June/July 2024 Decisions in Brief

Plaintiff UIRC did not create the underlying documents on its own, but utilized existing documents created by the Idaho Housing and Finance Association (Idaho). For each of UIRC’s transactions issuing bonds, UIRC updates the standard documents and, after the transaction is closed, files copyright applications at the U.S. Copyright Office seeking protection for the “additional and revised text” it had drafted in the final documents. During prosecution, the Copyright Office required UIRC to clarify which parts of the bond documents were original text or otherwise substantial revisions to preexisting text. The copyright registrations were granted with limiting language, excluding protection for the “standard legal language” in the documents.

UIRC learned that a third party it hired to help market its bonds had used its documents in a transaction with another company. In fact, references to UIRC remained in the final documents, even though it was not a party to the transaction. UIRC sued defendant Blair, alleging that Blair had copied original portions of UIRC offering documents, thereby infringing its copyrights in the documents under the Copyright Act, 17 U.S.C. §§ 101 et seq.

The Seventh Circuit affirmed the district court’s grant of the defendant’s motion for summary judgment, determining that the documents in question were not subject to copyright protection. The UIRC documents failed to be independently created or possess even the most minimal amount of creativity. The UIRC documents were near replicates of the Idaho documents; in one section, the only difference was the changing of a semicolon to a period. After eliminating all of the text that was directly copied from the Idaho documents, the Seventh Circuit determined that even in the areas of the documents where a court could accept that UIRC made substantive additions, those additions lacked creative expression because the text was “a mixture of fragmented phrases, facts, and language dictated solely by functional considerations,” which are not copyrightable. The documents were not entitled to copyright protection, so the court did not consider the second element of the copyright infringement claim.

Just Dance

Hanagami v. Epic Games, Inc., 85 F.4th 931, 2023 U.S.P.Q.2d 1296 (9th Cir. 2023). The Ninth Circuit determined that the district court erred in granting the defendant’s motion to dismiss because it improperly applied the substantial similarity test for copyright infringement when determining that the plaintiff did not plausibly allege that its copyrighted choreography and the allegedly infringing dance in the video game share substantial similarities.

Plaintiff Hanagami appealed the dismissal of his claim for copyright infringement against Epic, the developer of the virtual reality game Fortnite. In 2017, Hanagami created a choreographic dance work to Charlie Puth’s “How Long” song. In 2020, Fortnite released a new version of the game that permits users to purchase various accessories for their virtual avatar, as well as “emotes” that allow the avatar to celebrate or dance in the game. One emote is called “It’s Complicated,” and Hanagami alleged that four of the 16 counts of emote movement were copied from Hanagami’s work, which he obtained a copyright registration for in 2021, covering only the choreography in the video, not the music or audiovisual elements.

Hanagami sued for direct and contributory copyright infringement against Epic, which moved to dismiss the claims for failure to state a copyright claim on the grounds that the allegedly copied dance steps were not protectable and the works are not substantially similar. The district court granted Epic’s motion.

The Ninth Circuit reversed the dismissal. To state a claim for copyright infringement, one must show that (1) there is a valid copyright and (2) the defendant copied protected aspects of the work. There is no question that Hanagami owns a valid copyright. To establish that the defendant copied protected elements of the work, Hanagami must show that Epic copied protected aspects of the “How Long” choreography.

Whether there was unlawful appropriation by Epic requires a demonstration that the works share substantial similarities because the defendant copied the author’s expression of the work, not just the underlying idea. The Ninth Circuit held that the district court erred in its determination that the steps at issue are unprotectable as individual poses when considered in isolation because choreography is more than just a “static collection of poses,” and the district court failed to consider the other expressive elements of the choreography.

Patents

ANDA Application

H. Lundbeck A/S v. Lupin Ltd., 87 F.4th 1361, 2023 U.S.P.Q.2d 1453 (Fed. Cir. 2023). The Federal Circuit affirmed the district court’s finding of no direct infringement because the abbreviated new drug applications (ANDAs) were effective after the expiration of the compound patents and were directed to a use case not covered by the method patents. The Federal Circuit also affirmed the district court’s finding of no induced infringement because the defendants lacked the requisite specific intent and action to induce infringement. The Federal Circuit further affirmed the district court’s finding of no contributory infringement based on substantial noninfringing uses.

