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Cisco’s 597 patent, titled “Method and Apparatus for Securing a Communications Device using a Logging Module,” relates generally to ensuring network device security by using a logging module with restricted configurability to detect and communicate changes to a network device’s configuration. Arista petitioned for an inter partes review (IPR) of certain claims of the patent. The Patent Trial and Appeal Board upheld some of those challenged claims as patentable but invalidated others. On appeal, Arista argued that the Board erred in construing the term “broadcast,” and that this error caused the Board to improperly reject Arista’s obviousness challenge to five claims. Cisco’s cross-appeal concerned the Board’s refusal to apply the doctrine of assignor estoppel. The Federal Circuit reversed as to Arista’s appeal, finding that the Board applied incorrect claim construction, and affirmed Cisco’s cross-appeal. While the issue of assignor estoppel was reviewable, section 311(a), by allowing “a person who is not the owner of a patent” to file an IPR, unambiguously dictates that assignor estoppel has no place in IPR proceedings. View "Arista Networks, Inc. v. Cisco Systems, Inc." on Justia Law

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Ford sued to recover interest payments that it alleges the government owes on Ford’s past tax overpayments. Ford can only recover this interest if it and its Foreign Sales Corporation subsidiary were the “same taxpayer” under 26 U.S.C. 6621(d) when Ford made its overpayment and the subsidiary made equal tax underpayments. The Claims Court granted the government summary judgment for the government after concluding that Ford and its subsidiary were not the same taxpayer. The Federal Circuit affirmed, explaining the interplay between the “interest netting” provision of 26 U.S.C. 6621(d) and the Foreign Sales Corporation (FSC) statute that incentivized U.S. company exports in 1984-2000. Treating FSCs and their parents as different taxpayers under section 6621(d) does not create any tension between section 6621(d) and the FSC statute. The FSC statute encouraged corporations to export through FSCs, even if section 6621(d) did not provide an additional interest netting benefit for that arrangement. View "Ford Motor Co. v. United States" on Justia Law

Posted in: Tax Law

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The Congressional Accountability Act (CAA) conferred rights and protections to employees of the legislative branch, modeled after and incorporating executive branch labor and employment statutes. CAA section 1351 gives legislative branch employees the right to bargain “with respect to conditions of employment" through their chosen representative, 5 U.S.C. 7117, but does not define “conditions of employment.” The Compliance Board issues regulations to implement section 1351; its regulations track the language in the Federal Service Labor-Management Relations Statute, defining “conditions of employment” as “personnel policies, practices, and matters, whether established by rule, regulation, or otherwise, affecting working conditions, except that such term does not include policies, practices, and matters . . . [t]o the extent such matters are specifically provided for by Federal statute.” A negotiability dispute arose between the U.S. Capitol Police and the Union during negotiations for a new collective bargaining agreement (CBA). The Police proposed to exclude employee terminations from the scope of the CBA’s grievance and arbitration procedures. The Union proposed language to ensure that terminations would continue to be covered by the grievance procedures. The Police refused to negotiate. The Compliance Board found the Union’s proposals negotiable. The Federal Circuit dismissed the Police’s petition for lack of jurisdiction, but, applying the Administrative Procedure Act standard of review, granted an enforcement petition, finding that the Compliance Board’s decision not contrary to law or otherwise invalid. View "United States Capitol Police v. Office of Compliance" on Justia Law

