Trolls and Trial Lawyers Should Curb Their Enthusiasm Over Patent Reform Timeout

patentLast week was quite a successful one in Washington for the plaintiffs’ bar. First, as WLF’s Rich Samp detailed in a May 22 Legal Pulse post, the Solicitor General of the U.S. opposed federal preemption of state failure-to-warn suits against medical device companies. Then, the following day, the Senate Judiciary Committee shelved legislation meant to curb abusive litigation and related activities by “patent-assertion entities” (PAEs), a.k.a. patent trolls.

But attorneys who represent PAEs, and the private businesses that may benefit from PAE activity, should temper their enthusiasm. The concept of “patent reform” will persist during Congress’s timeout. Various Executive Branch entities are working to shine a light on patent troll misbehavior, and the federal judiciary is gradually becoming less tolerant of patent litigation abuse. Consider the following examples of such non-legislative activity.

Federal Agencies. While the White House made the biggest splash on patent litigation last June with a Task Force on High-Tech Patent Issues report, far more impactful work regarding PAEs is being done at the Federal Trade Commission (FTC). For the past year, FTC has been conducting a formal “6(b)” study of PAEs. In a May 19 Federal Register notice, the Commission noted that it would be sending information requests to 25 PAEs as well as 15 wireless communication industry manufacturers and patent holding companies. Continue reading “Trolls and Trial Lawyers Should Curb Their Enthusiasm Over Patent Reform Timeout”

Solicitor General’s Brief in Medical Device Tort Case Capitulates to Plaintiffs’ Bar

DOJThe Obama Administration has been a faithful friend of the plaintiffs’ bar, particularly regarding federal preemption of State-law tort claim against product manufacturers. The Food and Drug Administration has, for example, proposed a regulation (with direct input from plaintiffs’ lawyers) on labeling of generic drugs that would sweep away a federal preemption defense upheld twice by the U.S. Supreme Court.

A Supreme Court brief filed on May 20 by the Solicitor General of the United States provides another example of just how committed the Administration is to this mutually beneficial friendship. In urging the Court to deny review in a medical device preemption case, the brief urges the Court to ignore an express preemption statute and to effectively overrule its 2008 pro-preemption decision in Riegel v. Medtronic.

The Supreme Court has steered a middle course when previously considering claims that the federal statute at issue, 21 U.S.C. § 360k(a), preempts product liability suits against medical device manufacturers. It held in a 1996 case that federal law does not preempt claims involving the vast majority of medical devices: those devices being marketed based on a determination that they are “substantially equivalent” to devices already on the market as of 1976 (so-called § 510(k) devices).   The Court explained that FDA never undertook a formal review of the safety and effectiveness of such devices, and thus there was no reason to believe that Congress intended to prevent States from imposing their own safety and effectiveness requirements. The Court later held in Riegel that § 360k(a) generally does preempt design defect and failure-to-warn claims involving the small number of Class III devices that FDA has approved for marketing following a safety and effectiveness review undertaken in accordance with the agency’s rigorous pre-market approval (PMA) process.

The Solicitor General’s office submitted its brief in connection with a petition (Medtronic v. Stengel) seeking review of a U.S. Court of Appeals for the Ninth Circuit decision that claims involving a PMA device for delivering pain medication were not preemped. (WLF filed an amicus brief in support of certiorari). Riegel left open the possibility that some State law claims might escape § 360k(a) preemption if they were “parallel” to federal law; i.e., if the State were simply imposing the very same requirements on a device that FDA regulations specific to the device already imposed. Lower courts have struggled in the ensuing years to craft a workable definition of a “parallel claim,” and the Stengel petition asks the Supreme Court to resolve a well-entrenched conflict among the federal appeals courts regarding the meaning of the parallel-claims exception. Last October, the Supreme Court invited the Solicitor General to comment on the petition. Continue reading “Solicitor General’s Brief in Medical Device Tort Case Capitulates to Plaintiffs’ Bar”

WLF Briefing Addresses Antitrust Law Ramifications of “Patent Privateering”

PodiumPic1Patent Assertion and “Privateering”: When Do Antitrust Law Concerns Arise when the Patent Is the Product?

