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Easy Tiger: Docuseries Summary Judgment Remanded for Further Fair Use Consideration

by and | Apr 11, 2024 |

Addressing copyright fair use in the wake of the Supreme Court’s recent guidance in Warhol, the US Court of Appeals for the Tenth Circuit partially reversed the district court’s grant of summary judgment in favor of the defendants. The Tenth Circuit held that the first fair use factor (the purpose and character of the use) weighed in favor of the plaintiffs and remanded for further consideration of the accused infringing work’s effect on the potential market for the copyrighted work. Whyte Monkee Productions, LLC; Timothy Sepi v. Netflix, Inc.; Royal Goode Productions, LLC, Case No. 22-6068 (10th Cir. Mar. 27, 2024) (Holmes, C.J.; Hartz, Carson, JJ.)

In 2020, Netflix and Royal Goode Productions (the defendants) released the popular multipart documentary Tiger King: Murder, Mayhem and Madness. Tiger King included eight videos filmed by Timothy Sepi (the plaintiff), seven of which were filmed while Sepi was employed by the zoological park featured in the docuseries. The eighth video, a 24-minute recording of the funeral of Travis Maldonado (who was the husband of Joe Exotic, aka the Tiger King) was filmed by Sepi after his employment ended. After the release of Tiger King, the plaintiffs registered the copyrights for the eight videos and sued the defendants for copyright infringement.

The district court granted summary judgment in favor of the defendants, holding that Sepi did not own the copyright for the seven videos he filmed during his employment because they were “works made for hire” and that the defendant’s use of the eighth video was permissible fair use. The plaintiffs appealed.

On appeal, the plaintiffs argued that the district court erred in holding that seven of the videos were works made for hire because Sepi’s scope of employment “did not extend to cinematography and film editing conducted on his own time.” The plaintiffs also argued that the district court incorrectly assessed each of the fair use factors in connection with the eighth video.

The Tenth Circuit swiftly affirmed the grant of summary judgment on the first seven videos, noting that the plaintiffs’ argument regarding the scope of Sepi’s employment was a new theory on appeal and therefore had been waived. Nonetheless, the Court reversed the grant of summary judgment in favor of the defendants with respect to the eighth video, stating that the district court erred in concluding that the first and fourth fair use factors weighed in favor of the defendants.

As set forth in the Copyright Act, there are four nonexclusive factors to consider in assessing whether the use of a copyrighted work is protected fair use:

  • The purpose and character of the use
  • The nature of the copyrighted work
  • The amount and substantiality of the portion used
  • The effect of the use on the potential market for or value of the copyrighted work.

Important here, the Tenth Circuit noted that all four factors should be weighed together “in light of the aim of copyright, which is ‘to promote the progress of science and the arts, [...]

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ITU Applicants Beware: Federal Courts Have Jurisdiction Over Pending Trademark Applications

by | Apr 11, 2024 |

The US Court of Appeals for the Ninth Circuit affirmed in part a district court’s ruling in a trademark dispute, upholding its decision to invalidate trademark applications. The Ninth Circuit held that district courts have jurisdiction to alter or cancel trademark applications in an action properly brought under 15 U.S.C. § 1119, and that in the context of challenges to intent-to-use (ITU) applications, proof of a lack of bona fide intent can invalidate. BBK Tobacco & Foods LLP v. Central Coast Agriculture, Inc., Case Nos. 22-16190; -16281 (9th Cir. Apr. 1, 2024) (Hurwitz, Desai, JJ.) (Bumatay, J., dissenting).

BBK sells and distributes smoking-related products with BBK’s “RAW” branding. Central Coast Agriculture (CCA) sells cannabis products using “Raw Garden” branding. BBK filed a complaint against CCA including claims of trademark infringement and a petition to void several ITU trademark applications owned by CCA for lack of a bona fide intent to use the relevant trademarks in commerce. Instead of disputing the merits of BBK’s claims, CCA argued that the district court had no jurisdiction to adjudicate this issue. The district court granted summary judgment in favor of BBK on its claims to invalidate the trademark applications. CCA appealed.

