Other Barks & Bites for Friday, December 24: Judge Stark Avoids Responses on Section 101 Questions, EPO Dismisses DABUS Patent Applications

This week in Other Barks & Bites: the Eleventh Circuit upholds a jury verdict finding misappropriation of trade secrets to alcohol sales invoicing software; the European Patent Office rules that an AI system cannot be a legal person who satisfies inventorship requirements; a U.S. magistrate judge recommends $83 million in statutory damages against Russian operators of a YouTube stream-ripping service; Amazon Web Services suffers its third major outage in one month; Judge Leonard Stark evades strong responses on Section 101 patentability and judge shopping issues raised in questions by Senator Tillis; Judge McNulty allows False Claims Act claims against Johnson & Johnson over its misrepresentations to the USPTO to proceed toward trial; Chinese tech conglomerate Tencent issues special dividend of more than 450 million JD.com shares amidst crackdown by Chinese antitrust regulators; and amici file briefs at the Supreme Court supporting petitioner Apple in its appeal of the Federal Circuit’s Article III standing decision.

Bites

Judge Stark Avoids Patent Eligibility, Judge Shopping Questions from Sen. Tillis – This week, U.S. District Judge Leonard P. Stark of the District of Delaware, whose appointment to serve on the bench of the U.S. Court of Appeals for the Federal Circuit is currently being debated by Congress, provided responses to several questions for the record  following a Senate Judiciary Committee hearing earlier this month. In his responses to Senator Thom Tillis (R-NC), Judge Stark cited Section 101 issues currently before him in Delaware district court as a reason why he couldn’t answer Tillis’ questions regarding Judge Stark’s views on the current state of patent eligibility. Judge Stark also cited his lack of knowledge of other judicial districts in declining to answer other Tillis questions on judge and forum shopping.

Eleventh Circuit Finds No Absolute Absence of Evidence to Overturn Trade Secret Verdict – On Wednesday, December 22, the U.S. Court of Appeals for the Eleventh Circuit issued a ruling in Financial Information Technologies, LLC v. iControl Systems, USA, LLC in which the appellate court affirmed part of a jury verdict finding that iControl misappropriated trade secrets regarding alcohol sales invoicing software. iControl’s appeal sought a new trial on liability and the Eleventh Circuit, applying an abuse of discretion standard because iControl didn’t raise the issue in the district court on a motion for judgment as a matter of law (JMOL), found no absolute absence of evidence allowing it to overturn the jury’s verdict that Financial Information Technologies owned several trade secrets that were misappropriated by iControl.

Second Circuit Says Dish Network’s Copyright Defense Costs Excluded from Insurance Agreement – On Wednesday, December 22, the U.S. Court of Appeals for the Second Circuit issued a decision in Dish Network Corp. v. Ace American Insurance Co. in which the appellate court affirmed a lower court’s grant of summary judgment in favor of Ace after finding that Dish Network’s claim for copyright infringement defense costs, incurred in litigation involving its Hopper commercial skipping service, was excluded from Ace’s general liability coverage by insurance agreement provisions exempting broadcasting companies from coverage for liability over personal and advertising injuries.

CAFC Vacates Arbitrator’s Dismissal of Past Employee’s Grievance Against USPTO – On Tuesday, December 21, the U.S. Court of Appeals for the Federal Circuit issued a decision in Robinson v. U.S. Patent and Trademark Office in which the appellate court vacated an arbitrator’s dismissal of a past USPTO employee’s challenge to her dismissal from the agency, ruling that the arbitrator had failed to properly consider Robinson’s explanation of how delays leading up to arbitration were not unreasonable, and failed to address how those delays caused prejudice to the agency.

Second Circuit Transfers Injunction Appeal to CAFC Due to Patent Claims at District Court – On Tuesday, December 21, the Second Circuit issued a decision in Hudson Furniture, Inc. v. Lighting Design Wholesalers Inc. in which the appellate court transferred the appeal over an injunction granted in district court over trademark and copyright infringement claims to the Federal Circuit, ruling that the CAFC has exclusive jurisdiction over the appeal because the original complaint included several patent infringement claims.

EPO Dismisses DABUS Patent Applications, Rules Inventor Must Be Natural Person – On Tuesday, December 21, the European Patent Office’s (EPO) Legal Board of Appeal announced its decision to dismiss a pair of patent applications listing the artificial intelligence system DABUS as the sole inventor after conducting oral proceedings in which the Board found that relevant provisions of the European Patent Convention (EPC) required an inventor to be a person having legal capacity.

Amici Briefs Supporting Apple’s Article III Standing Arguments in Qualcomm IPR Case – On Monday, December 20, several amicus briefs were filed at the U.S. Supreme Court asking the nation’s highest court to grant a petition for writ of certiorari filed by Apple, challenging the Federal Circuit’s dismissal for lack of Article III standing of its appeal of inter partes review (IPR) proceedings challenging the validity of Qualcomm patents. Briefs supporting Apple’s petition were filed by Unified Patents, Thales, and Senator Patrick Leahy (D-VT) and Representative Darrell Issa (R-CA). The previous Friday, another amicus brief supporting Apple’s petition was filed by Engine Advocacy in conjunction with the Public Interest Patent Law Institute and ACT | The App Association.

