Tag Archives: statute of limitations

Trade Secret Misappropriation Preliminary Injunction Reversed

By Dennis Crouch

The Federal Circuit has reversed a preliminary injunction order in a trade secret misappropriation case, finding that the district court abused its discretion by failing to properly evaluate the likelihood of success on the merits and the balance of harms. Insulet Corp. v. EOFlow, Co., No. 2024-1137 (Fed. Cir. June 17, 2024). The appellate court held that the district court’s analysis was deficient in several key respects, including not addressing the statute of limitations defense, defining trade secrets too broadly, and not sufficiently assessing irreparable harm and the public interest.

This classic trade secret case involves former employees left to join a competitor.  As free humans, they are permitted to take their skill and wisdom to the new jobs, but are forbidden from misappropriating trade secret knowledge.  That line drawing is particularly difficult, and one reason why many employers moved toward contractual non-compete agreements. The case is also complicated because the defendant here admit to reverse engineering that apparently lead to some substantial similarities between the products.

The decision highlights a high bar for obtaining a preliminary injunction, even in trade secret cases involving competitors where we previously may have assumed irreparable harm.  The Federal Circuit here explained that lower courts are required to individually evaluate each of the four injunction factors – likelihood of success on the merits, irreparable harm, balance of hardships, and public interest. Conclusory assertions of competitive harm are insufficient to show irreparable injury.  For trade secret claims in particular, the alleged trade secrets must be defined with specificity. But, this proof is often difficult at the preliminary injunction stage of a case when the particular knowledge used by the defendant has not been fully discovered.

The Federal Circuit has been seen as largely supporting strong trade secrecy rights. However, this decision may put a damper on forum shopping attempts. (more…)

Gorsuch’s “Dead Letter” Prophecy: Hearst v. Martinelli may Settle Copyright’s Discovery Rule following the Warner Chappell Avoidance

by Dennis Crouch

The pending Hearst v. Martinelli case may be the “dead letter” offered by Justice Gorsuch. This time, the Supreme Court might actually decide whether the “discovery rule” applies to the Copyright Act’s statute of limitations.

Copyright law provides (more…)

Supreme Court Affirms Availability of Back-Damages Under Copyright Discovery Rule

By Dennis Crouch and Timothy Knight

On May 9, 2024, the Supreme Court issued its opinion in Warner Chappell Music v. Nealy, No. 22-1078, 601 U.S. ___ (2024), resolving a circuit split over the availability of back-damages in copyright infringement cases. In a 6-3 decision authored by Justice Kagan, the Court affirmed the Eleventh Circuit’s ruling, permitting recovery of damages for acts that occurred more than three years before the filing of the lawsuit under the “discovery accrual rule.”

For those of you who have not been following the case, the Plaintiff Sherman Nealy, a music producer, helped create musical works in the 1980s with his collaborator, Tony Butler.  Nealy was incarcerated from 1989 to 2008 and again from 2012 to 2015 (more…)

Dir. Vidal on Privity and Real-Party-in-Interest in IPRs

by Dennis Crouch

Samsung v. NetList, IPR2022-00615 (Dir. Rev. 2023)

USPTO Director Vidal has ordered the PTAB to expand its approach to the privity and real-party-in-interest (RPI) analysis at the start of inter partes review (IPR) proceedings.  The question in the Samsung case is whether Google should be considered an RPI or privy in a way that would bar Samsung’s IPR petition.

Back in October 2022, Samsung filed an IPR petition against Neglist’s US7619912; and the PTAB granted institution.  The patent covers a memory module, and Netlist previously sued Google for infringement back in 2009. That case is amazingly still pending in C.D.Cal.  The accused modules were supplied by Samsung, and Google at one point demanded indemnification from Samsung. Netlist agreed to stay the Google case in while awaiting the outcome of a parallel Samsung lawsuit that was filed more recently.

After the PTAB granted the IPR, Director Vidal quickly issued a sua sponte director review order and also ordered the PTAB to allow additional discovery into Google’s role.  Repeating precedent and rules already in place, Dir. Vidal has now ordered the PTAB to particularly consider the “extent to which Google has an interest in and will benefit from Samsung’s actions, and inquire whether Samsung can be said to be representing that interest after examining its relationship with Google.” Quoting with modification, Applications in Internet Time, LLC v. RPX Corp., 897 F.3d 1336 (Fed. Cir. 2018).  Further, the PTAB must also recognize that the notion of “privity” is a separate and distinct inquiry from that of RPI.  At times, a party may be in privity with the petitioner even if not a real-party-in-interest.

Statute of Limitations – One year Time Bar: An IPR petition has a clear deadline.  No IPR can be instituted if “the petitioner, real party in interest, or privy of the petitioner” had been sued for infringing the patent more than 1-year beforehand. 35 U.S.C. 315(b).   Based upon this statute, if Google is an RPI/Privy, then the IPR is time barred.

In this type of indemnification situation, it is easy for me to see the RPI/privity connection. But, the PTAB, at least originally, refused to see a connection.  Its basic idea is that Samsung’s indemnity agreement relieves Google of all liability — and therefore (despite being an accused infringer), Google has no interest in the outcome of the IPR.  It is really hard for me to wrap my head around this argument.  If I were being sued by a third party, I would be glad to have an indemnification agreement, but would be much more satisfied if the case were entirely dismissed.  A potential contract right is generally much less valuable than a final decision absolving liability.