IP UPDATE
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No Breach of Contract Where Company Disclosed Its Own Non-Public Information

by | Apr 14, 2022 |

The US Court of Appeals for the Eighth Circuit affirmed a district court’s dismissal of a trade secret lawsuit against a consultant that allegedly failed to prevent its client from disclosing its own proprietary information during a call with a potential buyer. Protégé Biomedical, LLC v. Duff & Phelps Securities, LLC, and Philip I. Smith, Case No. 21-1368 (8th Cir. Apr. 4, 2022) (per curiam) (Erickson, J., dissenting).

Protégé entered into an agreement with Duff & Phelps to help Protégé find a buyer for its business. Under the agreement, Duff & Phelps received immunity from certain types of claims, its employees were shielded from individual liability and it owed no fiduciary duties to Protégé.

One of Protégé’s competitors, Z-Medica, was identified as a potential buyer. One of Duff & Phelps’s employees, Philip Smith, facilitated execution of the non-disclosure agreement (NDA) by a member of Z-Medica’s board of directors. Protégé assumed that the NDA would also bind Z-Medica and thus participated in conference calls with Z-Medica in which Protégé revealed non-public information. In Z-Medica’s view, however, the board member signed the NDA in his personal capacity and not as Z-Medica’s representative. As a result, Z-Medica used the information it received from Protégé to create its own competing product.

Protégé sued Z-Medica. After settling with Z-Medica, Protégé sued Duff & Phelps and Smith in state court for breach of contract, unlawful practice of law, negligence, breach of professional services and breach of fiduciary and principal-agent duties. Duff & Phelps removed the case to federal court on the ground that Smith, the only non-diverse defendant, had been fraudulently joined. The district court dismissed the case for failure to state a claim. Protégé appealed.

The Eighth Circuit first analyzed whether the case belonged in federal court. The Court upheld the district court’s determination that Smith was fraudulently joined. The Court stated that fraudulent joinder occurs when there is no reasonable basis in fact and law for the claims brought against the non-diverse defendant. Here, the Court found that there was no reasonable basis for Protégé to allege breach of contract against Smith since he was never a party to the contract between Protégé and Duff & Phelps. The Court found that Protégé’s unlawful practice of law claim against Smith also constituted fraudulent joinder because Smith never gave legal advice to Protégé. The Court noted that the contract immunized Smith from Protégé’s other claims and thus, without any viable claims against Smith, the case was properly in federal court under 28 U.S.C. § 1332.

Turning to the merits of the claims against Duff & Phelps, the Eighth Circuit affirmed the dismissal for failure to state a claim. The Court reasoned that Protégé’s breach of contract claim was predicated on an alleged failure by Duff & Phelps to prevent Protégé from disclosing its proprietary information. However, the agreement only made Duff & Phelps responsible for its own conduct, not for Protégé’s conduct. The Court explained that Protégé’s other claims failed for the same reason.

Judge Erickson [...]

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Missed Connection: Avoid Claim Construction Rendering Independent Claim Narrower Than Dependent Claim

by | Apr 14, 2022 |

The US Court of Appeals for the Federal Circuit vacated a district court’s claim constructions concerning generic independent claims that were amended after a species restriction requirement, because the district court disregarded the doctrine of claim differentiation after incorrectly concluding that the examiner had mistakenly rejoined withdrawn claims. Littelfuse, Inc. v. Mersen USA EP Corp., Case No. 21-2013 (Fed. Cir. Apr. 4, 2022) (Prost, Bryson, Stoll, JJ.)

Littelfuse owns a patent directed to a fuse end cap for providing an electrical connection between a fuse and an electrical conductor. The specification teaches three embodiments of the invention:

  1. A single-piece machined end cap comprising a mounting cuff and a terminal
  2. A single-piece stamped end cap comprising a mounting cuff and a terminal
  3. A two-piece assembled end cap comprising a mounting cuff, a terminal and a fastening stem attaching the mounting cuff to the terminal.

The originally filed claims included independent claims covering an end cap with a mounting cuff and a terminal, and dependent claims directed to the three embodiments. The claims directed to the two-piece assembled end cap embodiment contained the limitation that the terminal is press-fit onto the fastening stem.

