Earlier this evening President Donald Trump announced the nomination of Judge Neil Gorsuch of the Court of Appeals for the 10th Circuit as his selection to replace Justice Antonin Scalia, who passed away February 13, 2016. While there will be much time to evaluate Judge Gorsuch’s record and impressive Ivy League background prior to any confirmation hearing or vote in the United States Senate, I have located several intellectual property cases from the 10th Circuit with decisions authored by Gorsuch. While patent issues would not have gone to the 10th Circuit, it also seems worth pointing out that Judge Gorsuch has expressed skepticism of Chevron deference.
Trademark: El Encanto v. Hatch Chile
On June 17, 2016, Judge Gorsuch authored the opinion in El Encanto, Inc. v. Hatch Chile Company. The dispute arose between these companies after Hatch Chile attempted to trademark the term HATCH for exclusive use relative to it chile pepper products. As Judge Gorsuch wrote: “The Hatch Valley may be to chiles what the Napa Valley is to grapes.” That is no doubt why El Encanto objected in filings before the Trademark Trial and Appeal Board (TTAB).
During the TTAB proceeding El Encanto asked Hatch Chile to disclose the provenance of the chiles they used, and Hatch Chile responded that they did not know and that El Encanto should ask their co-packers and suppliers. Armed with that suggestion, El Encanto issued subpoenas under Federal Rule of Civil Procedure 45, which authorizes discovery from non-parties. Hatch Chile objected in federal court, sought a protective order and a motion to quash. Hatch Chile argued that such a Rule 45 subpoena could only be used in conjunction with a deposition, which was not requested. The district court agreed.
Judge Gorsuch observed that this case was rather unusual because in the typical discovery battle the fight is over whether one party seeks too much discovery, while here the fight was about whether enough discovery was requested to warrant use of a Rule 45 subpoena. Gorsuch explained that no one wanted a deposition, all that was requested were documents that answered a rather straightforward question. Ultimately Gorsuch ruled “a party to a TTAB proceeding can obtain nonparty documents without wasting everyone’s time and money with a deposition no one really wants.”
Copyright: Meshwerks v. Toyota Motor Sales
In Meshwerks, Inc. v. Toyota Motor Sales U.S.A., Inc., Judge Gorsuch authored an opinion on whether digital models are entitled to copyright protection. In this case the facts showed that the models and their designs owed their origins to Toyota, and there was a deliberate choice not to include anything original of their own. As such, the 10th Circuit had little difficulty finding that the models in question were not original works of authorship entitled to copyright protection.
In approaching the answer to the question presented in Meshwerks, Gorsuch observed: “While there is little authority explaining how our received principles of copyright law apply to the relatively new digital medium before us, some lessons may be discerned from how the law coped in an earlier time with a previous revolution in technology: photography.” Gorsuch explained that photographs are copyrightable to the extent that they offer an original depiction of the subject, which can include a photographer’s choices regarding pose, lighting, shading, positioning and other elements of composition. Armed with these lessons Gorsuch concluded “Meshwerks’ models are not so much independent creations as (very good) copies of Toyota’s vehicles.”
Time to end Chevron Deference?
With respect to Chevron deference, on August 23, 2016, Judge Gorsuch wrote a concurring opinion in Gutierrez-Brizuela v. Lynch, which substantively relates to an Order from the Board of Immigration Appeals. Gorsuch wrote that he thinks it is time to address the elephant in the room; namely that Chevron deference is inconsistent with the Constitution because it deprives the Judiciary of the power to review agency actions and interpretations. Gorsuch explained:
There’s an elephant in the room with us today. We have studiously attempted to work our way around it and even left it unremarked. But the fact is Chevron and Brand X permit executive bureaucracies to swallow huge amounts of core judicial and legislative power and concentrate federal power in a way that seems more than a little difficult to square with the Constitution of the framers’ design. Maybe the time has come to face the behemoth.
Gorsuch would go on to write that the Founders thought “separation of powers to be a vital guard against governmental encroachment on the people’s liberties…”
Already we have seen President Trump issue an Executive Order relating to the streamlining of the federal regulatory system, so the nomination of Gorsuch who seems highly skeptical of the ever-increasing power of the federal regulatory system should shock no one. Further, on January 11, 2017, the United States House of Representatives passed the Regulatory Accountability Act of 2017, which in part would modify the scope of judicial review for agency actions. If passed by the Senate and signed into law by President Trump, the Regulatory Accountability Act of 2017 will authorize courts reviewing agency actions to decide all relevant questions of law de novo, without giving deference to the agency’s interpretation. Passage of the Regulatory Accountability Act of 2017 would significantly open the door for the Federal Circuit to reconsider all of the Patent Office’s interpretations of the America Invents Act (AIA), and having a Justice on the Supreme Court openly skeptical of vast federal regulatory powers insulated from any judicial review would seem to bode well for patent owners.