IP UPDATE
Exploring the Latest in Intellectual Property Law
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Exploring the Latest in Intellectual Property Law
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Thank You to Our Readers

by | Mar 31, 2021 | ,

We greatly appreciate our readers over the past year and are pleased to share that we were recently recognized for our intellectual property thought leadership in the 2021 JD Supra Readers’ Choice Awards, which acknowledge top authors and firms for their thought leadership in key topics during all of last year.

Sarah Bro, a regular contributor to IP Update, was recognized as “Top Author” for trademarks. She focuses her practice on trademark prosecution, enforcement and brand portfolio management, as well as licensing, due diligence, copyright, right of publicity and domain name matters. Through our various blogs and thought leadership pieces, we are dedicated to maintaining our position as a leading firm for intellectual property work and keeping clients abreast of significant and relevant topics in the industry.



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The Road Less Traveled: IPR Denial Decisions Appealable via Mandamus

by | Mar 24, 2021 |

The US Court of Appeals for the Federal Circuit concluded that while it did not have jurisdiction to consider the direct appeal of a Patent Trial & Appeal Board decision denying institution, it could review the decision under its mandamus jurisdiction. Mylan Laboratories Ltd. v. Janssen Pharmaceutica, N.V., Case No. 20-1071 (Fed. Cir. Mar. 12, 2021) (Moore, J.)

In 2019, Janssen sued Mylan in district court for infringement of one patent. Less than six months later, Mylan petitioned the Board for inter partes review (IPR) of that patent. Opposing institution, Janssen argued that the IPR would be an inefficient use of Board resources because of two co-pending district court actions (one involving Mylan and one involving a third party) that implicated the same validity issues as the IPR petition. Janssen also argued that those district court actions would likely reach final judgment before any IPR final decision. The Board agreed with Janssen. Mylan appealed and also requested mandamus relief.

On appeal, Mylan argued that the Board’s determination to deny institution based on the timing of a separate district court action that did not involve Mylan undermined constitutional and due process rights.

Before addressing the merits of the appeal, the Federal Circuit addressed two jurisdictional questions: whether it had jurisdiction over Mylan’s direct appeal and whether it had jurisdiction over the mandamus request. As to the first question, the Court relied on its decision in St Jude Medical v. Volcano, finding that decisions denying institution are not subject to review on direct appeal. As to the second question, the Court concluded that judicial review was available in extraordinary circumstances, and particularly in situations involving denial of petitions. The Court stated that “[t]o protect our future jurisdiction, we have jurisdiction to review any petition for a writ of mandamus denying institution of an IPR.”

Having found that it had jurisdiction, the Federal Circuit turned to the merits. The Court explained that when a mandamus petition challenges a decision denying institution, it will be especially difficult to satisfy the requirements for mandamus because the relevant statute bestows the Board with significant discretion. The Court concluded that there is no reviewability of a Board denial of institution except for colorable constitutional claims. The Court found that Mylan lacked a clear and indisputable right to relief and also failed to state a colorable claim for constitutional relief since it did not identify a deprivation of “life, liberty or property” necessary to a procedural due process claim. The Court also found that there were no substantive due process claims since there is no fundamental right to have the Board consider whether to institute on an IPR petition based only upon co-pending litigation to which petitioner is a party. The Court thus denied Mylan’s petition.



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Freeze Frame: EU Copyright Holders Entitled to Restrict Framing

by | Mar 24, 2021 |

In a case referred by German authorities, the Court of Justice of the European Union (CJEU) resolved a dispute between a visual arts copyright collecting society and a cultural heritage foundation involving a digital library that includes images and links to the institution providing the subject matter. The CJEU affirmed that the principle of the right of communication to the public is subject to technical measures to prevent infringement. VG Bild-Kunst v. Stiftung Preußischer Kulturbesitz, Case C-392/19 (CJEU, 9 March 2021) (Grand Chamber).

Takeaways:

  • Framing and inline linking remain generally permitted. Both forms of linking do not necessarily constitute an act governed by copyright law.
  • Where the copyright holder has adopted or obliged licensees to employ, measures to restrict framing so as to limit access to its work from websites other than that of its licensees, framing must be authorized by the rights holders concerned.