The Ninth Circuit affirmed the summary judgment in favor of BBK on its claims to invalidate CCA’s trademark applications. The Court explained that “when an action involves a claim of infringement on a registered trademark, a district court also has jurisdiction to consider challenges to the trademark application of a party to the action.” The Lanham Act, at 15 U.S.C. § 1119, provides that “[i]n any action involving a registered mark the court may determine the right to registration, order the cancelation of registrations, . . . restore canceled registrations, and otherwise rectify the register with respect to the registrations of any party to the action.” The Lanham Act, at § 1051, defines an application for use of trademark as a “request for registration of a trademark on the principal register.” Because a challenge to an application affects the applicant’s right to the registration, the Court reasoned that § 1119 authorizes a district court to resolve disputes over trademark applications.

The Ninth Circuit held that a “lack of bona fide intent to use a mark in commerce is a valid basis to challenge a trademark application,” aligning with decisions in sister circuits and the Trademark Trial & Appeal Board. An applicant can seek to register a mark if the mark is already being used in commerce or if the applicant has a bona fide intention, under circumstances showing the good faith of such person, to use a trademark in commerce. While applicants filing under the ITU provisions may begin the registration process based on a bona fide intent to later use the mark in commerce, the Lanham Act requires such applicants to either subsequently file a verified statement of actual use of the mark or convert their application into a use application. As a result, the Ninth Circuit affirmed the district court’s ruling [...]

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Reasonable Royalty Available for Foreign Activities (But Not This Time)

by | Apr 11, 2024 |

The US Court of Appeals for the Federal Circuit affirmed a district court’s decision to preclude a patent owner from seeking damages based on method claims infringed outside of the United States but confirmed that reasonable royalties are available based on foreign activities. Harris Brumfield v. IBG LLC, Case No. 22-1630 (Fed. Cir. Mar. 27, 2024) (Prost, Taranto, Hughes, JJ.)

Trading Technologies International (TT), whose successor is Harris Brumfield, filed a lawsuit against IBG in 2010 alleging infringement of four patents directed to graphical user interfaces for commodity trading and methods for placing trade orders using those interfaces. During the underlying proceeding, the district court issued several orders. The district court granted IBG’s motion for summary judgment that the claims of two of the patents were invalid. The district court also excluded one of TT’s damages theories concerning foreign activities. Prior to trial, the district court found that two of the patents were invalid as patent ineligible and that the other two patents contained patent eligible subject matter. The district court also excluded one of TT’s damages theories concerning foreign activities.

The case proceeded to trial on the two remaining patents, and the jury found the asserted claims of those two patents infringed. IBG proposed $6.6 million in damages, which corresponds to the total demanded by IBG using IBG’s proposed royalty rate measured against domestic usage, rather than global users. By contrast, TT proposed damages of $962 million, which included all worldwide users of the accused product, regardless of whether they performed the claimed method. The jury agreed with IGB and awarded TT $6.6 million. the district court denied TT’s post-verdict motion for a new trial on damages, a motion in which TT alleged that IBG had misrepresented how it calculated the damages figures it presented to the jury. TT appealed.

Under the Supreme Court’s 2018 decision in WesternGeco v. Ion Geophysical, a patent owner can recover damages in the form of foreign lost profits when infringement is found under 35 U.S.C. § 271(f)(2) of the Patent Act. TT argued that under WesternGeco, it can seek damages in the form of a reasonable royalty based on IBG “making” the accused product in the US, even though the products were used overseas. The Federal Circuit engaged in a detailed description of WesternGeco, concluding that the Court must examine the particular acts alleged to constitute infringement under particular statutory provisions to determine if the allegations focus on domestic conduct. The Court explained that under § 271(a), the making, using, offering to sell and selling provisions are limited to domestic acts. The Court acknowledged that the WesternGeco framework applies to reasonably royalty awards (not just lost profits) and that a reasonable royalty would be the amount a hypothetical infringer would pay to engage in the domestic acts constituting the infringement.

Despite finding that reasonable royalties are permitted under WesternGeco, the Federal Circuit affirmed the district court’s exclusion of TT’s damages theory because TT’s infringement theory about making the accused product [...]

