NEWS
A former Coca-Cola chemical engineer has been sentenced to 14 years in prison after being convicted of stealing trade secrets worth $120 million to benefit a China-based company.
The US Department of Justice (DoJ) confirmed on May 9 that a federal judge in Greeneville, Tennessee, handed down the sentence to Xiaorong You, aka Shannon You, 59, of Lansing, Michigan.
The defendant was also ordered to serve three years of supervised release and pay a $200,000 fine.
Economic espionage
In April 2021, a jury at the US District Court for the Eastern District of Tennessee found that You had conspired to commit trade secret theft and economic espionage, stolen trade secrets, and carried out wire fraud.
According to court documents and evidence presented at trial, the trade secrets related to formulations for bisphenol-A-free (BPA-free) coatings for the inside of beverage cans.
You gained access to the trade secrets, which had cost nearly $120 million to develop, while working at Coca-Cola in Atlanta, and Eastman Chemical Company in Kingsport, Tennessee.
You stole the trade secrets to set up a new BPA-free coating company in China. You and her Chinese corporate partner, Weihai Jinhong Group, received millions of dollars in Chinese government grants to support the new company (including a Thousand Talents Plan award).
From December 2012 through August 2017, You was employed as principal engineer for global research at Coca-Cola, which had agreements with numerous companies to conduct research and development, testing, analysis and review of various BPA-free technologies.
“The defendant stole valuable trade secrets and intended to use them to benefit not only a foreign company, but also the government of China.”
Matthew Olsen, US Department of Justice
BPA-free trade secrets
Because of You’s extensive experience with BPA and BPA-free coating technologies, she was one of a limited number of Coca-Cola employees with access to BPA-free trade secrets belonging to Akzo-Nobel, BASF, Dow Chemical, PPG, Toyochem and Sherwin Williams.
From September 2017 through June 2018, You was employed as a packaging application development manager for Eastman Chemical Company in Kingsport, Tennessee, where she was one of a limited number of employees with access to trade secrets belonging to Eastman.
“As the evidence at trial showed, the defendant stole valuable trade secrets and intended to use them to benefit not only a foreign company, but also the government of China,” said assistant attorney general Matthew Olsen of the Justice Department’s National Security Division.
He added: “Today’s sentence reflects the seriousness of this offence, as well as the Department of Justice’s commitment to protect our nation’s security by investigating and prosecuting those who steal US companies’ IP.”
Until recently, BPA was used to coat the inside of cans and other food and beverage containers to help minimise flavour loss and prevent the container from corroding or reacting with the food or beverage contained therein.
However, due to BPA’s potential health risks, companies began searching for BPA-free alternatives. Developing these BPA-free alternatives was a very expensive and time-consuming process, noted the DoJ statement.
Image: Shutterstock.com / OFFFSTOCK
The English High Court has rejected tobacco company Philip Morris International’s (PMI) request for a stay in patent proceedings concerning competitor British American Tobacco (BAT).
On Friday, May 27, Mr Justice Mellor of the Patents Court held that a refusal of the stay would bring some commercial certainty for BAT, while also directing that one of the trials be heard in March 2023.
A BAT spokesperson said: “BAT is pleased with the UK Patents Court decision dismissing PMI’s application to stay UK revocation proceedings brought by BAT against PMI’s patent, European patent number 3266323. BAT has consistently maintained that this PMI patent is invalid. The court directed the UK trial of the revocation proceedings to be listed for hearing in March 2023. While this case remains ongoing, we are unable to comment further.”
The two actions before the court consist of a revocation of two BAT patents, brought by Philip Morris, and an action brought by BAT to revoke PMI’s ’323 patent. BAT has already consented to revocation of one of the patents (EP080) and counterclaimed for infringement of the other in the former action (EP830).
