Amongst the many issues faced by developing countries to ensure access to medicines, cost is a primary one. Proposals to tackle it include limiting the price and regulating competitive conditions. Monopolies created by patents are seen by many as an im…Continue Reading ...
Karin Seegert studied pharmacy and received her PhD from the University of Munich in 1985. Following several years working in R&D in industry, she joined the EPO in 1991. During her time at the EPO, she has worked as Examiner and then beginning in 2002 as Director in the pharmaceutical area and as Director in Patent Administration. In 2010, Karin became Principal Director with responsibility for various technical fields, mainly in Electro Physics and Chemistry, before being appointed as…
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This case initially did involve patent infringement, but a large
part of this CAFC opinion relates to trade secrets:
sued Intersil in federal district court for infringement of
U.S. Patent No. 6,596,981, as well as for trade secret
misappropriation, breach of contract, and tortious interference
with prospective business relations under Texas
state law. After a trial held in early 2015, a jury returned
a verdict for TAOS and awarded damages on all four
claims. The court ruled on the parties’ post-trial motions
and entered final judgment, and both parties appealed
Although the CAFC found one ground of liability for trade secret misappropriation,
the damages award was vacated because
there was no evidence of “how much” the award should be on this one ground:
The monetary award for trade secret misappropriation
must be vacated because we have determined that
misappropriation liability here can properly rest on only
one of the three grounds that TAOS presented to the jury.
TAOS’s calculation of monetary relief did not distinguish
among those grounds. TAOS’s expert testified that the
“trade secrets [were] the – the drivers of sales.”
J.A. 21137–38. But he did not explain which of the trade
secrets contributed to what amount of profit to be disgorged;
he assigned all profits to the misappropriation of
all trade secrets. On this record, we have no basis to
conclude that the remaining ground for liability—the
photodiode structure trade secret—supports the entire
award. This is one reason for vacating the award.
There is a second, independent reason. As to the loss
of trade secret status, the unrebutted evidence at trial
showed that TAOS’s 1:1 interleaved photodiode array was
accessible to Intersil by proper means long before the time
of many of the sales included in TAOS’s request for mone-
tary relief. Such accessibility existed no later than January
2006, when Intersil successfully reverse-engineered
the TSL2560, and perhaps as early as February 2005,
when TAOS “released” the TSL2560.8 We need not pinpoint
the date to know that it predated many of the sales
included in the calculation of monetary relief put before
the jury by TAOS’s expert.
Accessibility by proper means rendered the photodiode
array structure no longer a protected secret. See E.I.
duPont deNemours & Co. v. Christopher, 431 F.2d 1012,
1015 (5th Cir. 1970) (“[T]he Texas rule is clear” that
“[o]ne may use his competitor’s secret process if he discovers
the process by reverse engineering applied to the
finished product.”). Secrecy protection terminated at the
end of the period of time it would have taken Intersil,
after Intersil’s permissible discovery of the photodiode
structure, to recreate that structure in its own products.
See Research Equip. Co. v. C. H. Galloway & Sci. Cages,
Inc., 485 S.W.2d 953, 956 (Tex. Civ. App. 1972) (explaining
that “the trial court was called upon to determine that
period of time which would have been required for one
having no background in the cage manufacturing business
to launch such an enterprise”); see also Injunction Order,
2016 WL 1615741, at *3 (in denying TAOS’s motion for an
injunction based on the misappropriation, the trial court
acknowledged that “[w]hatever potential ‘head start’
[Intersil] may have gained from its misappropriation of
[TAOS]’s trade secrets occurred years ago and has no
bearing on any future harm”).
For those reasons, we vacate the jury’s monetary
award for misappropriation of trade secrets. On remand,
any determination of sales-based monetary relief for trade
secret misappropriation requires evidence and a determination
of the time at which the trade secret became
properly accessible to Intersil and the duration of any
Of 7th Amendment/equity issues:
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TAOS does not dispute Intersil’s premise that Intersil
had a right to a non-jury decision on disgorgement unless
TAOS had a Seventh Amendment right to a jury decision
on disgorgement. We therefore proceed on that premise.
