Pandora filed a rate court petition on the issue of partial withdrawals of new media rights. The Southern District of New York granted Pandora’s petition and set a licensing rate. The Second Circuit affirmed, finding that the partial withdrawals violated the consent decree’s requirement to license the entire ASCAP repertory, and further that the rate of 1.85% was objectively fair. The Second Circuit noted that copyright holders remain free to choose whether to license their works through ASCAP, but the performance rights organization must operate within the limits of the consent decree.

Laminate Floor Design Is Copyrightable

Home Legend, LLC. v. Mannington Mills, Inc., 784 F.3d 1404, 114 U.S.P.Q.2d 1644 (11th Cir. 2015).The Eleventh Circuit reversed a summary judgment in favor of Home Legend and held that that a two-dimensional laminate flooring design was eligible for copyright protection. Mannington Mills manufactures laminate wood flooring featuring a variety of designs that simulate hardwood flooring, including a design called “Glazed Maple” that was registered with the Copyright Office. Mannington created the design for Glazed Maple by starting with maple hardwood flooring, and adding stain and physical imperfections to the surface of the flooring. Mannington then arranged scanned images of the flooring into a pattern that was utilized on laminate flooring. Home Legend also sells laminate flooring, including a design called “Time Crafted Maple” that Mannington alleged infringed the copyright for Glazed Maple. Home Legend filed a declaratory judgment suit seeking to invalidate the Glazed Maple copyright, and Mannington counterclaimed alleging copyright infringement. The district court granted Home Legend’s motion for summary judgment that the copyright was invalid for not covering copyright-eligible material.

The Eleventh Circuit reversed the grant of summary judgment that the copyright was invalid. The Eleventh Circuit determined that the work Mannington performed to obtain the desired color and surface appearance of the Glazed Maple design was sufficiently creative to satisfy the originality requirement for copyright registration. The Eleventh Circuit next determined that Mannington’s Glazed Maple design was separable from the useful article of flooring itself, and, therefore, was eligible for copyright registration. The Eleventh Circuit ruled that Mannington’s copyright covered the design of Glazed Maple, not the manner in which it was created. Therefore, the Eleventh Circuit reversed the grant of summary judgment that Mannington’s copyright for Glazed Maple was invalid.

PATENTS

Anticipation

Ineos USA LLC v. Berry Plastics Corp., 783 F.3d 865, 114 U.S.P.Q.2d 1568 (Fed. Cir. 2015). The Federal Circuit affirmed the district court’s summary judgment that the asserted patent is anticipated. The asserted patent relates to polyethylene-based compositions that can be used to form shaped products, such as screw caps for bottles. The patent claims compositions having various amounts of ingredients, one of which was required at a specific weight and three more that fall within specific weight ranges. The lower end of two of the claimed ranges was zero. The prior art reference discloses the ingredient for which a specific weight was claimed; the two ingredients whose claimed weight-ranges included zero and the possibility of using 0% of those ingredients; as well as both the ingredient for which a non-zero weight range was disclosed and various weight ranges for that ingredient, some of which overlapped with the claimed weight range. The Federal Circuit noted that if “prior art discloses its own range, rather than a specific point, then the prior art is only anticipatory if it describes the claimed range with sufficient specificity such that a reasonable fact finder could conclude that there is no reasonable difference in how the invention operates over the ranges.” The patentee failed to show that the claimed range was sufficiently critical to the invention that the properties of the claimed composition would differ if the range from the prior art were to be substituted for the claimed range. Thus, the prior art range anticipated the claimed range.

Kennametal v. Ingersoll Cutting Tool Co., 780 F.3d 1376, 114 U.S.P.Q.2d 1250 (Fed. Cir. 2015). The Federal Circuit found that substantial evidence supported the PTAB’s determination in an inter partes reexamination that certain claims were anticipated by, and all claims were obvious in view of, certain prior art. During reexamination, the examiner found all the claims obvious but refused to adopt Ingersoll’s anticipation arguments. On appeal to the PTAB, the PTAB confirmed the examiner’s obviousness rejections, but reversed the examiner’s anticipation decision. Notably, while the prior art reference disclosed each claimed element, it did not expressly spell out all the limitations, but PTAB nevertheless held that a person of ordinary skill in the art would “at once envisage” the claimed invention upon studying the prior art reference, thus rendering the claims invalid as anticipated. The Federal Circuit affirmed and held that although there was evidence of actual performance in the prior art of combining the claimed element, but that such evidence was not required—“[r]ather, anticipation only requires that those suggestions be enabled to one of skill in the art.”

