Hulk Hogan victory over Gawker shows problems with a bond requirement

A Florida jury recently awarded $115 million to former professional wrestler turned reality TV star Hulk Hogan.  As you might expect, Gawker immediately announced they would appeal. Unfortunately for Gawker, thanks to Florida law, they could be required to post a bond of up to $50 million for the privilege of appealing this decision. Posting a bond that large, Gawker argues, would imperil their ability to defend themselves and mount an appeal. Indeed, this verdict could destroy Gawker altogether.

Without getting into the substance of the Hogan vs. Gawker lawsuit, the issue of posting bonds to appeal is quite relevant in the ongoing debate over patent reform. While the philosophy behind a bond requirement makes some sense, in practice there are serious issues with prohibiting a party from appealing a decision unless they can post a ridiculously expensive bond.

The issue of bonds has been an important matter for innovators. The bond requirement has been promoted by Senator Orrin Hatch (R-UT), for example, as a way to curb abusive patent litigation by forcing those who have lost to reasonably assure the victorious party that the losing party can cover any resulting losses to the appellee before they can appeal.  VCs, universities and others object to the bond requirement and related measures that would enable defendants to get “real parties in interest” to shift fees, arguing that the real motivation is simply to make it financially impossible to ever assert a patent in the first place.

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Coalition for Affordable Drugs IPR against Juxtapid gets “green light”

The Coalition for Affordable Drugs, the entity backed by patent renegades Kyle Bass and Erich Spangenberg, recently won two more victories at the Patent Trial and Appeal Board (PTAB).  This time Bass and Spangenberg obtained favorable inter partes review (IPR) institution decisions on two petitions filed against the University of Pennsylvania, which challenged patents covering Juxtapid. Juxtapid is a drug that slows cholesterol production thereby making it easier for the body to remove remaining cholesterol from the bloodstream. To read these institution decisions see IPR2015-01835 and IPR2015-01836. Because the Board did not find it necessary to construe claim terms at the institution stage, both decisions are mirror images of one another.

The patents in question, U.S. Patent No. 7,932,268 and U.S. Patent No. 8,618,135, relate to “the surprising discovery that one may treat an individual who has hyperlipidemia and/or hypercholesterolemia with an MTP inhibitor in a manner that results in the individual not experiencing side-effects normally associated with the inhibitor, or experiencing side-effects to a lesser degree.”

Ultimately, the Board determined that the petitioner demonstrated that the claims challenged were likely invalid because they were obvious. The case will now proceed through the administrative trial. There were, however, several issues that came up in the institution decision that warrant consideration.

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Become a patent litigator in one easy step

There has never been a busier time to be a patent litigator, and if you have been thinking about what it takes to get started in this exciting practice area, look no further than PLI’s Fundamentals of Patent Litigation 2016, scheduled on April 19 in New York City and May 12 in San Francisco and via Live Webcast. This comprehensive program is perfect for those who want to add patent litigation to their litigation or patent prosecution practices.

Fundamentals of Patent Litigation 2016 will address key topics including:

  • Elements of a patent case and what to expect plaintiff-side and defendant-side
  • Overview of patent prosecution and changes to post-grant review
  • Claim construction and the all-important Markman hearing
  • Valuable practice tips – what can make or break a patent infringement case
  • Critical venue and forum issues, how the ITC fits in, and the timeline of a case

04.4.16 | posts | Mark Dighton

SCOTUS takes Samsung appeal in Apple design patent infringement case

On Monday, March 21, 2016, the United States Supreme Court agreed to hear the matter of Samsung Electronics v. Apple, Inc., a dispute between two giant technology companies that at its core relates to how much Samsung owes Apple for infringing certain design patents.

So far, these two technology giants have shown little interest in playing nice. A jury found that Samsung infringed Apple design patents, Apple utility patents and also diluted Apple’s trade dresses. The infringed design patents are U.S. Design Patent Nos. D618,677 (“D’677 patent”), D593,087 (“D’087 patent”), and D604,305 (“D’305 patent”), which claim certain design elements embodied in Apple’s iPhone. The infringed utility patents are U.S. Patent Nos. 7,469,381 (“’381 patent”), 7,844,915 (“’915 patent”), and 7,864,163 (“’163 patent”), which claim certain features in the iPhone’s user interface. The diluted trade dresses are Trademark Registration No. 3,470,983 (“’983 trade dress”) and an unregistered trade dress defined in terms of certain elements in the configuration of the iPhone.

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Octane Fitness acquired by Nautilus for $115 million

North Castle Partners announced the sale of Octane Fitness, LLC, a manufacturer of zero-impact cardiovascular fitness equipment, to Nautilus, Inc. (NYSE: NLS) for a purchase price of $115 million.

Those familiar with the patent industry will readily recognize the name Octane Fitness. It was Octane Fitness, the much smaller company, that successfully sued and prevailed in a patent infringement lawsuit against ICON Health & Fitness. The case went all the way to the United States Supreme Court on the issue of attorneys’ fees. A unanimous Supreme Court ruled that the district court has broad discretion to award attorneys’ fees under Section 285 of Title 35 of the United States Code. See Octane Fitness, LLC v. ICON Health & Fitness, Inc.

Rudy Telsher represented Octane Fitness, and in July 2015, I had an opportunity to speak to him on the record. Telsher explained that many people incorrectly jumped to the conclusion that Octane was a patent troll. Quite to the contrary, ICON accused Octane of infringing one of its patents that was never commercialized, “so in that sense [ICON] was a non-practicing entity as to the patent and suit,” Telscher explained. “[Octane] had award winning technology covered by a different patent.”

When I learned of the acquisition of Octane Fitness by Nautilus, I reached out to Telsher for a comment. “Happy ending to a long battle,” Telscher said. “Octane did it by the book. They developed award-winning technology. When that technology got challenged by ICON, under the pretense of patent claims that never should have been brought, they defended all the way to the Supreme Court. A fabulous ending to a little guy stands up to the big guy battle.”

Incidentally, in unrelated news that will keep the name Octane Fitness in the forefront of minds of those in the patent industry, the Supreme Court is currently considering whether to extend the Octane Fitness ruling. In Octane Fitness, the Supreme Court ruled that district court judges should be given broad discretion to award attorneys’ fees, overruling the Federal Circuit and explaining that their interpretation of prior Supreme Court precedent was erroneous. That same Federal Circuit reasoning deemed erroneous has been similarly applied by the Federal Circuit in analyzing awards of enhanced damages for patent infringement. Therefore, this term, the Supreme Court must decide whether to also give district court judges broad discretion to enhance patent infringement damages pursuant to 35 U.S.C. 284. Stay tuned. Oral arguments were heard on February 23, 2016, and a decision will be handed down no later than the end of June 2016.

03.12.16 | Patent Issues, posts | Gene Quinn

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