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Customs and Border Protection to Begin Collecting Exit Data on Certain Foreign Nationals

U.S. Customs and Border Protection (CBP) has announced that it will begin collecting biographic and biometric data from some foreign national travelers in a test program when they depart the United States at Atlanta’s Hartsfield-Jackson International Airport

The biometric and departure data will be collected through use of an “enhanced mobile device” that will allow CBP to record exit information efficiently and streamline inspection queries for foreign national travelers. All test passengers will have their fingerprints and passports scanned by a CBP Officer using the mobile device on the loading bridge of selected flights departing the U.S. Each traveler’s departure data will be matched to the digital biometrics information that was collected when he or she arrived in the country. This information will be stored and managed by the U.S. Department of Homeland Security (DHS). Only non-U.S. citizens will have their information collected and processed.

The test program is expected run through June 2016, eventually expanding beyond Atlanta into the following major air travel ports: Chicago, Dallas, Houston, Los Angeles, Miami, Newark, New York, San Francisco, and Washington-Dulles.

Jackson Lewis P.C. © 2015

Is the SCOTUS Rule of Reason Unreasonable?

“Not too hard, not too soft,” says the Supreme Court in FTC v. Actavis, 133 S. Ct. 2223 (2013).  The majority tries to reach middle ground by rejecting both the FTC’s argument that any reverse payment in settlement of a patent claim is presumptively unlawful and Actavis’ argument that any settlement within the scope of the patent is permissible, but is the court’s new “rule of reason” approach really “just right?” Let’s see how this plays out in a simple scenario using a product whose success everyone loves to hate—the Snuggie.

Meet Peter.  He has a pug with whom he likes to spend his evenings, wrapped up in a Snuggie, watching movies and sharing popcorn.  Peter was quite dismayed, though, to see his poor little pug shivering and cold without a Snuggie of his own.  So, Peter invented the Puggie.  He used special fibers formulated specifically to maintain heat while resisting odors because no one likes a smelly dog blanket.  Peter even obtained a patent on his Puggie and began producing more to sell around his neighborhood, the Franklin Terrace Community.  Once word spread of Peter’s success, however, several of Peter’s neighbors began producing competing products—the Pug Pelt, the Schnauzzie, and so on–which boasted the same odor-resistant properties as Peter’s Puggie.

Outraged, Peter publicly accused his competitors of patent infringement and demanded that they stop producing their “piddly dog pelts.” But they refused, claiming their fibers were different.  Knowing how costly an extensive fiber dispute could be, Peter offered his competitors $1,000 to stop producing their competing pelts for a period of two years.  The other pelt producers agreed, took the money, and stopped production immediately.  The Franklin Terrace Community, however, was not pleased.  Peter had not only run off the competition, but he had also bumped the Puggie price up afterward, making a killing during the chilly winter as the sole pelt producer.  Community members petitioned the homeowners’ board for some guidance on whether Peter’s payment constituted an unfair trade practice.  Peter opposed the petition and claimed that he had the right to pay whatever amount he deemed fit to protect his patent.

The board found the community’s argument that any “reverse settlement” payment by a patent holder is presumptively unlawful to be too harsh.  Peter’s assertion, however, that any payment is immune from attack so long as it remains within the scope of the patent was believed to be too soft.  Peter complained that the money and time he would have to commit to an extensive patent lawsuit over his odor-resistant fibers would put him out of business, but the board believed that his willingness to drop a grand to keep his competitors at bay was a much more accurate representation of Peter’s confidence in his patent.  Specifically, the board found Peter’s payment of $1,000 to be a “strong indicator of power.”  In an effort to come up with a more “middle of the road” approach, the board created the “rule of reason” to determine the legality of reverse settlement payments.  No real guidance was provided, though, on how to apply the new rule—just not too hard, not too soft.

Without any elaboration on how this new “rule of reason” is to be applied in antitrust lawsuits, did the board cause more confusion than clarity?  And, how large must a reverse settlement payment be to stand as an “indicator of power” and “lack of confidence” in the patent?  If Peter’s patent was iron-clad and his competitors were infringing, should he have had the right to pay any amount he deemed fit to protect his patent, or was $1,000 too much for some piddly pooch pelts?  Does this unfairly prohibit Peter from settling litigation that he may see as too costly or damaging?  Or, does the need to protect consumers from the Puggie monopoly Peter created outweigh Peter’s patent rights?

