On June 30, 2020, the U.S. Supreme Court held that the addition of ".com" to a generic term can create a protectable trademark. Patent and Trademark Office v. Booking.com B.V., 591 U.S. ___ (2020). In affirming the Fourth Circuit's decision, the Court rejected the PTO's "nearly per se rule" that when a generic term is combined with a generic top-level domain the resulting combination is generic. Full text of the opinion is available here.
On May 14, 2020, the U.S. Supreme Court ruled that federal preclusion principles do not bar a defendant from raising a defense it failed to litigate in an earlier suit. Lucky Brand Dungarees, Inc. v. Marcel Fashions Grp., Inc., U.S., 590 U.S. ___ (2020). The Court reversed and remanded the Second Circuit's decision.
Marcel sued Lucky Brand in 2001 alleging that Lucky Brand's use of "Get Lucky" infringed Marcel's trademark. The parties settled and Lucky Brand agreed to stop using the phrase "Get Lucky." In 2005, Lucky Brand sued Marcel for copying its designs and logos and Marcel counterclaimed on Lucky Brand's continued use of "Get Lucky." Lucky Brand argued that Marcel's counterclaims were barred by the settlement agreement. The court permanently enjoined Lucky Brand from copying or imitating "Get Lucky" mark and the jury found in favor of Marcel's counterclaims. In 2011, Marcel sued Lucky Brand for continuing to infringe "Get Lucky" mark but not the "Get Lucky" phrase. Lucky Brand moved to dismiss arguing that Marcel had released its claims in the settlement agreement. Marcel responded that Lucky Brand couldn't invoke the release defense because it failed to pursue that defense in the 2005 action. The District Court granted the motion to dismiss holding that Lucky Brand could assert its release doctrine and the settlement agreement barred Marcel's claims. The Second Circuit vacated the decision concluding that "defense preclusion" barred Lucky Brand from raising it in the 2011 suit.
In a unanimous decision, Justice Sotomayor explained that the Court has never recognized "defense preclusion" as a standalone category of res judicata and that "preclusion of defenses must  satisfy the strictures of issue preclusion or claim preclusion." As the parties agreed that issue preclusion did not apply, Lucky Brand's defense could only be barred under claim preclusion which requires the causes of action to have a "common nucleus of operative facts." While the 2005 action was on Lucky Brand's use of "Get Lucky", the 2011 action alleged Lucky Brand's use of Marcel's other marks containing the word "Lucky" but not the use of "Get Lucky" itself. Further, the conduct in 2011 action occurred after the conclusion of the 2005 action and therefore, did not support claim preclusion.
Full text of the opinion is available here.
The U.S, Supreme Court granted certiorari in the copyright case between Oracle and Google over the use of Java in Google's Android OS. Google LLC v. Oracle Am., Inc., No. 18-956 (Nov. 15, 2019) (cert granted). Two questions are presented in this case: (1) Whether copyright protection extends to software interface; and (2) whether the use of software interface in creating a new computer program a fair use.
Oracle sued Google in N.D.Cal. for copyright violations for using 37 packages of Java API in Android OS. Google claimed fair use to allegations of copyright infringement. Jury found Google guilty of infringement but was deadlocked on fair use. Therefore, the district judge ruled that the API packages were not copyrightable. Oracle appealed to the Federal Circuit and the appeals court reversed the district court find that the SSO of Java API packages were copyrightable. Google then filed a writ to the Supreme Court but the Court denied review based on the Solicitor General's views. The case then went back to the district court.
In the second trial, Google won on fair use defense. Oracle then appealed to the Federal Circuit and it once again reversed the district court concluding that Google's use of Java API packages was not fair use. Google then filed a writ and the Supreme Court granted cert.
