IP Law Daily, WORTH NOTING—Other IP law developments, (Jan 7, 2022)

By WK Editorial Staff

A periodic roundup of other items of interest to the Intellectual Property community.

PATENT—Fed. Cir.: The U.S. Court of Appeals for the Federal Circuit on December 28 issued two precedential decisions addressing Patent Trial and Appeal Board decisions following inter partes review of four patents owned by Qualcomm. In both cases, the court first found that Intel adequately demonstrated Article III standing to pursue the appeals even though Qualcomm had not sued or threatened to sue Intel for infringement because it was undisputed that Qualcomm had mapped the claims of the patent at issue in one appeal to an Intel product (and only an Intel product) in a prior suit against Apple and Qualcomm had identified an Intel product as the “secondary processor” of a patent at issue in the second appeal. Accordingly, “Intel’s risks transcend mere conjecture or hypothesis,” the court said. On the merits, in Appeal No. 2020-1664, the panel determined that while the Board correctly found that various claims of U.S. Patent No. 8,229,043, directed to radio frequency communication systems, were unpatentable as obvious and or anticipated, the Board erred in finding that three substitute claims proposed by Qualcomm were nonobvious. In Appeal Nos. 2020-1828 and -1867, involving U.S. Patent No. 8,838,949, directed to a system with multiple processors, each of which must execute its own “boot code,” the panel vacated the Board’s erroneous construction of the term “hardware buffer” and its corresponding finding that claims 1–9 and 12 were non-obvious over the prior art, as well as the Board’s conclusion that claims 16–17 in means-plus-function format lacked sufficient corresponding structure in the specification because the Board improperly relied on Intel’s representations rather than conducting its own analysis. Both cases were remanded to the Board for further proceedings (Intel Corp. v. Qualcomm Inc., December 28, 2021).

PATENT—Fed. Cir.: Substantial evidence supported the Patent Trial and Appeal Board’s determination that claims 1, 2, and 4–14 of U.S. Patent No. 8,409,862 (the ’862 patent), owned by Quest Diagnostics and directed to using mass spectrometry to detect low levels of testosterone in female humans, were unpatentable as either anticipated or obvious. Contrary to Quest’s argument, the key disqualifying reference—an abstract found on a compact disc (CD) from the 49th annual conference of the American Society for Mass Spectrometry (ASMS) held in May 2001 (“Clark”)—was valid prior art as a publicly available printed publication. ASMS had sent the searchable CD containing Clarke to thousands of ASMS members, and the CD was available in the University of Wisconsin-Madison library before the priority date of the ’862 patent (Quest Diagnostics Investments LLC v. Hirshfeld, December 27, 2021, Chen, R.).

PATENT—Fed. Cir.: The U.S. Court of Appeals for the Federal Circuit has denied LG Electronics’ petition for panel rehearing or rehearing en banc of its August 31, 2021 decision in Mondis Technologies v. LG Electronics, Inc., holding that LG’s post-trial motion addressing only the issue of damages did not extend its time to file an interlocutory appeal. Pursuant to 28 U.S.C. § 1292(c)(2), an interlocutory appeal to the Federal Circuit may be brought within 30 days of the date when the trial court’s judgment becomes final “except for an accounting.” Circuit Judge Kathleen O’Malley filed an opinion dissenting from the denial of the petition for rehearing en banc. Judge O’Malley would rehear this case to explain that that the court does not have jurisdiction to hear LG’s appeal under § 1292(c)(2) until the damages trial is no longer outstanding because a trial on damages is not an “accounting.” According to Judge O’Malley, this would remedy the court’s prior misinterpretation of § 1292(c)(2) in Robert Bosch, LLC v. Pylon Manufacturing Corp., 719 F.3d 1305 (Fed. Cir. 2013) (en banc). Circuit Judge Pauline Newman also dissented but fled no opinion (Mondis Technology Ltd. v.LG Electronics Inc., December 23, 2021, per curiam).

