Source: https://www.mwe.com/insights/2018-10-ip-update/
Timestamp: 2019-04-23 20:20:57+00:00

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The US Court of Appeals for the Federal Circuit denied a patent holder’s petition for rehearing en banc but issued a modified opinion finding that to invoke the entire market value rule, the patent holder must show that the non-patented features do not cause consumers to purchase the product. Power Integrations, Inc. v. Fairchild Semiconductor International Inc., Case Nos. 16-2691, 17-1875 (Fed. Cir. Sept. 20, 2018) (Dyk, J).
The Federal Circuit issued its original opinion on July 3, 2018, finding that in order to invoke the entire market value rule, “[w]here the accused infringer presents evidence that its accused product has other valuable features beyond the patented feature, the patent holder must establish that these features are not relevant to consumer choice,” and “[w]hen the product contains other valuable features, the patentee must prove that those other features did not influence purchasing decisions” (IP Update, Vol. 21, No. 8).
After the original decision, Power Integrations filed for rehearing en banc, arguing that the Federal Circuit had announced a new test for the entire market value rule, which for the first time requires the patentee to prove a negative: “[w]hen a product contains other valuable features, the patentee must prove that those features did not influence purchasing decisions.” Power Integrations argued that this test had never been stated previously by the Court, was not supported by precedent, and overruled the holdings of at least three prior panel decisions. Thus, Power Integrations requested en banc review to reconcile the panel split. Fairchild opposed the petition for rehearing en banc.
Practice Note: Under the modified ruling, in order to satisfy the entire market value rule, patent holders must show that non-patented features do not cause consumers to purchase the product. This appears to be a less stringent standard than the holding in the original opinion, which required patent holders to prove that non-patented features did not influence purchasing decisions.
The US Court of Appeals for the Federal Circuit, finding errors in claim construction, overturned a jury verdict of infringement and affirmed a district court summary judgment determination that the claims at issue were not anticipated by the prior art. Wis. Alumni Research Found. v. Apple Inc., Case Nos. 17-2265, -2380 (Fed. Cir. Sept. 28, 2018) (Prost, CJ). Both issues involved hotly contested disputes as to the plain and ordinary meaning of key claim terms, and the Federal Circuit’s decision ultimately turned on how it defined those terms.
The Wisconsin Alumni Research Foundation (WARF) owns a patent directed to a data speculation decision circuit that uses predictions to help increase the efficiency of computer processing functions running in parallel. The claims require that a prediction be associated with a “particular” load instruction. WARF filed a patent infringement complaint against Apple asserting the patent.
Apple argued that it did not infringe the claims because the plain and ordinary meaning of “particular” requires that the claimed prediction be associated with a single load instruction, but each “prediction” in Apple’s accused product was tied to multiple load instructions. Apple’s expert offered opinions based on this meaning of “particular,” and WARF moved to exclude that testimony at trial. The district court denied WARF’s motion and agreed with Apple’s position about the meaning of “particular,” but declined to give the jury a specific instruction about the meaning of “particular.” The jury returned a verdict of infringement, and the district court denied Apple’s motion for judgment as a matter of law. WARF appealed.
On appeal, the Federal Circuit agreed with Apple’s position about the plain and ordinary meaning of the term “particular,” but did not provide any analysis or explanation of its reasoning, or cite to any evidence upon which it relied to reach that conclusion. Instead, the Court focused on the merits of the infringement issue under the construction the Court adopted. The Court considered and rejected several arguments by WARF that the accused products still infringed, even under Apple’s construction of “particular,” but the Court overturned the jury verdict of infringement.
The anticipation issue on appeal rested on another claim construction dispute, this time with respect to claim language including a “prediction” limitation. WARF contended that the claimed “prediction” must be dynamic and capable of receiving updates. Apple contended that the term was broad enough to include static predictions. The Federal Circuit adopted WARF’s definition because the patent as a whole “repeatedly and consistently” characterized a “prediction” as being capable of receiving updates, and because Apple could not point to any portion of the specification that described a static prediction. The Court found that construing “prediction” to encompass static predictions would expand the scope of the claims beyond what was supported by the specification. Finding that the prior art reference at issue did not disclose predictions that can receive updates, the Court affirmed the lower court’s grant of summary judgment that the claims were not anticipated.
Addressing whether arguments made during prosecution serve to disavow the plain meaning of certain claim terms, the US Court of Appeals for the Federal Circuit reversed the district court’s claim construction, finding that there was no clear disavowal of claim scope. Intellectual Ventures I LLC v. T-Mobile USA, Inc., Case Nos. 17-2434, -2435 (Fed. Cir. Sept. 4, 2018) (Moore, J).
Intellectual Ventures owns a patent directed to “an application-aware resource allocator that allocates bandwidth resources to transmit information from software applications over a packet-switched network.” Specifically, the resource allocator is able to adjust the quality of service (QoS) to prioritize either speed or error minimization based on the application type. In order to determine the proper QoS, the patented technology takes into account the seven-layer Open Systems Interface (OSI) standard, which defines multiple network protocol “layers” between layer 1, the physical layer, and layer 7, the application layer.
After being sued, T-Mobile moved for summary judgment on the basis of non-infringement and indefiniteness under 35 USC § 112. T-Mobile argued that the term “allocate resources based on application type” requires allocating resources using information obtained in at least OSI layer 7, the application layer. T-Mobile based its construction on certain remarks made during the prosecution of the asserted patent, arguing that the remarks disavowed any additional claim scope. Conversely, Intellectual Ventures argued for a broader interpretation, indicating that the term may include information obtained from any of OSI layers 3, 4 or 7. The district court agreed with T-Mobile, noting that the construction was supported by the prosecution history. The district court also found that the term “QoS requirements” was indefinite. Intellectual Ventures appealed.
Turning to indefiniteness, the Federal Circuit affirmed the district court’s finding that the definition of “QoS requirements” within a means-plus-function claim was indefinite. The specification of the asserted patent defined QoS requirements as “a continuum, defined by what network performance characteristic is most important to a particular user [and which has] different meanings for different users.” The Court found this definition to be “purely subjective.” Thus, the claim was deemed indefinite without the need to evaluate any means-plus-function structure.
Practice Note: In finding the “QoS requirements” indefinite, the Federal Circuit explained that terms of degree that depend upon “the unpredictable vagaries of any one person’s opinion” are, by definition, purely subjective. Thus, drafters should use caution when combining terms of degree with user preferences.