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ITC Shines Light on DI: Complainant Can’t Aggregate Investments Across Patents, Prongs

by | Apr 11, 2024 |

Addressing a determination by its chief administrative law judge (CALJ) finding a violation of § 337, the US International Trade Commission reversed and held that the complainant had not satisfied the economic prong of the domestic industry (DI) requirement by aggregating its investment across multiple asserted patents. Certain Replacement Automotive Lamps (II), Case No. 337-TA-1292 (USITC Mar. 22, 2024).

In late 2021, Hyundai filed a complaint seeking an investigation under 19 U.S.C. § 337 based on alleged infringement of 21 design patents, each covering a different automotive headlamp or taillamp. In response, two of the proposed respondents filed a request seeking early disposition of the economic prong of the domestic industry under the Commission’s 100-day program. Hyundai filed a response opposing the 100-day program request based on the complexity of the issues. The Commission instituted the investigation and denied the 100-day program request, but when setting the procedural schedule, the CALJ scheduled an early evidentiary hearing on the economic prong of the domestic industry pursuant to the Commission’s pilot program for interim initial determinations. Following that initial hearing, the CALJ issued an interim initial determination finding that Hyundai had satisfied the economic prong of the domestic industry requirement. After the full evidentiary hearing, the CALJ issued a final initial determination finding a violation of § 337 by the respondents based on infringement of all asserted patents. The Commission decided to review both the initial and final determinations.

On review, the Commission reversed the finding that the complainant had satisfied the economic prong of the domestic industry requirement. As the Commission explained, where DI products do not have overlapping protection across common asserted patents, a complainant must treat each product as requiring a separate DI showing. The Commission cannot aggregate investments in articles covered by one patent with investments in articles only covered by a different patent. Here, because each DI product practiced only one of the asserted design patents, to satisfy the economic prong Hyundai was required to demonstrate that the investments in each product were independently significant. The Commission also held that investments in plant and equipment (§ 1337(a)(3)(A)) cannot be combined with employment of labor or capital (§ 1337(a)(3)(B)) and concluded that Hyundai had mistakenly aggregated its investments from both prongs.

Commissioner Schmidtlein filed an opinion concurring with the outcome but declining to join the majority opinion based on her view that it went beyond what was necessary to dispose of the investigation.



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PTO Stands by Patent Fee Increases

by | Apr 11, 2024 |

The US Patent & Trademark Office (PTO) issued a notice of rulemaking announcing proposed patent fee increases beginning next year. 89 Fed. Reg. 23226 (April 3, 2024). The proposed increases are generally consistent with the PTO’s May 2023 proposal.

The Notice states that the PTO needs the proposed fee adjustments to provide sufficient revenue to recover costs of patent operations in future years. To that end, the PTO proposes to set or adjust 455 patent fees, including 73 new fees. Complete information about the fee adjustments, including the Notice, is available on the PTO’s website.

The fee increases include higher amounts for routine fees necessary to obtain a patent, including filing, search, examination and issue fees. Excess claim fees will also increase to $200 for each claim over 20 and $600 for each independent claim over three. There will also be an escalating fee structure for terminal disclaimers, ranging from $200 if filed before the first office action to $1,400 if filed after the PTO grants the patent. The fees for filing requests for continued examination (RCE) will now use a tiered fee structure and will increase to $1,500 for the first RCE, $2,500 for the second RCE and $3,600 for the third RCE. Patent Trial & Appeal Board fees will increase by about 25%, and a new fee of $400 will be required for a Request for Director Review of a Board decision.

Written comments on proposed patent fees must be submitted by June 3, 2024, through the Federal eRulemaking Portal.



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Taking the High Road: Ambiguity Regarding “Versions” of Beer Precludes Summary Judgment

by | Apr 4, 2024 |

The US Court of Appeals for the Second Circuit affirmed a district court’s summary judgment denial and determination that the definition of “beer” (which encompassed “other versions and combinations” of beer and malt beverages) in a trademark licensing agreement was ambiguous. Cerveceria Modelo de Mexico, S. de R.L. de C.V. v. CB Brand Strategies, LLC, Case No. 23-810 (2d Cir. Mar. 25, 2024) (Cabranes, Wesley, Lohier, JJ.) (nonprecedential).

