Other Barks & Bites for Friday, February 5: CAFC Strikes Down PTAB’s ‘Marked Deviation’ From IPR Petition; Fourth Circuit Rules on Appropriate Defense to Lanham Act Claims; and FTC Settles Action Against Zoom

This week in Other Barks & Bites: the Federal Circuit vacated a PTAB ruling that invalidated patent claims over prior art on different grounds than those asserted by the petitioner; the CJEU finds that a German state treaty prohibiting regional advertisements in national TV networks may violate EU law; the Fourth Circuit holds that laches and not a statute of limitations is the appropriate defense against unfair competition claims filed under Section 43(a) of the Lanham Act; Kia Motors continues to explore potential business partnerships for a $3 billion investment into developing a car with Apple; Japan announces that it will amend its rules surrounding fair use to address copyright infringement posed by paid cosplayers; Home Depot faces a patent lawsuit over the sale of various LED products; and the FTC settles an enforcement action against Zoom over claims that the company mislead consumers about its data security practices.

Bites

CJEU Finds Possible EU Law Violation in German State Treaty Prohibiting Regional TV Ads – On Wednesday, February 3, the Court of Justice for the European Union (CJEU) issued a decision finding that a treaty between German states which prohibits national television broadcasting networks from inserting advertisements that are limited to a certain region, a law which is meant to promote local and regional media providers, may create an inacceptable inequality between national TV broadcasters and Internet ad providers that violates EU law.

Ninth Circuit Strikes Down Multiple Statutory Damages Awards in Fabric Design Copyright Case – On Tuesday, February 2, the U.S. Court of Appeals for the Ninth Circuit issued a decision in Desire, LLC v. Manna Textiles, Inc. in which the appellate court vacated a portion of a district court ruling that had entered multiple statutory damages awards for copyright infringement against Manna Textiles under either sole or joint and several liability. The Ninth Circuit held that the Copyright Act only authorized a single statutory damages award against Manna because infringement of only a single copyrighted article was at issue in the case.

Fourth Circuit Says Laches, Not Statute of Limitations, is Appropriate Defense to Lanham Act Claims – On Tuesday, February 2, the U.S. Court of Appeals for the Fourth Circuit issued a decision in Belmora LLC v. Bayer Consumer Care AG in which the appellate court vacated a district court’s dismissal of unfair competition claims filed by Bayer under Section 43(a) of the Lanham Act. The Fourth Circuit held that the district court should have found that laches was an appropriate defense to Bayer’s Lanham Act claims instead of reading a statute of limitations into Section 43(a) from related state law.

Legislation Introduced to Waive Copyright Fees for Student Art, App Competition Winners – On Tuesday, February 2, Sens. Thom Tillis (R-NC) and Patrick Leahy (D-VT) as well as Representatives Hakeem Jeffries (D-NY) and Nancy Mace (R-SC) introduced the Artistic Recognition for Talented Students (ARTS) Act into both houses of Congress. If enacted, the bill would give the Register of Copyrights authority to waive copyright registration fees for student winners of the Congressional Art Competition and the Congressional App Competition. 

CAFC Vacates PTAB Invalidation for “Marked Deviation” From Grounds Challenged in Petition – On Monday, February 1, the U.S. Court of Appeals for the Federal Circuit issued a precedential decision in M&K Holdings, Inc. v. Samsung Electronics Co., Ltd. in which the appellate court vacated part of a final written decision issued by the Patent Trial and Appeal Board (PTAB). The Federal Circuit ruled that the PTAB’s invalidation of an M&K patent claim on Section 102 anticipation grounds when the petition asserted the relevant prior art as part of a Section 103 obviousness challenge was an impermissible “marked deviation” from the petition that failed to put M&K on notice.

Thirty-Month Prison Sentence Issued for Theft of Pediatric Exosome Trade Secrets – On Monday, February 1, the U.S. Department of Justice announced that a former employee of the Nationwide Children’s Hospital’s Research Institute was sentenced to 30 months in prison for her part in a conspiracy to steal trade secrets from the Research Institute related to exosomes useful for researching and identifying pediatric diseases and operating a Chinese company selling medical kits based on the stolen trade secrets.

FTC Settles Action Against Zoom for Misleading Customers on Data Security – On Monday, February 1, the Federal Trade Commission (FTC) announced that it had finalized a settlement with Zoom Video Communications ending an FTC enforcement action filed over allegations that Zoom misled its customers about its data security practices. The settlement requires Zoom to implement a comprehensive security program including biennial assessments by an independent third party.

Japan to Amend Fair Use Rules to Enforce Against Paid Cosplaying Infringements – On Friday, January 29, Shinji Inoue, head of the Japanese government’s Cool Japan pop culture initiative, made public remarks indicating that current Japanese copyright rules regarding fair use would be reviewed to address legal violations by cosplayers who are paid to appear at events as copyrighted animated and video game characters.

