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This week in Other Barks & Bites: the U.S. Court of Appeals for the Federal Circuit (CAFC) holds that a district court committed harmless error in granting a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim because Hawk Technology Systems’ patent claims were directed to ineligible subject matter under 35 USC § 101, ultimately affirming the decision; ASML says former employee stole data related to proprietary chip technology; the U.S. Department of Justice states that the U.S. government, not Moderna, bears liability for potential patent infringement in ongoing COVID vaccine case; and Canada Announces funding restrictions to protect IP.
Federal Circuit Issues Precedential Decision on Eligibility Rulings at Rule 12(b)(6) Stage
The U.S. Court of Appeals for the Federal Circuit on Friday affirmed a district court’s holding that Hawk Technology Systems LLC’s U.S. Patent No. 10,499,091, titled “high-quality, reduced data rate streaming video product and monitoring system,” should be dismissed for failure to state a claim because the patent was invalid under 35 U.S.C. § 101. After agreeing with the district court’s analysis of the claims as abstract under Alice step one and lacking a technological improvement sufficient to transform the claims into a patent eligible application under Alice step two, the CAFC also disagreed with Hawk that the district court committed reversible error in granting the motion to dismiss under Rule 12(b)(6). Although the court acknowledged that the district court should have converted the motion to a Rule 56 motion for summary judgment under Sixth Circuit law because it considered evidence outside the pleadings, the CAFC said this amounted to “harmless error.” The court explained: “The Sixth Circuit has ‘held that the failure to convert the motion to a motion for summary judgment is not reversible error if the court’s ‘rationale’ in no way ‘hinged on the additional information provided there.’… Our review of the district court’s opinion here indicates that the district court’s analysis did not hinge on the additional information provided.”
Clarivate Releases Top 100 Global Innovators List
On Thursday, February 16, the British-American analytics company Clarivate released its annual Top 100 Global Innovators list for 2023. The list ranks the companies that “sit at the very top of the global innovation ecosystem, with the most consistent above-the-bar innovation performance.” Companies from 12 countries are represented on the list with Asia continuing its growth and dominance at the top end of the innovation industry. Japanese companies topped the list with 38, and the United States was the highest outside of Asia with 19 companies.
CAFC Agrees with District Court in Peloton Patent Infringement Case
On Thursday, February 16, the United States Court of Appeals for the Federal Circuit upheld a district court ruling that said a patent from Villency Design Group (VDG), a former designer for Peloton, was invalid and ordering the company to pay Peloton’s attorney fees. Peloton’s remaining claims for breach of warranty, breach of the covenant of good faith and fair dealing, fraudulent concealment, and tortious interference were all denied by the district court. Both sides appealed the case to the CAFC, but ultimately the circuit court was unpersuaded by the arguments and affirmed the district court’s ruling.
ASML Claims Former Employee Stole Chip Technology
On Wednesday, February 15, semiconductor company ASML claimed in its annual report for 2022 that a former employee in China stole information about its chip technology. The company wrote, “we have experienced unauthorized misappropriation of data relating to proprietary technology by a (now) former employee in China.” While ASML said the information is not material to the business, the Dutch company said that it has reported the incident to relevant authorities because the security breach violated export rules. The revelation comes after the United States, Japan, and the Netherlands were rumored to have agreed to a deal that would limit exports of chips to China.
DOJ Says U.S. Government, Not Moderna, Liable for Patent Infringement
On Tuesday, February 14, the Department of Justice told a district court that the U.S. government, not Moderna, bears the liability for patent infringement in a patent lawsuit over COVID-19 vaccines. The United States did not accept full liability for all alleged infringing activity by Moderna, but everything that fell under a contractual agreement between the pharmaceutical company and the government. The alleged patent infringement in the case was against patents from Arbutus Biopharma and Genevant Sciences. A Delaware district court had previously ruled that Moderna bears the liability in this case.