Addressing Patent Trial and Appeal Board (PTAB) inter partes review (IPR) decisions finding some, but not all, challenged claims unpatentable, the US Court of Appeals for the Federal Circuit affirmed the PTAB’s determination finding the apparatus claims unpatentable but sparing the method claims. ParkerVision, Inc. v. Qualcomm Inc., Case Nos. 2017-2012, -2013, -2014, -2074 (Fed. Cir. Sept. 13, 2018) (O’Malley, J).
Qualcomm filed three IPR petitions against a ParkerVision patent directed to devices and methods for up-converting low frequency signals. The first and second petitions targeted both apparatus and method claims and relied on a first set of prior art references. The third petition targeted other apparatus claims and relied on a second set of prior art. The PTAB instituted review for all three petitions.
ParkerVision filed responses in the first two IPRs contending that the prior art failed to satisfy the “plurality of harmonics” claim language because that prior art only explicitly mentioned having a single harmonic. Qualcomm filed a reply that argued that multiple harmonics would necessarily occur with the prior art for certain frequencies. The PTAB concluded that the apparatus claims were rendered obvious because the prior art was capable of having the plurality of harmonics. But the PTAB held that the method claims were patentable over the same prior art, because Qualcomm did not show motivation to actually use the prior art to obtain the plurality of harmonics. The parties cross-appealed the split decision to the Federal Circuit.
On appeal, the Federal Circuit affirmed the PTAB’s decisions. The Court considered whether the claims were written to require an infringing configuration or instead merely recited capability to perform functions. The Court found that the claims recited capability based on preamble language reciting an apparatus “for” frequency up-conversion and a switch module “to receive” a string of pulses. In view of that decision, the Court concluded that the prior art rendered obvious the apparatus claims, because it was capable of achieving the recited plurality of harmonics.
Turning to the method claims, the Federal Circuit concluded that prior art that only sometimes uses a claimed method amounts only to a teaching of that method and must be supported by a reason why an ordinary artisan would adopt that teaching. The Court agreed with the PTAB that Qualcomm met that burden and affirmed the decision finding the method claims patentable.
ParkerVision also filed a response in the third IPR arguing that Qualcomm’s identification of a transistor in the primary reference was insufficient to satisfy the “gate” claim language. Qualcomm’s reply explained that the primary reference’s transistor constitutes a gate when driven by the square wave function disclosed in the secondary reference. The PTAB agreed. The Federal Circuit consolidated the appeal of that third IPR decision with the other appeals and rejected ParkerVision’s argument that the PTAB relied on untimely arguments from Qualcomm’s reply brief by noting that the PTAB ultimately relied on passages cited in Qualcomm’s petition.
The district court upheld the validity of the Elan patent but found the Acorda patent claims invalid as obvious. The district court found that, in view of the prior art, a person of ordinary skill would have been motivated to improve the walking ability of MS patients by administering a stable dose of 10 mg of 4-AP twice daily, with a reasonable expectation of success. Further, the recited pharmacokinetic aspects were found to be inherent to dosing. While acknowledging evidence of commercial success, long-felt need and failure of others, the district court held that the weight of these secondary indicia of non-obviousness was discounted: not only did the in-licensed Elan patent deter third-party innovation in this blocked space, but Elan and Acorda were incentivized not to develop the follow-on patents immediately. Acorda appealed.
In a case involving abuse-resistant pharmaceutical compositions for the treatment of opioid dependence, the US Court of Appeals for the Federal Circuit reversed the district court’s finding of non-obviousness on a patent covering the drug Zubsolv. Orexo AB v. Actavis Elizabeth LLC, Case No. 17-1333 (Fed. Cir. Sept. 10, 2018) (Newman, J).
Orexo owns two patents directed to Zubsolv, its US Food and Drug Administration approved product for treatment of opioid dependence. A common treatment for opioid addiction is a protocol called “substitution therapy,” in which the abused drug is substituted with a partial opioid agonist that is longer acting but less euphoric. The substitute drug reduces cravings and withdrawal symptoms while decreasing the patient’s dependency. A common “substitute” drug is buprenorphine, which can be administered as a sublingual tablet or as an oral film. Addicts have been known, however, to abuse buprenorphine by dissolving the tablets or film and injecting the solution intravenously to enhance the euphoric opioid effect.
To counteract this abuse, drug companies have combined buprenorphine with the opioid antagonist naloxone at a 4:1 ratio. Naloxone has poor transmucosal bioavailability, so if the mixture is taken in a sublingual tablet or as an oral film, the buprenorphine will act as intended to treat opioid dependency with little interference with naloxone. If the tablet is dissolved and injected, however, the naloxone will antagonize the effects of buprenorphine, resulting in withdrawal symptoms and thus deterring abuse of the formulation. Naloxone’s functional blockade of buprenorphine’s action is partial and short lived.
Orexo’s patent describes a formulation that enhances the bioavailability of the buprenorphine, which permits a reduced amount of the buprenorphine in the tablet, thereby reducing the amount available on dissolving and injecting the product intravenously. The formulation works by adhering microparticles of buprenorphine to the surface of carrier particles of citric acid. The patent showed a 66 percent improvement in bioavailability in buprenorphine relative to the prior art formulations.
Actavis initiated a lawsuit by filing an abbreviated new drug application for a generic counterpart to Zubsolv. At trial, the district court found certain claims of one of the patents invalid as obvious. Specifically, the district court found that all the ingredients in the claims were generally known, and although the specific formulation was not shown or suggested in any reference, the new combination would have been obvious to a person of ordinary skill. The district court cited to Actavis’s expert testimony as showing that “citric acid is pharmaceutically acceptable, water soluble, and of the right size, so therefore it would act as a carrier particle, because it is in the Suboxone tablet.” Orexo appealed.
The Federal Circuit reversed the district court’s obviousness determination, finding that none of the prior art taught using citric acid as a carrier particle and that Actavis’s expert did not testify that a skilled artisan would obviously select citric acid as a carrier for buprenorphine—he simply stated that the artisan would expect it to work. The Court found that the expert’s analysis was incorrect, stating that the question was not whether the various references separately taught components of the patented formulation, but whether the prior art suggested the selection and combination achieved by the invention. The Court also stated that the district court improperly discounted the enhanced bioavailability of the patented formulation, and the real-world evidence that Zubsolv is less susceptible to abuse than Suboxone. Based on the entirety of the record, the Court found that Actavis did not establish obviousness by clear and convincing evidence.