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The Capitol Police and the Union were negotiating a new collective bargaining agreement. The Police notified the Union of planned changes to its personnel policies. The Union responded with its own proposals. The Police declined to negotiate some proposals. The Compliance Board ruled for the Police as to some proposals but for the Union as to others and ordered the Police to bargain with the Union. In related cases, the Federal Circuit held that it lacked jurisdiction over the Police’s petitions for direct review of the negotiability decisions but that it had jurisdiction over the Office of Compliance petitions to enforce those decisions. In ruling on the enforcement petitions, the court reviewed the underlying negotiability decisions under the Administrative Procedure Act, 5 U.S.C. 706, default standard of review. In this decision, the court held that whether the Board refers a negotiability petition to a hearing officer is a matter for the Board's discretion, not a matter of statutory compulsion, and that the opportunity for such a referral may be lost if not timely requested. The court separately dismissed the Police’s petitions for direct review of the negotiability decisions regarding 12 specific proposals; held that it has jurisdiction over the enforcement action under 2 U.S.C. 1407(a)(2); granted the petition for enforcement with respect to five proposals while denying the petition with respect to six proposals; and set aside the order with respect to one proposal, remanding for determination of whether that proposal involves a change in conditions of employment. View "Office of Compliance v. United States Capitol Police" on Justia Law

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The patents at issue are directed to a broadcast technique in which a broadcast channel overlays a point-to-point communications network. The communications network consists of a graph of point-to-point connections between host computers or “nodes,” through which the broadcast channel is implemented. Blizzard filed six inter partes review (IPR) petitions regarding the three patents based principally on two different prior art references: one set of IPRs challenged claims based on the Shoubridge article 2 alone or combined with a prior art book DirectPlay3 and another set of IPRs challenged claims based on the Lin article 4 alone or combined with DirectPlay. The Patent Trial and Appeal Board held that multiple claims were unpatentable but upheld others and held that the Lin article is not a printed publication under 35 U.S.C. 102(a). The Federal Circuit affirmed, rejecting arguments that the Board erred by construing the term “participant” according to its plain meaning; that the terms “game environment” and “information delivery service,” appearing in two patents should have been given patentable weight; and that the Board failed to identify a broadcast channel in Shoubridge in its anticipation and obviousness analyses. The Board’s finding that Lin was not publicly accessible before the critical date was supported by substantial evidence. View "Acceleration Bay, LLC v. Activision Blizzard Inc." on Justia Law

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K-Con and the Army entered into two contracts for pre-engineered metal buildings. K-Con claims that the Army subsequently delayed issuance of a notice to proceed for two years, resulting in $116,336.56 in increases in costs and labor. According to K-Con, this delay was due solely to the government’s decision to add to each contract the performance and payment bonds set forth in Federal Acquisition Regulation (FAR) 52.228-15. The Armed Services Board of Contract Appeals held that bonding requirements were included in the contracts by operation of law when they were awarded, pursuant to the Christian doctrine. The Federal Circuit affirmed. The two contracts are construction contracts and, under the Christian doctrine, the standard bond requirements in construction contracts were incorporated into K-Con’s contracts by operation of law. If the contracts had been issued using the standard construction contract form, there would have been no issue, but these contracts issued using the standard commercial items contract form. There were, however, many indications that the contracts were for construction, not commercial items. The statement of work included many construction-related tasks, including developing and submitting construction plans, obtaining construction permits, and cleaning up construction areas. The statement of work also required compliance with FAR regulations relevant only to construction contracts. View "K-Con, Inc. v. Secretary of the Army" on Justia Law

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Garcia served in the Army from 1952-1954. The military’s records of his medical treatment during service were among those destroyed in a fire in 1973 at the National Personnel Records Center in St. Louis. The record of his medical examination upon leaving the service was not destroyed and reveals a normal psychiatric state and no severe illnesses or injuries. Garcia saw Dr. Smoker, in 1965 for a burn from a welding accident. In 1969, Dr. Smoker diagnosed Garcia with, and prescribed medication for, paranoid schizophrenia. In 2002, Garcia sought disability benefit, alleging service connection of disability-causing paranoid schizophrenia. The regional office denied the claim. The Board of Veterans’ Appeals remanded for a VA psychiatric examination. Although García claimed to have been seen twice for his condition while in service, a VA examiner found it “impossible to say, without resorting to mere speculation, as to whether this veteran’s schizophrenia, paranoid type actually started in Service, without more documentation and records.” The previous denial was “confirmed.” Garcia collaterally challenged the 2006 Board decision, alleging clear and unmistakable error (CUE). The Board and Veterans Court rejected Garcia’s CUE arguments. The Federal Circuit affirmed, upholding the Veterans Court’s application of 38 C.F.R. 20.1409(c) to bar a due process allegation of CUE. View "García v. WIlkie" on Justia Law