It is hard to say exactly what effect the Supreme Court’s “rule of reason” decision in FTC v. Actavis will have on future antitrust litigation.  We are likely to see an increase in the number of antitrust suits that are tried as opposed to settled. What do you make of this amorphous, middle-of-the-road approach?

© Copyright 2002-2015 IMS ExpertServices, All Rights Reserved.
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Senate Passes the Every Child Achieves Act to Replace No Child Left Behind

Recently, the Senate passed the Every Child Achieves Act to replace No Child Left Behind, which was seven years past the reauthorization date. This bipartisan agreement was shepherded through the Senate by the Senate Health, Education, Labor, and Pensions Chairman Lamar Alexander (R-Tenn.) and Ranking Member Patty Murray (D-Wash.)

What the Every Child Achieves Act Does

  • Strengthens state and local control – The bill recognizes that states, working with school districts, teachers, and others, have the responsibility for creating accountability systems to ensure all students are learning and prepared for success. These accountability systems will be state-designed but must meet minimum federal parameters, including ensuring all students and subgroups of students are included in the accountability system, disaggregating student achievement data, and establishing challenging academic standards for all students. The federal government is prohibited from determining or approving state standards.

  • Maintains important information for parents, teachers, and communities – The bill maintains the federally required two annual tests in reading and math in grades 3 through 8 and once in high school, as well as science tests given three times between grades 3 and 12. These important measures of student achievement ensure that parents know how their children are performing and help teachers support students who are struggling to meet state standards. A pilot program will allow states additional flexibility to experiment with innovative assessment systems. The bill also maintains annual data reporting, which provides valuable information about whether all students are achieving, including low-income students, students of color, students with disabilities, and English learners.

  • Ends federal test-based accountability – The bill ends the federal test-based accountability system of No Child Left Behind, restoring to states the responsibility for determining how to use federally required tests for accountability purposes. States must include these tests in their accountability systems, but will be able to determine the weight of those tests in their systems. States will also be required to include graduation rates, another measure of academic success for elementary and middle schools, English proficiency for English learners. States may also include other measures of student and school performance in their accountability systems in order to provide teachers, parents, and other stakeholders with a more accurate determination of school performance.

  • Maintains important protections for federal taxpayer dollars –The bill maintains important fiscal protections of federal dollars, including maintenance of effort requirements, which help ensure that federal dollars supplement state and local education dollars, with additional flexibility for school districts in meeting those requirements.

  • Helps states fix the lowest-performing schools – The bill includes federal grants to states and school districts to help improve low-performing schools that are identified by the state accountability systems. School districts will be responsible for designing evidence-based interventions for low-performing schools, with technical assistance from the states, and the federal government is prohibited from mandating, prescribing, or defining the specific steps school districts and states must take to improve these schools.

  • Helps states support teachers –The bill provides resources to states and school districts to implement activities to support teachers, principals, and other educators, including allowable uses of funds for high quality induction programs for new teachers, ongoing rigorous professional development opportunities for educators, and programs to recruit new educators to the profession. The bill allows, but does not require, states to develop and implement teacher evaluation systems.

  • Reaffirms the states’ role in determining education standards – The bill affirms that states decide what academic standards they will adopt, without interference from Washington, D.C. The federal government may not mandate or incentivize states to adopt or maintain any particular set of standards, including Common Core. States will be free to decide what academic standards they will maintain in their states.

ARTICLE BY Bruce H. Stern of Stark & Stark

COPYRIGHT © 2015, STARK & STARK

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DNA Sequencing Patents: Simultaneous Invention As Secondary Evidence Of Obviousness

I do not usually write about non-precedential Federal Circuit decisions, but I could not let the discussion of “simultaneous invention” in Columbia University v. Illumina, Inc.go without comment. As if protecting patents from a hindsight-based determination of obviousness is not challenging enough, this theory holds that subsequent invention by another relatively soon after the invention at issue can support a finding of obviousness.

