Supreme Court Loosens Standard for Recovering Fees in Patent Suits

Posted on April 30, 2014 by Chris Neumeyer

In two 9-0 decisions, the US Supreme Court just made it easier for the winning party to recover its attorney fees in US patent lawsuits. In Octane Fitness v. ICON, the Court relaxed the standard for recovering attorney fees and in Highmark v. Allcare Health Management, the Court made it harder for the Federal Circuit to second-guess district courts on a party’s bad conduct.

The US Patent Act allows a successful party in patent litigation to recover its attorney fees in “exceptional cases.” In the Octane case, the Fed Circuit ruled that such cases required both objective baselessness and subjective bad faith. The Supreme Court disagreed, finding “A case presenting either subjective bad faith or exceptionally meritless claims may sufficiently set itself apart from mine-run cases to warrant a fee award.”

In the Highmark case, a district court awarded Highmark $5.2 million in attorney fees after finding it was the subject of a frivolous patent infringement suit. The plaintiff in the underlying action appealed the decision and the Fed Circuit re-heard arguments on attorney fees and came to a different decision. The Supreme Court found the Fed Circuit should have left the judge’s decision alone unless it found the court acted unreasonably.

Microsoft to Close Nokia Deal by Friday

Posted on April 22, 2014 by Chris Neumeyer

Microsoft announced it will complete its US$7.5 billion acquisition of Nokia’s cellphone business by Friday, April 25, including over 30,000 staff, a wide range of devices and Nokia’s CEO, who will report directly to Microsoft’s CEO.

The transaction will allow Microsoft to compete directly against Apple, Samsung and other cell-phone makers and allow Nokia to focus on generating revenue from its extensive patent portfolio.

Chinese antitrust regulators finally gave their approval to the deal earlier this month, while South Korea’s regulators still haven’t given their approval, but the parties claim approval from Korea is not required to close the deal. Continue reading →

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

Posted on March 29, 2014 by Chris Neumeyer

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.

40-year US Patent Review Period?

Posted on March 26, 2014 by Chris Neumeyer

“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

Posted on February 10, 2014 by Chris Neumeyer

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

Posted on November 25, 2013 by Chris Neumeyer

“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

Posted on November 2, 2013 by Chris Neumeyer

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

Posted on October 2, 2013 by Chris Neumeyer

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

Posted on September 5, 2013 by Chris Neumeyer

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

Posted on July 16, 2013 by Chris Neumeyer

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 →

International Technology Law Blog

For companies doing business in Asia.