Gibbons Law Alert Blog

Ignorance Isn’t Bliss: Federal Sanctions Imposed for Party’s Failure to Timely Search Its Email Server

A recent decision from the Eastern District of Pennsylvania underscores an important lesson on attorneys’ duty of competence, which requires a practical and well-rounded understanding of technology in order to execute their clients’ e-discovery obligations. Indeed, as Ondigo LLC v. intelliARMOR LLC reflects, ignorance of the various sources of e-discovery cannot shield attorneys or parties from sanctions under Federal Rules of Civil Procedure 26(g) or 37(e).

Of All People…: DC District Court Hits Experienced Litigator Defendant With Terminating Sanctions for Failure to Preserve

In yet another cautionary tale displaying how seriously attorneys and clients must take discovery obligations, United States District Court Judge Beryl A. Howell entered a very rarely imposed default judgement against famed former U.S. Attorney and Mayor Rudy Giuliani for failure to preserve discovery in a defamation suit. Judge Howell’s opinion in Freeman, et al. v. Giuliani represents a blunt condemnation of discovery gamesmanship that is part of a growing number of cases that impose the most severe sanctions for failure to comply with preserving electronic evidence. In 2021, plaintiffs Ruby Freeman and Wandrea’ ArShaye Moss brought suit against defendant Giuliani for defamation, intentional infliction of emotional distress, civil conspiracy, and punitive damage claims. In response to the plaintiffs’ first set of discovery requests, Giuliani – an attorney for over 50 years – served an “initial production of 193 documents [that was] largely a single page of communications, blobs of indecipherable data, a sliver of the financial documents.” After the plaintiffs’ repeated inquiries into his preservation efforts and the court’s intervention, Giuliani issued a sworn declaration providing that his only preservation effort was turning off the auto-delete function on a nondescript list of devices and social media and email accounts. Given Giuliani’s admitted “preference to concede plaintiffs’ claims rather than produce discovery in this case,”...

District Court Affirms United States Copyright Office’s Denial of Copyright Registration for AI-Generated Visual Art

Pursuant to the Copyright Act of 1976, “original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device” are eligible for immediate copyright protection, provided certain requirements are met. Against this backdrop, Stephen Thaler applied for copyright registration with the United States Copyright Office (USCO) of a piece of visual art produced by a generative artificial intelligence system he created – the “Creativity Machine.” The USCO subsequently denied the application, reasoning that Thaler’s work “‘lack[ed] the human authorship necessary to support a copyright claim,’” as “copyright law only extends to works created by human beings.” After Thaler filed suit against the USCO, both parties moved for summary judgment on the sole issue of whether a work generated entirely by an artificial system should be eligible for copyright protection. On August 18, 2023, in Thaler v. Perlmutter the United States District Court for the District of Columbia granted the USCO’s motion for summary judgment, concluding that “human authorship is an essential part of a valid copyright claim.” The court rejected as contrary to the Copyright Act’s plain language Thaler’s contention that because he created the AI system that “autonomously” produced...

Baxalta Inc. v. Genentech, Inc.: The Federal Circuit Addresses Enablement After Amgen v. Sanofi

Baxalta Inc., v. Genentech, Inc., Appeal No. 2022-1461 (Fed. Cir. Sept. 20, 2023) is another in the line of cases where claims to biological compounds are drafted functionally and raise §112 issues. This decision was an appeal from a grant of summary judgment that held certain claims of Baxalta’s ‘590 patent invalid for lack of enablement. The technology involved antibodies for enhancing the mechanism for blood clotting to treat patients with hemophilia type A. Claim 1 of the patent recited “[a]n isolated antibody or antibody fragment thereof that binds Factor IX or Factor IXa and increases the procoagulant activity of Factor IXa.” (Emphasis added). The claim is drafted functionally; it describes what the antibody does, rather than what the antibody actually is, and it encompasses any antibody capable of achieving that function. The specification of the ‘590 patent disclosed only 11 actual antibodies that fell within the claim’s scope, and referred to generally known methods for producing and screening antibodies. Relying on the analysis provided by the Supreme Court’s recent decision, Amgen Inc. v. Sanofi, 598 U.S. 594 (2023), the court found that the ‘590 patent’s specification simply provided a roadmap for one to engage in the same iterative, trial-and-error process that the inventors used to find their 11 antibodies. It did not identify any common...

