November 3, 2017

Lit Alerts—November 2017

A Publication of the Litigation Practice Group

In This Issue:


False Advertising: California Court of Appeal Rules That Plaintiffs' Expert Witness' Failure to Test Homeopathic Remedy Was Not Grounds for Excluding Opinion on the Remedy's Effectiveness

A California Court of Appeal has reversed a trial court's decision to strike plaintiffs' expert witness who opined on the efficacy of an anti-snoring medicine without testing a sample of the product. The trial court entered judgment for the defendant after striking the plaintiffs' expert witness.

In Rosendez et al. v. Green Pharmaceuticals, the plaintiffs sought to recover for false advertising, unfair competition, and violations of California's Consumers Legal Remedies Act. The plaintiffs alleged that the defendant, a pharmaceutical company, had falsely claimed that its homeopathic snoring remedy was effective at preventing snoring. The plaintiffs' expert, a pharmacologist, opined that according to the ingredients (and their concentrations) listed on the defendant's product label, the medicine central to the case could not be expected to have any effect on a patient's snoring. The defendant successfully moved to strike the expert on the ground that because he did not actually test a sample of the defendant's drug, he had no basis to opine on the drug's efficacy. After striking the plaintiffs' expert, the trial court entered judgment for the defendant because the class could not prove its case without expert testimony.

The Court of Appeal reversed the trial court's ruling, stating that the expert was entitled to rely on the package's labeling when analyzing the effect the ingredients would have; testing samples was not necessary.  The Court of Appeal further ruled that the plaintiffs' expert provided sufficient evidence to permit the fact finder to have found for the plaintiffs, and that because the trial court had correctly stricken the defendant's expert, the opinions of plaintiffs' expert were unrebutted by the defendant. The Court of Appeal accordingly remanded the case to the trial court to determine the measure of damages to which the plaintiff class was entitled.

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Discovery: S.D.N.Y. Finds "No Foundation" to Impose Spoliation Sanctions Under Federal Rule 37 Where No Evidence Was "Lost"

The US District Court for the Southern District of New York recently denied a motion for spoliation sanctions in Barcroft Media Ltd. v. Coed Media Group, LLC, No. 16-cv-7634 (S.D.N.Y. Sept. 28, 2017). The case involved an allegedly infringing use of certain celebrity photographs on the defendant's website. The plaintiffs sought spoliation sanctions pursuant to FRCP 37, on the ground that the defendant failed to preserve the webpages on which it had displayed the photographs at issue.

However, several of the images at issue were still hosted on the defendant's websites at the time the motion was filed, and the plaintiffs had taken screenshots of the other websites when they had displayed the images at issue in the past. Notably, the defendant did not dispute the authenticity of the plaintiffs' screenshots.

Emphasizing the 2015 amendments to the Federal Rules of Civil Procedure, the Court found the plaintiffs' motion to be without merit because "there was no foundation to impose sanctions under Rule 37(e)" where the plaintiffs could not show that the images at issue were "lost." Rule 37 was amended in 2015 to state that a court may impose sanctions only "if electronically stored information that should have been preserved in anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through additional discovery." More severe sanctions can be imposed "only upon finding that the party acted with the intent to deprive another party of the information's use in the litigation." Fed. R. Civ. P. 37(e)(2).

Denying sanctions, the Court observed that the plaintiffs could not show prejudice because they themselves actually possessed copies of the relevant evidence.  Moreover, even if an appropriate foundation for sanctions otherwise existed, the Court explained that sanctions would not be appropriate due to the lack of evidence that the defendant "acted with the intent to deprive another party of the information's use in the litigation," Fed. R. Civ. P. 37(e)(2). The Court ultimately found that the plaintiffs' sanctions motion was "without merit," and "borderline[d] on frivolous."

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Intellectual Property: Federal Circuit Upholds ITC Finding Of Invalidity of Patent as "Abstract Idea" Under Alice Corp. Ptv. Ltd. v. CLS Bank Int'l, 134 S. Ct. 2347 (2014)

Last month, in Creative Technology Ltd. v. International Trade Commission, 2016-2715 (Fed. Cir.), the Court of Appeals for the Federal Circuit upheld the International Trade Commission's (ITC) determination regarding patent invalidity under the Supreme Court's 2014 decision in Alice Corp. Ptv. Ltd. v. CLS Bank Int'l, 134 S. Ct. 2347 (2014). The patent at issue, U.S. Patent No. 6,928,433, disclosed a user interface for portable media players. The claimed interface utilized an "organizational hierarchy" that organized musical tracks in a series of lists organized by category, subcategory, and item.

The patent owner, Creative Technology Ltd., filed a complaint with the ITC in March 2016, requesting that various electronic device manufacturers be prevented from continuing to import smartphones that it believed incorporated software that infringed the '433 patent.

The ITC denied the complaint on the ground that the '433 patent was invalid. At issue was whether the '433 patent claimed an unpatentable "abstract idea." In evaluating patents that claim an abstract idea, courts consider whether the patent "transforms" the abstract idea into a patent-eligible application by adding an "inventive concept." In Alice, the Supreme Court clarified that in the computer context, an abstract idea is not transformed into a patentable concept merely by adding the instruction to "implement [the] abstract idea on a computer."

The ITC explained that the patent at issue did not claim any concept beyond "the application of known organization methods to the standard functions of portable music players and similar devices"—in other words, that the patent's claims failed under Alice because it merely described an abstract concept's implantation in a generic computer environment. The ITC therefore found that the '433 patent claimed an unpatentable abstract idea. The Federal Circuit affirmed the ITC's decision without explanation.

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© 2017 Arnold & Porter Kaye Scholer LLP. This Law & Industry Update is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.

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