Source: http://www.jdsupra.com/legalnews/ip-update-vol-16-no-4-april-2013-24061/
Timestamp: 2013-12-19 02:59:47
Document Index: 404048388

Matched Legal Cases: ['§24', '§ 24', '§ 24', '§ 24', '§ 24', '§ 24', '§ 24', '§ 24', '§ 24', '§ 23', '§ 23', '§ 23', '§ 24', '§ 23', '§ 24', '§ 24', '§ 24', '§24', '§ 24', '§ 42', '§ 112', '§ 112', '§ 111', '§ 371', '§ 1']

IP Update, Vol. 16, No. 4, April 2013 | McDermott Will & Emery - JDSupra
Babak Akhlaghi, Sarah Bro, Kenneth Cheney, Bernard Codd, Paul Devinsky, Roozbeh Gorgin, Charles Hawkins, Donna M. Haynes, Sungyong “David” In, John Low, Amol Parikh, Sarika Singh, Joseph Speyer, Rose S. Whelan, Han (Jason) Yu | McDermott Will & Emery
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Patent Marking: An Extrajudicial Admission that the Product Is Covered by the Patent but Not an Estoppel New Claim Construction Guts Nearly $600 Million Dollar Infringement Award
by Kenneth C. Cheney and Sungyong “David” In Addressing an obviousness-type double patenting rejection, the U.S. Court of Appeals for the Federal Circuit upheld a decision by the U.S. Patent and Trademark Office (PTO) Board of Patent Appeals and Interferences (Board), finding that obviousness-type double patenting can exist even when there is no common ownership. In Re Hubbell, Case No. 11-1547 (Fed. Cir. Mar. 7, 2013) (O’Malley, J.) (Newman, J, dissenting).
The rejected application and the patent used as the basis for the rejection were owned by two different institutions, and each resulted from research conducted by certain inventors while employed at each of the respective institutions at various points in time. The rejected application was a continuation of a parent application that was filed before the priority date of the patent used in the double patenting rejection. During prosecution of the rejected application, the examiner found that certain claims of the reference patent were a species of the claimed invention in the rejected application and thus rejected the application claims based on obviousness-type double patenting. The Board affirmed the examiner’s rejection, finding that the genus claim in the rejected application was anticipated by issued species claims of the reference patent. The Board further determined that common ownership was not required where the rejected application and the reference patent shared common inventors. Jeffrey Hubbell appealed to the Federal Circuit.
The Federal Circuit disagreed, concluding that when assessing obviousness-type double patenting rejections, a complete identity of inventors or common ownership is not required. The Court also explained that a terminal disclaimer was not available to Hubbell to overcome the rejection because the rejected application and the reference patent were not commonly owned, and there is no Sec. 103 (c)-type joint research agreement between the assignees. Compounding Hubbell’s problems, the Court also explained that a two-way obviousness analysis was not applicable because Hubbell admitted that he was at least partially responsible for the delay. The Court therefore affirmed the Board's decision of unpatentability of the application claims based on obviousness-type double patenting. Dissenting, Judge Newman strongly argued that the majority decision is a “departure from the principles of the law of double patenting” and that the Court “need not create a new protocol wherein the contributions of distinct entities and separate ownership are rejected for ‘double patenting’ instead of examined under the established rules.”
by Charles J. Hawkins Addressing the issue of divided infringement in the wake of the en banc Akamai decision, the U.S. Court of Appeals for the Federal Circuit vacated and remanded the portion of a lower court’s summary judgment ruling involving indirect infringement, concluding that the plaintiff deserved an opportunity to press its indirect infringement theory with the benefit of the Court’s clarification regarding inducement. Aristocrat Techs. Australia PTY Ltd. v. Int’l Game Tech., Case No. 10-1426 (Fed. Cir., Mar. 13, 2013) (O’Malley, J.).
by Babak Akhlaghi Addressing the issue of whether an anticipatory prior art reference was enabled during prosecution, the U.S. Court of Appeals for the Federal Circuit vacated part of a decision by the U.S. Patent Trademark Office (PTO) Board of Patent Appeals and Interferences (Board) that found that applicant had failed to rebut the presumption that prior art references are enabled, finding that affidavits or declarations are not required to challenge the enablement of the prior art reference. In re Morsa, Case No. 12-1609 (Fed. Cir., Apr. 5, 2013) (O’Malley, J.).