During prosecution, the examiner issued a restriction requirement, asserting that the independent claims were generic to the three species in the dependent claims. Littelfuse elected to prosecute the assembled end cap species and the examiner withdrew the claims directed to the other embodiments. In response to a novelty rejection, Littelfuse amended the independent claims by adding the fastening stem element without specifying that the terminal is press-fit onto the stem. After allowing the amended independent claims, the examiner concluded that the previously withdrawn claims “require all the limitations of the . . . allowable claims,” and thus rejoined them.

Littelfuse sued Mersen for selling allegedly infringing fuses. The parties asked the district court to determine whether the fastening stem element in the independent claims limited Littelfuse’s patent to multi-piece end caps, despite the rejoined dependent claims being directed to one-piece embodiments. The district court found that the claim language, the specification and the prosecution history required the invention to have a multi-piece construction. First, the district court determined that the plain meaning of “fastening stem” was “a stem that attached or joins the other two components of the apparatus.” The district court then noted that the fastening stem was only mentioned in the specification in relation to the multi-piece embodiment in which the terminal is joined to the mounting cuff by the fastening stem. While Littelfuse argued that the US Patent & Trademark Office’s rejoining of the withdrawn claims meant that the independent claims covered unitary and multi-piece embodiments, the district court reasoned that the claims were rejoined based on a “misunderstanding” because they referred to the original independent claim, which did not include a fastening stem. In light of the district court’s finding that the independent claims covered only a multi-piece apparatus, the parties stipulated to non-infringement. Littelfuse appealed.

Applying the doctrine of claim differentiation, the [...]

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First Sale Defense Bars Trademark Infringement Where Trademarked Component Is Adequately Disclosed

by | Apr 14, 2022 |

A US Court of Appeals for the Ninth Circuit panel vacated a grant of summary judgment in favor of the plaintiff, holding that the first sale doctrine applies when a trademarked product is incorporated into a new product. Bluetooth SIG Inc. v. FCA US LLC, Case No. 21-35561 (9th Cir. Apr. 6, 2022) (per curiam).

Bluetooth SIG administers standards for Bluetooth technology. SIG owns and licenses the trademarks below to product manufacturers:

Fiat Chrysler Automobiles (FCA) makes cars that contain Bluetooth-equipped head units. The head units are made by third-party suppliers that have been qualified by SIG, but FCA has not taken steps to qualify the Bluetooth capabilities in its cars. FCA uses the SIG trademarks on its head units and publications.

SIG sued FCA under the Lanham Act for trademark infringement. In its defense, FCA asserted the first sale doctrine. Under the doctrine, the right of a producer to control the distribution of its trademarked product does not extend past the first sale of the product. For example, a purchaser who stocks, displays and resells a producer’s product under a producer’s trademark violates no trademark rights under the Lanham Act. The district court granted partial summary judgment for SIG on the first sale issue, finding that the first sale doctrine was inapplicable because FCA’s conduct went beyond “stocking, displaying, and reselling a product.” FCA appealed.

The Ninth Circuit found that the lower court erred when it took a narrow view of the Ninth Circuit’s 1995 decision in Sebastian Int’l, Inc. v. Longs Drugs Stores Corp., in which the Court stated that “it is the essence of the ‘first sale’ doctrine that a purchaser who does no more than stock, display, and resell a producer’s product under the producer’s trademark violates no right conferred upon the producer by the Lanham Act.” The panel noted that the Sebastian Court never purported to articulate the outer bounds of the first sale doctrine; instead it simply captured the unauthorized resale of genuine goods.

The Ninth Circuit explained that the first sale doctrine also applies when a trademark is used to refer to a component incorporated into a new end product as long as the seller adequately discloses how the trademarked product was incorporated. The Court cited to the 1925 Supreme Court precedent in Prestonettes, Inc. v. Coty, which effectively extends the first sale doctrine beyond the examples stated in Sebastian. In Prestonettes, the Supreme Court held that trademark law did not prohibit a manufacturer from using a trademark, not to indicate the goods, but to say that the trademarked product was a component in a product being offered as new and changed. The Ninth Circuit also noted its 1998 holding in Enesco Corp. v. Price/Costco, in which it found that the first sale doctrine protected a retailer that resold dolls in allegedly inadequate packaging to the extent the repackaging was disclosed. The Enesco Court explained that if the public was adequately informed that [...]

