Justia Arbitration & Mediation Opinion Summaries

Articles Posted in Intellectual Property
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In a dispute between SmartSky Networks, LLC and DAG Wireless, Ltd., DAG Wireless USA, LLC, Laslo Gross, Susan Gross, Wireless Systems Solutions, LLC, and David D. Gross over alleged breach of contract, trade secret misappropriation, and deceptive trade practices, the United States Court of Appeals for the Fourth Circuit ruled that the district court did not have the jurisdiction to enforce an arbitration award. Initially, the case was stayed by the district court pending arbitration. The arbitration tribunal found in favor of SmartSky and issued an award, which SmartSky sought to enforce in district court. The defendants-appellants argued that, based on the Supreme Court decision in Badgerow v. Walters, the district court lacked subject matter jurisdiction to enforce the arbitration award. The Fourth Circuit agreed, noting that a court must have a basis for subject matter jurisdiction independent from the Federal Arbitration Act (FAA) and apparent on the face of the application to enforce or vacate an arbitration award. The court concluded that the district court did not have an independent basis of subject matter jurisdiction to confirm the arbitration award. As such, the court reversed and remanded the case to the district court for further proceedings. View "Smartsky Networks, LLC v. DAG Wireless, LTD." on Justia Law

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Lai, an engineer, had access to Applied’s trade secrets and participated in highly confidential meetings. Mattson, Applied's direct competitor, recruited 17 Applied employees. Lai accepted a job with Mattson. Before his last day at Applied, Lai accessed proprietary information from Applied’s cloud-based storage system and sent e-mails attaching highly confidential Applied documents—many clearly marked as such—to his personal email accounts. He signed a separation certificate stating he had not retained any Applied information and confirmed this in two exit interviews. After starting his new job, Lai logged into his personal email accounts on his Mattson computer. Lai claims never disclosed any Applied information to Mattson. Mattson denies any knowledge of Lai’s actions.Applied sued Mattson and Lai, citing the Uniform Trade Secrets Act (Civ. Code 3426) and breach of Lai’s employment agreement. Lai then deleted the emails he had sent to one account, and, after communicating with Mattson’s lawyers, downloaded a confidential Applied document to his Mattson laptop, deleting it a moment later. Mattson put Lai on leave. cut off his access to his personal email accounts. and sequestered his iPhone and computers. The defendants moved to compel arbitration based on a provision in the Applied-Lai employment contract. The court of appeal affirmed a preliminary injunction prohibiting the defendants from accessing or using Applied’s confidential information and an order compelling arbitration as to Lai. Mattson, a non-party, is not entitled to arbitration. The litigation should be stayed pending arbitration. View "Mattson Technology, Inc. v. Applied Materials, Inc." on Justia Law

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NuVasive, Inc. manufactures medical products and equipment to treat spinal diseases. In central Florida, NuVasive sold its products through an exclusive distribution agreement with Absolute Medical, LLC. Under the agreement, Absolute Medical employed independent-contractor sales representatives who marketed and sold NuVasive’s products to doctors and medical practices in the region. NuVasive sued Absolute Medical, Soufleris, AMS, and two of Absolute Medical’s sales representatives who began working for AMS for breaching the exclusive. The district court enforced a dispute resolution clause in the agreement, ordering NuVasive and Absolute Medical to arbitrate NuVasive’s breach-of-contract claim seeking money damages. Absolute Medical, Soufleris, AMS, and the sales representatives appealed the district court’s order granting NuVasive’s motion to vacate the arbitration panel’s final award.   The Eleventh Circuit affirmed. The court held that the district court did not err by equitably tolling the three-month filing deadline and considering NuVasive’s motion as timely. The court explained that the district court’s findings of fact were not clearly erroneous, and they supported the district court’s conclusion that NuVasive satisfied both prongs of the equitable tolling analysis. Defendants’ conduct presented extraordinary circumstances, and NuVasive was diligent once it learned that there was reason to pursue vacatur. Further, the court held that the district court did not err by vacating the final award. The district court correctly concluded that the fraud was materially related to that issue. Finally, the court held that the district court did not abuse its discretion by declining to direct a rehearing by the arbitration panel. View "Nuvasive, Inc. v. Absolute Medical, LLC, et al." on Justia Law

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Direct Biologics, LLC (“DB”) brought claims for breach of covenant to not compete and misappropriation of trade secrets against Adam McQueen, DB’s former employee, and Vivex Biologics, Inc. (“Vivex”), McQueen’s new employer. After granting DB a temporary restraining order based on its trade secret claims, the district court denied DB’s application for a preliminary injunction. Finding that DB’s claims were subject to arbitration, the district court also dismissed DB’s claims against McQueen and Vivex and entered final judgment.   The Fifth Circuit vacated the district court’s orders denying DB’s motion for a preliminary injunction and dismissing DB’s claims and remanded. The court held that the district court did not abuse its discretion by declining to presume irreparable injury based on McQueen’s breach of his non-compete covenants. The court held that remand is thus proper to allow the district court to make particularized findings regarding irreparable harm; specifically, the likelihood of misuse of DB’s information and the difficulty of quantifying damages should such misuse occur. View "Direct Biologics v. McQueen" on Justia Law

