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DEVOTED to INTELLECTUAL PROPERTY LITIGATION & ENFORCEMENT Edited by Gregory J

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DEVOTED to INTELLECTUAL PROPERTY LITIGATION & ENFORCEMENT Edited by Gregory J NOVEMBER/DECEMBER 2014 VOLUME 20 NUMBER 6 DEVOTED TO INTELLECTUAL PROPERTY LITIGATION & ENFORCEMENT Edited by Gregory J. Battersby Litigatorand Charles W. Grimes FEATURES COLUMNS Strategic Considerations in Litigating Praxis. .23 Design-Arounds. 1 Antitrust By G. Brian Busey, Josh Hartman, and Michelle Yang Discovery Court Finds That Adverse Markman Ruling False Advertising Does Not Automatically Establish Good Cause Practice Areas . .28 to Amend Contentions . .8 Copyright Litigation By Joseph E. Cwik Internet Litigation A Look at IP Rights under the New Patent Litigation Comprehensive Economic and Trade Agreement . 10 Technology Litigation By Nathan B. Fan Trade Dress Litigation Copyright and Performance Rights Trademark Litigation in an Online Video World. 15 By Mark Sableman Proposed Changes to FRCP Likely to Lead to Heightened Pleading Standard in Patent Suits . 18 By Jason Stach and Jeff Watson Third Circuit Rejects Presumption of Irreparable Harm in Lanham Act Cases. 20 By Meredith Wilkes, John Froemming, Jessica Bradley, and Candice Reder Executive Editors Gregory J. Battersby Charles W. Grimes Editor-in-Chief Michelle Houle Battersby Law Group, LLC, 25 Poplar Plain Road, Westport, CT 06880 (203) 454-9646 Advisory Board David Hill Mark S. Sommers United States Finnegan Henderson Farabow Finnegan Henderson Farabow Garrett & Dunner, LLP Garrett & Dunner, LLP Edward V. Anderson John Hornick John F. Sweeney Sheppard, Mullin, Richter & Hampton, LLP Finnegan Henderson Farabow Locke Lord, LLP Spiro Bereveskos Garrett & Dunner, LLP Rod Thompson Woodard Emhardt John C. Jarosz Farella Braun & Martel, LLP Bruce Bernstein Analysis Group Economics, Inc. Edward E. Vassallo Fitzpatrick Cella Harper & Scinto Bernstein, Litowitzm Berger & Paul R. Juhasz Grossmann, LLP Juhasz Law James Bikoff Jeffrey L. Laytin International Silverberg, Goldman and Bikoff Laytin Verner, LLP William H. Brewster Kilpatrick & Townsend Jeffery I. D. Lewis C.V. Chen Brian D. Coggio Patterson, Belknapp, Webb & Lee & Li Fish & Richardson Tyler, LLP Andros Chyrsiliou David G. Conlin Gregg Marrazzo Chrysiliou Moore Martin Edwards Wildman Estee Lauder Luis H. de Larramendi Dianne Elderkin Michael D. McCoy Elzaburu Akin, Gump, Strauss, Hauer & Alston & Bird Dedar Singh Gill Feld, LLP William T. McGrath Drew & Napier York Faulkner Davis McGrath, LLC Joaquim Goulart Finnegan Henderson Farabow George D. Medlock, Jr. Dannemann, Siemsen, Bigler & Garrett & Dunner, LLP Alston & Bird, LLP Ipanema Moreira Edmund J. Ferdinand, III Bruce C. Morris Min Han Ferdinand IP Beirne, Maynard & Parsons LLP Woo, Yun, Yang, Jeong & Han Edward V. Filardi Martin Köhler Russell L. Parr, CFA, ASA Skadden Arps Reimann Osterrieth Köhler Haft IP Metrics Thomas R. Fitzgerald Martin Köhler Christensen O’Connor Johnson Kindness Mark V. B. Partridge Dike Bronstein Roberts & Cushman Donald F. Frei Partridge IP Law Miguel B. O’Farrell Wood Herron & Evans Paul A. Ragusa Marval O’Farrell & Mairal James Galbraith Baker & Botts Anthony Prenol Kenyon & Kenyon Mark Schonfeld Blake Cassels & Graydon Laurence R. Hefter Gibson Dunn Jonathan Radcliffe Finnegan Henderson Farabow Neil Smith Nabarro Nathanson Garrett & Dunner, LLP Ropers, Majeski, Kohn & Bently, PC Acquisitions Editor: Michelle Virzi Content Manager: Christine Vincent Managing Editor: Ravindran Santhanam Copyright © 2014 CCH Incorporated. All Rights Reserved. IP Litigator (ISSN 1086-914X) is published bimonthly by Aspen Other Customer Services: To purchase back issues of IP Litigator, Publishers, 76 Ninth Avenue, New York, NY 10011, (212) 771- from within the past 12 months only, to order a subscription, or to 0600. This material may not be used, published, broadcast, get information about other Aspen Publishers products call (800) rewritten, copied, redistributed or used to create any derivative 638–8437. works without prior written permission from the publisher. Permission requests: For information on how to obtain permission Printed in U.S.A. POSTMASTER: Send address changes to to reproduce content, please go to the Aspen Publishers website at IP Litigator, Distribution Center 7201 McKinney Circle Frederick, www.aspenpublishers.com/permissions. MD 21704. Purchasing reprints: For customized article reprints, please contact Wright’s Media at 1-877-652-5295 or go to the Wright’s Media Web site at IP Litigator is sold with the understanding that it is not www.wrightsmedia.com. engaged in rendering legal counseling or other professional Editorial Offices: To speak with the editor; to ask questions or service. If legal counseling or other professional assistance is comment on newsletter content call (203) 733-7653. required, the