Gibbons Law Alert

Gibbons Law Alert Blog

On October 9, 2014

Twitter’s ubiquitous 140-character-or-less tweets are not, the company argues, sufficiently similar to email or other forms of stored electronic information to warrant lumping them together with the likes of Google, Microsoft, Facebook, Yahoo!, or Apple, all of which have agreed to restrictive limitations on their public reporting of government surveillance. Twitter has sued the U.S. Government in federal court in California to make its point.

Seventh Circuit Rejects Unbalanced “Division of Spoils” Between Class Counsel and Class Members in RadioShack Settlement

by Gibbons P.C.

Posted in Class Action Defense

On October 8, 2014

In Redman v. RadioShack Corp., the Court of Appeals for the Seventh Circuit, in an opinion by Judge Richard Posner, reversed and remanded the district court’s judgment approving the settlement terms for a class action filed against RadioShack Corp. alleging violation of the Fair and Accurate Credit Transactions Act. The court expressed concern about “the division of spoils between class counsel and class members” and found it likely that “each class member has a valid claim to a good deal more than one $10 coupon, and it would seem therefore that the equities favor a reallocation of some of what we are calling the spoils from class counsel to class members who have submitted claims for the coupons.”

Because I Said So: Courts’ Inherent Powers to Impose Fees for Bad Faith, Vexatious, or Wanton Litigation

by Charles H. Chevalier

Posted in Patent

On October 8, 2014

Fee shifting has been a recent theme in patent litigation, with judges, legislators, and state attorney generals alike attempting to curb abuses of the patent system by creating new penalties. One judge has fallen back on the long-standing inherent powers of the judiciary to do so. This appealing new method of punishing patent litigation abusers comes from the U.S. District Court of the District of Delaware, one of the nation’s busiest patent dockets. Judge Richard G. Andrews’ well-reasoned opinion awards attorneys’ fees to the defendant on the basis of the court’s inherent powers to penalize those who act in “bad faith, vexatiously, wantonly, or for oppressive reasons.” Parallel Iron LLC v. NetApp Inc., No. 12-769, Slip Op. at 15 (D.Del. Sept. 12, 2004).

New Jersey Assembly Advances Bill To Address Bad-Faith Patent Infringement Actions

by Charles H. Chevalier

Posted in Patent

On October 7, 2014

We have previously posted on proposed federal and state legislation aimed at addressing the toll of “patent troll” litigation by non-practicing entities on the U.S. economy. The Gibbons IP Law Alert has previously posted regarding such issues on August 26, 2014, June 25, 2014, March 10, 2014, and December 13, 2013. Continuing the trend, the New Jersey General Assembly panel recently advanced bill A-2462 to address so called “Patent Troll” litigation. Consistent with other recent efforts at curbing patent litigation abuses, this bill attempts to identify wrongdoers and penalize specific abuses through monetary sanctions.

A Contested Order By The Federal Circuit Denies Request For En Banc Review Of Its Decision That Patent Co-Owners May Not Be Involuntarily Joined In A Patent Dispute

by Christopher H. Strate

Posted in Patent

On October 6, 2014

Recently, the Federal Circuit issued an order denying a request for en banc review of a panel decision that held that a patent co-owner may not be involuntarily joined as a plaintiff in a patent dispute. It is generally recognized that all owners to a patent in suit must be a party to the action, otherwise the suit is dismissed for lack of standing. The reason is that a defendant should not be subjected to multiple suits by different parties regarding the same patent. The Federal Circuit in STC.UNM v. Intel Corporation considered the situation in which Sandia Corp (a co-owner of the patent in suit) refused to join STC.UNM’s (the licensing arm of the University of New Mexico) patent infringement suit against Intel.