All the patents concern ’heat not burn’ products (HNB), also known as ’tobacco-heating products’ (THP). Tobacco is heated to generate a nicotine-containing aerosol, with the lack of burning said to significantly reduce the levels of harmful chemicals in the aerosol compared to the smoke of combustible cigarettes.
In late April, Mellor heard three applications. In the first proceeding (known as the ‘029 action’) Philip Morris applied for permission to amend its statements of case to introduce a claim for Arrow-type declaratory relief.
In the latter proceedings, known as the 002 action, Philip Morris applied for a stay of proceedings pending final resolution of parallel opposition proceedings at the European Patent Office (EPO). BAT also applied for an order that the trial take place at the earliest possible date after 1 March 2023.
”On these applications one side is attempting to alleviate the effects of legal and litigation uncertainty on their commercial plans, whilst at the same time seeking to obstruct (to differing degrees) a similar attempt by the other,” said Mellor.
“Each side has been and remains intent on building up/acquiring a thicket of patents around every possible detail of their HNB or THP products, ready to assert against the other.”
Mr Justice Mellor, Patents Court
He added: “In the 029 action, BAT opposes Philip Morris’ application to introduce the claim for Arrow-type relief, relief which aims to provide legal certainty for Philip Morris. In the 002 action, BAT seeks an early resolution in this action of its claim that the Philip Morris patent in suit is invalid. It can be said that by its application for a stay, Philip Morris seeks to delay the achievement of the legal certainty sought and thereby to prolong the uncertainty for BAT.”
The actions are part of a “much larger global battle” started by Philip Morris in Japan in 2018, said Mellor.
In March last year, the English High Court revoked two BAT e-cigarette patents for obviousness, concluding they lack an “inventive step” over Philip Morris’ patent. And, in April 2020, BAT commenced proceedings to revoke three divisional patents from the same family as those in issue in Japan. An appeal is pending and due to be heard in November 2022.
Turning to the stay application, Mellor said that the 002 action must be considered against the global patent dispute backdrop.
“Although this point was not discussed in the evidence, in my view, there is reason to believe, from this dispute and the previous cases between the parties decided in the UK, that each side has been and remains intent on building up/acquiring a thicket of patents around every possible detail of their HNB or THP products, ready to assert against the other,” he said.
While adding there is nothing inherently wrong with this (provided the patents are valid), both sides are “intent on creating and maintaining as much commercial and legal uncertainty as possible for the other”.
According to the court, refusal of the stay will bring some commercial certainty for BAT at a considerably earlier date via the 002 action than in the EPO.
Mellor concluded: “In my view the balance of justice comes down firmly in favour of eliminating, as soon as possible, the uncertainty created for BAT by the presence of EP323 and EP225, and hence in favour of refusing the stay sought by Philip Morris.”
However, Philip Morris did succeed in introducing its claim for Arrow-type relief.
Image: Shutterstock.com / Dziewul
The US Supreme Court will not review a lower court’s decision to throw out patent infringement claims levied at several Amazon Web Services customers in line with a 114-year-old patent doctrine.
PersonalWeb has pursued several infringement lawsuits against Amazon and dozens of its major web services clients including Patreon, BuzzFeed and Vox Media over the past decade.
The lawsuits held that Amazon’s Simple Storage Service (S3)—an internet protocol offering data storage services—infringed several of PersonalWeb’s patents related to its proprietary data-tagging system TrueName.
Amazon was initially targeted in a 2011 lawsuit, which was dismissed with prejudice in 2014. PersonalWeb then attempted to sue several of its customers using the S3 system over similar patent infringement claims.
Amazon later intervened in the lawsuit, citing the 114-year-old Kessler doctrine—which holds that a patent owner that has unsuccessfully sued a manufacturer for infringement is barred from then suing one of its customers for infringement based on the same product—as reason to dismiss the case.
The lawsuit made it to the US Federal Circuit, where the three-judge panel agreed that Kessler barred PersonalWeb from suing the Amazon customers.
