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One Claim Construction Error Is Enough to Trigger New Trial on Infringement

by | Oct 8, 2020 | ,

The US Court of Appeals for the Federal Circuit re-affirmed that incorrect construction of even a single claim element can be grounds for a new trial on infringement. Network-1 Technologies, Inc. v. Hewlett-Packard Company, Case Nos. 18-2338, -2339, -2395, -2396 (Fed. Cir. Sept. 24, 2020) (Prost, C.J.).

Network-1 Technologies sued Hewlett-Packard (HP) for patent infringement. HP defended on the grounds that the patent was invalid and that it did not infringe. The jury found the patent not infringed and invalid as obvious. Following post-trial motions, the district court denied Network-1’s request for a new trial on infringement but granted its motion for judgment as a matter of law (JMOL) on validity. The court found that HP should have been estopped from raising certain obviousness challenges as a consequence of certain obviousness challenges raised by a third party in a prior inter partes review (IPR) that were essentially the same as HP’s obviousness challenge here. Network-1 appealed the district court’s final judgment that HP did not infringe, arguing that the district court erred in its claim construction. HP cross-appealed on the issues of IPR estoppel under 35 USC § 315(e)(2) and invalidity because of a claim improperly broadened in re-examination.

On appeal, Network-1 contended that the district court erroneously construed the claim terms “main power source” and “low level current.” In order to prevail, Network-1 had to establish not only that at least one jury instruction on claim construction was legally erroneous, but that the error had prejudicial effect. Under Federal Circuit precedent, an incorrect claim construction that removes from the jury a basis on which it reasonably could have reached a different verdict can be an incorrect jury instruction. As the Court explained in Avid Tech. v. Harmonic (Fed. Cir. 2016), “[a]n erroneous claim construction on one element is harmless ‘only if a reasonable jury would have been required by the evidence to find non-infringement even without the error.’”

The Federal Circuit concluded that the district court correctly construed the term “low level current” but erred in its construction of “main power source” to exclude AC power sources on the basis of expert testimony that receipt of AC power by a network device would render it inoperable. The Court deemed this error for two reasons:

    • Even though the network device cannot receive AC power, the record established that “data nodes” or network switches were commonly used to convert AC power to DC power as needed to power the network device. Because nothing in the patent claims precluded the conversion of AC power to DC power, it was error for the district court to add such a limitation.
    • The district court erred by adding a limitation to the claims to carve out certain inoperable embodiments, in this case embodiments that do not convert AC to DC. The Federal Circuit has previously explained that it is improper to add limitations to a claim to exclude only certain inoperable embodiments (Cordis v. Medtronic (Fed. Cir. 2008)). Here, [...]

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“Can’t Hold Us” Liable: Macklemore & Ryan Lewis Win Affirmance in Copyright Suit

by | Oct 8, 2020 |

The US Court of Appeals for the Fifth Circuit affirmed a grant of summary judgment on the issue of copyright infringement and an award of attorneys’ fees against the plaintiff under the Copyright Act. Although the Court noted that it lacked jurisdiction to review sanctions against the plaintiff’s attorney, it observed that counsel went beyond “vigorous representation.” Batiste v. Lewis, Case Nos. 19-30400, -30889 (5th Cir. Sept. 22, 2020) (Clement, J.).

Batiste, a local musician, sued Macklemore & Ryan Lewis, an internationally famous hip-hop duo, for copyright infringement. Batiste alleged that the duo sampled his songs without authorization. As support, Batiste submitted the expert report of a musicologist, Milton, but Milton later admitted that Batiste had conducted the analysis and written the report, and that Milton did not even have access to the necessary software. The district court excluded the report, which Batiste then sought leave to resubmit in his own name. The district court denied leave because Batiste had not disclosed himself as an expert and because the new report was untimely. The district court subsequently granted the defendants’ motion for summary judgment, finding that Batiste had failed to submit sufficient evidence of Macklemore and Lewis’s alleged access to Batiste’s work or of probative similarity between Macklemore and Lewis’s works and Batiste’s. The district court then awarded fees to Macklemore and Lewis under the Copyright Act (17 USC § 505) and made Batiste’s attorney (Hayes) jointly and severally liable for the fees award as a sanction under 28 USC § 1987. Batiste appealed.

Addressing the district court’s summary judgment of no infringement, the Fifth Circuit considered Batiste’s proofs as to access and similarity.

