Johnson Investiture, Wichita Falls Docket Update

Johnson Investiture. The Honorable Kimberly C. Priest Johnson was sworn in today as a magistrate judge in the Eastern District of Texas. The ceremony was well attended by area judges and luminaries, including Chief Judge Ron Clark (E.D. Tex.) and Chief Judge Barbara M.G. Lynn (N.D. Tex.). Judge Johnson has a long history with the Northern District. She served as an Assistant U.S. Attorney in Dallas and also served as a law clerk to Chief Judge Lynn. Congratulations to Judge Johnson!

Wichita Falls Update. At the investiture, Chief Judge Lynn announced that she will begin receiving a portion of her cases from the Wichita Falls Division, rather than receiving cases exclusively from the Dallas Division. This will not be the Chief Judge’s first experience with the Wichita Falls docket. In 2005, she presided over Johnson v. Wathen (No. 07:02-CV-87), a five-week civil-rights trial brought by the ACLU.

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Chief Judge Lynn Awards Attorney’s Fees to Microsoft and AT&T in Case Where Plaintiff Did Not Own Asserted Patents

On September 2, 2016, Chief Judge Lynn issued a decision in Raniere v. Microsoft (available here) finding that AT&T and Microsoft were entitled to recover their attorney’s fees from the plaintiff under 35 U.S.C. § 285. Section 285 provides that, in patent cases, “[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party.” The fee award was based on plaintiff not owning the asserted patents and, according to the Court, engaging in deliberately misleading conduct:

Defendants challenged Plaintiff’s ownership of the asserted patents and pleaded lack of standing as an affirmative defense in their respective answers. The Court also questioned Plaintiff’s standing early in the litigation and gave Plaintiff multiple opportunities to establish his ownership interest in the asserted patents. Despite these opportunities, Plaintiff failed to establish that he owns the patents in suit. Further, the Court found that Plaintiff engaged in deliberately misleading conduct to obscure and complicate the standing issue.

Defendants estimated that they incurred over $1 million in fees and non-taxable costs. Chief Judge Lynn ordered Defendants to submit to the Court evidence of their reasonable attorney’s fees and non-taxable costs, and provided that the plaintiff could object to the specific amount of the requested fees.

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Dallas Court of Appeals Rules That Texas Does Not Recognize Patent Agent Privilege

On August 17, 2016, the Dallas Court of Appeals, in In re Silver, 05-16-00774-CV, 2016 WL 4386004 (Tex. App.—Dallas Aug. 17, 2016, no. pet. h.), found that the State of Texas does not recognize a patent-agent privilege, because “[n]o Texas statute or rule recognizes or adopts a patent-agent privilege.” The Silver decision is contrary to the Federal Circuit’s recent decision in In re Queen’s University at Kingston, 820 F.3d 1287, 1301 (Fed. Cir. 2016), recognizing a patent-agent privilege. The net result of these two decisions is that the patent-agent privilege exists and applies in federal court in patent-infringement cases, while it does not apply in Texas state court cases.

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Judge Godbey Issues Order of Civil Contempt and Coercive Incarceration For Failure to Answer Discovery

Here’s a good reason to answer discovery—if you don’t, the judge can throw you in jail until you do. In Denton v. Suter, Judge Godbey issued an Order of Civil Contempt and Coercive Incarceration (available here). In the case, plaintiffs sought post-judgment discovery from the defendant. The defendant failed to respond, and Magistrate Judge Horan entered an order (i) granting the plaintiffs’ motion to compel the defendant to respond to interrogatories and (ii) awarding the plaintiffs $27,605 for payment of reasonable and necessary fees under Rule 37(a)(5)(A). Defendant failed to comply, which resulted in plaintiffs filing a contempt motion, which Judge Horan granted, requiring the $27,605 to be paid within 10 business days. Defendant failed to answer the interrogatories or pay the $27,605. This resulted in plaintiffs filing a second motion for sanctions and contempt. Judge Horan certified facts to Judge Godbey that defendant’s conduct constituted civil contempt of the requirements of the Court’s orders.

Judge Godbey then held a show cause hearing; the defendant failed to attend. Judge Godbey then found the defendant in civil contempt, and ordered the defendant to be coercively incarcerated until he fully and completely responds to the interrogatories and pays the $27,605. Another $8,086.50 was tacked on for plaintiffs’ attorney’s fees incurred in connection with the proceedings before Judge Godbey.

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Supreme Court Clarifies When An Award Of Attorney’s Fees Is Proper Under The Copyright Act

On June 16, 2016, the Supreme Court issued its unanimous opinion in Kirtsaeng v. John Wiley & Sons, Inc. (available here). Section 505 of the Copyright Act states that a district court “may . . . award a reasonable attorney’s fee to the prevailing party.” The Court held:

The question presented here is whether a court, in exercising that authority, should give substantial weight to the objective reasonableness of the losing party’s position. The answer . . . is yes—the court should. But the court must also give due consideration to all other circumstances relevant to granting fees; and it retains discretion, in light of those factors, to make an award even when the losing party advanced a reasonable claim or defense.

