Fitch Even News Feed

IP Alert: FTC Announces Rule Banning Noncompetes

24 Apr 2024 00:00:00 -0800

The Federal Trade Commission (FTC) recently issued a final rule that bans noncompete clauses (“noncompetes”) nationwide. The FTC believes the new rule will protect the ability of workers to change jobs, increase innovation, and foster new business formation. The new rule will go into effect 120 days after it is published in the Federal Register.

Noncompetes are often used in employment contracts and impose conditions that prevent workers from taking a new job or starting a new business in a certain field. Noncompetes typically force workers to either stay in a job they want to leave or switch to a lower-paying field. The FTC estimates 30 million workers are subject to a noncompete clause.

In the final rule, the Commission determined that noncompetes are an unfair method of competition, and therefore a violation of Section 5 of the FTC Act (ban on unfair methods of competition). The FTC found that noncompetes tend to: negatively affect competitive conditions in labor markets by inhibiting efficient matching between workers and employers; negatively affect competitive conditions in product and service industries, inhibiting new business formation and innovation; and can lead to increased market concentration and higher prices for consumers.

Under the FTC’s new rule, existing noncompetes for the vast majority of workers will no longer be enforceable. Employers will be required to provide notice to workers other than senior executives who are bound by an existing noncompete that they will not be enforcing any noncompetes against them. Existing noncompetes for senior executives can remain in force, but employers are banned from entering into or attempting to enforce any new noncompetes, even if they involve senior executives. The final rule defines senior executives as workers earning more than $151,164 annually and who are in policy-making positions.

One argument in favor of noncompetes is that they protect a company’s investment in their personnel particularly investments made concerning senior executives. Anticipating this sort of argument, the FTC found that employers have several alternatives to noncompetes that still enable firms to protect their investments without having to enforce a noncompete.

More specifically, the FTC argued that trade secret laws and non-disclosure agreements (NDAs) both provide employers with well-established means to protect proprietary and other sensitive information. The FTC also asserted that instead of using noncompetes to lock in workers, employers that wish to retain employees can compete for the worker’s services by improving wages, benefits and/or working conditions.

As mentioned, the new rule is currently scheduled to go into effect 120 days after it is published in the Federal Register. However, several legal challenges are expected to be directed against the new rule in the near future. Given this, the ultimate fate of the new rule is uncertain.

For more information on this topic, please contact Fitch Even partner Timothy R. Baumann.

Fitch Even IP Alert^®

IP Alert: USPTO Issues Guidance for Examining Means-Plus-Function and Step-Plus-Function Claim Limitations

10 Apr 2024 00:00:00 -0800

On March 18, the USPTO issued a guidance document on how to examine claims that recite functional limitations without necessarily using the term “means” under 35 U.S.C. § 112. The guidance document aims to improve clarity, consistency, and predictability of examination under § 112 for different technology areas.

The guidelines explain how to determine whether § 112(f) applies using a three-prong analysis based on the presence or absence of the term “means,” the recitation of sufficient structure, and the recitation of a specific function. The guidance document also provides examples of sufficient structure and specific function for different types of computer-implemented inventions, such as software, algorithms, databases, and graphical user interfaces. The document notes that a generic computer component, such as a processor, memory, or display, does not necessarily provide sufficient structure for a specific computer function, unless the specification clearly links or associates the function and the component.

The guidance document provides further guidance on evaluating whether § 112(b) definiteness is met by identifying the corresponding structure, material, or acts in the specification that perform the claimed function and determining whether they are adequate to support the full scope of the claimed function. Examples are provided of corresponding structure, material, or acts for different types of computer-implemented functional claim limitations, such as software modules, algorithms, data structures, and graphical elements. The guidance document explains how to assess the adequacy of the corresponding structure, material, or acts by considering the level of detail, the use of generic terms or overly broad language, and the consistency with the enablement requirement of § 112(a).