Appealability

Exela Pharma Scis., LLC v. Lee, 781 F.3d 1349, 114 U.S.P.Q.2d 1328 (Fed. Cir. 2015). The Federal Circuit affirmed the district court’s dismissal of Exela’s complaint, but for grounds that PTO revival rulings are not subject to third party collateral challenge. The Patent Act’s scheme for administrative and judicial review of PTO patentability determinations, and the Patent Act’s careful specific framework for judicial review demonstrated that third party challenges of PTO revival rulings under the Administrative Procedure Act was not legislatively intended.

Case or Controversy

Apotex Inc. v. Daiichi Sankyo, Inc., 781 F.3d 1356, 114 U.S.P.Q.2d 1269 (Fed. Cir. 2015). The Federal Circuit reversed the district court’s dismissal of Apotex’s complaint for lack of a case or controversy. The Federal Circuit found that under the statute that governs marketing approval of generics, Apotex had a concrete, potentially high-value stake in obtaining the judgment it sought, and Daiichi had a concrete, potentially high-value stake in denying Apotex that judgment and thereby delaying Apotex’s market entry to sell a generic drug bioequivalent to Daiichi’s drug.

Claim Construction

Enzo Biochem Inc. v. Applera Corp., 780 F.3d 1149, 114 U.S.P.Q.2d 1055 (Fed. Cir. 2015).The Federal Circuit reversed, vacated and remanded the district court’s judgment of infringement. The Federal Circuit found that the district court improperly broadened the claim scope to include direct and indirect detection. The specification made clear that only indirect detection was the purpose of the invention.

Info-Hold, Inc. v. Applied Media Techs. Corp., 783 F.3d 1262, 114 U.S.P.Q.2d 1563 (Fed. Cir. 2015). The Federal Circuit reversed the district court’s claim construction and remanded the case. At the district court, the patent owner stipulated to noninfringement based on this claim construction. The Federal Circuit found that the district court improperly narrowed the claim term “transmit” to require server initiation. In support of its finding, the Federal Circuit noted that the term transmit does not suggest a limitation on initiation and that the specification confirms that the term transmit is neutral on initiation.

Vasudevan Software, Inc. v. MicroStrategy, Inc., 782 F.3d 671, 114 U.S.P.Q.2d 1349 (Fed. Cir. 2015). The Federal Circuit affirmed-in-part, reversed-in-part, and remanded the district court’s summary judgment. In determining the proper construction of the term “disparate databases”, the Federal Circuit found that the specification left uncertain the full scope and meaning so the Federal Circuit turned to the prosecution history. The Federal Circuit found that statements made in the prosecution history clearly defined the term “disparate databases.”

Damages

AstraZeneca AB v. Apotex Corp., 782 F.3d 1324, 114 U.S.P.Q.2d 1416 (Fed. Cir. 2015).The Federal Circuit rejected a challenge to the district court’s conclusion that a 50 percent royalty rate constituted fair compensation under a reasonable royalty theory. The Federal Circuit also determined there was no reason to exclude the value of an active ingredient in calculating damages where the new drug that was previously unknown and was novel in its own right. However, a portion of the district court’s damages award was reversed and the case was remanded for a recalculation of damages due to including Apotex’s sales after the expiration of the patent.

Doctrine of Equivalents

Cadence Pharm. Inc. v. Exela PharmSci Inc., 780 F.3d 1364, 114 U.S.P.Q.2d 1177 (Fed. Cir. 2015). The Federal Circuit affirmed several findings on infringement and invalidity. In a doctrine of equivalents determination, the accused infringer argued that the accused process had the antithesis of a claim limitation and that this limitation would be vitiated. The Federal Circuit noted that vitiation is not an exception that forecloses the doctrine of equivalents. Similarly, an antithesis characterization cannot be used to overlook the doctrine of equivalents factual analysis. The Federal Circuit found that the accused process was insubstantially different from the claims and that the vitiation argument was incorrect.