In 2013, Modelo granted Constellation Brands a perpetual sublicense to use Modelo’s trademarks for Corona and Modelo to sell “beer” in the United States. The sublicense defined “beer” as “beer, ale, porter, stout, malt beverages, and any other versions or combinations of the foregoing, including non-alcoholic versions of any of the foregoing.” Several years later, Constellation launched Corona Hard Seltzer and Modelo Ranch Water, both of which are flavored alcoholic seltzers derived from fermented sugar.

Modelo sued Constellation in 2021, alleging that Constellation’s sales of the “Corona” or “Modelo” branded hard seltzers violated the sublicensing agreement because the license for use of the marks on “beer” did not encompass sugar-based hard seltzers. Modelo moved for summary judgment, which the district court denied after determining that the agreement’s definition of “beer” was ambiguous. At trial, the jury found that Modelo had failed to show that the seltzers were not “beer” under the sublicense definition. Modelo appealed.

Modelo asserted that the district court erred in denying summary judgment, arguing that the agreement’s definition of “beer” was unambiguous and challenged the district court’s jury instructions and exclusion of certain evidence at trial.

The Second Circuit agreed that the term “beer” as used in the agreement was ambiguous. The Court noted that a motion for summary judgment in a contract dispute generally may only be granted when the relevant language has a definite meaning and is unambiguous. Modelo argued that the sublicense plainly excluded the hard seltzers because they were not “beer,” “malt beverages,” or versions or combinations of either. Modelo contended that the term “versions” was limited to beverages with characteristics in common with “beer” and “malt beverages” and would not include “malt-free,” “hops-flavorless” hard seltzers.

The Second Circuit assumed for purposes of the opinion that the plain and ordinary meaning of “beer” and “malt beverages” excluded seltzers but reasoned that Corona Hard Seltzer and Modelo Ranch Water could plausibly be understood as a “version” of either. The Court found Modelo’s limited view of the term “versions” unpersuasive, given that the sublicense allowed for “nonalcoholic versions” of beer and malt beverages, even though dictionary definitions uniformly define “beer” as containing alcohol. Because each party’s reading of “versions” was at least plausible, the Court concluded that the relevant contract language was ambiguous and affirmed the district court’s summary judgment denial.

Modelo also argued that the district court failed to instruct the jury that undefined words should be given their plain and ordinary meaning and improperly instructed the jury to ignore dictionary definitions. The Second Circuit rejected this argument, noting that the instructions properly informed the jury [...]

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Faulty Jury Instruction Tampered With Tamper-Proof Trial

by | Apr 4, 2024 |

The US Court of Appeals for the Federal Circuit affirmed in part, vacated in part and remanded a district court decision after concluding that a jury instruction on the objective indicia of nonobviousness that failed to specify all indicia on which evidence had been received constituted prejudicial legal error. Inline Plastics Corp. v. Lacerta Group, LLC, Case Nos. 22-1954; -2295 (Fed. Cir. Mar. 27, 2024) (Taranto, Chen, Hughes, JJ.)

Inline Plastics owns a patent family pertaining to containers with specific tamper-proof features and methods of producing these containers using thermoformed plastic. The invention is intended to deter unauthorized tampering with products in the containers. These tamper-proof features serve to prevent theft and product loss and maintain consumer confidence in product integrity.

Inline sued Lacerta Group for patent infringement over its tamper-proof technology. The district court made several significant pretrial rulings, including a claim construction order, and granted Inline’s motion for partial summary judgment of infringement on some of the asserted claims. During trial, Inline voluntarily withdrew certain claims, and the jury returned a verdict declaring all remaining claims (even those on which summary judgment had been granted) invalid and not infringed. After trial, Inline sought partial final judgment, which was granted, but also motioned for judgment as a matter of law and a new trial on invalidity. The district court denied Inline’s motions. Both Inline and Lacerta appealed.

Inline argued that it was entitled to judgment as a matter of law of no invalidity and that an error in the jury instructions requires a new trial on invalidity. Lacerta cross-appealed, challenging the denial of attorneys’ fees and the “without prejudice” dismissal of certain patent claims that Inline voluntarily dropped from its asserted-claims list near the end of trial.