Addressing obviousness in inter partes reviews (IPRs), the US Court of Appeals for the Federal Circuit reversed the Patent Trial and Appeal Board (PTAB) and held a patent invalid for obviousness where claim limitations reciting ranges overlapped with ranges disclosed in the prior art. E.I. DuPont de Nemours & Co. v. Synvina C.V., Case No. 17-1977 (Fed. Cir. Sep. 17, 2018) (Lourie, J).
The reaction and its product were known in the prior art, but the three asserted prior art references disclosing the reaction use slightly different reaction conditions. Nonetheless, the prior art discloses ranges that include the claimed ranges and, in some instances, preferred ranges that include, or are about, the claimed ranges.
DuPont challenged the patent in an IPR, and the PTAB concluded in its final written decision that the claims of Synvina’s patent were not invalid for obviousness. The PTAB rejected DuPont’s contention that a burden-shifting framework applied because of the overlap between the claimed and prior-art ranges. The PTAB also found that DuPont had failed to show that temperature and PO2 were result-effective variables. Consequently, the PTAB concluded that a person of ordinary skill would not have been motivated to experiment with temperature and PO2 in order to optimize the yield of the reaction. Finally, although it found the claims not obvious, the PTAB found that Synvina’s evidence of secondary considerations was unpersuasive because the allegedly unexpected results arising from the claimed reaction conditions were found using one specific set of conditions that did not adequately address the full scope of the claimed ranges. DuPont appealed.
In the appeal, Synvina raised the issue of DuPont’s Art. III standing. Although DuPont had not been accused of infringement, the Federal Circuit, citing its recent JTEKT decision (IP Update, Vol. 21, No. 9) found the injury-in-fact requirement satisfied because DuPont had set up a commercial plant capable of operating in an infringing manner, and Synvina had rejected DuPont’s request for a covenant not to sue.
On the merits, the Federal Circuit explained that where patent claims recite ranges that overlap with ranges disclosed in the prior art, the burden-shifting framework that applies in district court litigation and patent examination also applies in IPRs. Although DuPont retained the ultimate burden of persuasion, Synvina had the burden to produce evidence supporting either criticality of the claimed range or that the prior art taught away from the claimed range. The Court found that Synvina had failed to carry that burden. Further, the Court took a broad view of what constitutes recognition in the prior art that a variable is result-effective. It explained that the prior art in this case did disclose that temperature and PO2 were result-effective and that the PTAB had erred in concluding otherwise. Accordingly, the Court also found error in the PTAB’s holding regarding motivation to combine; because temperature and PO2 are result-effective variables, persons of ordinary skill would naturally be motivated to optimize them.
Finally, the Federal Circuit found that the PTAB’s conclusions regarding secondary consideration were supported by substantial evidence. On those bases, the Court held that the claims at issue were obvious.
Practice Note: Validity analysis applied in IPRs should conform to the analysis used in other contexts. Practitioners should read any cases that appear to create special rules for America Invents Act reviews narrowly.
In an opinion addressing the sufficiency of corroborating evidence regarding public availability of a catalog, the US Court of Appeals for the Federal Circuit concluded that prior art status was established based on testimonial evidence presented to the Patent Trial and Appeal Board (PTAB) regarding public availability of the catalog in issue. Nobel Biocare Servs. AG v. Instradent USA Inc., Case No. 17-2256 (Fed. Cir. Sept. 13, 2018) (Lourie, J).
The US Court of Appeals for the Federal Circuit reiterated the standard under which Patent Trial and Appeal Board (PTAB) decisions regarding obviousness are reviewed, concluding that substantial evidence supported the PTAB’s determination of how an artisan would understand the teachings of the prior art. IXI IP v. Samsung Electronics, Case No. 17-1665 (Fed. Cir. Sept. 10, 2018) (Reyna, J).
Samsung Electronics and Apple (collectively, Samsung) filed a petition for inter partes review (IPR) challenging claims of IXI’s patent. The PTAB instituted review and found that the challenged claims were invalid as obvious. IXI appealed.
The patent at issue is directed to a system that contains both a personal area network and a wide area network, connected via a cellphone, including “a first wireless device . . . having a software component to access information from the Internet . . . and, a second wireless device . . . to provide [a] first short-range radio signal, wherein [a] software component includes a network address translator software . . . a service repository software component to identify a service provided by the second wireless device.” During the proceeding, the PTAB determined that Samsung established by a preponderance of the evidence that prior art references taught every limitation such that all of the challenged claims were obvious.
The stipulated (single) issue on appeal was whether a person of skill in the art (POSITA) would read a prior art reference relied on by the PTAB as implicitly describing an implementation in which a Java look-up service identifying network-provided services is located on the cellphone. Samsung conceded that there was no express statement to that effect, but argued that a POSITA would read the reference to understand that the look-up service may be co-located. IXI argued that the only express disclosure in the reference places the look-up in a laptop. Based on the prior art disclosure, expert statements that a POSITA would read the reference to include co-location (corroborated by the Java specification), implicit disclosure in view of the reference’s system methodology, and other expert testimony, the PTAB rejected IXI’s arguments for a narrow interpretation (citing a specific reference figure and inoperability).
Addressing the standard for imposing fee and cost awards against counsel, the US Court of Appeals for the Federal Circuit reversed the district court’s award holding the patent owner’s lawyers jointly and severally liable for litigating patents invalid under Alice. Gust, Inc. v. AlphaCap Ventures, LLC, Case No. 17-2414 (Fed. Cir. Sept. 28, 2018) (Linn, J) (Wallach, J, dissenting).
AlphaCap, a non-capitalized, non-practicing entity, secured counsel at Gutride Safier (GS) on a contingency basis and asserted three patents against 10 internet crowdfunding companies in January 2015, seven months after the Supreme Court of the United States decided Alice (IP Update, Vol. 17, No. 7). Nine defendants settled for less than $50,000, but Gust continued to litigate both infringement and invalidity.
GS appealed, limiting its appeal to GS’s joint and several liability for Gust’s attorneys’ fees under § 1927.
First, the Federal Circuit addressed the “color” of the claims. The Court rejected the filing of a baseless complaint as support for a § 1927 award, noting that a baseless filing must be addressed under Fed. Rule of Civil Pro 11, not § 1927. The Court agreed with GS that AlphaCap’s patent-eligibility position was colorable based on the “relative paucity” of § 101 cases decided between the Supreme Court’s decision in Alice and the filing of AlphaCap’s complaint, and throughout the pendency of the litigation. The Court recognized the importance of “allow[ing] attorneys the latitude necessary to challenge and thus solidify the legal rules without the chill of direct economic sanctions.” Thus, where the law is unsettled, a finding that the lawyer’s position lacked color should not rest on hindsight as to the state of the law.
