©2014. Published in Landslide, Vol. 6, No. 3, January/February 2014, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.
Sorry for Fair Use
Michael Kienitz v. Sconnie Nation LLC, 2013 WL 4197454 (W.D. Wis. 2013). Kienitz is a photographer who owns the copyright in an official portrait of Paul Soglin, the mayor of Madison, Wisconsin. The photograph was used by the defendants to develop shirts having the phrase “Sorry for Partying” adjacent a replicated image of Mayor Soglin. The shirt was developed after Mayor Soglin expressed interest in ending the Mifflin Street Block Party, an annual event that began in May 1969 as part of the student protest movement. Notably, Mayor Soglin attended and was arrested at the first block party, but more recently had grown to favor a sense of order. Upon motions for summary judgment, the district court held that the defendants were entitled to a finding of no infringement based on fair use. The district court found that use of the photograph by the defendants was commercial, but more importantly was parody or satire directed at political commentary. Moreover, the defendants used a monochromatic outline of the photograph on the shirts, thereby transforming the image from the original, and the shirts did not materially impair the marketability of the original work.
Works Not Rights Determinative in Streaming Music Performance License
In re Pandora Media, Inc. (related to United States v. Am. Soc’y of Composers, Authors & Publishers), 2013 WL 5211927 (S.D.N.Y. 2013). Pandora, a company that streams music over the Internet to users, applied for a blanket, through to the audience, license from ASCAP to be able to provide streaming music to customers. ASCAP functions as a performing rights organization that licenses copyrighted works to third parties. ASCAP operates under a consent decree with the United States to settle an antitrust matter that limits the ways ASCAP may issue licenses. After Pandora applied for its license, ASCAP purported to allow music publishers to limit the ability to license works to “new media” users while continuing to allow the works in ASCAP’s repertory for licensing to other users. Pandora moved for summary judgment that ASCAP could not allow withdrawal of works from “new media” while continuing to have those works in the ASCAP subject to license in other sectors.
The court granted Pandora’s motion for summary judgment, and ruled that ASCAP had to license all works within its repertory to Pandora, despite any actions taken by music publishers to withdraw rights to use their works in “new media,” such as Internet streaming. The court relied heavily on the language of the consent decree. Based on the fact that the consent decree focused on “works” and not on “rights,” the court found that ASCAP had to license Pandora all works and that the withdrawal of the rights to “new media” had no effect on the license.
Leo Pharm. Prods., Ltd. v. Rea, 726 F.3d 1346, 107 U.S.P.Q.2d 1943 (Fed. Cir. 2013). The Federal Circuit reversed the Board’s obviousness determination and claim construction. The Federal Circuit found that the Board erred by narrowly defining the construed claim term. The Federal Circuit also found that in light of the expectation of a successful result, the failure of the prior art to provide direction, and the substantial number of intervening years between the prior art publication and the filing date of the patent at issue, the invention was not a case of picking and choosing from a list so as to achieve the result. The Board improperly applied the objective indicia of nonobviousness as an afterthought instead of treating it as part of the obviousness analysis.
Plantronics, Inc. v. Aliph, Inc., 724 F.3d 1343, 107 U.S.P.Q.2d 1706 (Fed. Cir. 2013). The Federal Circuit reversed in part, vacated in part, and remanded the district court’s findings on summary judgment that the two asserted claims were not infringed and invalid as obvious. The Federal Circuit found that the district court erred in construing the terms “stabilizer support member” and “concha stabilizer” by limiting them to elongated structures. The asserted claims were drafted broadly, without bounds to any particular structure. Thus, the Federal Circuit reversed the district court’s claim construction and, as such, vacated its finding of no infringement and remanded. With respect to obviousness, the Federal Circuit found that the district court failed to identify factual bases in the record to show that one of ordinary skill in the art would have been motivated to combine the two references. The district court also failed to give proper consideration to objective evidence of nonobviousness, such as copying and commercial success. Thus, the Federal Circuit reversed and remanded the district court’s obviousness findings.