RIAA Says Vital Litigation Principles Set in Damages Recommendation Against Russian Stream-Ripper – On Thursday, December 16, U.S. Magistrate Judge Theresa Carroll Buchanan of the Eastern District of Virginia issued a report and recommendation finding that a group of music publishing companies should be awarded nearly $83 million in statutory damages for Copyright Act and Digital Millennium Copyright Act (DMCA) claims against Russian-based operators of a stream-ripping service circumventing YouTube’s technological copyright protection measures. Ken Doroshow, Chief Legal Officer of the Recording Industry Association of America (RIAA), said that Magistrate Buchanan’s recommendation “sets out vital first principles that should chart a path for further enforcement against foreign stream-rippers and other forms of online piracy that undermine the legitimate market for music.”

Barks

CRB Adopts Section 111 Rate Proposal in Settlement Agreement After Zero Public Comments – On Thursday, December 23, the Copyright Royalty Board issued a final determination in the Federal Register adopting royalty rates proposed in a settlement agreement involving Section 111 statutory licenses for retransmissions of over-the-air TV and radio broadcasts by cable companies to their subscribers. The CRB didn’t receive any comments from interested parties regarding the royalty rates proposed in the settlement agreement after publishing the proposed rates this past February.

Copyright Office Announces Consultations on Technical Measures to ID Copyrighted Works – On Wednesday, December 22, the U.S. Copyright Office issued a notification of inquiry in the Federal Register announcing a series of consultations on technical measures to identify or protect copyrighted works online, in light of recommendations made in the Office’s Section 512 report issued May 2020, with a plenary session launching the consultations to be held on February 22 of next year.

Revised CAFC COVID-19 Protocols Require Negative PCR Test Before Oral Arguments – On Wednesday, December 22, the Federal Circuit issued revised protocols for in-person arguments which requires both counsel and attendees at oral arguments before the appellate court to submit proof of a negative polymerase chain reaction (PCR) COVID-19 test administered within 72 hours of oral argument. Counsel and attendees will also have to wear masks and observe physical distancing regardless of vaccination status.

Judge Donato Denies Arizona Transfer, Finds Personal Jurisdiction in Patent Letters – On Tuesday, December 21, U.S. District Judge James Donato of the Northern District of California denied both a motion to dismiss Juniper Network’s complaint for declaratory judgment of noninfringement of patent claims owned by Swarm Technologies, and Swarm’s motion to transfer the case to the District of Arizona, after finding that letters from Swarm to Juniper regarding the patent-at-issue and Swarm’s presence at trade shows in California established minimum contacts giving rise to personal jurisdiction over Swarm in Northern California.

USPTO Announces New AI Tools Under Development for PE2E Patent Examiner Searches – On Monday, December 20, the USPTO issued a patent-related notice announcing that the agency was in the process of developing artificial intelligence (AI) tools to aid patent examiners performing prior art searches through the Patents End-to-End (PE2E) during the patent examination process. The agency noted that patent examiners’ search records will include notations informing the public when an AI search was performed by the examiner.

BioDelivery Touts Market Exclusivity for BELBUCA Through 2032 After Delaware Patent Win – On Monday, December 20, American pharmaceutical company BioDelivery Sciences International announced that it expects to enjoy market exclusivity for its BELBUCA pain relief treatment through 2032 after a ruling by U.S. District Judge Colm F. Connolly of the District of Delaware upholding the validity of BioDelivery’s patent claims covering BELBUCA in an infringement suit following the filing of an abbreviated new drug application (ANDA) for a generic version of the drug to be marketed by rival firm Alvogen Group.

USPTO Corrects Date on Public Comment Deadline for Electronic Trademark Certificates – On Monday, December 20, the USPTO issued a correction in the Federal Register amending the deadline by which public comments are due regarding the agency’s recent proposal to begin issuing electronic trademark registration certificates to January 14, 2022.

Judge McNulty Denies Motion to Dismiss FCA Suit Over False Claims to USPTO – On Friday, December 17, U.S. District Judge Kevin McNulty of the District of New Jersey denied most of a motion to dismiss a lawsuit brought under the False Claims Act against Johnson & Johnson and its pharmaceutical subsidiary Janssen, finding that patent attorney Zachary Silbersher’s allegations that defendants made misrepresentations to the USPTO in the course of obtaining patent claims covering its prostate cancer treatment Zytiga were not precluded from a civil action under the False Claims Act and were sufficiently plead under the relevant standard.

This Week on Wall Street

Quidel Improves Innovation Pipeline With $6B Acquisition of Ortho Clinical Diagnostics – On Thursday, December 23, American diagnostic healthcare firm Quidel Corporation announced that the company has entered into a definitive agreement to purchase blood testing firm Ortho Clinical Diagnostics in a cash and stock deal valued at about $6 billion and expected to improve Quidel’s innovation and R&D pipeline for point-of-care diagnostics products.

Tencent to Divest Vast Majority of JD.Com Stock Ownership Amid Chinese Tech Crackdown – On Thursday, December 23, Chinese tech conglomerate Tencent filed a declaration with the Stock Exchange of Hong Kong announcing a special interim dividend of more than 457 million shares of Chinese e-commerce firm JD.com, worth a reported $16.4 billion, in the latest action by a major Chinese tech firm to divest control of other corporate entities during a wave of antitrust enforcement action by Chinese regulators.

Internet Suffers From Third Amazon Web Services Outage in One Month – On Wednesday, December 22, a power outage at an Amazon Web Services data center in North Carolina caused connectivity issues disrupting a wide range of Internet activities for a period of two and a half hours, the third such outage suffered by Amazon’s massive cloud computing services during the period of one month.