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And the Band Played On: Reviewing Rule 54(b) Partial Summary Judgment Based on Who Did What to Whom and When

by | Oct 6, 2022 |

In a case where the cast of characters on both sides of the v. evolved during the lead-up to the litigation as the litigants negotiated third-party deals and formed new entities, the US Court of Appeals for the First Circuit (characterizing the matter as the “entrepreneurial equivalent of musical chairs”) affirmed a dismissal of a trade secret claim against a foreign defendant but not against the related US entity, and found that the case qualified under Rule 54(b) for the “narrow exception” to the finality rule. Amyndas Pharmaceutical, SA v. Zealand Pharma A/S, Case No. 21-1781 (1st Cir. Sept. 2, 2022) (Barron, Selya, Kayatta, JJ.)

Amyndas is a Greek company with a US affiliate. It is a biotechnology firm that researches and develops therapeutics targeting a part of the immune system known as the complement system. One area of Amyndas’s research deals with “complement inhibitors.”

Amyndas’s research yielded compstatin, a peptide that selectively inhibits the C3 protein (which plays a role in activating the complement system). Amyndas also developed a related peptide (AMY-101) that targets that protein. Amyndas owns trade secrets and confidential information related to this work.

Zealand Pharma, a Danish biotechnology firm, contacted Amyndas about a potential partnership for the development of complement-related therapeutics. The firms entered into a confidential disclosure agreement (CDA) regarding information-sharing “for the purposes of evaluating a possible business/services relationship between the parties and their respective Affiliates.” Amyndas started giving Zealand Pharma access to confidential information (including confidential information about AMY-101). The firms also entered into a second CDA—with added protections—for “the evaluation or formation of a possible business and/or services and/or collaborative relationship.”

Both CDAs included an identical “Governing Law” provision stipulating that the CDAs would “be interpreted and governed by the laws of the country (applicable state) in which the defendant resides” and a forum-selection clause stipulating that “any dispute arising out of th[e CDA] shall be settled in the first instance by the venue of the defendant.”

Zealand Pharma also began its own research program focused on complement therapeutics. It did not inform Amyndas of this initiative. Although negotiations continued, the firms ultimately decided not to collaborate. Amyndas later terminated its information-sharing relationship with Zealand Pharma.

Zealand Pharma later formed Zealand US, a Delaware corporation. Without Amyndas’s knowledge or consent, Zealand Pharma also filed two European patent applications for compstatin analogues and later an international patent application designating the United States and claiming priority to the earlier  EU applications.

After the international applications were published, Amyndas learned that they described “compstatin analogues that are capable of binding to C3 protein and inhibiting complement activation,” which had been the focus of Amyndas’s research and a subject of Amyndas’s confidential information-sharing with Zealand Pharma.

The other defendant, Alexion, is an established player in the complement therapeutics field and a proprietor of Soliris, a complement inhibitor that targets a protein in the complement system. Soliris is approved by the US Food and Drug Administration (FDA) and previously was the only FDA-approved and clinically available [...]

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Play It Again and Again (Sam): Meanwhile No Injunction, No Fees

by | Sep 15, 2022 |

In its third opportunity to review the district court’s decision in this trade secret case involving flooring, the US Court of Appeals for the Eleventh Circuit again reversed, this time vacating a permanent injunction and an award of attorneys’ fees. The Eleventh Circuit noted that the district court failed to make the findings required to support an injunction and abused its discretion in awarding full fees notwithstanding prior reversal of relief awarded. AcryliCon USA, LLC v. Silikal GmbH, Case No. 21-12853 (11th Cir. Aug. 29, 2022) (Newsom, Marcus, JJ.; Middlebrooks, Distr. J.)

