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President's Corner Beyond Taking “Reasonable Measures of Protection,” The Protection of Trade Secrets in the Current Era By: Giselle Ayala Mateus, Esq. and Anne Rock March-in Rights - Implications from the COVID Pandemic[1] By: Nick Palmieri Notable Trademark Decisions, December 2022 By: Scott Greenberg and Vrudhi Raimugia Historian's Corner Board Minutes NYIPLA Events Welcome New Members Upcoming Programs
HEATHER SCHNEIDER
Winter 2022 / 2023
2023 is off to a great start for the NYIPLA community as we continue to celebrate our 100th year as an organization and get ready to celebrate our 101st Annual Dinner in Honor of the Federal Judiciary at the New York Hilton Midtown on March 31st. I am so pleased to present our keynote speaker, Dr. Mae Jemison. Dr. Jemison was the first African American Woman in Space onboard the space shuttle Endeavour in 1992, and is an inductee into the National Women's Hall of Fame & International Space Hall of Fame. She is also the Founder and President of two medical technology companies, the Jemison Group and BioSentient Corp. One reason she particularly appealed to me as a speaker this year is that she is also leader of the 100 Year Starship non-profit project, whose goal is to achieve human interstellar space travel within the next century. As we celebrate our 100th year as an organization and look forward to the future, I cannot imagine a better speaker. And if that was not enough, she was also the first real astronaut to appear on an episode of Star Trek: Next Generation! I am also very proud to present the NYIPLA’s Outstanding Public Service Award this year to Chief Judge Rodney Gilstrap of the United States District Court for the Eastern District of Texas. Known by many as the country’s “busiest patent judge,” Chief Judge Gilstrap is a Baylor University Law School alumnus and 2011 appointee to the Court by former President Obama. His work in Marshall, Texas has shaped the state of patent litigation for a generation of patent lawyers. We are honored to give him this award. The year has also gotten off to a busy start with a President’s Forum on January 19th. As many of you may recall, one of my goals this year was to have programming on life sciences topics, and I was pleased to bring together thought leaders to consider the impact of the Inflation Reduction Act (IRA) on the pharmaceutical industry. We had speakers from The Brookings Institution, Bristol Meyers Squibb, the Association for Accessible Medicines, and Marathon Asset Management to discuss the public policy and economic reasoning both for and against the IRA and similar policies. These excellent speakers addressed the IRA’s impact on innovation and drug development, potential consequences for end consumers, and how the IRA and similar policies could impact investments in the pharmaceutical sector. We also held a Board meeting with Committee Chairs in January, and we have a lot of exciting events being organized this year across all topics, including upcoming programs on The Scope of IPR estoppel, Biologics & Biosimilars and Section 112 at the Supreme Court, Selecting a Winning Jury in Patent Trials, and Leading Ladies of Law – Advice from the Top. I look forward to seeing all of you at the Judges Dinner and these other events.
NYIPLA President's Corner
NYIPLA Calendar
21st ANNUAL OUTSTANDING PUBLIC SERVICE AWARD
THE NEW YORK INTELLECTUAL PROPERTY LAW ASSOCIATION
KEYNOTE SPEAKER
March 31st, 2023 New York Hilton Midtown Hotel
Dr. Mae Jemison Physician, Engineer, former NASA astronaut, leader of 100 Year Starship non-profit for space exploration
Honorable Rodney Gilstrap Chief Judge United States District Court, Eastern District of Texas
Beyond Taking “Reasonable Measures of Protection,” The Protection of Trade Secrets in the Current Era By: Giselle Ayala Mateus, Esq. and Anne Rock
Business communications, business models, and cross-border relationships have evolved thanks to the internet and the development of modern technologies. However, together with that progress, trade secrets theft has also changed. In the face of trade secrets theft, owners encounter difficult challenges related to the collection of evidence, prosecution of civil actions against overseas actors, and proper compensation of damages. In fact, nowadays, trade secrets theft can be a matter of state and national concern resulting in enforcement authorities increasing their presence in the courtrooms, leading investigations and prosecutions. Trade secrets theft may result in civil and criminal liability. While trade secrets owners can bring a lawsuit under the Defense Trade Secrets Act, the Computer Fraud and Abuse Act, common law, and state statutes enacted to protect trade secrets, federal prosecutors may also file criminal charges against individuals and corporations involved in the misappropriation of trade secrets under the Economic Espionage Act. However, there are significant differences between chargeable criminal conduct and actionable civil conduct. Therefore, it is fundamental that trade secrets owners implement strict preventive measures to protect their proprietary information and take an active role in reporting trade secrets theft as soon as possible. The present article explores recent case law related to the following: i) the requirements to bring a claim under the Defend Trade Secrets Act (DTSA) and the Computer Fraud and Abuse Act (CFAA); ii) the necessity of pleading a trade secrets theft claim with specificity; iii) the challenges that the DTSA present when it comes to arguing unavoidable disclosure and the validity of restrictive covenants; iv) the requirements to bring a claim under the Economic Espionage Act; and v) the reasonable measures of protection that trade secrets owners can take to avoid trade secrets theft or to strengthen their compensation claims. The requirements to bring a claim under the Defend Trade Secrets Act (DTSA) and the Computer Fraud and Abuse Act The Defend Trade Secrets Act Before the enactment of the Defend Trade Secrets Act, in the absence of diversity jurisdiction or an independent basis to establish federal jurisdiction, trade secret owners seeking a remedy for trade secrets theft had no other choice than to file a lawsuit in state court. This resulted in conflicting decisions and conflict of laws issues that delayed any chance of compensation. While the Defend Trade Secrets Act created a new federal cause of action, it does not prohibit trade secret owners from pursuing a cause of action under existing state trade secret laws. Though, the definition of trade secrets may change from one state to the other. The Defend Trade Secrets Act created a federal private civil cause of action for trade secrets owners who were victims of espionage or theft and unified the definition of what a trade secret is. Under 18 U.S.C. § 1839(3)[1], a trade secret refers to, “all forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing.”[2] In order to bring a viable claim of trade secret misappropriation, trade secret owners are required to demonstrate that they took reasonable measures to protect that information which is alleged to be a trade secret under the DTSA. The text of the statute explicitly states, “[…] if (A) the owner thereof has taken reasonable measures to keep such information secret; and (B) the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, another person who can obtain economic value from the disclosure or use of the information.”[3] This means, that a viable trade secret theft claim requires that the information’s secrecy has value to its owners and the owner must take reasonable measures to keep that information secret. It is the reasonable measures element, in many trade secret litigations, which prevents plaintiffs from establishing their case against defendants. The definition of what reasonable measures are has been one of the most litigated issues relating to trade secrets theft. In Turret Labs USA, Inc. v. Cargo Sprint, LLC,[4] a recent Second Circuit decision, the courtdiscusses what constitutes reasonable measures. In this case, the Circuit Court affirmed the dismissal of the case because the Plaintiff failed to demonstrate that the information at issuewas a “trade secret” under the DTSA and common law, specifically, the Plaintiff did not adequately allege that it took reasonable measures to keep its information secret from third parties.[5] Turret Labs is the proprietor of a software, Dock EnRoll.[6] Turret entered into an exclusive licensing agreement with Lufthansa Cargo Americas(“Lufthansa”). The licensing agreement authorized Lufthansa to manage Dock EnRoll and grant access to other users. Turret Labs alleged in their complaint that the defendants gained unfettered access to Dock EnRoll by falsely presenting themselves as freight forwarders to Lufthansa.[7] However, the complaint was not clear on whether defendant’s access was granted by Lufthansa, or if the defendants used other wrongful means to expand their access after initially receiving login information.[8] The Second Circuit’s analysis turned on what constitutes reasonable measures for protecting a trade secret, The court explained thatreasonableness necessarily depends on the nature of the trade secret at issue.[9] Here, the trade secret at issue was software developed by Turret Labs and licensed to Lufthansa.[10] The Second Circuit explained that where an alleged trade secret consists “primarily, if not entirely,” of a computer software's functionality—“functionality that is made apparent to all users of the program”—the reasonableness analysis will often focus on who is given access, and on the importance of confidentiality and nondisclosure agreements to maintaining secrecy.[11] Basically, from the text of the complaint it was not clear that Lufthansa or any other user of the plaintiff’s software was required to keep plaintiff’s information confidential[12] or that it was prohibited to replicate the software after using it.[13] This case highlights the importance of trade secrets owners taking reasonable measures, and if seeking to enforce their rights, to clearly plead the measures that were taken. The Computer Fraud and Abuse Act Trade Secret owners may also file a federal claim for trade secrets theft under the Computer, Fraud and Abuse Act where the theft has occurred through wrongful use of a computer. Here, it is worth noting that the CFAA provides for a civil cause of action by an employer who has been injured by an individual’s wrongful access to a protected computer. Unlike the DTSA, the CFFA limits the scope of the action and establishes different requirements to establish a viable cause of action, specifically, the trade secret owner must demonstrate that the defendant had no authorization to access the information at the time of the alleged theft. In Royal Truck & Trailer Sales & Serv. v Kraft[14], the plaintiff, employer, failed to satisfy the statutory requirements of the CFFA because its former employees were authorized to access the information in question at the time of the alleged misappropriation. In this case, following the abrupt resignation of two employees, the plaintiff discovered that the employees, prior to resigning, had accessed confidential information from their company-issued computers and cell phones and then utilized the information in violation of company policy. Here, the Court explained: “The conduct at issue might violate company policy, state law, perhaps even another federal law. But because Royal concedes that the employees were authorized to access the information in question, it has failed to satisfy the statutory requirements for stating a claim under the CFAA.”[15] “The Computer Fraud and Abuse Act's damages and loss provisions further confirm the Act's narrow scope. They appear aimed at preventing the typical consequences of hacking, rather than the misuse of corporate information.”[16] The CFAA provides a cause of action for employers to defend their trade secrets. However, in contrast with the DTSA its applicability is more limited. The necessity of pleading a trade secrets theft claim with specificity The necessity of pleading a trade secrets theft claim with specificity has also been an issue frequently discussed by the courts. Enforcing trade secrets in court when there has been a theft presents several challenges to trade secrets owners. Consequently, it is equally important for trade secret owners to both take preliminary measures to protect their proprietary information and to understand the scope of their trade secrets; with this information, trade secret owners will be in a better position to make a plea of theft with the proper specificity. Earlier this year, in REXA, Inc. v.Chester[17],the Seventh Circuit reemphasized the need for plaintiffs to identify with particularity a claim of trade secret misappropriation. In this case, the Plaintiff, REXA Inc., filed a lawsuit against an ex-employee of Koso America (Koso), an associated company.[18] Back in 1993, Koso underwent a corporate reorganization to transfer a specific line of business to the Plaintiff. According to the complaint, the defendants misappropriated Koso’s information relating to an abandoned prototype, part of the said line of business.