New Jersey Supreme Court Adopts O’Brien Factors For Determining When Real Estate Transactions Constitute an Equitable Mortgage

by Andrew J. Camelotto

Posted in Transactional Real Estate and Leasing

On October 6, 2014

Founded on the principle that equity looks to substance over form, courts will find an equitable mortgage to exist when a deed or contract, while lacking the characteristics of a typical mortgage, is used to pledge an interest in real property as security for a debt with the intention of acting as a mortgage. On September 9, 2014 in Zaman v. Felton, the New Jersey Supreme Court decided that when determining whether a particular transaction gives rise to an equitable mortgage, a trial court must utilize the eight factor test set forth by the Bankruptcy Court for the District of New Jersey in O’Brien v. Cleveland.

Patent Assertion Entities Hit With Rule 11 Sanctions and Section 285 Attorneys’ Fees in Separate Delaware District Court Cases

by Charles H. Chevalier

Posted in Patent

On September 30, 2014

Much attention has been said about the role 35, U.S.C. § 285 in combating vexatious litigations brought by patent assertion entities (“PAE”) following the Supreme Court’s decision in Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749 (2014). Overshadowed by the Supreme Court’s ruling is the imposition of sanctions under Federal Rule of Civil Procedure 11. Not anymore. In a recent federal court case before Judge Richard G. Andrews, of the District of Delaware, the patent assertion entity (PAE) plaintiff was hit with R. 11 sanctions, resulting in the dismissal of all pending actions. This ruling illustrates that courts have multiple avenues to exercise their discretion on how to approach PAE actions, and offers insights as to how defendants can thwart PAE litigants that bring baseless patent infringement claims.

Blurred Lines: Third Circuit’s Lanham Act Attorneys’ Fees Analysis Follows Recent Supreme Court Ruling in Patent Case

by Gibbons P.C.

Posted in Patent / Trademarks

On September 29, 2014

The Court of Appeals for the Third Circuit recently decided that the U.S. Supreme Court’s April decision on attorneys’ fees in a patent case, Octane Fitness, LLC v. Icon Health & Fitness, Inc., should also be applied in trademark cases under the Lanham Act. See Fair Wind Sailing, Inc. v. Dempster, Nos. 13-3305 & 14-1572 (3d Cir. Sept. 4, 2014). Defendant Dempster had successfully moved to dismiss the action under Rule 12(b)(6) of the Federal Rules of Civil Procedure and was awarded its attorneys’ fees under § 35(a) of the Lanham Act and the Virgin Islands Code. Plaintiff Fair Wind Sailing appealed the fee award. The Third Circuit ultimately vacated the District Court’s fee award and remanded, instructing the court below to utilize an inquiry consistent with the Supreme Court’s decision in Octane Fitness.

Classwide Arbitration is a Gateway Issue That Must Be Decided by Courts Not Arbitrators

by Gibbons P.C.

Posted in Class Action Defense

On September 25, 2014

In Opalinski v. Robert Half International Inc., the Third Circuit recently tackled the question of whether a district court— rather than an arbitrator—should decide if an agreement to arbitrate between two parties also authorizes the arbitration of unidentified individuals’ claims on a classwide basis. Concluding that the district court should decide this question, the Third Circuit joined the Sixth Circuit as the only Courts of Appeals to squarely confront the “who decides” inquiry.

Rule Amendments Update: Judicial Conference Approves Proposed Changes

by Gibbons P.C.

Posted in E-Discovery: Legal Decisions and Court Rules

On September 25, 2014

On September 16, 2014, the Judicial Conference approved, without changes, the proposed amendments to the Federal Rules of Civil Procedure. (For background information on the proposed amendments and the approval process, see our previous blog posts from June 19, 2014, May 27, 2014, February 10, 2014, and May 6, 2013.) The proposed amendments, which include changes to the definition of the scope of discovery in Rule 26(b)(1) and the applicable standard courts should apply when considering sanctions for ESI spoliation under Rule 37(e), will now be submitted to the U.S. Supreme Court for consideration and approval. If adopted by the Supreme Court before May 1, 2015, and Congress does not intervene, the proposed amendments will take effect on December 1, 2015.