SoCal IP Law Group

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Monthly Archives: April 2012

SoCal IP Institute :: April 30, 2012 :: Trade Secrets and Different Methods of Use in ANDA

We will be discussing one Seventh Circuit case and one Federal Circuit case during our weekly SoCal IP Institute meeting on Monday, April 30, 2012. Brief synopses are presented below.

Fail-Safe, LLC. v. A.O. Smith Corp., Case No. 11-1354 (7th Cir. Mar. 29, 2012) (attached).

Fail-Safe manufactures anti-entrapment devices for pool drains.  A.O. Smith manufactures motors for pool and spa pumps.  The two companies entered into a project to develop a pump motor for pool suction entrapment prevention technology.  No formal agreement was signed, nor did the parties discuss confidentiality.  Eventually, the relationship fell apart and later A.O. Smith introduced two pump motors that Fail-Safe claims incorporated its trade secrets.

A trade secret is any information that gives a business a competitive advantage over others who do not know that information.  In order to claim that such information has been wrongfully used or disclosed, the owner must be able to show that it took reasonable steps to protect its secrecy.

The appeals court found that since the plaintiff, Fail-Safe, failed to take reasonable steps to protect its information, that information was not protected as a trade secret, and further, since the material conveyed to A.O. Smith was without any intellectual property protection or contractual agreement for confidentiality, A.O. Smith could not profit unjustly from the use of that voluntarily disclosed information. The court looked at the following facts: 1) the plaintiff never mentioned confidentiality in its oral or written communications with the defendant; 2) the plaintiff did not require defendant to sign a confidentiality agreement, even though defendant had plaintiff sign a one-way confidentiality agreement, and despite the fact that plaintiff had used confidentiality agreements in the past; and 3) plaintiff did not designate as confidential any information provided.

Fail-Safe was decided under Wisconsin state law, but the principles are broadly applicable.  Like California, Wisconsin has adopted the Uniform Trade Secret Act, and adheres to the same fundamental concepts with respect to the protection of trade secrets. 

Bayer Schering Pharma v. Lupin, Case No. 2011-1143 (Fed. Cir. April 16, 2012) (attached).

The Hatch-Waxman Act makes it an act of infringement to file an abbreviated new drug application (ANDA) for a drug or for a use of the drug that is claimed in a patent.  That “artificial” act of infringement creates jurisdiction for a court to entertain an action by the patentee against the ANDA applicant.

When an applicant files an ANDA seeking FDA permission to market a generic drug, it is required to address each patent that relates to that drug.  One way that the ANDA application can address the patent is to include a statement, known as a “section viii statement,” that the applicant is not seeking approval for the method of use that is claimed in the patent.  The ANDA applicant must include a proposed label that removes or “carves out” the claimed method of use.  The FDA will approve an ANDA with a section viii statement only if (1) there is no overlap between the proposed label submitted by the ANDA applicant and the claimed use, and (2) removing the information about the claimed method of use from the label does not render the drug less safe or effective.

In consolidated patent infringement actions brought by pharmaceutical manufacturer Bayer against defendants who filed ANDAs with the FDA to market generic versions of the Bayer’s contraception drug Yasmin, the district court’s judgments of noninfringement were affirmed, where: 1) the defendants’ ANDAs sought approval to market the generic form of the drug solely for contraceptive use, and there was no valid patent on the use of the drug for that purpose alone; 2) the FDA-approved label for the generic drug did not indicate to physicians that the generic drug was safe and effective for the claimed use, so the defendants could not be held liable for infringement of the patent.

The Court stated that Bayer failed to persuade the Court that the FDA had approved the generic for the claimed use or that the generic was otherwise inducing physicians to prescribe for the claimed use:

“[T]he fact that certain of the effects of a drug are described in the Clinical Pharmacology section of the label does not mean that the FDA has approved the use of the drug to produce those effects; it only ensures that physicians are aware of the full range of the drug’s pharmacological effects (especially those that might be considered adverse effects) when prescribing the drug for a purpose set forth in the Indications and Usage section and under the conditions described in other parts of the label.”

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, April 30, 2012 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Elisha Manzur by 9 am Monday morning.

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SoCal IP Institute :: April 23, 2012 :: Changes at the USPTO and Implementation of the America Invents Act

We will be discussing recent trends and changes at the US Patent and Trademark Office and implementation of the America Invents Act during our weekly SoCal IP Institute meeting on Monday, April 23, 2012.

Some of the topics that we will discuss include:
  1. Efforts by the USPTO to reduce the backlog in examination of patent applications
  2. Prioritized Examination (Track 1)
  3. Change to first-inventor-to-file
  4. Preissuance submission of prior art
  5. Derivation procedure
  6. Supplemental Examination
  7. Post Grant Review
  8. Inter-Partes Review
  9. Micro-entity

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, April 23, 2012 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Elisha Manzur by 9 am Monday morning.