[19] The plaintiff’s claim for misappropriation of trade secrets was filed under the Illinois Trade Secrets Act ("ITSA"). It is worth noting that in the litigation, the court expressly stated that in order to prevail, the plaintiff must demonstrate "that the information at issue was a trade secret, that it was misappropriated, and that it was used in the defendant's business."[20] Following the same logic applied in DTSA cases[21], the Seventh Circuit affirmed the district court's grant of summary judgment to the defendants.[22] Upon review, the Seventh Circuit held that the plaintiff’s claim failed “[…] for lack of an identifiable trade secret . . .”. Considering that part of the information alleged as a trade secret was actually known in the plaintiff’s industry, the claim lacked a fundamental element.[23] The Court emphasized the need for something more than inference to survive the pleading stage, stating, “REXA has not directed us to a case where a court inferred that the misappropriation of trade secrets could plausibly have occurred despite a lack of evidence concerning the defendant's seizure or possession of documents.”[24] Granting the defendant’s motion for summary judgment for the plaintiff’s failure to state a trade secret misappropriation claim is not unique to the Seventh Circuit. In Beijing Neu Cloud Oriental Sys. Tech. Co. v. IBM[25], the Southern District of New York granted a summary judgment motion in favor of the defendants for failure to state a proper trade secrets theft claim. In this case, the plaintiff filed a complaint under the DTSA, seeking to recover for an alleged misappropriation of their trade secrets by the defendant.[26] Defendant, IBM Corporation, filed a motion to dismiss for failure to state a claim.[27] The defendant’s motion was granted.[28] The main facts of the complaint are based on a purchase agreement entered into between the parties. Neu Cloud, the plaintiff, entered into an agreement with IBM, the defendant, for the purchase of equipment that would be integrated with Neu Cloud’s own products. “Pursuant to that agreement, Neu Cloud submitted to IBM China bid requests, which included Neu Cloud's customer information.”[29] To the point of making a plea for trade secrets theft with specificity, the court stated, “[h]ere, Plaintiffs have done little more than plead ‘broad categories of information,’ which is legally insufficient to state a claim. […] The Complaint alleges that "customer information" is a trade secret and asserts that such information is a trade secret by reciting the statutory elements without providing additional details.”[30] The court was emphatic that the Second Circuit district courts “require that allegations of misappropriation plead the existence of trade secrets with sufficient specificity to inform the defendants of what they are alleged to have misappropriated.”[31] In this case, the plaintiff failed to plead facts that explain how the defendant misappropriated trade secrets, and how plaintiffs' trade secrets were developed or generated. The plaintiffs’ argument that the defendant benefitted from the use of the trade secrets, alone, was insufficient to establish the misappropriation prong under the DTSA.[32] Rexa and Neu Cloud highlight the frequent dilemma that plaintiffs face in trade secrets litigation. On the one hand, to survive the pleading stage, plaintiffs must identify the existence of the trade secret and the unlawful act of misappropriation. On the other hand, plaintiffs must be careful of how much information they provide in their pleading and consider the consequences of making excessive disclosures. In this context, defendants have shown frequent success at the summary judgment level.[33] The challenges that the DTSA presents when it comes to arguing unavoidable disclosure and the validity of restrictive covenants The proper defense of a trade secrets theft claim requires specific pleadings regarding the definition of the trade secret and the act of misappropriation. However, in the context of employment agreements, there is an additional challenge for trade secret owners defending a trade secret theft claim under the DTSA; this is defending the validity of the inevitable disclosure doctrine, NDAs, and restrictive covenants, which are intended to protect owners’ proprietary information. In the context of trade secrets litigation between employers and employees, especially regarding claims that arise when an employee changes jobs, trade secrets owners usually argue the unavoidable disclosure of their proprietary information by the former employee. Under the inevitable disclosure doctrine, trade secret owners are allowed to “prove a claim of trade secret misappropriation by demonstrating that defendant’s new employment will inevitably lead him to rely on the plaintiff’s trade secrets.”[34] The discussion about the applicability of the inevitable disclosure doctrine comes from a specific provision in the DTSA, which states that a court may not grant an injunction to “prevent a person from entering into an employment relationship”. Moreover, the DTSA requires that prior to granting an injunction the plaintiff is required to provide “evidence of threatened misappropriation and not merely on the information the person knows.”[35] Finally, according to the DTSA an injunction is also prohibited when it is conflicting with an applicable state law. The DTSA was created in part to serve as a single standard to litigate trade secrets theft, in other words, to create a common understanding of what is required to defend a trade secrets theft claim, with clear rule and predictability to all litigants.[36] However, to this date, courts’ position regarding the applicability of the inevitable disclosure doctrine is split. Early this year, in Kinship Partners, Inc. v. Embark Veterinary, Inc.,[37] the United States District Court for the District of Oregon, denied the plaintiff’s motion for a preliminary injunction intended to prevent a former employee from changing to a new position with plaintiff’s main competitor. The court noted that the plaintiff did not demonstrate a likelihood of succeeding on the merits, the effective existence of irreparable harm risk, and the balance of the equities did not tip in his favor.[38] Additionally, the district court noted that it has been the Oregon legislature's purpose to promote employee freedom and mobility. The court recognized that injunctive relief has been granted in specific cases in the past, like in Phoseon Tech., Inc. v. Heathcote[39], where the plaintiff’s request for an injunction was granted because of an existing noncompete agreement, but then stated that it was unlikely that Oregon would adopt a general applicability of the inevitable disclosure doctrine, because granting such relief could undermine Oregon's public interest goals. Illinois, notably, has recognized the applicability of the inevitable disclosure doctrine. In GE v Uptake Tech., Inc.[40] the Illinois Northern District Court recognized that Illinois allows the inevitable disclosure doctrine to support a plaintiffs’ claim of trade secrets theft and that a DTSA claim based on inevitable disclosure may survive a motion to dismiss. Delaware has also recognized the inevitable disclosure doctrine, in W.L. Gore & Assoc. v Wu[41], the court explained that “[a] court may limit a defendant from working in a particular field if his doing so poses a substantial risk of the inevitable disclosure of trade secrets.”[42] Finally, in Pennsylvania, in Jazz Pharms., Inc. v Synchrony Group, LLC[43], the court recognized that, “[t]he Third Circuit has held that where an employee's work for a new employer substantially overlaps with work for a former employer, based on the same role, industry, and geographic region, a district court may conclude that those employees would likely use confidential information to the former employer's detriment.”[44] However, it seems like the tendency is moving against a general recognition of the inevitable disclosure doctrine. In Idexx Lab’ys v. Bilbrough[45], the District Court of Maine, despite recognizing that there is not judicial consensus[46] as to the applicability of the inevitable disclosure doctrine under the DTSA, expressly stated that, “[t]o the extent there is an ambiguity in the statute, a review of the development of the statute suggests Congress did not intend the doctrine to apply to DTSA claims. […] In sum, based on the plain language of the statute, the inevitable disclosure doctrine does not apply to claims brought pursuant to DTSA.”[47]. In UCAR Tech. (USA) Inc. v. Yan Li[48], the Northern District of California struck DTSA allegations that relied on the inevitable disclosure doctrine because, “California courts have resoundingly rejected claims based on the ‘inevitable disclosure’ theory”[49]. In Prime Therapeutics LLC v. Beatty[50], the District Court of Minnesota expressed in a foot note, “[…] the Court has identified only one case from this District finding inevitable disclosure of trade secrets . . .”[51] and denied plaintiff’s request for injunctive relief due to lack of evidentiary support. For employers, the fate of the inevitable disclosure doctrine remains unclear due to the split of positions between district courts. Additionally, recently this year, Colorado and Washington issued state statutes that restrict the enforceability of restrictive covenants imposed by employers. A growing number of states has taken judicial or legislative measures to limit, or even ban, the applicability of covenants that limit employee’s mobility[52]. The requirements to bring a claim under the Economic Espionage Act Together with the DTSA, the Economic Espionage Act (EEA), a criminal federal statute, gives trade secret owners another option to take action against trade secrets theft. Before the enactment of the DTSA, it was uncommon for trade secrets owners to get involved in the criminal investigation of trade secrets theft. However, DTSA brought the topic of trade secret misappropriation to the front row and raised awareness of the necessity of mutual collaboration between trade secrets owners and enforcement authorities. Similar, to the DTSA, the EEA broadly defines the term “trade secret” to include all types of information that the owner has taken reasonable measures to keep secret and that itself has independent economic value.[53] Trade secrets theft can result in criminal liability. However, not every act of trade secrets misappropriation is investigated or pursued by the Department of Justice (DOJ). Before initiating a criminal investigation, the DOJ considers several factors, including, the scope of the criminal activity, the existence of evidence of involvement by a foreign instrumentality, the degree of economic injury to the trade secret owner, the type of trade secret misappropriated, the effectiveness of available civil remedies and the potential value of the prosecution.[54] The EEA contains two separate provisions that criminalize the theft of trade secrets. The first, 18 U.S.C. § 1831, prohibits the theft of trade secrets for the benefit of a foreign government, instrumentality, or agent, and is punishable by up to 15 years’ imprisonment and a $5,000,000 fine. The second, 18 U.S.C. § 1832, prohibits the commercial theft of trade secrets to benefit someone other than the owner, and is punishable by up to ten years’ imprisonment and a $250,000 fine. The penalties are higher for defendants who are companies. The EEA also provides special provisions to ensure that the confidentiality of trade secret information is preserved during the course of criminal proceedings. Specifically, the statute expressly states that courts “[…] shall enter such orders and take such action as may be necessary and appropriate to preserve the confidentiality of trade secrets, consistent with the requirements of the Federal Rules of Criminal and Civil Procedure, the Federal Rules of Evidence, and all other applicable laws.”[55] Recently, criminal investigations under the EEA have resulted in substantial judgments. In USA v. You et al[56], a chemist was convicted of conspiracy to commit trade secret theft, conspiracy to commit economic espionage, possession of stolen trade secrets, and sentenced to 14 years in prison, a $200,000 fine and a $10,000 restitution. On the civil side of this case, in Appian Corp. v. Pegasystems Inc.[57], a Virginia jury awarded the plaintiff $2.04 billion in damages for trade secret misappropriation. Practitioners should be mindful that there is a large disparity in sentencing by federal courts for trade secret theft. This year, in California in a trade secrets case exceeding $101 million, a biotech CEO was sentenced to 12 months in prison, while in Florida, for a trade secrets theft amounting to $135,000, a certified teacher was sentenced to 10 months, and in New York, for a trade secrets theft amounting to $1.4 million, an engineer was sentenced to 24 months.