Copyright Office Issues Proposed Rule on Ex Parte Communications
The U.S. Copyright Office announced Friday that it has issued a notice of proposed rulemaking clarifying the use of ex parte communications in informal rulemakings. “The proposed rule defines ex parte communications, instructs the public on how to request an ex parte meeting with the Office, sets forth responsibilities of parties after an ex parte meeting, and identifies impermissible ex parte communications,” said the announcement. Comments must be received by April 3, 2023, at 11:59 PM EST.
Virgin Wins $160 Million from Alaska Airlines in Trademark Dispute
On Thursday, February 16, a U.K. High Court judge ruled that Alaska Airlines has to pay Virgin $160 million due to a previous trademark contract. Despite the fact that Alaska Airlines no longer uses the Virgin brand, the U.K. judge ruled that the U.S. airline was still contractually obligated to make royalty payments to Virgin until 2039.
Trademark Dispute Over WallStreetBets Reddit Forum Results in Lawsuit
On Wednesday, February 15, an entrepreneur and former moderator of the WallStreetBets Reddit community filed a trademark lawsuit against Reddit. Jamie Rogozinski founded WallStreetBets in 2012, and it gained widespread attention for its role in driving up the price of so-called “meme stocks” like GameStop in 2021. Rogozinski, who has been banned from the community by its members for violating its rules, claimed in the lawsuit that the social media company banned him from the site because of a trademark application he filed in 2020.
Canada Announces Research Funding Restrictions to Prevent IP Theft
On Tuesday, February 14, Canada announced new rules to protect intellectual property that includes blocking funding to researchers affiliated with institutions connected to foreign governments. “Canada’s advanced research ecosystem is at the forefront of global discovery, but it can also be an attractive target for foreign state actors that pose a risk to our national security,” wrote three ministers in a public statement. Canada announced that the strategy will entail the government rejecting funding to any individual that the government determines is connected to a foreign government that is perceived as a threat. The ministers continued, “this new action is one of many significant steps the Government of Canada is taking to protect our country, our institutions and our intellectual property.”
Sohn Faces Heated Third Nomination Hearing
On Tuesday, February 14, Gigi Sohn appeared before the Senate Commerce Committee in her third confirmation hearing to be nominated to the vacant seat on the Federal Communications Commission (FCC). Sohn, a proponent of net neutrality, has drawn the ire of Republicans and large telecommunications companies. In her opening statement, Sohn accused “dark money groups” of being behind the Republican opposition to her. Senator Ted Cruz (R-Texas) called Sohn an “extreme partisan”, while Maria Cantwell (D-WA) said, “personal attacks are distractions from the fact that Ms. Sohn is immensely qualified for this position and a highly effective, would be, FCC commissioner.”
This Week on Wall Street
YouTube CEO Susan Wojcicki Announces Departure from Company
On Thursday, February 16, YouTube CEO Susan Wojcicki sent a letter to employees announcing that she would be leaving the company to focus on her family. Wojcicki was one of the first employees at Google and had been YouTube’s CEO for nine years. Wojcicki’s tenure at YouTube was part of Google’s increased interest in YouTube, which the tech giant acquired in 2006.
Tesla Recalls 362,758 Vehicles Due to Self-Driving Beta
On Wednesday, February 15, Tesla announced that it is voluntarily recalling 362,758 vehicles that have the Full Self-Driving (FSD) Beta software. According to the announcement, “the FSD Beta system may allow the vehicle to act unsafe around intersections.” Tesla had never previously publicly stated how many of its vehicles have the FSD beta installed.
Quarterly Earnings – The following firms identified among the IPO’s Top 300 Patent Recipients for 2022 are announcing quarterly earnings next week (2022 rank in parentheses):
- Monday: None
- Tuesday: Medtronic (29), Walmart (218)
- Wednesday: Baidu (73), NVIDIA (159), eBay (179), Stellantis (205)
- Thursday: Alibaba (103), Intuit (256)
- Friday: Berkshire Hathaway (239)
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