On Jan. 22, 2019, the U.S. Supreme Court unanimously affirmed Federal Circuit's decision regarding "on sale" bar under AIA's 35 USC 102(a)(1) by holding that the catchall phrase "otherwise available to the public" did not alter the meaning of "on sale." Helsinn Healthcare S.A. v. Teva Pharm. USA, Inc., 586 U.S. ___ (2019). Petitioner Helsinn, a Swiss pharma, acquired rights to palonosetron, the active ingredient in Aloxi. Helsinn submitted protocols for Phase III clinical trials for 0.25mg and 0.75mg dose of palonosetron. Helsinn and MGI Pharma entered into a license agreement, and a supply and purchase agreement. Both agreements included the dosage information and MGI disclosed these agreements in its SEC 8K filing after redacting the dosage information. Two years thereafter, Helsinn filed a provisional patent application covering the above dosages and the asserted patent issued from an application filed on May 2013 claiming priority to the provisional application. Teva filed an ANDA and asserted that the patent was invalid because the 0.25mg dose was "on sale" more than one year before Helsinn filed the provisional patent application.
The district court concluded that the "on sale" provision did not apply because the public disclosure of the agreements did not disclose the dosages and therefore the invention was not "on sale" before the critical date. The Federal Circuit reversed concluding that "if the existence of the sale is public, the details of the invention need not be publicly disclosed in the terms of sale" to fall within the AIA's on-sale bar. In affirming the Federal Circuit, the Supreme Court reasoned that the Court's precedence suggest that a sale or offer of sale need not make an invention available to the public and that "secret sales" can invalidate a patent. According to the Court, the phrase "on sale" had acquired a well-settled meaning when the AIA was enacted and that Congress did not intend to upset that precedent with the addition of a broad catchall phrase. The Court then held that Congress did not alter the meaning of "on sale" when it enacted the AIA and that an inventor's sale of an invention to a third party who is obligated to keep the invention confidential can qualify as a prior art under 35 USC 102(a).
The takeaway from the Supreme Court's decision is that secret sales can be prior art. Any patent application filing must consider the date of such sales for prior art purposes.
Full text of the opinion is available here.
On June 22, 2018, in a 7-2 decision, the U.S. Supreme Court held that a patent owner may recover lost foreign profits under 35 USC 284 for infringement under Section 271(f)(2). WesternGeco LLC v. Ion Geophysical Corp., 585 U.S. __ (2018). WesternGeco LLC, owner of four patents relating to lateral-steering technology for surveying the ocean floor, performs surveys for oil and gas companies using its patented technology. ION Geophysical manufactured components in the US and shipped to companies abroad who combined them to create a competing system indistinguishable from WesternGeco. WesternGeco sued for patent infringement under Section 271(f)(1) and (f)(2). At trial, WesternGeco proved that it lost 10 contracts due to ION's infringement and the jury awarded damages of $12.5 million in royalties and $93.4 million in lost profits. The district court denied ION's post-trial motion to set aside the verdict and dismissed the arguments that 271(f) does not apply extraterritorially to lost profits. On appeal, the Federal Circuit reversed the award of lost-profits damages holding that Section 271(a) does not allow patent owners to recover for lost foreign sales. The Court granted cert, vacated the Federal Circuit's judgment and remanded it in light of its Halo Elec. v. Pulse Elec. decision. On remand, the Federal Circuit reinstated its decision regarding the extraterritoriality of Section 271(f). The Court again granted cert.
In his opinion, Justice Thomas acknowledged that there's a presumption against extraterritoriality of federal statutes but questions of extraterritoriality are determined using a two-step framework. The first step asks whether the presumption has been rebutted by a clear indication of extraterritorial application in the statutory text. The second step asks whether the case involves a domestic application of the statute, which is determined by identifying the statute's focus and asking whether the conduct relevant to that focus occurred in the U.S territory. If it did, then it's a permissible domestic application of the statute. In resolving this case under step two using the court's discretion, the Court reasoned that step one would require resolving difficult questions that do not change the outcome of the case but could have far-reaching effects in future cases.
Justice Thomas, citing the Court's decision in RJR Nabisco v. European Community, which found that conduct relevant to a statute's focus which occurs in the U.S. involves a permissible domestic application of the statute, even if other conduct occurred abroad. The Court found that the focus of Section 284, in a case involving infringement under Section 271(f), is on the act of exporting components from the U.S. and therefore, the focus is domestic conduct. Because ION's domestic act of supplying the components that infringed WesternGeco's patents, lost-profits damages that were awarded were a domestic application of Section 284.
