U.S. Trade Secrets Law, Panasonic: Intellectual Property

A closed-door briefing was held in Washington yesterday for staff on the Senate Judiciary Committee to review draft laws to create a new private right of action under federal law for the theft of trade secrets.

Industry experts and academics advised on the legislation, which is pending in the U.S. House of Representatives and Senate and known as the Trade Secrets Protection Act of 2014 and the Defend Trade Secrets Act of 2014, respectively. The bills, which have bipartisan sponsors, would allow companies to bring civil suits in federal court when their trade secrets have been misappropriated.

Companies currently bring state law trade secret misappropriation claims in state court and in federal court if they can satisfy the federal diversity statute or the federal supplemental jurisdiction statute.

“The challenge is quick enforcement across state lines,” said Mark Schultz, senior scholar and co-director of the Center for the Protection of Intellectual Property at George Mason University School of Law, who spoke in support of the bills at the briefing session.

With different statutes in each state, the law has not kept up with technology, Schultz said in an interview. “The bottom line is to be able to stop a leak faster,” Schultz said.

An Aug. 26 open letter to Congress posted on the Internet opposes the draft laws, stating that a federal private civil remedy for trade secrets is unnecessary and would be harmful. The letter was co-authored by David S. Levine, a professor at Elon University School of Law, who also appeared at the briefing session and advised against the laws, and Sharon Sandeen, a professor at Hamline University School of Law.

The letter was signed by 31 academics.

Among the group’s objections is the provision of quick injunctive relief, which could inadvertently result in greater disclosure of trade secrets. The federal laws also would have a negative impact on business collaboration and worker mobility, according to the open letter.

“We have the best trade secret protection in the world,” Sandeen said in an interview. “A federal law will create more problems than it solves.”


Panasonic, LG Case Over Optical Devices Remanded at ITC

A U.S. administrative law judge presiding over trade cases was ordered to reconsider the standard used to determine if patent-licensing companies can file complaints seeking to block imports of products, the U.S. International Trade Commission wrote in a notice posted late in the day on Sept. 3.

Optical Devices LLC didn’t meet the requirement of having a domestic industry to protect because it was a “revenue-generating licensing entity,” Administrative Law Judge Sandra “Dee” Lord had said in a decision.

Lord tossed the complaint against Lenovo Group Ltd., Panasonic Corp., Nintendo Co., Toshiba Corp. and MediaTek Inc.

The Commission disagreed. It vacated Lord’s opinion and ordered further review.

The case is In the Matter of Certain Optical Disc Drives, Components Thereof, and Products Containing the Same, Investigation No. 337-TA-897, U.S. International Trade Commission (Washington).

For more patent news, click here.


Chinese Citizens Plead Guilty To Counterfeiting

Two Chinese citizens living in Massachusetts pleaded guilty yesterday in federal court in Boston to charges of importing and reselling counterfeit cases for cellphones, according to a statement by the U.S. Attorney’s Office for the District of Massachusetts.

Zexiong Chen and Haotian Chen, who are not related, pleaded guilty to trafficking in counterfeit goods before U.S. District Judge F. Dennis Saylor IV. They are to be sentenced Dec. 11.

The two formed Max Wireless Group Inc. to import the goods from China and resell them. Most of the cases were sold to people who later resold them at places like shopping mall kiosks, according to the statement.

Over the course of the investigation, 13 seizures were made of over 10,000 counterfeit cases bearing marks including those of Hello Kitty, Kate Spade, and Ferrari. The retail price for the authentic version of the seized goods was more than $350,000, according to the statement.

Zexiong Chen was arrested in February as he was boarding a plane to China and remains in custody. Haotian Chen, who was also arrested in February, remains on conditional release.

No working telephone numbers could be found for Haotian Chen or Zexiong Chen in the Massachusetts listings. The identity of the pair’s lawyers could not be immediately obtained for comment on the guilty pleas.

Disney Opposes Deadmau5 on Trademark Infringement

Disney Enterprises Inc. is defending its iconic mouse trademark against the interests of musician and producer Joel Zimmerman, who goes by the name deadmau5 and wears a mouse-like headpiece he calls the mau5head.

Disney filed a notice of opposition before the Trademark Trial and Appeal Board in the U.S. Patent and Trademark Office against Ronica Holding Ltd., an affiliate of Zimmerman, which has registered deadmau5 marks.

Disney’s pursuit of deadmau5 was reported earlier by TMZ.

The mau5head is “a registered trademark in 30 countries,” said Dina LaPolt, the lawyer for deadmau5.

LaPolt said that deadmau5 applied to register the front facing mau5head in June 2013 and Disney “is now opposing the U.S. filing.”

“Given that the mau5head and the other identifying deadmau5 trademarks have been used in the U.S. and around the world for almost a decade, we wonder why Disney is only now coming after deadmau5,” LaPolt said.

Linda McLeod, an attorney for Disney, did not immediately respond to an e-mail seeking comment on the notice of opposition.

A trademark for deadmau5 is registered to Joel Zimmerman, according to the USPTO website. The mark is described as relating to music sound recordings, computer game software and “spectacles,” among other uses.

A prior owner for the mark was Ronica Holdings Ltd., which has registered three other marks with the deadmau5 name, according to USPTO records.

For more trademark news, click here.

(Corrects statement about jurisdiction over federal trade secrets cases in third paragraph of top item in story published Sept. 5. This is a daily report on global news about patents, trademarks, copyright and other intellectual property topics. To be sent this column daily, click SALT IPREPORT.)
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