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“What the Court Giveth, it May Taketh Away”

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Texas Appeals Court Erases Verdict of $4.4 Million in Lost Profits for Trade Secret Misappropriation

One monetary remedy often sought by a trade secrets-plaintiff is lost profits.  Want to know what kind of evidence a trade secret-plaintiff needs to marshall and present to support a lost profits damage model?  Conceptual image illustrating the word ProfitA recent Texas appeals court provides instructions about how NOT to do it.  Indeed, in Hunter Buildings & Manufacturing, L.P. v. MBI Global, L.L.C., No. 14-12-00246-CV, 2014 WL 1258017 (Tex. App.—Houston [14th Dist.] Mar. 27, 2014, no pet. h.), the court reversed a $4.4 million verdict for lost profits, finding that the proof offered by trade secrets-plaintiff was insufficient to establish that the defendants’ alleged trade secret misappropriation caused the trade secret-plaintiff’s damages.

The dispute in Hunter Buildings arose out of the departure of Milo Nickel and Michael LeBlanc, president and vice-president, respectively, from MBI Global (“Global”)—a company in the business of manufacturing and selling blast-resistant buildings.  Nickel and LeBlanc left in 2009 to form another company, BBG Group.  Although Nickel and LeBlanc both had signed a “Non-competition and Trade Secrets Agreement” at Global, Nickel and LeBlanc formed BBG Group, and went into business with Hunter Buildings to compete against Global. Continue Reading »

No district court review for patent wwner in ex parte reexamination;

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Fed. Cir. affirms dismissal for lack of jurisdiction to review ex parte reexamination decision but treats the case as if on direct appeal from the BPAI and affirms obviousness rejection.

In re Teles AG Informationstechnologien, ___ F.3d ___ (Fed. Cir. Apr. 4, 2014) (DYK, Moore, Wallach) (D.D.C.: Howell, but treated as if directly appealed from BPAI) (1 of 5 stars)  Continue Reading »

District court does not need to verbalize claimed design in design patent if its reasoning is apparent

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Fed. Cir. affirmed summary judgment of invalidity of two design patents for obviousness.  The patents claim designs for football and baseball jerseys for dogs.Dog in jersey_200pxwide  The district court had found obviousness by combining a “primary reference” with one of several “secondary references,” and the patentee challenged whether various prior art was properly considered a primary or secondary reference.

MRC Innovations, Inc. v. Hunter Mfg., LLP, __ F.3d __ (Fed. Cir. Apr. 2, 2014) (Rader, PROST, Chen) (N.D. Ohio Gaughan) (2 of 5 stars) Continue Reading »

Claim preclusion bars a second suit on new claims obtained in reexamination absent a clear showing otherwise

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Fed. Cir. affirms dismissal based on claim preclusion.  In a prior suit, the district court found that Senju’s patent claims were invalid, but Senju instituted a re-examination and obtained an amended version of one claim and several new claims. Senju filed a new suit based on the re-examined claims.

Senju Pharm. Co., Ltd. v. Apotex Inc., ___ F.3d ___ (Fed. Cir. Mar. 31, 2014) (Newman, PLAGER, O’Malley (dissenting)) (D. Del: Robinson) (3 of 5 stars) Continue Reading »

Abuse of discretion to deny transfer where some factors favor transfer and none weigh against it

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Fed. Cir. granted a mandamus petition and vacated the denial of motions to sever and transfer claims against Toyota and a motion to stay the remaining claim against its co-defendant and distributor, Gulf States.  In addition to the district court’s finding that no factors favored venue in E.D. Tex. while several favored venue in Michigan, the Fed Cir noted that availability of compulsory process and cost of attendance for willing witnesses also favored Michigan—some witnesses resided there,  Continue Reading »

Lack of overlap between markush groups used to narrowly construe claim term

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Fed. Cir. reverses the district court’s claim constructions and finding of infringement, and remands for further proceedings. The patent covers a controlled-release oral pharmaceutical composition for treating inflammatory bowel diseases.

Shire Development, LLC v. Watson Pharmaceuticals, Inc., __ F.3d __ (Fed. Cir. Mar. 28, 2014) (Rader, Prost, HUGHES) (No. 2013-1409, S.D. Fla.) (1 of 5 stars) Continue Reading »

“You get what you bargain for”: The Implied License Doctrine Is Limited to Continuations of Patents Listed in a License Agreement

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Fed Cir vacated and remanded denial of preliminary injunction because the defendants had neither an express nor implied license to the asserted patents.

Endo Pharm. Inc. v. Actavis, Inc. , __ F.3d __ (Fed. Cir. Mar. 31, 2014) (Newman, Dyk (dissenting in part), MOORE) (S.D.N.Y. Griesa) (2 of 5 stars) Continue Reading »

Assistance in Constructive Reduction to Practice (Writing Patent Application) Alone Does Not Support A Declaratory Judgment Action For Inventorship

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The Fed Cir vacated a preliminary injunction and remanded with instructions to dismiss the case based on lack of subject matter jurisdiction.

StoneEagle Services, Inc. v. Gillman et al., __ F.3d __ (Fed Cir. Mar. 26, 2014) (RADER, Moore, Reyna) (N.D. Tex.: Solis) (3 of 5 stars)

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Kessler doctrine applies as an independent estoppel doctrine to limit claim splitting

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Fed. Cir. affirms application of claim preclusion and Kessler doctrine to assertions against products that existed when an earlier litigation was concluded, vacates with respect to new/different products, and remands.   Claim preclusion applied to apparatus claims that were previously litigated (which everyone agreed it should) and method claims that were previously dismissed without prejudice (which Brain Life argued it should not), but only with respect to acts that occurred before the prior judgment.  Issue preclusion blocked subsequent assertion of the apparatus claims that were “fully, fairly, and actually litigated to finality” as to then-existing products, but did not block assertion against new products or assertion of the method claims, which were dismissed.

Brain Life, LLC v.  Elekta Inc., ___ F.___ (Fed. Cir. Mar. 24, 2014) (O’MALLEY, Bryson, Wallach) (S.D. Cal.: Bencivengo) (3 of 5 stars)

The Kessler Doctrine, of Kessler v. Eldred, 206 U.S. 285 (1907), “fills the gap” between claim and issue preclusion, so that an adjudged noninfringing product (and products “essentially the same”) have “a limited trade right” to be free of infringement assertions even under claims that were not brought or were dismissed, and whether against the manufacturer or privies, such as downstream buyers/users (even though the acts of infringement were not protected by claim preclusion).

Bold and brave new worlds: Unionizing college athletics

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Last month, we wrote about the efforts by football players at Northwestern University to join a labor union.  football and helmet_220x133This week the world of college sports was thrown into turmoil when the Regional Director of the National Labor Relations Board’s Chicago Region surprised many by ruling that the players are “employees” within the meaning of the National Labor Relations Act and, therefore, eligible to vote in an election to determine if they desire to be represented by a union.

The Regional Director, Peter Sung Ohr, ruled that the players were employees because they performed services (playing football and engaging in other football-related activities) for the university and received compensation for these services (athletic scholarships).  The scholarships would be withdrawn if the player quit the team, and Ohr noted that the players were subject to numerous rules, including when they went to sleep, when they woke up, when they ate, and where they lived.  The decision details the extent of the time players spend on “football related activities” Continue Reading »