The parties debate whether TAOS has a Seventh
Amendment right to a jury decision on its request for
disgorgement of Intersil’s profits. We conclude that TAOS
does not have such a right, and we therefore vacate the
disgorgement award on this ground as well. Intersil is
entitled to a decision on disgorgement by the trial court,
with findings of fact and conclusions of law duly entered
in accordance with Rule 52.
In Recalibrating Patent Venue, Colleen Chien and I did a nationwide study of forum shopping in patent cases (shocker – everybody did it, and not just in Texas), and predicted that many patent cases would shift from the Eastern District to the District of Delaware. And, lo, it has come to pass. Delaware is super busy. This has been good for us at Villanova (only 30 miles away from the court), as our students are getting some great patent experience in externships and internships.
But how much did firms value not being sued in Texas? The TC Heartland case is a clear shock event, so an event study can measure this. In Will Delaware Be Different? An Empirical Study of TC Heartland and the Shift to Defendant Choice of Venue, Ofer Eldar (Duke Law) and Neel Sukhatme (Georgetown Law) examine this question. The article is forthcoming in Cornell Law Review and a draft is on SSRN. Here is the abstract:
Why do some venues evolve into litigation havens while others do not? Venues might compete for litigation for various reasons, such as enhancing their judges’ prestige and increasing revenues for the local bar. This competition is framed by the party that chooses the venue. Whether plaintiffs or defendants primarily choose venue is crucial because, we argue, the two scenarios are not symmetrical.
The Supreme Court’s recent decision in TC Heartland v. Kraft Foods illustrates this dynamic. There, the Court effectively shifted venue choice in many patent infringement cases from plaintiffs to corporate defendants. We use TC Heartland to empirically measure the impact of this shift using an event study, which measures how the stock market reacted to the decision. We find that likely targets of “patent trolls”— entities that own and assert patented inventions but do not otherwise use them—saw their company valuations increase the most due to TC Heartland. This effect is particularly pronounced for Delaware-incorporated firms. Our results match litigation trends since TC Heartland, as new cases have dramatically shifted to the District of Delaware from the Eastern District of Texas, previously the most popular venue for infringement actions.
Why do investors believe Delaware will do better than Texas in curbing patent troll litigation? Unlike Texas, Delaware’s economy depends on attracting large businesses that pay high incorporation fees; it is thus less likely to encourage disruptive litigation and jeopardize its privileged position in corporate law. More broadly, we explain why giving defendants more control over venue can counterbalance judges’ incentives to increase their influence by encouraging excessive litigation. Drawing on Delaware’s approach to corporate litigation and bankruptcy proceedings, we argue that Delaware will compete for patent litigation through an expert judiciary and well- developed case law that balances both patentee and defendant interests.
As I discuss below, I have a like/dislike reaction to this paper.
I like the empirical setup – comparing companies that will be sued in Texas with those that will be sued in Delaware and with those that will be sued outside of Delaware (because they are incorporated elsewhere). The most robust results are that being sued anywhere else increased value, though there are some barely significant results that firms did even better in Delaware. This was interesting and useful.
But I dislike event studies generally, for a variety of reasons. The big issue here is uncertainty about how districts will change behavior in the long term. Thus, there is no way the authors could have waited for a correction (they note this, of course). But this means (which they also note) that this is a market prediction about firm value from not being sued in Texas – but that tells us very little about the actual impact of actual litigation or changes in the future. It may be that Delaware is already perceived as better than Texas, or it could be that the market is simply wrong about the cost of being in Texas.
I like the theoretical setup – that Delaware has attracted incorporation through its court behavior and laws, and using bankruptcy as an example. This adds a lot, though the empirical results only weakly support the theory (in a predictive sense) from a patent point of view. But the thought that Delaware will move to be pro-defendant (or at least less pro-plaintiff in their view) is an area for explanation.