In an earlier appeal in this case, the Eleventh Circuit reversed a ruling on trade secret misappropriation rendered by the district court in favor of AcryliCon USA (AC-USA) and vacated the damages award. An aspect of the Court’s ruling was that the “permanent” injunction entered by the district court was only preliminary in nature (not permanent) and was, as a matter of law, dissolved because the district court did not include it in the original final judgment. On remand, the district court was ordered to determine the appropriate amount of attorneys’ fees the prevailing party should receive. However, the district court just entered the same amount of attorneys’ fees it had originally awarded and again entered a “permanent” injunction barring the use of the trade secret at issue, concluding that it was obliged to do so by the Eleventh Circuit’s ruling in the first appeal.

In the second appeal, the Eleventh Circuit held that AC-USA failed, as a matter of law, to prove its misappropriation claim and reversed the judgment entered in favor of AC-USA on that count. The Court also reversed the district court’s judgment that its $1.5 million damages award could be sustained on the basis of the contract claim once the misappropriation claim was reversed. The Court ruled that, as a matter of law, since AC-USA had failed to prove actual damages on its consequential damages theory, it could only recover nominal damages based on its breach of contract claim. Finally, the Court concluded that AC-USA was entitled to attorneys’ fees only on its breach of contract claim because, under Georgia law, even a nominal damages award would still materially alter the legal relationship between the parties.

In the second remand, the district court awarded essentially the same amount of attorneys’ fees ($1.3 million) to AC-USA but acknowledged that, since Silikal prevailed in vacating the award of compensatory and punitive damages, Silikal “was the prevailing party on the appeal under the terms of the [agreement]” and was entitled to almost $500,000 in attorneys’ fees for its successful appeal. The district court also awarded $100 in nominal damages to AC-USA for its successful appeal on the breach of contract claim. The district court then entered a permanent injunction enjoining Silikal “from disclosing or using in any way, directly or indirectly, the [ . . . resin . . . ] to anyone other than Plaintiff.”

Both parties appealed. AC-USA appealed the award of [...]

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Too Little Too Late: No Tenable Misappropriation Claim Based on 11-Year-Old Prototype

by | Aug 11, 2022 |

In a dispute between an employer and a former employee, the US Court of Appeals for the Seventh Circuit affirmed a district court’s grant of summary judgment against an employer asserting trade secret misappropriation and breach of implied-in-fact contract claims relating to an 11-year-old prototype developed by a former employee. The Court also affirmed the district court’s finding of litigation misconduct by the former employer but vacated the lower court’s award of attorneys’ fees, remanding the case for a more detailed justification for the considerable award. REXA, Inc. v. Chester, Case Nos. 20-2953; -3213; -2033 (7th Cir. July 28, 2022) (Wood, Hamilton, Brennan, JJ.)

Mark Chester is a former employee of Koso America, a manufacturer of hydraulic actuators. Chester participated in a 2002 project at Koso that sought to develop a new flow matching valve for Koso’s actuators. While the project team failed to design a new flow matching valve, they did manage to develop an experimental prototype of an actuator with solenoid valves. Koso abandoned the new design because of the improbability of commercial success, and the prototype was disassembled. Chester—who had never signed a confidentiality or employment agreement with Koso—resigned from Koso in 2003 and later joined MEA Inc. in 2012. In 2013, 11 years after developing the Koso prototype, Chester helped MEA design a new actuator with solenoid valves and an improved motor. MEA filed a patent application in 2017 claiming the actuator, and the US Patent & Trademark Office issued a notice of allowance in 2018 based on the improved motor limitations.

REXA, a successor company to Koso, sued Chester and MEA for misappropriation under the Illinois Trade Secrets Act (ITSA) and for breach of an implied-in-fact contract. REXA alleged that MEA and Chester misappropriated the 2002 designs by filing the 2017 patent application and by incorporating the 2002 designs into MEA’s Hawk brand actuator, and that Chester breached an implied-in-fact obligation to assign any patent rights associated with the 2017 application to REXA. Chester and MEA accused REXA of improper conduct during discovery after REXA appended a confidentiality agreement that Chester had never received to Chester’s 2002 bonus letter and used the manipulated document during Chester’s deposition. The parties filed cross motions for summary judgment. The district court ruled for Chester and MEA and awarded them almost $2.4 million in attorneys’ fees for REXA’s litigation misconduct. REXA appealed.

