Source: http://www.jdsupra.com/legalnews/ip-update-vol-15-no-9-september-55736/
Timestamp: 2017-05-28 18:03:00
Document Index: 481331650

Matched Legal Cases: ['§101', '§ 285', '§271', '§ 271', '§ 271', '§ 337', '§ 102', '§ 102', '§ 102', '§161', '§161', '§ 1001', '§ 1', '§ 119', '§ 371', '§ 106', '§ 301', '§ 102', '§ 102', '§ 102', '§ 102', '§ 102', '§ 102', '§ 102']

IP Update, Vol. 15, No. 9, -- September 2012 | McDermott Will & Emery - JDSupra
IP Update, Vol. 15, No. 9, -- September 2012 by McDermott Will & Emery
Implicit Jury Findings Are Binding **WEB ONLY** Same Claim Terms Used In Related Patents Have the Same Meaning
What Doesn’t Kill Me, Makes Me Stronger—Surviving Allegations of Copyright Infringement Gossip Mag’s “Fair Use” Claim in Publishing a Celebrity’s Wedding Photos Rejected
In both of these cases, the respective district courts, citing BMC v. Paymentech, found no infringement since direct infringement under sec. 271(a), the acknowledged predicate for inducement, requires proof that a single-actor (or plural actors acting under the accused infringer’s direction and control) performed all of the claimed steps. In both cases the patentees were unable to satisfy the second prong of the inducement test (classical direct infringement under sec. 271(a)). According to the majority, the new decision does not rely on any change in the law of direct infringement (or of direct divided infringement). Rather, under the new rule articulated by the en banc majority, inducement liability exists if the accused infringer knew of the patent, induced performance of the steps of the method and those steps were actually performed. The accused infringer will also be liable if it performs some of the steps of the method and then actively induces performance of the other steps. Under the Akamai/McKesson rule, inducement still requires that the accused infringer have knowingly induced the infringement—that is with knowledge that the steps it is encouraging are covered by the patent—but does not require a classical direct (271(a)) infringer as a predicate.
Although the majority overruled the BMC v. Paymentech single actor rule, it held that an active inducer will only be held liable if one or more parties are induced to practice all the steps of a claimed method. The majority explained that innocent actors who were “induced” by someone else to perform one or more (but not all) of the claimed steps will not be individually liable. In other words, under this decision, innocent third parties (who are not direct infringers and who do not have culpable intent) will not be held strictly liable for infringement. In note 1 the majority explains that “[b]ecause liability for inducement, unlike liability for direct infringement, requires specific intent to cause infringement, using inducement to reach joint infringement does not present the risk of extending liability to persons who may not be aware of the existence of the patent or even unaware that others are practicing some of the steps claimed in the patent.” The theme of the majority opinion goes to balancing the tension created by the sometimes competing objectives of protecting patentees from intentional infringement while also protecting innocent parties who are not intentionally involved in any infringing activity.
Judge Newman, in dissent, argued that the majority opinion creates “dramatic changes in the law of infringement” and warned that the “greatly enlarged grounds” for proving inducement “contains vast potential for abuse” that “imposes disruption, uncertainty and disincentives upon the innovation [read: design around] communities.” She wondered aloud about the wisdom of the majority in imposing liability under the inducement statute for acts such as “urging or encouraging” while “exonerating direct infringers from liability when the patented method is ‘collectively practiced.’”
Judge Linn also penned a vigorous dissent, his rooted in what he perceives to be the majority’s improper use of this case as a vehicle to make policy rather than interpret statutory text: “The majority opinion is rooted in its conception of what Congress ought to have done rather than what it did. It is also an abdication of this court’s obligation to interpret Congressional policy rather than alter it. When this court convenes en banc, it frees itself of the obligation to follow its own prior precedential decisions. But it is beyond our power to rewrite Congress’s laws. Similarly, we are obliged to follow the pronouncements of the Supreme Court concerning the proper interpretation of those acts.”
Practice Note: It remains to be seen how future decisions will sharpen the test in terms of exactly how much knowledge will be required to prove inducement under the Akamai/McKesson case and the impact (if any) of the “knowledge” requirement for willful infringement knowledge (as set forth in Bard Peripheral Vascular v. W. L. Gore & Assoc. (Fed. Cir., 2012) and In re Seagate (Fed. Cir., 2007) (en banc) (see IP Update, Vol. 10, No. 8) or the inducement knowledge standard as explained by the Supreme Court in its 2011 decision in Global-Tech Appliances v. SEB (in the context of apparatus claims), that while knowledge of a patent is required to prove inducement, one cannot escape liability through “willful blindness” that a copied product is patented. It appears that the dissenting opinions (especially that of Judge Linn), were written with an eye toward identifying a serious intra circuit split that requires Supreme Court attention. In the meantime the takeaway here is that there is now additional value to method claims, especially those that recites steps involving interaction among multiple individuals.
by Robert J. Walters and Michael V. Sardina
The Georgia-Pacific royalty damages calculation is based on what two willing parties would agree to pay for a license under a hypothetical negotiation generally set on “the date that the infringement began.” The district court reasoned that August 2006, the date of filing of the complaint and notice of infringement to QCI, was the proper hypothetical negotiation date—when QCI first met all the elements of inducement infringement. The Federal Circuit, explaining that in the active inducement infringement context, the “hypothetical negotiation is deemed to take place on the date of the first direct infringement traceable to [the inducing party’s] first instance of inducement conduct” (emphasis added), reversed that ruling. Thus, the Court explained, the correct hypothetical negotiation date was 2003, given that QCI’s first act of inducing conduct (resulting in direct infringement) occurred that year, when it began selling the accused computers in the United States.
