Posts Tagged: "US Supreme Court"

On November 27, briefing concluded at the Supreme Court with the filing of Fossil’s respondent’s brief in Romag Fasteners, Inc., v. Fossil, Inc., et al. The final briefing sets the stage for the Court to hear the case on January 14, 2020. The Court will hopefully resolve a current Circuit split on the availability of disgorgement of profits as damages for trademark infringement. Currently, the First, Second, Eighth, Ninth, Tenth and D.C. Circuits all require willful infringement before allowing disgorgement of an infringer’s profits (the First Circuit requires willfulness if the parties are not direct competitors and there is also some disagreement on where the Eighth Circuit falls on the issue). The Third, Fourth, Fifth, Sixth, Seventh and Eleventh Circuits all allow for disgorgement of profits without willful infringement. There has been a Circuit split for some time on this issue and the Supreme Court previously denied certiorari on similar cases but the Court is now set to resolve the split.

The United States Office of the Solicitor General has filed its brief in response to the Supreme Court’s March request for views in Hikma Pharmaceuticals v. Vanda Pharmaceuticals. The December 6 brief says that the Federal Circuit correctly held the relevant claims of Vanda’s patent-in-suit eligible, and that the case “is not an optimal vehicle for bringing greater clarity” on the topic of Section 101 law since the CAFC arrived at the correct result. Instead, the High Court should grant certiorari in a case like Athena Diagnostics v. Mayo Collaborative Services, in which the order denying en banc rehearing “was accompanied by multiple separate opinions articulating different understandings of Mayo and seeking clarification from this Court.”

On Monday, December 9, the U.S. Supreme Court will hear oral arguments in Thryv, Inc. v. Click-to-Call Technologies, LP. The case, which has gone through multiple name changes since its original appeal from the Patent Trial and Appeal Board (PTAB), will ask the nation’s highest court whether 35 U.S.C. § 314(d), which states that decisions to institute inter partes review (IPR) proceedings shall not be appealable, permits appeals of PTAB institution decisions based upon 35 U.S.C. § 315(b). Section 315(b) states that IPRs won’t be instituted if the patent owner served the petitioner with a complaint for patent infringement more than one year prior to the petition. To summarize the lower court proceedings in this case, the patent-at-issue was first asserted against Keen Inc. by Inforocket.com in 2001 in a case that was voluntarily dismissed. Click-to-Call acquired the patent and asserted it in 2012 against Ingenio, a company formed through a merger of Keen and Inforocket.com. Ingenio filed for an IPR petition and Click-to-Call challenged it based on the Section 315(b) time-bar and the former suit against Ingenio’s predecessor. The appeal reached the Supreme Court, where it was remanded in June 2016 in light of Cuozzo Speed Technologies v. Lee. Most recently, the U.S. Court of Appeals for the Federal Circuit rendered a decision last August where all 12 Federal Circuit judges joined a footnote finding that the Section 315(b) time bar applies even when the earlier infringement action had been voluntarily dismissed without prejudice.

This week in Other Barks & Bites: the U.S. Supreme Court hears oral arguments over copyright status of the Official Code of Georgia Annotated; the Federal Circuit remands Ericsson appeal to calculate release payment in patent license; Apple, Ford and others urge the USPTO to retain policy against injunctions on companies practicing SEPs; Huawei asks the Fifth Circuit to undo the FCC’s ban preventing it from supplying U.S. networks; Sergey Brin and Larry Page relinquish executive duties at Google; U.S. antitrust regulators explore Amazon’s cloud business; Washington politicians send letter to ALI over Copyright Restatement Effort concerns; and Qualcomm challenges Judge Koh’s class action certification at the Ninth Circuit.

On November 13, the United States Patent and Trademark Office (USPTO) requested the U.S. Court of Appeals for the Federal Circuit suspend all consideration of an appeal from the Patent Trial and Appeal Board (PTAB) that would raise the same issues addressed in Arthrex, Inc. v. Smith and Nephew, Inc., because the Office will seek rehearing en banc in Arthrex. See Stuben Foods, Inc. v. Nestle USA, Inc., No. 20-1082, -1083. As a reminder, on October 31, the Federal Circuit issued an important constitutional decision in Arthrex, which found that the hiring of Administrative Patent Judges (APJs) violated the Appointments Clause of the U.S. Constitution. The Federal Circuit did, however, attempt to provide a gift to the Office by rewriting the section of the statute they found to create the problem, which created the PTAB and the appointment of APJs, and by so doing turned APJs into inferior officers. The solution: APJs were judicially decreed to be employees-at-will in order to save the statute. So, why hasn’t Director Iancu cleaned house at the PTAB? It would seem to be because the USPTO believes Arthrex was wrongly decided.  

