Intellectual Property Law Archives

July 20, 2023

This May in Syntel Sterling Best Shores Mauritius Ltd. v. TriZetto Grp., Inc., the U.S. Court of Appeals for the Second Circuit ruled on the availability of damages in cases involving trade secrets under the Defense Trade Secrets Act (the “DTSA”).

The dispute in Syntel involved the theft of a trade secret related to healthcare insurance software against a rival software company. The Second Circuit affirmed the lower court’s finding that Syntel stole trade secrets from TriZetto under the DTSA, but the Second Circuit vacated the jury’s $285 million award for compensatory damages for avoided development costs, i.e., the costs the trade secret holder spent which the thief of the secret saved.

Typically, under the DTSA, avoided costs are recoverable as damages for unjust enrichment. But in Syntel, the Second Circuit vacated the jury’s award of avoided costs, reasoning that such damages are only available when a party’s injury “is not adequately addressed by lost profits”.

The Restatement (Third) of Unfair Competition and most States have adopted a rule that allows avoided costs as a damages measure in trade secret cases. New York is the only state that has not passed a version of the Uniform Trade Secrets Act (“UTSA”) that explicitly allows avoided cost damages. As New York is a major hub of nearly every industry, many are urging New York to finally pass legislation following the USTA and ensure that parties have equal access to equitable remedies.

To read the full opinion in Syntel Sterling Best Shores Mauritius Ltd. v. TriZetto Grp., Inc., click here.

To read how Castaybert PLLC can assist you in employment and IP trade secret matters, click here and here.

June 15, 2022 —

Juli Saitz, an expert witness in commercial damages and investigations, wrote an excellent overview of the Lanham Act posted on LinkedIn. Saitz explains that the Lanham Act is a federal law that provides a basis for individuals and companies to sue for false advertising, deceptive branding, and trademark infringement.

First passed in 1946 as the Trademark Act, the law allows an individual or a company to seek redress against a commercial actor who falsely represents an association with a registered trademark. Saitz notes that the Act provides four types of damages: injunctive relief, actual damages, statutory damages, and profits gained at the expense of the plaintiff.

To read Saitz’s post and learn about the intricacies of the Lanham Act in detail, click here.

To find out how Castaybert PLLC can assist you in trademark and intellectual property litigation, click here.

June 6, 2022

The Department of Justice (DOJ) has recently updated its prosecutorial policy under the Computer Fraud and Abuse Act (CFAA). Enacted in 1984 and repeatedly amended since, the CFAA has produced a circuit split concerning the law’s reach, leading to recent attempts by the judiciary to restrict the open-ended language of the statute.

Definitions

The CFAA provides that a person who “intentionally accesses a computer without authorization or exceeds authorized access, and thereby obtains… information from any protected computer” has violated the law. 18 U.S.C. § 1030(a)(2)(C).

Exceeding authorized access is defined by the statute as accessing “a computer with authorization and to use such access to obtain or alter information in the computer that the accessor is not entitled so to obtain or alter.” 18 U.S.C. § 1030(e)(6).

Recent Jurisprudence

The DOJ’s new policy reflects both changing jurisprudence and changing technological and business practices.

Heeding the decisions by the Ninth Circuit in hiQ Labs, Inc. v. LinkedIn Corp., 17-16783 (9^th Cir. 2019), and the Supreme Court ruling in Van Buren v. United States 19-783, 593 U.S. (June 3, 2021), the new DOJ policy will limit the scope of its investigations into CFAA violations relating to “web scraping” and departing employees accessing sensitive information.

In the hiQ case, the Ninth Circuit ruled that hiQ did not violate the CFAA by “scraping” large quantities of publicly available LinkedIn member profile data to create a competing product. LinkedIn argued that hiQ’s continued scraping practice constituted a violation of the CFAA. The Ninth Circuit ruled in hiQ’s favor, and did so again in April 2022.
In the Van Buren case, the Supreme Court sided against the government’s argument that a person authorized to access a protected computer system “exceeds” authorization by doing so with improper motives.

Policy shift

The DOJ has enumerated new conditions under which it will prosecute cases under the CFAA, defining what kinds of actions fall under the statute’s language.

The DOJ now says it will charge defendants for accessing “without authorization” in cases where the defendant was “not authorized to access the protected computer under any circumstances” and did so knowingly.

It defines “exceeding authorized access” as cases where:

a defendant knowingly accesses information from which they are “unconditionally prohibited” in a protected computer that has clear “computational” divisions of its contents.

In either case, DOJ says it will also weigh whether prosecution “would serve the Department’s goals for CFAA enforcement,” which it defines through several criteria, including:

the scale of the crime and harm committed, whether the crime impacts broad national or economic interests
the deterrent value of an investigation, if any other jurisdiction is likely to hold a defendant accountable if DOJ declines to prosecute
whether “the defendant’s conduct consisted of… good-faith security research.”

