Minding Your Business

Proskauer’s perspective on developments and trends in commercial litigation.

Ninth Circuit Decision Has Significant Implications for Terms and Conditions in Smartphone Apps

A recent Ninth Circuit decision centered on something most consumers use many times every day: smartphone apps.

In Wilson v. Huuuge, Inc., the Ninth Circuit affirmed the denial of defendant Huuuge’s motion to compel arbitration against a user of its smartphone casino app. Addressing a question of first impression, the Court considered the circumstances under which an app user who downloads or uses an app can be said to have constructive notice of the app’s terms and conditions. The Court ultimately held Huuuge failed to provide reasonable notice of its app’s Terms of Use, which included an embedded arbitration provision, and thus the app user was not bound to the terms. Continue Reading

Caltech Ten-Figure Patent Verdict Showcases Impact of University Intellectual Property

A California jury recently ordered Apple, Inc. (“Apple”) and Broadcom, Ltd. (“Broadcom”) to pay the California Institute of Technology (“Caltech”) over $1.1 billion in damages for infringing several patents owned by Caltech.  The patents relate to a type of error correction code used in wireless technology (known as “irregular repeat and accumulate” codes) to improve transmission rates and performance.  The products alleged to have used these codes include multiple models of the Apple iPhone, iPad, iPod, iMac and other popular Apple products.  Apple is responsible for $838 million of the damages, and Broadcom’s share is $270 million.  If the verdict stands, it will be one of the largest patent awards in history.  However, both Apple and Broadcom have signaled their intent to appeal, and large jury verdicts are sometimes set aside in favor of lower settlements.

In the university setting, high value patented technologies like this one can have a unique impact that extends beyond the named parties.  For example, Caltech’s online patent policies state that the inventors are collectively entitled to 25% of the income received from licensing of a patent after certain expenses and third party income sharing are deducted.  The same policies invite the inventors to donate a portion of their income share to support research of their choosing within Caltech, with Caltech vowing to match the contributed amount.  Moreover, the patents state that the U.S. Government has the right, in limited circumstances, to require the patent owner to license others on reasonable terms, as provided for by the terms of the applicable National Science Foundation grant.  In determining what is “reasonable” for a given patent, prior licenses or payments can be considered key evidence, further extending the possible impact of the case to future prospective licensees on the open market.  (The U.S. Government itself has a paid-up license in the invention, as is typical where federal funds have been received.)  As a result, more parties have a stake in this technology than initially meet the eye.

The case is California Institute of Technology v. Broadcom Ltd., et al., No. 2:16-cv-03714, in the U.S. District Court for the Central District of California (Los Angeles).

Ninth Circuit “Scraps” Old Construction of CFAA in Closely Watched LinkedIn Data Scraping Case

This past month, professional networking site LinkedIn Corp., was given more time to file a petition for certiorari challenging a Ninth Circuit finding that hiQ Labs Inc. (“hiQ”), a workforce data analytics startup, did not violate federal hacking laws by “scraping” LinkedIn member profiles without LinkedIn’s permission.

Data scraping, or web scraping, is a method where a computer program extracts data from websites. The data that is extracted is often considered to be human-readable information. The question of who owns data that is scraped from public websites is now at the doorstep of one of the largest technology social media companies in the United States. Continue Reading

CCP 2031.280(a): New Document Production Obligations in California Civil Litigation

Effective as of January 1, 2020, all civil litigants in California will have additional discovery burdens. The California Code of Civil Procedure now requires “[a]ny documents or category of documents produced in response to a demand for inspection, copying, testing, or sampling shall be identified with the specific request number to which the documents respond.”  Cal. Civ. Pro. § 2031.280(a). This is a major departure from the prior rule. Responsive documents can no longer be produced as they were “kept in the usual course of business.”  This new requirement applies to all pending cases in California, regardless of whether a case commenced prior to the amendment’s effective date of January 1, 2020.  Continue Reading

Fifth Circuit Holds Failure to Mitigate is No Bar to Statutory Damages Under Copyright Act

Recently, copyright owners suing in the jurisdiction of the United States Court of Appeals for the Fifth Circuit were given a new reason to seek statutory damages instead of actual damages under the Copyright Act. Failure to mitigate damages is not an absolute defense to a claim for statutory damages, the Court ruled on Wednesday, January 15, 2020. Continue Reading

Is Increased Transparency into Litigation Financing on the Horizon?

The market for litigation finance shows no signs of slowing down, but pressure from rulemaking bodies and the judiciary may reshape whether and to what extent funding arrangements must be publicly disclosed. The use of litigation finance to fund claims that may not otherwise have been pursued or as a risk management strategy has continued to expand in recent years. For much of its history, parties were not required to disclose whether they were receiving litigation financing or the source of such funding, however the recent trend is toward increased transparency into funding arrangements. Continue Reading

Data Breaches and Damages: Consumer Action Under the CCPA

With less than one month to go before the California Consumer Privacy Act of 2018’s (“CCPA”) effective date of January 1, 2020, businesses should be aware of the potential litigation that awaits them.

The CCPA is a California privacy law that gives California consumers the rights to know about and control the personal information that businesses collect about them.  In turn, the CCPA requires businesses to give consumers the ability to effectuate these rights.  For a more in-depth review of the CCPA, please view our previous posts on our Privacy Law BlogContinue Reading