Misappropriation of Trade Secrets

The Seventh Circuit first considered the trade secret misappropriation claim, specifically whether REXA had identified a trade secret with enough specificity. The ITSA requires that a plaintiff “present a specific element, or combination of elements, that is unknown to the trade and was allegedly misappropriated.” Applying this standard, the Court found that REXA had not identified any protectable trade secrets because it had broadly asserted that the “2002 designs” qualified as trade secrets without explicitly identifying an element that was not well known in the industry.

The Seventh Circuit further concluded that even if REXA had identified a specific and protectable trade secret, [...]

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Breach of Confidentiality Claim Survives Motion to Dismiss under Anti-SLAPP Law

by | Jul 28, 2022 |

The Court of Appeals of Texas (Fourth District) upheld a trial court’s order denying a motion to dismiss a breach of confidentiality agreement claim pursuant to the Texas Citizens Participation Act (TCPA), which is designed to protect people from strategic lawsuits against public participation (SLAPP). Harper v. Crédito Real Bus. Cap., Case No. 21-0212 (Tex. App. July 20, 2022) (Martinez, Chapa, Watkins, JJ.)

Crédito Real Business Capital (CRBC) leases equipment and provides financing services to companies in the construction industry. CRBC provides its services through two limited liability companies: CR-FED and CR-FED Leasing. Earl Harper previously worked for CRBC as executive vice president and was required to sign a confidentiality agreement with CR-FED stipulating that he would not share its confidential information with third parties.

CRBC advanced money and leased equipment to Ontrack Site Services, a site grading contractor and customer with whom Harper worked. As part of his employment, Harper was provided with confidential information regarding CRBC’s plans and projections for its relationship with Ontrack, including CRBC’s willingness to extend additional financing or leasing services to the contractor. Harper allegedly used this information to help Ontrack negotiate better lease rates and financing terms to CRBC’s detriment. CRBC terminated Harper’s employment. Harper subsequently joined a new company and advised Ontrack to obtain financing from that company instead of CRBC.

CRBC sued Harper for breach of fiduciary duty and breach of contract for misappropriating CRBC’s trade secrets and breaching the confidentiality agreement. Harper filed a motion to dismiss the breach of contract claim pursuant to the TCPA, under which a party can file a motion to dismiss a lawsuit if it “is based on or is in response to a party’s exercise of the right of free speech, right to petition, or right of association.” The trial court denied the motion. Harper appealed, contending the following:

  • CRBC’s breach of contract claim related to Harper’s exercise of free speech.
  • CRBC did not establish a prima facie case of its breach of contract claim.
  • The trial court improperly considered CRBC’s amended petition.

A motion to dismiss pursuant to the TCPA is evaluated under a three-step burden shifting framework:

  • The movant must first demonstrate that the legal action is based on the movant’s exercise of the right to free speech, the right to petition or the right to association.
  • The nonmovant must then establish a prima facie case of its claim.
  • If the nonmovant satisfies its burden, the action must still be dismissed if the movant establishes grounds on which it is entitled to judgment as a matter of law.

The Texas Court of Appeals first addressed whether the trial court was permitted to consider CRBC’s amended petition when it ruled on the motion to dismiss. CRBC’s amended petition merely clarified that “CRBC” was the assumed name for both CR-FED and CR-FED Leasing, rather than just CR-FED. Because the amended petition was filed well before the hearing date and did not include any element of surprise, the Court concluded that [...]

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PTO Issues Report to Congress on Patent Eligible Subject Matter

by | Jul 14, 2022 |

On June 24, 2022, the US Patent & Trademark Office (PTO) issued a report to Congress titled “Patent Eligible Subject Matter: Public Views on the Current Jurisprudence in the United States.” The report comes in response to a March 5, 2021, letter from Senators Tillis (R-NC), Coons (D-DE), Hirono (D-HI) and Cotton (R-AR) expressing concern over a lack of consistency and clarity in US patent eligibility laws since the Supreme Court of the United States’ rulings in Alice Corp. v. CLS Bank International and Mayo Collaborative Services Inc. v. Prometheus Laboratories Inc. The PTO solicited public feedback until October 15, 2021, and the report summarizes the PTO’s findings based on the 141 comments it received.