The Court adopted the broad construction advocated by MagSil and entered by the district court, finding that the range of the “at least 10% resistance change” limitation extended from 10 percent to infinity. Turning to the specification, the Court noted that reference was made to a 1975 article that predicted an ideal tunnel junction could yield around a 24 percent change in resistance; however, 20 years later, when the application was filed, the specification taught that the highest achieved change was only 11.8 percent. This was insufficient disclosure to enable a resistance change up to infinity. In the end, “[t]he scope of the claims must be less than or equal to the scope of the enablement to ensure that the public knowledge is enriched by the patent specification to a degree at least commensurate with the scope of the claims.” In attempting to use broad claim language, the patentee risks “losing any claim that cannot be enabled across its full scope of coverage.” Practice Note: Claimed ranges should be carefully drafted to correspond to the range enabled by the specification. Open-ended ranges, in particular, should be avoided, as they will be closely scrutinized. Patents/ Obviousness
“The isolated DNA molecules before us are not found in nature. They are obtained in laboratory and are man-made, the product of human ingenuity,” stated the Federal Circuit, in a case on remand from the U. S. Supreme Court for further consideration in light of Mayo Collaborative Services v. Prometheus Laboratories, Inc., (see IP Update, Vol. 15, No. 3).
In an opinion that essentially tracked the Federal Circuit’s prior analysis in 2011, i.e., before appeal to the Supreme Court, the panel majority re-staked their positions. All three judges on the panel agreed that cDNAs and screening methods involving transformed cells are patent-eligible and method claims comparing or analyzing DNA sequences are not. The judges varied, however, regarding isolated genomic DNA molecules with sequences identical to those found in nature. Judges Lourie and Moore agreed that such isolated DNA molecules were patent eligible, but for different reasons. Judge Lourie found the isolated genomic DNA molecules to be patent eligible because they are “markedly different … from those found in nature.” Passing on the Mayo decision, Judge Lourie instead relied on the Supreme Court’s Chakrabarty and Funk Brothers decisions. “Mayo does not control the question of patent-eligibility of [isolated DNA molecules] claims. They are claims to compositions of matter, expressly authorized as suitable patent-eligible subject matter in §101,” Judge Lourie penned. Judge Moore agreed that smaller genomic DNA molecules are patent-eligible, but would have found long genomic DNA molecules that include most or all of a gene patent-ineligible if she “were deciding this case on a blank canvas. … But we do not decide this case on a blank canvas,” wrote Judge Moore. “Congress has, for centuries, authorized an expansive scope of patentable subject matter. Likewise, the United States Patent Office has allowed patents on isolated DNA sequences for decades. […] I will not strip an entire industry of the property rights it has invested in, earned and owned for decades unchallenged under the facts of this case,” she wrote in affirming the patent eligibility of isolated genomic DNA molecules.
Judge Bryson dissented. In his opinion, the native gene and claimed genomic DNA molecules were “the same, structurally and functionally,” making them patent-ineligible. The principle disagreement between Judges Lourie and Bryson was whether the structural differences between the native genes and the isolated genomic DNA molecules were respectively “markedly different” or merely “necessarily incidental to the extraction of the genes.” This difference of opinion underscores the need for “why the exceptions to patentability apply only to the clearest cases,” noted Judge Moore, cautioning against “an arbitrary decision based on a judge-made exception.” As to the method claims, the panel unanimously found that Myriad’s claims of comparing gene sequences did not constitute patentable subject matter. Indeed, the court found the claims “indistinguishable” from the method claims struck down in Mayo v. Prometheus, stating that the Supreme Court “made clear that such diagnostic methods in that case essentially claim natural laws not eligible for patent.”
On appeal, the Federal Circuit explained that under § 285, “sanctions may be imposed against the patentee only if two separate criteria are satisfied: (1) the litigation is brought in subjective bad faith, and (2) the litigation is objectively baseless.” The “objectively baseless” requirement “does not depend on the state of mind of the party at the time the action was commenced, but rather requires an objective assessment of the merits.” The Court continued, “[t]o be objectively baseless, the infringement allegations must be such that no reasonable litigant could reasonably expect success on the merits.” The Federal Circuit rejected the patentee’s assertion that the objective prong is assessed only at the time legal claims are first filed. Rather, the Court explained that “the objective prong is a single backwards-looking inquiry into the reasonableness of the claims in light of the full record. […] Unlike the objective prong, which is a single retrospective look at the entire litigation, the subjective prong may suggest that a case initially brought in good faith may be continued in bad faith depending on developments during discovery and otherwise.” Further, over the dissent, the majority noted that the “objective prong … is a question of law based on underlying mixed questions of law and fact and is subject to de novo review” and is a determination that must be made by the court rather than by the jury. In contrast, the subjective prong must be established by clear and convincing evidence because “there is an assumption that an assertion of infringement of a duly granted patent is made in good faith.” The majority noted “the objective reasonableness standard does not require fact finding. The question is simply whether the record established in the proceeding supports a reasonable argument as to facts and law.” Here the Court concluded that as to one of the patent owner’s claims, the district court did not err in concluding the claim was frivolous and the case exceptional. However, as to another of the infringement claims, the majority concluded that “Allcare’s position was not objectively unreasonable.” Since there had been no apportionment of the award (in terms of the Allcare claims), the Federal Circuit ordered the case remanded for a calculation of the fees and expenses attributable to the frivolous claim.
The dissent would have applied a highly deferential standard of review and affirmed the exceptional case award in its entirety
In other words, under the bill, there would be no inquiry into whether “the lack of objective foundation for the claim ‘was either known or so obvious that it should have been known’ by the party asserting the claim.’” Thus, patent holders could face substantial financial risk when asserting patent claims. In the technology area targeted by the bill, it is often the case that allegedly-infringing computer hardware and software is effectively a “black box.” Thus, even a patentee operating in good faith in anticipation of receiving further details of the accused instrumentalities through discovery could be subject to sanctions if it is later determined that the facts, as viewed at the end of the case, do not support infringement. The holding in Highmark that claimants are entitled to de novo review of the “objectively baseless” standard may also incentivize prevailing defendants to routinely appeal a sanctions motion if it is denied. Patents / §271(e)(1)
Addressing the scope of the Hatch-Waxman safe harbor provision of 35 U.S.C. § 271(e)(1), the U.S. Court of Appeals for the Federal Circuit found that practicing a patented method in the commercial manufacture of a drug was not an act of infringement. Momenta Pharm., Inc. v. Amphastar Pharm., Inc.., Case Nos. 12-1062, -1103, -1104 (Fed. Cir., Aug. 3, 2012) (Moore, J.) (Rader, C.J., dissenting).
