Weekly IP Takeaways

Prepared by Cislo & Thomas LLP Attorney Mark D. Nielsen, Ph.D.

1. People often ask about whether some proprietary know-how, technique, or process should be patented or protected as a trade secret. The decision is not necessarily a binary one. One may argue that, in a context where a patent application is filed and trade secret protection is also sought on the same or highly similar proprietary subject matter, publication of a trade secret (via publication of the patent application) destroys the trade secret. Before one makes such an argument, however, one must ensure that the trade secret is covered by the disclosure of the published patent application. If portions of the trade secret are not disclosed in the published patent application, it may survive publication of the patent application. To this end, the California Court of Appeal found that a patent for a formula did not destroy a trade secret for the process related to use of the trade secret. The opinion is here.

2. A federal judge in Oregon denied motions to dismiss or strike racketeering and fraud claims related to attempts to invalidate a patent by a vendor of a patent infringement defendant where the infringement defendant was time-barred from seeking to invalidate the asserted patent in the Patent Trial and Appeal Board (PTAB). The order is here. Basically, the infringement defendant offered improper financial incentives to its vendor in the form of alleged license fees in exchange for its vendor seeking to invalidate the asserted patent even though the infringement defendant was the real party in interest. Parties seeking to use the PTAB to invalidate patents must be the real party in interest and be cognizant of time limits on filing. Attempting to manipulate the system in regards to the real party in interest or time bars could expose the real party in interest to liability according to this ruling.

3. The Eastern District of Texas (Gilstrap, J.), not surprisingly, denied two motions to transfer filed by Amazon and Apple here and here. While Judge Gilstrap noted that each case could have been filed in the Northern District of California (the district to which transfer was sought in both cases), he did not find that the various transfer factors indicated that the Northern District of California was “clearly more convenient” than East Texas. In the Amazon case, the Court did not there was sufficient evidence in the record regarding certain non-party witnesses in the Northern District of California, and also was not persuaded bringing evidence from Seattle to Texas was a significant burden relative to bringing evidence from Seattle to the Northern District of California. In both cases, the Court found that East Texas has a faster time to trial than the Northern District of California, and weighed that fact against transfer. The Court also found that Apple’s documents are likely digitized and easy to transport. These decisions reaffirm that it is not easy to get a case out of East Texas if there is even a modicum of basis for proper venue.