The report found that supporters of the current state of the law on eligibility tended to be companies faced with abusive and costly litigation involving “overbroad” patents, mostly related to software. Those companies noted that the current law allows them to avoid or more efficiently resolve abusive and costly litigation. Some high-tech representatives noted that their investments and innovations have increased under current eligibility jurisprudence. Certain life sciences and patient advocacy organizations also favored the current law, noting its role in enhancing access to medical technologies.

Respondents critical of the current state of the law included many patent practitioners and innovative companies, especially companies involved in life sciences. These respondents stated that current law makes patents less available and rights less predictable and has inhibited investment in new technologies and companies. Several startups and small- and medium-sized enterprises also noted that the current law undermines innovation by decreasing the availability of private risk capital and works to concentrate markets in the hands of a few large, well-resourced entities, thereby decreasing competition. Some commenters stated that they no longer seek patents and instead rely on trade secrets, resulting in reduced public disclosure of technological innovations.

The PTO will continue to solicit feedback from stakeholders, including through listening sessions. The PTO noted that additional feedback and suggestions may be sent to 101@uspto.gov.



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Stormy Weather Ahead: Lack of Causation Evidence Rains Out Appeal

by | Jul 14, 2022 |

The US Court of Appeals for the Tenth Circuit found that a trade secret owner lacked “non-speculative and sufficiently probative evidence of a causal nexus between Defendants’ alleged bad acts and [the trade secret owner’s] asserted damages,” and upheld a lower court’s summary judgment ruling for defendants. GeoMetWatch Corp. v. Hall, et. al, Case No. 19-4130 (10th Cir. June 29, 2022) (Holmes, Kelly, Lucero, JJ.)

GeoMetWatch (GMW) alleged misappropriation of trade secrets and multiple other complaints against several different groups of defendants, including the Hall defendants, Utah University Advanced Weather Systems Foundation (AWSF) defendants, and Utah State University Research Foundation (USURF) defendants. The lower court granted summary judgment to all defendants based on lack of non-speculative causation relating to lost profits, to the USURF and AWSF defendants based on governmental immunity under Utah law, and to AWSF on its contractual counterclaim. GMW appealed.

Background

GMW launched a venture for a new satellite-based weather-detecting senor system developed by USURF. GMW entered into a cooperation agreement with AsiaSat, a foreign commercial satellite operator on which GMW relied to secure funding from Export-Import Bank. There were two conditions precedent before AsiaSat would seek the loan: a guarantee for the loan and a convertible note. The Hall defendants were brought in to possibly provide the guarantee, and with the understanding that Hall would maintain confidentiality of GMW’s information. After reviewing the confidential information, Hall entered into a nondisclosure agreement (NDA) with GMW. Despite the NDA, Hall launched a competing company and sent a series of inflammatory emails regarding the state of GMW to AsiaSat. These actions became the basis for GMW’s complaint of trade secret appropriation. After failing to make payments to AWSF for the construction of the senor, and despite finding a replacement manufacturer, GMW never satisfied either of the conditions precedent and AsiaSat never applied for the loan. GMW eventually ran out of money and filed the underlying suit.

GMW argued that its lost profits stemmed from its failure to secure a loan with AsiaSat and Export-Import Bank because of the defendants’ trade secrets misappropriation and other bad acts. GMW relied on evidence such as a series of inflammatory emails from Hall stating that “GMW is in Trouble,” along with an invitation to do business with a new company that the Hall defendants launched reviewing GMW’s confidential information. The lower court found that GMW had failed to provide more than speculative evidence that the defendants’ actions, with or without GMW’s confidential information, caused GMW’s lost profits.

