Gibbons Law Alert

Gibbons Law Alert Blog

Legislators Propose Framework To Reform Patent Eligibility Under Section 101

Posted in Biotech / Patent / Pharmaceuticals

On May 2, 2019

On April 17, 2019, Senators Chris Coons and Thom Tillis, and Representatives Doug Collins, Hank Johnson, and Steve Stivers unveiled a framework to reform 35 U.S.C. §101. Section 101 of the Patent Act currently makes patentable “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” Although the statute is relatively permissive, courts have limited patentable subject matter beyond the statutory mandate by creating judicial exceptions. Under these exceptions as articulated in Alice Corp. v. CLS Bank International, “[l]aws of nature, natural phenomena, and abstract ideas are not patentable.” The proposed framework seeks to address these exceptions to patent eligible subject matter through statute versus an ever-growing list of case law. Under the lawmakers’ proposed framework, reformed Section 101 would: Keep existing statutory categories of process, machine, manufacture, or composition of matter, or any useful improvement thereof. Eliminate, within the eligibility requirement, that any invention or discovery be both “new and useful.” Instead, simply require that the invention meet existing statutory utility requirements. Define, in a closed list, exclusive categories of statutory subject matter which alone should not be eligible for patent protection. The sole list of exclusions might include the following categories, for example: Fundamental scientific principles Products that exist solely and exclusively in nature Pure...

Opportunity Zone Update – IRS Releases Second Set of Proposed Regulations

by Peter J. Ulrich

Posted in Development/Redevelopment / State Legislation / State Legislative and Budget Matters

On April 30, 2019

On April 17, 2019, the Internal Revenue Service released the second set of Qualified Opportunity Zone (“QOZ”) proposed regulations (the “New Regulations”). The New Regulations address multiple issues relating to the structuring and operation of qualified opportunity zone funds (“QOFs”) and provide clarity on areas that include: Meeting the original use test for purchased tangible property Safe harbors for leased tangible property to qualify as QOZ business property Related party rules for leased tangible property and tangible personal property Investment vs. active business use of QOZ land Safe harbors to meet the 50% gross income test for the active conduct of a QOZ business Inclusion events for otherwise deferred capital gains Definitions for the term “substantially all” used in several statutory provisions Special elections when QOF partnerships and S corporations dispose of property after 10 years QOF reinvestment of the proceeds from the distribution, sale, or disposition of QOZ property Application of the 90% asset test to newly contributed QOF assets The New Regulations provide answers to many unresolved questions and present needed definitions where uncertainties were impeding investment into QOZs, particularly with respect to QOZ businesses. Our new article discusses many of the details.

Recent Decision Highlights Importance of Pleading Compliance with the Federal Patent Marking Statute

by Wendy R. Stein

Posted in Patent

On April 26, 2019

A Delaware district court recently held that a patentee failed to state a claim for past patent infringement damages where the patentee failed to plead compliance with the patent marking statute in its complaint. See Express Mobile, Inc. v. Liquid Web, LLC, C.A. Nos. 18-01177-RGA, 18-01181-RGA, 2019 U.S. Dist. LEXIS 64362, at *5 (D. Del. Apr. 15, 2019). The decision highlights the importance of pleading compliance with the marking statute even where a product covered by the patent is not being offered for sale or sold in the United States. The federal patent marking statute (“Marking Statute”) provides a limitation on recoverable damages in patent litigation. See 35 U.S.C. § 287(a). It provides that “Patentees, and persons making, offering for sale, or selling within the United States any patented article for or under them, or importing any patented article into the United States, may give notice to the public that the same is patented, either by fixing thereon the word ‘patent’ or the abbreviation ‘pat.,’ together with the number of the patent.” The Marking Statute further provides that “[i]n the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter,...

NYC Council Passes Legislation Barring Pre-employment Marijuana Testing

by Gibbons P.C.