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Fifth Circuit Upholds Judge Lynn’s Decision Finding That Second Amendment Does Not Protect Machineguns

On June 30, 2016, the Fifth Circuit issued its decision in Hollis v. Lynch (available here). The Fifth Circuit upheld Judge Lynn’s decision holding that machineguns are not protected by the Second Amendment. Notably, the Court found that “[t]he Second Amendment does not create a right to possess a weapon solely because the weapon may be used in or is useful for militia or military service.” Ultimately, the Court found that “[m]achineguns are dangerous and unusual and therefore not in common use. They do not receive Second Amendment protection[.]”

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Recent N.D. Tex. Patent Infringement Lawsuits

There have been many new patent infringement cases filed over the last several months in the Northern District of Texas, including:

  1. RFJ Licensing, LLC v. Tait Radio, Inc. (complaint available here)
  2. Datamotion Texas, LLC v. Zix Corp. (complaint available here)
  3. Nautilus Hyosung Inc. v. Diebold, Inc. (complaint available here)
  4. Hawk Technology Systems, Inc. v. Amarillo Nat’l Bank  (complaint available here)
  5. Kyotocooling North America, LLC v. Nortek Air Solutions, LLC (complaint available here)
  6. Berman v. DirectTV, LLC (complaint available here)
  7. Blephex, LLC v. Pain Point Medical Sys., Inc. (complaint available here)
  8. Commscope Technologies LLC v. Dali Wireless, Inc. (complaint available here)
  9. RFJ Licensing, LLC v. Icom America, Inc. (complaint available here)
  10. RFJ Licensing, LLC v. Ritron Inc. (complaint available here)
  11. Youtoo Technologies, LLC v. Twitter, Inc. (complaint available here)
  12. Varidesk LLC v. Nortek, Inc. (complaint available here)
  13. Camatic Proprietary Limited v. Irwin Seating Co. (complaint available here)
  14. Reconstruction Holdings, LLC v. Ayasdi, Inc. (complaint available here)
  15. LakeSouth Holdings, LLC v. Kohl’s Department Stores, Inc. (complaint available here)
  16. LakeSouth Holdings, LLC v. Lowe’s Cos. (complaint available here)
  17. LakeSouth Holdings, LLC v. Tuesday Morning Corp. (complaint available here)
  18. Galderma Laboratories, L.P. v. Tolmar Inc. (complaint available here)
  19. AT&T Services, Inc. v. Berman (complaint available here)
  20. New World International, Inc. v. Ford Global Technologies, LLC (complaint available here)
  21. Securus Technologies, Inc. v. Global Tel*Link Corp. (complaint available here)
  22. Hawk Technology Systems, LLC v. W2007 MVP Dallas, LLC (complaint available here)
  23. T-Rex Property v. Intersection Media Holding (complaint available here)
  24. Galderma Laboratories, L.P. v. Akorn, Inc. (complaint available here)
  25. Blackberry v. Avaya (complaint available here)
  26. Galderma v. Taro Pharmaceuticals (complaint available here)
  27. R.D. Jones v. Intelligent Traffic Equipment Marketing (complaint available here)
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Northern District of Texas Selects New Magistrate Judge

On July 19, 2016, the Northern District of Texas announced that D. Gordon Bryant, Jr. has been selected as the Northern District’s newest magistrate judge (news release available here). Mr. Bryant has a B.B.A., with honors, from Baylor University and a J.D. from Baylor School of Law. Mr. Bryant’s legal career includes positions as an Assistant United States Attorney for the Northern District of Texas in Amarillo, as well as Senior Litigation Counsel within the U.S. Attorney’s Office. Mr. Bryant begins service on August 1, 2016, and will preside in the Lubbock Division of the Northern District.

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Supreme Court Upholds “Broadest Reasonable Construction” Standard in Inter Partes Reviews

On June 20, 2016, the Supreme Court issued its decision in Cuozzo Speed Technologies, LLC v. Lee (available here). The decision had two notable holdings. First, the Supreme Court held that the Patent Office could properly implement its regulation that, in an inter partes review, a patent claim shall be construed according to “its broadest reasonable construction.” In so holding, the Supreme Court rejected the argument that the Patent Office should, like courts, give claims their “ordinary meaning . . . as understood by a person of skill in the art.” This holding was principally based on Chevron deference.

Second, the Supreme Court held that Section 341(d) of the America Invents Act, which provides that “[t]he determination by the Director [of the Patent Office] whether to institute an inter partes review under this section shall be final and non-appealable” bars “mine-run claim[s]” involving the Patent Office’s decision to institute inter partes review, although it may not bar consideration of, for example, a constitutional question.

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Federal Defend Trade Secrets Act Now In Effect

Effective May 11, 2016, the United States enacted the Defend Trade Secrets Act, which provided, for the first time, a federal cause of action for trade secret misappropriation. Notable provisions of the Act include those:

  • Providing for a private civil cause of action, with a three-year statute of limitations, for the owner of a trade secret that is misappropriated, 18 U.S.C. § 1836(b)(1), (d).
  • Defining “trade secret” to mean “all forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing if—(A) the owner thereof has taken reasonable measures to keep such information secret; and (B) the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, another person who can obtain economic value from the disclosure or use of the information[.]” 18 U.S.C. § 1839(3).
  • Criminalizing theft of trade secrets and providing for up to 10 years’ imprisonment and a fine of the greater of $5,000,000 or 3 times the value of the stolen trade secret, 18 U.S.C. § 1832.
  • Providing for an interlocutory appeal from a decision or order of a district court authorizing or directing the disclosure of any trade secret in cases brought under the Act, 18 U.S.C. § 1835(a).
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