Accordingly, the Federal Circuit vacated the finding of the anticipation since both the examiner and the Board failed to engage in a proper enablement analysis after Morsa provided a substantial rebuttal of the presumption of enablement. Patents / Damages
After a jury trial, Power Integrations was initially awarded total damages of $34 million. Fairchild moved for remittitur, judgment as a matter of law (JMOL), or, in the alternative, a new trial on damages. The district court agreed that the damages award was contrary to law and, based on an inducement theory presented at trial, remitted the jury’s original award by 82 percent, resulting in a total award to Power Integrations of a little more than $6 million. Power Integrations appealed. Power Integrations argued that the original jury award was appropriate because it was foreseeable that Fairchild’s domestic infringement would cause Power Integrations to lose sales in foreign markets. The Federal Circuit rejected this argument, finding that “entirely extraterritorial production, use, or sale of an invention … is an independent, intervening act that, under almost any circumstances, cuts off the chain of causation initiated by an act of domestic infringement.”
by Amol Parikh Addressing for the first time whether 35 U.S.C. §24 empowered a district court to issue a subpoena in an inter partes reexamination proceeding, the U.S. Court of Appeals for the Federal Circuit found that § 24 only empowered a district court to issue a subpoena in proceedings in which regulations specifically authorize the parties to take depositions and went on to conclude that subpoenas were not permitted in inter partes reexamination proceedings. Abbott Labs. v. Cordis Corp., Case No. 12-1244 (Fed. Cir., Mar. 20, 2013) (Dyk, J.).
Later, Cordis sought from a federal district court subpoenas pursuant to § 24, which mandates that upon application by any party, a district court must issue a subpoena to any witness for testimony in connection with “any contested case in the Patent and Trademark Office.” At the same time, Cordis filed petitions with the director of the PTO asking him to confirm that PTO rules do not require that a party obtain PTO authorization prior to seeking enforcement subpoenas under § 24. In the alternative, Cordis asked the PTO to authorize such subpoenas if authorization was required.
The PTO denied Cordis’s petitions, determining that § 24 subpoenas are not permitted by the inter partes reexamination statute, or by any regulation governing inter partes reexamination proceedings. The PTO reasoned that because initial examination in inter partes proceedings do not provide for discovery practice, inter partes reexaminations are not “contested cases” within the meaning of § 24. Subsequently, the district court granted Abbott’s motion to quash the subpoenas, concluding that the PTO’s decision, while not binding, was persuasive and that inter partes reexamination is not a “contested case” within the meaning of § 24. Cordis appealed.
The Federal Circuit recognized that the appeal turned on the question of whether an inter partes reexamination is a “contested case.” In finding that it was not, the Court analyzed the phrase “contested case” in the context of its relationship with adjacent provisions of title 35, the legislative history of § 24, and the interpretation of that provision by other courts.
The Federal Circuit found that the plain meaning of “contested case” means a proceeding for which testimony may be taken for use before the PTO. The Court then analyzed the relationship between § 24 and the immediately proceeding § 23, which entrusts the PTO with the power to decide by regulation which proceedings require testimony to be taken for use before the PTO. The Federal Circuit noted that as originally drafted in 1861, the language of §§ 23 and 24 were part of a single provision, but starting in 1870 and subsequent years, Congress divided the language of that single provision into separate provisions. However, nothing in the subsequent history reveals an intent on the part of Congress to sever the relationship between §§ 23 and 24. The Federal Circuit found that the “contested cases” of § 24 are those for which the director of the PTO has established rules for taking depositions under § 23.