The Momenta patents at-issue contained claims directed to manufacturing methods for analyzing the anticoagulant drug enoxaparin. Amphastar received approval by the U.S. Food and Drug Administration (FDA) to market enoxaparin and subsequently began to manufacture and market the drug. Momenta alleged that Amphastar, as part of its commercial manufacturing processes, practiced Momenta’s patented manufacturing methods.
Chief Judge Rader dissented, arguing that the majority opinion conflicted with the Court’s prior decision in Classen Immunotherapies, Inc. v. Biogen IDEC. Chief Judge Rader wrote “[t]his court’s interpretation of § 271(e)(1) would essentially render manufacturing method patents worthless.” Momenta has filed a petition for rehearing en banc. Patents / Domestic Industry
This case addresses the issue of whether satisfaction of the so-called “technical prong” is required for a licensing-based domestic industry. Traditionally, the ITC has required proof that a domestic article practices at least one claim of the asserted patent to satisfy product-based domestic industry allegations, but has not required that proof when a complainant is relying solely upon licensing activities. In the underlying investigation, the ITC held that complainant InterDigital satisfied the domestic industry requirement, but found no violation of § 337 because respondent Nokia did not infringe the asserted patents. On appeal, the Federal Circuit found that the ITC erred in construing certain claim terms and reversed the ITC’s order finding no infringement and remanded the case for further proceedings.
The Federal Circuit also rejected Nokia’s argument that the ITC’s finding of no violation can be upheld on the alternative ground that InterDigital failed to satisfy the domestic industry requirement. The Court acknowledged that the statute permits barring the importation of infringing articles “only if an industry in the United States, relating to articles protected by the patent . . . exists or is in the process of being established.” Nonetheless, the Federal Circuit rejected Nokia’s argument there must always be a domestic industry relating to articles protected by the patent, noting that “section 337(a)(3) makes clear that the required United States industry can be based on patent licensing alone.” In support of this interpretation, the Court looked to the legislative history and found that the Senate report of the bill that amended the domestic industry requirement recognized that the “third factor,” which permitted reliance upon investments in licensing, “does not require actual production of the article in the United States if it can be demonstrated that substantial investment and activities of the type enumerated are taking place in the United States.” The Court also noted that in the years since the enactment of that amendment, the Commission has consistently ruled that a domestic industry can be found based on licensing activities alone. As such, “[i]f there were any ambiguity as to whether the statute could be applied to a domestic industry consisting purely of licensing activities, the Commission’s consistent interpretation of the statute to reach such an industry would be entitled to deference under the principles of Chevron U.S.A.”
A Range of Possible Dates for Alleged Prior Art Does Not Satisfy Standard of Clear and Convincing Evidence for Proving Invalidity by Christopher D. Bright
Amkor initiated an ITC investigation, alleging that certain respondents violated section 337 of the Tariff Act of 1930 based on the importation of certain encapsulated integrated circuit devices that allegedly infringed Amkor’s patent. The administrative law judge issued an initial determination finding that a third party (ASAT) conceived of the invention in a foreign country sometime during April or May and that Amkor’s patented technology was conceived sometime during May through August, or on December 10, of that same year. The ALJ went on to conclude, however, that ASAT’s alleged prior invention was not prior art under § 102(g)(2) because there was a failure of proof “by clear and convincing evidence that the April/May date of invention [for the ASAT invention] . . . is prior to the [May through August] date of invention accorded the asserted claims.” The Commission reversed and determined that Amkor’s patent was invalid under § 102(g)(2). The Commission held that the ASAT invention is prior art under § 102(g)(2) because, according to the Oka rule, the patent must be accorded the last date in the range of possible conception dates, or December 10, which falls after the April/May date of invention for the ASAT invention. Amkor appealed.
The Federal Circuit reversed, explaining that the Commission applied an erroneous legal standard. The Federal Circuit noted that the Oka rule, applied in the context of interferences, does not apply to patents entitled to a presumption of validity in litigation, which can only be overcome by clear and convincing evidence. The Federal Circuit went on to find that the range of dates of possible prior invention “at best, establishes that the ASAT inventor might have conceived of the invention first. Evidence establishing that there might have been a prior conception is not sufficient to meet the clear and convincing burden needed to invalidate a patent.” Practice Note: A party trying to prove prior art, and in particular prior invention, would be better served in terms of persuasion by presenting—and is essentially legally required to present—a consistent story on the date of the prior art, rather than a range of possible dates for the prior art, particularly if part of that date range is after the conception of the patented invention.
Patents / Jury Findings
Implicit Jury Findings Are Binding by Daniel Bucca, Ph.D.
