IP Litigation Summer 2008 Newsletter

17 September 2008 Publication
Author(s): Brian J. McNamara

Legal News: IP Litigation

Legislative Update: IP Enforcement Act Advances in the Senate
By Jason A. Berta and Jeffrey A. Simmons

New legislation aimed at bolstering intellectual property (IP) rights enforcement is making its way through Congress and is poised to become law before the end of the year. The Enforcement of Intellectual Property Rights Act of 2008 (Senate Bill 3325; Bill) was approved by the Senate Judiciary Committee last week and now awaits a vote before the full Senate. The House passed companion legislation in May 2008.

The Bill was introduced by Sen. Patrick Leahy (D-VT) to combat global counterfeiting and piracy of American innovation. It is estimated that 750,000 American jobs have been lost due to overseas IP infringement, and that $200 billion in U.S. sales are lost each year. “Intellectual property is one of the few areas where America has a clear advantage over foreign competitors,” asserts Sen. George V. Voinovich (R-OH), co-sponsor of the Bill.

Senate Bill 3325 would give the government an assortment of tools to achieve its goal of protecting American innovation. The legislation focuses primarily on the enforcement of copyright and trademark rights. Highlights of the Bill include: (1) authorizing the U.S. Attorney General to enforce civil copyright laws; (2) increasing the resources allocated to the U.S. Department of Justice (DOJ) for combating IP theft; and (3) increasing the penalties for trademark infringement.

Increased Enforcement Options and Penalties
Perhaps the Bill’s most significant change is that it would give the Attorney General the option of bringing a civil action for copyright infringement against an infringer. Under current law, the Attorney General may only prosecute criminal copyright infringement. Civil copyright infringement actions are generally easier to prove than criminal actions because the civil action contains fewer legal elements and is subject to a lower burden of proof.

The new legislation also increases the financial risk of counterfeiting by doubling statutory fines for trademark infringement, which would allow a successful plaintiff to recover up to $200,000 for an infringement violation.

New Role for the DOJ
The Bill also aims to reduce global counterfeiting and piracy by getting foreign countries to step up enforcement of their IP laws. If passed, the legislation would create a new IP enforcement division within the DOJ. That division would work with other government agencies to develop a joint strategic plan against counterfeiting and piracy. The objectives of the plan include: (1) reducing counterfeit and pirated goods in the domestic and international supply chains; (2) disrupting the networks that supply such goods; (3) strengthening the capacity of other countries to protect and enforce IP rights; and (4) developing formal procedures and international standards for effective protection of IP. The DOJ would be required to submit a report of its activities on an annual basis.

To execute the joint strategic plan, the IP enforcement division of the DOJ would cooperate with other departments within the government and with foreign governments. In particular, another provision of Senate Bill 3325 creates an operational unit of the Federal Bureau of Investigation to investigate complex IP-related crimes. The Bill also mandates formation of a task force comprising the Computer Crime and Organized Crime sections of the DOJ. The joint strategic plan likewise includes programs to provide training and technical assistance to foreign governments, focusing on those countries that provide the greatest benefit to reducing counterfeit and pirated products to the U.S. market.

More Legislation on the Way
This new legislation represents a growing movement toward protecting American IP rights. One day before the Senate Judiciary Committee reported The Enforcement of Intellectual Property Rights Act, Sen. Max Bacus (D-MT) and Sen. Orrin Hatch (R-UT) introduced The International Intellectual Property Protection and Enforcement Act of 2008, which would provide the funding needed to work with developing countries to improve IP protection and enforcement.

Senate Vote Pending
The Enforcement of Intellectual Property Rights Act of 2008 is pending a vote before the full Senate. If approved, a conference committee will iron out the differences between the Senate and House versions of the Bill, then it will be presented to the President for signature. Those steps could happen quickly, as Sen. Leahy and other supporters have stated that they want the legislation passed prior to Congress’s recess, which occurs later in September.

