Legal Updates

Estate Planning Alert: Estate taxes in Ohio: More good news

When Governor John Kasich signed Amended Substitute House Bill 153 on June 30, 2011, Ohio taxpayers received the second piece of good news regarding estate taxes in less than seven months. In December 2010, the federal estate and gift tax exemptions were increased to $5 million until at least the end of 2012 and now, as of December 31, 2012, the Ohio estate tax will be repealed.

The Ohio estate tax, which is a tax independent of the federal estate tax (unlike most other states), has a maximum rate of 7 percent and an exemption amount of $338,333–one of the lowest exemptions of any state. Eighty percent of the tax owed is returned to the local government where the decedent was a resident, with the remaining 20 percent passing to the state.

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Intellectual Property Alert: Be careful with your agreements: Bayh-Dole Act does not automatically confer ownership of inventions from inventor

Court holds Bayh-Dole Act simply assures that contractors may keep title to what they already have
The Supreme Court recently held in Stanford v. Roche that the Bayh-Dole Act (also known as the University and Small Business Patent Procedures Action of 1980, the “Act”) does not confer title to federally funded inventions on contractors or authorize contractors to unilaterally take title to those inventions. Instead, the Act “simply assures contractors that they may keep title to whatever it is they already have.” Therefore, the institution mayretain its ownership provided it meets the remaining requirements of the Act only if it has an agreement with an inventor assigning his or her rights in a federally funded invention.

Upon joining Stanford University, Dr. Mark Holodniy agreed “to assign” to Stanford his “right, title and interest in” inventions resulting from his employment at Stanford. As part of this research, Dr. Holodniy’s supervisor arranged for him to conduct research at Cetus, a research company developing methods for quantifying blood-borne levels of HIV. As a condition for gaining access to Cetus, Dr. Holodniy signed a second agreement by which he actually assigned to Cetus his “right, title and interest in each of the ideas, inventions and improvements” made “as a consequence of [his] access.”

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Intellectual Property Alert: It will be clear and convincing evidence to invalidate a patent

Supreme Court reaffirms patent invalidity must be proved by clear and convincing evidence
The Supreme Court in Microsoft v. i4i affirmed that 35 U.S.C. § 282 of the Patent Act requires an invalidity defense to be proved by clear and convincing evidence. In so holding, the Supreme Court rejected Microsoft’s position that, when the U.S. Patent and Trademark Office has not considered the evidence of invalidity in prosecuting the patent, the appropriate standard should be a preponderance of evidence.

Microsoft was sued by i4i alleging that Microsoft’s 2003 and 2007 versions of Microsoft Word infringed i4i’s U.S. Patent No. 5,787,449 (‘449 Patent), which relates to custom XML. Microsoft counterclaimed and sought a declaration that the ‘449 Patent was invalid under § 102(b)’s on-sale bar, which precludes a patent from issuing for any invention that was on sale in this country more than one year prior to the filing of a patent application.

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Intellectual Property Alert: Patent owners rejoice: Inequitable conduct in litigation more difficult to prove

Decision raises the threshold to prove inequitable conduct in patent litigation
The Federal Circuit’s en banc decision in Therasense v. Becton raises the threshold for proving inequitable conduct as a defense to patent infringement. “To prevail on a claim of inequitable conduct, the accused infringer must prove that the patentee acted with the specific intent to deceive the PTO.” The Federal Circuit explained that, to prove specific intent to deceive, requires an accused infringer must “prove by clear and convincing evidence that the applicant knew of the reference, knew that it was material, and made a deliberate decision to withhold it.”

Therasense (now Abbott) filed a patent application for disposable blood glucose test strips for diabetes management. During the 13 years of prosecution, the application received multiple rejections for anticipation and obviousness. To overcome these rejections, Abbott submitted an affidavit from its Director of Research and Development, and the application finally issued as U.S. Patent No. 5,820,551 (the ‘551 Patent).

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Intellectual Property Alert: Induced infringement: Are you being willfully blind?