Similarly, the Court explained that it must review all of the jury’s explicit and implicit factual findings for substantial evidence and then examine the legal conclusion of obviousness de novo to determine whether it is correct in light of the factual findings that it finds adequately supported. Practice Note: When seeking a trial by jury, if a jury is asked to determine the question of obviousness, the jury’s implicit factual findings are binding on the court and the parties if supported by substantial evidence. Patents / Claim Construction
Rambus argued at the Federal Circuit that the stated goals of the invention required a single chip memory device without a memory controller or control functions, citing to portions of the specification describing a “memory device” in such a way. The Federal Circuit rejected this argument, finding that the use of the term “memory device” in the specification to describe embodiments of single-chip devices does not necessarily restrict the invention to single-chip memory devices. The Court explained that language in the specification describing “only preferred embodiments” does not exclude other embodiments that are also described in the specification. The Federal Circuit also refused to limit the memory device term to a single chip device when Rambus could have expressly done so itself during prosecution of the application for the patent, but chose not to. According to the Federal Circuit, the Board’s construction is consistent with the use of the term in other patents in the same family where Rambus used the term “memory device” in the independent claim and included a dependent claim covering memory devices formed on a single chip component. Quoting from Omega Eng’g, Inc., the Court noted that “unless otherwise compelled … the same claim term in the same patent or related patents carries the same construed meaning.” The Court also found that nothing in the claim or specification limits the control functionality of the memory device and explained that “excluding more complex controllers does not eliminate all control functionality.” The Court distinguished its prior decision in Lisle by noting that the “general speed and efficiency goals” of Rambus’s invention do not require a different construction of “memory device” that excludes all control functions including the claimed functions of receiving and outputting data. The Court concluded that “[b]y not restricting a memory device to a single chip or otherwise restricting the necessary interface control logic function within the claims, there is simply no principled way to distinguish” the memory module disclosed in the prior art reference manual from the memory device in Rambus’s patent.
The recapture rule states that a patentee cannot regain through reissue subject matter that he or she surrendered in order to obtain allowance of the original claims. Here, Xicor argued that the TEOS features could not have been effective in overcoming the prior art, and, therefore, Xicor did not surrender non-TEOS implementations because the structure of the tunneling layer does not depend on the material used for the process but depends on conditions present during the process, such as temperature and pressure. The Federal Circuit rejected Xicor’s arguments explaining, “Xicor is bound by the arguments that it made before the examiner … the sole question is whether the argument was made,” not whether the argument was technologically accurate. Thus, Xicor could not obtain a reissue patent that did not include the TEOS features because Xicor explicitly relied on the TEOS features to obtain the parent patent.
by Cary Chien
Addressing a stream-of-commerce argument on personal jurisdiction, the U.S. Court of Appeals for the Federal Circuit affirmed a district court’s decision that it lacked jurisdiction over a patent infringement action in which the plaintiff failed to show sufficient contacts with the forum state. AFTG-TG, LLC v. Nuvoton Tech. Corp. et al., Case Nos. 11-1306, -1307 (Fed. Cir., Aug. 24, 2012) (per curiam) (Rader, C.J., concurring). Non-practicing entity AFTG filed its patent infringement suit against multiple defendants in federal district court in Wyoming. While it did not claim that defendants engaged in direct sales in Wyoming, AFTG argued for jurisdiction under a “stream-of-commerce” theory, contending that defendants sold their products to various companies, who in turn sold them to consumers in Wyoming. The district court found AFTG’s accusations insufficient to establish personal jurisdiction, noting that there was “no evidence or allegation that the infringing technologies or products actually reached Wyoming.” The Federal Circuit upheld the district court’s decision, by employing a fact-driven approach found in its own precedent interpreting the Supreme Court’s stream-of-commerce precedent. The Federal Circuit concluded that AFTG’s “bare formulaic accusation” that the defendants maintain sufficient contacts with Wyoming were not supported by any allegations, facts or declarations identifying sales in Wyoming. The Court noted that the Supreme Court has yet to address its long-standing split on the stream-of-commerce theory; questions that have remained since Asahi. In Asahi, members of the Supreme Court disagreed about whether a defendant could be subject to personal jurisdiction in a forum merely because the defendant had placed a product in the stream of commerce. Justice Brennan, writing for four justices, articulated a stream-of-commerce theory based on foreseeability, concluding that as long as the participant is aware that the final product is being marketed in the forum, the possibility of a lawsuit there cannot be a surprise. Justice O’Connor and three other justices rejected this approach, instead concluding that the party’s action must be purposefully directed toward the forum. Despite urging by Chief Judge Rader in the concurring opinion to clarify the Federal Circuit’s precedent on personal jurisdiction in stream-of-commerce cases, the Court did not stake its position in either Justice Brennan’s or Justice O’Connor’s articulations. Patents / Future Infringement
Criticizing the denial of a prevailing patentee’s requests for relief from future infringement, the U.S. Court of Appeals for the Federal Circuit listed possible equitable relief available to patentees to be considered. WhitServe, LLC v. Computer Packages, Inc., Case Nos. 11-1206; -1261 (Fed. Cir., Aug. 7, 2012) (O’Malley, J.) (Mayer, J., dissenting). WhitServe sued Computer Packages Inc. (CPi) for patent infringement, alleging that CPi’s IP docketing software for annuity and maintenance fees infringed certain patent claims. Finding no anticipation and willful infringement, a jury awarded WhitServe more than $8 million in damages. The trial court denied WhitServe’s motions for a permanent injunction, compulsory license, prejudgment interest and enhanced damages. The district court reasoned that the verdict adequately addressed all legal and equitable considerations. WhitServe appealed.
The Federal Circuit vacated the denial of WhitServe’s motions and remanded the case for an analysis of the patent owner’s remedies for future infringements. It listed four possible remedies for addressing future infringement: a permanent injunction, an order for the parties to negotiate terms for future use, an ongoing royalty or a conclusion that no forward-looking relief is appropriate in the circumstances. The Federal Circuit found that the district court abused its discretion by inadequately considering WhitServe’s request for relief from future infringements, stating that a damages award remedies past, not future, infringement. Similarly, the Federal Circuit found that because the jury award did not include punitive damages for willful infringement or account for prejudgment interest, the trial court abused its discretion when denying those motions on the same grounds. The Federal Circuit also overturned the damages award. At the Federal Circuit WhitServe argued that the $8 million award was based either on a proper royalty analysis or alternatively that the jury, acting within its discretion, included “other damages.” The Court found that the only support for the damage award was “based on fiction,” and that WhitServe’s expert testimony was “conclusory, speculative, and, frankly, out of line with economic reality.” The Federal Circuit also noted that, although a jury is free to award “other damages,” i.e., above the reasonable royalty floor, such an award must be supported by the patentee’s evidence, which WhitServe did not introduce. Patent / Plant Patents
Beineke filed two plant patent applications, each directed to a particular oak tree. In 1980, Beineke had observed two oak trees that appeared to display superior genetic traits in comparison with other oak trees. At that time, both trees were more than 100 years old. Beineke planted acorns from the two trees, observed the resulting offspring and concluded that these progeny trees exhibited the same superior traits. Beineke asexually reproduced the trees and once again observed the same superior traits. Beineke then filed patent applications. The patent examiner rejected both applications on the grounds that Beineke failed to show that the claimed trees were in a “cultivated state” as required by §161, and the Board affirmed the rejection. Beineke appealed.