The Tenth Circuit’s Ruling

At the Tenth Circuit, GMW argued that the lower court ignored “non-speculative” evidence from which it could be inferred that the defendants’ actions were the cause of lost profits. The Court noted that the district court found that none of GMW’s experts actually opined that any of the defendants’ actions caused the lost profits. Although one expert put forth a theory based on GMW losing its “first-mover advantage,” the Court found that no specific facts were offered to support this theory. The [...]

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No Breach of Contract Where Company Disclosed Its Own Non-Public Information

by | Apr 14, 2022 |

The US Court of Appeals for the Eighth Circuit affirmed a district court’s dismissal of a trade secret lawsuit against a consultant that allegedly failed to prevent its client from disclosing its own proprietary information during a call with a potential buyer. Protégé Biomedical, LLC v. Duff & Phelps Securities, LLC, and Philip I. Smith, Case No. 21-1368 (8th Cir. Apr. 4, 2022) (per curiam) (Erickson, J., dissenting).

Protégé entered into an agreement with Duff & Phelps to help Protégé find a buyer for its business. Under the agreement, Duff & Phelps received immunity from certain types of claims, its employees were shielded from individual liability and it owed no fiduciary duties to Protégé.

One of Protégé’s competitors, Z-Medica, was identified as a potential buyer. One of Duff & Phelps’s employees, Philip Smith, facilitated execution of the non-disclosure agreement (NDA) by a member of Z-Medica’s board of directors. Protégé assumed that the NDA would also bind Z-Medica and thus participated in conference calls with Z-Medica in which Protégé revealed non-public information. In Z-Medica’s view, however, the board member signed the NDA in his personal capacity and not as Z-Medica’s representative. As a result, Z-Medica used the information it received from Protégé to create its own competing product.

Protégé sued Z-Medica. After settling with Z-Medica, Protégé sued Duff & Phelps and Smith in state court for breach of contract, unlawful practice of law, negligence, breach of professional services and breach of fiduciary and principal-agent duties. Duff & Phelps removed the case to federal court on the ground that Smith, the only non-diverse defendant, had been fraudulently joined. The district court dismissed the case for failure to state a claim. Protégé appealed.

The Eighth Circuit first analyzed whether the case belonged in federal court. The Court upheld the district court’s determination that Smith was fraudulently joined. The Court stated that fraudulent joinder occurs when there is no reasonable basis in fact and law for the claims brought against the non-diverse defendant. Here, the Court found that there was no reasonable basis for Protégé to allege breach of contract against Smith since he was never a party to the contract between Protégé and Duff & Phelps. The Court found that Protégé’s unlawful practice of law claim against Smith also constituted fraudulent joinder because Smith never gave legal advice to Protégé. The Court noted that the contract immunized Smith from Protégé’s other claims and thus, without any viable claims against Smith, the case was properly in federal court under 28 U.S.C. § 1332.

Turning to the merits of the claims against Duff & Phelps, the Eighth Circuit affirmed the dismissal for failure to state a claim. The Court reasoned that Protégé’s breach of contract claim was predicated on an alleged failure by Duff & Phelps to prevent Protégé from disclosing its proprietary information. However, the agreement only made Duff & Phelps responsible for its own conduct, not for Protégé’s conduct. The Court explained that Protégé’s other claims failed for the same reason.

Judge Erickson [...]

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Half-Baked Case: No Misappropriation or False Advertising Given Over-Broad Allegations

by | Mar 31, 2022 | ,

The US Court of Appeals for the Tenth Circuit affirmed a district court’s grant of summary judgment in favor of a defendant baker on a trade dress infringement claim and reversed the district court’s denial of the defendant baker’s motions for judgment as a matter of law on trade secrets misappropriation and false advertising claims. Bimbo Bakeries USA, Inc. v. Sycamore, Case Nos. 18-4062; -4031; -4040 (10th Cir. Mar. 18, 2022) (Hartz, Phillips, Eid, JJ.)