To view the entire Bill, please go to http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_bills&docid=f:s3325is.txt.pdf

Fighting Counterfeit Goods on eBay: Mixed Results in Europe, and a Recent Victory for eBay in the United States
By Katherine L. Tabor

In recent years, luxury goods retailers including Tiffany & Co., Rolex, LVMH Möet Hennessey Louis Vuitton, Hermès International, and The L’Oreal Group (Retailers) have taken legal action in various countries against online auction giant eBay, Inc. to combat sales of counterfeit goods on eBay Web sites. So who is winning this battle? Until recently, the Retailers were ahead with three wins, but eBay now has garnered two victories to nearly even the score.

The trouble for eBay began in 2001, when Rolex sued eBay in Germany for selling counterfeit watches on eBay’s German Web site. Rolex was unsuccessful until June 2007, when Germany’s highest court finally sided with Rolex. According to documents filed by eBay with the U.S. Securities and Exchange Commission (SEC), the German court held that “eBay must take reasonable measures to prevent recurrence (of counterfeit Rolex postings) once it is informed of clearly identified infringement.” More recently, on June 30, 2008, a French court ordered eBay to pay LVMH Möet Hennessey Louis Vuitton (LVMH) and other high-end retailers approximately $61 million in damages for selling counterfeit goods on eBay’s French Web site. eBay has appealed this ruling. The LVMH ruling came on the heels of another French court decision, which required eBay to pay Hermès approximately $31,000 for the sale of fake Hermès bags on eBay’s French Web site.

In the last two months, however, eBay has scored two victories, one in the United States and another in Belgium. In August, a Belgian court dismissed an action brought by The L’Oreal Group against eBay for selling counterfeit Lancôme perfume on its auction Web site. The Belgian court held eBay does not have a general obligation to monitor its Web site for counterfeit products and required L’Oreal to pay $22,000 in court costs. L’Oreal has stated that it intends to appeal the decision and still has four other lawsuits pending in Europe against eBay.

eBay’s first victory in American courts came in July 2008 in the United States District Court for the Southern District of New York. In June 2004, Tiffany filed claims against eBay for direct and contributory trademark infringement under the Lanham Act and common law, false advertising under the Lanham Act, and unfair competition and dilution under the Lanham Act and common law. Tiffany, Inc, and Tiffany and Co. v. eBay, Inc., 2008 WL 2755787 (S.D.N.Y. Jul. 14, 2008). After a bench trial in November 2007, Judge Richard Sullivan issued a 49-page opinion holding that Tiffany had failed to meet its burden of proof on all claims and entered judgment for eBay. Tiffany, 2008 WL 2755787 at *56.

With respect to direct trademark infringement, the Court ruled “that eBay’s use of Tiffany’s trademarks in its advertising, on its homepages, and in sponsored links purchased through Yahoo! and Google is a protected, nominative fair use of the marks.” Id. at *1. In the Court’s view, the Tiffany jewelry sold on eBay could not be identified in any other manner; eBay used only so much of the Tiffany marks as necessary; and eBay did nothing to suggest that Tiffany sponsored or endorsed eBay’s use of the marks. Similarly, the Court found that eBay’s purchase of sponsored links on the Google and Yahoo! search engines did not constitute direct trademark infringement because those uses of Tiffany’s trademarks were “effectively identical” to eBay’s use of the Tiffany name on the eBay Web site. Id. at *31.