In affirming the Board’s decision, the Federal Circuit interpreted the 1930 Plant Patent Act as providing “patent protection to only those plants … that were created as a result of plant breeding or other agricultural and horticultural efforts and that were created by the inventor, that is, the one applying for the patent.” The Federal Circuit held that Beineke met neither of these requirements because he did not create the oak trees but merely found them. The Federal Circuit further held that the 1954 amendments to the Plant Patent Act provided Beineke no relief because those amendments only extended patent protection to “newly found seedlings,” and the oak trees at issue were not seedlings. Thus, the Federal Circuit concluded that §161 did not provide patent protection for plants discovered or found in the wild, but only those that were created by the inventor. Patents / Evidence
The Federal Circuit also found that the district court abused its discretion in three evidentiary rulings. First, the district court improperly limited the scope of prior art to only two references even though additional references were sufficiently disclosed. Second, the district court improperly excluded Bodum’s expert from testifying that the asserted patents were invalid as being obvious even though the expert submitted a sufficiently detailed report. Third, the district court improperly erred in precluding a lay witness from testifying to authenticate one of the prior art references. These evidentiary errors, according the Federal Circuit, had the cumulative effect of preventing Bodum from presenting the substance of its obviousness defense which resulted in a “one-sided” trial. The Federal Circuit also ruled that the district court improperly dismissed Bodum’s claim of inequitable conduct on a motion in limine, finding that “a motion in limine is not the appropriate vehicle for weighing the sufficiency of the evidence.” The Federal Circuit vacated the willfulness verdict and the award of attorney fees’ in view of the evidentiary and procedural rulings.
Effective September 16, 2012, the inventor’s oath or declaration must include the following three statements: (1) the person executing the oath or declaration believes the named inventor or joint inventor to be the original inventor or an original inventor of a claimed invention in the application for which the oath or declaration is being submitted; (2) the application was made or was authorized to be made by the person executing the oath or declaration; and (3) any willful false statement made in the declaration is punishable under 18 U.S.C. § 1001 by fine or imprisonment of not more than five years, or both. The final rules no longer require the inventor to include the “without deceptive intention” statement in the declaration. Although, the inventors still have a duty to disclose relevant information under 37 C.F.R. § 1.56, it is no longer necessary for the inventors to acknowledge this duty in the declaration. In addition, under the final rules, the inventors do not have to acknowledge the claim for domestic or foreign priority in the declaration. However, to claim priority to or benefit of a prior-filed application under 35 U.S.C. §§ 119, 120, 121, or 365, the claim must be made in an Application Data Sheet (ADS). Under the final rules, the U.S. Patent and Trademark Office (USPTO) will issue patents to the applicant, who may be someone other than the inventor, such as assignee, but the inventors names will still be on the face of the patent. If an inventor is unable or unwilling to sign an oath or declaration, an applicant may file a substitute statement in lieu of an oath or declaration stating the reason why the inventor did not execute the oath or declaration. A petition accompanied with evidence showing that the applicant exercised diligence in trying to procure the inventor’s signature is no longer required, although applicant is still required to use diligent effort to obtain the inventor’s signature. The new wording is required in declarations for all new applications, continuations, and divisional applications filed after September 15, 2012, except National Phase Applications filed under 35 U.S.C. § 371 (’371 Applications) claiming priority to an International Application filed before September 16, 2012. Declarations for ’371 Applications claiming priority to an International Application filed prior to September 16, 2012 must use the previously required declaration wording.
In the discussion accompanying the final rules, the USPTO discouraged the use of a combined declaration/power of attorney and encouraged the use of a combined declaration/assignment. The USPTO has examples of a new declaration form on its website. The USPTO, however, will not provide forms with combined declaration and power of attorney or combined declaration and assignment.
Derivation proceedings essentially replace interference proceedings for patents and applications filed on or after March 16, 2013. Derivation, unlike interference, is limited to situations in which a petitioner can show that the earlier filed application was derived from the petitioner’s invention. Under the final rules, an inventor seeking a derivation proceeding must file a patent application. The inventor, however, may copy the alleged deriver’s application, making any changes necessary to reflect accurately what the inventor invented. A petition for a derivation proceeding must be supported by substantial evidence that the earlier filer derived the invention from the petitioner and the petitioner did not authorize the earlier filing. The petitioner has to show why the petitioner’s claim is patentably indistinct from the earlier-filed claim and identify how each claim at issue is to be construed. If the construed claim is a means-plus-function or step-plus-function claim, the portions of the specification that describe the structure must be identified. The petition must be filed within a year of the first publication of a claim to the same or substantially the same invention as that of the petitioner. The first publication includes a World Intellectual Property Organization publication of an international application designating the United States. As explained in the discussion of the final rules, a derivation proceeding would be conducted before the Patent Trial and Appeal Board in a manner similar to inter partes review and post grant review. In accordance with the final rules, the parties to a derivation may terminate the proceeding by filing a written statement reflecting the agreement of the parties as to the correct inventors of the claimed invention unless the Board finds the agreement inconsistent with the evidence of record. The final rules also provide that the parties to a derivation proceeding may agree to arbitration to settle the dispute, except nothing shall preclude the UPSTO from determining the patentability of the claimed inventions involved in the proceedings.