Framing

At the core of this decision is “framing.” The technique of framing consists of dividing a website page into several frames and posting within one of them, by means of a clickable link or an embedded internet link (inline linking), an element from another site in order to hide from users the original environment to which that element belongs.

Background

The decision was based on a request for a preliminary ruling in proceedings between VG Bild-Kunst, a visual arts copyright collecting society in Germany, and SPK, a German cultural heritage foundation. The proceedings concerned VG Bild-Kunst’s refusal to conclude a license agreement with SPK for the use of its catalogue of works unless the agreement contained a provision obliging SPK as a licensee, when using protected work and subject matter covered by that agreement, to implement effective technological measures to prevent third parties from framing such protected work or subject matter.

The German Federal Court of Justice referred the following question to the CJEU for a preliminary ruling:

Does the embedding of a work—which is available on a freely accessible website with the consent of the right holder—in the website of a third party by way of framing constitute communication to the public of that work within the meaning of Article 3(1) of Directive 2001/29 where it circumvents protection measures against framing adopted or imposed by the right holder?

The Decision

The CJEU’s reasoning behind the above ” takeaways” is that by adopting or obliging licensees to employ, technological measures limiting access to works from websites other than those on which the copyright owner has authorized communication to the public of such works, a copyright holder is deemed to have expressed its intention to attach qualifications to its authorization to communicate those works to the public by means of the internet, in order to confine the public for those works solely to the users of one particular website.

Consequently, where the copyright holder has adopted or obliged licensees to employ, measures to restrict framing so as to limit access to its work from websites other than that of its [...]

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Waiver in PTO Trademark Appeals Applies “Per Decision, Not Per Case”

by | Mar 24, 2021 |

Addressing a “narrow question of statutory interpretation,” the US Court of Appeals for the Fourth Circuit reversed the district court’s dismissal of a trademark case for lack of subject matter jurisdiction, holding that a party that appeals a Trademark Trial & Appeal Board (TTAB) decision to the US Court of Appeals for the Federal Circuit may, after remand to and issuance of a new decision by the TTAB, seek review of the new decision in federal district court. Snyder’s-Lance, Inc. v. Frito-Lay N.A., Inc., Case No. 19-2316 (4th Cir. Mar. 17, 2021) (Wynn, J.)

Princeton Vanguard, a snack food producer, applied to register its mark “Pretzel Crisps” on the principal register. Frito-Lay opposed. The TTAB denied Princeton Vanguard’s application, concluding that the mark was generic.

Under the Lanham Act, Princeton Vanguard could appeal the TTAB’s original decision to either the Federal Circuit under 15 USC § 1071(a) or federal district court under § 1071(b). Princeton Vanguard elected a direct appeal to the Federal Circuit pursuant to § 1071(a), thus waiving its right to district court review. The Federal Circuit concluded that the TTAB applied the wrong legal standard in evaluating whether Princeton Vanguard’s mark was generic and remanded the case to the TTAB. The TTAB again concluded that Princeton Vanguard’s mark was generic. This time, Princeton Vanguard appealed to a federal district court pursuant to § 1071(b).

The district court sua sponte dismissed the case for lack of subject matter jurisdiction, concluding that Princeton Vanguard’s appeal of the original decision to the Federal Circuit pursuant to § 1071(a) precluded Princeton Vanguard from appealing the second decision to a district court pursuant to § 1071(b). Princeton Vanguard appealed.

On appeal, the Fourth Circuit concluded that the statutory text of the Lanham Act supported Princeton Vanguard’s argument in favor of jurisdiction. The Court explained that Princeton Vanguard’s waiver of its right to district court review of the original TTAB decision pursuant to § 1071(a) did not apply to any subsequent decisions in the same case, and that the waiver applied “per decision, but not per case.”

The Court rejected Frito-Lay’s argument that Princeton Vanguard was taking a second bite at the apple by seeking re-review in federal district court of issues already decided by the Federal Circuit, reasoning that Princeton Vanguard was seeking district court review of the second, separate decision that had not been reviewed by the Federal Circuit. The Court stressed, however, that the Federal Circuit’s review of the TTAB’s original decision was binding as to issues it decided.