Second, the Federal Circuit addressed GS’s lack of bad faith. The Court rejected the district court’s conclusion that GS knew that AlphaCap’s patents were invalid, refusing to infer bad faith unless a lawyer’s actions were “so completely without merit as to require” such a conclusion. The Court also refused to allow concerns about AlphaCap’s business model as a non-capitalized, non-practicing entity pursuing quick settlements to support a § 1927 award, again leaving such concerns to Rule 11. Likewise, the Court rejected the selection of a proper venue (here, the Eastern District of Texas), even if ultimately found less convenient, as supporting such an award. Finally, it rejected the district court’s reliance on a refusal to settle or grant a covenant not to sue to justify an award against a lawyer, because settlement is a decision in the client’s purview.
Judge Wallach dissented, accusing the majority of substituting its own factual findings for those of the district court and concluding that the district court had not based its award on an erroneous view of the law or facts.
The US Court of Appeals for the Federal Circuit vacated a final Patent Trial and Appeal Board (PTAB) decision in an inter partes review (IPR) that held all challenged claims of a patent unpatentable, finding that the petition was time barred because it was filed more than one year after the service of a complaint that was dismissed without prejudice. Bennett Regulator Guards, Inc. v. Atlanta Gas Light Co., Case Nos. 17-1555, -1626 (Fed. Cir. Sept. 28, 2018) (Stoll, J).
Bennett served Atlanta Gas with a complaint alleging infringement of its patent on July 18, 2012. Atlanta Gas moved to dismiss the complaint, and the district court granted the motion and dismissed without prejudice. On February 27, 2015, Atlanta Gas filed a petition to institute an IPR against the patent asserted in the complaint. Bennett argued that Atlanta Gas’s IPR was time barred, but the PTAB disagreed. The PTAB instituted review of all challenged claims and found every challenged claim unpatentable in a final written decision. After issuance of the PTAB’s final decision, Bennett sought sanctions from the PTAB for Atlanta Gas’s failure to notify the PTAB of its changed parentage. The PTAB declined to terminate the IPR but authorized Bennett to move for costs and fees incurred between the date of the PTAB’s final written decision and the grant of sanctions. While a dispute over the amount of costs and fees was ongoing, Bennett appealed the PTAB’s final written decision and award of only monetary sanctions. Atlanta Gas cross-appealed, arguing that the PTAB erred in awarding any sanctions.
On appeal, the Federal Circuit vacated the PTAB’s final written decision, finding the IPR time barred under § 315(b), which prohibits institution “if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner . . . is served with a complaint alleging infringement of the patent.” The Court explained that the statute endorses no exceptions for dismissed complaints, regardless of whether the complaint was dismissed voluntarily or involuntarily. The Court further noted that there was no dispute that the IPR petition was filed more than a year after the service of the complaint.
On the issue of sanctions, the panel declined to resolve the issue, finding that it lacked jurisdiction because the PTAB had not yet quantified its sanction award. The Court also declined to exercise pendent jurisdiction, explaining that different legal analyses were implicated in the invalidity and sanctions issues, and that the sanction issue—relating to termination and monetary sanctions—was a single issue, not to be arbitrarily divided and resolved.
Practice Note: File a petition for IPR within one year after service of complaint, regardless of the status of a motion to dismiss.
Addressing for the first time which party bears the burden of proof as to the accuracy of a petitioner’s identification of real parties-in-interest (RPIs) in an inter partes review (IPR), the US Court of Appeals for the Federal Circuit found that the petitioner bears the ultimate burden of persuasion. Worlds Inc. v. Bungie, Inc., Case Nos. 17-1481, -1546, -1583 (Fed. Cir. Sept. 2018) (Prost, CJ). In addition, the Court clarified that a petitioner’s identification of RPIs does not create a formal presumption of accuracy. As a result, a petitioner must use evidence to carry its burden, if and when a patent owner disputes the identified RPIs.
In 2012, Worlds sued Activision Publishing in district court for infringing various patents related to video gaming. Activision did not file an IPR petition challenging the validity of any claims of the asserted patents. In late 2014, Worlds added a new accused product to the litigation—a product Activision distributed for Bungie under a development and distribution agreement (DevPub Agreement). Although Bungie was not added as a party to the litigation, Bungie filed six IPR petitions on the asserted patents, listing itself as the sole RPI. Worlds argued that Activision should have been named as an RPI, and, as a result, the petition was time barred under § 315(b) because Activision had been served with a complaint alleging infringement of the challenged patents more than one year earlier. The PTAB rejected Worlds’ arguments, finding that World had not shown that the DevPub Agreement gave Activision control over the litigation. The PTAB also accepted Bungie’s representation that although Activision provided money to Bungie for development, Activision had not funded the IPRs. Worlds appealed.
On appeal, the Federal Circuit rejected the PTAB’s RPI analysis because it failed to place the burden of persuasion on the petitioner and it appeared to rely on presumptions instead of actual evidence to support its conclusions. The Court held that as the proponent, the petitioner has the burden of persuasion to show that the RPIs listed in the petition are accurate. While the PTAB may accept the petitioner’s identification of RPIs, it does not create a “formal presumption” of accuracy. If the patent owner reasonably challenges the list of RPIs by providing evidence—as it did in this case with the DevPub Agreement—the petitioner must respond with sufficient evidence to carry its burden. Petitioner must provide such evidence in the form of sworn declarations and documentary evidence, and not merely lawyer argument. Because the PTAB’s RPI decision appeared to have placed the burden on patent owner to disprove petitioner’s identification of RPIs, the Court vacated and remanded.
Practice Note: Worlds failed to appeal the PTAB’s final RPI determination in an earlier-decided IPR. Although briefed, the Court did not address whether collateral estoppel applied in this circumstance, and it is unclear whether the PTAB’s earlier, non-appealed RPI determination would be controlling in later IPRs.
In a case involving the right of priority to basic gene editing technology, the US Court of Appeals for the Federal Circuit affirmed a Patent Trial and Appeal Board (PTAB) decision that there was no interference-in-fact between the competing patent applications of two prestigious research institutions. Regents of the University of California v. Broad Institute, Inc., Case No. 17-1907 (Fed. Cir. Sept. 10, 2018) (Moore, J).