The USPTO issued proposed changes in patent prosecution fees in accordance with the authority granted to the USPTO under section 10 of the America Invents Act (AIA). The proposed rules include the micro entity fees set at 25 percent of the large entity fees, as authorized by the AIA. The USPTO explained that the proposed fee schedule would recover the aggregate estimated costs of the USPTO while achieving strategic and operational goals, such as implementing a sustainable funding model, reducing the current patent application backlog, decreasing patent pendency, improving patent quality, and updating the patent IT business capability and infrastructure. Some of the proposed fees are set at levels to recover USPTO costs, while others are set below cost recovery and others, such as maintenance and issue fees, are set above cost recovery. Some notable proposed fees include increasing the combined basic filing fee, search and examination fee to $1,600; first RCE to $1,200; second and subsequent RCE to $1,700. The 3.5 year, 7.5 year and 11.5 year maintenance fees would be increased to $1,600, $3,600 and $7,400, respectively. Further, each independent claim in excess of three would cost $420, each dependent claim in excess of 20 would be $80, and the multiple dependent claim fee would be $780. In addition, extension of time fees would rise to $200 (one month), $600 (two months), $1,400 (three months), $2,200 (four months) and $3,000 (five months). On the other hand, fees would be lowered for prioritized examination ($4,000), combined publication/issue fee ($960); ex parte reexamination ($15,000) and combined supplemental examination/reexamination ($18,000). The proposed small entity and micro entity fees would be one-half and one-quarter of the above fees, respectively. The USPTO proposed new schemes for charging fees for appeals, inter partes review, post grant review and assignments. Under the proposed rules, the fee for filing a notice of appeal would increase to $1,000 and there would be no fee for filing an appeal brief, but the USPTO would charge $2,000 once the appeal is forwarded to the Board. In an inter partes review, the proposed fee would be $9,000 for filing a request for review of up to 20 claims and $200 for each additional claim, and if inter partes review was granted there would be an additional fee of $14,000 for up to 15 claims and $400 for each claim over 15. In a similar manner, the fee for requesting post grant review would be $12,000 for requesting review of up to 20 claims, and if post grant review is granted an additional fee of $18,000 for review of up to 15 claims and $550 for each claim in excess of 15. Finally, while the fee for recordation of assignments would remain at $40, there will be no recordation fee charged to applicants who electronically record assignments. Comments on the proposed fees should be emailed to fee.setting@uspto.gov by November 4, 2012. A complete listing of the proposed fees can be found in the Notice of Proposed Rulemaking at http://www.uspto.gov/aia_implementation/Proposed_Fee_Schedule.pdf.
In a case captivating the fashion world, the U.S. Court of Appeals for the Second Circuit has issued an important trademark ruling in a case involving high-end luxury women’s shoes. Holding that the district court erred in resting its denial of the plaintiffs’ requested preliminary injunction on the ground that a single color cannot serve as a trademark in the fashion industry, the Second Circuit determined that French shoe designer Christian Louboutin is entitled to trademark protection for its red lacquered sole on footwear, except where the remainder of the shoe itself is red. Christian Louboutin S.A. v. Yves Saint Laurent Am. Holding, Inc., Case No. 11-3303-cv (2d Cir., Sept. 5, 2012) (Cabranes, J.).
French shoe designer Christian Louboutin sells high-fashion women’s footwear that cost anywhere from about $700 to several thousands of dollars a pair. Predominantly focused on sky-high, high heels, Louboutin has stated that, “I would hate for someone to look at my shoe and say, ‘Oh my God! That looks so comfortable!’ That’s not what I want to project … comfort is not part of my creative process.” For 20 years, the brand has used a high-gloss, red-colored bottom (outsole) for the majority of its shoes, which fashionistas and others worldwide have come to associate exclusively with Louboutin. The eye-grabbing cherry red finish easily captures the attention of those viewing a woman in coveted Louboutin heels. Louboutin has explained, “The shiny red color of the soles has no function other than to identify to the public that they are mine. I selected the color because it is engaging, flirtatious, memorable, and the color of passion.” Louboutin obtained a federal trademark registration for a red lacquered sole on “women’s high fashion designer footwear” in 2008.
In 2011, fashion atelier Yves Saint Laurent (YSL) prepared to market a line of monochromatic women’s shoes in the colors of purple, green, yellow and red, where each portion of a particular shoe would use the exact same color. Four different styles used a monochromatic red theme, using a red insole, outsole, upper and heel. Believing that YSL’s monochromatic red shoes would infringe the Louboutin red-sole trademark, Louboutin requested YSL remove them from the market. After informal negotiations failed, Louboutin filed an action in the U.S. District Court for the Southern District of New York alleging claims for trademark infringement and counterfeiting; false designation of origin and unfair competition; and trademark dilution, as well as related state law claims. Louboutin also sought a preliminary injunction preventing YSL from marketing, during the pendency of the lawsuit, any shoes, including red monochromatic shoes, in a shade of red identical or confusingly similar to Louboutin’s red sole mark. YSL counterclaimed, in part to cancel Louboutin’s federal trademark registration covering a red lacquered sole, alleging that the mark was invalid as merely ornamental and functional based on the doctrine of aesthetic functionality.