Doctrine of Equivalents
Charles Machine Works, Inc. v. Vermeer Mfg. Co., 723 F.3d 1376, 107 U.S.P.Q.2d 1622 (Fed. Cir. 2013). The Federal Circuit vacated the grant of summary judgment of no infringement (both literally and under the doctrine of equivalents) to the accused prototypes and remanded for further proceedings. As to the accused commercial products, the Federal Circuit affirmed the grant of summary judgment of no literal infringement, reversed the grant of summary judgment of no infringement under the doctrine of equivalents, and remanded for further proceedings. Regarding the accused prototypes, the Federal Circuit found that CMW had insufficient notice that the summary judgment decision would include the prototypes, as Vermeer titled its own moving papers and final rulings as limited to the commercial products, and explained at the summary judgment hearing that its motion was limited to the commercial products. With respect to the commercial products, the Federal Circuit found that CMW’s expert declaration established genuine disputes about equivalence.
Wyeth v. Abbott Labs., 720 F.3d 1380, 107 U.S.P.Q.2d 1273 (Fed. Cir. 2013). The Federal Circuit affirmed the district court’s summary judgment of invalidity for nonenablement and lack of written description, which was partly based on the district court’s unchallenged construction of “rapamycin” to mean “a compound containing a macrocyclic triene ring structure produced by Streptomyces hygroscopicus, having immunosuppressive and anti-restonotic effects.” In affirming the district court, the Federal Circuit applied the rule that claims are not enabled when, at the effective filing date of the patent, one of ordinary skill in the art cannot practice their full scope without undue experimentation. The court held that even accepting Wyeth’s assertions that one of ordinary skill (1) would have understood that potential rapamycin compounds should have molecular weights below 1,200 Daltons, and (2) could routinely use the assays disclosed in the specification to determine immunosuppressive and anti-restenotic effects in candidate compounds, the claims would still require more than routine experimentation. The court reasoned that there are at least tens of thousands of potential rapamycin compounds whose molecular weight is below 1,200 Daltons, and each of these candidates would need to be screened and synthesized to determine whether it has immunosuppressive and anti-restenotic effects. This was excessive experimentation.
Monolithic Power Sys., Inc. v. O2 Micro Int’l Ltd., 726 F.3d 1359, 107 U.S.P.Q.2d 1972 (Fed. Cir. 2013). The Federal Circuit affirmed the district court’s exceptional case finding and its attorney fees award. O2 Micro was incorrect in arguing that findings of bad faith and objectively baseless litigation are always required in addition to a litigation misconduct finding for an exceptional case. Because of the examples of unprofessional behavior provided by the district court and additional ones gleaned by the Federal Circuit from the record, the Federal Circuit agreed with the district court that O2 Micro’s rampant misconduct so severely affected every stage of the litigation that a full award of attorney fees was proper.
Rembrandt Vision Techs., LP v. Johnson & Johnson Vision Care, Inc., 725 F.3d 1377, 107 U.S.P.Q.2d 1795 (Fed. Cir. 2013). The Federal Circuit affirmed the district court’s grant of JMOL that JJVC does not infringe the patent claims. The main issue was whether the patentee Rembrandt provided sufficient evidence that the accused contact lenses were “soft,” which was agreed by the parties and adopted by the court as having a hardness (Shore D) less than five. The trial testimony of Rembrandt’s expert attempted to correct the methodology in his expert report to show that the testing conformed to the hardness (Shore D) test. The district court excluded the trial testimony of Rembrandt’s expert because it did not match the opinions from his expert report. The Federal Circuit looked to regional circuit law (11th Circuit) to determine whether the evidence should be excluded. An expert witness may not testify to subject matter beyond the expert report unless the failure to include that information in the report was substantially justified or harmless. The Federal Circuit stated that waiting until cross-examination to disclose his testing procedures was not justified. This was also not harmless because JJVC prepared its noninfringment defense based on the methodology in the expert report and opted to challenge that methodology rather than introducing a competing expert testimony.