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Acts Supporting Induced Infringement Allegations Must Occur During Damages Period

by | Apr 14, 2022 |

The US Court of Appeals for the Federal Circuit vacated a damages verdict because the acts supporting the induced infringement finding took place years before the statutory damages period and thus could not support a finding of specific intent to induce infringement. Roche Diagnostics Corporation v. Meso Scale Diagnostics, LLC, Case Nos. 21-1609; -1633 (Fed. Cir. Apr. 8, 2022) (Prost, Taranto, JJ.) (Newman, J., dissenting).

Meso Scale Diagnostics (Meso) was formed in 1995 pursuant to a joint venture agreement between IGEN and Meso Scale Technologies. As part of the agreement, IGEN granted Meso exclusive rights to certain patents. In 1998, Roche acquired Boehringer Mannheim GmbH, an entity that IGEN had previously licensed to develop, use, manufacture and sell ECL assays and instruments in a particular field. As a result of the acquisition, Roche acquired Boehringer’s license rights, including the field-of-use restrictions. In 2003, IGEN and Roche terminated the 1992 agreement and executed a new agreement granting Roche a non-exclusive license to IGEN’s ECL technology in the field of “human patient diagnostics.” As part of the transaction, IGEN transferred its ECL patents to a newly formed company, BioVeris. In 2007, Roche also acquired BioVeris, including the ECL patents. Roche believed the acquisition meant the elimination of the field-of-use restrictions (and hence no patent liability) and began selling its products without regard to those restrictions.

In 2017, Roche sued Meso seeking a declaratory judgment that it did not infringe Meso’s rights arising from the 1995 joint venture license agreement. Meso counterclaimed for infringement. At summary judgment, Roche argued that Meso’s 1995 license didn’t convey the rights Meso asserted. The district court denied Roche’s summary judgment motion, and the parties tried the case to a jury. The jury found that Meso held exclusive license rights to the asserted claims, that Roche directly infringed one patent and induced infringement of two others and that Roche’s infringement was willful. The district court denied Roche’s post-trial motions challenging the infringement verdict and damages award. The district court granted Roche’s motion for judgment as a matter of law (JMOL) on willfulness but denied Meso’s motion to enhance damages. The district court also rendered a non-infringement judgment on three additional patents on the ground that Meso waived compulsory counterclaims. Roche appealed the findings regarding the scope of Meso’s license rights, the induced infringement verdict and the damages award. Meso appealed the district court’s application of the compulsory counterclaim rule.

The Federal Circuit first addressed the scope of Meso’s rights under the 1995 license agreement, which was the only ground on which Roche challenged the direct infringement judgment. The Court found that there was clear testimony from the manager of the joint venture that the work involved in developing the patent that was found to be directly infringed was part of the joint venture. The Court dismissed Roche’s argument that Meso acted in a manner that demonstrated that it had accepted Roche’s rights to the asserted patents, finding that the argument was “made in passing only in a footnote,” [...]

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Game Reset: Extrinsic Evidence Can’t Limit Claim Scope Beyond Scope Based on Unambiguous Intrinsic Evidence

by | Apr 7, 2022 |

The US Court of Appeals for the Federal Circuit reversed a district court’s grant of summary judgment of noninfringement after concluding that the district court erred by relying on expert testimony to construe a claim term in a manner not contemplated by the intrinsic evidence. Genuine Enabling Tech. LLC v. Nintendo Co., Ltd., et al., Case No. 20-2167 (Fed. Cir. Apr. 1, 2022) (Newman, Reyna, Stoll, JJ.)