Practice Note: If the TTAB issues multiple decisions in the same proceeding, each decision is considered a separate decision for purposes of waiver under §§ 1071(a) (b), even if the decisions implicate similar issues.



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For Certain Not Secret Now: Court Declines to Seal Alleged Trade Secret in Amended Complaint

by | Mar 24, 2021 |

The US Court of Appeals for the Federal Circuit affirmed a decision declining to seal information in an amended complaint where the defendant failed to prove that the information was a trade secret. DePuy Synthes Products, Inc. v. Veterinary Orthopedic Implants, Inc., Case No. 20-1514 (Fed. Cir. Mar. 12, 2021) (Dyk, J.)

After DePuy sued Veterinary Orthopedic Implants (VOI) for patent infringement, the district court issued a protective order providing that “supplier . . . names and identifying information” would be treated as “Highly Confidential Material—Attorney Eyes Only.” DePuy later filed an amended complaint containing such information when it joined VOI’s manufacturer as a defendant. The amended complaint disclosed the manufacturer as such and alleged additional facts about the defendants’ relationship. VOI argued that the manufacturer’s identity and additional facts about the VOI-manufacturer relationship should be sealed as trade secrets. DePuy argued that the manufacturer’s identity was already public, but took no position regarding the additional facts. After the district court declined to seal the amended complaint, VOI appealed.

The Federal Circuit first considered whether it had jurisdiction under the collateral order doctrine and whether the district court abused its discretion in denying the motion to seal.

The Federal Circuit found that it had jurisdiction under the collateral order doctrine because:

  • The district court’s order conclusively determined the sealing issue.
  • The sealing issue was important although unrelated to the merits of the infringement claim.
  • Meaningful review after final judgment would be impossible because disclosed information can never be secret again.

On the merits, the Federal Circuit found no abuse of discretion, reasoning that there was no clear error in the district court’s finding that the manufacturer’s identity was not a trade secret where (1) the manufacturer openly advertised itself as an orthopedic manufacturer, (2) the manufacturer and VOI did not have a confidentiality agreement or a confidential relationship giving rise to an implied obligation of confidentiality, and (3) a third-party email suggested that VOI’s relationship with the manufacturer was “known within the relevant community.” The Court further found no abuse of discretion in the district court’s declining to seal the additional allegations despite DePuy’s non-opposition because the district court was required to independently weigh the parties’ interest in confidentiality against the public right of access.

Practice Note: Parties routinely seek sealing of information that may not qualify as formal trade secrets. The district court’s duty to independently evaluate sealing means that parties must be prepared to articulate the particularized harm they will suffer absent sealing or risk the public disclosure of the information, even where the parties agree to treat information confidentially.



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No Estoppel in the Name of Different Interests and Claims

by | Mar 17, 2021 |

The US Court of Appeals for the Federal Circuit found that 35 USC § 314(d) did not bar its review of a Patent Trial & Appeal Board determination that a petitioner was not estopped from maintaining inter partes review (IPR) proceedings since the alleged estoppel-triggering event occurred post-institution. Uniloc 2017 LLC v. Facebook Inc., Case Nos. 19-1688, -1689 (Fed. Cir. Mar. 9, 2021) (Chen, J.)

Facebook and WhatsApp (collectively, Facebook) filed two IPR proceedings challenging certain claims of Uniloc’s patents. Apple also filed a petition challenging a subset of claims of the patent. Facebook subsequently filed a third petition that was substantively identical to Apple’s petition and also filed a motion to join Apple’s IPR. LG Electronics filed petitions identical to Facebook’s three petitions and also filed motions to join Facebook’s IPRs. The Board instituted Facebook’s third petition and granted Facebook’s motion to join Apple’s IPR. The Board then instituted Facebook’s original IPRs and ordered the parties to “brief the applicability, if any, of 35 U.S.C. § 315(e)(1)” against Facebook, in light of the soon-to-be-issued final written decision for Apple’s IPR. At the time, LG’s petition and motion to join Facebook’s IPRs had not been decided.