Much of the opinion focused on whether eBay’s actions constituted contributory trademark infringement — namely, whether eBay was liable for infringement even though it was not the party selling the counterfeit goods. Judge Sullivan applied the contributory infringement test set forth by the Supreme Court in Inwood Labs, Inc. v. Ives Labs, Inc., 546 U.S. 844 (1982), which required Tiffany to establish that eBay continued to supply its services “to one whom it knows or has reason to know is engaging in trademark infringement.” The Court found evidence that eBay had “generalized knowledge” that “some portion of the Tiffany goods sold on its Web site might be counterfeit.” Tiffany, 2008 WL 2755787 at *37-38. However, the Court held that such a general knowledge was insufficient to establish contributory liability because “the law demands more specific knowledge as to which items are infringing and which seller is listing those items before requiring eBay to take action” to stop the counterfeit sales. Id. at *2. The Court repeatedly acknowledged that when eBay possessed specific knowledge of counterfeit Tiffany jewelry on its Web site, eBay took steps to remove the listings and suspend service. Id. at *1-2, 36-45.

In Judge Sullivan’s view, absent knowledge of specific instances of infringement, the law does not require eBay to take more proactive measures to curtail sales of counterfeit goods on its Web site. The Judge rejected the argument that eBay should “monitor its website and preemptively remove listings for Tiffany jewelry before the listings become public.” Id. at *1. It is the trademark owner, rather than eBay, the Court reasoned, that “must ultimately bear the burden of protecting its trademark.” Id. at *2. On August 11, 2008, Tiffany announced that it would appeal the New York District Court’s ruling.

Despite being presented with nearly the same fact scenarios, the European and U.S. courts that have addressed the issue of whether eBay should be liable for the sale of counterfeit merchandise on its Web sites have reached different conclusions. Thus, with the appeal by Tiffany, the remaining L’Oreal cases in Europe, and eBay’s appeal of the LVMH decision, the battle continues, and it remains to be seen how the case law will continue to develop in this area and whether the Retailers or eBay will ultimately prevail.

Have You Exhausted Your Patents? A Recent Supreme Court Decision Affects Patent Licenses
By George C. Best

A U.S. Supreme Court decision issued this past June clarified the doctrine of patent exhaustion and will affect the viability of some patent licensing strategies.

The doctrine of patent exhaustion “provides that the initial authorized sale of a patented item terminates all patent rights to that item.”1 As a result, once a patent owner sells a patented item, it is generally unable to use a patent infringement action to prevent the subsequent resale of that item. Although this doctrine is long-standing, it was unclear whether the doctrine applied to patent claims directed to methods. In addition, patent owners sometimes used creative licensing techniques to avoid the limiting effects of the doctrine. In Quanta Computer, Inc. v. LG Elecs., Inc.,2 the Supreme Court unanimously held that the doctrine applies to method patents and that the patent owner’s license agreement failed to preclude application of the doctrine.

Factual Background
In 1999, LG Electronics, Inc. (LG) purchased a patent portfolio that included the patents at issue.3 These patents claimed methods of managing the data flow inside a computer.4

LG licensed a patent portfolio, including these patents to Intel.5 Under the license agreement, Intel was entitled to make and sell computer components that used the patented methods.6 The agreement, however, stated that no license “is granted … to any third party for the combination by a third party of Licensed Products of either party with items, components, or the like acquired” from sources other than LG or Intel.7 A separate agreement (the Master Agreement) required Intel to notify its customers in writing that Intel’s license did not “extend, expressly or by implication, to any product that you make by combining an Intel product with any non-Intel product.”8

Quanta Computer, Inc. (Quanta) purchased Intel components and received the notice required by the Master Agreement.9 Notwithstanding this notice, Quanta combined the Intel products with various non-Intel components to make computer systems.10 As a result, LG sued Quanta for infringement of its patents.

The District Court granted summary judgment to Quanta, holding that the patents were exhausted because Intel had a license to make and sell the components, which did not have any substantial noninfringing use.11 The District Court later clarified its ruling, holding that only the apparatus claims, and not the method claims, were exhausted.12

The United States Court of Appeals for the Federal Circuit (Federal Circuit) affirmed in part and reversed in part.13 It reaffirmed its prior cases that stated that the doctrine of patent exhaustion does not apply to method claims. In the alternative, it held that LG’s patents were not exhausted because LG did not license Intel to sell the Intel products to Quanta for use in combination with non-Intel products.14

The Supreme Court’s opinion contained three important holdings: (1) patent claims for methods may be exhausted by the sale of a product that embodies the patented method, (2) a patent is exhausted by the unconditional sale of a product that substantially embodies the claimed invention, and (3) the license agreement at issue did not protect the patent owner from patent exhaustion.