The guidance document is not represented as changing current practice. That said, the author suspects that the issuance of this guidance heralds an intention to review patent applications more rigorously in these regards.

For more information on the revised guidelines, please contact Fitch Even partner Steven G. Parmelee, author of this alert.

Fitch Even IP Alert^®

IP Alert: USPTO Revises Electronic Signature Rule in Patent Correspondence

22 Mar 2024 00:00:00 -0800

The USPTO has revised the electronic signature rule. Effective March 22, 2024, patent correspondence signed using third-party document-signing software, such as DocuSign^® and Acrobat^® Sign, may be accepted under newly added 37 CFR §1.4(d)(4). To be acceptable, the software must be designed to generate the electronic signature and preserve signature date for later inspection. The software must also indicate that the page/form was generated or electronically signed using the document-signing software. The USPTO recommends that the software generate the date the signature was applied.

In addition to being signed by a proper person (e.g., §1.33(b)), the submission must be personally signed by the individual identified in the Signer Name field. The electronic signatures under §1.4(d)(4) do not require the forward slashes (“/”), which are required for “S-signatures” (§1.4(d)(2)). Further, the signature block under §1.4(d)(4) must have the name of the person who signed the document presented in printed or typed form immediately below or adjacent to the electronic signature.

If the signer is a patent practitioner, their registration number must be supplied either as part of the signature or immediately below or adjacent to the signature. Moreover, if the signer is a design patent practitioner, the design patent practitioner status must be indicated by placing the word “design” (in any format) adjacent to the signature.

For more information, please contact Fitch Even attorney Jennifer V. Suarez, author of this alert.

Fitch Even IP Alert^®

Fitch Even Sponsors 80th Annual UNCF Gala

11 Mar 2024 00:00:00 -0800

Fitch Even was proud to be a sponsor of United Negro College Fund’s (UNCF) 80th Annual National “A Mind Is…”® Gala on March 7 at Walter E. Washington Convention Center in Washington, DC. This fundraising and social event focuses on raising awareness of the need and benefits of a college education, the students UNCF serves, and the contributions of historically Black colleges and universities (HBCUs).

Fitch Even attorneys in attendance at the event included Sherri Blount and Kerianne Strachan along with Fitch Even alums, Ed Gray and Catherine Toppin, as well as other guests, including Ted Wood from Wood IP LLC.

UNCF serves as the leading advocate for promoting minority education and community engagement in the U.S. Since its founding in 1944, UNCF has raised more than $5 billion to fund college scholarships for over 500,000 students and to support 37 HBCUs.

IP Alert: USPTO Proposes Expanding Opportunities to Appear Before the PTAB

22 Feb 2024 00:00:00 -0800

In a recent announcement, the United States Patent and Trademark Office (USPTO) is proposing new rulemaking to expand access to practice before the PTAB. Specifically, the USPTO is proposing four changes. First, the USPTO is proposing to amend the rules regarding admission to practice before the Patent Trial and Appeal Board (PTAB) in proceedings under the Leahy-Smith America Invents Act (AIA proceedings) to give parties the option to designate non-registered practitioners who are recognized pro hac vice (i.e., granted recognition in a specific PTAB proceeding) as lead counsel. The second change would establish a streamlined alternative procedure for recognizing counsel pro hac vice that is available when counsel has previously been recognized pro hac vice in a different PTAB proceeding. The third proposes excusing parties from the requirement to designate back-up counsel upon a showing of good cause, such as a lack of resources to hire two counsel. Finally, the fourth proposed change attempts to clarify that those recognized pro hac vice have a duty to inform the Board of subsequent events that render inaccurate or incomplete representations they made to obtain pro hac vice recognition.

