light, are used to adjust the brightness of an electronic screen display. One benefit is better visibility; another is improved battery efficiency. In 2004, the parties confidentially shared technical and financial information during negotiations regarding a possible merger that did not occur. Soon after, Intersil released new sensors with the technical design TAOS had disclosed in the confidential negotiations. TAOS sued for infringement of its patent, and for trade secret misappropriation, breach of contract, and tortious interference with prospective business relations under Texas state law. A jury returned a verdict for TAOS and awarded damages on all four claims. The Federal Circuit affirmed liability for trade secret misappropriation, though on a more limited basis than TAOS presented to the jury, and affirmed liability for infringement of the asserted apparatus claims of the patent, but vacated the monetary awards. The court noted that there was no evidence of Intersil’s independent design of the photodiode array structure. View "Texas Advanced Optoelectronic Solutions, Inc. v. Renesas Electronics America, Inc." on Justia Law

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Alcon Laboratories Holding Corporation, a developer of artificial lenses, was exploring electroactive intraocular lens (“EAIOL”) that used electric power and changes in eye pupil size to “trigger” the focus of an artificial lens. Elenza, Inc. and Alcon decided to jointly pursue the technology, first by signing a Non-Disclosure Agreement (“NDA”), followed by a Stock Purchase Agreement (“SPA”). Unfortunately, the project fizzled after Elenza failed to meet development milestones in the SPA. Much to Elenza’s surprise, two years later, Alcon filed a patent application for an EAIOL and announced that it was working with Google, Inc. to develop an EAIOL. Elenza filed suit in Delaware, claiming Alcon breached its agreements with Elenza and misappropriated Elenza’s EAIOL trade secrets. Before trial, the Superior Court granted in part Alcon’s motion for summary judgment, finding that Elenza failed to support its trade secret claims. The court also limited Elenza’s damage claims. The contract claims went to trial, and a jury found against Elenza on all claims. On appeal, Elenza argued to the Delaware Supreme Court that the Superior Court erred when it granted summary judgment on its trade secret claims. According to Elenza, at the summary judgment stage, its trade secret disclosures were sufficient to prove that trade secrets existed and that Alcon used or disclosed those secrets in its later development efforts. The Supreme Court did not reach Elenza’s claim on appeal that it raised disputed factual issues about the existence of trade secrets because the Court agreed with the Superior Court that, at summary judgment, Elenza failed to support its claim that Alcon improperly used or disclosed any of Elenza’s alleged trade secrets. View "Elenza, Inc. v. Alcon Laboratories Holding Corporation, et al." on Justia Law

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SightSound’s patents disclose methods for sale and distribution of digital audio and video signals, requiring: connection, by telecommunications lines, between a party’s memory and a second party’s memory; selling digital signals to the second party for a fee through telecommunications lines; transmitting the signal from the first memory to the second memory by telecommunications lines; and storing the signal in the second memory. Apple sought covered business method (CBM) review under the America Invents Act, 125 Stat. 284, arguing that claims were invalid as anticipated under 35 U.S.C. 102. The Patent Board determined that the patents are CBM patents because they recite an activity that is “financial in nature,” and do not include novel, non-obvious technological features, then determined that there was a reasonable likelihood that the claims were anticipated or obvious by disclosures relating to a 1980s CompuSonics computer system. The petitions did not specifically allege obviousness over CompuSonics. The Board granted SightSound additional time and authorized sur-replies and new declaration testimony on the issue of obviousness, then rejected SightSound’s contention that the term “second memory” is limited to non-removable media and held seven claims invalid as obvious. The Federal Circuit found that it lacked jurisdiction to review the decision to consider issues not explicitly raised in the petitions, but affirmed that the patents are CBM patents and the final decision with respect to claim construction and obviousness. View "Sightsound Techs., LLC v. Apple Inc." on Justia Law

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Expro Americas, LLC ("Expro") filed a complaint seeking, inter alia, a temporary restraining order and preliminary injunction against Eddie Walters, a former Expro employee, and H&H Welding, LLC. Expro offered "oil and gas well and pipeline services," including providing "specially designed flaring products and services to pipeline transmission companies and refineries along the Gulf Coast." Expro's six-inch, trailer-mounted flare stacks were at the heart of this dispute. Eddie Walters was an Expro employee until August 5, 2013. Thereafter, Walters was employed by Clean Combustion, a competitor of Expro's that was created in 2013 by former Expro employees. Expro filed its application for a restraining order against H&H and Walters, alleging that both defendants stole the design for its flare stack. Expro specifically alleged that "[t]he information used to design and create the trailer-mounted flaring system is a ‘trade secret' of Expro's." Furthermore, it alleged breach of contract against H&H, claiming that the terms of Expro's purchase orders with H&H contained a "Proprietary Rights" section "in which H&H ‘warrants to keep all design, information, blueprints and engineering data with respect to the Goods confidential and to not make use of but to assign to Expro each invention, improvement and discovery relating thereto (whether or not patentable) conceived or reduced to practice in the performance of the Purchase Order by any person employed by or working under the directions of the Supplier Group.'" The trial court granted the restraining order, but after conducting an evidentiary hearing, the chancellor dissolved the temporary restraining order and found no facts to justify the issuance of a preliminary injunction. The chancellor awarded the defendants attorneys' fees and expenses in excess of the $5,000 injunction bond that Expro had posted. After determining that Expro's suit against H&H was meritless, the chancellor sua sponte dismissed H&H from the suit with prejudice. Expro appealed, and the Supreme Court affirmed in part and reversed in part. The Court found that the chancellor did not err by awarding the defendants attorneys' fees and expenses, because Expro's application for a preliminary injunction was frivolous and was made in bad faith. However, the Court found the chancellor misapplied Mississippi Rules of Civil Procedure Rule 4, and therefore erred by dismissing H&H from the suit with prejudice. View "Expro Americas, LLC v. Walters" on Justia Law

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Licensees entered into a licensing agreement with Safeblood Tech for the exclusive rights to market patented technology overseas. After learning that they could not register the patents in other countries, Licensees sued Safeblood for breach of contract and sued Safeblood, its officers, and patent inventor for fraud, constructive fraud, and violations of the Arkansas Deceptive Trade Practices Act (ADTPA), Ark. Code 4-88-101 to -115. The district court dismissed the fraud claims at summary judgment. The remaining claims proceeded to trial and a jury found for Licensees, awarding them $786,000 in contract damages and no damages for violations of the ADTPA. The district court awarded Licensees $144,150.40 in prejudgment interest. The Eighth Circuit reversed as to the common-law fraud claim and the award of prejudgment interest, but otherwise affirmed. Licensees produced sufficient evidence that the inventor made a false statement of fact; the district court did not abuse its discretion when it gave the jury a diminution-in-product-value instruction; and Licensees waived their inconsistent-verdict argument. View "Yazdianpour v. Safeblood Techs., Inc." on Justia Law