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In 2007, ROHM Japan and MaxPower entered into a technology license agreement (TLA). ROHM Japan was permitted “to use certain power [metal oxide semiconductor field-effect transistors (MOSFET)]-related technologies of” MaxPower (Licensor) developed under a Development and Stock Purchase Agreement in exchange for royalties paid to MaxPower. The TLA, as amended in 2011, includes an agreement to arbitrate “[a]ny dispute, controversy, or claim arising out of or in relation to this Agreement or at law, or the breach, termination, or validity thereof.” Arbitration is to be conducted “in accordance with the provisions of the California Code of Civil Procedure.”In 2019, a dispute arose between ROHM Japan and MaxPower concerning whether the TLA covers ROHM’s silicon carbide MOSFET products. MaxPower notified ROHM Japan of its intent to initiate arbitration. Shortly thereafter, ROHM's subsidiary, ROHM USA, sought a declaratory judgment of noninfringement of four MaxPower patents in the Northern District of California and four inter partes review petitions. The district court granted MaxPower’s motion to compel arbitration and dismissed the case without prejudice, reasoning that the TLA “unmistakably delegate[s] the question of arbitrability to the arbitrator.” The Federal Circuit affirmed. In contracts between sophisticated parties, incorporation of rules with a provision on the subject is normally sufficient “clear and unmistakable” evidence of the parties’ intent to delegate arbitrability to an arbitrator. View "ROHM Semiconductor USA, LLC v. MaxPower Semiconductor, Inc." on Justia Law

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The Second Circuit affirmed the district court's confirmation of an arbitration award under 9 U.S.C. 9 for petitioners and other individuals. This case involved a dispute between two groups of the Bobov Hasidic Jewish community in Brooklyn that agreed to arbitration before a rabbinical tribunal. The tribunal ruled that petitioners owned the "Bobov" trademark, and the district court confirmed the ruling.The court held that district courts should "look through" a 9 U.S.C. 4 petition to the underlying controversy to determine whether subject matter jurisdiction exists to confirm the arbitration award pursuant to 9 U.S.C. 9. The court held that the district court properly looked through the arbitration petition here to the underlying controversy to determine that it had subject matter jurisdiction. In this case, the district court properly turned aside respondent's non-jurisdictional arguments, found the petition "effectively" unopposed and that no issue of material fact precluded confirmation, and did not err in confirming the award. View "Landau v. Rheinold" on Justia Law

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In 2009, RNB and GAF entered into an agreement under which GAF would promote RNB’s “Roof N Box” product, a three-dimensional roofing model, to building construction contractors affiliated with GAF. The agreement required the parties to submit disputes “arising under” the agreement to arbitration. GAF terminated the agreement after about a year. In 2016, RNB, together with its founder and president, Evans, brought suit against GAF based on GAF’s activities in marketing its own product that competes with the Roof N Box. The complaint alleged design patent infringement, trade dress infringement, and unfair competition. GAF moved to dismiss or stay the action pending arbitration. The district court denied that motion. The Federal Circuit affirmed, stating that GAF’s assertion that the arbitration provision covers the claims stated in the complaint is “wholly groundless.” The complaint challenges actions whose wrongfulness is independent of the 2009 agreement’s existence. View "Evans v. Building Materials Corp." on Justia Law

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Defendants, collectively referred to as “InterDigital,” and LG Electronics, Inc. entered into a non-disclosure agreement, titled “Agreement Governing Confidential Settlement Communications (the NDA), after LG filed a demand for arbitration with the International Centre for Dispute Resolution. InterDigital claimed that the parties did not intend to prevent the submission of pre-NDA evidence to the arbitral tribunal and disclosed in its brief to the tribunal alleged settlement communications. LG then filed this action seeking injunctive relief compelling InterDigital to withdraw its brief, claiming that InterDigital breached the NDA by submitting the documents to the arbitrators. InterDigital moved to dismiss LG’s complaint in favor of arbitration, asking the Court of Chancery to exercise its discretion under the doctrine established in McWane Cast Iron Pipe Corp. v. McDowell-Wellman Engineering Co. to dismiss the action in favor of the earlier-filed arbitral proceeding. The Court of Chancery dismissed the action in favor of the earlier-filed arbitral proceeding under the McWane doctrine, concluding that this case met the McWane doctrine’s requirements. View "LG Elecs., Inc. v. Interdigital Commc’ns, Inc." on Justia Law

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This case stemmed from a dispute between the parties over license agreements which allowed Myriad access to Oracle's Java programming language. On appeal, Myriad challenged the district court's partial denial of its motion to compel arbitration. The court concluded that the incorporation of the United Nations Commission on International Trade Law (UNCITRAL) arbitration rules into the parties' commercial contract constituted clear and unmistakable evidence that the parties agreed to arbitrate arbitrability. Accordingly, the court reversed and remanded for further proceedings. View "Oracle America, Inc. v. Myriad Group A.G." on Justia Law

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In 1996, RG, exclusive licensee of a German patent and corresponding patents in the U.S., Europe, and Japan relating to genetic identification, entered into a license agreement with Promega, granting Promega certain licenses. The agreement included a clause, providing that “all controversies or disputes arising out of or relating to this Agreement, or relating to the breach thereof, shall be resolved by arbitration” and prohibited assignment without consent. Assignments were approved in 2001 and 2003; a subsequent assignment from IP to LT was not approved. In 2008 LT believed that Promega was paying less than required royalties. Negotiations failed and LT demanded arbitration. Promega sought a declaratory judgment of non-arbitrability, alleging infringement of five patents and contenting that rights under the 1996 agreement had never been assigned to LT. IP then moved to compel arbitration. The district court ordered arbitration, finding that IP was the assignee, remained in existence, and that it was irrelevant that Promega alleged that IP was merely a puppet of LT. The Federal Circuit affirmed.View "Promega Corp. v. Life Tech. Corp." on Justia Law