The Supreme Court of Texas held that a limited partner had standing to sue for alleged loss in the value of its interest in the partnership, but reversed a damages award in favor of that limited partner for insufficient evidence. Pike v. Texas EMC Management, LLC, Case No. 17-0557 (Tex. June 19, 2020) (Busby, J) (Bland, J, dissenting).
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A Texas Court of Appeals reversed a jury verdict for the plaintiff on claims of trade secret misappropriation under the Texas Uniform Trade Secrets Act (TUTSA) and fraud. The Court reversed the misappropriation verdict because the jury form commingled valid and invalid theories of liability, and reversed the fraud verdict because the jury instructions permitted a finding of liability under theories that were closely related to trade secret misappropriation and therefore preempted by TUTSA, as well as theories that were not. The Court ordered a new trial on both claims. Title Source, Inc. v. HouseCanary, Inc., Case No. 04-19-00044-CV (Tex. App. – San Antonio June 3, 2020) (Watkins, J.).
Title Source (TSI) provides title insurance, property valuations and settlement services. HouseCanary is a real estate analytics company. TSI hired HouseCanary to build an iPad application for its appraisers to use. The app would be based on HouseCanary’s automated valuation models (AVM). The parties’ agreement specifically prohibited TSI from reverse-engineering or attempting to discover HouseCanary’s source code or confidential information. Nonetheless, and despite its assurances to the contrary, TSI sought and used HouseCanary’s proprietary information to develop its own AVM. The parties’ contract required HouseCanary to maintain a certain “hit rate” (a metric of accuracy), but TSI’s employees took steps to purposely drive down the hit rate (including searching for an appraisal of the supposed street address: “Wiping a Vendor Wipes the fee”). The parties’ contract originally provided for a per-appraisal royalty to be paid to HouseCanary; the parties later amended the agreement to provide for a flat fee in exchange for TSI’s promise to deliver valuable historical valuation data (which it did not deliver).
TSI sued HouseCanary for breach of contract and fraud, alleging that HouseCanary had failed to deliver the app as promised. HouseCanary counterclaimed for breach of contract, fraud, unjust enrichment, quantum meruit and misappropriation of trade secrets under TUTSA. The jury rejected all of TSI’s affirmative claims and found in favor of HouseCanary on its misappropriation, fraud and breach of contract claims. TSI moved for a new trial, which the trial court denied. HouseCanary elected to recover on its misappropriation and fraud claims. The trial court entered judgment in favor of HouseCanary and awarded almost $740 million. TSI appealed.
HouseCanary’s TUTSA Claim
On appeal, TSI argued that the verdict was insufficiently supported by evidence and that two questions on the jury form commingled valid and invalid theories of recovery (Casteel error). The first question involved ownership of trade secrets. The Texas Court of Appeals held that sufficient evidence had been presented to sustain the finding of trade secret ownership, and that TSI had waived its objection based on the alleged Casteel error.
The second question asked the jury whether TSI misappropriated HouseCanary’s trade secrets, and the corresponding instruction provided that misappropriation could be found on either a “use” or an “acquisition by improper means” theory. The Court found that there was enough evidence to sustain a verdict on the “use” theory, but that the jury instructions regarding “acquisition by improper means” was overbroad, [...]
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The US Court of Appeals for the Sixth Circuit affirmed that a state court’s finding of “willful and malicious injury” in connection with the misappropriation of trade secrets entitled the plaintiff, in the defendant’s subsequent bankruptcy proceeding, to summary judgment of nondischargeability on collateral estoppel grounds. In re Hill, Case No. 19-5861 (6th Cir. May 4, 2020) (Donald, J.).
McDermott Will & Emery’s IP Update blog highlights the latest cases and legislative issues shaping intellectual property (IP), including patents, trademarks, trade secrets, copyrights and more.
Combining a deep knowledge of IP law and business savvy, McDermott’s IP team serves as our clients’ secret weapon in the courtroom and the boardroom for IP litigation, licensing, monetization and strategic portfolio development. With a team of more than 100 IP lawyers and professionals, we earn major patent and trademark victories in dozens of district and appellate courts. Whether you’re building the next iconic brand, protecting game-changing new technology or creating new revenue streams from your established IP assets, we can help you achieve your business goals at every stage of the IP lifecycle.
