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)
Posted in New Lawsuits Filed | Comments Off on Recent N.D. Tex. Patent Infringement Lawsuits

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).
Posted in Developing Law | Comments Off on Federal Defend Trade Secrets Act Now In Effect

Make Sure to Follow The Local Rules Or Risk Having Your Motion Denied

I recently came across an interesting Order from Senior Judge Sam Cummings in Medshare Technologies, Inc. v. Commonwealth Capital Corp. (available here). Defendants filed a Motion to Strike, for More Definite Statement, and Motion to Dismiss for Failure to State a Claim. Seven days later, the Court denied the motion because it lacked a certificate of conference and an appendix. This is a good example showing the importance of being familiar with the Court’s Local Rules.

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Supreme Court Unanimously Rejects Federal Circuit’s Enhanced Damages Standard For Patent Infringement

On June 13, 2016, the Supreme Court issued its unanimous opinion in Halo Electronics v. Pulse Electronics (available here). Halo rejected the Federal Circuit’s Seagate test for enhanced damages.

The Patent Act specifies that, in cases of infringement, “the court may increase the damages up to three times the amount found or assessed.” 35 U.S.C. § 284. The Federal Circuit had applied a multi-part test, founded upon In re Seagate Technology, LLC, 497 F. 3d 1360 (Fed. Cir. 2007) (en banc), to determine the circumstances when an award of enhanced damages was appropriate:

[Under the Federal Circuit’s test], a plaintiff seeking enhanced damages must show that the infringement of his patent was “willful.” The Federal Circuit announced a two-part test to establish such willfulness: First, “a patentee must show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent,” without regard to “[t]he state of mind of the accused infringer.” This objectively defined risk is to be “determined by the record developed in the infringement proceedings.” “Objective recklessness will not be found” at this first step if the accused infringer, during the infringement proceedings, “raise[s] a ‘substantial question’ as to the validity or noninfringement of the patent.” That categorical bar applies even if the defendant was unaware of the arguable defense when he acted.

Second, after establishing objective recklessness, a patentee must show—again by clear and convincing evidence—that the risk of infringement “was either known or so obvious that it should have been known to the accused infringer.” Only when both steps have been satisfied can the district court proceed to consider whether to exercise its discretion to award enhanced damages.

Then, under Federal Circuit law, an award of enhanced damages would be subject to “trifurcated” appellate review:

The first step of Seagate—objective recklessness—is reviewed de novo; the second—subjective knowledge—for substantial evidence; and the ultimate decision—whether to award enhanced damages—for abuse of discretion.

Hardly anything about Seagate survived Halo. Halo found:

  • Enhanced damages “are not to be meted out in a typical infringement case, but are instead designed as a ‘punitive’ or ‘vindictive’ sanction for egregious infringement behavior” which has been described as “willful, wanton, malicious, bad-faith, deliberate, consciously wrongful, flagrant, or—indeed—characteristic of a pirate.”
  • Enhanced damages are “generally reserved for egregious cases of culpable behavior.”
  • Seagate’s test “is unduly rigid, and it impermissibly encumbers the statutory grant of discretion to district courts.” “[I]t can have the effect of insulating some of the worst patent infringers from any liability for enhanced damages.”
  • Objective recklessness need not be found before district courts may award enhanced damages. “In the context of [] deliberate wrongdoing, [] it is not clear why an independent showing of objective recklessness—by clear and convincing evidence, no less—should be a prerequisite to enhanced damages.”
  • “The subjective willfulness of a patent infringer, intentional or knowing, may warrant enhanced damages, without regard to whether his infringement was objectively reckless.”
  • “[C]ulpability is generally measured against the knowledge of the actor at the time of the challenged conduct” not on the strength of the actor’s “attorney’s ingenuity.”
  • Enhanced damages need not follow a finding of egregious misconduct. “[C]ourts should continue to take into account the particular circumstances of each case in deciding whether to award damages, and in what amount.”
  • Enhanced damages “should generally be reserved for egregious cases typified by willful misconduct.”
  • “Bad-faith infringement” is an independent basis for enhancing patent damages, and a showing of objective recklessness is not required.
  • The enhanced damages determination is not governed by a clear and convincing standard of proof—a preponderance of the evidence standard applies.

Finally, Halo rejected the Federal Circuit’s “tripartite” framework for appellate review. Enhanced damages awards should be reviewed for abuse of discretion. Appellate review should be informed by “the considerations . . . identified” by the Supreme Court.

In light of its holdings, Halo is a very favorable decision for patent holders. For example, post-Seagate, many defendants had basically ignored patentees’ assertions of infringement, relying on the fact that, under Seagate, so long as the defendant came up with an “objectively reasonable” defense of either non-infringement or invalidity by the time of trial, enhanced damages could not be awarded. Halo, however, made it clear in no uncertain terms that engaging in this conduct will not preclude an award of enhanced damages. Other notable aspects of Halo are that the Federal Circuit will no longer review enhanced damages awards de novo, and a clear and convincing standard of proof no longer applies to the enhanced damages inquiry.

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New Local Rules To Become Effective September 1, 2016

On June 7, 2016, the Northern District of Texas entered Special Order No. 2-87 (available here), which amends Local Rule 5.4 and adopts Local Rule 7.5.

The amended Local Rule 5.4 provides that “[a] prisoner application, motion, or petition filed under 28 U.S.C. § 2241, § 2254, or § 2255 must be filed in accordance with the current miscellaneous order establishing procedures for such applications, motions, or petitions.”

The new Local Rule 7.5 provides for certain page limits in death penalty habeas cases.

These local rules become effective on September 1, 2016.

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