[58] In criminal prosecution, sentencing is determined by the “intended loss”. In USA v. You et al, the court explained that the “intended loss” means the loss the defendant purposely sought to cause and not the loss that the defendant knew would result from his conduct. The court stated, “[...] courts in multiple circuits have found that in trade secrets cases, [the intended loss] turns upon how much loss the defendant actually intended […] regardless of whether the loss actually materialized […].”[59] In this context, the DOJ has developed a longstanding policy promoting communication and coordination between federal prosecutors and civil attorneys handling trade secret theft actions.[60] Reasonable measures of protection that trade secrets owners can take to avoid trade secrets theft or to strengthen their compensation claims Prosecution of trade secrets theft presents many challenges to trade secrets owners, not only because of the procedural requirements of the action to survive the pleadings stage, but also because trade secrets owners must demonstrate the existence of the trade secret and the prior practice of taking proper measures to protect their proprietary information. Considering this, here is a non-comprehensive list of good practices that trade secret owners can implement to protect themselves and improve their possibilities of recovery in the case of a misappropriation. - In the case of a suspected theft of trade secrets, any internal investigation or surveillance of the suspect, or a competitor believed to be using the stolen information, should be recorded. Records of any interviews with suspects or witnesses should be made by tape or in writing. The pertinent confidentiality agreements, security policies, and access logs should also be gathered and maintained to facilitate review and reduce the risk of deletion or destruction.[61] - Any physical, documentary, or digital evidence acquired in the course of an internal investigation should be preserved for later use in a legal proceeding.[62] - If the computer of an employee suspected of stealing trade secrets has been seized, any forensic analysis should be performed on a copy of the data, or “digital image,” to refute claims that the evidence has been altered or corrupted. - Early referral to law enforcement is the best way to ensure that evidence of an intellectual property crime is properly secured and that all investigative avenues are fully explored, such as the execution of search warrants and possible undercover law enforcement activities. To be ready to act urgently when a theft occurs, a company should develop a relationship with their local FBI field office and also familiarize themselves with the DOJ’s guide for reporting intellectual property crime.[63] Not only will the DOJ’s guide assist a company in making any criminal referral, but if followed, a company will likely have more success even in the civil arena because it will have thought through identification of its trade secret and what measures to take for protection of it.[64] [1] 18 U.S.C.S. § 1839 (LexisNexis, Lexis Advance through Public Law 117-214, approved October 19, 2022) [2] Id. [3] Id. [4] Turret Labs USA, Inc. v CargoSprint, LLC, 2022 U.S. App.LEXIS 6070 (2d Cir Mar. 9, 2022, No. 21-952). [5] Id. [6] Id. [7] Id.at *2. [8] Id.at *2. [9] Id. at *5. (citing Trim Constr., Inc. v. Gross, 525 F. Supp. 3d 357, 380 (N.D.N.Y. 2021)). [10] Id. [11] Id. (citing TurretLabs, 2021 WL 535217, at *4). [12] Id.at *3. [13] Id. [14] Royal Truck & Trailer Sales & Serv. v Kraft, 974 F3d 756 (6th Cir 2020). [15] Id. at757. [16] Id. at761. [17] REXA, Inc. v Chester,42 F.4th 652 (7th Cir 2022). [18] Id. [19] Id. at 653. [20] REXA, Inc.,42 F.4th at 662 (citing Learning Curve Toys, Inc. v. PlayWood Toys, Inc., 342 F.3d 714, 721 (7th Cir. 2003)). [21] 18 U.S.C. § 1836(b)(1). [22] REXA, Inc.,42 F.4th 652at 675. [23] REXA's claim also fails for lack of an identifiable trade secret because the company concedes that several aspects of the shelved 2002 actuator prototype were and are widely known in the hydraulic-actuator industry.REXA, Inc.,42 F.4th 652, at 664. [24] Id. at 665. [25] Beijing Neu Cloud Oriental Sys. Tech. Co. v IBM, 2022 US Dist LEXIS 54348 (SDNY Mar. 25, 2022). [26] Id. [27] Id. [28] Id. [29] Id. [30] Beijing Neu Cloud Oriental Sys. Tech. Co.,2022 U.S. Dist. LEXIS 54348, at *11 (S.D.N.Y. Mar. 25, 2022) [31] Id. at *4. [32] Id. [33] 18 USCS § 1836 (LexisNexis, Lexis Advance through Public Law 117-214, approved October 19, 2022) [34] PepsiCo, Inc. v. Redmond, 54 F.3d 1262, 1269 (7th Cir. 1995). [35] 18 USCS § 1836 (LexisNexis, Lexis Advance through Public Law 117-214, approved October 19, 2022) [36] Danielle A. Duszczyszyn and Daniel F. Roland. Three Years Later: How the Defend Trade Secrets Act Complicated the Law Instead of Making It More Uniform. Aug. 2019. https://www.finnegan.com/en/insights/articles/three-years-later-how-the-defend-trade-secrets-act-complicated-the-law-instead-of-making-it- more-uniform.html [37] Kinship Partners, Inc. v Embark Veterinary, Inc., 2022 US Dist LEXIS 2804 (D Or Jan. 3, 2022, No. 3:21-cv-01631-HZ). [38] “Plaintiff alleges, but cannot demonstrate, that Smith's role at Embark is substantially similar to his prior role at Kinship […] Next, Plaintiff presents no facts that show Smith would necessarily disclose Kinship's trade secrets to fulfill his job duties at Embark. […] Plaintiff cannot show irreparable harm because there is no evidence that Smith acted in bad faith or has breached his Confidentiality Agreement […] Plaintiff cannot show its trade secrets are under threat of misappropriation because it relies on a legal theory that is unavailable in Oregon.Id. [39] Phoseon Tech., Inc. v Heathcote,2019 US Dist LEXIS 221633 (D Or Dec. 27, 2019, No. 3:19-cv-2081-SI). [40] GE v Uptake Tech., Inc.,394 F Supp 3d 815 (ND Ill 2019). [41] W.L. Gore & Assocs. v. Wu, Civil Action No. 263-N, 2006 Del. Ch. LEXIS 176 (Del. Ch. Sep. 15, 2006) [42] Id. at *59. [43] Jazz Pharms., Inc. v Synchrony Group, LLC, 343 F Supp 3d 434 (ED Pa 2018). [44] Id. at 446. [45] Idexx Lab'ys v Bilbrough, 2022 US Dist LEXIS 136676 (D Me Aug. 2, 2022, No. 2:22-cv-00056-JDL). [46] Id.(citing Sunbelt Rentals, Inc. v. McAndrews, 552 F. Supp. 3d 319, 331 (D. Conn. 2021)). [47] Id. [48] UCAR Tech. (USA) Inc. v. Yan Li, No. 5:17-CV-01704-EJD, 2017 WL 6405620. [49] Id. [50] Prime Therapeutics LLC v Beatty, 354 F Supp 3d 957 (D Minn 2018) [51] Id. [52] Mark S. Goldstein and Noah S. Oberlander. What does the future hold for restrictive covenant agreements in the U.S.? Reuters. Oct. 21, 2021. https://www.reuters.com/legal/legalindustry/what-does-future-hold-restrictive-covenant-agreements-us-2021-10-01/. [53] 18 U.S.C.S. § 1839 (LexisNexis, Lexis Advance through Public Law 117-214, approved October 19, 2022) [54] Economic Espionage Act of 1996 (18 U.S.C. §§ 1831-1837)—Prosecutive Policy, Chapter 9-59.100. https://www.justice.gov/jm/jm-9-59000-economic-espionage#:~:text=It%20was%20passed%20in%20recognition,this%20important%20area%20 of%20law. [55] 18 U.S.C. § 1835(a); see also Levine & Flowers, How Prosecutors Protect Trade Secrets, 38 Am. J. Trial Advoc. 461 (2014-2015). [56] USA v. You et al.2:19cr14. [57] Appian Corp. v. Pegasystems Inc., No. 2020-07216 (Va. Cir. Ct. Fairfax Cty. May 9, 2022). [58] Steven H. Lee. Sentencing Disparities Can Lead to Increased Uncertainty for Victim Companies of Trade Secret Theft. https://lewisbrisbois.com/newsroom/legal-alerts/sentencing-disparities-can-lead-to-increased-uncertainty-for-victim-companies-of-trade- secrets-theft#:~:text=Legal%20Alerts-,Sentencing%20Disparities%20Can%20Lead%20to%20Increased%20Uncertainty%20for%20Victim% 20Companies,billion%20and%20%24600%20billion%20annually. [59] USA v. You et al2:19-cr-00014-JRG-CRW.PACER Doc. No. 420. (citing United States v. Xue, No. 16-22, 2020 U.S. Dist. LEXIS 173410, at *40–*42 (E.D. Pa.Sept. 22, 2020)) (citing United States v. Pu, 814 F.3d 818, 824 (7th Cir. 2016) (citations partially omitted)). [60] Jeffrey A Pade and Anand B. Patel. Criminal Considerations In Trade Secrets Disputes. Part One of a Three-Part Series. Oct. 2022. https://www.lawjournalnewsletters.com/2022/10/01/criminal-considerations-in-trade-secrets-disputes/?slreturn=20221001215852 [61] REPORTING INTELLECTUAL PROPERTY CRIME. A Guide for Victims of Copyright Infringement, Trademark Counterfeiting, and Trade Secret Theft. Third Edition. U.S. Department of Justice | Computer Crime and Intellectual Property Section. October 2018. https://www.justice.gov/criminal-ccips/file/891011/download [62] Id. [63] Id. [64] Id.
I. Introduction. Created as part of the Bayh-Dole Act of 1980 (Pub. L. 96-517), “march-in rights” were created as a way to balance the need of small and non-profit entities to obtain government financing with the public’s right to access certain innovation resulting from government funds. In particular, march-in rights were created, at least in part, to further Congress’s goal “to ensure that the Government obtains sufficient rights in federally supported inventions to meet the needs of the Government and protect the public against nonuse or unreasonable use of inventions.” 35 U.S.C.§ 200. Accordingly, under the provisions of 35 U.S.C.§203, agencies of the federal government are empowered to require entities that receive federal funding to provide licenses in certain circumstances. Yet in the more than 40 years since enactment, and despite several attempts, such march-in rights have yet to be exercised. Despite this lack of action, the rights remain in existence. The COVID-19 pandemic, and the world’s response to develop a vaccine and treatment for the ravaging disease, renewed calls for the exercise of march-in rights have appeared.[2] However, as will be discussed in more detail below, march-in rights are unlikely to significantly change after the COVID pandemic. II. Scope Before delving into when and how march-in rights have been asserted, one must understand the limited circumstances in which the rights may even by applicable. As a preliminary matter, march-in rights only apply to inventions “in which a small business or nonprofit organization has acquired title.” 35 U.S.C.§ 203(a) (emphasis added). The definitions of these entities is given separate from the meaning of “small” or “micro” entities used elsewhere in patent law. A “small business” is defined by the U.S. Small Business Association (“SBA”) for each industry, in a comprehensive document which outlines the revenue or number of employees that qualifies an entity as a “small business.”35 U.S.C. § 201(h); see 15 U.S.C.§ 632 (empowering the SBA to define small businesses). “Nonprofit organizations” are defined as “universities and other institutions of higher education” or an organization exempt from taxation under 26 U.S.C. § 501(c)(3),[3] and thus applies to inventions generated by colleges and universities that take government funding. So while the classification of entities to which march-in rights are limited, it is not as simple as applying the rights to “small entities,” defined under 13 CFR § 121.802 as an entity “whose number of employees . . . does not exceed 500 persons” and “[w]hich has not assigned, granted, conveyed, or licensed . . . any rights in the invention” to a non-independent inventor or to any organizations that do not qualify as a “small business concern.” Though these requirements certainly have some relation to one another, they are different and can impact the government’s choice to exercise march-in rights. March-in rights contain a further gatekeeping mechanism that must apply before the rights can even be considered: “subject inventions.” Defined as “any invention of the contractor[4] conceived or first actually reduced to practice in the performance of work under a funding agreement,” 35 U.S.C. § 201(e), the law makes clear that march-in rights only apply where the invention was made as part of a “funding agreement.” Put another way, only those inventions which have been created with funding provided by one (or more) government agencies are even eligible for march-in rights. And the eligible agencies are broadly defined, including each “Executive agency” under 5 U.S.C. § 105 and all “Military departments” under 5 U.S.C. § 102. This requirement serves as the backstop to the policy behind march-in rights. That policy is not to simply provide government agencies with the ability to license patents which may be pertinent to the public good. Rather, the purpose of march-in rights is specifically to balance the government’s interest in funding innovations and research by smaller or non-profit entities with the public’s interest in accessing innovations which have been funded by the public’s taxes. This interest in narrow and, to date, has not been sufficient to justify the government’s intervention, though that need hardly count as a failure of the policy. III. Application Given a valid entity to which the Act applies, under the terms of a funding agreement by a Federal agency, there are two circumstances in which march-in rights can be applied to a subject patent, or imposed upon a “contractor”: where the contractor is cooperative, and where it is not. In the first circumstance, the contractor[5] may be required to grant “a nonexclusive, partially exclusive, or exclusive license in any field of use to a responsible applicant or applications, upon terms that are reasonable under the circumstances.” 