Our team is known for delivering business-driven solutions and innovative ideas to keep our clients ahead of the competition in jurisdictions around the world. In the last five years, we have handled more than 225 patent cases and led more than 100 trademark and copyright cases in US District Courts, and conducted more than 125 proceedings before the Patent Trial and Appeal Board. We protect and manage the IP portfolios of some of the world’s most notable innovators, and we marry our legal and technical expertise at the deal table to maximize value and minimize risk to our clients’ valuable IP assets. To us, an engagement isn’t just a matter; it’s a partnership. Central to our approach is investing deeply in your business to develop strategies that fully leverage your IP assets and give you a strategic advantage in today’s competitive global market.
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Search for: BLOG EDITORS STAY CONNECTED Subscribe TOPICSTOPICS Select Category America Invents Act Antitrust Cert Alert Copyrights EU Update Food, Beverage & Agribusiness Life Sciences Patents Technology Trade Secrets Trademarks Uncategorized ARCHIVES ARCHIVES Select Month July 2025 June 2025 May 2025 April 2025 March 2025 February 2025 January 2025 December 2024 November 2024 October 2024 September 2024 August 2024 July 2024 June 2024 May 2024 April 2024 March 2024 February 2024 January 2024 December 2023 November 2023 October 2023 September 2023 August 2023 July 2023 June 2023 May 2023 April 2023 March 2023 [...]On January 21 and 22, 2020, the 8th annual McDermott International Seminars took place in Osaka and Tokyo. These seminars focused on cross-border M&A, GDPR, intellectual property, global enforcement and other key topics. Lawyers from McDermott’s US and European offices, including Washington, DC; Chicago; New York; Paris; London; Brussels; and Munich, discussed these topics with Japanese companies operating globally. During the International Seminars, the Intellectual Property team discussed insights around emerging technologies and intellectual property.
What follows are key takeaways from the IP session of the seminar. (See highlights from the full Seminar.)
In a case addressing the applicability of free speech as a defense to trade secret misappropriation, the Court of Appeals for the Fifth District of Texas retracted its previous ruling, holding that communications with customers and suppliers did not involve a matter of public concern and were therefore not an exercise of free speech. Goldberg, et al. v. EMR (USA Holdings) Inc., et al., Case No. 05-18-00261-CV (Tex. App. Jan. 23, 2020) (Myers, J).
Addressing an emergency request for a writ of mandamus to compel discovery of electronically stored information, the US Court of Appeals for the Sixth Circuit declined to set aside a district court’s denial of a request to create forensic images of all the defendant’s business and personal computers and cell phones. In re FCA US LLC, Case No. 19-1923 (6th Cir. 2019) (per curiam).
FCA filed trade-secret misappropriation and other claims against Patrea Bullock, a lawyer who formerly served as outside counsel to FCA. According to FCA, while serving as defense counsel, Bullock had access to extensive confidential and proprietary information belonging to FCA, including its “defense playbook.” After she resigned from her law firm, but before returning her computer, Bullock downloaded her files from the laptop onto several USB drives. Thereafter, she opened her own law firm representing plaintiffs against automobile manufacturers, including FCA. During discovery, Bullock produced 1,345 documents in response to FCA’s requests for the documents she had taken FCA, however, moved to compel a forensic image of all of Bullock’s business and personal laptops and cell phones so an expert could investigate what documents Bullock took.
The US Court of Appeals for the Ninth Circuit affirmed in part and reversed in part a case involving a deceased religious leader who owned the copyrights to works reflecting his teachings. The Court found that the copyrighted works were not works for hire under copyright law, that the leader therefore had the right to license his copyrights, and that the subsequent owner of the copyrights (not a statutory heir) also had the right to terminate licenses. Aquarian Foundation, Inc. v. Bruce Kimberley Lowndes, Case No. 22-35704 (9th Cir. Feb. 3, 2025) (Hawkins, McKeown, de Alba, JJ.)
Aquarian Foundation is a nonprofit religious organization founded by Keith Milton Rhinehart. During his time as the leader of Aquarian, Rhinehart copyrighted his spiritual teachings. An Aquarian member, Bruce Lowndes, claimed that he obtained a license from Rhinehart in 1985. Upon Rinehart’s death in 1999, he left his estate, including interests in copyrights, to Aquarian. In 2014, Aquarian discovered that Lowndes was uploading Rhinehart’s teachings online and sent Lowndes takedown requests pursuant to the Digital Millennium Copyright Act (DMCA). In 2021, Aquarian sent Lowndes a letter terminating Lowndes’ license and sued Lowndes for copyright infringement, trademark infringement, and false designation of origin.