In October 2022, the USPTO published a Request for Comments regarding ways to expand opportunities for nonregistered practitioners to appear before the PTAB. Based in part on the received comments, the USPTO is proposing to retain the requirement that parties be represented by a registered practitioner, but “would permit parties to designate a non-registered practitioner as lead counsel and the registered practitioner as back-up counsel.” The USPTO believes such changes “may better support individuals, smaller entities and others who may be under resourced.” Additionally, in attempts to “increase efficiency and reduce unnecessary expenses,” the USPTO is further proposing the second change in attempts to streamline procedures once counsel has previously been recognized pro hac vice in a PTAB proceeding.

Comments can be submitted to the USPTO regarding these rule changes. Any such comments must be received by May 21, 2024 (within 90 days after the date of publication in the Federal Register) through the Federal eRulemaking Portal at www.regulations.gov.

For more information on this announcement, please contact Fitch Even partner Steve M. Freeland, author of this alert.

Fitch Even IP Alert^®

IP Alert: Government’s Royalty-Free Licensing Rights Affirmed Over USF Patent

13 Feb 2024 00:00:00 -0800

On February 9, in University of South Florida Board of Trustees v. United States, the Federal Circuit upheld royalty-free license rights of the U.S. government over a University of South Florida (USF) patent directed to Alzheimer’s disease research under the Bayh-Dole Act. The Federal Circuit’s decision confirms that 35 U.S.C. §202(c)(4) confers to the U.S. government a broad scope of licensing rights under the Bayh-Dole Act, including in some instances inventions that predate the funding agreement with the government.

In 2015, USF sued the U.S. government for infringement of its U.S. Patent No. 5,898,094 (the ’094 patent), directed to transgenic mice expressing mutated genes linked to Alzheimer’s disease, asserting a government contractor, The Jackson Laboratory, used the patented mice without authorization. Notably, the transgenic mice covered by the ’094 patent were developed at USF and Mayo Clinic (Mayo) with partial funding from a National Institutes of Health (NIH) grant.

The Bayh-Dole Act, under 35 U.S.C. §202(c)(4), gives federal funding agencies “a nonexclusive, nontransferrable, irrevocable, paid-up license.” As a defense, the government argued the work that resulted in the invention covered by the ’094 patent occurred “under” a grant funding agreement between the government and Mayo. After summary judgment proceedings and a trial, the Court of Federal Claims agreed with the government and entered a final judgment of noninfringement. USF appealed this decision to the Federal Circuit.

The Federal Circuit pointed out that USF’s argument for reversal rested on two necessary premises: (1) 35 U.S.C. §202(c)(4) applies only if the funding agreement predates the inventive work that resulted in the granted patent; and (2) there was no legally adequate implied agreement at the time the inventive work that resulted in the granted patent was performed. In particular, USF’s argument was that the subcontract between Mayo and USF was not executed until months after the experiments that resulted in the invention covered by the ’094 patent. However, the Federal Circuit determined that the language of 35 U.S.C. §202(c)(4) is broad enough to support inclusion within the provision of a subcontract that provides for, among other things, payment for work already performed before the subcontract is executed or before the subcontract’s effective date.

The Federal Circuit held that work already performed may be covered by a later-signed agreement if the scope of the funding grant specifies payment for the earlier-performed work. As a result, the Federal Circuit ruled that 35 U.S.C. §202(c)(4) does not impose strict timing requirements for federal funding agreements to establish the government’s license rights, and that 35 U.S.C. §202(c)(4) applies to give the government a license to use the patented transgenic mice because USF accepted federal grant funds for the inventive experiments under its subcontract with Mayo. More specifically, the Federal Circuit stated that “[w]e reject this [USF]-suggested temporal limitation on the scope of the relevant Bayh-Dole Act language.”

In this case, several of the government’s witnesses testified, without contradiction, that it was common for there to be a delay in subcontracting after an award of a government grant to a research institution. The Federal Circuit pointed out that its conclusion is “strongly bolstered by the record in this case, which suggests that what occurred here is not an uncommon fact pattern in government funding of research conducted in part by non-grantee members of a consortium called for in a government grant.” More specifically, the Federal Circuit stated that “the record makes clear that subcontracts are commonly not executed until sometime after the grant is awarded, yet the grant-covered work proceeds without waiting for the inking of a subcontract.”

