Posts in US Supreme Court

Last week, in Golden v. United States, the Federal Circuit again rejected the argument that the cancellation of a patent in an America Invents Act (AIA) post-grant proceeding violates the Fifth Amendment’s Takings Clause. Just as it did in other cases raising Patent Trial and Appeal Board (PTAB)-related Takings Clause issues, the appellate court in Golden relied on its July 2019 decision in Celgene Corp. v. Peter (931 F.3d 1342 [Fed. Cir. 2019]), rejecting the Takings Clause argument on the merits. See Collabo Innovations, Inc. v. Sony Corp., 778 F. App’x 954, 961 (Fed. Cir. 2019); Enzo Life Sci., Inc. v. Becton Dickinson & Co., 780 F. App’x 903, 911 (Fed. Cir. 2019). But unlike these previous decisions, the Federal Circuit’s analysis in Golden also included discussion and resolution of an important threshold jurisdictional question—an issue that, as we argued in a November 2019 IPWatchdog piece, should have precluded the Federal Circuit from reaching the merits of the Takings Clause argument in Celgene in the first place.

The COVID-19 crisis has once more highlighted the need for incentivizing investment and innovation—and thus, for patent laws that duly “promote” and protect such “progress,” precisely as our Founders envisioned. See U.S. Const., Art. I., § 8, cl. 8. Indeed, those patent-based incentives over the years have helped produce life-saving medicines, tests, treatments, and cures; once-unimaginable computer technology, robotics, and nanotechnology; LASIK eye-surgery and cochlear implants; personal satellite-based navigation systems; handheld devices seemingly straight out of Star Trek; 3-D printer technology; and much, much more. Nevertheless, a series of judicial rulings over the past 15 years have steadily eroded U.S. patent protections. Consequently, once-innovative companies, including major innovative pharmaceutical companies, have divested in R&D, and investors more generally have diverted funding to non-inventive areas (like entertainment) or to countries (like China) whose patent laws offer protections more favorable than U.S. law. American innovation has fallen accordingly.

To the surprise of Lemley and Zyontz, their study uncovered a striking disparate treatment in the way federal courts handle patent eligibility matters based on entity size, with startup companies doing poorly when it comes to Alice-related patent eligibility matters, and individual inventors doing even worse. Their abstract summarizes their findings thusly: “Most surprisingly we find that the entities most likely to lose their patents at this stage are not patent trolls but individual inventors and inventor-started companies,” Lemley and Zyontz write. “As biotech worries about deterrence of new innovation and software worries about patent trolls dominate the debates, we may be ignoring some of the most important effects of Alice.”

Today, like so much of the rest of the world, the United States is faced with many shortages due to the coronavirus pandemic, including personal protective equipment, basic medical supplies, and qualified medical staff. Of course, the lack of treatments or vaccine is a huge problem. Another secular problem is the lack of a quick, inexpensive, reliable test for the virus. But a test for the virus is a diagnostic method, and that is a big problem for U.S. patent laws because diagnostic methods are simply not patent eligible in the United States. This is also a big problem for the world because ever since the veil of patent eligibility was lifted for the life sciences sector in 1981 by the U.S. Supreme Court in Diamond v. Chakrabarty, the U.S. has dominated the biotechnology sector, specifically, and life science sectors more generally speaking. In 1981, the Supreme Court opened the floodgates saying that what was created by man could be patented, and if it could be owned it could be invested in, and investors rushed in and the biotechnology industry that we know today was born. But what the Supreme Court gave they can, and ultimately did, take away.

Earlier this week, the Supreme Court handed down its ruling in Allen v. Cooper, which relates to photos and videos of the sunken remains of the Queen Anne’s Revenge, the centuries-old ship once captained by the famed pirate Blackbeard. The plaintiff in that case claimed that North Carolina unlawfully used his copyrighted works. Only two months earlier, the Trump Administration also faced a copyright infringement imbroglio. Following the official Twitter unveiling of the seal for the newly created U.S. Space Force, critics noted that the seal bore a striking similarity to that of Starfleet, the scientific and military force in the fictional universe of the television and film property, Star Trek. While some pointed to the (fairly far-fetched) trademark implications of the Space Force logo, many voices on the Internet also alleged that the government infringed on the copyright for the Starfleet seal. These two cases have brought the issues of copyright infringement and sovereign immunity into the spotlight. To resolve them, one must first look to the tenets of copyright law.

On March 13, the United States Patent and Trademark Office (USPTO) filed a reply brief urging the Supreme Court on to reverse a judgment of the U.S. Court of Appeals for the Fourth Circuit that held BOOKING.COM to be a registrable trademark. The case was set to be argued on Monday, March 23, but was postponed due to the coronavirus pandemic. Fifteen parties have filed amicus briefs in the case, most of those in support of Booking.com. In response to Booking.com’s brief of February 20, the USPTO primarily argued that, 1) Goodyear Co. v. Goodyear Rubber Co. remains good law and resolves the question presented in the present case, 2) Sound trademark policy supports the conclusion that adding a top-level domain, such as .com, to a generic term does not lead to a protectable trademark, and 3) Booking.com’s survey evidence does not provide a sound basis for treating the term “Booking.com” as a registrable trademark.