En Banc Hearing/Willfulness

Halo Elecs., Inc. v. Pulse Elecs., Inc., 780 F.3d 1357, 114 U.S.P.Q.2d 1079 (Fed. Cir. 2015). The Federal Circuit denied the request for rehearing en banc that focused on willfulness.

Exceptional Cases – Attorneys’ Fees

Oplus Techs., Ltd. v. Vizio, Inc., 782 F.3d 1371, 114 U.S.P.Q.2d 1413 (Fed. Cir. 2015). The Federal Circuit vacated and remanded the case to the district court, which had denied fees despite findings of litigation misconduct and that the case was exceptional. The Federal Circuit stated that the district court must articulate its reasons for the decision denying fees. The decision to vacate and remand was also grounded on the lower burden of proof for obtaining fees under Section 285 in light of the Supreme Court decision in Octane Fitness v. ICON, 134 S. Ct. 1749 (2014).

Interlocutory Appeals

Intellectual Ventures II LLC v. JPMorgan Chase & Co., 781 F.3d 1372, 114 U.S.P.Q.2d 1387 (Fed. Cir. 2015). The Federal Circuit dismissed the defendants’ request for an interlocutory appeal. The Federal Circuit only has jurisdiction to review a final decision of the district court. The Federal Circuit reviewed the AIA and the procedural history to determine whether the fact that two covered business method reviews (CBMR) were pending was enough to grant an interlocutory appeal. The Federal Circuit found they only have jurisdiction over a decision on a motion to stay that is related to an actual CBMR proceeding, not a decision on a motion to stay that is related to anything that relates—however remotely—to a hoped-for CBMR proceeding.

Judicial Review – Appealability

Automated Merch. Sys., Inc. v. Lee, 782 F.3d 1376, 114 U.S.P.Q.2d 1457 (Fed. Cir. 2015). The Federal Circuit found no error in granting summary judgment to the PTO. The Federal Circuit determined that the PTO’s refusal to terminate a reexamination proceeding was not a final agency action and, thus, was not appealable. Rather once AMS receives an adverse final determination of patentability, it can then appeal at that time for consideration of whether the reexamination proceedings should have been terminated.

Obviousness

Insite Vision Inc. v. Sandoz, Inc., 783 F.3d 853, 114 U.S.P.Q.2d 1448 (Fed. Cir. 2015). The Federal Circuit affirmed the district court’s determination of the validity of selected claims and the failure of Sandoz to meet its clear and convincing burden. The Federal Circuit did not find any clear error in the district court’s fact finding or the legal conclusion on the issue of obviousness.

MobileMedia Ideas LLC v. Apple Inc., 780 F.3d 1159, 114 U.S.P.Q.2d 1001 (Fed. Cir. 2015). The Federal Circuit affirmed-in-part, reversed-in-part, vacated, and remanded the district court’s judgment of two patents being infringed and valid, and two patents being invalid and not infringed. In determining obviousness in view of two prior art references, the Federal Circuit found when there is conflicting testimony at trial, and the evidence overall does not make only one finding on the point reasonable, the jury is permitted to make credibility determinations and believe the witness it considers more trustworthy. The Federal Circuit reversed the district court’s findings of infringement of certain claims because the accused device had no structure corresponding to a function recited in the claims.

Reasonable Royalty/Induced Infringement

Info-Hold, Inc. v. Muzak LLC, 783 F.3d 1365, 114 U.S.P.Q.2d 1556 (Fed. Cir. 2015). In a case involving the appeal of numerous issues, the Federal Circuit affirmed, reversed, and remanded. The Federal Circuit affirmed the district court’s ruling striking a damages expert report that improperly relied on the entire market value rule and the flawed 25 percent rule-of-thumb. The Federal Circuit, however, reversed the district court’s summary judgment denial of reasonable royalty damages, finding that other evidence of record, including the defendant’s expert’s deposition testimony, can be used to demonstrate the existence of a genuine issue of material fact as to whether no royalty was owed. The Federal Circuit then addressed the inducement arguments, and held that genuine issues of material fact remain as to whether Muzak acted with knowledge that its actions constituted infringement of the patent. Thus, the Federal Circuit vacated the district court’s summary judgment of no induced infringement and remanded. The Federal Circuit also affirmed the district court’s claim construction.