In his dissenting opinion, joined by Justice Breyer, Justice Gorsuch agreed with the Federal Circuit's result in concluding that the Patent Act forecloses claim for lost profits because in their view the Act's terms prohibit the lost profits sought in the case whatever the general presumption against extraterritoriality applicable to all statutes might allow.
On April 24, 2018, the U.S. Supreme Court issued its decisions in two much-awaited patent cases involving inter partes review. In Oil States, in a 7-2 decision, the Court held that inter partes reviews were constitutional under the public-rights doctrine. Oil States Energy Svcs., LLC v. Greene's Energy Group, LLC, 584 U.S. ___ (2018). In SAS, in a 5-4 decision, the Court held that the PTAB must decide the patentability of all the claims the petitioner has challenged in an inter partes review. SAS Inst. Inc. v. Iancu, 584 U.S. ___ (2018).
Oil States Energy Svcs., LLC v. Greene's Energy Group, LLC
In Oil States, petitioner Oil States Energy Services, LLC obtained a patent relating to technology for protecting wellhead equipment used in hydraulic fracturing. Oil States sued Greene's Energy Group, LLC for infringement and Greene's Energy challenged the validity in district court and also filed an IPR petition. The district court issued a claim construction order favoring Oil States while the PTAB concluded that the patented claims were invalid. Oil States appealed to the Federal Circuit challenging the PTAB decision and the constitutionality of IPR. While the appeal was pending, the Federal Circuit rejected the constitutionality of IPR in a separate case and summarily affirmed the PTAB's decision involving Oil States.
On appeal, the U.S. Supreme Court held that the inter partes review does not violate Article III. Writing for the majority, Justice Thomas reasoned that IPR falls squarely within the public-rights doctrine and that patents are "public franchises." According to the Court, IPR involves the same basic matter as the grant of a patent subject to the Board's authority and that the Court has recognized that franchises can be qualified in this manner. Addressing the petitioner's arguments, the Court found that the three decision recognizing patent rights are private property were decided under a different statutory scheme, historical practice where courts have adjudicated patent validity does not foreclose Congress from assigning matters governed by public-rights doctrine to the Executive, and that the similarities between the various procedures used in IPR and in courts does not lead to the conclusion that IPR violates Article III. The Court went on to to say that the holding is narrow and does not address whether patents are property for the purposes of Due Process Clause or the Takings Clause.
In his dissent, Justice Gorsuch joined by Chief Justice Roberts, stated that the decision signaled a retreat from Article III's guarantees that "suits at the common law, or in equity, or admiralty" must be heard by independent judges.
Full text of the Oil States opinion is available here.
SAS Institute Inc. v. Iancu
In SAS, petitioner SAS Institute sought an inter partes review of ComplementSoft's software patent alleging that all 16 of the claims were unpatentable. The Director instituted review of only claims 1 and 3-10 and denied review on the rest. At the end of litigaton, PTAB issued a final written decision finding claims 1, 3 and 5-10 to be unpatentable while upholding claim 4. PTAB's decision did not address the remaining claims on which the Director had refused review. SAS appealed to the Federal Circuit which affirmed the Board's decision and dismissed SAS's argument that 35 USC 318(a) required the Board to decide the patentability of every challenged claim in the petition. SAS filed a writ of certiorari.
On appeal, the U.S. Supreme Court, in a 5-4 decision, held that the Patent Office must decide the patentability of all of the claims the petitioner has challenged in an IPR instituted by the PTAB.
Full text of the SAS opinion is available here.
There are numerous IP related review requests before the Supreme Court as its 2017-2018 term begins on October 2, 2017. Several petitions seeking review of IP issues have been filed with the Court. The Court will be hearing oral arguments in the upcoming term on the constitutionality of AIA trials in Oil States Energy Services, LLC v. Greene's Energy Group, LLC, No. 16-712. For more on the list, please click here.
On June 19, 2017, the U.S. Supreme Court held that trademarks are private speech protectable under the First Amendment and ban on registration of disparaging trademarks violates the Free Speech Clause. Matal v. Tam, 582 U.S. ___ (2017). Simon Tam, lead singer of the rock group "The Slants", sought federal registration of the mark "The Slants" in an effort to reclaim and take ownership of Asian stereotypes. USPTO refused registration finding that "even though Tam may have chosen the mark to reappropriate the disparaging term, a substantial portion of persons of Asian descent would find the term offensive." TTAB affirmed the USPTO's refusal and Tam appealed to the Federal Circuit. A panel of the court affirmed the TTAB's ruling but an en banc court, in a 9-2 decision, determined that Section 2(a) of the Lanham Act is facially unconstitutional.