The Federal Circuit also reviewed decisions from other regional courts of appeal prior to the creation of the Federal Circuit. In particular, the Court reviewed decisions from the U.S. Court of Appeals for the First and Third Circuits which both concluded that § 24 is simply a provision giving teeth, through the court’s subpoena power, to authority conferred upon the Commission of Patents to regulate PTO proceedings. Turning to the case at hand, the Federal Circuit found that district court properly quashed the subpoenas because PTO regulations do not permit parties to take depositions in inter partes reexamination proceedings, and thus, § 24 subpoenas are not available for such proceedings. The Court noted that the only PTO regulations providing for depositions in patent proceedings apply exclusively to interferences, derivation proceedings, and new Board proceedings created by the new America Invents Act (AIA). The Court further noted that each of these is accompanied by a regulation explicitly allowing parties to seek § 24 subpoenas in the covered proceedings. Because inter partes reexamination fall outside of these covered proceedings, the Court found that §24 subpoenas are not available. Practice Note: Under the AIA, inter partes reexamination have been replaced by inter partes reviews and post grant reviews. Since the new statute provides for discovery in these proceedings, they will likely be treated as “contested cases” for the purposes of § 24. However, the PTO has instituted regulations that would bar the filing of a subpoena without authorization of the Patent Trial and Appeal Board, as set forth in 37 C.F.R. § 42.52. Moreover, recently in Garmin v. Cuozzo, the Patent Trial and Appeal Board promulgated the following five-factor test that it will use to determine whether to allow additional discovery:
More than a Possibility and Mere Allegation—The mere possibility of finding something useful and mere allegation that something useful will be found are insufficient to demonstrate that the requested discovery is necessary in the interest of justice. The party requesting discovery should already be in possession of evidence tending to show beyond speculation that in fact something useful will be uncovered.
Easily Understandable Instructions—The questions should be easily understandable. For example, 10 pages of complex instructions for answering questions is prima facie unclear. Such instructions are counter-productive and tend to undermine the responder’s ability to answer efficiently, accurately and confidently.
Requests Not Overly Burdensome to Answer—The requests must not be overly burdensome to answer, given the expedited nature of inter partes review. The burden includes financial burden, burden on human resources and burden on meeting the time schedule of inter partes review. Requests should be sensible and responsibly tailored according to a genuine need.
by Blake Wong Faced with the question of whether a federal district court should change the inventors listed on the face of a patent, the Federal Circuit found that the decision to change inventors was a question of priority of invention, and thus was properly an issue to be resolved by the U.S. Patent and Trademark Office (PTO) by virtue of an interference proceeding. Rubin v. Gen. Hosp. Corp., Case No. 11-1439 (Fed. Cir., Mar. 28, 2013) (Newman, J.).
Patent Marking Estoppel
Patent Marking: An Extrajudicial Admission that the Product Is Covered by the Patent but Not an Estoppel Frolow v. Wilson Sporting Goods Co.
Addressing for the first time whether marking a product with a patent number creates an estoppel preventing a later assertion that the product is not covered by the patent, the U.S. Court of Appeals for the Federal Circuit refused to adopt the doctrine of “marking estoppel,” but nonetheless reversed a lower court’s summary judgment ruling in favor of the defendant, finding that the lower court had erred in holding that defendant’s marking was irrelevant to whether defendant could now argue that marked products were not covered by the patent. Frolow v. Wilson Sporting Goods Co., Case No. 12-1185 (Fed. Cir., Mar. 15, 2013) (Moore J.) (Newman, J., concurring).