PTAB Finds Service of Complaint for Infringement Without Exhibits Does Not Trigger 35 U.S.C. § 315(b) Time Bar

In Lightricks Ltd. v. Plotagraph, Inc., the Patent Trial and Appeal Board (PTAB or “Board”) recently clarified the standard for what triggers the 35 U.S.C. § 315(b) time bar for filing a petition for inter partes review. Section 315(b) requires that petitions for inter partes review be filed with the Board within “[one] year after the date on which the petitioner … is served with a complaint alleging infringement of the patent.” 35 U.S.C. § 315(b). In Lightricks v. Plotagraph, the Patent Owner (“PO”) argued that the petition at issue was filed outside of the one-year anniversary of the service of its complaint for infringement in the related federal district court action and was therefore time barred. The PO had attempted to serve its complaint at two of the petitioner’s office locations more than one year before the petition was filed. However, the exhibits to the complaint were not included in either of those two service attempts. The petitioner argued that the date of service for purposes of § 315(b) was the date that it filed a waiver of service with the district court, and that because the waiver of service was filed less than one year before the petition was filed, the petition was not time barred under § 315(b). The Board agreed with...

New Jersey Enacts Anti-SLAPP Legislation

Lawsuits filed to intimidate or punish those who are engaged in constitutionally protected activity by, in effect, suing them into submission or silence through the prospect of expensive and time-consuming litigation are commonly referred to as strategic lawsuits against public participation (SLAPP). On September 7, 2023, Governor Murphy signed New Jersey’s first anti-SLAPP legislation, which is designed to thwart such lawsuits by providing a process for early dismissal of these suits and an award of costs and counsel fees to a prevailing moving party. New Jersey now joins 32 other states that have enacted some form of anti-SLAPP legislation. The legislation applies to a civil cause of action against a person based on the person’s: (1) communications during a legislative, executive, judicial, administrative, or other governmental proceeding; (2) communications on an issue under consideration or review by such a body; or (3) engagement in any other activity that is protected by the First Amendment freedoms guaranteed by the United States Constitution or New Jersey Constitution and that relates to a matter of public concern. Modeled after the Uniform Public Expression Protection Act (UPEPA), the New Jersey legislation: permits a SLAPP defendant to file an early application for an order to show cause to dismiss the cause of action in whole or in part establishes a...

Court Sends a Strong “Signal”: Defendants Sanctioned Over Their Failure to Preserve Ephemeral Communications and Surreptitious Use of Encrypted Email

“The Individual Defendants’ systematic efforts to conceal and destroy evidence are deeply troubling and have cast a pall over this action.” These are some of the harsh words used by the Honorable Dominic W. Lanza, District Judge for the United States District Court for the District of Arizona, in Federal Trade Commission v. Noland, in lambasting the defendants for their deliberate deletion of cellphone messages sent via the Signal app and their suspension/clearing of email messages sent through ProtonMail (an encrypted email platform). One day after individual defendant James Noland became aware that the FTC was investigating him and his business Success by Health (SBH), he required the other individual defendants – who are all part of SBH’s leadership team – to start using a pair of encryption communications platforms: the Signal app for their cellphones and ProtonMail for email messaging relating to SBH’s business. After doing so, the individual defendants stopped using their previous messaging platforms for work-related communications and turned on Signal’s auto-delete function. After the FTC filed the action, it obtained a restraining order appointing a receiver to assume control over SBH and required the individual defendants to produce their electronic communications and turn over the mobile devices used to operate the business. In his deposition, Noland failed to disclose the Signal...

Pay Equity Compliance Front and Center in New Jersey Department of Labor’s Proposed Regulations for the Temporary Workers Bill of Rights

The New Jersey Department of Labor recently issued proposed regulations for the Temporary Workers Bill of Rights (TWBR). The proposed regulations include new definitions and further guidance for employers to comply with TWBR’s pay equity requirements. The proposed regulations are open for public comment until October 20, 2023. By way of background, the TWBR, which became fully effective on August 5, 2023, seeks to protect more than 127,000 temporary workers working in the state and employed through a temporary help service firm in designated occupations, including protective services; food preparation and serving; building and grounds cleaning and maintenance; personal service and care; construction labor, helpers, and trades; installation, maintenance, and repair; production; and transportation and material moving. The TWBR, among other things, implements detailed wage notice requirements to be provided to temporary workers in both English and the temporary worker’s primary language, recordkeeping requirements, advanced notice for changes to temporary worker schedules, pay equity, and anti-retaliation rights with a rebuttable presumption for any disciplinary action taken within 90 days of a temporary worker’s exercise of those rights. The goal of the TWBR is to strengthen employment protections for temporary workers in these designated occupations, and employers need to be mindful of the TWBR’s requirements for compliance purposes. The TWBR’s pay equity component requires temporary workers...