Method Claims May Be Exhausted
In prior cases, the Federal Circuit had held that method claims are not subject to the patent exhaustion doctrine.15 The Supreme Court reversed this rule and held that method claims can be exhausted by the sale of a device that embodies the claimed method.16 The Court reasoned that an opposing rule provided an incentive for parties to convert apparatus claims to method claims during patent prosecution and allowed “an end-run around exhaustion.”17 “Such a result would violate the longstanding principle that, when a patented item is ‘once lawfully made and sold, there is no restriction on [its] use to be implied for the benefit of the patentee.’”18

A Two-Part Test for Determining Whether a Sale Exhausts a Patent
The Supreme Court made clear that a patent is exhausted by the first authorized sale of a product that embodies the patent, and that sales of an incomplete product may exhaust a patent. The Court provided a two-part test for determining whether the sale of an incomplete product exhausts the patent rights in that product.

First, the incomplete product must have no reasonable use other than practicing the patents. In reaching this decision, the Court pointed to whether the product embodied essential features of the patented product or the inventive aspects of the patented methods.19 The Court also distinguished between practicing the patent and infringing the patent. Thus, the exhaustion doctrine is not defeated by the possibility of overseas sales that would use the patented technology without infringing the patent.20

Second, the incomplete product must “substantially embod[y] the patent” and “all but completely practice the patent.”21 Thus, sale of an incomplete product exhausts the patent if the only “step[ ] necessary to practice the patent is the application of common processes or the addition of standard parts.”22 In reaching this conclusion, the Court distinguished the patents at issue from so-called “combination patents,” where it is the combination of elements itself that provides the inventive aspect of the patent.23

In practice, this test will be difficult to apply in many situations. Whether a particular product “substantially embodies” the invention or whether the patent is a “combination patent” that falls outside the rules set forth in this opinion are likely to be the subject of future litigation.

Drafting Agreements
Turning to the details of this case, the Court analyzed the provisions of the agreements between the patentee and the licensee. While the Court determined that the licensee was authorized to make these sales, the Court’s reasoning suggests that future licenses can be drafted in ways that avoid the application of patent exhaustion.

The Court held that the sales were authorized because the license agreement did not restrict the licensee’s ability to sell the product in any way. The license only required the licensee to notify its customers that they did not receive a license to the patents. Despite this requirement, the patents were exhausted because (1) there was no evidence that the licensee failed to provide the required notice, and (2) the notice requirement was contained in a separate agreement rather than being incorporated into the license agreement itself.24 The Court, however, stated that exhaustion only prevents an assertion of patent rights, but does not necessarily limit other rights conferred by the license agreement.25 In some circumstances, therefore, the patentee may be able to pursue a breach of contract claim, even if a patent infringement claim is no longer available.

Implications of the Quanta Opinion
The Court’s opinion has several implications. First, parties accused of patent infringement should carefully review license agreements to see if the patentee’s rights have been exhausted. In particular, parties should examine what limitations, if any, a license agreement places on the right to sell products that “substantially embody” the patents.

Second, in the future, a patentee who hopes to avoid exhaustion will have to draft licenses carefully to achieve that goal. Strategies that might be effective in this regard include (1) carefully limiting the scope of the licensees’ rights so that only a narrowly drawn set of sales or uses are authorized while avoiding potential antitrust issues or (2) licensing multiple end-users of the claimed invention rather than targeting a single major manufacturer.