35 U.S.C. § 203(a). The process for exercising these rights is set forth in the corresponding enabling regulations. 37 C.F.R. § 401.6.[6] Upon reception of information indicating that march-in rights may be warranted, the agency is required to coordinate with the contractor and investigate whether the circumstances warrant the exercise of march-in rights. 37 C.F.R. § 401.6(b). After providing written notice to the contractor, which includes the justification for march-in rights, the contractor is provided an opportunity to rebut or oppose the potential march-in. Id.§ 401.6(d). If afterwards a “genuine dispute over the materials facts upon which the march-in is based” remains, the regulations require “fact-finding” to proceed, according to the specific procedures of each agency. Id.§ 401.6(e). These specific procedures are left specifically to the agency considering march-in rights, but the regulations note that procedures “shall be as informal as practicable and be consistent with principles of fundamental fairness.” Id. The ultimate decision on whether to exercise march-in rights is left to the head of the relevant agency (or their designee) who will base their decision upon the facts found and arguments presented. Id.§ 401.6(g). At any time, though, the agency, regardless of the facts in evidence or stage of the proceedings, may terminate the march-in proceeding if it determines that it “does not wish to exercise march-in rights.” Id.§ 401.6(h). There is also a second scenario in which agencies may choose to exercise these rights: when the contractor “refuses” a request to grant a license. Where the relevant agency determines that the circumstances, and public policy, justify it, the law gives the agency the ability to direct grant licenses to use the subject invention, regardless of the contractor’s cooperation. There are four circumstances in which the agency may directly grant a license under these circumstances (after the contractor’s refusal): 1) The contractor (or assignee) has not taken and is not expected to take effective steps to achieve “practical application” of the subject invention in the requested field of use; 2) A license is necessary to “alleviate health or safety needs, which are not reasonably satisfied by the contractor”; 3) Federal regulations require public use of the subject invention, and the actions of the contractor are not sufficient to meet this requirement; 4) An agreement under 35 U.S.C. § 204[7] has not been obtained, or is in breach of such an agreement. 35 U.S.C. § 203(a)(1)-(4). Where the relevant agency determines that at least one of these circumstances apply, they are empowered to grant a license, whether exclusive or not, to those deemed appropriate. Should a contractor disagree with this, or any determination, they may appeal the determination to the U.S. Court of Federal Claims, which is given jurisdiction over the exercise of these rights.[8] IV. Attempts at Exercise As noted above, although march-in rights have been around for more than 40 years, they have yet to be successfully exercised, despite various calls to do so. To date, petitions have only asked the National Institutes of Health (“NIH”) to exercise these rights, in attempts to improve or better regulate the production of various pharmaceuticals. Ultimately, though, each of these petitions was denied.[9] In 1997, the NIH received its first petition, from CellPro, Inc. after a competitor (Johns Hopkins) asserted that CellPro’s Ceprate system infringed various patents. Finding ultimately that Johns Hopkins was taking steps to commercialize its own products and recognizing that Johns Hopkins had not sought to enjoin CellPro’s conduct, but only sought a reasonable royalty rate, the NIH refused the petition. Id. In 2004, a diverse groups of patients, advocates, and even members of Congress asked the NIH to exercise its march-in rights in order to reduce the price of the HIV/AIDS treatment Norvir/ritonavir.[10] Here, the NIH denied the petition on that basis that the drug was sufficiently “available” to the public and that the “extraordinary” remedy of imputing the responsibility for controlling drugs prices to the NIH was “not an appropriate means” to justify the exercise of march-in rights. Elias A. Zerhouni, Director, NIH, In the Case of Norvir Manufactured by Abbott Laboratories, Inc., July 29, 2004, https://www.techtransfer.nih.gov/sites/default/files/documents/policy/March-In-Norvir.pdf. In a similar case in 2004, the NIH also refused to march-in against the manufacturer of Xalatan/latanoprost, finding that the drug had been practically applied, was actively being marketed and regularly prescribed, and it was not appropriate for the NIH to step in and regulate prices, even where the drug was being sold at a much higher price within the United States than elsewhere throughout the world. Elias A. Zerhouni, Director, NIH, In the Case of Xalatan, Manufacture by Pfizer, Inc., September 17, 2004, https://www.techtransfer.nih.gov/sites/default/files/documents/policy/March-in-xalatan.pdf. What these two petitions made clear, from the NIH’s perspective at least, is that march-in rights are not, and should not be, a means of price control. The question of a particular drug having different prices across different country is, if it falls to anyone, an issue to be addressed by Congress, not one which the NIH should be responsible for regulating. In 2010, in a petition to exercise march-in rights against the drug Fabrazyme/agalsidase beta, the NIH put forth a new reason to justify their decline. The manufacturer, Genzyme Corporation, faced certain manufacturing difficulties, and thus the petitioners desired an open license for the drug. However, the NIH noted that (1) the manufacturing difficulties were actively being resolved and addressed, and (2) FDA approval for generic versions of the drug could not have been obtained before the manufacturing difficulties were resolved. As a result, the NIH’s intervention at that time would not have alleviated any manufacturing difficulties or made the drug more readily accessible to the public (since Genzyme would have no difficulty meeting demand once it resolved the manufacturing difficulties), which is the entire purpose of march-in rights. In 2016, the NIH received a petition to march-in against the drug Xtandi/enzalutamide, a prostate cancer drug. Again, though, the NIH denied the petition, noting again that it was “broadly available as a prescription drug” with increasing sales each year and no indication that the drug “will be in short supply,” and it was not the NIH’s role to regulate prices. Letter from Francis C. Collins, Director, NIH, to Andrew S. Goldman, June 20, 2016, https://www.keionline.org/sites/default/files/Final-Response- Goldman-6.20.2016.pdf. The COVID-19 Pandemic also brought about new petitions, though similarly to no avail, despite the significant public interests inherent in effective treatments. One such petition sought the NIH to march-in against Remdesivir, an antiviral produced by Gildea Sciences, that showed promise as a treatment for COVID-19. So much promise, that the NIH funded a multi-stage clinical trial of the drug as treatment for COVID-19. Given the public’s interest in resolution of this “unprecedented crisis” 34 Attorneys General submitted a petition to the NIH to exercise its march-in rights. See Xavier Becerra, California Attorney General, et al., Letter to Alex M. Azar, Secretary, U.S. Dept. of Health & Human Services, August 4, 2020, https://www.oag.ca.gov/system/files/attachments/press-docs/Remdesivir%20 Letter%2020200804.pdf. But this petition ultimately proved unpersuasive as well, though for a different reason than many others. Despite the “unprecedented” public interest in providing a treatment for COVID-19, march-in rights still require that the government agency’s funding be directed to the invention itself. Remdesivir, though, was developed in 2009-2013, with NIH funding only coming during the clinical and testing phases of the drug. See U.S. Gov’t Accountability Off. GAO-21-272, Biomedical Research: Information on Federal Contribution to Remdesivir 10 (2021).[11] As such, the NIH had no march-in rights to assert, as its funding was not used to develop the drug itself. V. Post-COVID March-In Rights Several lessons can be drawn from these petitions, and their subsequent rejection, the most notable of which is that the NIH, while recognizing that drug prices may be inconsistent across high-income nations, does not believe itself to be the appropriate body to regulate those prices, nor march-in rights the appropriate mechanism for redress. In order to memorialize this understanding, the National Institute of Standards and Technology (“NIST”) published new “proposed rulemaking” in January 2021. The new regulation (which would be entered as 37 C.F.R. § 401.6(e) notes that “[m]arch-in rights shall not be exercised exclusively based on the business decision of the contractor regarding the pricing of commercial goods and services arising from the practical application of the invention.” Rights to Federally Funded Inventions and Licensing of Government Owned Inventions, 85 Fed. Reg. 35, 37 (2021). While some call this a reduction in the scope of the provision, the proposed rule revision[12] clarifies the de facto policy which has already been practiced by the NIH. Whether other agencies would follow a similar rule is, as of yet, undetermined, but the rule would not preclude any agency from considering pricing as a factor in favor of exercising march-in rights, but merely precludes price as being the only consideration. Such a policy supports the overall purpose of march-in rights. The government’s role is not to act as a price-setter, stepping in when competitors and purchasers believe a price is too high, but rather to monitor whether the public interest calls for access to an invention which cannot otherwise be provided to the public. Forcing Federal agencies to step in as an enforcer, and evaluate the pricing of every company which commercializes an invention that happens to utilize Federal funding, would pose an unreasonable (and arbitrary) administrative burden, a burden that would be levied against small and non-profit entities. While there may be legitimate concerns about the commercial availability of various invention, march-in rights remain a limited remedy whose exact application has yet to be truly tested, but which stands available as one further tool in arsenal of rights available to Federal agencies. [1] This article was previously published in the January 2023 issue of Pratt’s Government Contracting Law Report, © 2023 Matthew Bender & Co., Inc. All rights reserved. [2] Including a call by various Attorneys General for the National Institute of Health to exercise its march-in rights with respect to Gilead’s remdesivir. [3] This Section covers “[c]orporations . . . operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition . . ., or for the prevention of cruelty to children or animals” which do not earn a profit. Id. [4] An individual, small business firm, or nonprofit organization who is party of a funding agreement with a federal government agency. [5] Or an assignee or exclusive licensee. [6] Individual agencies may also themselves have their own regulations which supplement the general regulations at Section 401.6.For example, the National Science Foundation sets forth enabling regulations in 45 C.F.R.§ 650.13. [7] The section, entitled “Preference for United States industry” requires that exclusive rights to a subject invention will only be granted to those who agree that the invention “will be manufactured substantially in the United States” subject to certain exceptions which may be granted by the relevant Federal agencies. [8] While the Court of Federal Claims has jurisdiction in these cases, since no agency has exercised march-in rights, there has never been a determination to appeal.Standing to make such an appeal is also limited to “any contractor, inventor, assignee, or exclusive licensee adversely affected” by the determination, so it does not provide an avenue of relief for those who might bring a petition to exercise march-in rights. [9] See John R. Thomas, Cong. Rsch. Serv., R44597, March-In Rights Under the Bayh-Dole Act 8-9 (2016). [10] Another petition was brought against this same drug in 2012 and denied for largely the same reasons, with the NIH taking the position that a disparity in prices does not fall within any of the defined criteria of Section 203. [11] Available at https://www.gao.gov/assets/gao-21-272.pdf. [12] Which has made it into President Biden’s regulatory agenda, https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202104&RIN= 0693-AB66.
March-in Rights - Implications from the COVID Pandemic[1] By: Nick Palmieri This article was previously published in the January 2023 issue of Pratt’s Government Contracting Law Report, © 2023 Matthew Bender & Co., Inc. All rights reserved.