Patents / Claim Construction—Prosecution Disclaimer, Means-Plus-Function Limitations
Judge Moore disagreed with the majority that “chemical bonds and linkages” was not a “corresponding structure.” Judge Moore argued that that § 112 ¶ 6 requires only “some link between a generic structural reference and a claimed function.” Judge Moore also criticized the panel majority as “punish[ing] the patentee for providing a detailed description of his preferred embodiment.” Judge Moore also found the panel majority’s construction to be unnecessary due to the resolution of the case based on the “device” construction. On that basis, she characterized the majority’s “means for release” analysis as dicta. Patents / Conception and Inventorship No Prior Conception Where Contemporaneous Disclosures Failed to Show Knowledge of Complete and Operative Method of Making Invention
by Vinu Raj Addressing the issue of conception in an interference proceeding, the U.S. Court of Appeals for the Federal Circuit affirmed a decision by the U.S. Patent and Trademark Office Board of Patent Appeals and Interferences (Board), finding that disclosures related to the subject matter at issue were insufficient to prove a prior conception date where the disclosures failed to show that the inventor possessed a definite and permanent idea of the complete and operative invention as it is thereafter to be applied in practice. Dawson v. Dawson, Case Nos. 12-1214, -1215, -1216, -1217 (Fed. Cir., March 25, 2013) (Bryson, J.) (Reyna, J., dissenting).
In the interference proceedings before the Board, UCSF attempted to prove that Dr. Dawson alone had conceived of the claimed inventions and had done so while employed at UCSF. UCSF primarily relied upon contemporaneous disclosures based on Dr. Dawson’s presentation at the 1997 WHO conference and accompanying documents. The Board found that UCSF had failed to prove sole conception by Dr. Dawson and that prior to his collaboration with Dr. Bowman at InSite, Dr. Dawson “did not fully appreciate how [his] idea was to be implemented in actual practice.” UCSF appealed. The Federal Circuit affirmed the Board’s conclusion that UCSF failed to prove sole conception by Dr. Dawson. The Court reiterated that conception requires the “formation in the mind of the inventor, of a definite and permanent idea of the complete and operative invention, as it is hereafter to be applied in practice the definition of conception.” The Court explained that conception is complete only when the idea is so clearly defined in the inventor’s mind that only ordinary skill would be necessary to reduce the invention to practice, without extensive research or experimentation.
The Federal Circuit found that the contemporaneous disclosures of the alleged conception showed only that Dr. Dawson had a general idea for a future research plan for developing a topical azithromycin treatment for eye infections. This finding was supported by a description in the disclosures of Dr. Dawson’s presentation as a “preliminary” statement about a “possibility” or “potential use” of a topical antibiotic eye infection treatment alongside a recommendation for continued work and a request to “report back” at the next meeting. In response to UCSF’s contention that the Board improperly required a showing of reduction to practice in order to prove conception, the Federal Circuit noted that while conception does not require reduction to practice, the inventor must still possess an operative method for making the invention, emphasizing the difference between conceiving a way to make an idea operative and knowing that a completed invention will work for its intended purpose. Patents / Design Patents
by Roozbeh Gorgin Addressing the issue of when and under what circumstances a design patent application can receive the benefit of the written description of its parent, the U.S. Court of Appeals for the Federal Circuit denied a bid by a bottle designer to claim priority to a parent application where a continuation attempted to claim only certain portions of the bottle he designed, finding that the introduction of dotted, unclaimed boundaries introduced new matter. In re Owens, Case No. 12-1261 (Fed. Cir., Mar. 26, 2013) (Prost, J.). Timothy Owens appealed a decision of the United States Patent and Trademark Office Board of Patent Appeals and Interferences (Board), affirming a rejection of his continuation design patent application. The continuation application sought to claim the benefit of priority to a parent design application, which ultimately issued as a U.S. design patent. Owens conceded that without the benefit of priority to the earlier application, the continuation application was barred by prior sales.
The continuation application claimed certain design elements found on the top and side portions of the original mouthwash bottle disclosed and claimed in the parent patent, including an upper portion of the bottle’s front pentagonal center panel. To indicate what portion of the center area was claimed in the continuation application, Owens bisected the top of the front pentagonal panel with a broken line. The examiner rejected the application, reasoning that the addition of the broken line defined an entirely new trapezoidal-shaped surface that constituted new matter. The examiner found no evidence that, in the parent application, Owens indicated processing such a trapezoidal region and rejected the continuation application for lack of written description under § 112, ¶ 1. After the Board affirmed the examiner, Owens appealed. On appeal, Owens argued against the notion that his continuation application claimed a trapezoidal-shaped area at all but explained that in order to claim his new design element, he was simply claiming a new boundary. However, as all parties agreed, the newly introduced broken line was “unclaimed.” Accordingly, Owens argued that the Board applied the wrong written description test to his case, one which erroneously treated his unclaimed boundary as though it were claimed.
