Gibbons Law Alert Blog

Supreme Court Finds Covenant Not to Sue Sufficiently Broad

Trademark holders no longer have to worry about not being able to dismiss a case by entering into a properly drafted covenant not to sue. In Already, LLC, dba Yums v. Nike, Inc., the Supreme Court unanimously affirmed the Second Circuit’s opinion by ruling that Nike’s covenant not to sue Yums for trademark infringement was sufficiently broad to render moot Yums’ challenge to the validity of Nike’s asserted registration. Yums had no reasonable apprehension of litigation and Nike met its burden of showing that Yums could not be sued later. Chief Justice Roberts delivered the opinion, which required a high standard for parties issuing the covenant, as they bear a “formidable burden” to establish that it is “absolutely clear” that the allegedly wrongful conduct cannot reasonably be expected to reoccur. Remand was not necessary under the circumstances, because the Court found that it “cannot conceive” of any shoe that Yums could make “that would potentially infringe Nike’s trademark and yet not fall under the Covenant.” Arguably, the Court construed the covenant so broadly as to exclude a claim of infringement based on Yums’ sale of the exact shoe covered by Nike’s challenged registration.

Netflix Case Illustrates Potential Social Media Pitfalls Facing Public Companies

As we reported in the Gibbons E-Discovery Law Alert in May 2012, “Reg FD” could present a potential pitfall for those that post material non-public information via social media platforms. In early December 2012, that “pitfall” became a reality for Netflix Inc. CEO Reed Hastings. In July 2012 Hastings published on his public Facebook page a 43-word post concerning viewership statistics, including that Netflix subscribers had watched one billion hours of video the previous month.

USPTO Launches First CBM Post-Grant Review

The America Invents Act (AIA), created a transitional program for post-grant review of certain patents claiming subject matter referred to as covered business methods (“CBM”). As defined by AIA § 18(d)(1) and 37 C.F.R. § 42.301, a CBM is “a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service.” 37 C.F.R. § 42.301 does, however, provide an exception for technological inventions. Whether a claim recites a technical feature is determined based on whether the claim is “novel and unobvious over the prior art; and [whether the claim] solves a technical problem using a technical solution.” Id.

Supreme Court Leaves Potential Void Regarding Licensee Validity Challenges to Patents

On Monday, the Supreme Court denied Rates Technology Inc.’s petition for writ of certiorari to hear whether a pre-litigation no-challenge provision is void under Lear, Inc. v. Adkins, 395 U.S. 653 (1969) as the Second Circuit found. We previously discussed the petition, the Second Circuit’s holding, and the no-challenge clause which prevents a licensee from challenging the validity of a patent.

Agreement to Arbitrate Trumped “Not a Contract” Language in Employee Handbook and Acknowledgement Form

The District of New Jersey recently held that a binding arbitration procedure contained in an employee handbook and the corresponding waiver in a signed acknowledgement form were enforceable despite a disclaimer in the handbook declaring the document to be unenforceable as a contract. In Brooks v. Brookdale Senior Living Communities, Inc., No. 12-CV-2821 (RBK/AMD) (D.N.J. Dec. 20, 2012), the defendant employer moved to dismiss the employee’s complaint and compel arbitration on the grounds that the employer had a binding arbitration procedure in its handbook and the employee executed a waiver of her right to sue the employer in court under two New Jersey statutes.

Recent Developments Under New Jersey’s Open Public Records Act

New Jersey courts decided a trio of cases last month that shine a spotlight on the State’s Open Public Records Act (“OPRA”), which governs the disclosure of government records when requested by members of the public. These opinions — the holdings of which are summarized below — serve as important guideposts for practitioners litigating OPRA-related matters.

U.S. Supreme Court Will Not Review Lead Compound Test for Obviousness Analysis

On Monday, the Supreme Court denied the petition for writ of certiorari filed by Apotex seeking review of the Federal Circuit’s May 7, 2012, ruling that affirmed the District Court of New Jersey’s judgment that Otsuka’s patents covering its blockbuster drug Abilify© are valid and not obvious. In that ruling, the Federal Circuit found no error in the District Court’s application of the so-called lead compound test; an analytical framework in chemical art cases that seeks — in an obviousness inquiry under 35 U.S.C. § 103 — to determine whether a POSA (“person of ordinary skill in the art”) would select the proffered prior art as a “lead compound.” Specifically, in a lead compound analysis, the Court will consider: the hypothetical person of skill in the art’s identification of a lead compound, structural differences between the proposed lead compound and the claimed invention, motivation or teachings in the prior art to make the necessary changes to arrive at the claimed invention, and whether the person of skill in the art would have a reasonable expectation of success in making such structural changes.

Confidentiality and Non-Disparagement Provisions in Employment Agreement Deemed Unlawful by NLRB Judge

Over the past two years, the National Labor Relations Board (the “Board”) has attacked various employment policies of union and non-union employers alike, ranging from social media policies to policies that establish protocol for employees to follow when responding to media inquiries. The Board also has been critical of at-will language commonly found in employee handbooks and policies used by employers throughout the country. In light of the Board’s recent actions, some employers–particularly non-union employers that have not historically focused on Board developments–have begun to reassess policy language that has long existed in their handbooks. Due to a recent administrative law judge (“ALJ”) decision, employers should add employment agreements to their list of employment practices to review and Board developments to watch in 2013.

A Super Step in Superfund Regulation? Time Will Tell: EPA Releases Guidance on Negotiation of RD/RA at Superfund Sites and a Revised Settlement Approach for Alternate Sites

In the controversial area of Superfund regulation, the United States Environmental Protection Agency (“EPA”) appears to be making steps toward more successful and more efficient negotiation of remedial design (“RD”)/remedial action (“RA”) settlements in Superfund cases. EPA recently released its Revised Policy on Managing the Duration of Remedial Design/Remedial Action Negotiations (“the Negotiation Policy”) and Transmittal of Updated Superfund Response and Settlement Approach for Sites Using the Superfund Alternative Approach (“Alternative Approach”).

Gibbons Director Rob Rudnick Elected President of the NJIPLA; “Electronics, Telecom and Software Patent Practice Update” Event Rescheduled for 1/24/13

Gibbons P.C. is pleased to announce that Robert E. Rudnick, a Director in the firm’s Intellectual Property Department, has been appointed President of the New Jersey Intellectual Property Law Association (NJIPLA). Mr. Rudnick has been an NJIPLA board member for the past four years. The New Jersey Intellectual Property Law Association (NJIPLA) is an organization consisting of more than 300 practicing intellectual property attorneys, patent agents, law students, and interested individuals, primarily from New Jersey, New York, Pennsylvania and Connecticut.