To read more about the DOJ’s new CFAA enforcement policy, click here for Jeffrey Neuberger’s detailed post in Proskauer’s New Media and Technology Law Blog.

To read the Department of Justice’s press release as well as its stated policy, click here and here.

To read how Castaybert PLLC can assist in employment disputes raising unauthorized access issues under the CFAA and in protecting trade secrets and company confidential information, click here.

March 8, 2022

Art, viewed throughout human history as one of the fundamental forms of human expression, cannot be machine-made or machine-conceived according to the US Copyright Office. The human consciousness behind creativity is a prerequisite to a work’s eligibility for copyright protection.

This issue garnered recent attention when Dr. Stephen Thaler, who attempted to copyright a work product of his Creativity Machine, which is run entirely on artificial intelligence, was once again denied by the USCO. The piece, entitled A Recent Entrance to Paradise, which features a haze of overgrown purple flowers that have grown over a tunnel intersected by railroad tracks, was created without any human manipulation.

Current copyright law only protects “the fruits of intellectual labor… founded in the creative powers of the [human] mind.” The USCO does not seem ready to stray from this principle, even in an age where computer thinking, 3D printing, and artificial intelligence are becoming more mainstream. A work that fails to evince the creative intervention of a human being, like A Recent Entrance to Paradise, is not well-positioned to convince the Office to “depart from a century of copyright jurisprudence.”

Among the Court’s reasons for denying the application was the uniform stance taken across the courts, including an appellate decision affirming a lower court’s denial of a copyright for a “selfie” photograph taken by a monkey in 2011. Courts in the United States are not alone in their position that copyright protection should be reserved for human-created works. The European Patent Office and UK Intellectual Property Office rejected applications from Dr. Thaler for DABUS, another AI that, like the Creativity Machine, he owns. South Africa and Australia have granted patent protection for AI-created inventions in recent years, including a South Africa patent for another of Dr. Thaler’s machines.

This development in the world of Intellectual Property and Copyright is one to watch as AI becomes a more integrated part of our everyday lives, but for now, Copyright law requires the influence of human beings on potentially protected works.

To read more about this issue, see the original article from The Verge, here.

To read how Castaybert PLLC can assist you in Copyright and Intellectual Property matters, click here.

October 5, 2021-

Facebook is not “off the hook” after the Third Circuit ruled Section 230 of The Communications Decency Act does not protect the social media giant from liability in the use of a news anchor’s image in ads for adult dating services on its platform. Hepp v. Facebook, Inc., No. 20-2725 (3d Cir. 2021).

Karen Hepp, a morning news anchor for Fox 29’s Good Day Philadelphia, was made aware by colleagues in 2018 that her picture was appearing in ads for erectile dysfunction products and adult dating services on Facebook. The images were posted without Hepp’s knowledge or approval, nor was she receiving compensation for the use of her image.

In her suit against Facebook, Ms. Hepp alleged violations of her right to control her public image and likeness under Pennsylvania law, made more pertinent by the fact her face is well recognized by the public in her professional capacity as a television news anchor.

Though internet providers like Facebook are generally protected by the Communications Decency Act from liability stemming from third-party content, the Third Circuit ruled in favor of Ms. Hepp, citing her intellectual property rights and status as a public figure in the section 230 carve out. The fact the image was used for the sale of “prurient” goods on Facebook without Hepp’s permission or compensation helped bolster the narrow 2:1 opinion on the Court. The majority opinion held section 230 did not bar the state intellectual property claims, while the dissent did not see them as falling under the federal statute.

The case has brought the issues of free speech in new media and intellectual property to the foreground, and has attracted the attention of The Electronic Frontier Foundation (in support of Facebook) and The Screen Actors Guild (showing support for Ms. Hepp’s interest in controlling the use of her image and likeness). The Third Circuit’s split away from a Ninth Circuit decision on the same issue could bring Ms. Hepp’s case as far as the Supreme Court.

Click here to read the original article from the Associated Press.

Click here to read the opinion of the Third Circuit. Hepp v. Facebook, Inc., No. 20-2725 (3d Cir. 2021).

Click here to read how AC-Counsel can help you in matters of Intellectual Property.