In response to the Board’s order, Facebook argued that it should not be estopped under § 315 from challenging the patentability of any claim upon the issuance of a final written decision in Apple’s IPR. Facebook argued that if the Board did find it estopped, Facebook should be able to continue as a petitioner against one of the claims, which it never challenged, in Apple’s IPR. Facebook also argued that if LG’s IPR petition was granted and LG was joined as a party to its first IPR, the IPR should proceed as to all challenged claims (regardless of whether Facebook was found estopped) because LG was not a party in Apple’s IPR. Uniloc responded, arguing that once the Board issued a final written decision in Apple’s IPR, Facebook would be estopped as to all claims challenged in its first IPR and the Board must terminate that proceeding. Uniloc also argued that allowing LG to join the IPR would create inefficiency and confusion.

The Board ultimately instituted LG’s IPR petitions and granted LG’s motion to join Facebook’s IPRs. In its Patent Owner Responses to the original Facebook IPR petitions, Uniloc argued that LG should be barred from maintaining the first Facebook IPR once the Board issued a final written decision in the Apple IPR because LG was estopped as a real party in interest (RPI) or privy to Facebook. A few months later, the Board issued a final written decision in the Apple IPR upholding the patentability of all challenged claims. The Board’s decision in the first Facebook IPR found that Facebook was estopped under § 315(e)(1) as to claims also challenged in Apple’s IPR, but not other claims since § 315(e)(1)’s estoppel provisions apply only to grounds that the petitioner raised or reasonably could have raised “with respect to that claim.”

In its final [...]

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Subscription to RSS Feed Doesn’t Trigger Implied-License Defense

by | Mar 17, 2021 |

The US Court of Appeals for the 11th Circuit affirmed a district court’s grant of judgment as a matter of law against an alleged copyright infringer on its implied-license defense, finding that a blog operator’s publication of entire articles through a really simple syndication (RSS) feed does not give rise to an implied license without substantial evidence showing an intent to grant a license. MidlevelU, Inc. v. ACI Information Group, Case No. 20-10856 (11th Cir. Mar. 3, 2021) (Pryor, J.)

MidlevelU published a free blog designed to attract potential customers in the midlevel healthcare market. MidlevelU made the full text of its blog articles (instead of only headlines and article summaries) available in an RSS feed. ACI is a content aggregator that subscribed to the blog’s RSS feed. ACI copied and published more than 800 entries from MidlevelU’s blog by including those articles in a curated index of abstracts and full-text articles of academic blogs. ACI had no license agreement with MidlevelU.

After discovering the ACI’s activities, MidlevelU registered 50 of its most recent articles for copyright protection with the US Copyright Office. MidlevelU also sent ACI a cease-and-desist letter demanding that its content be removed from ACI’s index. ACI removed the content from the index and coded links to index entries for MidlevelU’s articles so that they would redirect to the MidlevelU’s website. Months later, MidlevelU discovered that, although its content was no longer available on the index website, it still appeared in the website repositories of university libraries. These entries credited ACI as the content’s publisher and directed visitors to view the blog’s full-text content in the “subscribers only” section of the blog aggregator’s website.

MidlevelU sued ACI in federal district court, alleging copyright infringement of the registered articles. ACI asserted an implied-license defense. Relying on the Latimer case, which sets forth the test for implied license in work-for-hire situations, the district court entered judgment as a matter of law in MidlevelU’s favor, finding that there could be no implied license because the ACI could not meet the “creates a work at another person’s request” element of the Latimer test. ACI appealed.

The 11th Circuit found that the district court read Latimer too broadly by applying its holding outside of the work-for-hire context, but the Court nevertheless affirmed the district court’s decision because a jury could not have reasonably inferred from the evidence that the MidlevelU impliedly granted a license to ACI. The Court noted that it had never held that the Latimer test was the only way to prove an implied license. An implied license may arise from circumstances outside of work-for-hire situations: “Creating material at another’s request is not the essence of a license: an owner’s grant of permission to use the material is.”

When an owner clearly manifests consent to use of its copyrighted material, the owner impliedly grants a non-exclusive license. Citing Fields, a district court case in the search-engine web crawler context, ACI argued that an implied license arose because the MidlevelU did [...]