The recording of this Media Briefing program (held on May 21) can be viewed in its entirety online.  Click HERE.

Program focus:As federal antitrust officials continue to study the impact patent licensing and assertion have on market competition, concerns have been raised over “operating” companies’ relationships with patent-assertion entities. Can such “privateering” run afoul of antitrust laws or should regulators view such activity as a legitimate business practice at a time when patents are increasing seen as commodities?

Speakers:

 

A Farewell and Appreciation for WLF Featured Guest Expert Commentator

PTOFor the past two years, The Legal Pulse has been privileged to feature the work of Beth Z. Shaw, who provided insightful commentary on patent law developments as our Featured Guest Expert – Patents. Beth recently left her law practice at Brake Hughes Bellerman LLP to take a position as an Administrative Patent Judge with the U. S. Patent and Trademark Office. Because of her new position, Beth has stepped down as our expert patent blogger. The Legal Pulse and its readers will certainly miss her commentaries, but we wish her the best as she moves into this new and exciting opportunity.  Beth’s past commentaries are still available on The Legal Pulse on our Guest Contributor page.

COOL, Conflict Minerals, GMOs & Beyond: Much Hangs in the Balance of DC Circuit En Banc Rehearing in Commercial Speech Case

EnglishChip_lowGuest Commentary

by Chip English, Davis Wright Tremaine LLP

Americans are naturally curious and interested about the food we eat and the products we buy—e.g., non-GMO labeling, country of origin labeling (“COOL”) and “conflicts minerals.” The question I explore here is whether and how far the government may constitutionally compel commercial interests to disclose information about their products when such compelled speech goes beyond preventing consumer confusion or deception.

These First Amendment issues are now front and center before the United States Court of Appeals for the District of Columbia Circuit (often referred to as the second highest court in the United States).   While commercial speech is not as protected under the Supreme Court’s First Amendment jurisprudence, it is still subject to heightened scrutiny. But the question now before the D.C. Circuit is whether the general four part test formulated in Central Hudson Gas & Electric Corp. v. Public Ser. Comm’n, 447 U.S. 557, 566 (1980) applies to compelled speech, or whether the decision in Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626, 651 (1985) carves out a special rule for all compelled speech as opposed to compelled speech designed to prevent confusion or deception.

On Monday, May 19, the entire D.C. Circuit, sitting en banc, will hear arguments regarding the constitutionality of USDA’s COOL requirements for meat and poultry labels. COOL requires all USDA regulated food labels to disclose the country or countries where the product was grown or produced. A panel of three judges upheld the constitutionality of COOL on March 28, 2014, concluding that Zauderer establishes essentially an exception to the more rigorous (if amorphous) Central Hudson heightened scrutiny test when the government seeks to compel commercial speech. American Meat Institute v. USDA, 1:13-cv-01033 (Mar. 28, 2014). The American Meat Institute (“AMI”) panel concluded that in addition to preventing deception, there may be multiple government interests in mandating a disclosure such as COOL that “are reasonably related to the state’s interests.” Id. at 11. The panel strained to define COOL as being supported by more than consumer curiosity—e.g., consumers may conclude that food produced in a particular country is not as safe as food produced in the U.S. (even though FDA and USDA are charged with appropriate food safety). Continue reading “COOL, Conflict Minerals, GMOs & Beyond: Much Hangs in the Balance of DC Circuit En Banc Rehearing in Commercial Speech Case”

EPA Seeks Input on Regulating Hydraulic Fracturing Fluids under Toxic Substances Control Act

sboxermanFeatured Expert Column – Environmental Law and Policy

by Samuel B. Boxerman, Sidley Austin LLP with Ben Tannen, Sidley Austin LLP

As I have written previously in a Washington Legal Foundation Legal Backgrounder, the federal government is extending its regulatory reach over hydraulic fracturing. An example of that trend is the recent Advance Notice of Proposed Rulemaking (“ANPR”) by the U.S. Environmental Protection Agency (“EPA”) seeking comment through an advanced notice of proposed rulemaking (“ANPR”) on whether, and if so how, to impose a federal rule mandating the disclosure of the contents of chemical substances and mixtures used in hydraulic fracturing.