Furthermore, the exhaustion principle announced in Quanta leaves an open question regarding the effect of the sale of self-reproducing patented goods such as seeds or bacterial cultures. It is possible the sale of such products could exhaust a patent right because they substantially embody the patent. Companies selling such products may want to consider whether their current licenses protect them from exhaustion.

Because the Quanta decision means that patent rights can be more readily exhausted, a patentee may only get one bite at the licensing apple. This decision, therefore, increases the importance of a careful licensing strategy, with special attention to the drafting of license agreements.

Is Making Sound Recordings Available for Download “Distribution” of Copyrighted Works?
By Brian J. McNamara

Courts and copyright owners continue to struggle to adapt traditional concepts of copyright law to the Internet and, in particular, peer-to-peer music file-sharing. Another example occurred in April 2008, when a U.S. District Court in Arizona denied a motion by music recording companies for summary judgment of copyright infringement against a defendant who made sound recordings available to download through the KaZaA Web site. While sympathetic to the difficulties Internet file-sharing systems pose to copyright owners, the court concluded, among other things, that merely making a copy of a sound recording available for download over the Internet is not “distribution” of the work under the Copyright Act, 17 U.S.C. § 501(a). Atlantic Recording Corp. v. Howell, 554 F. Supp. 2d 976 (D. Ariz. 2008).

In January 2006, an investigator for the recording companies downloaded 12 of the 56 sound recordings that defendants Pamela and Jeffery Howell had in a publicly accessible shared KaZaA folder. Mr. Howell admitted to opening the KaZaA account to share pornography and free public software, but denied downloading music through KaZaA, putting music in a shared folder accessible to others, or otherwise authorizing sharing of the song files. Mr. Howell stated that he had compact discs containing the songs and copied the songs to his computer for personal use. In addition, Mr. Howell testified that he was unaware any music files were in the shared folder, did not know if such files existed as a result of a computer or operating system malfunction, and that other persons had access to the computer and KaZaA account.

The issue before the district court was whether Mr. Howell’s acts constituted “distribution” of copyrighted works in violation of the Copyright Act. The Copyright Act grants copyright owners the exclusive right to “distribute” copies of copyrighted works. 17 U.S.C. § 106(3). The Act, however, does not define the term “distribute.” Howell, 554 F. Supp. 2d at 981.

The recording companies argued that simply making recordings available to the public, regardless of whether anyone ever downloads them, should constitute “distribution” for purposes of the Copyright Act. To support their argument, the companies relied on the Fourth Circuit Court of Appeals’ decision in Hotaling v. Church of Jesus Christ of Latter-Day Saints, 118 F.3d 199 (4th Cir. 1997). In Hotaling, a library sent unauthorized microfiche copies of the plaintiff’s work to its branches and the branches allowed the public to view the non-circulating microfiche works without keeping records of the viewings. Although this practice made it impossible to prove the works were actually viewed, the court ruled that the library had “distributed” unlawful copies when it listed the works in its catalog and made them available to the borrowing or browsing public.

The district court rejected that argument, siding with other courts that have found Hotaling to be “inconsistent with the Copyright Act.” “Merely making an unauthorized copy of the copyrighted work available to the public,” said the district court, “does not violate a copyright holder’s exclusive right of distribution.” 554 F. Supp. 2d at 983. Instead, the district court held, “the great weight of authority” is that “unless a copy of the work changes hands … a distribution under the Copyright Act has not taken place.” Id. The district court added that there is no basis in the Copyright Act to impose liability for attempted distribution, no matter how desirable such liability may be as a matter of policy.