Attorney Fees

In re PersonalWeb Technologies LLC, 85 F.4th 1148, 2023 U.S.P.Q.2d 1308 (Fed. Cir. 2023). The Federal Circuit upheld the district court’s finding that this case was exceptional and its awarding of attorney fees. The Federal Circuit found that the district court appropriately applied the correct standard. The district court also found that the patentee had shifting infringement positions, which supported the position that this was an exceptional case.

Claim Construction

Actelion Pharmaceuticals Ltd. v. Mylan Pharmaceuticals Inc., 85 F.4th 1167, 2023 U.S.P.Q.2d 1314 (Fed. Cir. 2023). The Federal Circuit vacated the district court’s construction of the phrase “a pH of 13 or higher” and judgment of infringement for failing to consider extrinsic evidence relevant to claim construction. Actelion’s construction would allow for a pH of 12.5, rounded to 13, to meet the claim limitation, whereas Mylan argued that the limitation cannot cover any pH less than 13. The district court did not consider extrinsic evidence regarding the number of significant digits in a pH.

K-fee System GmbH v. Nespresso USA, Inc., 89 F.4th 915, 2024 U.S.P.Q.2d 12 (Fed. Cir. 2023). The Federal Circuit reversed the district court’s claim construction and subsequent grant of summary judgment of noninfringement and remanded for further proceedings. After considering the ordinary meaning of the claim term, the Federal Circuit reversed the district court’s construction. The Federal Circuit also found no disclaimer based on K-fee’s European prosecution history, as K-fee did not act with the clarity required to prescribe a new meaning for the claim term or to disclaim any portion of the apparent meaning.

► Malvern Panalytical Inc. v. TA Instruments-Waters LLC, 85 F.4th 1365, 2023 U.S.P.Q.2d 1297 (Fed. Cir. 2023). The Federal Circuit vacated and remanded the stipulated judgment of noninfringement due to the district court’s erroneous claim construction. The patentee included an unrelated patent and its office actions in an information disclosure statement. The alleged infringer argued that this meant the prosecution history of the cited patent could be used in claim construction. The Federal Circuit found that the mere listing of the office actions in the information disclosure statement was not an admission that the other patent’s prosecution history was controlling in construing the claim term.

ParkerVision, Inc. v. Vidal, 88 F.4th 969, 2023 U.S.P.Q.2d 1497 (Fed. Cir. 2023). The Federal Circuit affirmed the Patent Trial and Appeal Board’s (PTAB’s) claim construction and found no procedural error in how it treated certain arguments raised by the parties. The Federal Circuit found that ParkerVision had acted as its own lexicographer, which was correctly tracked in the PTAB’s claim construction. The Federal Circuit also found that substantial evidence supported the PTAB’s finding that prior art disclosed the constructed term.

Domestic Industry/Invalidity

Roku, Inc. v. International Trade Commission, 90 F.4th 1367, 2024 U.S.P.Q.2d 102 (Fed. Cir. 2024). The Federal Circuit affirmed the ITC’s final determination that Roku violated Section 337 by importing articles that infringed Universal’s patent. With respect to domestic industry, the Federal Circuit rejected Roku’s argument that Universal needed to show investments in the entire product, rather than a sufficiently substantial investment in exploiting the intellectual property (which can be related to a subset of a product). With respect to invalidity, the Federal Circuit determined that Roku failed to challenge the ITC’s actual finding that the combination of two references did not allow for a choice between different second media devices, as required by the claims.

Forum Selection

DexCom, Inc. v. Abbott Diabetes Care, Inc., 89 F.4th 1370, 2024 U.S.P.Q.2d 20 (Fed. Cir. 2024). The Federal Circuit affirmed the district court’s denial of DexCom’s preliminary injunction to enjoin Abbott from proceeding with an inter partes review (IPR) based on a forum selection clause in a settlement and license agreement between the parties. The Federal Circuit interpreted the contract and found that DexCom failed to demonstrate a likelihood of success, which is required for an injunction.

Invalidity/IPR

Pacific Biosciences of California, Inc. v. Personal Genomics Taiwan, Inc., 89 F.4th 1377, 2024 U.S.P.Q.2d 52 (Fed. Cir. 2024). The Federal Circuit affirmed two IPR decisions from the PTAB, invalidating certain claims in Personal Genomics’ patent while maintaining the validity of other claims. The Federal Circuit initially addressed the PTAB’s construction of a single phrase from the claims—a construction that led to invalidity of some claims but ultimately validity of others. The Federal Circuit affirmed the PTAB’s claim construction. The Federal Circuit then addressed the PTAB’s factual findings regarding the prior art and ultimately concluded that the PTAB’s findings were supported by substantial evidence.