Bimbo Bakeries (and its predecessor, EarthGrains Baking Companies) owns, bakes and sells Grandma Sycamore’s Home-Maid Bread, a popular bread in Utah. U.S. Bakery is a competitor, and Leland Sycamore is the baker who developed the Grandma Sycamore’s recipe. Sycamore parted with his interest in Grandma Sycamore’s and opened his own bakery, Wild Grains Bakery. U.S. Bakery hired Wild Grains Bakery to produce another homemade bread product, Grandma Emilie’s. The relationship soured, and U.S. Bakery moved its Grandma Emilie’s operations in-house. U.S. Bakery developed a new formula for Grandma Emilie’s and enlisted a former Wild Grain employee to help. U.S. Bakery also created packaging for the bread based on Grandma Sycamore’s packaging. U.S. Bakery used several taglines to help sell its products, including “Fresh. Local. Quality.”

Bimbo Bakeries (then EarthGrains) sued Leland Sycamore, Tyler Sycamore (Leland’s son and co-baker), Wild Grains Bakery and U.S. Bakery, alleging multiple claims related to the Grandma Emilie’s operations, including trade secret misappropriation under the Utah Uniform Trade Secrets Act and trade dress infringement, trade dress dilution, false designation of origin, false advertising and unfair competition under the Lanham Act. Bimbo Bakeries alleged that U.S. Bakery’s use of the word “local” in the tagline “Fresh. Local. Quality.” constituted false or misleading advertising because U.S. Bakery did not actually bake all its bread products within the state of sale. The district court granted summary judgment in favor of U.S. Bakery on the trade dress infringement claim. The parties went to trial on the trade secrets misappropriation and false advertising claims. The jury ruled in Bimbo Bakeries’ favor on both and awarded more than $2 million in damages. The district court increased the damages owed by U.S. Bakery by almost $800,000 because U.S. Bakery was found to have willfully and maliciously misappropriated Bimbo Bakeries’ trade secret. The district court remitted the jury’s damages for the false advertising claim to around $83,000. The district court also permanently enjoined U.S. Bakery and Sycamore from using Bimbo Bakeries’ trade secret and denied renewed motions by U.S. Bakery and Sycamore for judgment as a matter of law for the trade secrets misappropriation and false advertising claims.

Bimbo Bakeries, U.S. Bakery and Sycamore appealed. Bimbo Bakeries argued that the district court should not have granted U.S. Bakery summary judgment on its trade dress infringement claim and should not have remitted damages for the false advertising claim. U.S. Bakery and Sycamore argued that the district court should have granted their renewed motions for judgment as a matter of law for the trade secrets misappropriation and false advertising claims.

On [...]

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Third-Party Licensing Information May Be Exception to General Right of Public Access to Court Records

by | Feb 24, 2022 |

In a second appeal relating to sealing third-party licensing information, the US Court of Appeals for the Federal Circuit vacated and remanded a district court’s order denying a motion to seal because the district court failed to follow the Federal Circuit’s previous instruction to make particularized determinations regarding the information. Uniloc USA, Inc. v. Apple Inc., Case No. 21-1568 (Fed. Cir. Feb. 9, 2022) (Lourie, Cunningham, JJ.) (Mayer, J., dissenting).

In a previous decision, the Federal Circuit affirmed the denial of a motion to seal with regard to information pertaining to Uniloc but vacated and remanded the denial of the motion to seal with regard to certain third-party licensing information. The Court instructed the district court to “make particularized determinations as to whether and, if so, to what extent, the materials of each of these [third] parties should be made public.”

On remand, the district court again denied the motion to seal the third-party licensing information. The district court made findings regarding the relative weight of the public’s interest in accessing judicial records, including patent licensing information. It also found that the particular licensing information at issue was relevant to a dispute over Uniloc’s standing to sue. With regard to one particular third party, Uniloc’s financier Fortress Credit Co. LLC, the district court denied the motion to seal because Fortress had not complied with Local Rule 79-5(e)(1) of the Northern District of California, which requires that a supporting declaration be filed. Uniloc appealed a second time.

