Wage-Fixing Suit v. Tech Giants Moving Forward to Trial

wage-fixing suit

Defendants Adobe, Apple, Google, Intel, Intuit, Lucasfilm and Pixar lost an attempt to dispose of by summary judgment a wage-fixing lawsuit filed against them by 64,600 engineers, designers, quality analysts, artists, editors, and system administrators employed by the seven companies.

In the fascinating class-action lawsuit, the plaintiffs contend the defendant tech companies colluded to not hire employees away from each other, thereby reducing competition and lowering wages. On Friday, US District Court Judge Lucy Koh quashed the plaintiffs’ motion for summary judgment, so the case will move forward to trial.

Read more about the case HERE

40-year US Patent Review Period?

slow justice

“Father of the microcontroller,” Gilbert Hyatt, who has been granted over 70 patents, generating more than $350 million in royalties, and won a $388 million award against California’s Franchise Tax Board for wrongful harassment, has been waiting more than 40 years for the USPTO to respond to his pending patent applications.

Sounds crazy, but it may be true. Read his amazing story here: HERE

Nokia settles with HTC, adds to Patent War Chest

After two years of litigation in seven countries involving more than fifty of Nokia’s non-essential patents, Nokia announced a global settlement with HTC that should conclude all patent litigation between the two companies, but add to fears that Nokia is transforming itself into a formidable patent troll.

The announcement came this past Friday, just days after Nokia scored its fourth victory over HTC in a German court (three in the past two months) and days before the U.S. International Trade Commission was scheduled to review a preliminary ruling finding HTC infringed two of Nokia’s U.S. patents.

Although Nokia and HTC have a “long standing” agreement concerning licensing of Nokia’s patents that are deemed essential for practicing industry standards, Nokia has been battling with HTC over non-essential patents since Nokia fired the first shot in 2012, followed by victories in England, Wales, Munich, Mannheim and the U.S. Continue reading

Refusing to Testify in Civil Depositions based on the Fifth Amendment

“You have the right to remain silent. Anything you say can and will be used against you in a court of law.” We’ve all heard those words a thousand times in crime dramas, as the cops handcuff the bad guy and haul him away. Most lawyers recognize that as part of the Miranda warning, uttered by police in criminal cases to avoid violating the suspect’s rights under the Fifth Amendment to the U.S. Constitution.

What many don’t know, especially here in Asia, is the Fifth Amendment may also provide a valid excuse – even for foreign citizens – to avoid testifying in a U.S. civil lawsuit. On its face, the Fifth Amendment appears to be limited to criminal cases. It states that no person “shall be compelled in any criminal case to be a witness against himself.” However, courts have long held that the Fifth Amendment privilege “can be asserted in any proceeding, civil or criminal, administrative or judicial, investigatory or adjudicatory.” Kastigar v. United States, 406 U.S. 441, 445 (1972).

Consequently, it is not uncommon for witnesses in civil lawsuits to refuse to answer deposition questions based on that privilege, so long as the testimony could possibly lead to criminal liability. At first, the tactic may seem an easy way out for the witness. However, there are serious risks to invoking – or not invoking – the privilege, so anyone for whom the subject may be relevant should consult with experienced Fifth Amendment counsel. Continue reading

Negotiation, Brinkmanship and the Government Shutdown

Last month the world watched as the U.S. president and Congress brawled fiercely in a dispute over funding of the federal government, failing to reach agreement for weeks, forcing the government to partially shut down, laying off 800,000 workers and allowing the nation to hurtle recklessly towards financial default. Warren Buffet called it “pure idiocy.” The U.S. Treasury called it potentially catastrophic.

But was the drama a display of utter incompetence, or reasonable tactics employed by skilled negotiators, fully conscious of the risks and acting within the constraints of the circumstances to maximize gains for their constituents? Regardless of one’s political affiliation, it’s interesting to examine the events to see if they may impart any lessons for those who negotiate business agreements. Continue reading

Trade Secrets and Employee Mobility in the U.S. and Asia

In 2010, Hewlett-Packard sued its former CEO for threatened misappropriation of trade secrets, after he took a position as President of Oracle. In 2012, Taiwan’s Acer, Inc. sued its former CEO for breach of a non-competition agreement after he quit and took a top position at Lenovo. And last month, criminal charges were filed against five employees of Taiwan’s HTC Corp., for allegedly conspiring to form a competing company using secrets stolen from HTC.

Employers often spend considerable resources recruiting, hiring and training key talent, only to face potential disaster when those trusted employees quit to join a competitor, often taking sensitive files on their way out the door. Even if they don’t act in bad faith, departing employees carry critical, confidential information inside their heads, which can’t be deleted. Fortunately, various remedies may be available for the former employer, from confidentiality and non-competition agreements, to lawsuits for actual or threatened misappropriation of trade secrets and the doctrine of inevitable disclosure.