Re-Examination/Obviousness

Senju Pharm. Co. v. Lupin Ltd., 780 F.3d 1337, 114 U.S.P.Q.2d 1085 (Fed. Cir. 2015). The Federal Circuit affirmed the district court’s judgment that the reexamined claims at issue were invalid for obviousness. The Federal Circuit concluded that the district court correctly applied a presumption of validity to the reexamined claims, considering both the evidence of obviousness and the evidence of unexpected results, to find that the appellees set forth clear and convincing evidence of invalidity.

Petition for Rehearing/Willfulness

Stryker Corp. v. Zimmer, Inc., 782 F.3d 649, 114 U.S.P.Q.2d 1186 (Fed. Cir. 2015). The Federal Circuit granted Stryker’s petition for rehearing en banc to clarify the discussion of the standard of review of the objective reckless prong of willful infringement.

Subject Matter Jurisdiction

Versata Software, Inc. v. Callidus Software, Inc., 780 F.3d 1134, 113 U.S.P.Q.2d 2138 (Fed. Cir. 2015). The date before the Federal Circuit issued its opinion in an interlocutory appeal that reversed the denial of a stay pending the outcome of a post-grant review proceeding by the PTO, the parties filed a joint request to dismiss the appeal. Applying Third Circuit law, the appeal was deemed moot when the opinion issued. The Federal Circuit vacated its November 20, 2014 opinion and lifted its previous stay of the mandate.

Timeliness

Two-Way Media LLC v. AT&T, Inc., 782 F.3d 1311, 114 U.S.P.Q.2d 1147 (Fed. Cir. 2015). The Federal Circuit affirmed the district court’s refusal to extend or reopen the appeal period, as AT&T did not satisfy its burden to show excusable neglect for AT&T’s failure to read the underlying orders and check the docket for more than a month after the district court issued the final orders. The district court noted that the orders and notices of electronic filings had been sent to 18 different attorneys and legal assistants representing AT&T and that at least some of those recipients downloaded the full text of the orders. The district court concluded that it was inexcusable for AT&T’s multiple counsel to fail to read all of the underlying orders they received, or at a minimum to monitor the docket for any corrections or additional rulings. The Federal Circuit found no abuse of discretion by the district court.

Willfulness/Exceptional Case

Stryker Corp. v. Zimmer, Inc., ________, 114 U.S.P.Q.2d 1187 (Fed. Cir. 2015). The Federal Circuit affirmed the jury’s findings that three patents related to pulsed lavage devices were valid and infringed, as well as the jury’s damages award. The Federal Circuit, however, reversed the district court’s finding of willful infringement and vacated its consequent award of treble damages, as well as its finding of an exceptional case and award of attorneys’ fees. With respect to willfulness, the Federal Circuit found that the district court improperly analyzed the objective component of the Seagate analysis and, in particular, failed to undertake an objective assessment of Zimmer’s specific defenses to Stryker’s claims. The Federal Circuit held that “[a]n objective assessment of the case shows that Zimmer presented reasonable defenses to all of the asserted claims . . . and, therefore, it did not act recklessly.” The Federal Circuit further vacated the exceptional case finding, because it was premised on the district court’s now-reversed willfulness finding.

TRADE SECRETS

Am. Furukawa, Inc. v. Hossain, 2015 U.S. Dist. LEXIS 59000 (E.D. Mich. 2015). The district court recognizes the circuit split regarding interpretations of the CFAA’s phrases “without authorization” and “exceeds authorized access.” The Sixth Circuit has given separate meaning to both of these phrases. Following the Sixth Circuit’s guidance, the district court found that Furukawa stated a proper claim under the CFAA, because Furukawa plead that Hossain accessed some files when he was told not to work for Furukawa—“without authorization”—and accessed other files in violation of a computer policy—“exceeds authorized access.” Further, the district court found that there is no preemption of the state court claims under the Michigan UTSA because Furukawa’s claims are not based solely on trade secrets.