In an unanimous decision, the Supreme Court affirmed the Federal Circuit's en banc ruling. The Court rejected the government's argument that trademark registration is not subject to First Amendment scrutiny as it is government speech rather than private speech. The Court noted that there are more than 2million trademarks and these marks do not convey any government message. The Court also rejected the argument that trademark registration is a government subsidy noting that no payments are made to applicants while subsidies involve cash payments or equivalents. Finally, the Court rejected the argument that trademarks are commercial speech noting that the disparagement clause cannot withstand the relaxed scrutiny under Central Hudson as it neither serves a substantial interest nor is it narrowly drawn.
Full text of the opinion is available here.
On June 12, 2017, the U.S. Supreme Court granted certiorari on the constitutionality of IPRs. Oil States Energy Svcs, LLC v. Greene's Energy Group, LLC, 639 Fed. Appx. 539 (Fed. Cir. 2016), cert. granted, No. 16-712 (June 12, 2017). The Court presented the following questions: (1) whether inter partes review-an adversarial process used by the PTAB to analyze the validity of existing patents-violates the Constitution by extinguishing private property rights through a non-Article III forum without a jury; (2) whether the amendment process implemented by the PTO in IPR conflicts with this Court's decision in Cuozzo, and congressional direction; and (3) whether the "broadest reasonable interpretation" of patent claims-upheld in Cuozzo for use in IPR requires the application of traditional claim construction principles, including disclaimer by disparagement of prior art and reading claims in light of the patent's specification.
On June 12, 2017, the U.S. Supreme Court ruled that biosimilar makers can give 180-day notice of commercial marketing prior to obtaining license from the FDA. Sandoz Inc. v. Amgen Inc., 582 U.S. __ (2017). The Biologics Price Competition and Innovation Act of 2009 (BPCIA) provides an expedited pathway for obtaining FDA approval for a biosimilar to an already licensed biological product under 42 USC 262(k). Under 262(l)(2)(A), within 20 days of receiving notice from the FDA that an application has been accepted for review, the applicant must provide its application and manufacturing information to the manufacturer of referenced products (sponsor). Section 262(l)(3) triggers exchange of information between the applicant and sponsor and Section 262(l)(8)(A) requires the applicant to provide sponsor a notice at least 180 days prior to commercial marketing of the biosimilar.
Sandoz filed a 262(k) application for a biosimilar of Amgen's Neupogen. After receiving the FDA notice, Sandoz informed Amgen of the application but failed to provide a copy of the application or information on its manufacturing process. Amgen sued Sandoz for violating the BPCIA. During the pendency of the law suit, and after FDA's approval of its application, Sandoz notified Amgen its intent to launch commercial marketing. The district court granted Sandoz's partial judgment on the pleadings finding that Sandoz wasn't required to provide Amgen with a copy of the application or manufacturing information, and that the 180-day notice is effective even if it is provided prior to FDA's approval of the application. The Federal Circuit affirmed the dismissal of claim based on violation of section 262(l)(2)(A) holding that Sandoz did not violate the BPCIA in failing to disclose the application and manufacturing information but it enjoined Sandoz from marketing the biosimilar until 180 days after the date of notice as the notice requirement is mandatory under section 262(l)(8)(A).
The Supreme Court affirmed in part the holding that the requirement to provide information on application and manufacturing information was not enforceable by injunction and that the sponsor may bring a DJ action of patent infringement for an applicant's failure to provide such information. As to the 180-day rule, the Court held that the plain language of the statute and its context confirms a single timing requirement (180days before marketing) rather than two requirements posited by the Federal Circuit (after licensing, and 180 days before marketing) and accordingly, reversed the Federal Circuit's on that ground.
Full text of the opinion is available here.
Disclaimer: The content in this blog is solely for informational purposes and does not constitute legal advice.