The Federal Circuit rejected Inline’s argument for judgment as a matter of law of no invalidity but agreed with Inline that the jury instruction on the objective indicia of nonobviousness constituted prejudicial legal error. The Court determined that the jury could have reasonably found obviousness and rejected Inline’s three arguments against it. First, Inline argued deficiencies in Lacerta’s prior art references and expert testimony, but the Court found these arguments unpersuasive. Second, Inline challenged Lacerta’s evidence of motivation to combine references, but the Court found enough support to prove a motivation to combine. Third, Inline argued that Lacerta’s challenge failed because there was no rebuttal or opinion on objective-indicia evidence. The Court dismissed this argument, explaining that the absence of such testimony did not necessarily discredit the patentee’s evidence on nonobviousness. According to the Court, Inline failed to explain why the jury could not reasonably assign little weight to its objective-indicia evidence, which led the Court to reject Inline’s categorical argument based on the absence of expert testimony from Lacerta’s side.

However, the Federal Circuit agreed with Inline’s argument for a new trial on invalidity. The Court explained that jury instructions must be legally correct and sufficiently comprehensive to address disputed evidence. The Federal Circuit concluded that the district court’s objective-indicia instruction [...]

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Who Solved the Problem? Joint Inventors, That’s Who

by | Apr 4, 2024 |

The US Court of Appeals for the Federal Circuit affirmed a district court’s decision to correct inventorship in a post-issuance inventorship dispute, finding that the alleged joint inventors’ contributions were significant even though they were mostly unclaimed. Tube-Mac Indus., Inc. v. Campbell, Case No. 22-2170 (Fed. Cir. Mar. 15, 2024) (Lourie, Hughes, Stark, JJ.) (nonprecedential).

Steve Campbell was the original sole inventor named on a utility patent application directed to a container for transporting gaseous fluids. Before Campbell filed the patent application, Campbell’s prototypes had a “major problem” with the container’s liner. Campbell enlisted the help of Tube-Mac Industries’ Gary Mackay and Dan Hewson to solve the problem. Campbell, Mackay and Hewson exchanged plans regarding the problem over the course of several months. Campbell’s patent issued, naming himself as the sole inventor. Mackay, Hewson and Tube-Mac filed suit seeking to be named as co-inventors. The district court agreed and ordered correction of the patent under 35 U.S.C. § 256. Campbell appealed.

A court may order a correction of inventorship when it determines that an inventor has been erroneously omitted from a patent. In any inventorship challenge, the inventors listed in an issued patent are presumed to be the correct inventor(s). Thus, a party challenging inventorship must prove incorrect inventorship by clear and convincing evidence. A joint inventor must contribute significantly to the invention’s conception or reduction to practice when that contribution is measured against the scope of the full invention.

The Federal Circuit found that prior to the involvement of Mackay and Hewson, Campbell did not have a viable invention that could be reduced to practice without extensive experimentation. The Court also found that Mackay’s and Hewson’s contributions solved the problem that precluded the prototype from being successful, even though their contributions were “mostly unclaimed.” The Court noted, however, that their contributions were included in the application’s figures, specifications and dependent claims. Accordingly, the Court found that Mackay and Hewson contributed significantly to the conception of the invention and should be included as co-inventors.

The Federal Circuit also dismissed Campbell’s arguments that the district court did not properly construe the claims to determine their scope and erred by misidentifying the subject matter of the claims.



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PTO Proposes Trademark Application Filing Changes, Fee Adjustments

by | Apr 4, 2024 |

On March 26, 2024, the US Patent & Trademark Office (PTO) issued a notice of proposed rulemaking in the Federal Register concerning changes to trademark application filings and fee adjustments in trademark cases for 2025. The PTO solicits written comments from the public on the proposed rule changes on or before May 28, 2024. The proposed rules seek to generate sufficient multiyear revenue for trademark operations in future years based on projections described in the notice.

The changes are recommended to support the PTO’s strategic goals and objectives, including optimizing trademark application pendency through the promotion of efficient operations and filing behaviors, issuing accurate and reliable trademark registrations, and encouraging access to the trademark system for stakeholders.

The proposal seeks to incentivize more complete and timely filings, improve prosecution, adjust 31 trademark fees and impose 12 new fees while discontinuing six existing fees. The proposal also seeks to consolidate the present Trademark Electronic Application System (TEAS) filing options (i.e., TEAS Plus and TEAS standard) into a single electronic filing option. The single option would include most of the same requirements as TEAS Plus, while eliminating those under TEAS Standard. The new filing framework would discontinue the previous filing fees and fees for failing to meet the requirements of a TEAS Plus application. Similar to TEAS Plus, however, applicants complying with the proposed requirements in their initial filing would pay the lowest fees.