Giles Constr., LLC v. Tooele Inventory Solution, Inc., 2015 U.S. Dist. LEXIS 72722 (D. Utah 2015). The identity of Industrial Container Services as a barrel supplier is not a trade secret. Industrial Container Services has a publicly available website. When Giles Construction initially researched barrel suppliers, its employee found the website in approximately fifteen minutes. Where information alleged to be a trade secret can be readily ascertained by performing a basic research task, the information is not a trade secret.

Kforce Inc. v. Oxenhandler, 2015 U.S. Dist. LEXIS 54101 (W.D. Wash. 2015). The plaintiff’s attempts to draw an artificial distinction between confidential and proprietary trade secrets, and confidential and proprietary “non-trade secret information” are unavailing. All free-standing alternative causes of action for theft and misuse of confidential, proprietary, or otherwise secret information falling short of trade-secret status are preempted by the UTSA. However, to the extent that there are claims for improper direct solicitation of customers not involving the use of confidential, proprietary or otherwise secret information, these limited claims are not preempted.

Omega Morgan, Inc. v. Heely, 2015 U.S. Dist. LEXIS 56288 (W.D. Wash. 2015). The Storage Communications Act (SCA) provides a civil action for someone who intentionally accesses an electronic communication service either without authorization or in excess of authorization and thereby obtains access to an electronic communication stored on that service. The Computer Fraud and Abuse Act (CFAA) provides a cause of action when someone “knowingly and with intent to defraud, accesses a protected computer without authorization, or exceeds authorized access.” These causes of action are preempted by the Washington UTSA (WUTSA) because the plaintiff’s allegations that the defendants used company servers to copy confidential information rests on the same factual basis as the plaintiff’s WUTSA claims. However, the plaintiff’s allegation that the defendants “wiped” their computers of information prior to terminating their employment with the plaintiff is supported by an independent factual basis. The plaintiff does not allege that deleting files constitutes a misappropriation of the plaintiff’s trade secrets. The district court denied summary judgment on the plaintiff’s claims under the SCA and the CFAA for unauthorized deletion of files.

Think Tank Software Dev. Corp. v. Chester, Inc., 30 N.E.3d 738, 2015 Ind. App. LEXIS 318 (Ind. Ct. App. 2015). Customer lists and information accumulated regarding customers can qualify as a trade secret. However, all the information Think Tank claimed as trade secrets was generally known or readily ascertainable from other sources. Think Tank’s customer and network certification training programs are available to the public. Likewise, pricing information does not constitute a trade secret because it was readily available from customers without an obligation of confidentiality. The UTSA was not intended by the legislature to create a blanket post facto restraint on trade.

TRADEMARKS

Descriptiveness

In re TriVita, Inc., 783 F.3d 872, 114 U.S.P.Q.2d 1574 (Fed. Cir. 2015). TriVita filed a trademark application for the mark NOPALEA for dietary and nutritional supplements containing, in whole or in substantial part, nopal juice. The examining attorney rejected the application under section 2(e)(1) of the Lanham Act as being descriptive. TriVita appealed to the TTAB, arguing that “nopalea plant” is not commonly referenced in the food industry and that the term was not descriptive because TriVita’s products contained extracts from the Opunti genus of nopal cactus, not the Nopalea genus. The TTAB affirmed, citing websites showing Nopalea as the name of a genus of cactus used in food and supplements. The Federal Circuit affirmed.

The Federal Circuit rejected TriVita’s argument that the TTAB failed to compare the word “nopalea” to “nopal,” noting that “nopalea” is not a made-up word but, rather, “nopalea” is a genus of cacti from which nopal juice is derived. As such, customers were likely to assume that the NOPALEA mark denotes that TriVita’s products contain ingredients from the Nopalea cactus. The Federal Circuit also rejected TriVita’s argument that relevant consumers would not immediately recognize the botanical meaning of “nopalea,” noting the abundance of evidence presented by the TTAB that “nopalea” and “nopal” were often used interchangeably. TriVita’s argument that, due to the multi-level direct marketing of its products, it could ensure that its mark would be used non-descriptively was not established by any factual showing (in fact, there was some evidence to the contrary).