Notable Trademark Decisions, December 2022 By: Scott Greenberg and Vrudhi Raimugia
The Eleventh Circuit affirms the District Court decision and applies the Rogers test for the disputed mark “MTV Floribama Shore” The United States Court of Appeals of the Eleventh Circuit (“the Eleventh Circuit”) recently decided on the dispute between the Plaintiffs-Appellants MGFB Properties, Inc., Flora-Bama Management LLC, and Flora-Bama Old S.A.L.T.S. Inc. (collectively, “Plaintiffs”) and the Defendants-Appellees 495 Productions Holdings LLC, 495 Productions Services LLC, and ViacomCBS Inc. (collectively, “Defendants”) about the right to use the word “Floribama”. The Plaintiffs own and operate the Flora-Bama Lounge, Package and Oyster Bar (“Lounge”) on the Florida-Alabama border. The Defendants, on the other hand, create and distribute television programs, including the reality series Jersey Shore and its spin-off “MTV Floribama Shore”. MGFB Props., Inc. v. Viacom Inc., 2022 USPQ2d 1145 (11th Cir. 2022). Plaintiffs sued Defendants, alleging that the title of Defendants’ series, “MTV Floribama Shore”, infringed on the Plaintiffs’ “Flora-Bama” trademarks. The District Court granted summary judgment to Defendants and the Plaintiffs appealed. Here, the Eleventh Circuit had to decide whether the Defendants’ use of the mark “MTV Floribama Shore” would be protected by the First Amendment or would use of the same be violative of the provisions of the Lanham Act. The case highlighted the interplay between the interests of the trademark owner and the consumer in avoiding confusion about the source or sponsorship of products and the First Amendment interests of the creator of the artistic work and the public in allowing freedom of expression and the free flow of ideas. The Plaintiffs stated that use of their mark for their lounge on the Florida-Alabama border was in operation since 1964 and the mark had gained regional fame over the years. On the other hand, the Defendants stated that “MTV Floribama Shore” was a spin-off of the show Jersey show profiling subcultures of 20-somethings in different parts of the world where the Defendants wanted to highlight “young Southern folks” who go to “shore houses” or “spend summers” on the Gulf of Mexico, extending from the Florida panhandle into Alabama and Mississippi. The Eleventh Circuit, in deciding this case, heavily relied on the principles laid down by the case Rogers v. Grimaldi (“Rogers case”) wherein the Second Circuit reasoned that titles required more First Amendment protection than the labeling of ordinary commercial products. The Second Circuit, the Rogers case, held that because overextension of Lanham Act restrictions in the area of titles might intrude on First Amendment values, Courts should construe the Lanham Act narrowly to avoid such a conflict. The Second Circuit also emphasized that in general the Act should be construed to apply to artistic works only where the public interest in avoiding consumer confusion outweighs the public interest in free expression. The Second Circuit’s two-part test provided that the title of an artistic work would not violate the Lanham Act (1) unless the title as no artistic relevance to the underlying work whatsoever, or, (2) if it has some artistic relevance, unless the title explicitly misleads as to the source or the content of the work. Further, the Second Circuit added a footnote containing an exception to the Rogers test elaborating that the test would not apply to misleading titles that are confusingly similar to other titles because the public interest in sparing consumers this type of confusion outweighs the slight public interest in permitting authors to use such titles. This exception has come to be known as the “confusingly similar titles” exception or the “title-versus-title” exception. The Eleventh Circuit has, in the past, relied on the said Rogers test in Univ. of Ala. Bd. of Trs. v. New Life Art, Inc., 683 F.3d 1266 , 1278 (11thCir. 2012), wherein the suit was filed against Daniel Moore, an artist who had painted famous football scenes involving the University’s football team wherein Moore had reproduced his paintings as, among other things, prints and calendars. The University argued that Moore’s unlicensed paintings infringed on the University’s trademarks because the depiction of the football uniforms “created a likelihood of confusion on the part of buyers that the University sponsored or endorsed the product. The Eleventh Circuit therein readily concluded that Moore’s paintings, prints, and calendars were protected under the Rogers test. In applying the first prong of the Rogers test to the current “MTV Floribama Shore” case, the Eleventh Circuit held that to be artistically relevant, the relationship between the challenged title and the underlying work itself merely must be above zero and noted that the standard for artistic relevance is an appropriately low threshold of minimal artistic relevance. The Eleventh Circuit held that the relationship between the series title and the series content itself is well above the artistic relevance threshold. For the first prong, the Plaintiffs contended that the University of Alabama case added the standard of necessary component to artistic relevance of the mark and that the same would weigh against the Defendant. However, the Eleventh Circuit clarified that the University of Alabama precedent did not imply that the title must be strictly necessary to be artistically relevant and sided with the Defendants who countered that it would be improper for courts to decide what forms of expression are “necessary”. In that, the Eleventh Circuit opined that it was not their place to decide whether Defendants needed to use “Floribama” in their title and it was enough that the title was relevant to the series Defendants sought to produce. To determine whether the Defendants’ use of the mark would pass the second prong of the Rogers test, the Eleventh Circuit dealt with questions similar to the University of Alabama case namely whether (1) the secondary user overtly “marketed” the protected work “as ‘endorsed’ or ‘sponsored’” by the primary user or (2) “otherwise explicitly stated” that the protected work was “affiliated” with the primary user. To this end, Plaintiffs argued that because Defendants “deliberately copied” Plaintiffs’ mark, the intent to misappropriate goodwill must have been inferred. However, the Eleventh Circuit clarified that copying alone is not enough under Rogers test and that illustrated that in the Rogers case, filmmaker Federico Fellini intentionally copied the name to evoke the relationship between Fred and Ginger, and in University of Alabama case, Moore intentionally made an almost exact copy of the University’s trademarked uniforms and yet both artists won. The Eleventh Circuit stated that there was no evidence that Defendants held the series out as endorsed or sponsored by Plaintiffs, nor did they explicitly state that the series was affiliated with Plaintiffs. To the contrary, the Defendants chose a title that included its own house mark (MTV) and the name of one of its iconic franchises (Shore). Hence, the Eleventh Circuit concluded that the Defendants’ use of the title did not violate the Lanham Act as a matter of law. The Eleventh Circuit also analyzed the exception stated in the Rogers case and held that as the Defendants’ mark “MTV Floribama Shore” is the title of an artistic work whereas Plaintiffs use Flora-Bama as a mark to identify their bar and other commercial enterprises—not to identify any artistic works created or owned by Plaintiffs, the present case would not be subjected to the title-versus-title case exception. Although, the concurring opinion by Judge Brasher in this case, is of the view that the title-versus-title case exception should not be consulted in the first place and opined that the exception is inconsistent with the First Amendment values and is impractical as a matter of doctrine because it is hard to apply in a consistent and logical way. MGFB Props., Inc. v. Viacom Inc., 2022 USPQ2d 1145 (11th Cir. November 29, 2022) (precedential).[VR] Distinguishing Both Elster And Section 2(a) False Suggestion Claims, TTAB Sustains Opposition Based On Section 2(c) Lack Of Consent Terminal Moraine Inc. (“TMI”) applied to register the following mark in connection with backpacks and other outdoor/camping products: Registration was opposed by Mystery Ranch, Ltd. (“MRL”) on the grounds that (1) the applied-for mark falsely suggested a connection with MRL and its founder/co-owner Dana Gleason under Section 2(a) of the Lanham Act, and (2) TMI did not obtain the consent of a particular living individual identified by the mark, namely Dana Gleason, under Section 2(c) of the statute. In a precedential decision, the USPTO’s Trademark Trial and Appeal Board sustained the opposition solely on the Section 2(c) ground. Mystery Ranch, Ltd. v. Terminal Moraine Inc., 2022 USPQ2d 1151 (TTAB 2022). 1. MRL Entitled To A Statutory Cause of Action MRL’s opposition was based on allegations that its co-owner Dana Gleason is famous in the field of design and manufacture of backpacks and camping equipment under his name Dana, and that a previous company of Mr. Gleason’s, Dana Design Ltd. (not otherwise affiliated with MRL), had previously used and registered the marks “DANA DESIGN” and a design mark very similar to the design element of the opposed mark (prior to assigning those marks to a third-party company which did not maintain the marks). MRL’s evidence included online articles noting Dana Gleason’s involvement with MRL and that, e.g., MRL’s new backpack products “look very Dana Designs-esque”. 2022 USPQ2d 1151 at *17. The Board found that MRL was statutorily entitled to bring the opposition (formerly known in TTAB jurisprudence as “standing”) on all of MRL’s claims.In particular, the Board found that MRL, in addition to being a competitor of TMI, has demonstrated its personal stake in preventing the registration of a mark in the backpack field that allegedly appropriates the persona of one of its owners [Dana Gleason] promoted in connection with the business, and a reasonable belief in resultant damage. As the corporate body owned in part by Dana Gleason, Opposer has an interest beyond that of the general public in protecting Mr. Gleason's reputation as the purportedly famous "Dana" named in the designation DANA DESIGN.2022 USPQ2d 1151 at *15. 2. Section 2(a) False Suggestion Claim Rejected The Board noted that, in order to prevail on the claim under Section 2(a) that TMI’s mark “falsely suggest[s] a connection with persons, living or dead”, MRL must prove all of the following elements: 1. The opposed mark is the same or a close approximation of Opposer's name or identity; 2. The mark would be recognized as such, in that it points uniquely and unmistakably to Opposer; 3. Opposer is not connected with the goods sold by Applicant; and 4. Opposer is of sufficient fame or reputation that, when Applicant's mark is used in connection with its goods, a connection with Opposer would be presumed. 2022 USPQ2d 1151 at *19. The Board held that MRL failed to establish the first two elements. Regarding the first element, although MRL established that its co-owner Dana Gleason is known in the backpack field under his name Dana and is still associated with the name “Dana Designs”, his company MRL was the sole opposer in this proceeding, and neither “Dana” nor “Dana Designs” was a close approximation of MRL’s name or identity: [A]lthough Opposer has shown that consumers associate Dana Gleason and [MRL], we find that they are not perceived as each other's alter ego. There is no merger of the two such that the "Dana" in DANA DESIGN refers interchangeably to either entity. Opposer's efforts in publicizing Dana Gleason's involvement with Mystery Ranch "does not rise to the level of establishing [DANA] as the name or identity of [Mystery Ranch], or a close approximation of it."2022 USPQ2d 1151 at *27-28 (citing U.S. Olympic Comm., 2021 USPQ2d 164 at *22). Regarding the second element, the Board held that, even if “Dana” had been shown to be MRL’s name or identity, MRL failed to prove that TMI’s mark points uniquely and unmistakably to MRL, given MRL’s assertions that “Dana Design” also refers to Dana Gleason, Mr. Gleason’s previous company Dana Design Ltd., and the previous company’s assignees. 2022 USPQ2d 1151 at *29-30. The Board therefore dismissed MRL’s Section 2(a) claim. 