Intellectual Property Law Blog

On June 29, 2009, Governor Schwarzenegger signed into law California's Electronic Discovery Act, which is effective immediately. All discovery propounded or responded to must now comply with the new law. These rules are very similar to the recent revisions to the Federal Rules of Civil Procedure, and bring California in line with the federal e-discovery standards.

A recent decision by a California Court of Appeal should give employers pause before they use California's trade secret laws to try to stifle competition in violation of California law.

In the case of FLIR Systems, Inc. v. Parrish, the Court of Appeal affirmed a decision by the trial court awarding $1,641,216.78 in attorneys’ fees and costs to two former employees who successfully defended a trade secret action brought by their former employer. The Court agreed with the trial court that the action was filed and maintained in bad faith within the meaning of the California Uniform Trade Secrets Act.

The California Supreme Court heard oral argument on June 3 in an important “right of publicity” case, Christoff v. Nestle USA Inc. Issues included whether the single publication rule applicable to mass communication-based torts applies to right of publicity claims; whether use of another’s likeness on a product label is a “publication” for purposes of the rule; whether its continuing use on product labels and in various product advertisements constitutes a “republication” for each use giving rise to new causes of action; and whether the discovery rule applies to right of publicity claims.

In Edwards v. Arthur Andersen, the California Supreme Court reaffirmed California's strong public policy against covenants not to compete. The primary issue in Edwards was whether the Ninth Circuit's "narrow restraint" exception was a proper interpretation of California law. Under the narrow restraint exception, employers could enforce noncompetition agreements that did not "entirely preclude" an employee from practicing his or her trade, such as an agreement not to solicit specified customers for a specified period of time after employment. The agreement in Edwards was drafted to fall under this judicially-created exception. The Court rejected the "narrow restraint" exception, expressed a stark disapproval for judicially created exceptions to California Business and Professions Code Section 16600, and held that any time an agreement restricts an employee's "ability to practice his [] profession" in any way not explicitly excepted by the statute, it is void.

Social network Web site Facebook announced that, beginning this Saturday, June 13, at 12:01 am U.S. EDT, all Facebook users will be allowed to choose a personalized username for their Facebook profiles. This username will replace the numerical string that appears on the URL for each user's profile page. Facebook users will be able to choose names on a "first-come first-served" basis. All at once, millions of Facebook users will be choosing usernames. If you are a registered trademark owner, or represent such an owner, it's important that you immediately register your trademark(s) with Facebook at this link in order to prevent the trademark from being registered by others as a username on Facebook.

Clinical trials are the lifeblood of biotech. Finding the right service providers (CROs, safety, IVRS, consultants, contract manufacturers and many others), as well as the right clinical investigators and sites, results in a complex web of legal obligations and potential liabilities. Limitation of liability clauses can reduce a party's exposure if a contractual obligation is breached. More often, limitations of liability provisions are used to shift risk to the sponsor of the clinical trial. But, if your contracts are well negotiated and drafted, the risks can be carefully and fairly allocated between the parties in a balanced and reasonable manner. Because of the complexity of the legal relationships and liabilities found in clinical trials, this article is limited to a brief description of limitation of liability clauses, and their general strengths and weaknesses.

The ever-increasing reality of the global marketplace has, for many years, driven U.S. companies to seek intellectual property protection beyond the nation’s borders. Unfortunately, the reality they face is that global patent protection, and even multi-jurisdiction protection, is prohibitively expensive for all but those entities with the deepest of pockets. This, coupled with practicality problems associated with patent enforcement in foreign jurisdictions, has driven companies to develop a more strategic approach to foreign patent filings. There is no one-size-fits-all approach to foreign filing strategies. Each company must consider its business model and channels of commerce for its products, its business goals and objectives, desired utilization for its intellectual property items, and its budgetary constraints in developing a foreign filing strategy that is best suited for its needs while maximizing return on investment. Tough decisions must be made along the way, but with a practical value-minded approach, these decisions can become much easier and can increase the value returned for the foreignrelated expenditures.

In Raymond Edwards II vs. Arthur Andersen, the California Supreme Court has broadly interpreted the California Business and Professions Code to further prohibit employee noncompetition agreements which seek to prevent a former employee from working for a competitor, subject to specific statutory exceptions.

In World Financial Group, Inc. v. HBW Insurance & Financial Services, Inc. the Court of Appeal for the Second Appellate District rejected an Anti-SLAPP motion to strike in a breach of contract, theft of trade secrets, and unfair competition case. The defendants moved to strike the complaint under the Anti-SLAPP statute, claiming that their activities in soliciting the customers and employees of their previous employer were protected speech involving a "matter of public interest," to whit, their pursuit of employment under the public policies expressed in California Business and Professions Code section 16600 (California's prohibition of covenants in restraint of trade). The court upheld the trial court's denial of the motion, finding that solicitation of customers in a business context was not protected activity for the purposes of anti-SLAPP.

On April 3, 2009, the District Court for Colorado entered a groundbreaking copyright decision, treading on new judicial territory by directly applying the First Amendment to invalidate a provision of the Copyright Act. The case, Golan v. Ashcroft, Civil Case No. 01-cv-01854-LTB, found that, at least as applied to the plaintiffs, the copyright restoration provisions found in Section 104A of the Copyright Act violated rights to material permanently in the public domain by restoring full copyright protection as of January 1, 1996, to such material.