But I dislike the theoretical conclusions. I believe the paper relies too heavily on the “forum selling” motif without critical analysis. There is at least one article (Colleen’s and mine) that discusses other reasons why local scheduling winds up looking bad for defendants, such as congestion. Of course, we discuss selling as well, but we make the explicit point that the jury is out as to whether Delaware will be so friendly once the volume of cases doubles with its only four judges.
To that end, one would think that Delaware always had this pro-defendant (or balanced) approach if we buy the forum selling theory. But then why did so many plaintiffs (including NPEs) sue there even before TC Heartland? Doesn’t that seriously crimp either a) a selling theory, or b) a post-TC Heartland change?
But I do like their further discussion of this about a two-stage venue selection game: 1) select where to incorporate or have facilities, and 2) select where to sue. This would be an interesting theoretical paper in the future, or even something to be tested. I wonder whether Delaware’s incentives to treat plaintiffs/defendants a certain way will have much of an effect if the result is plaintiffs suing in other districts (which will often not have very helpful scheduling rules).
In the end, none of these are answered by the interesting empirical results. So, while I like the empirical analysis, I dislike that the analysis is not tied to the conclusions in a meaningful way.
That didn’t take long! U.S. Patent No. 10,000,000 just issued June 19, 2018, and already a patent in the 10 million series is being enforced. On July 3, 2017, the day the patent issued, Whirlpool Corporation filed a patent infringement lawsuit in the U…Continue Reading ...
In Impax Laboratories Inc. v. Lannett Holdings Inc., the Federal Circuit upheld the district court decision finding that defendants had failed to establish obviousness of AstraZeneca’s Zomig patents (directed to intranasal zolmitriptan formulations). Although an asserted reference could have been read to suggest an intranasal composition of zolmitriptan, both the district court and the Federal…… Continue reading this entryContinue Reading ...
By Donald Zuhn — In a memorandum distributed to the patent examining corps last month by Robert W. Bahr, Deputy Commissioner for Patent Examination Policy at the U.S. Patent and Trademark Office, the Office addresses a recent decision by the Federal C…Continue Reading ...
$$ After 7 hours polymerisations were terminated by cooling. / ７時間後、冷却によって重合を終了させた。(USPA03013822)
$$ The cups are removed after 24 hours, allowed to cool for 20 minutes and re-weighed. / ２４時間後カップを取り除き、２０分間冷却し再秤量する。(USP5968000): afer
$$ After 4 hours with occasional stirring, ninhydrin tests indicated that the couplings was complete. / 時々攪拌しながら４時間後、ニンヒドリン検査は、結合が完了したことを示した。(USP6797699)
$$ Thus the cylinder head shut off valve is opened after screw rotate and the entire flow channel and hot runner pressurised to injection pressure. / かくして、スクリューの回転後にシリンダヘッド遮断バルブが開き、流路全体とホットランナーが射出圧力まで加圧される。(USP6287494)
$$ The resulting mixture is stirred for 2 hours and then filtered, after which it is washed (dimethylformamide, methanol, dichloromethane) and then dried in vacuo. / その結果生じた混合物を２時間攪拌し、次に濾過した後、洗浄（ジメチルホルムアミド、メタノール、ジクロロメタン）し、その後真空乾燥する。(USP6797699)
$$ The mixture was then stirred for 1 hour after which it was filtered and washed (dimethylformamide, methanol, dichloromethane) and then dried in vacuo. / 次に混合物を１時間攪拌し、その後濾過して、洗浄（ジメチルホルムアミド、メタノール、ジクロロメタン）し、次に真空乾燥した。(USP6797699)
$$ Thereafter the device may be used as a conventional pen injection device. / この後において、注射装置は、従来のペン型注射装置として使用することができる。(USP8167874)
$$ Thereafter, event numbers 13856, 14024, 15752 and 14831 were events evoking call type A. / その後、イベント番号13856,14024,15752 および14831 は、タイプＡの呼を生じるイベントであった。(USP6182079)