In April last year, PersonalWeb submitted a petition for a writ of certiorari to the US Supreme Court, calling into question whether the Federal Circuit “correctly interpreted” Kessler and whether the doctrine extended to cases where the prior judgment was a voluntary dismissal.
On Monday, May 16, the Supreme Court denied PersonalWeb’s petition, concluding the long-running dispute.
The long road to Kessler
PersonalWeb first sued Amazon in 2011 at the US District Court for the Eastern District of Texas, accusing the company of infringing patents related to TrueName.
However, the district court dismissed the lawsuit with prejudice in June 2014, meaning that PersonalWeb could not raise claims against Amazon again.
Four years later, PersonalWeb sued eight of Amazon’s customers in the US District Court for the Northern District of California in 2018, alleging that they had infringed the same TrueName patents with their usage of the Amazon S3 system.
“Contrary to petitioner’s contention, Kessler is not a relic, but rather announced principles that remain legally sound and practically significant.”
Solicitor General Elizabeth Prelogar
Amazon intervened in the lawsuit on behalf of its customers, asking the court to declare that its customers had not infringed the patents as similar infringement claims had already been dealt with in the 2011 lawsuit.
The California court then ruled in favour of Amazon, holding that PersonalWeb was barred from raising claims over the TrueName due to the prior lawsuit dismissal.
PersonalWeb appealed this decision to the Federal Circuit, arguing that while it had claims in both rounds of litigation related to the S3, they dealt with “different features” of the system. However, the Federal Circuit was not swayed and upheld the California court’s dismissal.
In their reasoning, the Federal Circuit cited precedent in the Supreme Court’s 1907 ruling in Kessler v Eldred, which forms the basis of the Kessler Doctrine.
PersonalWeb appealed this opinion to the US Supreme Court, calling into question the Kessler doctrine and its application by the circuit.
The Supreme Court sought input on whether it should tackle the case, asking the Solicitor General’s office whether barring PersonalWeb from pursuing claims against Amazon customers was justified.
Solicitor General Elizabeth Prelogar responded in April 2022 requesting that the Supreme Court should deny PersonalWeb’s petition for a writ of certiorari.
“Contrary to petitioner’s contention, Kessler is not a relic, but rather announced principles that remain legally sound and practically significant,” Prelogar said.
However, she had reservations about how the court applied Kessler in its analysis. She added: “The Federal Circuit has invoked Kessler only to fill a perceived temporal gap when claim preclusion would not protect the manufacturer and its privies because a second suit involves conduct postdating the first judgment”.
The Supreme Court agreed with Prelogar’s view regarding the relevance of Kessler, denying the petition.
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Billionaire entrepreneur Elon Musk has voiced his support for a bill that would strip companies such as Disney of their extended copyright protections.
Musk appeared to back a bill introduced by Republican Senator Josh Hawley, which would reduce the term of protection for original works to a maximum of 56 years instead of the current 120 years.
In the tweet, sent on May 12, he poured scorn on Disney’s copyright extension that had retained its hold on the iconic Mickey Mouse mascot.
‘Absurd protections’
“Current copyright law in general goes absurdly far beyond protecting the original creator,” tweeted Musk.
Hawley’s proposed legislation, the Copyright Clause Restoration Act, would apply to Disney’s copyright to the original design of Mickey Mouse, who was first introduced in the 1928 short animated film “Steamboat Willie.”
Disney had secured an extension after it lobbied the federal government to pass the Copyright Act of 1976, which continued protections for another 75 years.
Commenting on the proposed law, Hawley said in a statement: “Thanks to special copyright protections from Congress…corporations like Disney have earned billions….It’s time to take away Disney’s special privileges and open up a new era of creativity and innovation.”
“Current copyright law in general goes absurdly far beyond protecting the original creator.”
Elon Musk
A ‘plague on humanity’
Musk also voiced another opinion on Twitter regarding copyright protections, describing the “overzealous” Digital Millennium Copyright Act (DMCA) as “a plague on humanity”.