Genuine owns a patent directed to a user interface device (UID) that, in the process of synchronizing and merging data streams into a combined data stream, directly receives microphone speech input and transmits speech output via a speaker. During prosecution, the inventor distinguished “slow varying” physiological response signals discussed in a prior art reference from the “signals containing audio or higher frequencies” in his invention, arguing that the latter posed a signal “collision” problem that his invention solved. In distinguishing the prior art, the inventor explained that his invention “describes, in its representative embodiments, how to combine the data from a UID (mouse) and from a high-frequency signal, via a framer, which is unique and novel.”

Genuine subsequently filed a lawsuit against Nintendo, accusing Nintendo’s Wii Remote, Wii Remote Plus, Nunchuk, WiiU GamePad, Switch Joy-Con Controller and Switch Pro Controller of infringing the patent. During claim construction, the parties asked the district court to construe the term “input signal.” Genuine proposed the construction of the disputed claim term to be “a signal having an audio or higher frequency,” whereas Nintendo proposed the narrower construction of “[a] signal containing audio or higher frequencies.” Relying on expert testimony, Nintendo also argued that the inventor “disclaimed signals that are 500 [Hz] or less . . . generated from positional change information, user selection information, physiological response information, and other slow-varying information.”

The district court found that the inventor’s arguments amounted to a disclaimer. Crediting Nintendo’s expert testimony, the district court construed “input signal” as “signals above 500 Hz and excluding signals generated from positional change information, user selection information, physiological response information, and other slow-varying information.” The district court subsequently granted summary judgment of noninfringement, finding that the accused controllers produced the types of slow-varying signals that the inventor had disclaimed during prosecution. Genuine appealed.

Genuine argued that the district court erred in construing “input signal” by improperly relying on extrinsic evidence and improperly finding that the inventor disclaimed certain claim scope during prosecution. The Federal Circuit agreed, reiterating that although extrinsic evidence can be helpful in claim construction, “the intrinsic record ‘must be considered and where clear must be followed,’” such that “where the patent documents are unambiguous, expert testimony regarding the meaning of a claim is entitled to no weight.” In this case, although the parties agreed that the inventor had disavowed claim scope during prosecution, there was a dispute as to the scope of the disclaimer beyond signals below the audio frequency spectrum.

The Federal Circuit explained that for a statement made during prosecution to qualify as a disavowal of claim scope, it [...]

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European Commission Seeks Comments on Revised Horizontal Guidelines Draft

by and | Apr 7, 2022 | ,

On 1 March 2022, the European Commission launched a public consultation inviting stakeholders to comment on a revised Horizontal Block Exemption Regulations on Research & Development and Specialisation (HBERs) draft, as well as on a revised draft of the guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union (TFEU) to horizontal co-operation agreements (Horizontal Guidelines). Comments are due no later than 26 April 2022.

This more general antitrust public consultation aims at drafting revised versions of existing normative texts and should not be confused with the European Commission’s more targeted “Call for Evidence” regarding a new framework for standard-essential patents (SEPs). Comments in response to the Call for Evidence must be submitted by 9 May 2022, and the new framework “may combine legislative and non-legislative action.” (For more information on the European Commission’s Call for Evidence, click here.) While these two EU public consultations are separate, they and their corresponding EU policies overlap on the question of SEPs.

Chapter 7 of the revised Horizontal Guidelines draft concerns SEP antitrust issues, such as the question of standardisation agreements and their compliance with EU antitrust law. The public consultation provides stakeholders in the SEP licensing and standardisation fields an opportunity to ensure that their interests will be considered during the drafting process of the revised Horizontal Guidelines.

The overall objective of the Horizontal Guidelines is to provide guidance on the European Commission’s application of the general norms prohibiting anticompetitive market behaviour set out in Art. 101 (1) and 101 (3) of the TFEU. The Horizontal Guidelines are de facto binding as EU courts and businesses use them to comply with Art. 101 (1) and (3) of the TFEU and to anticipate the European Commission’s enforcement of these norms.