U.S Supreme Court holds that actual knowledge is required for induced infringement
The U.S. Supreme Court’s recent decision in Global-Tech. App., Inc. v. SEB S.A. clarified the knowledge requirement for inducing patent infringement and held that liability for inducing patent infringement requires knowledge that the induced acts constitute patent infringement. The Court stated that inducement under 35 U.S.C. 271(b) requires the same knowledge that is also required under contributory infringement – knowledge of the existence of the patent that is infringed. The Court rejected the Federal Circuit’s “deliberate indifference” test for assessing the knowledge requirement of inducing infringement, which allowed a finding of knowledge when there is merely a known risk that a patent may exist covering the infringing product. While deliberate indifference will not satisfy the knowledge requirement, the Supreme Court stated that knowledge may be found under the doctrine of willful blindness.

Pentalpha Enterprises copied an SEB deep fryer and supplied it to Sunbeam, who resold the fryer in the U.S. under its own trademarks. SEB sued Sunbeam. After settling with Sunbeam, SEB sued Pentalpha for inducing Sunbeam and other resellers to infringe SEB’s patents. In bringing the deep fryer to resellers such as Sunbeam, Pentalpha had purchased an SEB deep fryer in Hong Kong and copied the fryer except for the cosmetic features. Pentalpha hired a patent attorney to conduct a right-to-use analysis, but failed to tell the attorney that the fryer was copied directly from SEB’s product.

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Ohio voters likely to decide fate of S.B. 5 on November 8th

In a demonstration that worker revolt in debt-laden states is not the mere province of cheese loving peoples (the Greeks, the French, and Wisconsinites), members of Ohio’s public employee unions, under the banner of “We Are Ohio”, took to the streets of Columbus on June 29th and presented Secretary of State Jon Husted with nearly 1.3 million signatures in favor of a petition for a public referendum to repeal recently passed amendments to the Public Employees’ Collective Bargaining Law (popularly known as S.B. 5). The 1,298,301 signatures collected far exceed the 231,149-signature requirement for putting repeal of S.B. 5 on the ballot this coming November—and in fact represents the largest haul of signatures ever collected for a referendum petition in the state’s history. 

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Corporate Risk and Insurance Update

Sparking a divide in defining ‘damage’ in business interruption claims?

Mainstream Aquaculture Pty Ltd v Calliden Insurance Ltd [2011] VSC 286

By Jessica Kinny and Ray Giblett of Gadens Lawyers, Sydney

The concept of ‘damage’ is fundamental to business interruption insurance because without it there is often no cover.  A broad approach to what constitutes ‘damage’ can therefore have a significant impact on the scope of such policies. read more


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Life Sciences Update

Intellectual Property Laws Amendment (Raising the Bar) Bill 

By Alexia Marinos of Gadens Lawyers, Sydney

On 22 June 2011, a Notice of Motion was given by the Minister for Innovation, Industry, Science and Research , Senator Carr to introduce the Intellectual Property Laws Amendment (Raising the Bar) Bill (Bill) into the Senate.  read more


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Corporate Update

Supplies of goods and services – replacement of laws on implied conditions and warranties

By Iris Dielmann of Gadens Lawyers, Sydney

Do you use standard terms and conditions of supply or purchase orders in your business?  If you are a supplier who supplies:

  • goods or service to a person (including a corporation) if the amount paid or payable for the goods or services is $40,000 or less (irrespective of the nature of goods or services)
  • goods or services to a person (including a corporation) if the goods or services are of a kind ordinarily acquired for personal, domestic or household use or consumption (irrespective of price)
  • a vehicle to a person (including a corporation) for use in the transport of goods on public roads (irrespective of price)


New laws on consumer guarantees may affect you.  read more


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Emerging Investment Opportunities in India: The Multi-Brand Retail Segment

A consensus has emerged in the government to permit foreign direct investment (FDI) in multi-brand retailing.

The Ministries of agriculture and food processing and the Planning Commission have suggested FDI up to 100 per cent in this sector, where other ministries have suggested smaller caps and sought more suggestions from industry.

The inter-ministerial group of inflation headed by Kaushik Basu, who is the chief economic advisor in the finance ministry, has recommended that FDI in multi-brand retail should be permitted, as it could be one of the key steps to help reduce rising prices and cut the margin between farms and retail prices.

To read the full article, please click here.

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