Posted in Policies and Handbooks

On April 16, 2019

On April 9, 2019, the New York City legislature passed legislation that would amend Section 8-107 of the New York City Administrative Code to prohibit employers from testing job applicants for marijuana or tetrahydrocannabinols (THC) – the active ingredient in marijuana. Specifically, the law states, “it shall be an unlawful discriminatory practice for an employer, labor organization, employment agency, or agent thereof to require a prospective employee to submit to testing for the presence of any tetrahydrocannabinols or marijuana in such prospective employee’s system as a condition of employment.” The legislation creates an exception for individuals who apply to specifically defined roles; such as police officers or peace officers, those requiring a commercial driver’s license, those requiring the supervision or care of children, medical patients, or other vulnerable persons, and those with the “potential to significantly impact the health or safety of employees or members of the public.” Furthermore, the law would not apply to drug testing that is required pursuant to: (a) regulations promulgated by the federal department of transportation; (b) federal contracts; (c) a federal or state law, regulation, or order that requires drug testing of prospective employees for purposes of safety or security; or (d) a collective bargaining agreement. Lastly, it should be noted that the bill does not bar marijuana testing...

Supreme Court Holds That 14-Day Appeal Deadline Established by Rule 23(f) Cannot Be Tolled

by Gibbons P.C.

Posted in Class Action Defense

On April 15, 2019

On February 26, 2019, the Supreme Court unanimously held in Nutraceutical Corporation v. Lambert, that the 14-day deadline imposed by Federal Rule of Civil Procedure 23(f), seeking permission to appeal an order granting or denying class certification, cannot be tolled. After initially certifying a class, the District Court, on February 20, 2015, decertified the class after finding that common issues did not predominate among the class members. Pursuant to Rule 23(f)’s 14-day deadline, the plaintiff, Lambert, had until March 5, 2015 to seek permission to appeal. But, on March 2, 2015, Lambert orally informed the District Court that he would seek reconsideration and did not file his motion for reconsideration until March 12, 2015. Lambert’s motion for reconsideration was denied on June 24, 2015. Fourteen days after that, almost four months past his 14-day deadline, Lambert petitioned the Ninth Circuit seeking permission to appeal the District Court’s order decertifying the class. The Court of Appeals granted Lambert’s petition, finding that the 14-day deadline under Rule 23(f) should be tolled given the circumstances. Specifically, the Court of Appeals found that because Lambert had informed the court within 14 days that he would be seeking reconsideration, he acted diligently. The Supreme Court disagreed, however, and found that the 14-day deadline imposed by Rule 23(f) could not be...

Gibbons Real Property Department Attorneys Represent Pharmaceutical Company in Cambridge Lease

by Gibbons P.C.

Posted in Transactional Real Estate and Leasing

On April 12, 2019

Gibbons attorneys Russell B. Bershad and Nicole E. Taplin, Directors in the Real Property Department, are representing Bayer Healthcare LLC in a long-term, large scale lease for laboratory and office space in a new building under construction by MIT in Kendall Square, in Cambridge, Massachusetts. The Boston Globe featured a story on the lease, which can be found here.

New York Appeals Court Decision Highlights the Risks of Not Filing Decisions and Not Holding Duly Noticed Public Hearings

by Howard D. Geneslaw

Posted in Development/Redevelopment

On April 4, 2019

A recent decision by New York’s Appellate Division, Second Department, serves as a reminder of the importance of promptly filing administrative determinations, holding required duly noticed public hearings, and the consequences of failing to do so. In Corrales v. Zoning Board of Appeals of the Village of Dobbs Ferry, Livingston Development Group in November 2012 submitted an application for the development of twelve condominiums. The Building Department forwarded the application to the Planning Board, which conducted a public hearing after which it recommended approval subject to certain conditions. The Village Board of Trustees, which retained site plan approval authority, granted site plan approval conditioned on, among other things, the applicant obtaining approval from the Architectural and Historic Review Board (the “AHRB”). Thereafter, the applicant applied to the AHRB, which denied its application. The applicant appealed the denial to the Zoning Board of Appeals (“ZBA”). While that appeal was pending, neighbors – one of whom did not receive notice of the Planning Board’s earlier public hearing – asserted that the proposed condominium use was not permitted in the zoning district. The neighbors’ attorney also raised this issue at a subsequent meeting of the AHRB, during which the assistant building inspector gave the opinion that the proposed use complied with applicable zoning regulations. The neighbors, viewing the...

