Insights

After months of anticipation, the Supreme Court issued its opinion in Van Buren v. United States narrowing the scope of what constitutes “exceeds authorized access” under Section 1030(a)(2) of the Computer Fraud and Abuse Act (“CFAA”). No. 19-783, --- S.Ct. --- (June 3, 2021). The Supreme Court ruled that to be liable under the “exceeds authorized access” prong of the CFAA, a defendant must have accessed information within a computer system they were not permitted to access. It is no longer sufficient under the CFAA to show a defendant had an improper motive to obtain and use information on a computer system which they were permitted to access. 

To put it mildly, 2020 was a year full of changes—including changes to the federal court rules of procedure. As litigants prepare for a new year of court proceedings, they should bear in mind several of these rule changes.

On September 10, the U.S. Department of Justice took what it described as an “extraordinary step” and issued a Supplemental Business Review Letter to its previous 2015 Business Review Letter to the Institute of Electrical and Electronics Engineers, Inc. (IEEE). IEEE is a standards development organization (SDO) that has developed thousands of international standards, including the 802.11 family of Wi-Fi standards. The DOJ’s latest letter to IEEE revised significant aspects of the DOJ’s original analysis of IEEE’s 2015 patent policy to align with current DOJ competition policy positions on standards development and SDO policies for providing access to standard essential patents.

As COVID-19 cases surge across much of the country, many courts are altering or postponing their reopening plans. Additionally, some courts that are reopening now face challenges from attorneys, staff, and litigants concerned about in-person court proceedings.

In looking to re-open, courts across the country are confronting both the public health and safety needs of their locales, as well as the role remote operations may continue to play. Courts—both federal and state—are reopening and implementing a patchwork of procedures on a court-by-court basis.

COVID-19 has disrupted and will continue disrupting supply chains in many important ways, as suppliers, carriers and buyers navigate the global pandemic. But does the pandemic allow activation of force majeure clauses in your contracts? If a force majeure clause is activated, what are the rights and responsibilities of each party during the pandemic? When does performance restart and how? And, what if there is a dispute?

The impacts of COVID-19 are rapidly evolving and quickly disrupting business operations. If they haven’t already done so, many businesses are deciding whether to activate contractual force majeure clauses or looking to other doctrines that may excuse non-performance. While many businesses during this global pandemic may want to address performance disruptions amicably to the extent possible, understanding how disputes over force majeure clauses are decided allows a business to act strategically. This is true whether you are the party seeking damages for non-performance or invoking a defense to performance. Even with a well-crafted force majeure clause, parties can disagree about whether the defense applies, what the implications are to continued performance, and what damages, if any, are recoverable. While each dispute is highly fact-specific and likely to be affected by the language of the contract and governing law, we provide guidance below on the factors most likely to be relevant to resolution of the dispute.

As discussed last week, many courts have issued standing orders delaying civil case deadlines. Litigants should note, however, that discovery-related deadlines set pursuant to statute, local rule, or case-specific scheduling orders have sometimes been excluded from the blanket extensions granted by federal and state trial courts. For example, while the Northern District of Illinois’ 39-day blanket extension order explicitly encompasses discovery deadlines, the District of Maryland explicitly exempted the conduct of discovery in civil cases from its 84-day extension of other civil filing deadlines. And although California state courts have suspended all jury trials for 60 days, that order does not appear to extend to discovery deadlines, which under California law are not automatically affected by a change in the trial date. It is therefore important for litigants with active cases to consider whether and how any COVID-related delays impact pending discovery deadlines—and if standing delay orders do not provide any relief from discovery obligations, consider whether such relief may be warranted.

As we discussed a few weeks ago, the federal courts’ responses to COVID have varied widely. One of the most common responses across the federal courts, however, has been the extension of filing deadlines—although the particular deadlines affected and the length of the extensions granted (again) vary. To give a few examples from all levels of the federal court systems:

COVID-19 likely will lead many contracting parties to consider declaring that a force majeure event has occurred when performance has become impossible or significantly more difficult. But the exact wording of the force majeure clause will matter a great deal in determining whether non-performance is legally excused. Force majeure clauses can be very different. You should consider carefully the language of a force majeure provision, and the questions below, before deciding on your response to a business disruption.