The Columbia University DNA Sequencing Patents

The patents at issue were three DNA sequencing patents: U.S. Patent No. 7,713,698; U.S. Patent No. 8,088,575; and U.S. Patent No. 7,790,869. Illumina challenged selected claims of the patents in Inter Partes Review (IPR) proceedings, and the USPTO Patent Trial and Appeal Board (PTAB) found all challenged claims anticipated or obvious over the asserted prior art references.

The Obviousness Issue

The Federal Circuit opinion was authored by Judge Wallach and joined by Chief Judge Prost and Judge Schall.

As summarized in the Federal Circuit opinion, the claims at issue “involve modified nucleotides that contain: (1) a labeled base; (2) a removable 3’-OH cap; and (3) a deazasubstituted base.” Columbia argued that “‘it would not have been obvious … to use ‘a reversible chain-terminating nucleotide with a label attached to the base, rather than to the cap on the 3’-OH group of the sugar.’”

After reviewing the prior art, the court found substantial evidence to support the PTAB’s findings regarding the disclosures of the asserted prior art references and reasonable expectation of success. It is in its discussion of secondary considerations of non-obviousness that the court discusses “simultaneous invention”:

“Independently made, simultaneous inventions, made within a comparatively short space of time, are persuasive evidence that the claimed apparatus was the product only of ordinary mechanical or engineering skill.” George M. Martin Co. v. Alliance Mach. Sys. Int’l LLC, 618 F.3d 1294, 1305 (Fed. Cir. 2010) ….

*****

As a secondary consideration … simultaneous invention is relevant when it occurs within a short space of time from the date of invention, and “is strong evidence of what constitutes the level of ordinary skill in the art.” Ecolochem v. S. Cal. Edison Co., 227 F.3d 1361, 1379 (Fed. Cir. 2000). Unlike the ultimate determination of obviousness, which requires courts to answer the hypothetical question of whether an invention “would have been obvious,” 35 U.S.C. § 103, simultaneous invention demonstrates what others in the field actually accomplished.

On the facts before it, the court noted that “Illumina did not present its simultaneous invention argument to the PTAB,” and because “the record is not fully developed, the evidence of simultaneous invention as a whole weighs only modestly in favor of obviousness.”

Why cite it as a factor at all if it wasn’t raised in the PTAB proceedings on appeal?

Simultaneous Invention

I traced the theory of “simultaneous invention” through the cases cited in the Federal Circuit decision.

In George M. Martin Co., the Federal Circuit already had determined that the district court had “correctly concluded as a matter of law that the differences between the prior art and the claimed improvement were minimal,” before it discussed “simultaneous invention.” Even then, it discussed it with this caveat:

Independently made, simultaneous inventions, made “within a comparatively short space of time,” are persuasive evidence that the claimed apparatus “was the product only of ordinary mechanical or engineering skill.” Concrete Appliances Co. v. Gomery, 269 U.S. 177, 184, 46 S.Ct. 42, 70 L.Ed. 222 (1925). But see Lindemann Maschinenfabrik GMBH v. Am. Hoist & Derrick Co., 730 F.2d 1452, 1460 (Fed. Cir. 1984) (“Because the statute, 35 U.S.C. § 135, (establishing and governing interference practice) recognizes the possibility of near simultaneous invention by two or more equally talented inventors working independently, that occurrence may or may not be an indication of obviousness when considered in light of all the circumstances.”).

In Ecolochem, the Federal Circuit discussed “simultaneous invention” in the context of reflecting the level of ordinary skill in the art, not obviousness per se:

The fact of near-simultaneous invention, though not determinative of statutory obviousness, is strong evidence of what constitutes the level of ordinary skill in the art.” The Int’l Glass Co. v. United States, 187 Ct.Cl. 376, 408 F.2d 395, 405 (1969). “[T]he possibility of near simultaneous invention by two or more equally talented inventors working independently, … may or may not be an indication of obviousness when considered in light of all the circumstances.” Lindemann, 730 F.2d at 1460, 221 USPQ at 487.

