The Supreme Court heard oral arguments regarding venue in patent actions. TC Heartland LLC v. Kraft Food Brands Group LLC, No. 16-341, oral argument 3/27/2017. The question presented by the Court was whether 28 USC 1400(b) is the sole and exclusive provision governing venue in patent infringement actions and is not to be supplemented by 28 USC 1391(c). The petitioner in this case challenged the Federal Circuit's precedence that amendments to Section 1391(c) justified its departure from Supreme Court's interpretation of Section 1400(b) in Fourco Glass Co. v. Transmirra Products Corp., 353 US 222 (1957).
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On March 22, 2017, the U.S. Supreme Court in a 6-2 decision held that cheerleader uniforms made from fabric that features a pattern of lines, chevrons, and colorful shapes are copyright protectable as a design of a useful article with graphical features that are separable and capable of existing independently of the uniforms. Star Athletica, LLC v. Varsity Brands, Inc., 580 U.S. ___ (Mar. 22, 2017).
Varsity Brands sued its competitor Star Athletica for copyright infringement of its designs that appear in cheerleading uniforms. The district court ruled a summary judgment of noninfringement finding that the designs were not separable from the utilitarian function of the uniform because the designs served the function of identifying the garments as cheerleading uniforms. The Sixth Circuit reversed finding the designs could be identified separately and were capable of existing independently of the uniforms. Star Athletica appealed to the Supreme Court. In a 6-2 decision the Court affirmed the Sixth Circuit decision that cheerleading uniforms are copyright protectable holding that a feature incorporated into a design of a useful article is eligible for protection only if the feature can be perceived as a 2- or 3-dimensional work of art separate from the useful article and would qualify as a protectable pictorial, graphic or sculptural work. Writing for the majority, Justice Thomas reasoned that the decisionmaker need not imagine a fully functioning useful article without the artistic feature but only that the separated feature qualify as a non-useful pictorial, graphic or sculptural work on its own. In his dissenting opinion, Justice Breyer noted that the design features here are not separable from the cheerleader uniform because after they are removed in the imagination, there remains a picture of a cheerleader uniform. Full text of the opinion is available here. In a 7-1 decision, the Supreme Court held that the equitable defense of laches (i.e., delay in filing suit for patent infringement) cannot be invoked against a claim for damages brought within Section 286's 6-year statute of limitations. SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC, 580 U.S. ___ (Mar. 21, 2017).
In 2003, SCA sent a cease and desist letter to First Quality alleging patent infringement to which First Quality responded that the asserted patent was invalid in view of its own patent. In July 2004, SCA initiated a reexam in light of the First Quality patent and in 2007, the PTO confirmed validity. In 2010, SCA sued First Quality and First Quality moved for summary judgment based, in part, on laches. District court granted summary judgement and on appeal, the Federal Circuit reversed the lower court's decision finding that SCA's claims were barred by laches. The en banc court reaffirmed, after considering the Supreme Court's Petrella decision, holding that laches can be a defense to a claim asserted within the 6-year period set out in the Patent Act. Writing for the majority, Justice Alito reasoned that laches defense does not apply for the following reasons: (1) under separation of power, equitable defense of laches does not apply where there is a statute of limitations; (2) even though relevant provisions of the Copyright and Patent Acts are worded differently, Petrella's reasoning applies here as well; and (3) that there were very few cases to establish a consensus in favor of laches. In his dissent, Justice Breyer argued that courts have unanimously applied laches in patent damages and that the majority opinion failed to identify a single case that held otherwise. Full text of the opinion is available here. The USITC issued a general exclusion order against certain woven textile fabrics and products that are falsely advertised by misrepresenting the thread count. Certain Woven Textile Fabrics and Products Containing Same, Inv. No. 337-TA-976 (Mar. 20, 2017). AAVN filed a complaint alleging Section 337 violation in the importation into the U.S. and the sale of certain woven textile fabrics and products based upon false advertising claims. Fourteen of the fifteen respondents settled and ALJ Essex granted AAVN’s motion of summary determination against the last remaining respondent Pradip Overseas Ltd., where Pradip’s “800 Thread Count” bed sheets were measured by AAVN at 252 threads. In affirming the ALJ’s grant of a GEO, the Commission agreed the GEO is appropriate given the pattern of widespread violation and the difficulty in identifying the source of infringing products. The decision highlights Section 337’s broad reach into unfair acts in importation beyond the typical patent or trade secret investigations.
Plaintiff Intellectual Ventures appealed dismissal of infringement claims under Rule 12(b)(1) for lack of standing or under Rule 12(b)(6) for patent ineligibility under Section 101. The Federal Circuit affirmed the 12(b)(1) dismissal for lack of standing agreeing with the district court's conclusion that plaintiff did not own the rights because a particular assignor did not assign any rights in the then-pending application to the asserted patent thereby breaking a chain in ownership. Intellectual Ventures LLC v. Erie Indemnity Co., No. 2016-1128, -1132 (Mar. 7, 2017). The Federal Circuit affirmed the 12(b)(6) dismissals of two other patents.
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