services of a competent practitioner in the rel- Articles, comments, or ideas for themes: The editors welcome the evant area should be sought. submission of articles, as well as questions and comments on mat- ters published and suggestions for future themes, which should be Subscription Services: Current subscribers with questions addressed to: Gregory J. Battersby, 25 Poplar Plain Road, Westport, about service or to make address changes call (800) 783-4903. CT 06880 (203) 454-9646. Strategic Considerations in Litigating Design-Arounds G. Brian Busey, Josh Hartman, and Michelle Yang G. Brian Busey is a partner and Josh Hartman This article explores strategic considerations in litigat- and Michelle Yang are associates in the IP ing potential design-arounds, such as how to meet the litigation practice of Morrison & Foerster LLP in Federal Circuit’s “more than colorable differences” test, Washington, DC. The views expressed in this article the benefits and risks of seeking and introducing design- are their own and do not represent the views of their around evidence during the proceedings, and the benefits firm or any of its clients. and risks of waiting until after a verdict or decision issues. It discusses these considerations in the context of district court litigation and in ITC and CBP proceedings, to highlight a few differences in strategy between the dif- Design-arounds are a well-recognized pathway for ferent forums. the public to benefit from the patent system. “One of the benefits of a patent system is its so-called ‘negative Federal Circuit Guidance incentive’ to ‘design around’ a competitor’s products, even when they are patented, thus bringing a steady flow on Design-Arounds of innovations to the marketplace.”1 Design-arounds are A common scenario for defendants is to attempt a therefore an example of how patents can spur innova- design-around after a finding of infringement and the tion, and thereby promote progress in the useful arts.2 issuance of a permanent injunction by a district court. Design-arounds, also known as “redesigns,” have This strategy, however, carries the risk of sanctions—the become an increasingly important and common element plaintiff can move the district court to find the defendant in patent litigation both in district court and before the in contempt of the court’s permanent injunction and US International Trade Commission (ITC). Potential award significant monetary penalties. In recent years, the design-arounds create strategic challenges for both plain- Federal Circuit has reaffirmed the “no more than color- tiffs and defendants relating to timing, discovery, claim ably different” standard. construction, and procedures. For example, in district Outside of the contempt proceeding context, attempted court litigation, plaintiffs must choose between broadly design-arounds also carry risks with respect to willful seeking discovery related to potential design-arounds infringement. Parties should be careful and consider the and risking a finding of noninfringement by those impact of evidence relating to attempted design-around design-arounds, or sitting back and attempting to pre- efforts that could be used to support willful infringement clude evidence regarding potential design-arounds. By allegations. contrast, defendants must choose between introducing potential design-arounds early in discovery and risk- ing an adverse adjudication, or waiting until later on The “More Than Colorable in litigation and risking preclusion or other unwanted Differences” Test consequences.3 Prior to 2011, the district court would conduct a Similarly, in ITC proceedings, where the relief is lim- two-step inquiry in contempt proceedings relating to ited to a form of injunctive relief (i.e., an exclusion possible violation of a permanent injunction by an order) enforced primarily by US Customs and Border alleged design-around. First, the court would determine Protection (CBP), parties must consider whether (1) to whether a contempt hearing was an appropriate setting attempt to force the ITC to adjudicate potential design- for adjudicating infringement by the alleged design- arounds during the investigation or (2) to wait until after around, by considering whether there was “more than a any exclusion order issues from the ITC, fight over the colorable difference” between the alleged design-around scope of any exclusion order at the CBP and/or return and the infringing product based on the existence of to the ITC to seek an advisory opinion or enforcement “substantial open issues with respect to infringement.”4 order. Then, after determining that contempt proceedings were NOVEMBER/DECEMBER 2014 IP Litigator 1 appropriate, the district court would determine whether address information.16 The Federal Circuit found that the redesigned products continued to infringe, thereby the patent owner never relied on the
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