3. Section 2(c) Claim Is Upheld A. CAFC’s ElsterRuling Is Distinguished The Board noted that Section 2(c) of the Trademark Act prohibits registration of a mark that "consists of or comprises a name, portrait, or signature identifying a particular living individual except by his written consent ...." The provisions of Section 2(c) are applicable to attempts to register a person's full name, a nickname, a first name or a surname, so long as the name identifies a particular living person. The Board further noted the recent decision of the Court of Appeals for the Federal Circuit in In re Elster, 26 F.4th 1328, 2022 USPQ2d 195 (Fed. Cir. 2022), which held that the Section 2(c) consent requirement violated the First Amendment’s protection of free speech as applied in that case, which involved an application to register the mark “TRUMP TOO SMALL” without the written consent of Donald J. Trump. However, the Board noted that (a) the Federal Circuit did not hold in Elster that Section 2(c) was facially unconstitutional, and (b) in the present case, the proposed mark is not critical of a public official or a public figure of any kind. Moreover, the record in the present case included testimony from Dana Gleason that he continues to make commercial use of his name in connection with MRL’s business, and that TMI’s opposed mark exploits his commercial interests. Therefore, the Board concluded that Section 2(c) presents no First Amendment problem in this case. 2022 USPQ2d 1151 at*31, n.15. B. TMI’s Application Violated The Section 2(c) Consent Requirement As noted above, a claim of false suggestion of a connection under Section 2(a) requires the opposer to show that the opposed mark is the same or a close approximation of the opposer’s identity. By contrast, the Board noted that an opposer can assert a claim of lack of consent of a living individual if the opposed mark identifies a non-consenting individual who is in privity with the opposer. Therefore, the Board permitted MRL’s Section 2(c) claim, based on the lack of consent of MRL’s founder and co-owner Dana Gleason, to go forward.2022 USPQ2d 1151 at *33. Moreover, whereas a Section 2(a) false connection claim requires that the opposed mark “points uniquely” to the opposer, the focus of a Section 2(c) claim is different. The Board noted that under Section 2(c), the opposer must show that the opposed mark identifies a living person (either the opposer or someone in privity with the opposer) because either (1) the person is so well known that the public would reasonably assume the connection, or (2) the person is publicly connected with the business in which the mark is being used.2022 USPQ2d 1151 at *35. Applying the above test to the present case, the Board held that: [T]he record establishes that Dana Gleason is known by the relevant consuming public to be associated with backpacks and hiking gear, and he remains publicly connected with the relevant marketplace by his ongoing affiliation with Opposer's business. Thus, use of the name DANA in connection with equipment in the field would lead to the assumption that Dana Gleason was in some way associated with the goods being offered under the name. 2022 USPQ2d 1151 at *36. The Board further noted that TMI failed to show that the name “Dana” in its mark refers to any other person. Id. The Board therefore sustained MRL’s opposition under Section 2(c). Mystery Ranch, Ltd. v. Terminal Moraine Inc., 2022 USPQ2d 1151 (TTAB November 30, 2022) (precedential). [SG] The TTAB refuses an appeal for registration of the mark “#LAW” on the ground of failure to function In this case, Pound Law, LLC (“the Applicant”) sought to register on the Principal Register of the USPTO, with a claim of acquired distinctiveness under Section 2(f) of the Trademark Act, 15 U.S.C. § 1052(f), the proposed mark #LAW in standard characters for legal services in International Class 35 and 45. Initially, the Examining Attorney refused registration of the proposed mark in both classes under Sections 1, 2, 3 and 45 of the Trademark Act, 15 U.S.C. §§ 1051-53 and 1127, on the ground that it failed to function as a service mark because “the applied-for mark #LAW as used on the specimen of record would be understood by consumers only as a means to contact applicant – a dialing code or an abbreviated phone number….”. After several years of prosecution history in the United States Patent and Trademark Office (“USPTO”), the Applicant appealed the refusal to the Trademark Trial and Appeal Board (“TTAB”). The TTAB’s decision made it clear that the USPTO “is statutorily constrained to register matter on the Principal Register if and only if it functions as a mark.” (quoting In re Brunetti, 2022 USPQ2d 764, at *9 (TTAB 2022). While the Applicant acknowledged that its proposed mark was a vanity phone number, the Applicant contended that #LAW should have been registrable as a mark because it was widely known to the consuming public as an alphanumeric telephone number uniquely associated with the services of the Applicant and its licensee (Morgan and Morgan law firm). Further, to assess whether Applicant’s proposed mark, #LAW, functioned as a mark, it is necessary to determine whether the relevant public, i.e. purchasers or potential purchasers of the identified legal and legal referral services, would perceive #LAW as identifying the source or origin of such services. See, e.g., In re Texas With Love, LLC,2020 USPQ2d 11290, at *2 (TTAB 2020). In deciding the present case, the TTAB gave an example of an earlier decision wherein it was held that any matter widely used to convey informational messages generally was not perceived as indicating a single source. See Vox Populi Registry,25 F.4th 1348, 2022 USPQ2d 115, at *3 (Fed. Cir. 2022) (affirming failure-to-function refusal where .SUCKS would be viewed “as only a non-source identifying part of a domain name, rather than as a mark”). The TTAB held that #LAW was commonly used as a hashtag in the legal field. In response to that, the Applicant illustrated its use of #LAW was a relatively new type of vanity phone number (and proposed service mark), wherein they also included evidence of Applicant’s licensee, Morgan & Morgan, in the evidence. Further, the Applicant pointed out that in an effort to differentiate its #LAW proposed mark from a commonly used hashtag, its radio advertising vocalized #LAW as “pound law.” The Applicant also introduced evidence that the # symbol may signify “Number, Pound, or Hashtag. The TTAB negated this argument and held that regardless of Applicant’s own pronunciation of #LAW in audible advertising as “pound law” rather than “hashtag law,” in Applicant’s extensive visual-only advertising that contained no such audio and it was obviously not possible for the Applicant or its licensee to control how purchasers would vocalize its mark. The TTAB also elucidated that given the prevalence of social media and hashtags, many purchasers would perceive and vocalize #LAW as a hashtag, regardless of Applicant’s intentions. Further, the TTAB held that prospective purchasers familiar with such widespread non-trademark use were unlikely to consider it to indicate the source of Applicant’s goods and that the evidence was directly relevant and quite persuasive to that effect. The TTAB also noted the consumer exposure to #LAW as an informational hashtag used in connection with services similar or identical to those identified in the involved application and rendered by multiple unrelated entities. As a result, consumers would be less inclined to view this common term as a source indicator, because they would have been exposed to third-party use of the same term in the same field. Further, the TTAB held that the Applicant’s use of its proposed mark was not qualitatively different than the third-party uses that Applicant conceded were non-source-indicating. Another argument brought up by the Applicant focused on the status of its proposed mark as a mnemonic telephone number, wherein the Applicant insisted that courts and the Office had long recognized the registrability of such marks. The Applicant also pointed to specific guidance in the Trademark Manual of Examining Procedure relating to the examination of proposed marks that were alphanumeric telephone numbers, arguing that such guidance would control the assessment of #LAW. The TTAB response was that unlike the traditional 10- or 11-digit numbers, the new shorter cell phone mnemonic numbers resembled hashtags commonly used nowadays in social media and other contexts, which would create more than just a minor additional wrinkle in assessing consumer perception of such proposed marks. The TTAB relied on an earlier case Federal Circuit decision in In re Dial-A-Mattress Operating Corpwhich elucidated that telephone numbers consisted of only seven numbers and typically could be used by only one entity at a time.” 240 F.3d 1341, 57 USPQ2d 1807, 1811 (Fed. Cir. 2001). Comparing the above with the current case, the TTAB held that the Applicant’s proposed mark #LAW was in use by numerous competitors as a hashtag. Thus, unlike the vanity phone numbers addressed by the Dial-A-Mattress court, #LAW, which was both a popular hashtag and a vanity phone number, was used by considerably more than one entity at a time. To determine whether the manner of Applicant’s use of the proposed mark conveyed to consumers that it was a source indicator, the TTAB stated that a proposed mark must be used in such a manner that it would be readily perceived as identifying the specified goods or services and distinguishing a single source or origin and the mere fact that a designation would appear on the specimen of record would not make it a trademark or service mark. The TTAB also dealt with the Applicants’ argument pertaining to their prior registration of a similar mark more than 15 years old. The TTAB clarified that circumstances had changed since the earlier registration was issued, including that there is now widespread third-party use of the proposed mark as a hashtag and given the nature of Applicant’s use on the specimens at issue, the prior registration did not convince the TTAB that #LAW would be able to function as a service mark. To conclude the TTAB affirmed the refusal to register Applicant’s proposed mark on the ground that it fails to function as a mark. In re Pound Law, LLC, 2022 USPQ2d 1062 (TTAB November 9, 2022) (precedential). [VR]
Historians Corner
BY: DALE CARLSON*
From time to time over the past few decades, the NYIPLA's Board of Directors has contemplated various ways to extend the Association's reach beyond the existing membership. During Peter Saxon's term as President in 1991-92, he requested comment from Committee Chairs regarding a Board proposal to admit two groups as affiliate members of the Association. The two groups included (a) registered U.S. patent agents admitted to practice before the USPTO and (b) foreign patent agents who are permitted to represent clients before their respective foreign patent office. In an April 1992 letter on the subject, Mr. Saxon observed that both groups of patent agents "should be able to affiliate with our Association since we share common interests. As a practical matter, many of our members regularly deal with U.S. and foreign agents. Since our stated objects in promoting and maintaining intellectual property laws, in educating persons in such laws and in cooperating with foreign associations in harmonizing international conventions are compatible with the common interests of such agents, we [the 1991-92 NYIPLA Board] would like to consider permitting them to affiliate with our Association." Mr. Saxon went on to observe that "The By-Laws in Article III, Sections 3 and 4 now provide that a member of the Association who is a patent agent may be a 'life' member or a 'retired' member. There was a time when patent agents were members of this Association. We [the 1991-92 Board] believe that they should be considered again." The proposal concerning U.S. and foreign patent agents was discussed in a lively debate at a Board meeting held in conjunction with the 1992 Annual Meeting. All living past presidents at the time were invited to the Board meeting. Past President John Kelton, who was in poor health at that time, stood with the help of a cane and made an impassioned plea in favor of the proposal. Nonetheless, the vote was deadlocked and the proposal was tabled for future consideration. As an aside, a national organization, namely the AIPLA, also contemplated admission of U.S. patent agents and ultimately decided to welcome them as members. Further, the AIPLA established a Patent Agents Committee to help promote the interests of patent agents within the AIPLA and the broader intellectual property community. Two decades after the original proposal, NYIPLA Board reconsidered only the aspect of the proposal relating to admission of U.S. patent agents. This happened during the 2012-13 Association year. Specifically, the Board requested approval by the full membership of a change in the By-Laws that would allow registered U.S. patent agents in good standing, who are located in our Association's geographic region, to be Associate Members of the Association. Associate status provided all the privileges of regular membership except those of voting and holding office. The membership approved the proposed change in the By-Laws in May 2013. The change, as recited in Article III, Section 6 (b) reads as follow: ARTICLE III, SECTION 6. Associate Members. (a) Any lawyer interested in intellectual property law, of good character and in good standing, and not having his/her residence or a regular and established office in the Second Circuit or in the District of New Jersey or who shall be admitted to practice, but not in a state or territory of the United States, or in the District of Columbia, or (b) any person who is not a lawyer, but is registered to practice before the United States Patent and Trademark Office and is in good standing on the registry of patent agents and who has his/her residence or regular and established office in the Second Circuit or the District of New Jersey, shall be eligible for election to Associate Membership. Associate Members shall have all the privileges of the Association except those of voting and holding office. Just imagine how this change in Associate Membership opportunity has the potential to benefit not only U.S. patent agents, but also the Association and the IP community at large. Such agents will be able to attend NYIPLA educational programs at the member rate, which will make such programs more affordable and thus encourage them to attend. Since many such agents work for corporations, their presence as members of our Association will likely increase our corporate membership base. To the extent that agents' practice skills become improved by virtue of NYIPLA membership, IP community at large stands to gain. In addition, patent lawyer colleagues of the patent agents within our Association may benefit if they are retained to enforce patents obtained by agents having practice skills enhanced by their NYIPLA experience. To get the ball rolling again in 2022-23, as the Covid pandemic hopefully begins to ease and in-person participation gains strength, our current Board would do well to consider reaching out to organizations like the National Association of Patent Practitioners [napp.org] for the names of agents located within the NYIPLA's geographic region, namely NY, NJ, CT & VT. Such outreach will hopefully facilitate growth in our membership. Hopefully we will welcome new NYIPLA members with open arms. In the meantime, wishing health to all of you! *Dale Carlson is NYIPLA past president and current historian. His email is dale.carlson@quinnipiac.edu.