In 2012, the University of California (UC) first applied for a patent on using CRISPR (Clustered Regularly Interspaced Short Palindromic Repeats, a gene-editing technology that enables scientists to modify an organism’s DNA) in any cellular environment, based on its experiments with bacteria. Several months later, the Broad Institute (of MIT and Harvard) applied for patents on using CRISPR to edit DNA in eukaryotic cells. While UC’s application remained pending, 12 Broad Institute patents were granted and one application remained pending. The PTAB instituted an interference, and the Broad Institute moved to terminate, arguing that its involved claims were patentably distinct from UC’s claims because a person of ordinary skill in the art would not have had a reasonable expectation that the CRISPR-Cas9 system would work successfully in the genomes of a eukaryotic cell—a group of organisms that includes plant and animals.
The PTAB determined, and the Federal Circuit agreed, that both claimed inventions were separately patentable and did not interfere with each other. The PTAB found that using CRISPR in eukaryotic cells would not be obvious in view of UC’s claims, because a person of ordinary skill would not have a reasonable expectation of success using the CRISPR method with plant and animal cells.
A two-way test is used to determine whether claims are patentably distinct as required to support an interference proceeding. The PTAB must first determine whether “the subject matter of a claim of one party would, if prior art, have anticipated or rendered obvious the subject matter of a claim of the opposing party and vice versa.” If the two-way test is not met, no interference-in-fact exists. In this case, the PTAB determined there was no interference-in-fact.
Practice Note: Although the America Invents Act changed the United States to a first-to-file country in March 2013, the first-to-invent system and the possibility of interference is still newsworthy almost six years later.
Since these competing applications were filed, researchers have discovered enzymes to replace Cas9 and have also modified the CRISPR-Cas9 to manipulate the genome in different ways. Although CRISPR-Cas9 is still often the preferred CRISPR variety, other systems may gain acceptance.
Reversing a district court’s dismissal of a patent applicant’s claim that the US Patent and Trademark Office (PTO) acted unlawfully in denying a petition for rulemaking on subject matter jurisdiction grounds, the US Court of Appeals for the Federal Circuit nevertheless found that the claim was either time-barred or reliant on mistaken statutory interpretation. Hyatt v. USPTO, Case No.17-1722 (Fed. Cir. Sept. 24, 2018) (Hughes, J).
The PTO denied the petition, and Hyatt filed a suit challenging the PTO’s denial in the US District Court for the District of Nevada under the Administrative Procedure Act (APA). The district court granted the PTO’s motion for summary judgment and dismissed Hyatt’s claims for lack of subject matter jurisdiction. The district court did not transfer Hyatt’s case to either the Federal Circuit or the Eastern District of Virginia, citing the doctrine of claim preclusion stemming from a prior suit. Hyatt appealed.
On appeal, the Federal Circuit found that the Nevada district court had subject matter jurisdiction over Hyatt’s challenge under the APA. The Court explained that although the Federal Circuit and the US District Court for the Eastern District of Virginia have exclusive jurisdiction to review final PTAB decisions, the PTO’s denial of Hyatt’s petition was neither a Patent Trial and Appeal Board (PTAB) decision nor an intermediate action that would culminate in a final agency action exclusively reviewable by those two courts.
The Federal Circuit also disagreed that Hyatt’s claims were precluded by his prior suit. Hyatt’s prior suit unsuccessfully challenged the PTO’s reopening of prosecution of his pending applications, alleging that reopening those prosecutions evidenced a pattern of unreasonable delay in final agency action, and sought injunctive relief against the PTO. The Court found that Hyatt’s prior lawsuit related to a different set of facts than the present lawsuit. Specifically, because Hyatt did not seek relief for the applications in this suit, the Court disagreed that he was collaterally attacking the prior decision regarding PTO prosecution delay.
The Federal Circuit agreed with the PTO that Hyatt’s claims based on conflicts with patent regulation and lack of notice and comment were time barred under the statute of limitations. The applicable statute of limitations bars civil actions against an agency if not filed within six years after the right of action first accrues. The Court explained that those two claims were not substantive in nature and the right to seek relief accrued at the time of the promulgation of the regulation, which in this case would be 2005. Hyatt filed his case in 2016.
However, the Federal Circuit concluded that Hyatt’s claim based on violation of patent law was timely. According to the Court, this claim was substantive, and the right of action accrued at the time of an adverse decision against the plaintiff. The PTO denied Hyatt’s petition for rulemaking in 2015, which constituted an adverse application of § 1207.04 against him only one year before he filed the suit. Nevertheless, the Court explained that the text of the patent law does not require the PTAB to reach the merits of every appeal filed.
Addressing whether the review of a single claim on a single challenged ground in a petition may be sufficient to institute inter partes review (IPR) for all challenged claims on all challenged grounds, the Patent Trial and Appeal Board (PTAB) held that SAS Institute’s baseline “one claim” requirement is also a threshold past which no further review of the petition’s substantive arguments is necessary. Alcatel-Lucent USA Inc. v. Oyster Optics, LLC, Case No. IPR2018-0070 (PTAB Aug. 31, 2018) (Kenny, ALJ).
Alcatel-Lucent filed a petition for IPR against a patent owned by Oyster Optics. In May 2018, the PTAB instituted review for all claims on all grounds, even though the PTAB’s evaluation of whether petitioner showed a reasonable likelihood of success was limited to a single ground of unpatentability for a single claim. Oyster filed a request for rehearing, arguing that the PTAB erred as a matter of law by failing to assess the merits of each claim and ground of unpatentability in the petition.
The PTAB denied Oyster’s request for rehearing, basing its holding on the logical implications of the Supreme Court of the United States’ opinion in SAS Institute (IP Update, Vol. 21, No. 5). The PTAB noted that Oyster failed to explain how SAS necessitates review of every claim, and pointed to contrary evidence from SAS where the Supreme Court interpreted § 314(a) of the America Invents Act to only guarantee meritorious assessment of all claims and all grounds in the final written decision. The administrative patent judge (APJ) here ruled that § 314(a) also authorizes the director to institute on all claims and on all grounds after a showing that “one claim” satisfies the threshold requirement for institution, quoting the Supreme Court’s stated intention of creating a regime where a reasonable prospect of success on a single claim justifies review of all claims. The APJ rejected Oyster’s alternative argument that excluding the meritorious analysis of all but one challenged claim and ground in the institution decision would disrupt the streamlining of trial as (1) underestimating the amount of overlap between the issues between the evaluated claim and the remaining claims, and (2) dismissing the well-defined grounds presented in the petition and the preliminary response, both of which will be clarified through discovery and trial briefing. Accordingly, the APJ upheld the PTAB’s post-SAS practice of reviewing only as much of the petition as is necessary to find a single claim that permits institution.