My company, Chestnut Hill Sound Inc. (ChillSound), has been victimized by a U.S. patent system that for nearly a decade has been in a sorry state. Changes wrought by the America Invents Act (AIA) in 2011 and other recent developments cost my company, its investors and inventors millions of dollars. These changes have allowed a large company to reap great profits at our expense. Even more unfortunately, our story is too typical of many other inventors and small companies. Small businesses are the backbone of our economy and need to be cultivated, as they are the most dynamic source of new jobs and competitive products and technologies. There have always been reports of large corporations stealing inventions from small businesses, but it used to be possible via the courts to vindicate the patent rights of owners and obtain ultimate redress.  The AIA—sold by the “efficient infringers” lobby as a measure to protect big business from the expense and nuisance of so-called “patent trolls”—has turned into a weapon of deep-pocketed big businesses that enables them to steal with impunity inventions from small businesses and independent inventors. The AIA brought with it the Patent Trial and Appeal Board (PTAB) and Inter Partes Review (IPRs), a post-grant adversarial proceeding at the United States Patent and Trademark Office (USPTO). As has been amply discussed here on IPWatchdog, the Court of Appeals for the Federal Circuit (CAFC) recently opined that the so-called Administrative Patent Judges (APJs) were unconstitutionally appointed from the beginning. Yet these unconstitutionally appointed APJs continue to kill patents, especially when the patent owner is a small company that has sued a large company for infringement, as was the case with ChillSound.

Since inventors are rarely allowed to participate in patent discussions in Congress, I would like to submit my testimony here. In Arthrex, the Federal Circuit in effect decided that our rights are subordinate to the government, so the government has the authority to giveth them to us or taketh them away. I would like to remind the Federal Circuit, the Supreme Court, and Congress that you are tasked with the honor, privilege and duty to defend our rights. That is the very basis on which you are employed, and you have no function other than that. Our rights preexist you, supersede you, and come from sources that are above your pay grade. They exist as a matter of our birth. You have no legitimate authority to take those rights just because it is inconvenient for the huge multinational corporations that have to now deal with the illegitimate position of owning our rights because so-called judges unconstitutionally took them from us and gave them to those huge corporations.   

This year has included many twists and turns for IP stakeholders, particularly on the patent side. Most recently, the Federal Circuit’s decision in Arthrex has called into question the constitutionality of Patent Trial and Appeal Board decisions, and perhaps the Board itself. Elsewhere, Congress has been—unsuccessfully—attempting to step in and clarify U.S. patent law since early in the year, while the courts have continued to muddy the waters of patent eligibility law. The Federal Trade Commission’s case against Qualcomm, and Judge Lucy Koh’s decision in the case, have further called into question the United States’ ability to compete on the innovation front going forward. And yet, there have been some wins in other areas this year, including at the U.S. Patent and Trademark Office (USPTO), and there remain many reasons to be hopeful about the year ahead. IPWatchdog asked some IP experts to share what they have to be thankful for on the IP front this Thanksgiving, despite all the uncertainty. Hopefully, as those of you who celebrate the holiday enjoy your Thanksgiving dinners, these sentiments will inspire you to be thankful too.

Mayo Collaborative Services has filed its brief in opposition to Athena Diagnostics’ petition to the Supreme Court in early October asking the justices to weigh in on whether its patent claims for a method of making a medical diagnosis are patent eligible under Section 101. Eleven amici have weighed in on the case, and the patent community is waiting to see if the High Court will grant the petition and help to solve the Section 101 problem, which has been particularly problematic for the field of medical diagnostics. Mayo states its argument quite simply in the opening sentence of its brief, relying on the Court’s 2012 precedent in Mayo v. Prometheus: “Patent claims directed to a natural law that employ only conventional and routine activities to detect that law are not patent eligible. Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 73 (2012). That rule disposes of this case, as the district court, appellate panel, and en banc Federal Circuit each concluded.”

Nearly four months ago, the Federal Circuit for the first time addressed the applicability of the Takings Clause of the Fifth Amendment to IPRs, holding in Celgene Corp v. Peter “that the retroactive application of inter partes review (IPR) proceedings to pre-America Invents Act (AIA) patents is not an unconstitutional taking under the Fifth Amendment” Celgene Corp. v. Peter, 931 F.3d 1342, 1362 (Fed. Cir. 2019). Since then, the court has continued to reject similar Patent Trial and Appeal Board (PTAB)-related Takings Clause claims on the merits. E.g., Collabo Innovations v. Sony Corp., No. 2018-1311 (Fed. Cir. Aug. 5, 2019). Unsurprisingly, Celgene filed a request for an en banc rehearing, and the government has just this week filed its response. Both Celgene’s en banc petition and the government’s response address the merits of Celgene’s constitutional claim—but as we hinted at in an earlier article analyzing the Celgene decision, there is a serious question whether the Federal Circuit should have even reached the merits of the Takings Clause issue in its panel opinion. In light of Supreme Court Takings Clause precedent, the Federal Circuit may want to either request supplemental briefing to decide whether it should have addressed the constitutional question in the first place, or potentially even revise the panel opinion and leave this issue to be decided in another case.