Force majeure and related doctrines may allow a contracting party to suspend or terminate performance when certain unforeseeable events that are beyond the control of the parties occur, such as a global pandemic or government action or prohibition. However, the mere existence of a force majeure clause and qualifying event may not excuse non-performance if that event is not the actual cause of the business disruption.

In responding to a business disruption caused by the COVID-19 pandemic, it is not enough to read and rely on the language of the contract. You will also need to consider the law governing contract interpretation and commercial relationships. The relevant law may excuse non-performance even without a force majeure clause, and will certainly affect the interpretation of the force majeure clause.

The COVID-19 pandemic is causing widespread business interruptions with inevitable ramifications on commercial relationships. It is tempting to focus elsewhere and plan to deal with the legal issues when the smoke clears. This could be a mistake.

If it is your counterparty that invokes force majeure to excuse its performance, it is important that you understand what your own obligations and rights are, how to enforce those rights, and how to challenge the assertion of force majeure if you do not believe it is justified. The declaring party must be able to defend the invocation of the force majeure notice and justify whether all or just part of the performance should be excused. The analysis will be highly fact and contract-specific, and this guide provides a starting point to evaluate next steps and build your strategy after a force majeure event is declared.

Last week, we discussed COVID-related developments in the federal courts of appeals and federal district courts, noting the wide variety of measures that those courts have taken to adjust their operations in light of the COVID-19 pandemic. The state courts have taken a similarly wide range of measures to address this crisis, drastically altering many of their operations. State courts have been even more varied in their approach than the federal courts, with different levels of courts within the same state taking different (and sometimes potentially conflicting) actions. For example, the California Supreme Court and six appellate divisions have automatically extended all deadlines set forth in the California Rules of Court by 30 days—but those extensions have different effective dates and will expire on different days in mid- to late April. Moreover, those blanket extensions do not appear to cover filing deadlines for notices of appeal or designations of the record in the superior court. To complicate matters further, some of the California courts do not allow e-filing, suggesting that filings may still need to be submitted at the court house drop box—despite the fact that many courts are ostensibly closed to the public.

COVID-19 is rapidly evolving and has disrupted and will continue disrupting business operations in many important ways. But does it activate force majeure clauses in your contracts? The answer is, of course, it all depends. Watch this space for further guidance, as we are starting a series on contract disputes related to the COVID-19 pandemic.

As the COVID-19 pandemic continues to expand its geographic reach, courts across the country have begun to impose a number of restrictions, closures, and other emergency measures. Currently, however, these measures are being implemented by federal courts on an ad hoc, court-by-court basis, leaving litigants with a patchwork of sometimes inconsistent rules for accessing court services. These restrictions vary from modest restrictions on court access to high-risk individuals, to near total suspension of court activities. As of the time of this alert, for example:

The Advisory Committee on the Federal Rules of Civil Procedure has announced proposed amendments to the Federal Rules. The most significant are the proposed changes to Rule 30(b)(6) governing the deposition of corporate representatives. Specifically, the amendment would add a “conferral mandate” requiring the parties to confer in advance regarding the number and identity of topics and identify the corporate designees implicated by a Rule 30(b)(6) deposition notice. The amendments would be the first substantive changes to Rule 30(b)(6) in the nearly 50 years since it was adopted. If adopted by the Supreme Court, the rule would be effective December 1, 2020. 

The recent ruling by a California federal court in the Federal Trade Commission’s monopolization case against Qualcomm sparked immediate and strong reactions from varied quarters. In a lengthy opinion, the court held that Qualcomm violated federal antitrust law. It ordered a broad injunction that could alter Qualcomm’s business model just as the global cellular system transitions to 5G. Qualcomm has appealed to the Ninth Circuit. 

The Federal Circuit has revived a complaint to correct inventorship in another case involving the intersection of patent and trade secret law. In Coda Development v. Goodyear Tire & Rubber, Plaintiffs asserted that Defendants misappropriated trade secrets and breached a non-disclosure agreement (NDA) by seeking patent protection for Plaintiff’s inventions related to self-inflating tire (SIT) technology. The district court dismissed the case on a Rule 12(b) motion. But the Federal Circuit reversed holding that the district court improperly made underlying factual findings on the inventorship issue at the pleading stage.