In the pre-Patent Act 1925 decision in Concrete Appliances Co., the Supreme Court noted that “[t]he several elements in the petitioners’ claims which we have enumerated embrace familiar devices long in common use, separately or in smaller groups, both in this and in kindred mechanical arts. It is not argued that there is any novelty in such units or groups; and the only serious question presented is whether, in combination in the apparatus described, they constitute an invention.” The Court then discussed numerous examples of similar devices made around the same time as the invention at issue before it explained:

The adaptation independently made by engineers and builders of these familiar appliances to the movement and distribution of wet concrete in building operations and the independent patent applications, within a comparatively short space of time, for devices for that purpose are in themselves persuasive evidence that this use in combination of well known mechanical elements was the product only of ordinary mechanical or engineering skill and not of inventive genius.

This appears to be the genesis of “simultaneous invention.”

Now that U.S. patent applicants are becoming accustomed to the importance of being the “first inventor to file” under the America Invents Act, do they also have to worry about how many file after them?

© 2015 Foley & Lardner LLP
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Minor League Baseball Players’ Minimum Wage, Overtime Claims Proceed to Class Certification Stage

Former minor league baseball players are one step closer to gaining class certification of their wage and hour lawsuit against 22 Major League Baseball (“MLB”) franchises. The players allege that the franchises have been paying them less than minimum wage, denying them overtime pay, and requiring them to train during off-season without any pay. They contend the MLB and its clubs violated the FLSA, as well as similar state wage and hour laws in eight states by paying them a total of only $3,000 to $7,000 over the course of a five-month season despite workweeks of 50 to 70 hours.

On July 13, a California federal district court denied a motion by the baseball franchises to dismiss the high-profile suit for failure to pay minimum wages and overtime pay under the Fair Labor Standards Act and state wage and hour laws, allowing the players to proceed to discovery “to determine whether certification is appropriate and whether the proposed class representatives have standing to represent the various proposed classes.” Senne v. Kansas City Royals Baseball Corp., No. 3:14-cv-00608 (N.D. Cal. July 13, 2015).

On May 2, the court dismissed claims against eight of the MLB franchises, finding they did not have sufficient contacts with California, where the suit is pending, to establish personal jurisdiction over them. In the July 13 ruling, however, the court denied Defendants motion to dismiss stating that “the named plaintiffs who are proposed as class representatives of the various state classes seek to represent unnamed plaintiffs who were employed by these other franchise defendants on the basis that they suffered a similar injury.  As to these claims, the court ruled that it is appropriate to defer addressing the question of standing until after class certification.” (Senne, p. 25). As a result, the players have established sufficient standing to pursue discovery by claiming that at least one of the named plaintiffs was denied minimum wages or overtime pay from each of the remaining 22 defendants, and that at least one of the named plaintiffs was employed in each of the states for which the players assert state wage and hour violations.

The franchises have yet to reveal their defense to the specific claims; however, they may argue the players are exempt from FLSA’s minimum wage and overtime requirements because they are employed by a “seasonal amusement or recreational establishment.” Employees of establishments that operate for up to seven months per calendar year, or whose average receipts for any six months of the calendar year are not more than one-third its average receipts for the other six months of the year, are exempt from the FLSA’s minimum wage and overtime requirements.

Rulings on the applicability of the exemption to non-player employees in baseball have been inconsistent.  In 1998, members of the Cincinnati Reds maintenance staff sued the team, demanding overtime pay. An Ohio district court initially ruled in favor of the Reds, describing the team as “an amusement or recreational establishment” that played its games during a season that lasted seven months or less. That decision was overruled when the United States Court of Appeals conducted a detailed accounting analysis of the team’s operation and determined that the Reds did not qualify for a seasonal exemption.

The Detroit Tigers won a similar lawsuit in 1997 when bat boys sought overtime pay for their work in excess of 40 hours in a week. The Tigers claimed the seasonal exemption as a defense and were successful as the court recognized that Tiger Stadium only operated on a seven-month schedule, making its operation seasonal.

The Sarasota White Sox, a former minor league franchise in the Florida State League, also won a lawsuit by claiming a seasonal exemption in 1995 when a groundskeeper sued for overtime. The court ruled that the team played in a six-month season and made 99 percent of its revenue during that time period.

The question of whether the franchises will be safe from potentially significant wage and hour liability in this latest litigation may be a close call.

Jackson Lewis P.C. © 2015
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