In-House and Outside Counsel Disqualified and Complaint Dismissed Where In-House Counsel Played Significant Role in Preparing Lawsuit Against Former Employer

Author: Hala S. Mourad
Editor: Jeff T. Watson

In Dynamic 3D Geosolutions LLC v. Schlumberger Ltd., Nos. 15-1628, -1629 (Fed. Cir. Sept. 12, 2016), the Federal Circuit affirmed the district court’s decision to disqualify Dynamic 3D’s counsel and dismiss its patent infringement complaint without prejudice because Charlotte Rutherford, Dynamic 3D’s in-house counsel at a related subsidiary, previously worked for Schlumberger and was presumed to possess relevant confidential information.

Dynamic 3D sued Schlumberger, alleging infringement of U.S. Patent 7,986,319, which discloses three-dimensional displays of geological data. After Schlumberger raised the potential conflict of interest, the district court found that Rutherford’s work at Schlumberger was substantially related to her current work at Acacia Research Group LLC, a wholly-owned subsidiary of Acacia Research Corporation, the parent company of Dynamic 3D. The district court disqualified Rutherford, other Acacia in-house counsel, and Dynamic 3D’s outside counsel from representing Dynamic 3D. The district court also dismissed Dynamic 3D’s claims against Schlumberger without prejudice because the pleadings were drafted by counsel Rutherford interacted with who were presumed to possess Schlumberger’s confidential information.

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Spotlight on Upcoming Oral Arguments – September, 2016

Spotlight on Upcoming Oral Arguments – August 2016

Authors: Umber Aggarwal*
Editor: Lauren J. Dreyer

Tuesday, September 6, 2016

Asetek Danmark v. CMI USA, No. 16-1026, Courtroom 201

In this appeal, the Federal Circuit will address infringement, validity, damages, and an injunction in an appeal involving computer cooling systems. Defendant-appellant CMI USA argues that its accused products lack a “removably attached” heat exchanging interface because the interface is not designed to be removed during use. In response, Patentee-appellee Asetek contends, among other things, that the jury’s infringement verdict is supported by substantial evidence, including the undisputed fact that the interfaces of the accused products are held in place by removable screws.

The Federal Circuit will also address whether the patent is valid over certain prior art and whether Asetek’s damages expert, as CMI contends, improperly asserted a lost-profits claim under the guise of a reasonable royalty. Finally, the Federal Circuit will address whether the district court abused its discretion by specifically naming CMI’s affiliate (Cooler Master) in a permanent injunction where the district court found that the non-party affiliate was working in active concert with CMI to infringe in the U.S.

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A Lesson on Waiver: Voluntarily Dismissing Claim “Waives” Goodbye to Affirmative Defense

Author: Jose M. Recio
Editor: Lauren J. Dreyer

In Vapor Point L.L.C. v. Moorhead, Nos. 15-1801, 15-2003 (Fed. Cir. Aug. 10, 2016), the Federal Circuit affirmed a district court’s granting of a motion for correction of inventorship and dismissal of the case.

Vapor Point sued NanoVapor seeking to have two of Vapor Point’s employees added as joint inventors in NanoVapor’s patents. These two employees were previously employed by NanoVapor. NanoVapor countersued, seeking to have its employee added as a joint inventor in Vapor Point’s patents. Each party alleged state law claims against the other, and NanoVapor included an affirmative defense that Vapor Point’s employees, who were former employees of NanoVapor, had an obligation to assign their inventions to NanoVapor. As the case proceeded, the parties filed a notice of dismissal with prejudice of their state law claims. After resolving all inventorship issues in favor of Vapor Point, the district court dismissed the case and found that NanoVapor waived its claim relating to the obligation to assign.

The Federal Circuit affirmed the district court’s inventorship determination and also held that NanoPoint’s voluntary dismissal of its state law claims mooted its affirmative defense that Vapor Point’s two employees had an obligation to assign any rights to NanoVapor. Judge O’Malley concurred with the Court’s decision, but wrote separately to state that the Court should have decided NanoVapor’s assignment claim by holding that NanoVapor could not establish that any assignment of patent rights was executed in writing, as required by 35 U.S.C. § 261.

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