Source: https://cisloandthomas.com/october-2017/
Timestamp: 2019-04-20 03:18:20+00:00

Document:
Takeaway: A common law agency theory analysis applies to the safe harbor defense under the Digital Millennium Copyright Act.
In Mavrix Photographs, LLC v. LiveJournal, Inc., a new issue was presented under the Digital Millennium Copyright Act’s (“DMCA”) safe harbor protection provision 17 U.S.C. § 512(c). The issue was whether common law agency theories apply to the safe harbor defense under the DMCA. Mavrix brought this suit for copyright infringement because LiveJournal published 20 of Mavrix’s photos on their website.
The district court held that the DMCA safe harbor provision protected LiveJournal because Mavrix’s photos were stored at the discretion of the user and that the common law theories of agency did not apply to a safe harbor analysis. The Ninth Circuit Court of Appeals disagreed, stating that common law agency theories do apply to the DMCA analysis and that the issues surrounding the agency status of the moderators on LiveJournal’s site should be remanded for trial.
The Ninth Circuit determined that the trial court was focused on § 512(a) when they should have focused on § 512(c). The difference here was determinative in this appeal because § 512(a) is directed to the issue of infringing material that is passively and temporarily placed on a computer server whereas § 512(c) is focused on the service provider’s role in making material stored by a user publicly accessible on its site. The court said that public accessibility was important because the inquiry here turned to the role of the moderators in screening and posting user submissions of content.
The reason the Ninth Circuit determined that the rules of agency apply in this situation is because the Supreme Court has applied common law involving federal copyright law and the DMCA. The Ninth Circuit and other courts have applied agency law to determine things like whether a service provider was responsible under the DMCA for copyright infringement by its employees, whether a service provider was responsible under the DMCA for copyright infringement by its contractors, and whether a service provider is responsible under the DMCA for acts by its moderators.
For these reasons, the Ninth Circuit determined that there was a genuine issue of material fact as to whether the moderators were LiveJournal’s agents.
The statute has two “prongs” by for proper venue: (1) residence in the judicial district, OR (2) having a regular and established place of business in the judicial district and committing acts of infringement in the district. In re TC Heartland addressed the first prong – residence – and said that a corporation “resides” for purposes of venue in patent cases in its state of incorporation (“a domestic corporation “resides” only in its State of incorporation for purposes of the patent venue statute.”).
The Supreme Court’s holding that 28 U.S.C. § 1400(b) was the exclusive patent venue statute was in contrast to case law since 1990, which broadly allowed patent infringement plaintiffs to sue in any judicial district in which the defendant was subject to personal jurisdiction.
In the first, or one of the first, decisions looking at venue post-TC Heartland, Judge Rodney Gilstrap of the Eastern District of Texas denied a motion to transfer venue. Raytheon Corp. v. Cray, Inc., Case No. 2:15-CV-01554-JRG (E.D. Tex. June 29, 2017). In the ruling, Judge Gilstrap thoughtfully articulated a set of factors to consider regarding what constitutes a “regular and established place of business,” which corresponds to the second prong of 28 U.S.C. § 1400(b) for proper venue. These factors included: (1) physical presence in the district; (2) defendant’s representations regarding a presence in the district; (3) benefits received from its presence in the district; and (4) targeted interactions with persons or entities in the district.
Factually, Judge Gilstrap predicated his ruling denying a transfer on the activities of a sales representative for the accused products in the Eastern District even though the defendant itself did not have any facilities in the district.
In sum, the Federal Circuit provided some clarity as to what a “regular and established place of business” is under the patent venue statute. Looking forward, it would appear that venue choices for patent infringement plaintiffs are shrinking, and also that the Eastern District of Texas may lose its status as the number one federal judicial district for patent litigation in the U.S.
Takeaway: The PTAB takes a step toward deterring multiple challenges to the same patent by laying out seven factors that will be considered in future PTAB proceedings.
In a petition by General Plastic Industrial Co., Ltd. (“General Plastic”) for inter partes review, the PTAB has laid out an informative set of factors that will be considered when deciding whether to institute review of patents that have been challenged multiple times.
General Plastic Industrial Co., Ltd. previously petitioned the same patents that were at issue here for inter partes review. All of the petitions for inter partes review were originally denied on the merits and additionally denied in this opinion.
(7) the requirement under 35 U.S.C. § 316(a)(11) to issue a final determination not later than 1 year after the date on which the Director notices institution of review.
Even though this opinion was originally non-binding, the decision has now been designated as informative, which means that these factors will be used by the PTAB moving forward to evaluate multiple petitions on the same patents.
The subject of multiple petitions on the same patent has been a hot issue lately. The reason this decision may be a step in the right direction is because we do not want petitioners to have two bites at the same apple. This decision may be an effort by the PTAB to prevent petitioners from dragging on litigation through multiple challenges to the PTAB, district court, and the ITC. Patent owners should not be required to litigate the same issues over and over again while the petitioner hopes to get a better decision somewhere else or have the patent owner roll over because they cannot afford to litigate so many repetitive issues.
Another major issue to consider is the burden on the PTAB and the courts due to repetitive litigation. This decision may help discourage frivolous petitions to the PTAB, which we can only hope will free up the Board to review more legitimate patent challenges.
We are proud to announce that Cislo & Thomas’ partner Jeffrey Sheldon, Esq. is publishing the second edition to his book The Manager’s Guide to Intellectual Property. This publication is designed to help business executives and entrepreneurs understand the basics concepts of intellectual property and know when to call in the intellectual property attorneys to assist. Whether you are seeking a patent, registering a trademark or negotiating a license, quickly gain the information you need to know to protect your company’s ideas and, just as importantly, avoid infringing on the exclusive rights of others.
https://www.amazon.com/Managers-Guide-Intellectual-Property/dp/1610142918, or, next time you come by the office, we will have a second edition copy available for you.
Cislo & Thomas LLP has introduced a new online patent system making it easier than ever to protect your inventions. When you login to your personal PatentFiler account you can see a list of your provisional patent applications and the current status of each application as depicted below.
The new, easy to use system gives you the ability to: (1) track deadlines; (2) generate information disclosure statements; (3) request patentability opinions and searches; (4) create notes to stay organized; (5) create patent assignments; and (6) seek advice from a professional patent attorney at Cislo & Thomas LLP. Visit www.patentfiler.com to take the first step in protecting your innovation today!

References: v. 
 § 512
 § 512
 § 512
 § 512
 § 512
 § 1400
 v. 
 § 1400
 § 316