May 2019

Grand Theft Auto Cheater Loses Infringement Suit

Takeaway: Creating programs to help cheat in video games may constitute willful infringement of the original video game’s intellectual property.

David Zipperer created applications to cheat at the well-known video game Grand Theft Auto and has now admitted to copyright infringement, based on the creation of those applications in a settlement agreement by the parties. Zipperer’s settlement agreement made clear that he was admitting infringement of Grand Theft Auto and that the programs he created were unauthorized derivative works of Grand Theft Auto.

The secondary software programs he created were made with the intention to allow players to cheat at Grand Theft Auto. By creating such secondary programs, he was not only infringing, but also tortuously interfering with the contracts between Grand Theft Auto’s creator and breached its end user license agreement. This settlement comes after a preliminary injunction earlier in the case that precluded Zipperer from selling copies of his cheat software. However, he continued to sell the product despite the court’s order.


Federal Circuit is Not Bound by USPTO Guidance

Takeaway: It is important to follow decisions of the federal courts when dealing with Section 101 issues during patent prosecution as the Federal Circuit has ruled that they are not bound by USPTO guidance.

Recently, the USPTO issued new guidance that many practitioners thought may open up the door to expand patent eligibility in areas such as software and business methods. However, this month, the Federal Circuit invalidated two patents that the court determined were not patent eligible as being a natural law. This case specifically addressed a question that many practitioners may have been wondering in the patent industry: whether the Federal Circuit would follow the USPTO’s newly issued eligibility guidance under § 101.

The Federal Circuit, in this case, determined that even though they respect the USPTO’s guidance, the court is not bound by its guidance. In other words, even though the USPTO has issued guidance on what may be approved as patentable out of the patent office, these patents may not remain eligible after being challenged in federal court.

This ruling makes patent eligibility under § 101 even more murky than it was before. As practitioners in the patent industry, it is important to keep federal court decisions in mind when prosecuting applications before the USPTO. Making arguments for eligibility that may help the patent issue in the short term may not be upheld in court, so it is important to continue to make arguments that are believed to overcome the test from the Supreme Court’s decision in Alice v. CLS Bank.

Apple and Qualcomm Settle Case Where Billions were at Stake

Takeaway: It may not be the best idea to require a fee to license your intellectual property in addition to the cost of your actual product.

The dispute between Apple and Qualcomm came to a sudden close after opening arguments of their trial in San Diego. The case was about adhering to underlying licensing agreements that Qualcomm was requiring of purchasers of its industry standard technology. Attorneys for Apple stated in their opening arguments that Qualcomm was requiring purchasers of their product to also pay a five percent royalty in addition to the cost of the product in order to license the technology they were purchasing.

Allegedly, as a part of the agreements that Qualcomm was having purchasers sign, a gag clause provided penalties for those that reported Qualcomm’s licensing practices to regulatory authorities, such as the FTC. However, it turns out that Qualcomm is not done with litigation regarding this matter yet, as the FTC has a case against them in Northern California. Qualcomm had a bench trial in the FTC case earlier this year and is awaiting a ruling to determine whether its licensing practices have been improper.

Health Insurance Portability and Accountability Act Reduces Fines for Health Data Privacy Violations

Takeaway: The penalties for privacy violations of HIPAA under the HITECH Act have been reduced and redefined based on the type of information violation under the Trump Administration.

Compliance with the Health Insurance Portability and Accountability Act (HIPAA) requires entities that come into contact with Protected Health Information (PHI) to ensure technical, physical, and administrative safeguards to that information. This regulation essentially covers data privacy for entities in the healthcare industry.

Prior to last week, being caught in violation of HIPAA could cost an entity up to $1.5 million per violation. This was the interpretation of HIPAA penalties that the Obama Administration had previously defined in the Health Information Technology for Economic and Clinical Health Act (HITECH). However, last week, the Department of Health and Human Services under the Trump Administration decided that the proper interpretation of the penalties under HIPAA would apply lower caps for lesser violations of the act.

There are now four different caps for violations of HIPAA outlined in the HITECH Act. First, if there was no knowledge of the violation, the penalty may be from $100 – $50,000 per violation and an annual limit of $25,000. Second, if the violation is due to reasonable cause, not willful neglect, the penalty is now $1,000 – $50,000 per violation and an annual limit of $100,000. Third, if the violation was based on willful neglect, but was timely corrected, the penalty is now $10,000 – $50,000 per violation and an annual limit of $250,000. Finally, if the violation was based on willful neglect and the person or entity did not correct the violation in a reasonable amount of time, the penalty is $50,000 per violation and an annual limit of $1,500,000.


New Resource to Buy, Sell, and License Patents

Takeaway: There is a new platform for buying, selling, and licensing patents that provides a monetization guide and submission to over 100 of the top patent buyers.

Cascade Ventures, a patent monetization firm, has launched a new tool this month for patent owners to buy, sell, and license patents independently. The platform “PatHub” is claimed to be a global marketplace for “buyers, sellers, and practitioners” to monetize patents of all kinds.

According to PatHub, the goal behind the platform is to give patent owners the tools to successfully monetize their patents, without all of the confusion, by providing a patent monetization guide and automatic submission to “over 100 of the top patent buyers.” If you are interested in learning more, this platform may be found at

USPTO Details Options for Amending Patent Claims during AIA Proceedings

Takeaway: If you need to amend your patent claims during AIA proceedings, the USPTO has provided some available options

The USPTO released a notice dated April 16, 2019 detailing some of the available options for amending patent claims during the pendency of an inter partes review, post-grant review, or covered business method patent review (AIA proceedings). Although this notice does not modify the policies or procedures of the USPTO whatsoever, it does provide a summary of current procedures and some insight on the factors used in determining whether to stay reissue and reexamination proceedings.

Much of the notice is dedicated to explaining the processes by which a patent owner can amend the claims of a patent by filing a request for ex parte reexamination or by filing a reissue application. Importantly, the notice stresses that these actions can be taken before, during, or after an AIA proceeding. In fact, a patent owner may pursue these options to amend claims as long as they are pursued within 63 days of a final written decision resulting from these AIA proceedings.

Note: If seeking a reexamination after a final written decision, the requester must bring up a substantial new question (SNQ) of patentability. This SNQ cannot be the same question decided in the final written decision.

The publication of such a notice by the USPTO suggests that perhaps the office is encouraging more patent owners to seek amendments through these means. The inclusion of a summary of factors considered when determining whether to stay a reissue or reexam proceeding may also be intended to assuage the fear that these proceedings will be stayed in favor of the newer AIA proceedings. Coming Soon!

We are excited to announce that Cislo & Thomas has created! is an online platform to search existing U.S. trademarks, domains and other uses, and to connect with professionals to file trademark applications.


Cislo & Thomas LLP Spotlight

Cislo & Thomas is Headed to INTA 2019 in Boston

We are excited to be exhibiting at the 141st Annual Meeting of the International Trademark Association in Boston!

If you are attending the conference, we would love to say hello! Please visit us at Booth No. 834, exhibiting both Patentfiler and Trademarkfiler. If you have any questions, or would like to schedule a specific time to meet during INTA, please contact us at