The Federal Circuit’s decision in University of South Florida Board of Trustees v. United States supports the broad rights of the U.S. government under the Bayh-Dole Act to license a patented invention of an entity that accepted research funding from the federal government, even in some instances where the contract with respect to the federal funding for the work is executed between the parties after the work that results in the invention occurred.

For more information on this ruling, please contact Fitch Even partner David M. Kogan, author of this alert.

Fitch Even IP Alert^®

IP Alert: Federal Circuit Holds Operating Manuals Disclosed with Confidentiality Restrictions to be Prior Art

12 Feb 2024 00:00:00 -0800

On February 8, in Weber, Inc. v. Provisur Technologies, Inc., the Federal Circuit reversed the Patent Trial and Appeal Board (PTAB) and held that Weber’s operating manuals are prior art printed publications despite their limited distribution and distribution subject to confidentiality restrictions based on the operating manuals being sufficiently accessible to the public interested in the art.

In this case, the PTAB instituted inter partes review (IPR) proceedings based on obviousness theories involving Weber’s operating manuals in combination with other patent references. In the PTAB’s final written decisions, the Board found that Weber’s operating manuals did not qualify as printed publications.

In support of this finding, the PTAB found that the operating manuals were only distributed to ten unique customers and subject to confidentiality restrictions in the copyright notice, which stated that the operating manuals should not “be reproduced or transferred in any way.” The PTAB also found another confidentiality restriction based on the intellectual property rights clause from Weber’s terms and conditions covering sales stating that “[c]ost estimates, drafts, drawings and other documents remain the property of [Weber].”

The Federal Circuit reversed the PTAB’s finding that the Weber operating manuals did not qualify as prior art printed publications under 35 U.S.C. § 102. The Federal Circuit explained that the statutory phrase “printed publication” in the patent statute is defined as a reference that was sufficiently accessible to the public interested in the art. The standard for public accessibility is whether interested members of the relevant public could locate the reference by reasonable diligence.

The Federal Circuit criticized the PTAB’s analysis, stating that the PTAB misapplied public-accessibility precedent and misinterpreted the record evidence. In concluding the Weber operating manuals were not publicly accessible, the PTAB relied on a prior Federal Circuit case, Cordis Corp. v. Boston Scientific Corp., where two academic monographs were found not to be publicly accessible where they were distributed under academic norms that gave rise to an expectation of confidentiality. In Weber, the Federal Circuit found Cordis distinguishable because Weber’s operating manuals were created for dissemination to provide instructions about how to use Weber’s product and were not distributed under circumstances where there was an expectation of confidentiality.

In finding the Weber operating manuals to be publicly accessible, the Federal Circuit relied on record evidence establishing that the Weber operating manuals could be obtained upon purchase of the Weber product or upon request to a Weber employee. The Federal Circuit noted that the number of actual occasions of access is not dispositive to the inquiry of public accessibility, and that the copyright notice itself permitted the original owners to copy the operating manuals for their own internal use and Weber expressly instructed customers reselling their Weber products to transfer the operating manual to the purchasers.

The Weber decision provides guidance in determining what disclosures qualify as prior art to patent filings. The circumstances surrounding the disclosure, such as the purpose of the document and industry expectations of confidentiality, must be considered. To ensure disclosures do not qualify as prior art, such disclosures should be made with clear and express expectations of confidentiality, for example, under a non-disclosure agreement.

For more information on this ruling, please contact Fitch Even attorney Zachary Van Engen, author of this alert.

Fitch Even IP Alert^®

Fitch Even Partners Named Illinois Leading Lawyers for 2024

09 Feb 2024 00:00:00 -0800

We are pleased to announce that fourteen Fitch Even partners have been named Leading Lawyers in Illinois for 2024.

