Source: http://www.rajanlawoffice.com/blog/category/us-supreme-court
Timestamp: 2019-04-22 11:08:01+00:00

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On June 22, 2018, in a 7-2 decision, the U.S. Supreme Court held that a patent owner may recover lost foreign profits under 35 USC 284 for infringement under Section 271(f)(2). WesternGeco LLC v. Ion Geophysical Corp., 585 U.S. __ (2018). WesternGeco LLC, owner of four patents relating to lateral-steering technology for surveying the ocean floor, performs surveys for oil and gas companies using its patented technology. ION Geophysical manufactured components in the US and shipped to companies abroad who combined them to create a competing system indistinguishable from WesternGeco. WesternGeco sued for patent infringement under Section 271(f)(1) and (f)(2). At trial, WesternGeco proved that it lost 10 contracts due to ION's infringement and the jury awarded damages of $12.5 million in royalties and $93.4 million in lost profits. The district court denied ION's post-trial motion to set aside the verdict and dismissed the arguments that 271(f) does not apply extraterritorially to lost profits. On appeal, the Federal Circuit reversed the award of lost-profits damages holding that Section 271(a) does not allow patent owners to recover for lost foreign sales. The Court granted cert, vacated the Federal Circuit's judgment and remanded it in light of its Halo Elec. v. Pulse Elec. decision. On remand, the Federal Circuit reinstated its decision regarding the extraterritoriality of Section 271(f). The Court again granted cert.
In his opinion, Justice Thomas acknowledged that there's a presumption against extraterritoriality of federal statutes but questions of extraterritoriality are determined using a two-step framework. The first step asks whether the presumption has been rebutted by a clear indication of extraterritorial application in the statutory text. The second step asks whether the case involves a domestic application of the statute, which is determined by identifying the statute's focus and asking whether the conduct relevant to that focus occurred in the U.S territory. If it did, then it's a permissible domestic application of the statute. In resolving this case under step two using the court's discretion, the Court reasoned that step one would require resolving difficult questions that do not change the outcome of the case but could have far-reaching effects in future cases.
Justice Thomas, citing the Court's decision in RJR Nabisco v. European Community, which found that conduct relevant to a statute's focus which occurs in the U.S. involves a permissible domestic application of the statute, even if other conduct occurred abroad. The Court found that the focus of Section 284, in a case involving infringement under Section 271(f), is on the act of exporting components from the U.S. and therefore, the focus is domestic conduct. Because ION's domestic act of supplying the components that infringed WesternGeco's patents, lost-profits damages that were awarded were a domestic application of Section 284.
In his dissenting opinion, joined by Justice Breyer, Justice Gorsuch agreed with the Federal Circuit's result in concluding that the Patent Act forecloses claim for lost profits because in their view the Act's terms prohibit the lost profits sought in the case whatever the general presumption against extraterritoriality applicable to all statutes might allow.
On June 19, 2017, the U.S. Supreme Court held that trademarks are private speech protectable under the First Amendment and ban on registration of disparaging trademarks violates the Free Speech Clause. Matal v. Tam, 582 U.S. ___ (2017). Simon Tam, lead singer of the rock group "The Slants", sought federal registration of the mark "The Slants" in an effort to reclaim and take ownership of Asian stereotypes. USPTO refused registration finding that "even though Tam may have chosen the mark to reappropriate the disparaging term, a substantial portion of persons of Asian descent would find the term offensive." TTAB affirmed the USPTO's refusal and Tam appealed to the Federal Circuit. A panel of the court affirmed the TTAB's ruling but an en banc court, in a 9-2 decision, determined that Section 2(a) of the Lanham Act is facially unconstitutional.
In an unanimous decision, the Supreme Court affirmed the Federal Circuit's en banc ruling. The Court rejected the government's argument that trademark registration is not subject to First Amendment scrutiny as it is government speech rather than private speech. The Court noted that there are more than 2million trademarks and these marks do not convey any government message. The Court also rejected the argument that trademark registration is a government subsidy noting that no payments are made to applicants while subsidies involve cash payments or equivalents. Finally, the Court rejected the argument that trademarks are commercial speech noting that the disparagement clause cannot withstand the relaxed scrutiny under Central Hudson as it neither serves a substantial interest nor is it narrowly drawn.
