An Epic Tale of Trade Secrets

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I wrote earlier this year in my blog about a pending trade secret bill approved by the judiciary committee in the senate.  Recently the senate passed the Defend Trade Secrets Act.  The act essentially provides for a federal cause of action for trade secret cases.  The bill is now in the house and is expected to pass.  President Obama has shown his support for the bill.

While the federal law is pending, state trade secret laws are the only remedy currently available.  Recently Epic Systems brought a trade secret case against Tate Group, an Indian company, for theft of trade secrets, computer fraud, breach of contract and unfair competition in the western district of Wisconsin (case 14-cv-748-wmc).  The jury awarded Epic $240 million in compensatory damages and $700 million in punitive damages.  The jury found Tata guilty of downloading documents from hospital software and providing those documents to one of its subsidiaries, Med Mantra.  If Epic ends up collecting the award, it will be more than double Epic’s expected annual profits this year.

What’s the take away here?  If you are the owner of trade secrets-protect them.  Ensure that you have implemented systems and educated your people on best practices to keep your trade secrets confidential.  If someone takes your trade secrets without authorization, go after them.   Hopefully you will be able to do that in federal court in the near future.  If you are working with companies that have trade secrets, make sure you abide by the terms of the confidentiality agreement and treat the trade secret information in the same manner as you would treat your own proprietary information.

Protecting your innovative developments is critical to any organization.  Having the right person to help you make that decision is important.  The Law Office of Kathleen Lynch PLLC is designed to help businesses such as yours keep ahead of the game.   The first telephone consultation is free.  Email us at klynch@kliplaw.com.

Use Caution When Writing a Patent Application

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Writing a patent application is always a challenge.  In each case, it is a balance.  On one side, you are trying to ensure that you have provided an accurate and complete description of the invention.  On the other you worry about what the patent examiner might turn up in prior art that you didn’t think about when drafting the application.  Sometimes what is included may come back to limit the scope of your invention.

This is exactly what happened to UltimatePointer LLC when they sued Ninentendo for patent infringement (UltimatePointer, LLC v. Nintendo Co., Ltd., No. 15-1297 (Fed. Cir. Mar. 1, 2016).  The Federal Circuit, the appellate court for patent cases, affirmed a district court finding of noninfringement by Nintendo. The district court found the term “handheld device” to require a “direct pointing device”. The Federal Circuit found that UltimatePointer had made “repeated derogatory statements” relating to indirect pointing devices in the patent specification.  The court stated that the “criticized technologies were not intended to be within the scope of the claims.”  The court determined that Nintendo’s pointing involves the hand held remote relative to the sensor bar and not the television screen image. As a result, the court found the Wii system was considered an “indirect” pointing device and did not infringe.   

What’s the take away here?  Be careful what you write in your specification, especially in the area of describing other prior art.  You never know what prior art you may encounter down the road and you need to keep as many options open as possible. 

 Protecting your innovative developments is critical to any organization.  Having the right person to help you make that decision is important.  The Law Office of Kathleen Lynch PLLC is designed to help businesses such as yours keep ahead of the game.   The first telephone consultation is free.  Email us at klynch@kliplaw.com.

3M Gets Stuck with Attorneys' Fees in Patent Case

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In Transweb LLC v. 3M Innovative Properties Company & 3M Company, the Federal Circuit Court of Appeals affirmed the district court’s finding that 3M was liable for antitrust violations in that 3M was found to have obtained its patent through inequitable conduct and subsequently sought to enforce the patent. As a result of 3Ms behavior in both acquiring and enforcing the patent, the appellate court awarded treble attorneys’ fees which came to about $26 million.

The patents at issue focus on filter material used in respirators for construction workers etc.  Transweb had developed a new filter material similar to the 3M subject patents. The Federal Circuit found the 3M patents were invalid based on evidence indicating that Transweb’s president distributed samples of their new filter material at a trade show more than a year before 3M filed patent applications covering their new filter material. The finding of inequitable conduct was confirmed because the evidence indicated 3M knew of Transweb’s prior distribution, and did not properly disclose it to the US Patent and Trademark Office as required.

The court then found that 3M’s enforcement of their patent against Transweb constituted an antitrust violation as an abuse of the legal process and awarded Transweb’s attorneys’ fees for defending against 3M’s lawsuit.  In justifying the award, the court stated that the attorneys fees were appropriate because they flowed directly from “3M’s unlawful act [of] bringing suit based on a patent known to be fraudulently obtained.” In awarding treble attorneys’ fees, the court indicated that the enhanced award was justified because the suit brought by 3M forced Transweb to either cease competition in the market or expend money to defend itself.

What’s the take away here?  When preparing and prosecuting a patent application, ensure that your organization meets all requirements with regarding to disclosure to the US Patent Office.  This requires diligence and educating all involved in the process.  Sometimes that can include sales, marketing, and business development personnel as well as R&D and manufacturing. 

Protecting your innovative developments is critical to any organization.  Having the right person to help you make that decision is important.  The Law Office of Kathleen Lynch PLLC is designed to help businesses such as yours keep ahead of the game.   The first telephone consultation is free.  Email us at klynch@kliplaw.com.