"As Time Goes By - Extending the NYIPLA's Reach - Redux"
The Board meeting was held online with members attending via Zoom and over telephone conference. In attendance were: Heather Schneider, President, presiding David Goldberg Abigail Struthers Patrice Jean (dialed in 4:20 pm ET) Jonathan Berschadsky John Mancini Linnea Cipriano Jenny Lee Cheryl Wang Scott Greenberg Rob Rando (joined at 4:10 pm ET) Rob Isackson Mark Schildkraut Feikje van Rein attended from the Association’s executive office. Eric Greenwald attended from the Associate Advisory Council. Diana Santos, Paul Bondor, Christopher Loh as well as Khalil Nobles and Christine-Marie Lauture from the AAC, were unable to attend. The meeting was called to order by President Heather Schneider around 4:05 PM ET. Motion to waive reading of minutes was approved. A motion to approve minutes was passed. Financial Report & New Members – Scott Greenberg reported financials are down slightly from YTD. Difference is the Hilton deposit from last year. Enough revenue to break even. 13 new members, including a retired member. Membership is up YTD, 618 compared to 580, across all categories. Amicus Briefs Committee David Goldberg reported that there are no recommendations pending this month. Tomorrow morning, S. Ct. will have oral hearings in Warhol, copyright and transformative work issue. 18 cases on the watch list. Most recently added 2 patent cases & 1 trademark case to be monitored. Irena & Rob moderated the panel presentations. ABC is preparing material for upcoming 1 day CLE. Legislative Action Committee Rob Isackson reported that Committee participated in WTR waiver joint statement, which was issued yesterday. Keeping an eye on potential legislation but not much movement given pending elections. LAC is prepping to give presentation. For the Judicial Security & Privacy Act, reached out to Judge Salas & Judge Harper should they wish to speak to this legislation, reached out to Sen. Menendez, Sen. Booker and Congressman Nadler to see if NYIPLA can assist in pushing legislation. Associate Advisory Council Heather provided update in place of Diana, regarding AAC term & succession plan. Discussed AAC charter and staggered structure initially contemplated adding 3 members to ensure existing continuity and new voices. Propose extension & new member selection. Rob, Cheryl, Linnea, AAC current members & Diana to form sub-committee. Previous and Upcoming Programs: Amicus Program September 14, Kramer Robert Rando Covered 1) Section 101 & 2) Double Patenting topics. Dave Kappos & Judge – proposed amendment to Section 101; well received. 2 PTAB judges for 2nd topic. Some tech issues but great on-site engagement hosted by Kramer Levins. Young Lawyers/ Corp Committee - Penn 6 Diana Santos Heather reported well-attended; still searching for Corp. Committee co-chairs. Mark Schildkraut will search for 2 candidates & serve as board liaison. Fall IP Transactions Bootcamp Heather Schneider 42 registrants attended. Discussed data room hands-on interactive session for Day 3 of bootcamp. Discussed marketing push. Board members explored offering 1 free year of membership for attendees and other benefits. One Day Patent Program – Nov 9 Heather Schneider In-person at Willkie & possibly a couple of exceptions attending via Zoom. Program is coming along well. Chief Judge Bollock speaking. Corporate Panel pending final speakers. A few judges will speak on Mediation panel. Board & Past Presidents Dinner – Nov 15 – La Baia Rob Isackson Katie unable to make it but will be great for board to connect with President and Past Presidents. Committee Updates Trade Secrets Committee panel on Nov 9th One Day Patent CLE – DOJ AUSA from D.C. & former AUSA; another employment lawyer & forensic specialists. Purpose is to explore essential collaborations for IP lawyer. Jenny reported Connor Writing Competition chairs have revised rules and formatting submissions to ensure clarity and blind review structure. PTAB committee last Tuesday had monthly CLE program & several PTAB judges conducting mock ex-parte appeal, and tips on effective advocacy. Cheryl reported new member added to Fashion Law Committee who will connect with co-chairs. Linnea reported Women in IP new co-chairs are active. She is supporting the transition & handoff. Patrice reported that the NYIPLEF gala & dinner postponed last year will likely be held December 14th. Publications Committee is prepping for next publication but nothing new to report. Nothing new to report this month from Media Committee. Eric reported the AAC is looking to host an event early December. 101st Judges' Dinner – March 31, 2023 Discussed whether best to start award nominations with Justice Breyer or if best to focus closer to home and/or practice area. Agreed it still makes sense to begin with Justice Breyer. Motion was passed and meeting adjourned at 4:55 pm.
MINUTES OF OCTOBER 11, 2022 MEETING OF THE BOARD OF DIRECTORS OF THE NEW YORK INTELLECTUAL PROPERTY LAW ASSOCIATION
The Board meeting was in-person and online via Zoom. In attendance were: Heather Schneider Patrice Jean Rob Isackson Rob Rando Cheryl Wang Abigail Struthers (joined in-person 5:15 pm) Jonathan Berschadsky Jenny Lee (left the call at 5:30 pm) Scott Greenberg Chris Loh David Goldberg (joined 4:45pm) Diana Santos Feikje van Rein attended in-person from the Association’s executive office. Eric Greenwald from the Associate Advisory Council attended in-person at the close of the meeting. Paul Bondor, Khalil Nobles and Christine-Marie Lauture from the AAC, were unable to attend. The meeting was called to order by President Heather Schneider around 4:05 PM ET. Motion to waive reading of minutes was approved. A motion to approve minutes was passed. Financial Report & New Members. Scott Greenberg reported that total assets were down $1k compared to last year. This year the IP Transactions Bootcamp earned the most. For the 1 Day Patent CLE, the cost of travel & food added to the expenses, so while there were 61 total attendees, about a third were speakers. The Warhol event hosted by the Young Lawyers and Copyright Committee is Zoom only now and the food that was ordered has been cancelled because only 2 registered for in-person. Scott reported 14 new members with a mix of practitioners and students. Membership is up YTD from last year with 60 total members. Motion to waive reading of the names and to admit the new members was passed. The Board discussed ways to build on the welcoming / onboarding process for new members. Discussed waiving or discounting fee for speaker who are in-house counsel members. For Dec 8th, the Q&A with Chris Israel and Chris LoCicero is $75 for the event and the Board discussed extending a 50% discount to corporate members. Amicus Briefs Committee. David Goldberg reported that a conflict check has been run on the In re Grand Jury matter. The Board discussed the importance of the Amgen v. Sanofi case and whether an amicus brief can be submitted given the number of votes needed to reach a quorum and the conflict checks challenges. The Board members agreed that NYIPLA can submit an amicus brief addressing the broader implications. A motion was passed to form a subcommittee of non-conflicted out members to review and prepare for the Amgen v. Sanofi case provided the following: 1) Footnote in brief to be included that clarifies submission approval reflects only review done by board members with the ABC who are not conflicted; 2) neutrality is important to maintain. David reported on another amicus: the S. Ct. granted cert in Abatron (trademarks) case issue regarding extraterritorial application of Lanham Act. At issue is whether counterfeits from a company can be the but-for reason for lost revenue in calculation of damages. Case involves American electronics company with licensee in EU. There was a falling out over license but the EU company kept producing & selling the products including to some of the same clients in the US. American company sued & won damages. Deadline is December 19th. Legislative Action Committee. Rob Isackson reported thatnot much going on Congress. The NDAA manager’s amendments in – Judicial Security Act, INFORM Act. A letter was sent following up on Judicial Security Act. Committee is looking for more active members to participate. Jenny Lee mentioned USPTO req for comments and Rob Isackson noted that LAC typically monitors requests for comments & forwards to appropriate committees & chairs. Jenny noted one USPTO request with a deadline of Feb 23rdwith repercussions which would upend all patent continuation practice by writing away the rules. The board discussed selecting portions to respond to instead of responding to the entire extensive request. The board discussed another request for comments regarding Rule 66 and the extent of collaboration between SBA & USPTO. Copyright Office Comments. Scott Greenberg reported that comments have been filed and are now available online at regulations.gov. The comments addressed modification of the small claims rules, and discussed the importance of allowing written statement rebuttals. Associate Advisory Council. Diana Santos discussed next stage of AAC and how it may be determined. The board agreed it was important to pick broadly from members and non-members. Selection will start with our own members first, calling on all members with 6 years of practice & under. Previous and Upcoming Programs. Patent Eligibility Restoration Act –Oct 28 J. Berschadsky reported Brad Watts covered past & current status; did not go over American Axel but went over the Act. IP Transactions Bootcamp Oct 19th last day – J. Berschadsky reported there were 3-4 participants for each question. Mock data room setup worked well but not great for in-person. Attendance was great. PTAB program Rob Rando reported the event demonstrated technology at issue by USPTO with use of colors in brief and APJs such as APJ Bryan McNamara participating. One Day Patent Program – Nov 9 Heather Schneider reported that about 60 people attended. It was a successful event and easier to have in-person at the firm. PTAB Chief Judge stayed most of the day as well as many of the speakers. DOJ & FBI attended and audience was definitely engaged. Board & Past Presidents Dinner – Nov 15 – La Baia Rob Isackson Fair Use of Warhol v Goldsmith Scott Greenberg reported it is an online interactive event tomorrow night from 6-7 pm. NYU law professor will be a speaker & Mitch Stein, committee co-chair participating. Committee Reports. NYIPLEF event Dec 14 that Willkie High price point – in-house counsel; no auction; $1k per person; 2 people for $2500; $5k with name & logo; about 20 in-house people coming to join the event; either GC or lead IP counsel at their company; 3 of them will do a panel for DE&I; 1 of the scholarship winners will be moderatorFashion Law– new student members; outreach with BLS & Hofstra; setting up meeting with new members & co-chairs; UMiami students interested in joining Transactions Panel– Nov 8th– 2 outside counsel & in-house from Marsh New Business. CENTENNIAL COMMITTEE discussed. Meeting was adjourned at 5:53 pm.
MINUTES OF NOVEMBER 15, 2022 MEETING OF THE BOARD OF DIRECTORS OF THE NEW YORK INTELLECTUAL PROPERTY LAW ASSOCIATION
The Board meeting took place online via Zoom. In attendance were: Heather Schneider, President, presiding Patrice Jean Rob Isackson (joined at 5:20 pm) Rob Rando Cheryl Wang Abby Struthers Jonathan Berschadsky Jenny Lee Scott Greenberg Chris Loh David Goldberg Diana Santos Linnea Cipriano Feikje van Rein attended in-person from the Association’s executive office. Eric Greenwald, Christine Lauture and Khalil Nobles attended from the Associate Advisory Council. Heather Schneider and Paul Bondor were unable to attend. President Elect Rob Rando held the meeting in place of President Heather Schneider & called the meeting to order at 5 PM ET. Motion to waive reading of minutes was approved. Motion to approve minutes was passed. Financial Report & New Members. Scott Greenberg reported that total assets were down YTD but there were payments such as expenses for hotel reservations that did not need to be paid last year due to pandemic credit holdovers. Expecting to make the amount back through Judge’s Dinner and other programming. Scott reported membership is up YTD from last year, though this month is relatively quiet with 6 new members. Composed of a mix of students, retired, and 1 associate active for 3+ years. Motion to waive reading of the names and to admit the new members was passed. Amicus Briefs Committee. David Goldberg reported that the ABC reached out to the Trademark Committee on the Abatron case involving extraterritorial application of the Lanham Act. Of greater interest to the Trademark Committee members is the Jack Daniels parody case where cert petition has been accepted. Issue is whether there’s infringement, dilution, or it’s permissible parody. Currently, waiting on proposals to respond. Legislative Action Committee. Rob Isackson reported there was no meeting last month. Inventor of the Year. Feikje reported on behalf of Paul Bondor that the deadline for submissions has been extended to January 10th. The board discussed ways to expand submission pool. The academic field was suggested as a potential opportunity, such as professors who are up for tenure. Associate Advisory Council. Diana Santos will follow up with a report next meeting. In the meantime, AAC is planning Zoom Out with NYIPLA program. Eric & Christine are planning an in-person event for new lawyers and students. Judge’s Dinner. The board discussed OPS award. Currently, in contact with Mae Jemison, the first African American woman in space and Justice Breyer’s assistant. Heather is considering Judge Atkin if S. Ct. Justice is not available. Jonathan proposed Neil de Grasse Tyson & we have explored in the past. For Linn Inn Alliance, Judge Linn has not confirmed if they’re looking for a different host but Kirkland has been willing. Likely take place from 5-6 pm if suite is available. Previous and Upcoming Programs. Board & Past Presidents Dinner – Nov 15 at La Baia - Rob Isackson reported it was a great event and lovely venue. Very meaningful for board members to connect with past presidents. Fair Use of Warhol v Goldsmith- Scott Greenberg reported event went well and good participation. The panel was moderated by Mitch Stein, practitioners & NYU professor who worked on the amicus brief in that case. PTAB Meeting– Rob Rando reported that it was a great program and very informative. Covered PTAB trial practice with 31 attendees, of which 6 were APJs (2 current & 2 former). Extraterritoriality Revisited: Implications of Abitron for Patent Law President’s Forum event for Jan 19th- Chris Loh reported that program evolved out of a Patent Committee meeting presentation. It was informative content so they decided to make it available to a bigger audience. Corporate Committee: Legislative Update -Dec 8thChris Israel event with 8 people in attendance and lively discussion. NYIPLEF Dinner. The board discussed whether funds were sufficient for adding 3rd scholarship. Money raised so far from the Gala can still cover 2 scholarships as we’ve always done. Revisit at April 2023 board meeting after Judge’s Dinner since winner selection is not until Spring. Committee Reports. Jonathan B reported that the Patent Law & Practice Committee hosted Frank Cullen C4IP – essentially lobbying group, with former USPTO Director Iancu, judges such as Judge Paul Michelle, etc. New Business. Jan 10this new date for BOD (in-person at Union League) due to Connor Inn Dinner.