Prior Art

Medtronic, Inc. v. Teleflex Life Sciences, Ltd., 86 F.4th 902, 2023 U.S.P.Q.2d 1362 (Fed. Cir. 2023). The Federal Circuit affirmed the PTAB’s finding that the asserted prior art was antedated based on an earlier conception date and reasonably continuous diligence until a constructive reduction to practice. The Federal Circuit declined to address whether in vivo testing was required for actual reduction to practice. Appellant Medtronic waived its diligence arguments by incorporating them by reference in its opening appellate brief.

PTAB/Joinder of Time-Barred Party

► CyWee Group Ltd. v. ZTE (USA), Inc., 90 F.4th 1358, 2024 U.S.P.Q.2d 107 (Fed. Cir. 2024). The Federal Circuit affirmed the PTAB’s IPR decision determining multiple claims of the challenged patent to be obvious and denied CyWee’s revised motion to amend its claims. The PTAB allowed LG, a time-barred party, to join and “act as a passive ‘understudy’ and not assume an active role unless [ZTE] ceases to participate in the instituted IPR.” Since ZTE did not oppose CyWee’s revised motion to amend, LG moved for leave to oppose the revised motion to amend. CyWee’s main issue was whether the PTAB erred by allowing LG to oppose CyWee’s revised motion to amend since it allowed LG to violate the terms of its joinder. The Federal Circuit determined that there was no error in the PTAB’s conclusion that LG could participate in opposing the revised motion to amend as, although ZTE was still actively participating in the IPR, ZTE ceased to participate in the revised motion to amend. After determining that LG was properly allowed to join as an active participant in opposing the revised motion to amend, the Federal Circuit found that substantial evidence supported the PTAB’s motion to combine the prior art finding and thus affirmed the PTAB’s obviousness finding.

PTAB Jurisdiction

Purdue Pharma L.P. v. Collegium Pharmaceutical, Inc., 86 F.4th 1338, 2023 U.S.P.Q.2d 1389 (Fed. Cir. 2023). The PTAB did not lose jurisdiction to issue a final written decision when it failed to issue the decision within the extended statutory deadline. The Federal Circuit noted that the statute did not provide consequences for noncompliance with the deadline, and nothing in the statute or legislative history suggested that the PTAB lacked authority to issue a late final written decision.

Standing

Allgenesis Biotherapeutics Inc. v. Cloudbreak Therapeutics, LLC, 85 F.4th 1377, 2023 U.S.P.Q.2d 1325 (Fed. Cir. 2023). The Federal Circuit found that Allgenesis did not have standing. Allgenesis did not show that its activities would create a substantial risk of infringement. The Federal Circuit further found that Allgenesis did not establish that it had suffered an injury with enough specificity.

Trade Secrets

Efforts to Keep Information Secret

Taylor Made Express, Inc. v. Kidd, No. 21 C 2903, 2024 WL 197231, 2024 U.S. Dist. LEXIS 9211 (N.D. Ill. Jan. 18, 2024). To prevail on its claims under the Defend Trade Secrets Act (DTSA) and Illinois Trade Secrets Act (ITSA), Taylor Made must show: (1) the existence of a trade secret, (2) that a defendant misappropriated the trade secret, and (3) that the trade secret was used in the defendant’s business. Courts evaluate whether efforts to keep information confidential were sufficient on a case-by-case basis, considering the efforts taken and the costs, benefits, and practicalities of the circumstances. Taylor Made lacked an articulated and developed confidentiality policy, and it did nothing to train or instruct employees as to their obligation to keep certain categories of information as confidential.

Existence of Trade Secret

Catalyst Advisors, LP v. Catalyst Advisors Investors Global Inc., No. 21 Civ. 4855 (KPF), 2024 WL 522751, 2024 U.S. Dist. LEXIS 24552 (S.D.N.Y. Feb. 9, 2024). Whether or not a trade secret exists requires a twofold analysis. First is the question of specificity under which the party opposing summary judgment must identify the alleged trade secret with sufficient specificity to make the moving party aware of what information has been allegedly misappropriated. Second, a court considers whether a reasonable jury could conclude that the information can qualify as a trade secret.