Practice Note: While providing no substantive changes to IPR practice, this decision removes from both parties the opportunity to receive a substantial amount of useful information from the PTAB regarding the merits of all grounds asserted in the petition.
The US Court of Appeals for the Federal Circuit affirmed a Trademark Trial and Appeal Board (TTAB) decision sustaining the US Patent and Trademark Office’s refusal to register the mark DETROIT ATHLETIC CO. based on a likelihood of confusion. In Re: Detroit Athletic Co., Case No. 2017-2361 (Fed. Cir. Sept. 10, 2018) (O’Malley, J).
Since 2004, Detroit Athletic Co. (DACo) has used the mark DETROIT ATHLETIC CO. for its sports specialty shops that sell apparel and souvenirs related to Detroit’s professional sports teams. In May 2015, DACo applied to register the mark DETROIT ATHLETIC CO. for “online retail consignment stores featuring sports team related clothing and apparel; retail apparel stores; retail shops featuring sports team related clothing and apparel; retail sports team related clothing and apparel stores.” The examining attorney refused registration based on a likelihood of confusion with the registered mark DETROIT ATHLETIC CLUB for clothing, owned by a private sports club of the same name. The TTAB affirmed the refusal, concluding that consumers would likely confuse the marks based on the similarity of the marks, the relatedness of the goods and services, and the channels of trade. DACo appealed the TTAB’s decision to the Federal Circuit, which reviews TTAB legal determinations without deference and factual findings for substantial evidence.
The Federal Circuit addressed the TTAB’s decision with respect to the following factors.
The Federal Circuit found that substantial evidence supported the TTAB’s determination that the marks were nearly identical in sound, appearance and commercial impression. Both marks consisted of three words, the first two of which were identical. DACo argued that the TTAB failed to consider the differences between the words “Co.” and “Club,” but even if it had, the Court concluded that those descriptive terms would not alleviate confusion, because they do not serve any source-identifying function. Because consumers typically notice the initial words of a mark first, the TTAB did not err in placing more weight on the identity of the dominant portions of the marks, the Court explained.
DACo also argued that a consumer could easily distinguish between DACo’s clothing store and the Detroit Athletic Club’s private social club. But as the Court noted, that was not the inquiry: the inquiry focused on the goods and services identified in the application and registration at issue. Detroit Athletic Club’s registration only identified clothing, with no limitation on where the clothing was sold.
The Federal Circuit also agreed that the Detroit Athletic Club’s clothing was of the type that would be sold through DACo’s specialty sports stores. Detroit Athletic Club’s registration did not include a restriction on the channels of trade, so the TTAB rightfully presumed that the clothing would be sold in all normal trade channels. DACo again argued that Detroit Athletic Club sells clothing only to its members and only in its gift shop located at the club, but the Court rejected this argument as irrelevant. The Court reminded DACo that the inquiry focused on the channels specified in the application, not those in the real world.
Balancing these factors, the Federal Circuit agreed that there was substantial evidence to support a finding of a likelihood of confusion and affirmed the TTAB’s decision.
In considering whether online sales satisfied the minimum contacts requirement of a due process analysis, the US Court of Appeals for the First Circuit affirmed a district court opinion that a foreign company subjected itself to specific personal jurisdiction in a trademark dispute where the foreign company had sizeable continued online sales to customers in the United States. Plixer Int’l v. Scrutinizer GmbH, Case No. 18-1195 (1st Cir. Sept. 13, 2018) (Lynch, J).
In 2016, Plixer, a Maine corporation, sued Scrutinizer, a German corporation, for trademark infringement in the US District Court for the District of Maine. Plixer owns the US trademark for “Scrutinizer” and had been using the mark for over a decade for its computer software and hardware related to malware infections and application performance problems. Plixer alleged that Scrutinizer’s use of the term “Scrutinizer” to sell services that help customers build better code caused “confusion, mistake, or deception as to the source” of Scrutinizer’s services, and that continued use of the trademark would infringe or dilute Plixer’s rights. Scrutinizer offered its services through an interactive, self-service, English-language website. Over a three-year period, Scrutinizer sold approximately $200,000 worth of services to 156 US customers. Its customers paid in euros and agreed to a German choice of law clause. The company did not have a US office, phone number or agent for service of process and did not send its employees to the United States on business.
The district court concluded that Scrutinizer purposefully availed itself of doing business in the United States through a significant number of recurrent online sales and thus the exercise of specific personal jurisdiction under Federal Rule of Civil Procedure 4(k)(2) was warranted. It also found that Scrutinizer did not carry its burden of showing that the exercise of personal jurisdiction was unreasonable. Scrutinizer appealed.
On appeal, the only question presented to the First Circuit was whether personal jurisdiction comported with due process. Since Plixer asserted specific personal jurisdiction over Scrutinizer, Plixer was required to show relatedness, purposeful availment and reasonableness to demonstrate that Scrutinizer had sufficient minimum contacts with the United States and that due process was satisfied. Scrutinizer conceded the relatedness prong of the analysis.
As to purposeful availment, the First Circuit concluded that sizeable continuing commerce with US customers in more than 30 states was sufficient to show purposeful availment. Because the Supreme Court of the United States has not provided clear guidance as to how online activities translate to minimum contacts, the First Circuit’s ruling was confined to the specific facts of the case. Purposeful availment requires that a company voluntarily conducted commerce within the forum, such that it was foreseeable that it could face litigation in US courts. The Court reasoned that merely making a website available in the United States would not necessarily subject a foreign company to personal jurisdiction. Scrutinizer, however, had made its website available globally, had designed its interactive website to work with English-speaking customers, and had accepted sales from US customers. Moreover, Scrutinizer had not attempted to restrict US users’ ability to access its website. Thus, the Court concluded that Scrutinizer purposefully and voluntarily intended to serve and profit from US customers over several years.