Passed in 2000, the notice and takedown process under the act enable copyright owners to get user-uploaded material that infringes their copyrights taken down from websites.
If the Tesla CEO completes his acquisition of Twitter, he will have to comply with this law as the new owner.
This development comes after Twitter has received a plethora of DMCA-related removal requests. When combining the numbers of Twitter and its now defunct video-sharing app Periscope, there was a 6% increase in requests filed under the DMCA in 2021, up from 169,000 to 179,000, according to Twitter’s January Transparency report published in January.
The report, which covers the period between January and June 2021, revealed that Twitter received a total of 179,400 takedown notices for 799,400 affected accounts.
Image: Shutterstock.com / spiderman777
Fashion designer Hermès’ lawsuit against an artist centring on non-fungible tokens (NFTs) should be tested against a precedent set by a landmark ruling handed down more than two decades ago, according to a US federal judge.
Back in January, the French luxury brand sued Mason Rothschild for allegedly copying its Birkin handbag through the issuance of MetaBirkin NFTs at the US District Court for the Southern District of New York.
Intellectual freedom
Around December 2021, Rothschild created a collection of digital images, each of which depicted an image of a blurry faux-fur-covered Birkin handbag.
In 1989, Rogers v Grimaldi established the ”Rogers test” for protecting uses of trademarks that involve intellectual freedom issues.
According to the ruling, artists can use a trademark if it meets certain artistic criteria and doesn’t mislead consumers.
The Second Circuit affirmed that “suppressing an artistically relevant though ambiguous[ly] title[d] film” on trademark grounds would “unduly restrict expression”.
The court also held that: “In sum, we hold that section 43(a) of the Lanham Act does not bar a minimally relevant use of a celebrity’s name in the title of an artistic work where the title does not explicitly denote authorship, sponsorship, or endorsement by the celebrity or explicitly mislead as to content.”
First Amendment grounds
Rothschild argued that, because the digital images of the Birkin bags are tied to the NFTs he sells, the Second Circuit’s test in Rogers applies, and the lawsuit should be dismissed on First Amendment grounds.
Speaking at the International Trademark Association’s Annual Meeting held earlier this month, Evan Gourvitz, counsel at Ropes & Gray, argued that the rise of NFT legal disputes was unlikely to stretch existing legal parameters and older case law would apply.
“It is interesting that in this lawsuit against Rothschild, the defendant used much older case law to defend it against allegations of infringement.”
Evan Gourvitz, Ropes & Gray
The “Rogers test“, he explained, had been cited by numerous courts that have adopted its reasoning to protect the use of trademarks in works of creative expression.
“It is interesting that in this lawsuit against Rothschild, the defendant used much older case law to defend it against allegations of infringement,” noted Gourvitz.
“Basically Rothschild argued that these Metabirkins are art, and they’re usable because they are artistically relevant and not explicitly misleading,” he said.
But Hermès countered that the test shouldn’t apply as Rothschild had used the MetaBirkins name as a source identifier rather than the title of an artwork.
Hermès further argued that, even if the Rogers test does apply, the court cannot make factual determinations of artistic relevance or explicit misleadingness at the motion to dismiss stage.
Consumer confusion
Last week, the court concluded that the Rogers test applies, at least in part, to the trademark infringement analysis of Rothschild’s activities.
But the court also held that the fashion designer’s complaint includes sufficient allegations of misleading consumers and confusion, and rejected Rothschild’s motion to dismiss.
Based on these plausible allegations in the amended complaint, including Rothschild’s own descriptions of the “MetaBirkins“ project, the court declined to resolve at this stage whether the “MetaBirkins” cleared the “admittedly low bar of artistic relevance” outlined under Rogers.
Image: Shutterstock.com / Camera Rules
IPRs denied by the PTAB in 2020 that came under NHK/Fintiv, or were based on the parallel petition requirements
Source: Unified Patents