$$ Again, an alternative embodiment has a single decoder buffer followed by N decoder sub-loops. / この場合にも、別の実施例として、Ｎ個の復号器サブループがその後に続く単一の復号器バッファを備えたものがある。(USP5856847)
$$ A minor load of 1g was applied initially and this was followed by the application of a major load of 300g for 10 seconds. / はじめに１ｇの小荷重が加えられ、その後３００ｇの大荷重を１０秒間加えた。(USP6313192)
$$ Then, a further layer of carbon is placed inside this "cup", to be followed by a further "cup", more carbon, and so on. / 次に、更なる炭素層をこの「カップ」内に配置し、その後、更なる「カップ」を滑り込ませ、また、別の炭素を入れる等々する。(USP6098417)
$$ Following complete release and dissolution, a further plateau in the detected concentration will be reached. / 完全に放出され、溶解した後、更にその平坦な検出濃度に到達するであろう。(USP8141409)
$$ Following filtration under pressure, nanoparticles 3 may then be collected. / 加圧濾過後、ナノ粒子３を回収することができる。(USP7566436)
$$ The multiplier 6 operates to provide an output signal M of E.D*N+O which, because of the multiplier’s three stage pipeline appears 3 time steps later, at time step 4. / 乗算器６ではＥ．ＤN+0*の出力信号Ｍを供給する。これは、三つの時間ステップ後の時間ステップ４で乗算器の三段パイプライン処理が行われるからである。(USP5987485)
$$ FIG. 9 shows the allocation of a row of spot beams 51 in the beam pattern of a satellite 4a to groups of regions 52 at time To and at a later time T1. / 図９は、時刻Ｔ0及び後の時刻Ｔ1における、衛星４ａのビームパターン中の一列のスポットビーム５１の複数区域５２への割当てを示している。(USPA01046481)
$$ Diffusive transfer takes place across the interface, and subsequently the fluids flow away from the region without mixing. / 拡散移動は界面を横切って起こり、その後、流体流れは混合することなくその領域から流出する。(USP5961832)
$$ The fibre unit 1 is then pushed through a seal (not shown) which is subsequently positioned within the free end of the blown fibre tubing. / ファイバユニット１は次にシール（図示せず）を貫通して押し込まれる｡シールはその後吹き出しファイバ配管の自由端内に位置決めされる｡(USP5749565)
$$ The resin was then dried in vacuo. / その後、樹脂を真空乾燥した。(USP6797699)
$$ The combined slurry was then evaporated to dryness. / その後、この混合スラリーを乾燥するまで蒸発させた。(USP6855452)
$$ The process fluid passes though conduit 28 before being removed from the reaction vessel via port 18. / プロセス流体は導管２８を通過した後、ポート１８を通じて反応器から取り出される。(USP8056205)
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Three events boosted our economic turnaround in the 1980’s: the passage of Bayh-Dole, which injected the incentives of patent ownership into the federal R&D system; the enactment of the Court of Appeals for the Federal Circuit, which insured the courts would apply the patent law consistently; and the Supreme Court’s ruling in Diamond v Chakraberty that living organisms could be patented. That decision stated that patents could “include anything under the sun that is made by man.” Today…
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Recent Headlines in the IP World:
- Atty. Douglas Clark: NSBA Supports Patent System Reform Measure (Source: Financial Regulation News)
- Sam Sherratt: UC Berkeley to Gain Two US CRISPR Patents (Source: Bio News)
- Dugie Standeford: European Parliament Rejects Starting Negotiations On Copyright Reform Proposal (Source: Intellectual Property Watch)
- Chris Tsui: Cadillac Design Patent Reveals Possible CT5 Coupe (Source: The Drive)
- Aloysius Low: Future Samsung phone might get face-scanning camera, like iPhone X (Source: CNET)
Commentary and Journal Articles:
- Prof. Shobita P:arthasarathy: U.S. Patent System Out of Step with Today’s Citizens (Source: Finance and Commerce)
- Atty. AnthonyDe Fazekas and Atty. Maya Medeiros: Why Collaborative AI can Become a Legal Minefield (Source: The Globe and Mail)
- David Olive: Trump’s Tariffs are a Clear, Present Danger to Canada (Source: The Star)
- Prof. Wissam Aoun: The Fourth Industrial Revolution and the Democratization of Patent Agency (Source: SSRN)
- Prof. Lauren Cohen, Prof. Umit G. Gurun, and Prof. Scott Duke Kominers: Patent Trolls: Evidence from Targeted Firms (Source: SSRN)
New Job Postings on Patently-O:
- Sealed Air
- Michael Best & Friedrich LLP
by Dennis Crouch