The First Circuit also agreed with the district court’s finding that the exercise of personal jurisdiction over Scrutinizer was not unreasonable. Reasonableness factors “play a larger role in cases . . . where the minimum contacts analysis is very close.” The Court reasoned that although litigating in a foreign legal system was inconvenient and more expensive for Scrutinizer, these factors were outweighed by Scrutinizer’s substantial business interests in the United States, and the United States’ interested in adjudicating a dispute involving US trademark law. The Court also found that Scrutinizer had not shown any travel burdens that were “special or unique,” and that modern technology could mitigate logistical challenges of litigating in the United States.
Addressing the issue of substantial similarity as a matter of law, the US Court of Appeals for the Third Circuit affirmed the district court’s dismissal of a copyright infringement case against the creator of the television show Empire. Tanksley v. Daniels, et al., Case No. 17-2023 (3d Cir. Aug. 28, 2018) (Fisher, J).
Lee Daniels is the creator of the well-known television show Empire, which follows Philadelphia-born criminal-turned-music-executive Lucious Lyon and his dilemma over who will succeed him as head of the record label when he dies from ALS. Clayton Prince Tanksley is the creator of a three-episode television pilot called Cream. Cream’s main character is Winston St. James, who is the founder and owner of a record company in Philadelphia. The show documents St. James’s personal, family and professional problems, including health issues and an attempted takeover of his company.
Tanksley met Daniels in 2008 at the Philly Pitch, an event where aspiring writers pitch film ideas to entertainment professionals. Tanksley did not formally present Cream as his pitch, but he did discuss the show with Daniels one-on-one afterwards and provided Daniels with a DVD and script of the series. Seven years later, after Empire premiered on television in 2015, Tanksley sued Daniels (and others associated with Empire) for copyright infringement and other related claims. The district court found that the two shows were not substantially similar as a matter of law and granted defendants’ motions to dismiss for failure to state a claim. Tanksley appealed.
Tanksley raised two arguments on appeal: (1) that substantial similarity should not be resolved at the pleading stage, and (2) that the district court erred in finding no substantial similarity as a matter of law. The Third Circuit acknowledged that, although rare, “in recent years, several Courts of Appeals have . . . affirm[ed] dismissals under Federal Rule of Civil Procedure 12(b)(6) after finding no substantial similarity as a matter of law.” Doing so is appropriate, the Court reasoned, because courts may consider the complaint as well as “evidence ‘integral to or explicitly relied upon’ therein,” and additional fact-finding or discovery is typically unnecessary where the review requires only a visual comparison. In this case, the complaint included “dozens of side-by-side screenshots of each [show],” and no additional evidence or expert opinion was necessary (nor would have been relevant) to the assessment.
On the question of copying, the finder of fact may consider any aspect of the works that supports an inference of copying, even elements that are incapable of copyright protection. . . . By contrast, when assessing material appropriation, i.e., substantial similarity, only similarities in protectable expression may be considered.
Where, as here, the works contain both protectable and unprotectable elements, the Third Circuit assesses the substantial similarity of the protectable elements only. Here the Court concluded as a matter of law that “superficial similarities notwithstanding, Cream and Empire are not substantially similar.” For example, the Third Circuit noted that “the shared premise of the show—an African-American, male record executive—is unprotectable,” and therefore Tanksley’s copyright protection extended only to his particular expression of that idea. Comparing the characters, the Court concluded that the particular expressions of this character type were not substantially similar. Even in considering the protectable elements of Cream, the Court stated that no reasonable juror could find the works substantially similar.
The plaintiffs are sports photographers who take photos of NFL events. The defendants are the NFL, its various clubs and its photo store, as well as the Associated Press (AP), which served as the NFL’s exclusive licensing agent from 2009 to the present. In order to gain access to photograph NFL events (where NFL trademarks are inevitably displayed), the plaintiffs entered into “contributor agreements” with the AP, which granted the AP broad rights to use and sell their photos. In return, the AP was required to pay a royalty to the plaintiffs consisting of a percentage of the per-image price on sales of the photos.
Plaintiffs filed this lawsuit after learning that the NFL had been using and selling their photos since 2009 without making any royalty payments. The plaintiffs alleged copyright infringement against the NFL, its photo store and the AP, as well as violations of the Sherman Act and certain state law claims. The defendants moved to dismiss for failure to state a claim, and the district court granted the motion.
It was undisputed that the plaintiffs owned copyrights in the photos used and sold by the NFL, and that the AP had in 2012 granted the NFL a license to use and sell the plaintiffs’ photos. The sole issue for the Second Circuit was whether the plaintiffs’ contributor agreements permitted the AP to grant such a complimentary license to the NFL. Defendants argued that because the plaintiffs’ contributor agreements only required royalty payments on per-image sales, and the license from the AP to the NFL was simply a free license to use the photos, there was no per-image price and therefore no royalties were required.
The Second Circuit rejected this argument. Striving to give “effect and meaning to every term of [the] contract,” the Second Circuit looked at the overall structure of the plaintiffs’ contributor agreements. As the agreements expressly provided for only two exceptions to the requirement that royalties be paid—neither one of which applied—the Court concluded that the agreements were ambiguous as to whether royalties were required in all other situations, including in the AP’s act of granting a free sublicense to the NFL. Once the contributor agreements were found to be ambiguous, extrinsic evidence regarding their interpretation was admissible, including the plaintiffs’ allegations that they had expressly told the AP during negotiations that they were unwilling to grant the NFL complimentary licenses without additional compensation. This dispute over the proper interpretation of the contributor agreements, including whether the agreements allowed the AP to issue a complimentary sublicense to the NFL, required reinstatement of the copyright infringement claims.
The Second Circuit found additional rationale for reinstating the plaintiffs’ claims regarding the NFL’s pre-2012 use of the plaintiffs’ photos. Defendants argued that the plaintiffs’ claims were extinguished by the 2012 contract between the AP and the NFL, which retroactively permitted the NFL complimentary use of all contributor photos. Extending its 2007 holding in Davis v. Blige, the Court said that the AP could not retroactively grant a license that would extinguish the plaintiffs’ already-accrued right to sue for copyright infringement. Rather, the court explained that even if the AP had the right to grant such a complimentary license to the NFL in the first place (which as discussed above was ambiguous), it could not do so retroactively.