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Method for Determining Haplotype Phase Found Subject Matter Ineligible

by | Mar 17, 2021 |

In an appeal from a final rejection of a pending application, the US Court of Appeals for the Federal Circuit held that claims directed to methods for determining “haplotype phase” were correctly rejected under 35 USC § 101 as subject matter ineligible. In Re Board of Trustees of The Leland Stanford Junior University, Case No. 20-1012 (Fed. Cir. Mar. 11, 2021) (Reyna, J.)

Haplotype phase is a scientific way of describing the methodology of determining from which parent a particular allele (or gene) is inherited. The representative claim involved (i) receiving allele data, (ii) receiving pedigree data, (iii) determining an inheritance state based on the allele data, (iv) receiving transition probability data; (v) receiving linkage disequilibrium data and then- determining a haplotype phase based on the pedigree data, the inheritance state for the information described in the allele data, the transition probability data and the population linkage disequilibrium data; and storing the haplotype phase in a computer system and providing the stored haplotype phase in response to a request.

Steps (i) through (iii) were known in the art for determining haplotype phase. The crux of the improved process depended on steps (iv) and (v). The additional data provided as “linkage disequilibrium data” and “transition probability data” allegedly enable haplotype phase to be inferred in regions of the gene where “inheritance state” may be uninformative. The additional data in the claimed method resulted in an increase in the number of haplotype phase predictions made.

The examiner, and then the Patent Trial & Appeal Board, found that the claimed process was directed toward patent eligible subject matter—a mathematical algorithm. Stanford appealed.

Applying the two-step framework established by the 2014 Supreme Court decision in Alice Corp. v. CLS Bank, the Federal Circuit first determined that the claims were directed to an abstract mathematical calculation under Alice step one.

Under step two of the Alice inquiry, the Federal Circuit found that the claims did not include additional limitations that, taken as a whole, provide an inventive concept that transforms the abstract idea into patent eligible subject matter. The Court reasoned that the representative claim “recites no steps that practically apply the claimed mathematical algorithm; instead [the claim] ends at storing the haplotype phase and ‘providing’ it ‘in response to a request.'” These steps alone were not enough to transform the abstract idea into patent eligible subject matter.

Stanford argued that the claimed process was directed to patent eligible subject matter and represented an improvement on a technological process—namely, an improvement in the number of haplotype phase predictions that this mathematical algorithm could yield. The Federal Circuit was unpersuaded that the pending claims did anything other than “merely enhance[] an ineligible concept.”

The Federal Circuit concluded that the claims only recited the conventional haplotype phase algorithm and then instruct: “apply it,” similar to the claimed subject matter prohibited by the Supreme Court in Alice. Accordingly, the Court affirmed the Board’s decision.



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Doctrine of Equivalents Analysis Should Not Be Simple Binary Comparison

by | Mar 17, 2021 |

The US Court of Appeals for the Federal Circuit remanded a district court’s claim construction and grant of a defendant’s summary judgment motion of non-infringement under the doctrine of equivalents, finding that a reasonable juror could find that the accused products performed substantially the same function in substantially the same way to achieve substantially the same result as the claimed invention. Edgewell Personal Care Brands, LLC v. Munchkin, Inc., Case No. 20-1203 (Fed. Cir. Mar. 9, 2021) (Moore, J.)

Edgewell manufactures and sells the “Diaper Genie,” a diaper pail system with a replaceable cassette placed inside the pail for soiled diaper collection, forming a wrapper around the diapers. Munchkin marketed a refill cassette as compatible with Edgewell’s pails. Edgewell’s two patents at issue relate to improvements in the cassette. After claim construction, Edgewell asserted literal infringement of one patent and infringement under the doctrine of equivalents of the other patent. The district court granted Munchkin’s summary judgment motion of non-infringement against both patents. Edgewell appealed.