Coming Soon to an Opposition Brief Near You: U.S. Supreme Court Holds That Disseminators of False or Misleading Statements Face Liability for Securities Fraud Under Rules 10b-5(a) and (c) Even Where They Are Not Subject to Liability Under Rule 10b-5(b)

by Samuel I. Portnoy

Posted in Securities

On April 1, 2019

In a decision that is certain to receive a warm welcome from the securities class action plaintiffs’ bar, last week, in Lorenzo v. Securities and Exchange Commission, the U.S. Supreme Court held that a disseminator of a false or misleading statement, who cannot be liable for securities fraud under Rule 10b-5(b) because he or she was not the “maker” of that statement, nonetheless faces liability under Rules 10b-5(a) and (c) and related securities statutes. Under Rule 10b-5(b), it is unlawful to make any untrue statement of material fact in connection with the purchase or sale of a security. Nearly eight years ago, in Janus Capital Group, Inc. v. First Derivative Traders, 564 U.S. 135 (2011), the Supreme Court held that only the maker of a false or misleading statement faces liability under Rule 10b-5(b) and that the maker of a statement is the person with ultimate authority over the statement including its contents and whether and how to communicate it. As a result, in that case, an investment adviser who had participated in drafting a false statement included in the prospectus of its mutual fund client avoided liability for securities fraud because the mutual fund, and not the investment adviser, was the maker of the false statement. The decision was of no small significance. In...

Four Things to Watch After Legislature Cancels Votes on Marijuana

by Michael D. DeLoreto

Posted in State Legislation

On April 1, 2019

To the dismay of advocates and the cheers of opponents, the New Jersey Legislature canceled its scheduled votes on a three-bill package to legalize marijuana for adult use, expand the State’s medical marijuana program, and expunge the records of certain marijuana offenders. For the time being, New Jersey will not become the eleventh state to legalize cannabis for recreational use. But with legislators still committed to moving the issue in the future, here are four things to watch in the coming months. Will the Governor Take Action to Expand the State’s Existing Medical Marijuana Program? Marijuana is legal for medical use in New Jersey, and the State’s medical program has seen a rapid expansion under the Murphy Administration. Under the current framework of the “Compassionate Use of Medical Marijuana Act,” the Governor has the authority to permit more alternative treatment centers (ATCs) in the State, and to continue to expand the list of qualifying medical conditions that marijuana can be prescribed for. Governor Murphy and his Department of Health did a call for applicants in August 2018, and issued permits for six new vertically-integrated ATCs. The Governor expressed his desire to expand the medical marijuana program aggressively if legislation did not move forward. Administration officials have walked back the Governor’s statement in order to focus...

Governor Murphy Signs Stormwater Utilities Bill Into Law

by Gibbons P.C.

Posted in Environmental and Green Issues

On March 29, 2019

On March 18, 2019, New Jersey Governor Phil Murphy signed legislation authorizing municipalities (and other public entities) to establish utilities for the creation and management of stormwater infrastructure. The legislation, S1073, also known as the Clean Stormwater and Flood Reduction Act (the “Act”), provides that a governing body of a county or municipality may create a stormwater utility “for the purposes of acquiring, constructing, improving, maintaining, and operating stormwater management systems.” The Act also allows municipalities and counties that have established sewerage authorities to request that the authority create a stormwater utility, so that the functions of the utility would be managed by the existing authority rather than the municipality(ies) or county directly. Perhaps most importantly, the Act authorizes stormwater utilities to “charge and collect reasonable fees and other charges” to recoup the costs incurred by the utility in performing stormwater management in the subject locality. Under the Act, charges may be assessed against the owner or occupant, or both, of any real property from which stormwater enters a stormwater management system. The Act also includes provisions allowing municipalities, etc. that establish stormwater utilities to issue bonds to fund stormwater management systems, and imposes reporting requirements on utilities and rulemaking obligations on the New Jersey Department of Environmental Protection. The passage and signing of the...