The Federal Circuit found that substantial evidence supported the TTAB’s findings that relevant consumers would understand the mark NOPALEA to convey information that the goods contain ingredients from the Nopalea cactus. As such, the Federal Circuit affirmed the TTAB’s finding that NOPALEA was merely descriptive of TriVita’s goods and, as such, not registratable on the Principal Register for nutritional supplements containing nopal juice.

Issue Preclusion Based on Agency Decision

B&B Hardware, Inc. v. Hargis Industries, Inc., 135 S. Ct. 1293, 113 U.S.P.Q.2d 2045 (U.S. 2015). The Supreme Court reversed the decision of the Eighth Circuit and district courts in an action for trademark infringement, unfair competition, trademark dilution and false designation brought by B&B Hardware against Hargis for its use of a mark that was confusingly similar to B&B Hardware’s SEALTIGHT mark for fasteners for the aerospace industry. Hargis attempted to register the mark SEALTITE for fasteners for use in the construction trade. B&B Hardware opposed Hargis’ application and the TTAB agreed that a likelihood of confusion existed and refused registration.

As the TTAB was analyzing this case, a civil action for trademark infringement was proceeding in district court. The district court determined that Hargis was not precluded from contesting the likelihood of confusion analysis because of the TTAB’s decision. The Eighth Circuit agreed and held that issue preclusion was not warranted because the TTAB and the court used different factors in the likelihood of confusion analysis, the TTAB overly emphasized the differences in the appearance and sound of the two marks, and that B&B Hardware had the burden of persuasion in the district court, while Hargis had the burden in the TTAB proceeding.

The Supreme Court determined that as long as the other ordinary elements of issue preclusion were met, issue preclusion should apply when the usages adjudicated by the TTAB are materially the same as before the district court. The Supreme Court confirmed that issue preclusion is not limited to those cases where the same issue is before two courts, but rather preclusion may also involve an issue before a court and an administrative agency. Moreover, nothing in the language of the Lanham Act bars the application of issue preclusion, and there is no evident reason why Congress would not want TTAB decisions to have preclusive effect. The Supreme Court noted that while some TTAB decisions may not satisfy the ordinary elements of issue preclusion, this does not mean that none will. The Supreme Court further determined that the same likelihood of confusion standard applies to both registration and infringement. And even though the TTAB may not always consider the same usages of a mark as a district court may consider, this does not mean that the TTAB applies a different standard to those usages.

The Supreme Court also found that even though the TTAB and district courts use different procedures, this does not mean that issue preclusion can never apply. Moreover, there is no reason to doubt the quality, extensiveness, or fairness, of TTAB procedures, as they are, in large part, the same as in federal court. And in both the TTAB and the district court, the Supreme Court noted that B&B Hardware bore the burden of persuasion (for opposing Hargis’ application and bringing the infringement action).

Likelihood of Confusion

In re House Beer, LLC, 114 U.S.P.Q.2d 1073 (TTAB 2015). House Beer appealed the refusal of registration of its mark, HOUSE BEER, for retail store services featuring beer. The TTAB affirmed the refusal of House Beer’s mark due to a likelihood of confusion with a prior registration for HOUSE BEER for “beer” on the Supplemental Register.

According to House Beer, the PTO failed to follow required procedures under the Trademark Office rules. Specifically, House Beer argued that once the application for HOUSE BEER for beer changed from the Principal Register to the Supplemental Register, the effective filing date of the application became the date of the filing of the allegation of use. Here, the effective filing date was later than House Beer’s filling date for its HOUSE BEER mark, and House Beer contended that if the procedures had been followed, the refusal of its HOUSE BEER mark would not have issued.

The TTAB acknowledged that even though the effective filing date would have been subsequent to House Beer’s filing date, the refusal of House Beer’s application was procedurally proper as being based on Section 2(d) of the Trademark Act, which provides for refusal based on a mark registered in the PTO. The TTAB noted that the statute makes no reference to the filing date of the application used as the basis for refusal, and the specific examining procedures which were followed were not a prerequisite to issuing a refusal under Section 2(d). Upon reviewing the factors relevant to the issue of likelihood of confusion, the TTAB found that the marks were identical and that the goods and services were of the type that may emanate from the same source. Based on these findings, the TTAB determined that confusion was likely and affirmed the refusal to register.