Edgewell’s first patent is directed to a cassette with a clearance at its bottom portion. The claim construction dispute turned on whether the claims required a clearance space after the cassette was installed. The district court construed the claim to require a space and to require that the claimed “clearance” cannot be filled by an unclaimed interfering member. The district court granted Munchkin summary judgment because Munchkin’s refill cassette had no space after the cassette was installed. The Federal Circuit reversed, explaining that an “apparatus claim is generally to be construed according to what the apparatus is, not what the apparatus does.” The Court found that without an express limitation, “clearance” should be construed to cover all uses of the claimed cassette. The Court determined that the specification and purpose of the “clearance” supported the notion that the claim does not require a clearance after insertion.

The second patent is directed to a cassette with a cover that includes a “tear-off” section. The district court’s construction of an annular cover was of a single, ring-shaped cover. Munchkin’s cassettes each include a two-part cover, and the district court granted Munchkin’s motion for summary judgment of non-infringement. Although the Federal Circuit agreed with the claim constructions, the Court found that the district court erred in granting summary judgment to Munchkin under the doctrine of equivalents for claim element vitiation on the basis that “annular cover” and “tear-off” limitations §§would be rendered meaningless.

The vitiation doctrine ensures that applying the doctrine of equivalents “does not effectively eliminate a claim element in its entirety.” The Federal Circuit found that the district court erred in evaluating this element as a binary choice—single-component structure versus a multi-component structure. Instead, the Court explained that the district court should have evaluated the evidence to determine whether a reasonable juror could find that the accused products perform substantially the same function, in substantially the same way, achieving substantially the same result as the corresponding claim elements. Edgewell’s expert opined that Munchkin’s products performed the [...]

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Can’t Camouflage Express Trademark Contract Terms

by | Mar 17, 2021 |

Addressing a range of trademark licensing issues, including discretionary approval, exculpatory contract clauses and third party beneficiary standing, the US Court of Appeals for the Federal Circuit affirmed a lower court’s grant of summary judgment to the US Army, finding that the Army abided by the terms of a trademark licensing agreement with a brand management company that sold clothing bearing the Army logo. Authentic Apparel Grp., LLC v. United States, Case No. 20-1412 (Fed. Cir. Mar. 4, 2021) (Lourie, J.)

In a 2010 licensing agreement, the Army granted Authentic Apparel, a brand management company that licenses merchandise, a non-exclusive license to manufacture and sell clothing bearing the Army’s trademarks in exchange for royalties. The licensing agreement gave the Army sole and absolute discretion on whether to approve any products and marketing materials bearing the Army’s trademarks. The licensing agreement also included exculpatory clauses exempting the Army from liability for exercising this discretion. From 2011 to 2014, Authentic submitted 500 requests for product approval, and the Army disapproved of only 41. After a series of late or unpaid royalty payments, Authentic sent notice that it would not pay 2014 royalties. The Army then terminated the license to Authentic. In 2015, Authentic and its chairman, Ron Reuben, sued the US government for breach of contract of the licensing agreement. The alleged breaches included denial of the right to exploit the goodwill associated with the Army’s trademarks, refusal to permit Authentic to advertise its contribution to certain Army recreation programs, delay of approval for a financing agreement for a footwear line, and denial of approval for advertising featuring the actor Dwayne “The Rock” Johnson. The Court of Federal Claims granted summary judgment to the US government and dismissed Reuben as a co-plaintiff for lack of standing. Authentic appealed.

The two main issues on appeal were whether Authentic provided sufficient evidence to show there was a genuine dispute of material fact that the Army breached the terms of its contract or any implied duty of good faith, and whether Reuben was a third party beneficiary to have standing as a plaintiff to the suit.

As to the first issue, the Federal Circuit affirmed the lower court’s grant of summary judgment for the government because Authentic was unable to provide sufficient evidence that the Army breached the trademark licensing agreement. The Court found that:

The contracting parties contemplated the terms of the contract and voluntarily decided to include express language of broad discretionary approval and exculpatory clauses exempting liability for disapproval, and therefore they should be held to the express terms for which they bargained.

The Army did not act unreasonably or violate its duty of good faith and fair dealing in exercising its discretion because it did approve more than 90% of Authentic’s products.

Authentic’s argument that the Army’s discretion was too broad and restricted Authentic’s use of the trademarks to solely “decorative purposes” was without merit because (1) the Court was not evaluating the validity of the trademarks here, (2) Authentic still [...]

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