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Sunoco blends ethanol with gasoline to create alcohol fuel mixtures. Sunoco filed consolidated tax returns, 2004-2009, claiming the Mixture Credit under 26 U.S.C. 6426 as a credit against its gasoline excise tax liability for the years 2005-2008. In 2013, Sunoco changed its tax position by submitting both informal and formal claims with the IRS to recover over $300 million based on excise-tax expenses for the years 2005-2008, claiming that it erroneously reduced its gasoline excise tax by the amount of Mixture Credit it received, which had the effect of including the Mixture Credit in its gross income. In its view, Sunoco was entitled to deduct the full amount of the gasoline excise tax under section 4081— without regard to the Mixture Credit—and keep the Mixture Credit as tax-free income. In 2015, the IRS issued a statutory notice of disallowance denying Sunoco’s claims. Sunoco filed a refund suit. The Federal Circuit affirmed the Claims Court in upholding the disallowance. The alcohol fuel mixture credit must first be applied to reduce a taxpayer’s gasoline excise-tax liability, with any remaining credit amount treated as a tax-free payment. View "Sunoco, Inc. v. United States" on Justia Law

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Plaintiffs, retired or separated from their VA positions in 1993-1999, with accrued but unused leave. The Lump Sum Pay Act (LSPA), 5 U.S.C. 5551-5552, provides that an employee “who is separated from the service . . . is entitled to receive a lump-sum payment for accumulated and current accrued annual or vacation leave” equal to the pay the employee would have received had he remained in federal service until the expiration of the period of annual or vacation leave. Plaintiffs received lump-sum payments for their accrued and unused annual leave and later received supplemental lump-sum payments that reflected statutory pay increases and general system-wide pay increases that became effective before the expiration of their accrued annual leave. Plaintiffs sued, alleging that the VA omitted increases included Cost of Living Adjustments (COLAs) and Locality Pay Adjustments and that payments made to certain plaintiffs improperly omitted non-overtime Sunday premium pay or evening and weekend “additional pay” that they would have received had they remained in federal service. They sought pre-judgment interest under the Back Pay Act, 5 U.S.C. 5596. The claims for additional COLAs, Locality Pay Adjustments, and non-overtime Sunday premium pay were resolved. The Claims Court held, and the Federal Circuit affirmed, that, as members of the class, plaintiffs were not entitled to have evening and weekend “additional pay” included in their payments. They were not entitled to receive pre-judgment interest on amounts improperly withheld from their payments. View "Athey v. United States" on Justia Law

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The 753 trademark, issued to Converse in 2013, describes the trade-dress configuration of three design elements on the midsole of Converse’s All Star shoes. Converse filed a complaint with the International Trade Commission (ITC), alleging violations of 19 U.S.C. 337 by various companies in the importation into the U.S., the sale for importation, and the sale within the U.S. after importation of shoes that infringe its trademark. The ITC found the registered mark invalid and that Converse could not establish the existence of common-law trademark rights, but nonetheless stated that various accused products would have infringed Converse’s mark if valid. The Federal Circuit vacated. The ITC erred in failing to distinguish between alleged infringers who began infringing before Converse obtained its trademark registration and those who began afterward. With respect to the pre-registration period, Converse, as the party asserting trade-dress protection, must establish that its mark had acquired secondary meaning before the first infringing use by each alleged infringer. In addition, the ITC applied the wrong legal standard in its determination of secondary meaning. On remand, the ITC should reassess the accused products to determine whether they are substantially similar to the mark in the infringement analysis. View "Converse, Inc. v. International Trade Commission" on Justia Law