Induced Infringement/ Grant of New Trial
Commil USA LLC v. Cisco Sys., Inc., 720 F.3d 1361, 107 U.S.P.Q.2d 1290 (Fed. Cir. 2013). The Federal Circuit affirmed in part, vacated in part, and remanded to the district court. Cisco challenged the district court’s jury instruction on induced infringement. The Federal Circuit concluded that a jury instruction that allows for a finding of inducement based on recklessness or negligence is incorrect and, as a result, vacated the jury’s verdict on inducement and remanded for a new trial. Specifically, the Federal Circuit held that to prove infringement by inducement, a plaintiff must show not only that the defendant knew of the patent but also that the defendant knew that the induced acts constitute patent infringement. This knowledge can be proven by circumstantial evidence of actual knowledge or willful blindness. Second, and as an issue of first impression, the Federal Circuit recognized that a good faith belief of invalidity may negate the requisite intent for induced infringement, holding that the district court clearly erred by precluding Cisco’s proffered evidence of such a belief. The Federal Circuit clarified, however, that a good faith belief that an asserted patent is invalid automatically precludes a finding of inducement infringement; rather, it is simply an important factor to consider when analyzing whether a defendant knew that the induced acts constitute infringement.
Teva Pharm. USA, Inc. v. Sandoz, Inc., 723 F.3d 1363, 107 U.S.P.Q.2d 1655 (Fed. Cir. 2013). The Federal Circuit affirmed in part and reversed in part the district court’s findings that certain claims were infringed and not invalid. The district court addressed the asserted claims in two groups, finding that the Group I claims were invalid for indefiniteness, but that the Group II claims were not. Further, the Group II claims were infringed, and the appellants failed to prove that they would have been obvious or were not enabled. With respect to the Group I claims, the term “molecular weight” rendered the claims indefinite. There are multiple different measures of molecular weight, and the term, standing alone, does not indicate which one should be used. Moreover, the prosecution histories of two related patents used at least two different measures and, thus, reinforced the term’s ambiguity. The Group II claims were not similarly ambiguous, as they claimed exact molecular weight values. The Group II claims also did not lack enablement, because the factual record showed that the calibration methods necessary to obtain the claimed subject matter was routine. Further, the Group II claims were not obvious, because the prior art expressed preference for a higher molecular weight of a particular compound than was claimed and, thus, taught away from the claimed invention. There was also substantial, unrebutted evidence of commercial success with respect to the patentee’s commercial embodiment.
Apple, Inc. v. Int’l Trade Comm’n, 725 F.3d 1356, 107 U.S.P.Q.2d 1864 (Fed. Cir. 2013). In response to the ITC’s determination that Apple’s ’607 patent was invalid as anticipated, the Federal Circuit affirmed in part, agreeing with the ITC’s holding that the scanning algorithms of the ’607 patent were very similar to the prior art approaches. Apple’s main argument—that the prior art approaches were too slow or inaccurate—was not a limitation included in the ’607 patent. However, the Federal Circuit reversed the ITC’s determination that one claim was anticipated by the prior art. The Federal Circuit vacated and remanded the ITC’s findings of this claim as being obvious in light of two references because the ITC failed to even mention the secondary considerations as required by Graham. Lastly, the Federal Circuit vacated and remanded the ITC’s determination that Motorola did not infringe Apple’s ’828 patent in light of improper claim construction.
In re Adler, 723 F.3d 1322, 107 U.S.P.Q.2d 1526 (Fed. Cir. 2013). The Federal Circuit affirmed the Board’s obviousness rejection of the pending claims application in view of several references. The Federal Circuit confirmed the claims were correctly rejected by the examiner because the claims recited a predictable variation of the reference combination. One of the applicant’s grounds for appeal was that the Board relied on new grounds of rejection not relied on by the examiner and, thus, the applicant is entitled to reopen prosecution. According to Federal Circuit precedent, whether the Board relies on a new rejection turns on whether the Board finds facts not found by the examiner regarding the differences between the prior art and the claimed invention, and these facts are the principal evidence upon which the Board’s rejection was based. Here, the Federal Circuit determined that while the Board may have gone into more detail than the examiner, it did not rely on facts not relied on by the examiner.