The revised draft of the Horizontal Guidelines takes into consideration the evaluation process following a public consultation in 2019 that gave stakeholders the opportunity to review the 2011 version of the Horizontal Guidelines, which is currently in force. In the revised draft, Chapter 7 focuses on standardisation agreements as follows:

 

  • The new draft proposes to introduce more flexibility in the effects analysis by allowing (under specific circumstances) more limited participation in the development of a standard.
    • A standardisation agreement should not be considered to lead to
      restrictive effects on competition under Article 101 (1) of the TFEU if
      the restriction on the participants is limited in time       with a view
      to progressing quickly and if, at major milestones, all competitors have an
      opportunity to be involved in terms of continuing the development of the
      standard (marginal no. 496).
    • A standardisation agreement should be considered as removing potential
      negative effects resulting from limited participation stakeholders as long as
      stakeholders are kept informed and consulted on the work in progress. The
      objective is to promote procedures that recognize the collective representation
      [...]

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Half-Baked Case: No Misappropriation or False Advertising Given Over-Broad Allegations

by | Mar 31, 2022 | ,

The US Court of Appeals for the Tenth Circuit affirmed a district court’s grant of summary judgment in favor of a defendant baker on a trade dress infringement claim and reversed the district court’s denial of the defendant baker’s motions for judgment as a matter of law on trade secrets misappropriation and false advertising claims. Bimbo Bakeries USA, Inc. v. Sycamore, Case Nos. 18-4062; -4031; -4040 (10th Cir. Mar. 18, 2022) (Hartz, Phillips, Eid, JJ.)

Bimbo Bakeries (and its predecessor, EarthGrains Baking Companies) owns, bakes and sells Grandma Sycamore’s Home-Maid Bread, a popular bread in Utah. U.S. Bakery is a competitor, and Leland Sycamore is the baker who developed the Grandma Sycamore’s recipe. Sycamore parted with his interest in Grandma Sycamore’s and opened his own bakery, Wild Grains Bakery. U.S. Bakery hired Wild Grains Bakery to produce another homemade bread product, Grandma Emilie’s. The relationship soured, and U.S. Bakery moved its Grandma Emilie’s operations in-house. U.S. Bakery developed a new formula for Grandma Emilie’s and enlisted a former Wild Grain employee to help. U.S. Bakery also created packaging for the bread based on Grandma Sycamore’s packaging. U.S. Bakery used several taglines to help sell its products, including “Fresh. Local. Quality.”

Bimbo Bakeries (then EarthGrains) sued Leland Sycamore, Tyler Sycamore (Leland’s son and co-baker), Wild Grains Bakery and U.S. Bakery, alleging multiple claims related to the Grandma Emilie’s operations, including trade secret misappropriation under the Utah Uniform Trade Secrets Act and trade dress infringement, trade dress dilution, false designation of origin, false advertising and unfair competition under the Lanham Act. Bimbo Bakeries alleged that U.S. Bakery’s use of the word “local” in the tagline “Fresh. Local. Quality.” constituted false or misleading advertising because U.S. Bakery did not actually bake all its bread products within the state of sale. The district court granted summary judgment in favor of U.S. Bakery on the trade dress infringement claim. The parties went to trial on the trade secrets misappropriation and false advertising claims. The jury ruled in Bimbo Bakeries’ favor on both and awarded more than $2 million in damages. The district court increased the damages owed by U.S. Bakery by almost $800,000 because U.S. Bakery was found to have willfully and maliciously misappropriated Bimbo Bakeries’ trade secret. The district court remitted the jury’s damages for the false advertising claim to around $83,000. The district court also permanently enjoined U.S. Bakery and Sycamore from using Bimbo Bakeries’ trade secret and denied renewed motions by U.S. Bakery and Sycamore for judgment as a matter of law for the trade secrets misappropriation and false advertising claims.

Bimbo Bakeries, U.S. Bakery and Sycamore appealed. Bimbo Bakeries argued that the district court should not have granted U.S. Bakery summary judgment on its trade dress infringement claim and should not have remitted damages for the false advertising claim. U.S. Bakery and Sycamore argued that the district court should have granted their renewed motions for judgment as a matter of law for the trade secrets misappropriation and false advertising claims.

On [...]