The Federal Circuit, in affirming the Board, found that by introducing figures with a bottle that was bisected at the top of its pentagonal panel, Owens introduced new subject matter in his design patent application , i.e., the trapezoidal region. The Federal Circuit agreed with the Board that nothing in the parent application’s disclosure suggested anything uniquely patentable about the top portion of the bottle’s front panel, nor was there anything in the parent application indicating that Owens had in his possession a bottle design that was bisected at the top of its pentagonal panel. In addressing whether, and under what circumstances, a patentee can introduce an unclaimed boundary line in a continuing application and still receive the benefit of the written description of its parent, the Federal Circuit suggested that there are circumstances in which an unclaimed boundary line may not constitute new matter, such as if it only makes explicit a boundary that already existed but that was previously unclaimed in the original disclosure.
Patents / Rules of Professional Conduct
by Bernard P. Codd The U.S. Patent and Trademark Office (USPTO) recently released new rules for professional conduct that take effect on May 3, 2013. See 78 Fed. Reg. 20180 (April 3, 2013). The new rules are largely based on the American Bar Association’s (ABA) Model Rules of Professional Conduct. Noting that 50 U.S. jurisdictions (49 states and Washington, D.C.) have adopted the ABA model rules, the USPTO explained the new rules provide attorneys with consistent professional conduct standards and large bodies of both case law and opinions written by disciplinary authorities that have adopted the rules. While professional conduct and disciplinary opinions from the various state bars may be useful, the USPTO explained they would not be binding precedent, as the USPTO would be its own jurisdiction.
The new rules largely track the numbering of the ABA Model Rules. For example, USPTO Rule 11.101 parallels ABA Model Rule 1.1 and USPTO Rule 11.102 parallels ABA Model Rule 1.2, and so on. There are several important distinctions between the USPTO Professional Conduct Rules and the ABA Model Rules. The USPTO did not include portions of the ABA Rules that are not relevant to practice before the USPTO, but did include other rules not in the ABA Rules that are specific to USPTO practice. For example, there are no references to criminal law issues in the USPTO Rules. On the other hand, the USPTO retained the requirement that patent practitioners disclose to the USPTO all information necessary to comply with the duty of disclosure rules. In other rulemaking, the USPTO recently implemented several technical corrections to the America Invents Act (AIA) that were enacted January 14, 2013. In one correction, the USPTO specified that the 14-month period within which the USPTO must issue a notice of rejection or notice of allowance and the three-year application pendency period for determining patent term adjustment (PTA) are to be measured from the same date, i.e., the date of filing the application under 35 U.S.C. § 111 or the commencement of the national stage under 35 U.S.C. § 371. In another correction to the PTA, applicants can extend the period for requesting reconsideration of the PTA determination from two months up to seven months after patent grant via extensions of time in accordance with 37 C.F.R. § 1.136. Furthermore, the USPTO eliminated the nine-month dead zone for filing inter partes review of first-to-invent patents. As originally enacted, the AIA permitted the filing of a request for inter partes review nine months after issue for all patents (first-to-invent and first-to-file), and post-grant review of first-to-file patents only within the first nine months from date of issue. This created a nine-month dead zone for challenging first-to-invent patents. Under the AIA technical corrections, an inter partes review request can now be filed without waiting nine months in first-to-invent patents. It is still necessary, however, to wait nine-months to file an inter partes review in first-to-file patents.