After a bench trial, the district court concluded that Rhinehart’s works were not works for hire under either the 1909 or the 1976 Copyright Act, so Rhinehart had the authority to grant Lowndes an unrestricted license. The district court also found that Aquarian did not have the authority to terminate the license as a nonstatutory heir and should have given Lowndes two years notice. The district court denied attorneys’ fees. Both parties appealed the district court’s ruling on ownership and attorneys’ fees, and Aquarian appealed the ruling on its lack of authority to terminate the license.
The Ninth Circuit, finding no clear error, affirmed the district court’s holding that Rhinehart’s works were not works for hire under either the 1909 or the 1976 Copyright Act. Under the 1909 Act’s “instance and expense” test, the Court found that “the creation and maintenance of the works was Rhinehart’s purview, and not the church’s domain.” Under the 1976 Act, which applies agency law, the Court similarly found that Rhinehart’s creation of the works was outside the scope of his employment as Aquarian’s president and secretary. Therefore, under either act, Rhinehart’s works were not works for hire, making Rhinehart the copyright owner. The Ninth Circuit affirmed the district court’s finding that as owner, Rhinehart had authority to grant the license to Lowndes. The Court also found that Lowndes’ license to “use copyrighted materials ‘without restriction’” referenced “a coming World Wide Network,” so Lowndes did not breach the license by posting the works online.
The Ninth Circuit also affirmed that the testamentary transfer of copyrights to Aquarian was permitted by both the 1909 and 1976 Copyright Acts: “Both the 1909 and 1976 Copyright Acts allow for the transfer of a copyright by will. 17 U.S.C. § 42 (repealed) (providing that copyrights ‘may be bequeathed by will’); [...]
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On June 3, 2024, Under Secretary of Commerce for Intellectual Property and US Patent & Trademark Office (PTO) Director Kathi Vidal and Chief Executive Officer of the UK Intellectual Property Office (IPO) Adam Williams signed a memorandum of understanding (MOU) designed to tackle various issues related to standard-essential patents (SEPs).
SEPs are patents that have been declared essential to a particular technical standard. Common examples of technical standards with active SEP bases include cellular communication and other wireless standards, such as LTE, 5G and Wi-Fi. Standards are typically adopted by Standard Setting Organizations (SSOs). To have input on standard adoption, many SSOs require participants agree to license any patents that result from discussions with potential licensees on Fair, Reasonable and Non-Discriminatory (FRAND) terms (See e.g., ETSI Intellectual Property Rights Policy).
But what are FRAND terms, and who gets to decide whether they issue? While individual patents are territorial (e.g., a US-issued patent is only enforceable in the United States), patent owners often obtain patent coverage in multiple jurisdictions. This can lead to challenges wherein a court in one jurisdiction may determine FRAND terms for a patent in that jurisdiction, which may then set or significantly influence the FRAND rate for the patent owner’s corresponding patents in other jurisdictions.
While the MOU is not public at this time, the PTO indicated that the MOU sets forth a framework for the following action items:
The agreement remains in place through June 3, 2029. PTO Director Vidal emphasized that “[t]his important collaboration with UKIPO will help us work together toward a fair and balanced international standard essential patent ecosystem that benefits all businesses in our two countries, including small and medium-sized enterprises and new market entrants.”
On July 24, 2023, the US Patent & Trademark Office (PTO) announced that a revised interim Director Review (DR) process and Appeals Review Panel (ARP) process will replace the Precedential Opinion Panel Process. Updates to the interim DR process include the following:
Under the interim DR process, a party to a Board decision may now request DR of a Board decision, whether to institute trial, a final written decision or a decision granting a request for rehearing.
After a DR request is received and processed, the request will then be routed to an Advisory Committee that the Director has established to assist with the process. The Advisory Committee comprises 11 members and includes representatives from various PTO business units who serve at the discretion of the Director. A quorum of seven members is needed for the committee to meet. The Advisory Committee may include members from the following business units:
The Director will review each request for DR; the underlying decision, including the associated arguments and evidence; and the recommendation of the Advisory Committee. The Director will then determine whether to grant or deny review or delegate a decision to a Delegated Rehearing Panel (DRP). The DRP will be selected from among the Chief Judge, Deputy Chief Judge, Vice Chief Judges and Senior Lead Judges of the Board, excluding judges who served on the original panel for the case under review or otherwise have a conflict with the case. An appellant can request a rehearing of a DRP decision or appeal the decision to the US Court of Appeals for the Federal Circuit.
An ARP that consists of the Director, the Commissioner for Patents and the Chief Judge of the Board has now been created. The panel may be convened by the Director sua sponte to review ex parte, reexamination or reissue appeal decisions. Requests for ARP review will not be considered. ARP decisions are appealable to the Federal Circuit. An appellant may not [...]
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