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Not a Bullseye: Defendant Must Rebut Presumption That Claims Lacking “Means” Language Don’t Fall Under § 112 ¶ 6

by | Mar 31, 2022 |

Reversing a district court finding of indefiniteness under 35 U.S.C. § 112 ¶ 6, the US Court of Appeals for the Federal Circuit found that the district court erred by ignoring unrebutted evidence that the challenged claim terms would have been understood to connote sufficiently definite structure to avoid means-plus-function construction. Dyfan, LLC v. Target Corp., Case No. 21-1725 (Fed. Cir. Mar. 24, 2022) (Lourie, Dyk, Stoll, JJ.)

Dyfan sued Target for infringement of two patents directed to location-based message delivery. During claim construction proceedings, Target argued that certain claim limitations should be construed as means-plus-function limitations and that the specification failed to disclose the requisite corresponding structure. The district court found that three claim terms were subject to § 112 ¶ 6. For the terms “code” and “application,” the court assigned a “special-purpose computer function” as the corresponding structure and found that the specification did not disclose a requisite algorithm for the functions of the computer. The district court also found that the claim term “system” was subject to § 112 ¶ 6 because it recited purely functional language without disclosing sufficient corresponding structure, and that it was unclear which of the recited components performed the recited function. The district court concluded that all three terms were indefinite under § 112 ¶ 2 for lack of corresponding structure. Dyfan appealed.

Reviewing de novo, the Federal Circuit first addressed whether the claim language invoked § 112 ¶ 6. As the Court had stated previously, there is a rebuttable presumption that a claim limitation is not drafted in a means-plus-function format if it does not contain the term “means.” However, that presumption can be overcome if a challenger demonstrates that the term fails to recite sufficiently definite structure. The Court also explained that for purposes of § 112 ¶ 6, certain “nonce words that reflect nothing more than verbal constructs” are tantamount to using the word “means.”

Turning to the case merits, the Federal Circuit first considered the terms “code” and “application.” Given the absence of “means” language, Target was required to show by a preponderance of the evidence that persons of ordinary skill in the art would not have understood those terms to connote structure considering the claim as a whole. The Court found that the district court erred in concluding that Target overcame the presumption that § 112 ¶ 6 did not apply. The Court relied on unrebutted testimony from Target’s expert witness that the district court ignored. The expert testified that both terms would have connoted structure, such as off-the-shelf software. The Court found that this unrebutted testimony demonstrated that neither claim limitation recited purely functional language.

The Federal Circuit explained that the district court failed to follow its 2018 decision in Zeroclick v. Apple. In that case, the Court reversed a district court’s finding that the claim terms “program” and “user interface” invoked § 112 ¶ 6, finding that both terms were references to conventional program code existing in the prior [...]

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Only under Rare Circumstances Can the Patent Trial & Appeal Board Find Proposed Substitute Claims Unpatentable on Its Own

by | Mar 31, 2022 |

The US Court of Appeals for the Federal Circuit addressed, for the first time, the issue of when the Patent Trial & Appeal Board (Board) may raise a ground of unpatentability that was not advanced by a petitioner in relation to proposed substitute claims. The Court upheld the standard defining the “rare circumstances” in which such a ruling is proper while questioning the Board’s reasoning and application of the standard. Hunting Titan, Inc. v. DynaEnergetics Europe GMBH, Case Nos. 20-2163; -2191 (Fed. Cir. Mar. 24, 2022) (Prost, C.J., Reyna, Hughes, JJ.) (Prost, C.J., concurring).

Hunting Titan challenged DynaEnergetics’ patent in an inter partes review (IPR) based on anticipation and obviousness grounds. The Board found all the original claims of the patent unpatentable as anticipated. DynaEnergetics moved to amend to add proposed substitute claims. Hunting Titan opposed the motion to amend but advanced only obviousness grounds against the proposed substitute claims. The Board determined sua sponte that the proposed substitute claims were unpatentable as anticipated and, therefore, denied the motion to amend. DynaEnergetics requested rehearing, and the Precedential Opinion Panel (POP) reversed the Board’s denial of the motion to amend and determined that Hunting Titan did not prove that the proposed substitute claims were unpatentable.