Smith & Nephew Inc. v. Rea, 721 F.3d 1371, 107 U.S.P.Q.2d 1433 (Fed. Cir. 2013). The Federal Circuit reversed the Board’s decision in a reexamination case and found that the claims at issue would have been obvious. The Board found that some claims of Synthes were obvious over a number of references and some claims were not obvious. In finding the claims not obvious, the Board’s analysis could be summarized as follows: the prior art references did not teach or suggest the exclusive use of conical, partially threaded holes in a condylar buttress plate because it was not believed that those holes could be used with nonlocking screws to provide compression. The Federal Circuit found several problems with the Board’s analysis including: (1) the claims did not require that the screws provide compression; (2) using a standard compression screw would protrude about the line of the plate (it was undisputed that the prior art disclosed chamfers that can be used to countersink a screw head); and (3) two prior art references not relied on by the examiner disclosed using nonlocking screws in threaded holes. The Federal Circuit noted that the problem with Synthes’s argument is that it contended that a standard nonlocking screw would be inoperative to obtain compression in a threaded hole, while at the same time claiming that it managed to achieve exactly that objective all through a “specialized screw.” But an unclaimed and undisclosed feature such as the specialized screw cannot be the basis for finding Synthes’s patent to be nonobvious over the prior art.
Hamilton Beach Brands, Inc. v. Sunbeam Prods., Inc., 726 F.3d 1370, 107 U.S.P.Q.2d 1901 (Fed. Cir. 2013). The Federal Circuit affirmed the district court’s ruling that the asserted claims were invalid under the on-sale bar. The Federal Circuit found that there was no supplier exception to the on-sale bar. A commercial offer for sale made by a foreign entity that is directed to a United States customer at its place of business in the United States may serve as an invaliding activity. Hamilton Beach received a commercial offer for sale from its foreign supplier, and the patented invention was ready for patenting at the time of the same as supported by the working prototypes and detailed drawings and descriptions.
Preliminary Injunction/ Subject Matter Eligibility
Aria Diagnostics, Inc. v. Sequenom, Inc., 726 F.3d 1296, 107 U.S.P.Q.2d 1879 (Fed. Cir. 2013). The Federal Circuit vacated the district court’s claim construction and, as a result, its denial of a preliminary injunction. Aria sought a declaration that its method of testing for certain genetic disorders did not infringe patented methods exclusively licensed by Sequenom. In response, Sequenom counterclaimed for infringement and moved for a preliminary injunction. The Federal Circuit concluded that the district court erred by reading in limitations that were not required by the claim language and not supported by the intrinsic record. Specifically, the Federal Circuit refused to find clear disavowal of claim scope, lexicography, or words of manifest exclusion or restriction that limited the claimed invention to specific embodiments. Accordingly, because the district court applied an incorrect construction, its analysis on the substantial question of noninfringement prong of the preliminary injunction analysis was also incorrect. The Federal Circuit also remanded to the district court with instructions to examine subject matter eligibility in view of Molecular Pathology v. Myriad Genetics, Inc., 133 S. Ct. 2107 (2013).
Apple Inc. v. Samsung Elecs. Co. Ltd., 727 F.3d 1214, 107 U.S.P.Q.2d 2048 (Fed. Cir. 2013). The Federal Circuit reversed the district court’s order denying the parties’ requests to seal various confidential exhibits. The Federal Circuit confirmed its jurisdiction was proper given that the district court’s order at issue was a collateral order. The district court was found to have abused its discretion in denying the request to seal the exhibits because of their confidential nature. For example, the exhibits included detailed financial information regarding the profitability of the parties’ products. The Federal Circuit reasoned that such information was not central to the public’s understanding of the case and, thus, the public interest favoring disclosures should not override the potential competitive harm to the parties.
Fresenius USA Inc. v. Baxter Int’l Inc., 721 F.3d 1330, 107 U.S.P.Q.2d 1365 (Fed. Cir. 2013). The Federal Circuit vacated the judgment in the pending infringement action and remanded with instructions to dismiss on the ground that the asserted claims were cancelled during the reexamination. The claims were found to be invalid due to obviousness in the reexamination. However, the Federal Circuit had previously held the claims to be valid and not obvious. The Federal Circuit in the present case found that the decision on validity was not final as there were still other issues to be determined. Therefore, the PTO’s cancellation of the claims (and Federal Circuit’s affirmation of the PTO holding) required the case to be dismissed.