Currently, states where hydraulic fracturing techniques are used have already considered these questions and imposed a range of disclosure requirements. Moreover, to facilitate disclosure, state regulators and industry, working together through the Ground Water Protection Council and Interstate Oil and Gas Compact Commission, have developed a voluntary national hydraulic fracturing chemical registry accessible to the public online—FracFocus.org. Although established as a voluntary disclosure portal, to date, FracFocus has information on over 72,000 well sites and ten states have issued regulations requiring operators to use FracFocus as the means of official state chemical disclosure.

To the agency’s credit, EPA’s notice seeks comment on voluntary disclosure options, as well as using the FracFocus database as the repository for information it collects. ANPR at 1, 19.   However, EPA is also considering imposing mandatory federal disclosure rules, including mandates under Section 8 of the Toxic Substances Control Act (TSCA). Continue reading “EPA Seeks Input on Regulating Hydraulic Fracturing Fluids under Toxic Substances Control Act”

Ninth Circuit “Unfriends” Privacy Class Action Despite Finding Statutory Standing

likefacebookLawsuits alleging harm from either a business’s failure to protect personal information from a data breach or from its allegedly unauthorized sharing of data with third parties were supposed to be the “next big thing” for the Litigation Industry. But, as we’ve noted on previously (here and here, for instance), few of these suits have made it past the motion-to-dismiss stage. Plaintiffs consistently fail to demonstrate that they suffered an injury-in-fact, which is a constitutional prerequisite known as “standing.”

Lawyers who work in the Litigation Industry are nothing if not persistent, as former Washington Attorney General Rob McKenna and his Orrick, Herrington & Sutcliffe LLP colleague Scott Laidlaw explained in a February WLF Legal Backgrounder, “Targeting Harm From A Breach: Plaintiffs’ Lawyers Get Creative In Data Privacy Suits.” For example, some class action attorneys sue under federal statutes, such as the Wiretap Act and the Stored Communications Act. Those laws purport to provide “statutory standing” to private individuals and thus relieve them of the need to establish constitutional standing.

But as the U.S. Court of Appeals for the Ninth Circuit reminded a class of plaintiffs last week, litigants with standing to sue still must  prove they have a claim. On May 9, the Ninth Circuit affirmed a district court’s dismissal of two separate class actions filed under the Wiretap and Stored Communications Acts against Facebook and Zynga Game Network.

In re: Zynga Privacy Litigation involved claims that Facebook and Zynga unlawfully disclosed the information contained in “referer headers” to third parties such as advertisers. Referer headers, the court explained, display “the user’s Facebook ID and the address of the Facebook webpage the user was viewing.”

The Ninth Circuit had to determine whether the record information contained in the referer header constituted the “contents” of a communication under the two federal laws. The court examined the plain language and design of the statutes and concluded that “the term ‘contents’ refers to the intended message conveyed by the communication, and does not include record information regarding the characteristics of the message that is generated.” That conclusion is consistent with the reasoning in similar cases from the First and Third Circuits. The plaintiffs argued that third parties could utilize information from a referer header and determine a person’s specific identity and access his or her Facebook content. The court responded that neither the Wiretap Act nor the Stored Communications Act “preclude[s] the disclosure of personally identifiable information; indeed they expressly allow it.” Continue reading “Ninth Circuit “Unfriends” Privacy Class Action Despite Finding Statutory Standing”