Trademark and copyright enforcement remains a significant challenge for licensors of popular brands across sports, entertainment, fashion and other industries. The Organization for Economic Cooperation and Development, a group of three dozen industrial countries, estimates counterfeit goods account for 3.3% of global trade. Brand owners cannot rely on the belief that their trademark and copyright registrations will be respected, and they cannot confine their enforcement to demand letters and traditional intellectual property litigation. Rather, a brand owner must avail itself of additional approaches to address both traditional and newer platforms offering infringing products. We continue to see an increase in online infringements, especially in connection with certain e-commerce sites and targeted advertisements on social media. Under the current law, enforcement against online providers can be difficult, particularly when compared to traditional infringement hot sports in the brick-and-mortar marketplace. Flea markets, swap meets and other brick-and-mortar shopping venues reported verdicts and settlements in the last 10 years that confirm commercial landlords/owners can be held liable for the trademark infringement activity of their tenants, with courts around the country extending liability for trademark infringement beyond just the party selling infringing products.

“It’s up to you to do the right thing and fix this,” said Professor Arti Rai of The Center for Innovation Policy at Duke University School of Law near the end of a hearing on what Congress should do in the wake of the Arthrex decision yesterday. Rai was one of four IP scholars who testified during the hearing of the House Judiciary Committee’s Subcommittee on Courts, Intellectual Property and the Internet; all witnesses seemed to agree that the courts will not fix the problem soon enough to ensure the requisite certainty for U.S. patent owners and businesses, so Congress must act. In Arthrex, the Federal Circuit found that the Patent Trial and Appeal Board’s (PTAB’s) Administrative Patent Judges (APJs) were unconstitutionally appointed and removed the civil service protections they previously were deemed to enjoy—although, as Professor John Duffy of the University of Virginia School of Law pointed out, if the Federal Circuit ruled that the APJs can’t have tenure, that arguably means they never did. “If you go back to Marbury v. Madison, courts don’t actually strike down statutes; they simply say what the law is,” Duffy said.

The Supreme Court has agreed to hear Google’s petition for a writ of certiorari in its long-running case with Oracle. The High Court will decide: 1. Whether copyright protection extends to a software interface; and 2) Whether Google’s use of a software interface in the context of creating a new computer program constitutes fair use. In March 2018, the Federal Circuit issued its opinion in favor of Oracle in the case. See Oracle America, Inc. v. Google LLC. The Court found Google’s use of Java application programming interface (‘API packages’) not fair as a matter of law, reversing the district court’s decision on the matter. The ruling resurrected a multi-billion dollar copyright case brought by Oracle Corp against Google and was appealed to the Supreme Court in January 2019, after the Federal Circuit denied rehearing in August 2018. In a press release issued the same day Google filed its petition, Oracle dismissed Google’s move as “a rehash of arguments that have already been thoughtfully and thoroughly discredited” and said that Google’s “fabricated concern about innovation hides Google’s true concern: that it be allowed the unfettered ability to copy the original and valuable work of others as a matter of its own convenience and for substantial financial gain.”

This week in Other Barks & Bites: the Federal Circuit strikes down a district court’s finding of design patent infringement on summary judgment; the USPTO advises trademark attorneys to monitor filings to prevent against the unauthorized use of their names; the U.S. Copyright Office issues final rules eliminating options for physical material submissions for newspaper and serial registrations; the U.S. Supreme Court will take up Booking.com’s appeal of the rejection of its trademark application by the USPTO; AG Barr supports the FCC’s plan to restrict Huawei and ZTE equipment purchases through the Universal Service Fund; Nirvana’s copyright case against Marc Jacobs moves past a motion to dismiss; Biogen loses $3 billion in market value after PTAB hearing; and Amazon seeks an injunction against a patent owner asserting infringement claims against Amazon Fire product retailers.

Chestnut Hill Sound, Inc. has filed a petition asking the U.S. Supreme Court to consider whether the Federal Circuit’s disparate practice with respect to issuing Rule 36 decisions for losing patent owner-appellants versus losing petitioner-appellants is constitutional. The petition includes statistics demonstrating that patent owner-appellants are three times more likely to receive a Rule 36 judgment than petitioner-appellants. Chestnut Hill’s petition cites statistics on the number of Rule 36 decisions being issued, which come from Larry Sandell’s article, What Statistical Analysis Reveals About Winning IPR Appeals, LAW 360 (August 8, 2019, 5: 22 PM). A footnote in the petition explains that the likelihood of patent owner-appellants receiving a Rule 36 affirmance is actually closer to 3.6 than 3. “Since a losing Patent Owner- Appellant has a 66% chance of receiving a Rule 36 opinion, and a losing Petitioner- Appellant has an 18% chance of receiving a Rule 36 opinion, a Patent Owner- Appellant is 3.6 times as likely to receive a one- word affirmation than a Petitioner- Appellant,” says the petition.