On June 12, 2017, the U.S. Supreme Court ruled that biosimilar makers can give 180-day notice of commercial marketing prior to obtaining license from the FDA. Sandoz Inc. v. Amgen Inc., 582 U.S. __ (2017). The Biologics Price Competition and Innovation Act of 2009 (BPCIA) provides an expedited pathway for obtaining FDA approval for a biosimilar to an already licensed biological product under 42 USC 262(k). Under 262(l)(2)(A), within 20 days of receiving notice from the FDA that an application has been accepted for review, the applicant must provide its application and manufacturing information to the manufacturer of referenced products (sponsor). Section 262(l)(3) triggers exchange of information between the applicant and sponsor and Section 262(l)(8)(A) requires the applicant to provide sponsor a notice at least 180 days prior to commercial marketing of the biosimilar.
Sandoz filed a 262(k) application for a biosimilar of Amgen's Neupogen. After receiving the FDA notice, Sandoz informed Amgen of the application but failed to provide a copy of the application or information on its manufacturing process. Amgen sued Sandoz for violating the BPCIA. During the pendency of the law suit, and after FDA's approval of its application, Sandoz notified Amgen its intent to launch commercial marketing. The district court granted Sandoz's partial judgment on the pleadings finding that Sandoz wasn't required to provide Amgen with a copy of the application or manufacturing information, and that the 180-day notice is effective even if it is provided prior to FDA's approval of the application. The Federal Circuit affirmed the dismissal of claim based on violation of section 262(l)(2)(A) holding that Sandoz did not violate the BPCIA in failing to disclose the application and manufacturing information but it enjoined Sandoz from marketing the biosimilar until 180 days after the date of notice as the notice requirement is mandatory under section 262(l)(8)(A).
The Supreme Court affirmed in part the holding that the requirement to provide information on application and manufacturing information was not enforceable by injunction and that the sponsor may bring a DJ action of patent infringement for an applicant's failure to provide such information. As to the 180-day rule, the Court held that the plain language of the statute and its context confirms a single timing requirement (180days before marketing) rather than two requirements posited by the Federal Circuit (after licensing, and 180 days before marketing) and accordingly, reversed the Federal Circuit's on that ground.
On May 30, 2017, the Supreme held that a patentee's decision to sell a product exhausts all patent rights regardless of any restrictions on the sale or any sale outside the United States. Impression Products Inc. v. Lexmark Int'l, Inc., 581 U.S. __ (2017). Lexmark sold printer toner cartridges and required U.S. buyers to agree not to reuse or resell the cartridges. Impression refurbished used cartridges originally sold in the U.S. and later sold them. Lexmark sued Impression for patent infringement. The district court found that Lexmark exhausted its patent rights as to the cartridges sold in the U.S. but not to the cartridges sold outside the U.S. In an en banc decision, the Federal Circuit affirmed the lower court's holding that international sales do not exhaust the patent rights of the patentee and reversed the lower court's holding on domestic sales explaining that the patentee reserves its patent rights if there are restrictions on post-sale use.
In an unanimous decision, the Supreme Court reversed the Federal Circuit holding that Lexmark exhausted its patent rights in the U.S. despite the contractual restrictions and authorized sales outside the U.S. likewise exhausted any rights. In so ruling, the Court relied on English common law and its own precedence including its recent decision in Kirtsaeng that the limited, exclusive monopoly rights granted to a patentee is exhausted upon the sale of the patented product.
On May 22, 2017, the U.S. Supreme Court granted certiorari in SAS Institute v. Lee, 825 F. 3d 1341 (Fed. Cir. 2016), cert granted, No. 16-969 (June 12, 2017) regarding partial institution of IPR. The Court presented the following question: Does 35 USC 318(a) require the PTAB to issue a final written decision as to every claim challenged by the petitioner or does it allow the Board to issue a final written decision with respect to patentability of only some of the patent claims challenged by the petitioner.

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