PATENT—11th Cir.: A plaintiff that prevailed in an action for breach of contract and fraud for the defendants' failure to disclose a patent license agreement related to the plaintiff's purchase of a bowel management product was not precluded from recovering damages for its alleged failure to mitigate in a related patent suit. The issue was not preserved for appeal, but it also failed on the merits, according to the court, because there was no requirement under the Patent Act to record a release of liability. Therefore, the plaintiff's failure to assert that the release was void could not constitute a failure to mitigate. The case arose from an asset transfer in which the defendants represented that they were transferring to the plaintiffs the rights to the bowel management system free and clear of any IP claims, which turned out to be untrue because the defendants had granted a patent license to a competitor, causing the plaintiff to lose an infringement suit against that competitor. In a previous appeal in 2018, the Eleventh Circuit held that the district court erred in determining that the plaintiff was entitled to no damages, and sent the case back for a damages trial. After a bench trial, the court awarded the plaintiff $9.2 million. The defendants appealed, asserting that the plaintiff failed to mitigate its damages because it did not argue that a release of future claims of infringement that had been granted to the competitor by the defendants was void for failure to properly record it pursuant to 35 U.S.C. § 261. According to the Eleventh Circuit, even if this question had been properly preserved for appeal, there was no evidence that that recording would have mitigated, or avoided, the plaintiff’s damages. Additionally, the appellate court noted that Section 261 does not establish a requirement to record releases of claims of patent infringement (Hollister Incorp. v. Zassi Holdings, Inc., December 16, 2021, Lagoa, B.).

COPYRIGHT NEWS: The American Library Association (ALA) has expressed disappointment in a media release dated January 3 that New York State legislation to require publishers to offer licenses for electronic books to libraries under “reasonable” terms (S2890B/A5837B) was vetoed last week by Governor Kathy Hochul. The bipartisan measure had passed the Assembly 148-0 and Senate 62-1. Critics of the legislation–including the Association of American Publishers and the Authors Guild–argued that the bill conflicted with the U.S. Copyright Act and undermined the rights of authors and publishers. In her veto statement, Governor Hochul said, “While the goal of this bill is laudable, unfortunately, copyright protection provides the author of the work with the exclusive right to their works. As such the law would allow the author, and only the author, to determine to whom they wish to share their work and on what terms. Because the provisions of this bill are preempted by federal copyright law, I cannot support this bill.” ALA President Patricia “Patty” Wong said, Governor Hochul’s decision to veto S2890B / A5837B is unfortunate and disappointing. Protecting New Yorkers’ access to digital books through the library is critical to ensuring equitable access to information for all.”

JUDICIAL CONFERENCE NEWS: In a Year End Report on the Federal Judiciary for 2021, U.S. Supreme Court Chief Justice John Roberts raised eyebrows when he listed patent venue as one of three topics the Judicial Conference will focus on in the upcoming year. Unsurprisingly, the other highlighted areas involve judicial ethics and inappropriate behavior in the judicial workplace. Lawmakers have expressed concern about the assignment of nearly half the patent cases in the country to Judge Alan Albright in the Eastern District of Texas. The Federal Circuit on numerous occasions has mandated Judge Albright to transfer patent infringement cases to more appropriate fora. On the issue of patent venue, the Chief Justice wrote,

The third agenda topic I would like to highlight is an arcane but important matter of judicial administration: judicial assignment and venue for patent cases in federal trial court. Senators from both sides of the aisle have expressed concern that case assignment procedures allowing the party filing a case to select a division of a district court might, in effect, enable the plaintiff to select a particular judge to hear a case. Two important and sometimes competing values are at issue. First, the Judicial Conference has long supported the random assignment of cases and fostered the role of district judges as generalists capable of handling the full range of legal issues. But the Conference is also mindful that Congress has intentionally shaped the lower courts into districts and divisions codified by law so that litigants are served by federal judges tied to their communities. Reconciling these values is important to public confidence in the courts, and I have asked the Director of the Administrative Office, who serves as Secretary of the Judicial Conference, to put the issue before the Conference. The Committee on Court Administration and Case Management is reviewing this matter and will report back to the full Conference. This issue of judicial administration provides another good example of a matter that self-governing bodies of judges from the front lines are in the best position to study and solve—and to work in partnership with Congress in the event change in the law is necessary.

TRADE SECRETS NEWS: Xiang Haitao, 44, a Chinese national formerly residing in Missouri, has pleaded guilty to conspiracy to commit economic espionage by stealing a trade secret from Monsanto, for the purpose of benefitting the People’s Republic of China, the U.S. Department of justice has announced. Xiang was employed by Monsanto and its subsidiary, The Climate Corporation, from 2008 to 2017, where he worked as an imaging scientist. Monsanto and The Climate Corporation developed a digital, online farming software platform that was used by farmers to collect, store, and visualize critical agricultural field data and increase and improve agricultural productivity for farmers. A critical component to the platform was a proprietary predictive algorithm referred to as the Nutrient Optimizer, which was discovered on an electronic device owned by Xiang. Xiang faces a maximum penalty of 15 years in prison, and a potential fine of $5 million.