Supreme Court Jurisdiction
Univ. of Utah v. Max-Planck-Gesellschaft zur Forderung der Wissenschaften e.V., 107 U.S.P.Q.2d 1989 (Fed. Cir. 2013). The University of Utah sued the University of Massachusetts to correct the inventorship of a patent owned by the University of Massachusetts. The Federal Circuit held that such an action is not an action between states falling within the exclusive jurisdiction of the Supreme Court. Moreover, the Federal Circuit held that a state has no sovereign interest in inventorship.
In re Bimeda Research & Dev. Ltd., 724 F.3d 1320, 107 U.S.P.Q.2d 1619 (Fed. Cir. 2013). The Federal Circuit affirmed the Board’s rejection of the patent application. The Federal Circuit found substantial evidence to support the Board’s finding that the claim failed the written description requirement. The disclosure is generally inconsistent with a formulation which, like the claim, excluded one component but included another. The remainder of the disclosure distinguishes the invention due to its exclusion of one component but inclusion of another, and was therefore inconsistent with the claim.
Novozymes A/S v. DuPont Nutrition Biosciences APS, 723 F.3d 1336, 107 U.S.P.Q.2d 1457 (Fed. Cir. 2013). The Federal Circuit affirmed the district court’s JMOL that the patent claims are invalid for failure to satisfy the written description requirement of § 112, ¶1, despite the jury’s verdict form indicating the written description requirement was satisfied. The patent relates to recombinant enzyme technology and generally claims particular modified enzymes that exhibit improved function and stability under certain conditions. The Federal Circuit found that in contrast to the claims—which narrowly recite specific alpha-amylase variants that result from mutating a particular parent enzyme at a single amino acid position to yield distinctive functional properties—the supporting disclosure in the application’s specification only provides generalized guidance listing several variables that might, in some combination, lead to a useful result. Considering the claims as a whole rather than as the sum of their individual limitations, the Federal Circuit concluded that nothing in the application indicates that the applicant then possessed what it now claims.
Be In, Inc. v. Google Inc., 2013 WL 5568706, 2013 U.S. Dist. LEXIS 147047 (N.D. Cal. 2013). The district court granted the dismissal of a trade secrets misappropriation claim. The plaintiff failed to plead facts sufficient for the district court to determine either acquisition by improper means or disclosure/use by improper means. An allegation of breach of inducement or breach of a duty to maintain secrecy requires an affirmative allegation of a breach of an obligation of confidentiality.
Inevitable Disclosure Doctrine
Nanomech, Inc. v. Suresh, 2013 WL 4805692 (W.D. Ark. 2013). The Arkansas Supreme Court has expressed the approval of the inevitable disclosure doctrine in Trade Secret Act cases, and has stated that the doctrine may justify issuance of preliminary injunctions under certain circumstances. A review of the case law, however, reveals that there is no precedent for applying the inevitable disclosure doctrine to infer or impute potential losses in an NDA breach of contract action.
RF Micro Devices, Inc. v. Xiang, 2013 WL 5462295 (M.D.N.C. 2013). This dispute involved a trade secret misappropriation involving concurrent foreign litigation in the Chinese and U.S. courts. The Chinese defendants move to dismiss or stay the U.S. litigation pursuant to the Colorado River Abstention Doctrine and forum non conveniens. The district court denied the motion and the case proceeded under the North Carolina Trade Secrets Act.
Jacobs Vehicle Systems, Inc., v. Yang, 2013 WL 4833058 (M.D.N.C. 2013). A motion to dismiss overbroad trade secret allegations was granted. In cases involving trade secrets, the plaintiff must identify a trade secret with sufficient particularity so as to enable the defendant to delineate that which he is accused of misappropriating and a court to determine whether misappropriation has or is threatened to occur.