Yesterday, the U.S. Court of Appeals for the Federal Circuit denied rehearing en banc in Arthrex v. Smith & Nephew. Five of the 12 Federal Circuit judges wrote separately to explain their reasons for denying, or dissenting from denial on, rehearing. IPWatchdog Founder and CEO Gene Quinn said the order reveals a chaotic and disorganized court. “This court has horribly failed the industry by refusing to agree on anything,” Quinn said. “For a court that claims to be so overworked that it must dispose of literally half of its docket with one-sentence Rule 36 summary affirmances, spending so much time and energy across 58 pages of completely meaningless analysis and disagreement goes beyond unconscionable.”

The U.S. Court of Appeals for the Federal Circuit has denied rehearing en banc in Arthrex v. Smith & Nephew, a decision that made the Patent Trial and Appeal Board’s (PTAB’s) administrative patent judges (APJs) “inferior officers” under the U.S. Appointments Clause, in order to skirt the problem that they had been unconstitutionally appointed under the America Invents Act. Five of the 12 Federal Circuit judges wrote separately to explain their reasons for denying, or dissenting from denial on, rehearing. Judge Moore wrote to concur with the denial, and Judges O’Malley, Reyna and Chen joined, saying that granting rehearing “would only create unnecessary uncertainty and disruption.” Moore added that the Arthrex panel followed Supreme Court precedent in concluding that APJs were improperly appointed principal officers, and also followed precedent in its solution which severed a portion of the statute “to solve that constitutional problem while preserving the remainder of the statute and minimizing disruption to the inter partes review system Congress created.”

Blackbeard and his band of pirates pillaged and plundered up and down North Carolina’s Outer Banks more than 300 years ago, inspiring stories (both true and fictional) that capture imaginations to this day. On March 23, the battleground shifted from the watery landscape of Davy Jones’ Locker to the decidedly more law-abiding U.S. Supreme Court, where the justices unanimously ruled that North Carolina’s display of copyrighted footage showing recovery of the legendary pirate’s ship does not violate copyright law. The Supreme Court’s decision is a key victory for advocates who say sovereign immunity should shield states from copyright infringement suits by an individual.

Retired Chief Judge of the U.S. Court of Appeals for the Federal Circuit Paul Michel told registrants of IPWatchdog’s Virtual Patent Masters program taking place today  that the U.S. patent system has been “weakened to the point of being dysfunctional.” This dysfunction has been especially harmful to small businesses and startups, as well as to innovation in the life sciences industry—which we need now more than ever. Asked by IPWatchdog CEO and Founder Gene Quinn whether the coronavirus pandemic may be a wakeup call to those in power about the importance of incentivizing innovation in the life sciences area, Judge Michel noted that experts in the vaccine industry have indicated that China now dominates vaccine research and production. “The current circumstances may shift the thinking of policy makers quite suddenly and quite far,” Michel said. “We definitely are crimping the human health efforts for prevention and cure of symptoms. Let’s hope this really is a wakeup call for our leaders.”

Earlier this week, Chrimar Systems, Inc. filed a petition for certiorari asking the U.S. Supreme Court to take up a case on appeal from the U.S. Court of Appeals for the Federal Circuit. Chrimar is asking the nation’s highest court to answer the question of whether the Federal Circuit may: 1. apply a finality standard for patent cases that conflicts with the standard applied by the Supreme Court and all other circuit courts in non-patent cases, and 2. whether a final judgment of liability and damages that has been affirmed on appeal may be reversed based on the decision of an administrative agency.

At a time when most policymakers rightly argue that China and other countries need to do more to clamp down on intellectual property infringement, overturning the four-factor eBay test would impose new hurdles and increase the PAE problem that Congress and the Supreme Court have fought to address over that last two decades. The risk that an implementer engages in “efficient infringement” has made the ITC an increasingly attractive forum, for at least some patent owners and notably not PAEs. ITC exclusion orders and cease and desist orders are the last vestige of the exclusivity promised to the right patent owners at the time they are granted a patent. Compared to proposed sections of the STRONGER Patents Act, the ITC strikes a balance between offering at least some patent owners the ability to prevent infringers from engaging in the never-ending game of “efficient infringement” while frustrating PAEs attempts to abuse the exclusionary remedies offered.  Congressional action should be reserved for a time when there is clear evidence that the eBay decision is harming U.S. businesses and those U.S. businesses are unable to obtain the relief they need at the ITC. At this time, there is no such evidence.

As argument nears in the Supreme Court battle between Booking.com and the United States Patent and Trademark Office (USPTO), 12 parties have now filed amicus briefs in support of Booking.com. Among the amici are the Intellectual Property Owners Association (IPO), the International Trademark Association (INTA), and the Survey Scholars and Consultants (SSC).

The Supreme Court today denied certiorari in Apple, Inc. v. VirnetX, Inc. et. al., a development that VirnetX said in a press release spells “triumph” for the Internet security software company, following a decade long battle. The underlying judgment was delivered in October 2017, when the U.S. District Court for the Eastern District of Texas increased the amount of damages to be paid by Apple from $302.4 million in a prior jury verdict up to nearly $440 million for Apple’s infringement of patents covering secure communications in applications like FaceTime.

In November, the U.S. Supreme Court granted a petition for certiorari filed by the U.S. Patent and Trademark Office (USPTO) asking the Court to consider “Whether the addition by an online business of a generic top-level domain (“.com”) to an otherwise generic term can create a protectable trademark.” Booking.com filed its brief for the respondent in the case last week, arguing that “under the Lanham Act, the consumer is king,” and the fact that survey evidence has proven 74.8% of relevant consumers to consider BOOKING.COM a brand, rather than a generic name, “should end this case.”