Texas Advanced Optoelectronic v. Renesas Elecs. Am., 16-2121 (Fed. Cir. 2018)(Modified Panel Opinion Released July 9, 2018)
TAOS v. Renesas, focuses on the interplay between trade secret misappropriation (under Texas law), and patent law. TAOS patented an ambient light sensor using a photodiode array. See U.S. Patent No. 6,596,981. This type of sensor is widely used in smartphones to adjust the display brightness. Following failed merger negotiations, Intersil developed a competing product — which the district court found relied upon confidential information received during the negotiations. A jury found Intersil liable for patent infringement, trade secret misappropriation, breach of contract, and tortious interference with prospective business.
The damages verdict was as follows:
- Patent Infringement: $74,000
- Trade Secret Misappropriation – Disgorgment of D’s Profits: $48,000,000
- Trade Secret Misappropriation – Punitive Damages: $10,000,000
- Reasonable Royalty for Breach of Contract: $12,000,000
- Retention of Documents Breach of Contract: $1
- Tortious Interference – Lost Profits: $8,000,000
- Tortious Interference – Punitive Damages: $10,000,000
The district court ruled that the Trade Secret award was duplicative of the Contract and Tortious Interference awards — and thus kept only the larger of those awards.Continue Reading ...
I blogged about this one on May 1, and devoted most of my discussion to the disgorgement of profits issue. That opinion, however, also affirmed a judgment that the plaintiff TAOS could not recover patent damages for certain extraterritorial sales. The defendant filed a petition for rehearing en banc, which the court today denies, but the court also issues an order and opinion modifying that portion of the original opinion that discussed extraterritorial damages–though not in any way that makes a difference to TAOS, which still loses on this argument. Below is the relevant language from the original and the new opinions. First, the original:
TAOS renews its argument on appeal, but it now relies, in large part, on trial testimony and trial exhibits, rather than the exhibits submitted at the summary judgment stage. Compare TAOS Br. 29–31 (citing primarily to joint appendix cites at numbers over 20000, corresponding to trial evidence), and TAOS Reply Br. 10–11 (same), with J.A. 14498–15702 (TAOS exhibits submitted in response to Intersil’s motion for summary judgment); see also TAOS Br. 89 (argument focuses on trial evidence). Such evidence, which was not before the district court on summary judgment, is not a proper ground for disturbing the summary judgment ruling. See Meyer Intellectual Props. Ltd. v. Bodum, Inc., 690 F.3d 1354, 1371 (Fed. Cir. 2012) (A party “cannot for the first time on appeal introduce deposition testimony that was not before the district court when it was deciding the motions for summary judgment.”).
As for the evidence that may properly be considered, that evidence—of domestic negotiations and testing of some of Intersil’s products—does not demonstrate “substantial activities regarding sales” sufficient to raise a material dispute of fact as to sales or offers to sell in the United States. TAOS Reply Br. 10. . . .And the new opinion:
TAOS renews its argument on appeal, but it now relies, in large part, on trial testimony and trial exhibits, beyond the foregoing evidence. But even the additional evidence—e.g., of domestic negotiations and Intersil’s testing of some of Intersil’s products—does not demonstrate “substantial activities regarding sales” sufficient to raise a material dispute of fact as to sales or offers to sell in the United States. TAOS Reply Br. 10. . . .So, that’s it–no changes brought about the Supreme Court’s recent WesternGeco opinion, or anything along those lines.Continue Reading ...
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