The district court denied Louboutin’s requested injunction, holding that in the fashion industry single-color marks are inherently “functional” and adopted a per se rule that a single color can never serve as a trademark in the fashion industry. Under the district court’s per se rule, Louboutin was unlikely to prove that its red sole mark was eligible for trademark protection. The district court opined that Louboutin’s claim to the color red was overly broad, explaining that “Louboutin’s claim would cast a red cloud over the whole industry, cramping what other designers could do, while allowing Louboutin to paint with a full palette,” and reasoned that “there is something unique about the fashion world that militates against extending trademark protection to a single color.” Further, the district court issued an order to show cause why the court should not cancel Louboutin’s federal trademark registration. On appeal, the 2d Circuit found that the district court erred by holding that a single color can never serve as a trademark in the fashion industry, based on a misunderstanding of the aesthetic functionality doctrine. The doctrines of “utilitarian” functionality and “aesthetic” functionality both serve as an affirmative defense to trademark infringement. A product feature is considered to be “functional” in the utilitarian sense and thus not eligible for trademark protection of it is “essential to the use or purpose of the article” or if it “affects the cost or quality of the article.” The 2d Circuit explained that a mark is aesthetically functional, and thus ineligible for trademark protection, “where protection of the mark significantly undermines competitors’ ability to compete in the relevant market.” Acknowledging that special concerns exist in the fashion industry concerning trademark protection given that color can be used both as a branding tool as well as for mere ornamentation, the 2d Circuit nonetheless reasoned that Supreme Court precedent did not support a per se rule that would deny protection for the use of a single color as a trademark in the fashion industry or any other industry. “The functionality defense does not guarantee a competitor the greatest range for his creative outlet,” the court explained, “but only the ability to fairly compete within a given market.” Rejecting the district court’s finding that Louboutin’s red sole mark was not entitled to trademark protection based on its erroneous per se rule, the court determined that Louboutin’s mark did in fact merit protection. The evidence showed that Louboutin’s lacquered red sole, as applied to a shoe with an upper portion in a different color, had come to identify and distinguish the Louboutin brand and is therefore a distinctive symbol qualifying for trademark protection. The court determined that the evidence did not show, however, that the secondary meaning of Louboutin’s red sole mark extends to uses on shoes where the red sole does not contrast with the upper portion of the shoe—i.e., Louboutin was not entitled to trademark protection for uses of a red sole mark on a monochromatic red shoe like it sought to enjoin YSL from producing. Accordingly, the court directed the U.S. Patent and Trademark Office (USPTO) to limit Louboutin’s trademark registration to only those situations in which the red lacquered outsole is used with an adjoining upper of the shoe that contrasts in color and held Louboutin’s mark to be valid and enforceable as so modified. Its holding disposed of both parties’ Lanham Act claims, the court explained, because “the red sole on YSL’s monochrome shoes is neither a use of, nor confusingly similar to, [Louboutin’s] Red Sole Mark.” The court also affirmed the district court’s refusal to enjoin YSL from selling its monochromatic red shoe because the shoe was not a use of Louboutin’s mark, as modified. Due to that finding, the court did address whether Louboutin’s mark, as modified, was functional, or whether YSL’s use of a red outsole causes impermissible consumer confusion with Louboutin’s modified mark. The court remanded the case for the district court to consider YSL’s counterclaims. Trademarks / Use in Commerce
Lens.com is an online retailer of contact lenses and related products. In 2008, 1-800 Contacts, a competitor, instituted a cancellation proceeding at the USPTO, arguing that Lens.com fraudulently obtained or alternatively abandoned the mark because it never sold or engaged in the trade of computer software featuring programs for use in the field of optometry. Lens.com had earlier unsuccessfully applied for the mark LENS for use in connection with “retail store services featuring contacts through a global computer network,” but the examiner determined that the mark was descriptive for the services listed in the application, and the application was refused registration.
After the TTAB granted 1-800 Contacts’ motion for summary judgment on the abandonment claim, holding that Lens.com’s software was “merely incidental” to its contact lens sales and was not a “good in trade,” Lens.com appealed.
The Court further held that when determining whether consumers associate a given mark with software, as opposed to other services, courts should consider whether the software is just a conduit for the applicant’s services, whether it is so inextricably tied to a service that it was “no viable existence” apart from it and whether the software is sold separately from or has independent value apart from other services. The Federal Circuit concluded that Lens.com did not use the LENS trademark in commerce for the software services listed in the service mark registration and that the TTAB properly determined that the mark LENS did not meet the “use in commerce” requirement for its software, thus affirming the cancellation order.
The U.S. Court of Appeals for the Seventh Circuit has determined that an entity that provides a link to copyrighted material should not be held liable as a contributory copyright infringer if users of the site bookmarked, but did not upload, the copyrighted material to the site servers. Flava Works v. Marques Rondale Gunter, Case No. 11-3190 (7th Cir., Aug. 2, 2012) (Posner, J.). Flava is a producer and distributer of internet video content. Flava provided its video content on its website for a fee. After signing up, Flava customers could access the video content.
myVidster provides an internet video bookmarking service. Users of myVidster who find videos on the internet can “bookmark” (i.e., link) those videos to make them available to other myVidster users. When other users clicked the bookmark, the videos (e.g., Flava videos) appear in a widow frame of the myVidster website. However, the videos are streamed from the original third-party server, e.g., the Flava server(s) or other servers that Flava’s videos had been uploaded to; they are not streamed from or copied onto myVidster servers.
Flava filed suit, asserting that the myVidster bookmark links allowed users to essentially bypass Flava’s website (i.e., Flava’s “pay wall”) and watch Flava’s videos for free (Flava’s customers would obtain access to and then upload Flava’s videos to third-party servers, which myVidster users would then find and bookmark). Flava contended that this constituted copyright infringement and was granted a preliminary injunction against myVidster by the district court. myVidster appealed.
Judge Posner found that myVidster merely provided the names and links to already copied Flava videos. The myVidster users that click the bookmark links to “watch a copyrighted video for free is no more a copyright infringer than if he had snuck into a movie theater and watched a copyrighted movie without buying a ticket. The facilitator of conduct [e.g., myVidster] that doesn’t infringe copyright is not a contributory infringer.” Concluding that myVidster was not the copyright infringer (the individuals who uploaded Flava’s videos to the internet were) and that myVidster was not a contributory infringer (because it did not encourage such uploads), Judge Poser reversed the district court. For similar reasons, Judge Posner also found no infringement under 17 U.S.C. § 106(4)—the right “to perform the copyrighted work publicly.”