May 6, 2021 – Proskauer recently issued an interesting article about the Federal Circuit’s reversal of a $66 million judgment in the District Court of Delaware in favor of Olaplex, Inc., which had alleged claims of patent infringement and trade secret misappropriation by L’Oréal USA, Inc. Through the course of negotiations for a possible acquisition of Olaplex by L’Oréal, Olaplex shared confidential information and asserted trade secrets. When the acquisition fell through, L’Oréal launched its own line of competing products, which Olaplex asserts exploited four categories of the company’s trade secrets. The Federal Court found despite the parties being subject to a non-disclosure agreement, Olaplex failed to prove its asserted trade secrets were in fact such. The NDA prohibiting L’Oréal from using Olaplex’s confidential information was ambiguously written. In fact, the Federal Circuit pointed to language explicitly contemplating L’Oréal’s use of the confidential information during negotiations for a possible acquisition. The reversal in Olaplex, Inc. v. L’Oréal USA, Inc. should serve as a cautionary reminder of the need for careful drafting of NDAs and the inclusion of unambiguous definitions for language pertaining to “trade secrets.” Extra care should be taken in Intellectual Property transactions that the obligations of each party, especially the party on the receiving end of confidential information, are adequately defined.

Find the full article here.

Find the decision here.

Learn how CASTAYBERT PLLC can assist you with Trade Secret Law and NDAs here.

June 7, 2021-The Supreme Court recently weighed in on a circuit split regarding the interpretation of the Computer Fraud and Abuse Act’s (CFAA) “exceeds unauthorized access” clause. This clause is often used to litigate against employees who access proprietary data for an improper purpose. The Case, Van Buren v. United States centered around a former police officer’s criminal conviction under the CFAA for accessing a police license plate database, which he had authorization to access, to do a search for money violating department policy. Ultimately, the Court held that the CFAA “does not cover those who, like Van Buren, have improper motives for obtaining information that is otherwise available to them.” The Court also noted that a broader interpretation of “exceeds authorized access” would allow criminal penalties for a vast amount of “commonplace computer activity”. Proskauer Rose LLP’s Jeffrey Neuburger and Jonathan Mollod break down both the Supreme Court’s decision, and potential future implications of the Court’s interpretation of the CFAA provision.

Find full article here.

Find full decision here.

Learn how CASTAYBERT PLLC can assist you with Trade Secret Law here.

April 08, 2021- Another copyright case has been decided in favor of fair use. In Lawrence Marano v. The Metropolitan Museum of Art, the Second Circuit sided with the Metropolitan Museum of Art (the Met), holding that the museum’s use of Marano’s 1982 photograph of Eddie Van Halen playing his “Frankenstein” guitar on its website as part of an exhibit of rock n’ roll instruments was fair use. The fair use copyright exception is a context specific inquiry; in this instance, the Court focused on the “transformative” nature of the Met’s use of the photo. The transformation included: “foregrounding the instrument rather than the performer” and including other photos and accompanying text.

ArtNet’s Taylor Dafoe shared a statement from a Met Attorney, Linda Steinman, who said “The Second Circuit’s decision in the Marano case is an important one recognizing that museums, as cultural institutions, have the freedom to use photographs that are historical artifacts to enrich their presentation of art objects to the public,” further that “The mission of the Met and all museums… is to provide the public with access to art—and this important decision protects, indeed strengthens, this important societal role.”

Find full article here.

Find full decision here.

Learn how CASTAYBERT PLLC can assist you with Intellectual Property Law needs here.

April 07, 2021- Newly signed post-mortem rights of publicity legislation in New York will begin to apply to those who are deceased after May 29, 2021. Dentons explains what this law means for New Yorkers, specifically in regard to Digital Replicas and Deepfakes. The law will protect a person’s rights of publicity (a right inherent in the commercial value of a person’s identity) that have commercial value at the time of their death or resulting from their death.

The new rights will extend 40 years after the death if the decedent was living in New York at the time of their death. The right is transferable and descendible thus it can be transferred by legal instrument. The right however, is not absolute and has exceptions for certain expressive rights plus for satire, comment, parody or criticism. In order to bring an action for the use of a decedent’s rights, the decedent’s successors in interest must register the claimed right with New York’s Secretary of State.

The law also tackles new issues that have proliferated through technological advancement. With respect to digital replicas, purposefully realistic duplicates of an individual such as holograms, the legislation prohibits their use without consent. For Deepfakes—an artificial intelligence technique that realistically superimposes an individually into video, text, or audio material—the legislation protects against acts that the individual did not perform or that were altered.

Find the full article here.

Learn about how CASTAYBERT PLLC can assist you with Intellectual Property law needs here.

June 3, 2020 — The Vice President of the Artists Rights Society, Katarina Feder, recently authored an article for Artnet in which she answers questions of artists with copyright concerns. Ms. Feder touches on the copyright ownership of sold works, the copyrightability of and use concerns surrounding augmented reality art, and fair use in photo collages and memes.

Find the full article here. Learn about how CASTAYBERT PLLC can assist you with art law matters here.