In addition, the plaintiffs pleaded antitrust violations. The photographers alleged that the NFL and the AP had colluded to control the commercial market for professional football-related stock photography. Plaintiffs argued that by collectively licensing its intellectual property, the NFL and the NFL teams formed a horizontal conspiracy, operated in conjunction with the AP as their exclusive licensing agent. The plaintiffs alleged that the conspiracy had reduced the output of stock photography for NFL events, and that the aggregate cost to consumers of commercial licenses had increased. In doing so, the plaintiffs defined the relevant market as the market for commercial licenses of NFL event photographs. The Second Circuit rejected these allegations, as plaintiffs failed to allege an adverse effect in the market they had defined. However, the Court suggested that had the plaintiffs pleaded the market as commercial licenses for NFL trademarks, the result might have been different.
Practice Note: To avoid a finding that a contract is ambiguous, consider all the clauses of the contract in relation to each other rather than in isolation. Additionally, the right to sue for copyright infringement cannot be extinguished by a license after it has already accrued. Finally, in allegations of antitrust violations, it is important to define the relevant market correctly, as courts will only assess adverse effects vis-à-vis the market defined in the complaint.
Sara Fernandez also contributed to this article. Sara is an international attorney visiting our Washington, DC office from the law firm of Pérez-Llorca in Spain.
The US Court of Appeals for the District of Columbia Circuit sustained statutory royalty rates set by the Copyright Royalty Board for certain web streaming services following a challenge to the rates by an independent singer/songwriter and a collective organization representing holders of copyrights in sound recordings. SoundExchange, Inc. v. Copyright Royalty Board and Librarian of Congress, Case No. 16-1159, consolidated with 16-1162 (DC Cir. Sept. 18, 2018) (Srinivasan, J).
In 2016, the Copyright Royalty Board, a group of three judges appointed by the Librarian of Congress, undertook its responsibility of setting the rates and terms of statutory copyright licenses, including for “noninteractive” webcasting services (i.e., services that select the songs they play for listeners), for the following five-year period. In a hearing before the Board, SoundExchange opposed the Board’s use of real-world negotiated agreements from certain third-party noninteractive webcasters (among other market factors) to establish “benchmarks” for reasonable statutory royalty rates intended to reflect the private market, or the rates that “would have been negotiated in the marketplace between a willing buyer and a willing seller,” as required by the Copyright Act.
The Board rejected SoundExchange’s concerns and used the third-party agreements to form the basis of the 2016–2020 statutory royalty rates. The Board noted that the alternative agreements proposed by SoundExchange for benchmark rate setting were not “effectively competitive” because they focused on subscription-based interactive webcasting services (i.e., services that allow a user to select the songs to be played), as opposed to the noninteractive services at issue.
SoundExchange and independent singer/songwriter George Johnson moved for a rehearing of the Board’s royalty rate determination and were denied. The parties appealed.
Applying a deferential standard of review given the “highly technical” nature of the Board’s royalty rate-setting process, the DC Circuit sustained the denial of appellants’ challenges. In upholding the Board’s royalty rates, the Court rejected SoundExchange’s argument that the Board’s acceptance of the third-party benchmark agreements were “arbitrary and capricious” and instead found that the Board has “broad discretion” to select, reject and/or adjust rate benchmarks based on the terms of the benchmark agreements, predictive judgments about the music marketplace, and/or in comparison to other market factors.
SoundExchange also challenged the Board’s adoption of an effective-competition standard when determining the statutory rates and terms that would have been negotiated “between a willing buyer and a willing seller,” arguing that such an approach was foreclosed by the Copyright Act. Under Chevron review, the DC Circuit disagreed and noted an inherent ambiguity in the Act’s “willing buyer and a willing seller” standard. Instead, and in line with its decision in Intercollegiate Broadcasting System, the Court confirmed that the statute does not compel any particular level of competitiveness in the market, such that the Board is entitled to its discretion in identifying “relevant characteristics of competitiveness” to determine an “effectively competitive market” when assessing the suitability of a party’s proposed benchmarks under the statutory framework.
The DC Circuit also supported the Board’s decision to set different statutory rates for ad-based and subscription-based noninteractive webcasters. On this point, the Court noted that the Copyright Act specifically contemplates the Board’s ability to set different rates for distinct market segments, noting a “sharp dichotomy” between listeners willing to pay for subscription services and those that use only free ad-based services.
The final issue disputed by SoundExchange was copyright owners’ ability to audit webcasters’ royalty payments. In the rate resetting hearing, the Board tightened up the audit provision, requiring that any auditor must be a certified public accountant licensed in the jurisdiction in which it seeks to conduct the verification. The DC Circuit nonetheless found the requirement reasonable since, as the Board explained, the auditor would be held accountable to the local governance in the jurisdiction in which it operates.
The DC Circuit also examined the issue raised by George Johnson, who complained that the low royalty rates set by the Board equated to an unconstitutional taking of a copyright holder’s property rights in his or her intellectual property. Here, the Court explained that the Board’s extensive adversarial hearing process in determining such rates was sufficient due process, and that the royalty rate-setting process required by the Copyright Act was thus appropriate and constitutional. Therefore, the Court affirmed the Board’s rate determination.
Practice Note: The Music Modernization Act (MMA) passed Congress and was submitted for presidential approval only one week following this decision, so these disputes may become a thing of the past. Title I of the MMA establishes the standard that the Board must use when determining rates that digital streaming services pay to songwriters for mechanical licenses. Specifically, the MMA harmonizes the different standards that the Board uses to set rates for streaming services versus digital radio services, and settles on a willing buyer/willing seller standard that allows for consideration of market conditions.
Whether the Copyright Act’s allowance of “full costs,” 17 U.S.C. § 505, to a prevailing party is limited to taxable costs under 28 U.S.C. §§ 1920 and 1821, as the U.S. Courts of Appeals for the 8th and 11th Circuits have held, or whether the Act also authorizes non-taxable costs, as the U.S. Court of Appeals for the 9th Circuit held.
Oracle sued Rimini in 2010 for copyright infringement and ultimately received a damages award of $124 million. Rimini appealed, and the US Court of Appeals for the Ninth Circuit—which upheld most of the ruling—interpreted “full costs” under the Copyright Act to include non-taxable costs such as expert witness fees, consulting fees and other costs not permitted as taxable costs under 28 USC §§ 1920 and 1821 (IP Update, Vol. 21, No. 2). The Ninth Circuit’s ruling is a departure from other circuit courts that have found that the term “full costs” in the Copyright Act only includes the specific expenses listed in 28 USC §§ 1920 and 1821. Rimini appealed to the Supreme Court and requested that the Court address the circuit split on the meaning of “full costs” under the Copyright Act.

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