The district court’s position on liability for attempted distribution is interesting when viewed in light of the Supreme Court’s analysis of the role of intent in another peer-to-peer file-sharing case, Metro Goldwyn Mayer v. Grokster, Inc., 545 U.S. 913 (2005). Grokster dealt with secondary liability for inducing and contributing to infringement by others. The Supreme Court considered evidence of the peer-to-peer software distributor’s intent “to satisfy a known source of demand for copyright infringement” in determining culpability. Grokster, 545 U.S. at 939. One might reasonably ask what, if any, circumstances could exist that demonstrate culpability based on a party’s intent to engage in unauthorized distribution of sound recordings (primary liability), without actually requiring proof of the distribution? For example, where a shared folder contains hundreds or thousands of sound recordings, it may be impractical to prove which particular recordings the defendant actually distributed and how many times such distributions occurred.

Applying the “intent” principles in Grokster to primary copyright infringement liability, such as in Howell, could a plaintiff successfully argue that by making large numbers of such files available through a shared folder of a peer-to-peer system, the defendant demonstrates culpable intent to violate the copyright holder’s distribution rights in all the files in the folder, at least to merit injunctive relief, or should the courts require evidence of actual distribution for each file?

Although the plaintiffs in Howell did not make such an argument, given the music industry’s ongoing campaign against unauthorized file-sharing, parties and courts may confront it in the future.

In re Bilski: The Federal Circuit Hears Oral Argument on Business Methods
By C. Edward Polk, Jr.

Within the last year, the issue of what constitutes patentable subject matter — in particular, business method patents — has risen to the forefront of patent law, with In re Bilski taking center stage in this controversy. The United States Patent and Trademark Office (PTO) rejected Bernard Bilski’s patent application directed to methods for using hedge contracts to reduce the risks that a given commodity’s wholesale price will change. In its rejection, the PTO asserted that Mr. Bilski’s invention was not patentable subject matter in part because it can be implemented without the use of a computer or any other type of machine. A panel of the Federal Circuit heard Mr. Bilski’s initial appeal in October 2007 and, then, in February 2008, the Federal Circuit sua sponte granted an en banc hearing. The Federal Circuit heard oral arguments on May 8, 2008.

On appeal, the Federal Circuit asked the parties and interested amici curiae for supplemental briefing so the court could consider five en banc questions:

(1) Whether claim 1 of the 08/833,892 patent application claims patent-eligible subject matter under 35 U.S.C. § 101?

(2) What standard should govern in determining whether a process is patent-eligible subject matter under § 101?

(3) Whether the claimed subject matter is not patent-eligible because it constitutes an abstract idea or mental process; when does a claim that contains both mental and physical steps create patent-eligible subject matter?

(4) Whether a method or process must result in a physical transformation of an article or be tied to a machine to be patent-eligible subject matter under § 101?

(5) Whether it is appropriate to reconsider State Street Bank & Trust Co. v. Signature Financial Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998), and AT&T Corp. v. Excel Communications, Inc., 172 F.3d 1352 (Fed. Cir. 1999), in this case and, if so, whether those cases should be overruled in any respect?

While many amici were not interested in opining on question (1) (the patentability of Mr. Bilski’s specific claims), most were very interested in how the court ultimately would resolve the legal issues embedded in questions (2) through (5). In fact, the Federal Circuit’s request for supplemental briefing drew more than 40 amicus briefs from a wide variety of business and professional organizations.

During oral argument, the PTO asserted that a process is patentable only if that process is either tied to a particular machine or transforms a tangible article to a different state. The PTO contended that Mr. Bilski’s claim covered nothing more than an “abstract idea” and, thus, was not patentable. The PTO cited Supreme Court precedent to support its position. See, e.g., Diamond v. Diehr, 450 U.S. 175, 184 (1981) (“Transformation and reduction of an article ‘to a different state or thing’ is the clue to the patentability of a process claim that does not include particular machines.”) (quoting Gottschalk v. Benson, 409 U.S. 63, 70 (1972)); Parker v. Flook, 437 U.S. 584, 588 n.9 (1978) (“[T]his Court has only recognized a process as within the statutory definition when it either was tied to a particular apparatus or operated to change materials to a ‘different state or thing.’”) (citing Cochrane v. Deener, 94 U.S. 780, 787-88 (1876)).

