Rothschild accuses Fingent of infringing U.S. Patent No. 7,456,872 by sales of its “ReachOut Suite,” a field service management software application. It is not clear why Rothschild, a Texas entity, is suing Fingent, a New York business, in Massachusetts, and it is equally unclear why venue in Massachusetts is appropriate, as the pleadings related to venue do not appear consistent with the TC Heartland line of cases.
Judge O’Toole ruled on a pair of privilege disputes in this trade secret litigation, finding some claims of privilege to be without merit while upholding others. Lynx accuses Zebra of misappropriating real-time player tracking technology and used it to obtain a deal with the NFL that did not include Lynx. During discovery, certain e-mail chains were produced by Zebra in both keyword-searchable and non-searchable formats; redactions based on privilege were made in only one of the formats. The parties could not resolve whether the privilege claim was legitimate, leading to the filing of a motion to remove the redactions by Lynx. A first set of e-mails included communications between Zebra, Zebra’s counsel, and non-employee consultants hired by Zebra o assist in reaching agreement with the NFL. Following en camera review of the communications in question, Judge O’Toole determined that Zebra had waived privilege in these communications by sharing them with the consultants. He found that the Kovel doctrine, which extends privilege to communications with third parties that are necessary, or at least highly useful, for effective consultation between the client and the attorney, did not apply, because the redacted communications were not made for the purpose of obtaining legal advice, and instead concerned business advice. The communications also did not demonstrate that the consultants were necessary to interpret matters beyond the lawyers’ reach. He also rejected Zebra’s attempted reliance on the “functional equivalent” doctrine, by which non-employee agents of a corporation can be considered functionally equivalent to corporate employees by virtue of their close connection to the corporation, such that privilege would extend. Here, the consultants were not so closely tied to Zebra as to be equivalent to employees – they lacked longstanding relations with the company, worked remotely, were not Zebra’s sole representatives in negotiations, and were free to work for others. Judge O’Toole further noted that neither the First Circuit nor the District of Massachusetts had ever adopted or applied the doctrine. The results were different with respect to a different set of communications, with Judge O’Toole upholding the privilege in communications between Zebra executives and in-house counsel. He noted that such communications would only be privileged if they revolved around legal, as opposed to business, advice, but noted that the communications in question did address legal perspectives on issues being discussed.
A number of discovery disputes boiled over in a suit involving a Chinese hot-pot restaurant chain and a Boston restaurant who had tried to become its first American franchisee, resulting in the award of sanctions against plaintiffs’ attorney. Magistrate Judge Kelley is requiring the attorney to pay the defendants’ reasonable fees and costs for their work on a motion for a protective order and to quash subpoenas issued by the plaintiffs. Limited discovery had been allowed, to determine whether a forum selection clause in the franchise agreement had been triggered, which would require the bulk of the claims to be brought in China. A series of disputes over discovery arose, in which plaintiffs’ attorney repeatedly refused to meet and confer. Among the charges were that the attorney noticed numerous third party subpoenas seeking financial discovery well outside the bounds of the limited discovery that had been permitted at a time when the defendants were negotiating a resolution of a dispute concerning plaintiffs’ attempt to get this information directly from the defendants. Judge Kelley indicated that this is an improper attempt to circumvent the legitimate objections of the defendants to the discovery, and that plaintiffs should have moved to compel if they believed the objections to lack validity. She criticized plaintiffs’ arguments that defendants lacked standing to challenge third party subpoenas as “plainly without merit.” Perhaps most damaging, plaintiff itself cross-moved for sanctions, accusing defendants’ attorney of frivolous and vexatious conduct, obstruction of discovery, and “potentially falsifying discovery documents,” an allegation that he admitted at oral argument was entirely without basis.
The Federal Courts in Boston and Worcester are closed today in light of the storm. The Springfield court will, however, be open, albeit with limited staffing.
Judge Stearns construed a number of claim terms in this dispute in which Egenera accused Cisco of infringing U.S. Patent 7,231,430 (Egenera had previously voluntarily dismissed claims relating to a second patent, to avoid the case being stayed pending inter partes review of the second patent). The technology at issue relates to the creation of a virtual processing area network that simulates a network of computer processors. Judge Steans rejected Egenera’s proposed construction of “processor” as the “processing node” described in the specification, because the specification does not clearly set forth a definition of the term that is different from its plain and ordinary meaning. He also rejected Egenera’s proposed construction of “logic” as “software, firmware, circuitry, or some combination thereof.” Instead, he found “logic” as used in the claims to refer to the abstract concept of computer operations generally that perform the function recited after the term, and thus to be in means-plus-function format. Having so determined, however, he disagreed with Cisco that the terms were indefinite, finding sufficient structure in the specification for the various “logic” functions recited in the claims. Finally, he found in Egenera’s favor on “internal communication network,” determining that even though the network is described as emulating Ethernet functionality, the claimed network is not limited to a non-Ethernet physical network.
The PTO announced that it will remain fully open and operational, at least during the first few weeks:
“While activities across much of the federal government ceased at 12:01 a.m. January 20, 2018, due to a lack of appropriated funding, the USPTO remains operational.
This is possible because the agency has access to prior year fee collections, which enables the USPTO to continue normal operations for a few weeks. Should the USPTO exhaust these funds before a government shutdown comes to an end, the agency would have to shut down at that time, although a very small staff would continue to work to accept new applications and maintain IT infrastructure, among other functions.”
Judge Talwani allowed in part and denied in part a joint motion for a protective order. The motion was allowed insofar as it governed exchange of documents and information between the parties. The motion was denied without prejudice, however, insofar as it purported to designate what the court would allow to be filed under seal. In keeping with past practice, Judge Talwani propounded a strong defense of the presumptive public right of access to judicial documents, whereby only the most compelling reasons would permit the filing of documents. To that end, a party seeking to impound must show, on a document-by-document basis, a particular factual demonstration of potential harm by making a document or other information public.
Following construction of the claims, Judge Capser denied Philips’ motion for summary judgment of validity. WAC had sought inter partes review on several grounds, some of which were denied. Judge Casper, citing to Shaw Industries Group v. Automated Creel Systems, found that the Federal Circuit had determined that the estoppel resulting from an unsuccessful IPR did not apply to grounds that were not instituted by the PTO. Judge Casper denied WAC’s motion to compel the deposition of the named inventor of one of the patents-in-suit for lack of relevance. WAC had asserted that the inventor’s testimony was relevant on patent practices at the time the application was filed, prior art, the problem the patent allegedly solves, the underlying development of the technology claimed in the patent, the alleged contribution of each inventor to the patent, and the facts and circumstances surrounding the alleged invention. The problem was that none of these issues related to any claims or defenses of WAC, thus making these issues irrelevant. The court specifically noted, however, that the inventor was no longer an employee and was a resident of France, suggesting that the relevancy might have been sufficient had the witness been more readily available, but did not outweigh the inconvenience of making the witness appear.
As an FYI, the United States Court for the District of Massachusetts are closed due to the blizzard currently dumping snow on the state.
Following up on Friday’s post, Judge Talwani’s Order enjoined the use of The Atomic Café’s trademarks in written and electronic material, but denied the injunction without prejudice with respect to retail sales of Plaintiff’s prepackaged coffee beans, based on Plaintiff’s assertion at argument that it was not seeking to enjoin this use of the mark.