Barks 

Rightsholder Groups Seek No Adjustment of Royalties Under Section 111 Statutory Licenses – On Thursday, February 4, the U.S. Copyright Office published a notice of proposed settlement in the Federal Register indicating that participating rightsholders groups sought no adjustment to existing royalty rates for Section 111 statutory licenses covering distant retransmissions of over-the-air (OTA) television and radio broadcast systems by cable television providers during the years 2020 to 2025.

PTAB Institutes PGR Challenging Kansas State Pig Vaccine Claims Under Section 101 – On Wednesday, February 3, the PTAB issued a decision granting institution of a post-grant review (PGR) proceeding petitioned by German pharmaceutical firm Boehringer Ingelheim challenging patent claims owned by Kansas State University Research Foundation covering a vaccine composition for controlling porcine circovirus type 3 (PCV3) in pigs.

Copyright Office Announces Convening of Copyright Public Modernization Committee – On Wednesday, February 3, the U.S. Copyright Office published a notice in the Federal Register announcing the convening of an IT modernization public stakeholder committee that will provide a public forum for the technology-related aspects of the U.S. Copyright Office’s modernization initiative.

USITC Institutes Section 337 Investigation Into Samsung Wireless Electronic Devices – On Tuesday, February 2, the U.S. International Trade Commission (USITC) issued a notice that the agency had decided to institute a Section 337 investigation into patent infringement allegations raised by Swedish telecommunications firm Ericsson involving certain electronic devices with wireless connectivity and products containing the same imported for sale into the United States by Samsung Electronics.

Activision Faces Copyright Suit Over “Call of Duty: Modern Warfare” Character – On Tuesday, February 2, Clayton Haugen filed a lawsuit in the Eastern District of Texas alleging claims of copyright infringement against Activision Blizzard surrounding the character of Mara in the video game Call of Duty: Modern Warfare, which Haugen argues is a copy of a character known as Cade Janus he created for a film concept.

Western Washington Jury Finds Valve Liable for $4M in Video Game Controller Patent Case – On Monday, February 1, video gaming gear and technology firm Corsair Gaming announced that its subsidiaries Scuf Gaming and Ironburg Inventions were awarded more than $4 million in damages by a Western District of Washington jury that found Valve liable for willfully infringing patent claims covering a video game controller with rear buttons.

Lynk Labs Files Patent Suit Against Home Depot Over LED Products – On Friday, January 29, LED lighting and component firm Lynk Labs filed a lawsuit in the Western District of Texas against major retailer Home Depot asserting claims of seven U.S. patents over infringement allegations over Home Depot’s sale of LED products incorporating selectable correlated color temperature (CCT) and low-flicker driver on board (DoB) technologies.

Judge Mazzant Finds Gibson Cannot Win “Flying V” Guitar Trademark Case on SJ Motion – On Thursday, January 28, U.S. District Judge Amos L. Mazzant of the Eastern District of Texas issued a ruling denying a motion for summary judgment filed by Gibson Brands, finding that there are still genuine issues of material fact surrounding Gibson’s trademark infringement claims against Armadillo Distribution Enterprises, the parent company of Dean Guitars, over its sale of Flying V, Explorer and other guitar body types.

This Week on Wall Street 

Kia Motors Continues to Explore Potential Partnerships for Apple Car – On Friday, February 5, The Wall Street Journal reported that Kia Motors has approached several potential business partners to join a plan to invest as much as $3 billion into developing a car with consumer tech titan Apple that would be produced at Kia’s factory facilities in Georgia.

Ken Frazier to Step Down as Merck CEO – On Thursday, February 4, CNBC reported that Ken Frazier, CEO of pharmaceutical company Merck & Co., would be retiring from that position in June and will be replaced by the company’s current CFO Robert Davis. Frazier will stay on as Merck’s executive chairman after stepping down as CEO.

Quarterly Earnings – The following firms identified among the IPO’s Top 300 Patent Recipients for 2020 are announcing quarterly earnings next week (2019 rank in parentheses):

• Monday: Sharp Corp. (44th); Softbank Group Corp. (65th)
• Tuesday: Cisco Systems, Inc. (39th); Daikin Industries, Ltd. (t-290th); DuPont de Nemours, Inc. (226th); Fujifilm Holdings Corp. (30th); Honda Motor Co., Ltd. (35th); Nissan Motor Co., Ltd. (102nd); Sumitomo Rubber Industries, Ltd. (t-216th); Toyota Motor Corp. (13th)
• Wednesday: Applied Materials, Inc. (62nd); General Motors Co. (54th); Renesas Electronics Corp. (118th); Sonos, Inc. (t-267th)
• Thursday: Borgwarner Inc. (t-244th); Robert Bosch GmbH (41st); Innolux Corp. (t-261st); LG Corp. (3rd); NVIDIA Corp. (t-192nd); Toshiba Corp. (34th); The Walt Disney Co. (188th)
• Friday: Olympus Corp. (75th)