During argument and in its briefs, the PTO emphasized the new types of patent claims that are being presented by patent applicants. The PTO made reference to recent claims covering legal methods for entering into a contract, methods of teaching, methods of holding a conversation, and the infamous swing patent (e.g., methods of swinging on a playground swing). During the argument, some of the judges expressed concern over whether the test proposed by the PTO would be overly rigid and stifle new ideas, for example, in the computer and software industries.

Conversely, Mr. Bilski argued to the Court that a process should be patentable if it merely produces a “practical result,” regardless of whether the claim is tied to a particular machine or transforms something tangible. Like the PTO’s position, Supreme Court precedent also supports Mr. Bilski’s position. See, e.g., Benson, 409 U.S. at 71 (“It is argued that a process patent must either be tied to a particular machine or apparatus or must operate to change articles or materials to a ‘different state or thing.’ We do not hold that no process patent could ever qualify if it did not meet the requirements of our prior precedents.”); Flook, 409 U.S. at 71 (“The statutory definition of ‘process’ is broad. … An argument can be made, however, that this Court has only recognized a process as within the statutory definition when it either was tied to a particular apparatus or operated to change materials to a ‘different state or thing.’ … As in Benson, we assume that a valid process patent may issue even if it does not meet one of these qualifications of our earlier precedents.”). During the argument, some of the Federal Circuit judges expressed concern over whether the results-oriented test would provide a meaningful standard of patentability.

While it is certainly difficult to predict how the Federal Circuit will ultimately resolve the case, several judges and amici questioned whether this case was focused on the wrong section of the Patent Act. Indeed, the PTO may have forced the Federal Circuit into resolving this case solely under § 101 by not making any prior art rejections during examination. However, it was suggested that it may be better to keep the categories of patentable subject matter under 35 U.S.C. § 101 broad, and address the concerns raised by the PTO under other sections of the Patent Act, such as under the novelty requirements of § 102, the non-obviousness requirements of § 103, and the definiteness requirements of § 112. This would seem to be the case since hedge transactions existed long before Mr. Bilski filed his application with the PTO.

Foley’s Shanghai Office Hits the Ground Running

Foley celebrated its growing presence in China with the official opening of its Shanghai office on June 2, 2008. The opening festivities included a gala reception at the Shanghai Museum and roundtable discussions covering a range of issues critical to doing business in China, including the challenges of internationalizing in the global pharmaceutical market and advanced intellectual property issues in China.

Foley already had a well-established presence in the China legal market, having done considerable legal work with the Chinese government, including serving as the international legal counsel for the 2007 Special Olympic World Games Executive Committee. The Chinese government granted Foley a license to open a representative office in Shanghai in December 2007.

The new office, located in Shanghai’s landmark Jin Mao Tower, is led by Catherine Sun, Chair of the firm’s Asia Practice. Ms. Sun, who has law degrees from both Beijing University and George Washington University Law School, has 16 years of experience in IP counseling and litigation, including IP issues related to cross-border mergers and acquisitions (M&A), international technology transfer, licensing, and portfolio management.

This month, the Shanghai office continued to expand, adding another IP attorney, Yan Zhao, to its growing group of legal talent. Mr. Zhao obtained his electrical engineering degree from Peking University, and has law degrees from Peking University and the George Washington University Law School. Mr. Zhao has a number of years of experience working as an IP lawyer at Huawei Technologies, HP Singapore, Deacons Hong Kong, and Weil, Gotshal & Manges’ Shanghai offices. He brings with him a depth of experience in litigation, licensing, and IP management matters in varied electrical and mechanical technologies.

The opening of the Shanghai office came in the tragic aftermath of the 8.0 magnitude earthquake in China’s Sichuan province. Foley and its employees made a joint donation of more than 500,000 RMB to assist with the construction of earthquake-proof schools in Sichuan. The donations will help to rebuild at least two safe elementary schools. The firm is planning long-term support for the schools it is funding, including providing additional aid once the students return.