Patents / Failure to State a Claim
Fifth Circuit Flushes Away Pro Se Plaintiff’s Claims Against Oil Giants for Intellectual Property Theft and Infringement of a “Giant Plunger” Richards v. BP Exploration
The U.S. Court of Appeals for the Fourth Circuit has now weighed in on the latest turn of events a long-standing dispute between Georgia Pacific Consumer Products and Von Drehle Corp. holding that the district court erred in granting judgment as a matter of law (JMOL) based on Von Drehle’s previously rejected claim preclusion and issue preclusion defenses. Georgia Pacific Consumer Products, LP v. Von Drehle Corporation, Case No. 12-1444 (4th Cir., Mar. 14, 2013) (Keenan, J.). Plaintiff Georgia Pacific designs and manufacturers paper products and dispensers. In 2002, Georgia Pacific introduced its “enMotion” brand automated touchless paper towel dispenser, designed to use GP’s proprietary, “fabric-like” paper toweling. The dispensers bear marks “enMotion,” “Georgia-Pacific” and a stylized “GP.” Georgia Pacific leases the enMotion dispensers to distributors who sublease them to end users such as hotels and restaurants. The leases and subleases expressly provide that only enMotion brand paper toweling may be used in the dispensers.
In 2004, Van Drehle began selling lower-quality paper towels designed for use in Georgia Pacific’s enMotion dispenser. Georgia Pacific brought several suits for contributory trademark infringement against Van Drehle and Van Drehle’s distributors based on the “stuffing” of the enMotion dispenser. In September 2010, the 4th Circuit vacated the district court’s grant of summary judgment for holding that it was possible that restroom users could confuse inferior paper towels with, Georgia Pacific’s product and remanded the case back to the district court (IP Update, Vol. 13, No. 9). Less than one month later, the U.S. Court of Appeals for the Eighth Circuit affirmed a district court’s holding of non-infringement for Myers Supply, one of Van Drehle’s distributors, after a bench trial (IP Update, Vol. 13, No. 10). On remand from the 4th Circuit case, for the first time Van Drehle raised the defenses of claim preclusion and issue preclusion in a motion to amend its answer. The district court initially denied Van Drehle’s request to amend its pleadings and its request for reconsideration, finding that the request was untimely and prejudicial to Georgia Pacific. After Van Drehle’s initial request, the U.S. District Court for the Northern District of Ohio found for another distributor, Four-U-Packaging, Inc., based on a preclusion defense arising from the Myers decision. Van Drehle again filed a motion to amend its answer and a motion for summary judgment based on those defenses. Without a ruling from the court on those motions, the case proceeded to trial and the jury found in favor of Georgia Pacific. After trial, Van Drehle renewed its request for judgment as a matter of law (JMOL) based on its preclusion defenses and filed an additional motion seeking again to supplement its answer. This time, in a reversal of its previous orders, the district court allowed Van Drehle to assert its preclusion defenses and entered JMOL in Van Drehle’s favor. The district court explained its reversal by Van Drehle’s reliance on the subsequent Four-U ruling. Alternatively, the court stated that it would consider the preclusion defenses sua sponte. Georgia Pacific appealed. The 4th Circuit categorically rejected the district court’s finding, holding that it acted in an arbitrary manner and thus abused its discretion. The Four-U decision, the 4th Circuit reasoned, did not independently address the merits of Georgia Pacific’s claims, but rather was decided on the preclusion defense based on Myers. Therefore, the Four-U decision could not revive Van Drehle’s untimely preclusion defense that was substantively based on Myers. Rather, according to the 4th Circuit, Van Drehle waived its preclusion defense based on Myers by waiting 480 days after the district court decision in that case to raise the defense. Van Drehle’s delay caused Georgia Pacific to spend considerable time and money litigating the case through appeal and remand and by allowing Van Drehle to assert its untimely defense after trial prejudiced Georgia Pacific. The 4th Circuit also rejected the district court’s alternative consideration of the preclusion defenses sua sponte, holding that no special circumstances exist that would justify this issue being raised, sua sponte, after prior rejection of it.