The POP decided that “only under rare circumstances” should the Board sua sponte raise a ground for unpatentability not advanced by the petitioner in relation to proposed substitute claims. The rare circumstances include only two situations:

  1. When the petitioner is not involved in the motion to amend, such as when a petitioner chooses not to oppose the motion or ceases to participate in the proceeding altogether
  2. When evidence of unpatentability is readily identifiable and persuasive, such as if the substitute claims are unpatentable for the same reasons as the original claims.

The POP stated that in most circumstances, it is best to rely on the adversarial system and expect the petitioner to raise the unpatentability grounds for consideration.

The Federal Circuit upheld the POP’s standard for when the Board may sua sponte find proposed substitute claims unpatentable but also found the POP’s reasoning “problematic” because it placed too much emphasis on the adversarial system. The Court noted that Board proceedings, such as IPRs, are fundamentally a review of an earlier administrative proceeding, as opposed to civil litigation, The POP’s rationale was based on the public interest being served by an adversarial system rather than on the public interest being served by maintaining integrity of the patent system.

The Federal Circuit also questioned the POP’s application of its new standard to the case at hand, noting that the readily identifiable evidence exception should have been applied when the Board found the proposed substitute claims unpatentable for the same reasons it found the original claims to be unpatentable.

In her concurring opinion, Chief Judge Prost noted that “[i]t makes little sense to limit the [Board], in its role within the agency responsible for issuing patents, to the petitioner’s arguments.” Instead, “the Board must determine whether the [...]

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Re-Poster Child for § 230: Immunity under the CDA for Reposting Content of Another

by | Mar 31, 2022 |

The US Court of Appeals for the First Circuit affirmed a district court’s decision to dismiss claims for defamation under the Communications Decency Act (CDA), 47 USC § 230, and for copyright infringement under the fair use doctrine. Monsarrat v. Newman, Case No. 21-1146 (Kayatta, Lipez, Gelpí, JJ.).

The parties’ dispute arose from a series of posts on a community message board. Residents of the Davis Square neighborhood in Massachusetts maintained a Live Journal forum for several years. In response to a revision of the Live Journal terms of service in 2017, Ron Newman, a member of the community, copied the entirety of the content from the Live Journal forum to another online platform: Dreamwidth. The copied content included a series of allegedly defamatory posts about Jonathan Monsarrat and a post that Monsarrat had copyrighted. Monsarrat sued Newman for both defamation and copyright infringement. Newman moved to dismiss the defamation claim under the CDA, § 230, and the copyright claim under the fair use doctrine. After the district court granted the motions, Monsarrat appealed.

The First Circuit first addressed the defamation claim under § 230. Newman argued that § 230 provided him immunity from defamation. Specifically, § 230 states “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” It also provides a shield from state law claims that would be “inconsistent with this section.” Courts apply a three-part analysis to determine whether a defendant is entitled to immunity under § 230:

  1. Is the defendant a “provider or user of an interactive computer service”?
  2. Is the claim based on “information provided by another information content provider”?
  3. Does the claim treat the defendant “as the publisher or speaker” of that information?

Monsarrat did not challenge the fact that Newman was a “user” under the first prong. Regarding the second prong, the analysis hinged on whether Newman was an “information content provider,” which in turn relied on whether Newman was responsible for the allegedly defamatory content in whole or in part. The factual record showed that Newman did nothing but copy the allegedly defamatory posts that had been created by another. Monsarrat unsuccessfully argued that Newman was responsible because Newman copied the posts from Live Journal to a different digital platform with an allegedly different audience. The First Circuit was not persuaded, ruling that providing essentially the same content on a different platform did not make a defendant responsible for that content under § 230. Regarding the third prong, Monsarrat’s complaint clearly alleged that Newman was acting as a publisher. The Court affirmed the dismissal of the defamation claim under § 230.

Monsarrat’s copyright claim related to a Live Journal post by Monsarrat in the Davis Square forum. He had created a post with a link to Live Journal’s harassment policy, a quotation from the policy and a brief message regarding his attempts to report the abuse he felt he had suffered by other [...]

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