Sharon R. Barner, Chair of Foley’s IP Department, said the donation was part of Foley’s larger commitment to China. “Foley attorneys always give back to the communities in which we live and practice, including our newest community — Shanghai and greater China.”

Foley Adds Five Prominent IP Litigators to Its New York and Boston Offices

Foley continued the steady growth of its national IP Litigation Practice, recently adding four prominent partners and one senior counsel to its New York and Boston offices.

This past spring, Andrew Baum, Robert S. Weisbein, and Karin Segall joined Foley’s New York office as partners, bringing with them a wealth of experience in trademark, copyright, unfair competition, and false advertising disputes. Andy and Rob both have many years of experience representing clients in trademark, copyright, unfair competition, and false advertising litigation. Andy represents a broad cross-section of clients from the publishing, luxury goods, interactive entertainment, and home furnishing industries. Rob’s clients include major companies in the Internet, telecommunications, electronics, and retailing industries. Karin Segall brings with her 15 years of experience handling a broad range of IP matters, especially in the area of trademark and copyright counseling and litigation. Karin has considerable experience handling opposition and cancellation proceedings before the Trademark Trial and Appeal Board.

Foley’s two other new additions, Marc N. Henschke and Nicole Gage, add even more strength to the IP Litigation team in Foley’s Boston office. Marc joined Foley as a partner and has more than 16 years of experience in all aspects of commercial litigation. Marc has particular experience litigating patent infringement cases in the high-technology sector, including computer software, e-commerce applications, cell phones, and video cameras. “Anything in the high-tech space is my sweet spot,” he says. “Part of what I enjoy most is each time moving into a new area and learning something new.” Nicole joined Foley’s Boston office as senior counsel and has substantial patent and trademark litigation experience in more than a dozen federal district courts and the Federal Circuit. Nicole also has significant experience counseling clients with respect to the use, protection, and enforcement of trademarks and prosecuting and defending actions before the Trademark Trial and Appeal Board.

“We are thrilled to add five attorneys of this caliber to our team,” said Sharon R. Barner, Chair of Foley’s IP Department. “It is part of Foley’s ongoing commitment to provide top-notch IP litigation talent in major cities across the country.”

1 Quanta Computer, Inc. v. LG Electronics, Inc., 128 S. Ct. 2109, 2115 (2008).
2 128 S. Ct. 2109.
3 Id. at 2113.
4 Id. at 2113-14.
5 Id. at 2114.
6 Id.
7 Id. (quoting agreement).
8 Id. (quoting agreement).
9 Id.
10 Id.
11 LG Elecs., Inc. v. Asustek Computer, Inc., 65 U.S.P.Q.2d 1589, 1593, 1600 (N.D. Cal. 2002).
12 LG Elecs., Inc. v. Asustek Computer, Inc., 248 F. Supp. 2d 912, 918 (N.D. Cal. 2003).
13 LG Elecs., Inc. v. Bizcom Elecs., Inc., 453 F.3d 1364, 1377 (Fed. Cir. 2006).
14 453 F.3d at 1370.
15 See, e.g., Glass Equip. Dev., Inc. v. Besten, Inc., 174 F.3d 1337, 1341 n.1 (Fed. Cir. 1999) (citing Bandag, Inc. v. Al Bolser's Tire Stores, Inc., 750 F.2d 903, 924 (Fed. Cir. 1984)).
16 Quanta Computer, 128 S. Ct. at 2117-18.
17 Id. at 2118.
18 Id.
19 Id. at 2119.
20 Id. at 2119 n 6.
21 Id. at 2120.
22 Id.
23 Id. at 2121.
24 Id. at 2121-22.
25 Id. at 2122 n.7.


Brian J. McNamara

Retired Partner