The third contention by UMG was that Veoh should be deemed to have the right and ability to control infringing activity (it was undisputed that Veoh received a financial benefit therefrom) based on its general ability to “locate infringing material” and “terminate users’ access” (a common law vicarious liability standard employed by the 9th Circuit in A&M Records v. Napster, see IP Update, Vol. 4, No. 3). In declining to follow Napster, the 9th Circuit held that for DMCA purposes, “control” requires something more than just the general ability to locate infringing material and terminate users’ access. Rather, resolving an apparent conflict with the 2nd Circuit, the 9th Circuit adapted the Viacom test, which states that a service provider has the requisite “control” as long as it has “substantial influence” on the activities of users, which influence may be based on high levels of control over user activities or based on purposeful conduct such as intentional inducement. It is in this regard that the 9th Circuit’s revised opinion differs from its original 2011 opinion (in which it held that a service provider must be aware of specific infringing material to have the requisite “control”). The 9th Circuit also concluded that none of the Veoh’s investors should be held secondarily liable for copyright infringement. According to the 9th Circuit, secondary liability (i.e., contributory liability, vicarious liability, and inducement) cannot be based on the mere fact that the named investors together control a majority of the seats on the board, unless they were on some level working in concert to control and direct Veoh’s activities. Practice Note: The 9th Circuit’s new opinion in Veoh, together with the 2nd Circuit’s decision in Viacom, provides further clarity on the DMCA safe harbor rules and their application to online service providers that host user-generated content (UGC). Content owners, in particular, should carefully evaluate these decisions and adjust their enforcement and litigation strategies accordingly. Also, see the 9th Circuit’s discussion of vicarious liability in Luvdarts v. AT&T Mobility (IP Update, this issue) as well as the discussion of the DCMA safe harbor provision in Columbia Pictures v. Fung (IP Update, this issue).
Copyrights / Contributory Liability / Digital Millennium Copyright Act No “Safe Harbor” for BitTorrent Website Operator Columbia Pictures Industries, Inc., et al. v. Gary Fung, et al.,
by Sarah Bro The U.S. Court of Appeals for the Ninth Circuit affirmed a summary judgment ruling in favor of seven film studios finding that the defendant induced third parties to download infringing copies of the plaintiffs’ copyrighted works. Columbia Pictures Industries, Inc., et al. v. Gary Fung, et al., Case No. 10-55946 (9th Cir., Mar.21, 2013) (Berzon, J.).
The district court found Fung liable for contributory copyright infringement for inducing others to infringe the studios’ copyrights and also found that Fung was not entitled to protection from damages liability under the safe harbor provisions of the Digital Millennium Copyright Act (DMCA). After a permanent injunction was issued, Fung appealed. On appeal, Fung challenged the full holding, including the scope of the injunction claiming that it was vague, punitive and an impediment to free speech. The 9th Circuit, citing the Supreme Court decision in Grokster III (which also dealt with peer-to-peer file sharing technology), analyzed the facts of the present case under the four elements of the Grokster III inducement principle: the distribution of a device or product, acts of infringement, an object of promoting its use to infringe copyright and causation.
Copyrights / Vicarious Infringement Liability
by Michael V. Sardina In an opinion that elaborates on the degree of third-party supervision required in order to attach vicarious copyright infringement liability, the U.S. Court of Appeals for the Ninth Circuit Court upheld a decision that dismissed claims of vicarious copyright infringement against the major wireless networks for content distributed over their networks. The plaintiffs failed to plead a claim of copyright infringement because there was no identification of any system of supervision in place for the wireless carriers to influence, affect, or control what content its users were sharing on multimedia messaging service networks. Luvdarts, LLC et al. v. AT&T Mobility et al., Case No. 11-55497 (9th Cir., Mar. 25, 2013) (O’Scannlain, J.).
Ultimately, the 9th Circuit agreed that Luvdarts’ did not properly plead, and could not prevail, on its claims of vicarious or contributory infringement. Practice Note: A party alleging a claim of vicarious copyright ability must be prepared to specifically identify in its complaint both the exact content that has been infringed and allege that a third party had the requisite level of supervision over the infringement. On the other hand, third parties that provide platforms where infringement may occur should be protected from vicarious liability if they do not affirmatively supervise infringing activities.
Topics: Affidavits, Claim Construction, Copyright, Copyright Infringement, Discovery, DMCA, Infringement, Patents, Prior Art, Safe Harbors, Trademarks, USPTO
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