Centennial Bank v. Holmes, No. 5:23-CV-044-H, 2024 WL 733649, 2024 U.S. Dist. LEXIS 28406 (N.D. Tex. Feb. 20, 2024). A plaintiff’s definition of a trade secret cannot be too vague or inclusive. It is sufficient if the allegations demonstrate that at least some aspects of the information constitute a trade secret. Courts routinely find a plaintiff’s allegations to be sufficient if they identify specific groupings of information that contain trade secrets, identify the types of trade secrets contained in the groupings, and explain how the alleged trade secrets were maintained and treated as trade secrets.

Hoffman v. Goli Nutrition, Inc., No. 2:23-CV-06597-CAS (MAAx), 2024 WL 230873, 2024 U.S. Dist. LEXIS 11492 (C.D. Cal. Jan. 17, 2024). The plaintiff failed to adequately plead trade secret misappropriation in violation of the DTSA. The plaintiff identified the trade secret as a manufacturing process and formulations. The lack of particularity made it impossible to assess whether the alleged trade secret was disclosed in patent applications and/or disclaimed in contracts. The DTSA claim was dismissed without prejudice to amend the complaint to describe its claimed trade secret with greater particularity.

Ownership

Credit Sage LLC v. Credit Wellness LLC, No. 1:23-CV-110-SWS, 2024 WL 99474, 2024 U.S. Dist. LEXIS 6124 (D. Wyo. Jan. 9, 2024). The plain text of the DTSA establishes that an owner of a trade secret that is misappropriated may bring a civil action if the trade secret is related to a product or service used in, or intended for use in, interstate commerce. Under the DTSA, the plaintiff must plead ownership to state a claim under the DTSA.

Trademarks

Abandonment

Adamson Systems Engineering, Inc. v. Peavey Electronics Corp., Cancellation No. 92076586, 2023 U.S.P.Q.2d 1293, 2023 BL 391350 (T.T.A.B. Nov. 1, 2023). Respondent Peavey owns a registration for the mark CS for amplifiers in class 9. The respondent sent the petitioner, Adamson, a cease and desist letter after the petitioner began selling its “CS-Series” loudspeakers. The petitioner then sought cancellation of the respondent’s registration. The Trademark Trial and Appeal Board (TTAB) granted the petitioner’s petition to cancel on the ground of abandonment.

To cancel the CS mark, the petitioner needed to prove: (1) its entitlement to a statutory cause of action, and (2) abandonment of the CS mark by the respondent. Entitlement required the petitioner to demonstrate: (i) an interest falling within the zone of interests protected by the statute, and (ii) a reasonable belief in damage proximately caused by the registration or continued registration of the mark. The respondent’s cease and desist letter was sufficient to demonstrate both (i) and (ii).

For the petitioner’s claim of nonuse abandonment by the respondent, the petitioner needed to satisfy two elements: (1) the use of the mark has been discontinued (2) with intent not to resume use. A prima facie showing of abandonment can be established by showing three consecutive years of nonuse of the CS mark by the respondent. The petitioner was able to establish a prima facie showing because the respondent had de minimis domestic sales from 2016 to 2021 and had no sales from 2018 to 2020. The TTAB found that the respondent’s token and sporadic sales of CS amplifiers and the non-CS-branded repairs of the respondent’s CS amplifiers were each insufficient to rebut this prima facie showing. The record was devoid of evidence showing the respondent’s intent to resume use of the CS mark. Thus, the TTAB granted the petitioner’s petition to cancel on the ground of abandonment, and the respondent’s CS mark will be canceled in due course.

Failure to Function Refusal

► In re Black Card LLC, Serial No. 90641690, 2023 U.S.P.Q.2d 1376, 2023 BL 423176 (T.T.A.B. Nov. 21, 2023). Applicant Black Card sought registration of the trademark FOLLOW THE LEADER for various services. The examining attorney refused registration for failure to function as a trademark, asserting that FOLLOW THE LEADER was a “commonplace term, message, or expression, widely used by a variety of sources, which merely conveys an ordinary, familiar, or generally understood concept or sentiment.”

The TTAB noted that not every common term or phrase should be refused on failure to function grounds. Rather, a refusal must depend on evidence of how consumers would perceive the mark. The examining attorney located various sources of evidence showing use of FOLLOW THE LEADER, which was characterized as “Children’s Game,” “Business Decision-making Principles Based on Actions of the Market Leader,” “Business Leadership Principles,” “Information regarding Guided Travel Tours,” “Government and Political Leadership,” “Personal Decision-making,” “Name of Artwork,” and “Ornamental Use on Consumer Items.”

