March 2006

Patents. Here is a summary of the oral argument before the Supreme Court earlier this week, in the eBay v. MercExchange case, discussed earlier in this blog. [link]

The summary of oral argument (which apparently gave no clear clues to the outcome) is on the excellent SCOTUSblog [link].

UPDATE (April 18, 2006):

Here is a link to the transcript of oral argument before the Supreme Court [link]

The argument contains a humorous exchange between Carter Phillips, counsel for eBay, and Justice Kennedy:

Phillips: [references “patent trolls” in his argument]

Justice Kennedy: Well, is — is the troll the scary thing under the bridge, or is it a fishing technique? I– I want —

(laughter)

Read the full article

Noncompete Agreements. Clients frequently present the following issue: we have existing employees who have not signed noncompete agreements. We’d like to ask them to sign them. Any problem with that?

The knowledgeable lawyer then struggles with the following question: does the employee need to be given some consideration for the noncompete to be enforceable? Consideration is not an issue when an employee signs a noncompete at the beginning of employment, since the job itself provides the consideration. But when the employee already has the job, does the employer have to give the employee some new consideration? – a raise, a bonus, a promotion?

There is a line of Massachusetts cases suggesting that continued employment (for an at-will employee) is itself adequate consideration, but the rule is not as clear as most lawyers would like, and many lawyers are forced to equivocate on this issue. And, some states have clearly held that continued employment is not adequate consideration, adding to the uncertainty.… Read the full article

What Did You Say Your Trade Secrets Were?

by Lee Gesmer on March 27, 2006

Trade Secrets, Procedure. Warning: if you’re seeking discovery in a trade secret case in the Suffolk Business Litigation Session make sure that you have (a) provided the court with a detailed description of your trade secrets, and (b) filed a protective order that strictly complies with the Uniform Rules of of Impoundment.

For a recent decision making these points, written by Judge Allan Van Gestel in the Suffolk Business Litigation Session, click [here]. The decision, Tourtellotte Solutions, Inc. v. Tradestone Software, Inc., was featured on the front page of Massachusetts Lawyers Weekly last October. In a nutshell, the plaintiff asked for expedited discovery (in other words, the right to take discovery on a schedule faster than allowed in the ordinary course by the rules of civil procedure), so that the plaintiff could obtain evidence necessary to bring a preliminary injunction against the defendant. The plaintiff’s basic claim was that the defendant had engaged in “software misappropriation,” a term that Judge Van Gestel stated “sounds very much like trade secret misappropriation.”

The judge denied the motion, stating: “a detailed description of what is claimed to be a trade secret must be provided and a protective order of some sort needs to be worked out.”

Neither conclusion is surprising in the least.… Read the full article

Oral Argument Upcoming in eBay v. MercExchange

by Lee Gesmer on March 22, 2006

Patents. On Wednesday, March 29, 2006, the Supreme Court of the United States (SCOTUS) will hear oral argument in eBay v. MercExchange. The issue is whether the owner of a patent (in this case MercExchange) has the right to enjoin (or stop) an infringer (eBay) from selling an infringing product or service – in this case eBay’s popular “Buy It Now” (or, to eBay aficionados, “BIN”) purchase feature.

A jury has already found that eBay infringed MercExchange’s patent on this technology, and MercExchange is attempting to invoke the general rule that a successful patent plaintiff can shut down an infringing product, pending appeal. It was just this threat — the threat of a shut down — that led to Research in Motion paying a $612.5 million settlement to NTP in February. eBay is asking SCOTUS to modify the traditional rule and permit it to continue to use this service pending appeal.… Read the full article