But there’s a conflict. Employers have a legitimate interest in preventing misappropriation of trade secrets, while employees have a legitimate interest in utilizing knowledge and skills gained through work experience and working for employers of their choosing. Courts and lawmakers have long struggled to establish a balance between those competing interests. Below is a general overview of relevant laws and practices in the U.S. and Asia. Continue reading

Battling Trade Secret Theft in Taiwan

Here we go again. Last week, police detained three employees of Taiwanese smartphone-maker HTC, raided their homes and offices and seized their computers and cellphones to search for evidence, as HTC is accusing them of stealing sensitive technology to use in competition with HTC in China.

The three men – a vice president of product design, director of R&D, and senior designer – are accused of stealing secrets relating to HTC’s Sense 6.0 smartphones, which are scheduled for launch later this year. While the investigation is just beginning, reports have accused the three of collaborating with officials in Chengdu, China to form a competing smartphone company in China using the secrets stolen from HTC. They are also accused of defrauding HTC out of more than US$650,000, by use of forged documents, apparently to raise capital for their new venture.

Taiwan has seen similar cases before. In 2012, the nation’s second largest LCD panel-maker, AU Optronics (AUO), sued two of its former high-level executives for stealing trade secrets, which they took to their new employer, a major competitor in China. In 2011, Taiwan IC-design company, MediaTek, sued a former employee for stealing secrets and sharing them with his new employer. And, most famously, Taiwan Semiconductor Manufacturing Co. (TSMC) battled with its Chinese rival, Semiconductor Manufacturing International Corp. (SMIC), for almost a decade over allegations that SMIC poached numerous employees, who stole critical information that SMIC used to illegally manufacture competing products. Continue reading

Software May be Patented in Asia, but the Details Remain Unclear

In the United States, attorneys, judges and others have struggled for decades to determine when, if ever, computer programs or software should be eligible for patent protection. In the 1960’s the U.S. Patent Office declared that software could not be patented. Since then, a series of court decisions have rejected that view and established that one may definitely patent software in the U.S., although the exact requirements remain unclear and critics increasingly demand that it should not be patentable.

As a starting point, 35 U.S.C. §101 provides that any new and useful process, machine, manufacture, or composition of matter, or new and useful improvement thereof, is eligible for patent protection, subject to other requirements of the Patent Act (that is, §101 is just the threshold test for patentability). Congress has never stated any limitations to the patentable categories of §101 and case law has only recognized three categories of exceptions – subject matter that may not be patented: laws of nature, physical phenomena and abstract ideas. Computer software is often found to be ineligible on the ground that it comprises abstract ideas, but courts have struggled to provide a precise formula or definition for abstract ideas. Continue reading

Think Patent Arbitration Can’t Work? Think Again.

When amicable efforts fail to resolve a dispute concerning patent rights and the aggrieved party wishes to pursue the matter further, it usually initiates litigation or perhaps a U.S. International Trade Commission (“ITC”) investigation, despite the huge costs of such options, because it may assume no other plausible alternatives exist to achieve the desired objectives.

Articles, such as this one, tout arbitration as an alternative: faster, cheaper and more confidential than litigation, with other benefits as well. Apparently the U.S. Supreme Court agrees, having described the Federal Arbitration Act (9 U.S.C. §1, et seq.) as evidencing a “national policy favoring arbitration” (Nitro-Lift v. Howard); and recognized “an emphatic federal policy in favor of arbitral dispute resolution” (Marmet Health Care v. Brown). Likewise, the Patent Act provides at 35 U.S.C. §294(a) that any arbitration clause contained in a patent agreement shall be presumed valid, irrevocable and enforceable.

However, in actual practice, relatively few patent disputes are submitted to arbitration. Worldwide, only a few hundred requests to arbitrate patent disputes are filed each year. By comparison, in 2012 more than 5,000 patent lawsuits were filed in U.S. District Courts, not to mention courts of other nations. So what’s the problem? If arbitration is so great, why are so few patent disputes resolved in arbitration? More important, are patent litigants missing something? Should they rely on arbitration more often? Continue reading

10 Tips for Managing Litigation for Superior Results and Cost Savings

Earlier this year, a U.S. District Court approved the payment of $308 million in attorney fees to 116 law firms in a single case (In re TFT-LCD Antitrust Litigation, N.D. Cal.), with one firm receiving $75 million in fees and another receiving $49 million. While that case may be an extreme example, the median hourly rate for partners in U.S. law firms is $625 per hour and the average patent lawsuit requires $2.5 million in attorney fees. Is it any wonder people complain about attorney fees?

Fortunately, by managing litigation effectively, those costs can be greatly reduced. For several years I served as Director of Legal at a multi-billion dollar tech company based in Taiwan and was responsible for resolving all disputes and litigation. Cost-down was our corporate mantra, with every invoice closely scrutinized by management. Below are a few of the lessons I learned. Continue reading