LJN Newsletters

The high cost of discovery, especially e-discovery, has caused franchisors to frequently look to alternative dispute resolution. However, this is not always possible. Even when it is, it is not always wise to lose the benefits of an actual trial. Confidence that you can efficiently handle electronic discovery leaves all options open and also makes a positive result more likely.

Sixty franchisees forced The Ground Round restaurant chain to file bankruptcy on Feb. 19, 2004. The same franchisees, 4 months later, became their own franchisor. They bought the franchise assets out of bankruptcy, including all the franchise agreements, the development agreements, 42 trademarks, and 38 prime leases which they assigned to the subtenants. The franchisees formed a for-profit cooperative, reduced their own franchise royalties, and obtained traditional bank financing. They achieved their goal by maintaining a united front, developing a unique governance structure, and maintaining a vision for operating profitably unlike anyone else in the casual-dining restaurant sector.

In a hypothetical negotiation, what is the value of a relatively small piece of patented technology when it is integrated as a component of a much larger product? If the patented technology is part of Web browser software that is bundled with an all-encompassing operating system, the answer would appear to be — a lot — at least according to one of the largest patent infringement damage awards in recent years.

According to a recent academic overview, American patent holders pay their lawyers $5 billion per year for patent prosecution services and approximately another $2.4 billion for patent litigation (not counting payments of settlements or damages). Besides being good news for the patent bar, this level of investment in patent creation and protection suggests that patents are valuable.

The holder of a security interest in a patent is often faced with the question of where to record its security interest in order to "perfect" it. Yet the law on how to perfect a security interest in a patent remains uncertain even today. While it is generally accepted that patent lien creditors should record their security interest in accordance with Article 9 of the Uniform Commercial Code ("UCC") of the appropriate jurisdiction to perfect and obtain priority over subsequent lien creditors, it remains unclear as to whether UCC perfection alone, or even both UCC perfection and recordation with the Patent and Trademark Office ("PTO"), gives patent lien creditors priority over subsequent assignees of the patent itself.

Discussed below are the second five of the "Top 10 Patent Drafting Mistakes" that drafters often make that can impact the successful enforceability of patents. These mistakes, as with the first five discussed last month, are largely derived from the failure of prosecution counsel to recognize how a patent may be scrutinized and challenged in litigation. Spending the extra time and effort during drafting to avoid these 10 mistakes can drastically increase the odds of a successful outcome.

After they are administered, or taken by the patient, many drugs are converted into other chemical compounds or other physical forms, as the drugs are processed within the body of the patient. Often these compounds, known as metabolites, are the "active ingredient" that is responsible for the desired result, such as lowering blood pressure or cholesterol levels. The Court of Appeals for the Federal Circuit has also long recognized this effect and has held that the ingested form of a drug or its "metabolites" can be patented. Thus, an optimal patent strategy would require an inventor to patent both the pre-ingested form of the drug and its new physical forms or metabolites, as formed in the body ("in vivo"). However, the in vivo fate of the drug may not be learned until long after the "parent" drug has been tested and patented.

Highlights of the latest insurance cases from around the country.