MINUTES OF DECEMBER 13, 2022 MEETING OF THE BOARD OF DIRECTORS OF THE NEW YORK INTELLECTUAL PROPERTY LAW ASSOCIATION
Director Review, POP Panel Review, and Decision Circulation By: PTAB committee On Tuesday, September 6, 2022, the PTAB Committee held their monthly meeting and discussed Director review, POP panel review, and decision circulation. In this interactive meeting, a distinguished group of USPTO officials, including Vice Chief Judge Kal Deshpande and Vice Chief Judge Melissa Haapala, shared insights on the latest updates and current status of Director review, POP panel review, and decision circulation at the USPTO. Young Lawyers / Corporate Happy Hour By: young lawyers and corporate Committees On Wednesday, September 21, the Young Lawyers and Corporate Committees held a Happy Hour at Pennsylvania 6. Attendees were able to mingle and network with other young lawyers and corporate lawyers while enjoying food and drinks! USPTO Argue Mock Ex Parte Appeal By: PTAB committee On October 4. 2022, the PTAB Committee discussed effectively arguing an mock ex parte appeal at the USPTO. In this interactive meeting, a distinguished group of USPTO officials, including Lead Judge Phil Kauffman, Lead Judge Ryan Flax, Lead Judge Alyssa Finamore, Judge Bill Baumeister, Vice Chief Judge Kal Deshpande, and Vice Chief Judge Janet Gongola shared tips for effective written advocacy and argue a mock ex parte appeal with stop/start action to share commentary and insights about effective oral advocacy. IP Transactions Bootcamp By: Programs Committee The IP Transactions Bootcamp, which was geared towards junior and mid-level associates, allowed attendees to learn practical skills from experienced attorneys and in-house counsel. Topics included: Copyright, Trademarks Agreement Patent Agreements Cybersecurity, IP, and Privacy Issues in Technology Transactions. Government and University Agreements Mergers, Acquisitions, Due Diligence & Ethics Ethics Transactions & An In-House Perspective Patent Law: Patent Eligibility Restoration Act of 2022 By: Patent Law & Practice and Legislative Action Committees NYIPLA invited members to join the Patent Law & Practice and Legislative Action Committee's joint program on October 28, 2022. Brad Watts, Minority Chief Counsel of the Senate Judiciary Committee Subcommittee on IP spoke to the Patent Law and Practice Committee and Legislative Action Committee on October 28, 2022, regarding the recently proposed patent reform legislation. Key points covered included: The bill excludes from patent protection “NON-TECHNOLOGICAL economic, financial, business, social, cultural or artistic process” that is not “embodied in a machine or manufacture, unless that machine or manufacture is recited in a patent claim without integrating, beyond merely storing and executing, the steps of the process that the machine or manufacture perform. Mr. Watts indicated that Senator Tillis did not want to define “technological” because technology evolves over time and it is difficult to predict how industry will change in the future. He did not want to provide a definition that was too restrictive. However, Mr. Watts indicated that the intent was to have a low bar for what is considered “technological.” He used the term “de minimis” in this regard. When I asked if that term could be included in the legislation in the future, Mr. Watts said that it probably would not, as it could be considered as too minimal of a filter if taken to an extreme. Thus, “technological” essentially means something a little more than “de minimis.” After further discussion, Mr. Watts indicated that part of the intent was to prevent patents from being issued for inventions that were essentially the mere automation of conventional techniques previously performed manually. It is unlikely any legislation would get passed until approximately 6 to 8 years from 2022. The above-mentioned limitations of some of the language will evolve, so the intent at this point is more important than the specific terminology.” USPTO Discuss Presenting Technology to the Patent Trial and Appeal Board By: PTAB Committee On Tuesday, November 1, the NYIPLA PTAB Committee had a discussion on effective ways to present technology to the Patent Trial and Appeal Board. In this interactive meeting, Administrative Patent Judge Kim McGraw and Administrative Patent Judge Russell Cass explained best practices and effective ways to present technology to the PTAB. One-Day Patent CLE Seminar By: Programs Committee On Wednesday, November 9, the NYIPLA held the One-Day Patent CLE Seminar at Willkie Farr & Gallagher LLP. Beyond Taking “Reasonable Measures of Protection,” Essential Collaboration Required to Maintain and Enforce Trade Secrets Hot Topics in Pending and Proposed Legislation Hot Topics and Pitfalls When Negotiating Commercial Agreements Interactive Ethics CLE Recent Federal Circuit Decisions Impacting Patent Law An In-House Perspective on Managing Outside Counsel From the Arbitrator's Perspective: A Discussion of Best Practices in IP/Patent Arbitration The Future of Fair Use After Warhol v. Goldsmith By: Copyright, Amicus Brief, and Young Lawyer's Committees On Wednesday, November 16, NYIPLA's Copyright Committee, Amicus Brief Committee, and Young Lawyer's Committee had a evening round-table discussion about the Warhol v. Goldsmith case and its impact on the fair use and transformativeness analysis in the U.S. Intellectual Property and Art law. Specialists discussed the recent Supreme Court hearing on the case, previous SCOTUS decisions on fair use, the future of fair use analysis, and its impact on the world of visual art and content creation. Patent Law: Discussion on the Council for Innovation Promotion (C4IP) By: Patent Law & Practice Committee On Friday, December 2, NYIPLA's Patent Law & Practice Committee welcomed Frank Cullen, Executive Director of the Council for Innovation Promotion, to speak at their committee meeting. Mr. Cullen is part of the recently formed Council for Innovation Promotion (C4IP). He spoke about why the group was formed, what the goal of the group is, who is the group meant to serve; and what are the plans for involving patent practitioners. USPTO Returns to NYIPLA PTAB Committee to Hold an Advanced AIA Trial Practice By: PTAB Committee On December 6, 2022, NYIPLA's PTAB Committee discussed several topics during an advanced AIA trial practice session. During this interactive meeting, USPTO Judges Kevin Cherry and Linda Horner were joined by former Vice Chief Judge, Senior Legal Advisor to the Director, and current Partner at O'Melveny & Myers Tim Fink and General Counsel at Unified Patents Jonathan Stroud in a panel moderated by PTAB Committee Co-Chair Charles Macedo. The panel held an advanced AIA trial practice session and discussed some of the following important trial topics: When to file more than 1 petition against same patent (serial or parallel) When to challenge fewer than all claims When to file a Sotera stipulation When to ask for a Preliminary Reply How to navigate co-pending claim construction when filing an IPR How to address arguably indefinite claim terms When to move to strike for new argument versus letting it play out Contents of expert declaration and incorporation by reference Reach of estoppel When to object to demonstratives Extraterritoriality Revisted: Implications of Abitron for Patent Law By: Patent Litigation Committee On December 7, 2022, NYIPLA's Patent Litigation Committee welcomed Cassandra Roth, Counsel at Ropes & Gray LLP for the program 'Extraterritoriality Revisited: Implications of Abitron for Patent Law.' The Supreme Court recently decided to review the extraterritorial reach of the Lanham Act in Abitron Austria GmbH et al. v. Hetronic International Inc. Attendees learned about this pending case and its potential implications for extraterritoriality in patent law. Legislative Update By: Corporate Committee The NYIPLA Corporate Committee invited in-house counsel members to join their December 8 virtual meeting for a Legislative Update from Chris Israel of AGC. PTAB Committee Meeting: USPTO Returns to NYIPLA PTAB Committee to Provide a Recap of What Happened at the PTAB in 2022 and Explore What to Expect at the PTAB in 2023 By: PTAB Committee On January 3, USPTO Vice Chief Judge Janet Gongola provided PTAB committee members with an update and recap of what happened at the PTAB in 2022 and explore what to expect at the PTAB in 2023. NYIPLA Presidents' Forum: The Impact of the Inflation Reduction Act and Other Policies on the Pharmaceutical Industry By: Heather Schneider, Michael Johnson, Huiya Wu On January 19, the President’s Forum brought together thought leaders to consider the impact of the Inflation Reduction Act (IRA) and other policies, such as price controls and IP waivers, on the pharmaceutical industry. They discussed the public policy and economic reasoning both for and against the IRA and similar policies. They addressed the IRA’s impact on innovation and drug development, as well as potential consequences for end consumers. Speakers also considered how the IRA and similar policies could impact investments in the pharmaceutical sector.This Forum provided different perspectives from legal experts on these crucial issues, and the NYIPLA hopes this Forum can help move all parties closer to agreement. Speakers include: Richard Frank, Leonard Schaeffer Chair in Economic Studies, Director of Schaffer Initiative on Health Policy, The Brookings Institution Henry Hadad, Senior Vice President and Deputy General Counsel, Bristol Myers Squibb Karin Hessler, General Counsel, Association for Accessible Medicines Anna Makki, Managing Director, Marathon Asset Management
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NYIPLA Publications Committee Editorial Team Committee Co-Chairs Kyle Koemm and Margaret Welsh Giselle Ayala Mateus Board Liaison Patrice Jean Committee Members Heather Bowen Dale Carlson Jayson Cohen William Dippert John Kenneth Felter Robert Greenfeld Richard Koehl Kyle Koemm Keith McWha Clint Mehall Suzanna Morales Calvin Wingfield Anna Bank NYIPLA Executive Office 229 Seventh Street, Suite 202. Garden City, NY 11530 Tel: 1.201.461.6603 Email: admin@nyipla.org Web: www.nyipla.org
FEBRUARY 02/02/2023 Zoom Out with NYIPLA! 02/07/2023 PTAB Committee Meeting: NYIPLA PTAB Committee to Discuss Scope of IPR Estoppel 02/07/2023 Biologics & Biosimilars – Section 112 at the Supreme Court 02/15/2023 Patent Litigation Committee: Selecting a Winning Jury in Patent Trials MARCH 03/31/2023 101st Annual Dinner in Honor of the Federal Judiciary