The Federal Circuit found that the district court failed to follow its instructions to make particularized determinations regarding whether the third-party licensing information sought to be sealed should be made public. Accordingly, the Court remanded for the district court to carry out the inquiry it had previously ordered.

The Federal Circuit also noted its disagreement with certain statements the district court had made in its order denying the motion to seal. The district court had stated that “[t]he public has an interest in inspecting the valuation of patent rights . . . particularly given secrecy so often plays into the patentee’s advantage in forcing bloated royalties.” The Federal Circuit stated that the district court committed “an error of law in making a blanket ruling that the public has a broad right to licensing information relating to patents.” While the district court had stated that the public has a strong interest in knowing the full extent of the terms and conditions involved in the exercise of its patent rights and in seeing the extent to which the patentee’s exercise of the government grant affects commerce, the Federal Circuit wrote that “[a]bsent an issue raised by the parties concerning license rights and provisions, there is no public interest or entitlement to information concerning consideration for the grant of licenses.” And while the amount Uniloc received in royalties was relevant to the dispute regarding standing, the Court wrote that “that fact can be proved without opening up all the licenses that the court granted [...]

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Party May Not Veil EU Individual’s Information under GDPR at the TTAB

by | Oct 14, 2021 | ,

In a rare precedential opinion, the Trademark Trial & Appeal Board (TTAB, Board) ruled that the EU General Data Protection Regulation (GDPR) does not apply in Board proceedings. Chicago Mercantile Exchange, Inc. v. Intercontinental Exchange Holdings, Inc., Opposition Nos. 91235909; 91254514 (T.T.A.B. Sept. 27, 2021) (Faint, Interlocutory Attorney).

This was a consolidated proceeding between Chicago Mercantile Exchange and New York Mercantile Exchange (collectively, CME) and Intercontinental Exchange Holdings (ICE) and brought before the TTAB. CME sought to amend the Board’s standard protective order (SPO) to allow in-house access to information and materials designated by ICE as “Confidential – Attorney’s Eyes Only” and asked the TTAB to find that the EU GDPR does not apply in the proceedings.

The Board’s SPO is automatically imposed in all inter partes proceedings. In order for the Board to disturb their SPO, CME needed to show that protection of ICE’s trade secrets will impair CME’s prosecution of its claims. ICE asserted that CME failed to show good cause for modification of the SPO and the Board agreed. As an initial matter, CME failed to provide information sufficient for the Board to determine in-house counsel’s responsibilities, including whether those responsibilities included competitive decision-making such that disclosure to in-house counsel would competitively harm ICE. Secondly, CME failed to clearly demonstrate that there was a need for access to the highly sensitive competitive information to adequately prepare its case. Accordingly, the Board denied CME’s motion to amend the protective order.

CME next raised the issue of whether ICE may redact names, email addresses and other information from documents and electronically stored information (ESI) originating in the European Union prior to its production on the basis that the GDPR requires such redaction. CME argued that because ICE waited more than 18 months to assert this objection, the objection is waived, that CME will be severely prejudiced if ICE’s objection stands and that the GDPR does not apply in inter partes Board proceedings.

For background, the GDPR is an EU regulation made effective May 25, 2018, in order to protect the privacy and security of EU citizens’ personal data by limiting the transfer of such information among member states of the European Union, as well as between the European Union and other countries, including the United States. The broad definition given to “personal data” in the GDPR encompasses “any information relating to an identified or identifiable person.” However, this class of information (an individual’s name, position, job title and email address) is generally required to be produced in discovery pursuant to the Fed. R. Civ. Pro. 26(b)(1).

In this precedential decision, the Board, citing the 1987 Supreme Court case Societe Nationale Industrielle Aerospatiale v. U.S. Dist. Court, established that a foreign country’s law precluding disclosure of evidence in US courts and tribunals will generally not deprive those courts and tribunals of “the power to order a party subject to its jurisdiction to produce evidence even though the act of production may violate that statute.”. Additionally, the GDPR does not per [...]

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