SoCal IP Institute :: April 16, 2012 :: Summary Judgment of Copyright Claims and Functionality in Trademarks

We will be discussing one Ninth Circuit case and one Federal Circuit case during our weekly SoCal IP Institute meeting on Monday, April 16, 2012. Brief synopses are presented below.

L.A. Printex Indus., Inc. v. Aeropostale, Inc., Case No. 10-56187 (9th Cir. Apr. 9, 2012) (attached).  A designer at LA Printex created a design including flowers that it labeled “C30020.”  LA registered the C30020 design in a collection with four other designs.  LA Printext subsequently saw a very similar design in products sold by Aeropostale.  The two designs appear below:

The C30023 was registered as a collection of unpublished works.  However, two of the designs had been previously published.  After the suit began, this issue was corrected by LA Printex at the Copyright Office by a supplemental registration.  There were cross motions for summary judgment.  The defendants’ motion was granted on the basis that there was no genuine issue of material fact that the defendants had access to the C30020 design or substantial similarity.  Defendants then moved for and received attorneys fees.  LA Printex appealed.

LA Printex argued that the district court’s determination that there was no “access” to the design was faulty.  In particular, they asserted that the court’s relianceonly upon a declaration by an LA Printex employee.  However, the 9th Circuit found substantial additional invoices showing more than 50,000 yards of C30020 fabric sold from 2002-2008 in the trial record.  The question then was whether this was “widely distributed” as claimed by LA Printex, thereby demonstrating a genuine issue of material fact as to Aeropostale’s access to the pattern.  The court described the various levels of access required to show “wide dissimination” under copyright “access” jurisprudence in different contexts.  Based upon the sales, mostly to local Los Angeles fabric converters and the invoices, the 9th Circuit reasoned that a reasonable jury could find widespread dissemination of the C30020 design.  Thus, there was at least a genuine issue of material fact as to Aeropsotale’s access.

The 9th Circuit then took up the district court’s determination that the works were not substantially similar.  Though there were differences between the designs and elements of the design were not protectable by Copyright, the 9th Circuit pointed out that questions of substantial similarity should rarely be decided at the summary judgment phase.  Based upon an extrinsic (objective) evaluation of the designs and an intrinsic (subjective) evaluation, the 9th Circuit found that the question should at least be put to a jury.

Finally, Aeropostale argued that the registration was faulty and invalid. Therefore, they argued, they were entitled to summary judgment on this alternative ground.  The 9th Circuit reasoned that the original registration included an error that was subsequently corrected.  The inclusion of an error regarding two other designs does not render the C30020 registration invalid or bar LA Printex’s suit.  The summary judgment was reversed, the attorney’s fee award vacated and the case remanded for further proceedings.

In re Becton, Dickinson and Co., Case No. 2011-1111 (Fed. Cir. April 12, 2012) (attached).  Becton, Dickinson and Company (“BD”) appealed from the final decision of the Trademark Trial and Appeal Board (“TTAB”) affirming a refusal to register BD’s design of a closure cap for blood collection tubes as a trademark on the ground that the design is functional. BD also appealed the Board’s determination that the mark has not acquired distinctiveness. The Federal Circuit did not reach the issue of acquired distinctiveness. The Court held that the mark was not registerable because the mark as a whole was functional.  The cap is depicted below:

Judge Linn dissented, faulting the majority for deciding the case “piecemeal” rather than reviewing the proposed mark as a whole.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, April 16, 2012 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Elisha Manzur by 9 am Monday morning.

SoCal IP Institute :: April 9, 2012 :: Means-Plus-Function and Inequitable Conduct

We will be discussing a Federal Circuit case and a Northern District of California case during our weekly SoCal IP Institute meeting on Monday, April 9, 2012. Brief synopses are presented below:

Ergo Licensing, LLC. v. CareFusion 303, Inc., 2011-1229 (C.A.F.C. Mar. 26, 2012) (attached).

In a patent infringement case over a patent on an infusion system used to meter and simultaneously deliver fluids from multiple sources into a patient’s body, the Federal Circuit affirmed the district court ruling, which determined that the “control means” terms were indefinite under 35 U.S.C. § 112 (2).  The means-plus-function limitations were not supported by any corresponding structure disclosed in the specification.

35 U.S.C. § 112, paragraph 6: An element in a claim for a combination may be expressed as a means or step for performing a speci­fied function without the recital of structure, material, or acts in support thereof, and such claim shall be con­strued to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.

Therasense, Inc. v. Becton, Dickinson and Company (N.D. Cal. March 27, 2012) (attached).

Following the Federal Circuit’s remand in Therasense v. Becton Dickinson, the district court again concluded that the patent at issue is unenforceable due to inequitable conduct, even under the higher standards for intent and materiality articulated by the Federal Circuit. The judge found that the withheld briefs were material under the “but for” test for materiality outlined by the Federal Circuit.  The district court also determined that there is clear and convincing evidence that the plaintiff’s attorney and scientist knew of that but-for materiality, and that they possessed specific intent to deceive the Patent Office by withholding the omitted reference.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, March April 9, 2012 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Amanda Jones by 9 am Monday morning.