The proposed fee adjustments would:

  • Set the fee for a base application at $350 using the ID Master List (which is $100 more than the current fee for a TEAS Plus application)
  • Discontinue current fees for filing an application under the Madrid Protocol
  • Require surcharge fees between $100 and $200 for applications that are noncompliant with the base filing requirements
  • Require an additional $200 fee per class for the identification of goods and services entered in the free-form text field to incentivize use of the Trademark ID Manual for such identifications instead
  • Require an additional $200 fee for each additional group of 1,000 characters in the free-form text field; identifications directly from the ID Manual would not incur these fees
  • Increase fees by $50 for filing amendments to allege use (AAU) and statements of use (SOU), with fees being discounted $100 for electronic filings
  • Increase post-registration maintenance fees from $50 to $75
  • Increase the letter of protest fee from $50 to $150.

Regarding the proposed fee adjustments, the notice describes changes to 37 CFR 2.6 and 7.6. The notice further describes changes to 37 CFR 2.22 and 2.71 with respect to base application fees and amendments to correct informalities, respectively.

For further details, see the Federal Register notice.



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What Use Does § 271(e)(1) Safe Harbor “Solely” Protect?

by | Apr 4, 2024 |

The US Court of Appeals for the Federal Circuit affirmed that the 35 U.S.C. § 271(e)(1) safe harbor protecting certain infringing acts undertaken for regulatory approval applied to an alleged infringer’s importation of transcatheter heart systems while attending a trade conference, finding the importation reasonably related to submitting information to the US Food & Drug Administration (FDA) for medical device approval. Edwards Lifesciences Corp. v. Meril Life Sciences Pvt. Ltd., Case No. 22-1877 (Fed. Cir. Mar. 25, 2024) (Stoll, Cunningham, JJ.) (Lourie, J., dissenting).

The fact pattern in this case is unusual. Meril, a manufacturer of a transcatheter heart system approved for sale in Europe but not in the United States, brought two demonstration samples to San Francisco with lawyer-generated instructions that the samples could not be used, sold or offered for sale in the US. Meril presented at a trade booth during a cardiovascular medical device conference. It was undisputed that the samples never left a bag that was first kept at a hotel and later brought to the conference and placed in a storage room.

Edwards Lifesciences nevertheless sued for infringement based on importation. The district court found that Meril’s importation was reasonably related to its attempts to secure regulatory approval because they were for the purposes of recruiting investigators for a clinical trial Meril had made initial efforts to commence (as required to market this type of device in the US). Accordingly, the district court granted summary judgment of noninfringement on grounds that the safe harbor under § 271(e)(1) applied. Edwards appealed.

Edwards argued that the district court erred by not finding a genuine material dispute of fact relating to Meril’s subjective intent (i.e., whether, notwithstanding some evidence, Meril actually intended the importation to relate to FDA approval). Edwards also challenged whether the importation was solely related to FDA approval and argued that the non-use of the devices to recruit investigators rendered the safe harbor inapplicable.

The Federal Circuit rejected all three challenges. Canvassing the Federal Circuit’s decades of prior case law, the Court concluded that a putative infringer’s intent is irrelevant when determining whether the safe harbor applies. Thus, even if Edwards were correct in challenging Meril’s intent, there would still be no material factual dispute. On the issue of whether the importation activity was solely related to FDA approval, the Court, discussing the use of “solely” in terms of the safe harbor provision, reiterated prior cases’ determination that the uses need not be solely related to FDA approval, but rather, that the only uses that would be protected were those within the safe harbor. Finally, the Court again deemed the non-use of the devices irrelevant, as nothing in the statute required actual use.

Judge Lourie dissented, not because he necessarily viewed the district court’s or the majority’s application as squarely incorrect under existing precedent, but because he believed that existing precedent did not expressly give proper weight to the statute’s use of the word “solely.” Applying a plain text analysis, Judge Lourie argued that the safe harbor [...]

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