Source: https://www.iplawalert.com/author/ggould/
Timestamp: 2019-04-21 11:08:36+00:00

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In a recent decision from the Federal Circuit in AngioScore, Inc. v. TriREME Medical LLC et al. the court found that a plaintiff’s claim for patent infringement and breach of fiduciary duty did not have the requisite “common nucleus of operative fact” for the district court to maintain supplemental jurisdiction over breach of fiduciary duty claims. In particular, this decision provided the Federal Circuit a rare opportunity to review the jurisdiction limits of a district court in a case involving federal patent infringement claims and state law claims for breach of fiduciary duty aiding and abetting and unfair competition by an independent director and companies he co-founded which developed a competitive product to a product marketed by the plaintiff corporation AngioScore, Inc.
We previously reported that the Internal Revenue Service (the “IRS”) took an aggressive position in challenging the treatment of a license agreement as a sale of a capital asset in the Tax Court case Mylan Inc. & Subsidiaries v. Commissioner of Internal Revenue (Docket Nos. 16145-14 and 27086-14). Recently, Tax Court Judge Laro denied the IRS’s Motion for Summary Judgment in Mylan’s challenge of the IRS’s determination that Mylan’s 2008 amendment to the contract with Forest Labs was not a sale of its interest in rights to a certain drug product but merely an extension of the parties’ 2006 license agreement, giving rise to ordinary income to Mylan.
A summary review of green patent complaints filed in 2015 reveals that LED and Smart Grid technologies were the primary areas of dispute. Complaints filed in 2015 in areas such as biofuels, hybrid vehicles, and solar reflect the growth in clean energy patents issued in these technology sectors. LED Technology – The Federal Energy Star website says that LED lighting, when designed well, is different from incandescent and compact fluorescent lighting in that LED lighting is more efficient, durable, versatile, and longer lasting. In line with the growth of LED technology, this LED technology led with the number of patent complaints filed in 2015. At the end of 2015, Bluestone Innovations LLC filed 13 complaints against not only other LED manufacturers, but also retailers asserting infringement of Bluestone’s U.S. Patent No. 6,163,557, which directs to group III-V nitride films. The accused products in Bluestone’s suits are LED lightbulbs with group III-V nitride epitaxial films.
Recently, a Memorandum in Support of Motion for Summary Judgment was filed by the Internal Revenue Service (the “IRS”) in the Tax Court case Mylan Inc. & Subsidiaries v. Commissioner of Internal Revenue (Docket Nos. 16145-14 and 27086-14). Mylan’s opposition brief to the IRS’s motion followed shortly thereafter. This case illustrates the importance of exercising care when transferring intellectual property rights if you intend to benefit from capital gains treatment. An improperly structured sale may be recharacterized by the IRS as a license, resulting in a much larger tax liability for the transferor than what was anticipated.
We previously reported on the potential impact that the Supreme Court’s decision in the case of Kimble v. Marvel Enterprises, Inc. may have on patent licensing terms. On June 22, 2015, the Supreme Court, basing its decision on stare decisis, upheld Brulotte which had barred royalty payments on post patent expiration activities. Kimble et al. v. Marvel Ent., LLC, 576 U.S. __ (2015). The Supreme Court, referencing the Brulotte court’s opinion, found that such post expiration royalty provisions “conflict with patent law’s policy of establishing a ‘post expiration . . . public domain’ in which every person can make free use of a formerly patented product” Kimble, 576 U.S. at _ (slip op., at 5) (quoting Brulotte v. Thys Co., 379 U.S. 29, 33 (1964). In upholding that ruling, the Supreme Court reasoned that “stare decisis carries enhanced force when a decision . . . interprets a statute. Then, unlike in a constitutional case, critics of our ruling can take their objections across the street, and Congress can correct any mistake its sees.” Id. at _ (slip op., at 8).
As licensing professionals await the decision of the Supreme Court in the case of Kimble v. Marvel Enterprises, Inc., which is widely believed to determine the future viability of the fifty year old decision of the Court in Brulotte v. Thys Co., it may be useful to consider the practical impact such a decision may have. The Brulotte decision held that use of the monopoly power of a patent to exact royalty payments on post expiration activities was a per se violation of the anti-trust laws. The reasoning was based on an analogy of the Court’s earlier prohibitions against tie-in arrangements where the use of a patented article required the purchase of an unpatented article. The patented invention was considered to be in the public domain upon expiration and thus free to use by all.
In recent years, families and friends of terminally ill patients have launched highly visible social media campaigns to secure access to potentially life-saving medicine, before those experimental drugs are approved. Pharmaceutical companies that are developing these investigational medicines often face difficult ethical and business relations dilemmas: there are limited exceptions for non-approved drug dissemination and the costs and consequences attendant on the exceptions can make either choice unpalatable. Companies and caregivers alike have struggled with how to fairly provide access to experimental drugs without negatively impacting long term drug development or approval.

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