COPYRIGHT OFFICE NEWS: The Register of Copyrights Shira Perlmutter this week announced the appointment of Suzanne “Suzy” Wilson as General Counsel and Associate Register of Copyrights of the United States Copyright Office, effective January 31, 2022. Wilson will have responsibility for an extensive portfolio of regulatory, litigation, and policy matters for the Office. Wilson brings a wide range of experience to the Copyright Office, including serving as deputy general counsel for The Walt Disney Company, overseeing the company’s intellectual property and interactive and media legal functions, serving ten years as a partner at Arnold & Porter Kaye Scholer LLP, focusing on intellectual property litigation and counseling, and clerking for the Judge Warren J. Ferguson on the U.S. Court of Appeals for the Ninth Circuit. Wilson earned her JD magna cum laude from Harvard Law School and has an undergraduate degree in economics from the University of California, Berkeley.

COPYRIGHT OFFICE NEWS: The U.S. Copyright Office recently proposed procedures to govern representation of parties by law students and representation of business entities by authorized individuals in proceedings before the Copyright Claims Board (CCB), established by the Copyright Alternative in Small-Claims Enforcement (CASE) Act of 2020. The proposal would establish (1) threshold eligibility requirements for law students to appear before the CCB, expectations for practice by law students, and their supervising attorneys while participating in CCB proceedings, and create a public directory of clinics that are available to accept clients appearing before the CCB, and (2) requirements that must be followed by individuals who will be authorized to represent business entities, including corporations, limited liability companies, partnerships, and sole proprietorships. Initial comments on the proposal are due by February 3, 2022, and reply comments are due by February 18, 2022 (86 Fed. Reg. 74394, December 30, 2021).

COPYRIGHT OFFICE NEWS: The Register of Copyrights has determined that there is no longer evidence of a need for continued adjustments as a result of disruptions to the copyright system due to the COVID-19 pandemic emergency. Pursuant to the authority granted under section 710 of the Copyright Act (enacted as part of the CARES Act), the Register had allowed adjustments of certain timing provisions under the Copyright Act through December 31, 2021. Additional information is available on the Office’s Covid-19 Operations Updates webpage

COPYRIGHT OFFICE NEWS: Copyright Office plans to hold a series of consultations on technical measures to identify or protect copyrighted works online. The Office said it will hold a plenary session to launch consultations on this issue on February 22, 2022, to be followed by smaller specific industry-sector based consultations thereafter. The consultations are in response to a June 24, 2021, letter from Senators Patrick Leahy (D-Vt.) and Thom Tillis (R-N.C.) requesting that the Copyright Office “convene a representative working group of relevant stakeholders to achieve the identification and implementation of technical measures.”  As requested by the Senators, the National Telecommunications and Information Agency (NTIA), the National Institute of Standards and Technology (NIST), and the U.S. Patent and Trademark Office (USPTO), will be invited to participate in the consultations and provide technical and operational input. To aid in this effort, the Office also is seeking public input from rightsholders, online service providers, and uses on a number of specific questions. For more information, visit the Technical Measures Consultations webpage (86 Fed. Reg. 72638, December 22, 2021).

USPTO PATENT NEWS: The USPTO has decided to extend the modified COVID-19 Prioritized Examination Pilot Program until March 31, 2022. Under this pilot, the USPTO advances out of turn certain patent applications related to COVID-19 for examination, resulting in their prioritized examination. The USPTO aims to provide final disposition of patent applications in the pilot in one year or less after it grants prioritized status. More information on the USPTO’s prioritized patent examination program is available on this webpage. The USPTO will evaluate whether to terminate or further extend the program during this extension period (86 Fed. Reg. 74406, December 30, 2021).

Attorneys: Gregory H. Lantier and Thomas Saunder (Wilmer Cutler Pickering Hale and Dorr LLP) for Intel Corp. Jonathan S. Franklin (Norton Rose Fulbright U.S. LLP) and Israel Sasha Mayergoyz (Jones Day) for Qualcomm Inc. Thomas H. Wintner (Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.) for Quest Diagnostics Investments LLC. Martin Jay Black (Dechert LLP) for Mondis Technology Ltd., Hitachi Maxell, Ltd. and Maxell, Ltd. Michael J. McKeon (Fish & Richardson PC) for LG Electronics Inc. and LG Electronics USA, Inc. Frank Robert Jakes (Johnson Pope Bokor Ruppel & Burns, LLP) for Hollister Inc. Taylor Wayne Casey (Casey Firm, PLLC) for Zassi Holdings, Inc., and Peter Von Dyck.

Companies: Intel Corp.; Qualcomm Inc.; Quest Diagnostics Investments LLC; Laboratory Corp. of America Holdings; Mondis Technology Ltd.; Hitachi Maxell, Ltd.; Maxell, Ltd.; LG Electronics Inc.; LG Electronics USA, Inc.; Hollister Inc.; Zassi Holdings, Inc.

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