The applicant argued that its proposed mark had “no generalized informational message,” that third-party registrations for FOLLOW THE LEADER confirmed that the mark functioned as a trademark, that no blanket rule existed that common phrases are not registrable, and that proof of use had not yet been filed so the refusal was premature.

After reviewing the record, the TTAB found common use of FOLLOW THE LEADER in various contexts. However, in the context of the services at issue, including “credit card incentive program, credit card financial, travel information, ticket reservation, travel advisory, salon and spa reservation, and concierge services,” the TTAB found that the evidence conveyed different meanings depending on the specific context. Additionally, as a whole, the evidence did not demonstrate that FOLLOW THE LEADER had a commonly understood meaning such that the mark was incapable of acting as a source indicator. Moreover, the evidence did not indicate that FOLLOW THE LEADER conveyed “a single, common sentiment or meaning across a variety of goods or services.” Accordingly, the TTAB did not find that FOLLOW THE LEADER was incapable of acting as a source indicator of the applicant’s services, and the failure to function refusal was reversed. The TTAB affirmed the refusal to register the services in international class 41 as being indefinite.

Likelihood of Confusion

► Monster Energy Co. v. Critical Role, LLC, Opposition No. 91269187, 2023 U.S.P.Q.2d 1382, 2023 BL 423102 (T.T.A.B. Nov. 21, 2023). The applicant, Critical Role, sought registration of a mark containing a stylized “V” and “M” enclosed in a circle (the applicant’s mark). The opposer, Monster Energy, filed a notice of opposition on the grounds of (1) likelihood of confusion under Section 2(d) of the Trademark Act, and (2) dilution by blurring under Section 43(c) of the Trademark Act based on its mark comprising a stylized “M” (the opposer’s mark). The applicant moved for summary judgment for the likelihood of confusion claim only.

The TTAB granted the applicant’s motion for partial summary judgment because the TTAB found confusion to be unlikely due to the dissimilarity of the two marks. Specifically, the TTAB determined that there is no genuine dispute of material fact that the marks are dissimilar as a matter of law because (1) there are no circular elements in the opposer’s mark; (2) the applicant’s mark does not resemble claw scratches; and (3) the opposer’s mark consists of a stylized “M,” whereas the applicant’s mark consists of a stylized “M” and “V.” The applicant contended that the TTAB’s finding of no likelihood of confusion rendered the opposer’s claim of dilution by blurring moot. However, the TTAB held that dilution may exist even in the absence of actual or likely confusion. Thus, the opposer’s dilution claim remained pending.

Section 8 Declaration/Petition for Cancellation

Men’s Wearhouse, LLC v. WKND NYC LLC, Cancellation No. 92081842, 2024 U.S.P.Q.2d 86, 2024 BL 14563 (T.T.A.B. Jan. 16, 2024). Men’s Wearhouse filed a petition for cancellation of a registration owned by WKND NYC (the respondent). The petition was filed one day after the Section 8 declaration deadline for the registration, and before the expiration of the six-month grace period. The respondent failed to file a Section 8 declaration during the grace period, and subsequently the U.S. Patent and Trademark Office’s records reflected the cancellation of the registration. The TTAB then issued a show cause order as to why “cancellation [of Respondent’s registration under Section 8] should not be deemed to be the equivalent of a cancellation by request of Respondent without the consent of the adverse party, and should not result in entry of judgment against Respondent as provided by Trademark Rule 2.134.” The respondent filed a response indicating that its failure to file a Section 8 declaration was due to inadvertence or mistake.

The TTAB noted an analogous decision, Taylor v. Motor Trend Group, LLC, Cancellation No. 92081731, 2023 U.S.P.Q.2d 1051, 2023 BL 317130 (T.T.A.B. Sept. 8, 2023), which determined that “a registration expires by operation of law as of the last day of its ten-year term, and no rights in the registration exist after that date.” The TTAB indicated that due to the respondent’s failure to file the Section 8 declaration during the grace period, the registration was effectively cancelled by operation of law as of “the expiration of 6 years following the date of registration.” As a result, the cancellation petition filed by Men’s Wearhouse was filed after the respondent’s registration was canceled by operation of law. Accordingly, the petition for cancellation was deemed to be moot, and the TTAB’s order to show cause was vacated.