Copyrights/ Federal Jurisdiction § 301(a) of Copyright Act Creates Complete Preemption
The court determined that GlobeRanger alleged facts regarding the copying of business practices not wholly limited to the specific expression of the software. Those solutions included types of procedures, processes, systems and methods of operations that are excluded from copyright protection and, thus, are not preempted by the Copyright Act. However, the court also determined that certain clams may be preempted, such as GlobeRanger’s conversion claim. This claim hinges on whether the claim refers to physical property, as under Texas law, or intangible property that may be protected by copyright. Since some of GlobeRanger’s claim may be preempted, the 5th Circuit determined that the district court has sufficient jurisdiction to keep the case in federal court at the motion to dismiss stage. Due to the limited factual record, the case was remanded for the district court to make a more in-depth analysis of each claim to determine which claims are preempted and whether or not the district court has sufficient jurisdiction.
Addressing for the first time whether an architectural drawing may receive copyright protection even if it lacks the level of detail required for architectural works under the 1990 Architectural Works Copyright Protection Act (AWCPA), the U.S. Court of Appeals for the Second Circuit held that such architectural drawings may still be protected as “pictorial, graphic, [or] sculptural works” under 17 U.S.C.§ 102(a)(5) of the 1976 Copyright Act. Scholz Desig. v. Sard Custom Homes, Case No.11-3298 (2d Cir., Aug. 15, 2012) (Sack, J.).
The district court held that an architectural drawing under § 102(a)(5), even as a pictorial work, required a certain level of detail to receive copyright protection. Here, the district court found that the conceptual nature of the architect’s drawings lacked sufficient details and no copyright protection was provided. As a result, the district court dismissed, inter alia, the claims of copyright infringement which stemmed from the defendants’ alleged use of the architectural drawings in various marketing materials. Scholz appealed.
The 2d Circuit reversed, explaining that notwithstanding that the drawings were architectural, nothing more was required for copyright protection as a pictorial work. The court suggested that the district court had confused the requirements for protection under § 102(a)(5) with that under § 102(a)(8).
The 2d Circuit explained that there is a particular level of detail required, even for architectural drawings, under § 102(a)(5). Further, even if an architect’s expression fails to meet the level of detail required under § 102(a)(8) of the AWCPA, that does not preclude or deprive the architect of general copyright protection under § 102(a)(5). Since the copyright owner is not alleging infringement under the AWCPA, but rather, under the pre-existing copyright provisions for pictorial works, all that is required for copyright protection of the drawing is an author’s independent creation, originality and a modicum of creativity.
What Doesn’t Kill Me, Makes Me Stronger—Surviving Allegations of Copyright Infringement by Avani C. Macaluso
On appeal, the 7th Circuit reviewed de novo the district court’s determinations regarding the similarity between the two songs and the conclusion of non-infringement. The court acknowledged that the standards for determining whether a party has in fact copied another’s work are “surprisingly muddled.” The court held the 7th Circuit’s standards for proving copyright infringement is met by showing that the defendant had an actual opportunity to copy the original work, as well as that the two works “share enough unique features to give rights to a breach of duty not to copy another’s work.” The court found there was no question that Vince P.’s allegations supported an inference that West had access to Vince P.’s recording of “Stronger.” Monopoly clearly received two copies of Vince P.’s song, and Monopoly is also credited as the manager on West’s album. Evidence of a close collaboration between Monopoly and West suggested that Monopoly could have passed Vince P.’s song to West during production of his own album, and therefore West had an actual opportunity to copy Vince P.’s original work under the 7th Circuit’s standards.
Finally, Vince P. argued that both songs contain “incongruous” references to super-model Kate Moss, a person not typically featured in rap or hip-hop lyrics. The Court was once again was unwilling to grant Vince P. protection on the mere use of Kate Moss’ name, particularly when the lines in the song were entirely different and the fact that it is common to refer to models as shorthand for beauty. Copyrights / Fair Use Doctrine Gossip Mag’s “Fair Use” Claim in Publishing a Celebrity’s Wedding Photos Rejected
The U. S. Court of Appeals for the Ninth Circuit reversed the district court’s grant of summary judgment in favor of Maya Magazines and Maya Publishing Group (collectively Maya), finding that the media company did not meet its burden of establishing that its publication of previously unpublished photos of a celebrity couple’s wedding constituted fair use. Monge v. Maya Magazines, Case Nos. 10-56710, 11-55483 (9th Cir., Aug. 14, 2012) (McKeown, J.) (Smith, J., dissenting).
Declining to find fair use for an archbishop’s educational, non-commercial use of copyrighted material the U.S. Court of Appeals for the First Circuit upheld a grant of summary judgment over numerous orthodox (and unorthodox) arguments. Society of the Holy Transfiguration Monastery, Inc., v. Archbishop Gregory of Denver, Colorado, Case No. 11-1262 (1st Cir., Aug. 2, 2012) (Torruella, J.) (Souter, J., sitting by designation). In the mid-2000s, Archbishop Gregory (the Archbishop) posted seven works (that he helped to create), translated by the Society of the Holy Transfiguration Monastery (the Monastery), on his website. After the Monastery brought suit for copyright infringement, the district court granted summary judgment of infringement by the Archbishop. On the Archbishop’s appeal, the First Circuit affirmed the district court on the infringement issue and declined to recognize a transfer of copyright by operation of law.
The 6th Circuit analyzed each of the factors and concluded the jury could reasonably have found each weighed in Bosley’s favor. As for the first factor, the 6th Circuit concluded that “Defendant’s use of the Bosley photograph was clearly for commercial purposes, rather than for noncommercial, educational purposes. Hustler editors admitted that the ‘Hot News Babes’ section of the magazine was added to generate interest, sales, and profits.” Moreover, the court found nothing transformative about the Hustler photo: “Defendant’s use of the photograph was the same as [the photographer’s] original use—to shock, arouse, and amuse.”