Guggenheim Capital, LLC v. David Birnbaum, 722 F.3d 444, 107 U.S.P.Q.2d 1537 (2d Cir. 2013). The Second Circuit held that the district court did not abuse its discretion in entering a default judgment against the appellant. Since the 1970s, the appellant solicited investors to buy various financial products while presenting himself as “David B. Guggenheim,” claiming—but presenting no evidence of—a relationship with the well-known Guggenheim family. The appellee had rights or licenses to registered trademarks bearing the “Guggenheim” name, and filed a complaint alleging trademark infringement and other state law claims. The appellant never answered the complaint, willfully disobeyed discovery orders, and violated a preliminary injunction precluding his use of the “Guggenheim” mark. Upon the appellee’s request, the district court entered a default judgment against the appellant. The Second Circuit noted that less serious sanctions would have been futile, given the appellant’s intransigence, which spanned months. Furthermore, the Second Circuit found that the appellant could not credibly argue that he was not sufficiently warned that serious sanctions against him were imminent since he was counseled for most of the proceedings.
Unique Sports Products, Inc. v. Ferrari Importing Co., 720 F.3d 1307, 107 U.S.P.Q.2d 1531 (11th Cir. 2013). The Eleventh Circuit determined it had jurisdiction over Ferrari’s appeal of the district court’s ruling against Ferrari’s affirmative defense of unenforceability, where the district court had concurrently ruled in favor of Ferrari on Unique’s claim of trademark infringement. Unique owned a registered trademark for the light blue color of its grip tape for sports rackets. The district court found that Ferrari’s sale of teal blue gauze tape for tennis rackets did not infringe on Unique’s trademark. On Ferrari’s affirmative defense that Unique’s trademark was unenforceable, the district court found that Unique’s blue trademark was valid and enforceable. The Eleventh Circuit determined that it had jurisdiction to rule on Ferrari’s appeal and that it was proper to vacate the district court’s judgment on the question of validity as the legal consequence of an appeal by an otherwise successful party in an infringement suit.
Likelihood of Confusion
Joel Gott Wines, LLC v. Rehoboth Von Gott, Inc., 107 U.S.P.Q.2d 1424 (T.T.A.B. 2013). Rehoboth Von Gott filed an application to register the mark GOTT LIGHT with a design of a stylized wave surging upward from left to right for various water products. Joel Gott Wines opposed the registration of the mark, alleging a likelihood of confusion with its previously registered marks GOTT and JOEL GOTT for “wines.” The TTAB sustained the opposition, finding Rehoboth’s mark likely to cause confusion with Gott Wines’ previously registered marks.
The TTAB found that there was a likelihood of confusion that consumers would confuse Rehoboth’s mark with Gott Wines’ registered marks. It found that the design elements of Rehoboth’s mark were “insignificant background elements” that did not create a separate commercial impression, and the term “GOTT” was the most prominent part of its mark. The remaining term “LIGHT”—which was disclaimed in the application—appeared in smaller, lowercase letters and, furthermore, was merely descriptive of a characteristic of Rehoboth’s goods (e.g., low in calories or containing a less-than-usual amount of minerals and by-products). As such, Rehoboth’s mark was found to be similar to Gott Wines’ marks in sight, sound, meaning, and overall commercial impression. The TTAB also found the goods to be related for likelihood of confusion purposes. Thus, the TTAB concluded that purchasers of Gott Wines’ GOTT and JOEL GOTT wines would be likely to assume that Rehoboth’s water products, sold under the mark GOTT LIGHT and design, were merely a line extension of goods emanating from Gott Wines. Thus, the TTAB sustained the opposition of Rehoboth’s mark.
Stating Claims for Cancellation of Incontestable Mark
Caymus Vineyards v. Caymus Medical, Inc., 107 U.S.P.Q.2d 1519 (T.T.A.B. 2013). The TTAB granted Caymus Vineyards’ (the opposer) motion to dismiss Caymus Medical’s (the applicant) counterclaim to cancel the opposer’s registration for failure to state a claim for which relief could be granted. The applicant claimed that the opposer’s mark, CAYMUS, was primarily geographically descriptive and had not acquired secondary meaning. As the opposer’s mark was incontestable, a counterclaim to cancel a registration may only be filed on grounds specified in subsections 14(3) and 14(5) of the Trademark Act. The TTAB determined that the applicant’s counterclaim did not fall within any of the specified grounds.