Leading Lawyers:

Stephen S. Favakeh—Intellectual Property Law, International Business & Trade Law, Patent Law
Karl R. Fink—Intellectual Property Law, Patent Law
Mark W. Hetzler—Intellectual Property Law, Trade Secrets/Unfair Competition Law, Copyright & Trademark Law
Allen E. Hoover—Intellectual Property Law, Patent Law
John E. Lyhus—Advertising & Media Law, Copyright & Trademark Law, Intellectual Property Law, International Business & Trade Law, Trade Secrets/Unfair Competition Law
Timothy P. Maloney— Intellectual Property Law, Patent Law, Trade Secrets/Unfair Competition Law, Copyright & Trademark Law
Calista J. Mitchell—Intellectual Property Law, Patent Law
Joseph T. Nabor—Advertising & Media Law, Copyright & Trademark Law, Intellectual Property Law
Amanda Lowerre O’Donnell—Intellectual Property Law, Patent Law
Steven G. Parmelee—Intellectual Property Law, Patent Law
Nicholas T. Peters—Intellectual Property Law, Patent Law
Joseph E. Shipley—Intellectual Property Law, Patent Law, Trade Secrets/Unfair Competition Law, Copyright & Trademark Law
Alisa C. Simmons—Intellectual Property Law, Copyright & Trademark Law
Maureen R. Smith—Intellectual Property Law, Copyright & Trademark Law

Those who are designated Leading Lawyers were recommended by their peers to be among the top lawyers in Illinois. Less than five percent of all lawyers licensed in to practice in Illinois have received the distinction of being named a Leading Lawyer.

The entity Leading Lawyers is a division of Law Bulletin Media, a diversified print and electronic information company that has been serving the Chicago legal and business communities since 1854. For more information, please visit www.leadinglawyers.com.

Fitch Even Attorneys Named to Illinois Super Lawyers and Illinois Rising Stars Lists for 2024

30 Jan 2024 00:00:00 -0800

Six Fitch Even partners have been selected for inclusion in the 2024 list of Illinois Super Lawyers and two associates have been selected for inclusion in the 2024 list of Illinois Rising Stars.

Karl R. Fink and Timothy P. Maloney were once again recognized as top attorneys in Intellectual Property Litigation in Illinois. In addition, Stephen S. Favakeh, Mark W. Hetzler, Allen E. Hoover, and Joseph T. Nabor were once again recognized as top attorneys in Intellectual Property Law in Illinois. No more than 5 percent of all lawyers in the state are selected by the research team at Super Lawyers to receive this honor each year.

Mary F. Fetsco was once again named to this year’s Illinois Rising Stars list as a top-rated attorney in Intellectual Property Litigation. Kerianne A. Strachan was once again named to this year’s Illinois Rising Stars list as a top-rated attorney in Intellectual Property Law. They were included among the top up-and-coming attorneys in the state who are 40 years old or younger or who have been practicing for 10 years or less. No more than 2.5 percent of Illinois lawyers receive this honor each year.

Super Lawyers^®, a Thomson Reuters business, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. Attorneys are selected using a multiphase process that includes independent research, peer nominations, and peer evaluations. For more information, please visit www.superlawyers.com.

Fitch Even Attorneys Ken Colton and Alvaro Cure Dominguez Published in IP Litigator

20 Nov 2023 00:00:00 -0800

An article written by Fitch Even partner Kendrew H. Colton and associate Alvaro Cure Dominguez is featured in the September/October 2023 issue of IP Litigator, a Wolters Kluwer publication.

In the article, “Federal Circuit Warns Against Patent Owner Sandbagging in IPR Claim Construction,” Ken and Alvaro discuss the case of Axonics, Inc. v. Medtronic, Inc., and the Federal Circuit’s ruling that the Patent Trial and Appeal Board must consider an inter partes review petitioner’s arguments raised in their reply brief regarding a claim construction proposed by the patent owner’s response brief. The article was originally published as a Fitch Even IP Alert^®.