Batiste tried to prove access through “widespread dissemination” and “chain of events” theories. The Court held that Batiste’s evidence of widespread dissemination was insufficient because it only established “quite limited” dissemination of Batiste’s music. Batiste’s chain of events theory—under which Macklemore and Lewis allegedly accessed Batiste’s work by playing a concert at a venue near a record store that sold Batiste’s music—raised only a “bare possibility” of access and was therefore also insufficient.

On the issue of similarity, the Court explained that because of Batiste’s failure to show access, he needed to show “striking similarity” to withstand summary judgment. The Court rejected Batiste’s argument that “overwhelming evidence of access” obviated any need for him to show similarity. The Court compared the allegedly infringing songs to Batiste’s and found them insufficiently similar for a jury to find striking similarity. The Court also rejected Batiste’s invitation to adopt the US Court of Appeals for the Sixth Circuit’s ruling in Bridgeport, which held a showing of similarity unnecessary in some circumstances. The Fifth Circuit noted that Bridgeport has been widely criticized, and pointed out that Bridgeport considered the issue of substantial similarity (which dictates whether factual copying, once established, is legally actionable), whereas the issue in this case was probative similarity (which raises an inference of factual copying).

Batiste challenged the award of attorneys’ fees as erroneous absent a [...]

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Jersey Boys Don’t Cry: No Copyright Protection for Facts “Based on a True Story”

by | Sep 16, 2020 |

The US Court of Appeals for the Ninth Circuit affirmed a district court’s grant of judgment as a matter of law finding that the musical Jersey Boys did not infringe a copyright held in an autobiography of band member Tommy DeVito. Donna Corbello v. Frankie Valli, et al., Case No. 17-16337 (9th Cir. Sept. 8, 2020) (Berzon, J.).

In the 1990s, Rex Woodard ghostwrote an autobiography of Tommy DeVito, one of the original members of the 1950s quartet the Four Seasons. Woodard and DeVito agreed to split the profits equally. However, shortly after finishing the book, and before finding a publisher, Woodard died. Donna Corbello, Woodard’s widow, became the successor-in-interest to the book, and she continued the search for a publisher. Almost 15 years later, Corbello still had not published the book.

DeVito’s autobiography reads as a straightforward historical account of the Four Seasons. At the beginning of the book, DeVito, as the narrator, describes his autobiography as a “complete and truthful chronicle of the Four Seasons,” and he promises not to let “bitterness taint the true story.” Corbello also sent letters to potential publishers emphasizing that the book provided a “behind-the-scenes” look at the Four Seasons. In all accounts, the book is a non-fiction, historical chronicle of events of the Four Seasons.

In 2005, the musical Jersey Boys debuted on Broadway. Jersey Boys also depicts the history of the Four Seasons from its origins in New Jersey to its induction into the Rock and Roll Hall of Fame in 1990. DeVito admitted to working with people involved in developing Jersey Boys and sharing the book with the individuals researching the history of the band.

In 2007, Corbello sued DeVito and 14 defendants, including the band members and the writers, directors and producers of Jersey Boys. The complaint included 20 causes of action, including various forms of copyright infringement. The district court granted summary judgment in favor of the defendants on most of the claims. Corbello appealed. The Ninth Circuit reversed the district court’s grant of summary judgment in favor of defendants, vacated its assessment of costs against Corbello, and remanded for further proceedings.

On remand, the case proceeded to a jury trial where the jury found that the musical infringed the book and that use of the book was not fair use. After the verdict, the district court granted the defendant’s motion for judgment as a matter of law, concluding that any infringement was fair use. Corbello appealed.

On appeal, the central disagreements were whether the musical was substantially similar to the book and whether the defendants copied any protectable portions of the book. The Ninth Circuit analyzed the similarities under the extrinsic test for substantial similarity. The appellate court found that each of the similarities failed because they involved only non-protectable elements of the book. Those non-protectable elements included DeVito depicting himself in the musical (a character based on a historical figure is not protected); Bob Gaudio arriving late to rehearsal, excited about a new song he just [...]

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Liability for Copyright Infringement Attaches if Conduct Exceeds Scope of License

by | Sep 2, 2020 |

The US Court of Appeals for the Ninth Circuit revived a software owner’s copyright infringement suit because the district court erred in granting summary judgment of no infringement by failing to analyze whether the accused infringer exceeded the scope of a copyright license. Oracle America, Inc., et al. v. Hewlett Packard Enterprise Company, Case No. 19-15506 (9th Cir. Aug. 20, 2020) (Smith, J.).

Oracle owns registered copyrights for Solaris software, including copyrighted software patches. Oracle requires its customers have a prepaid annual support contract, for each server they desire to be under support, to access the software patches. Customers under a support plan can access patches through an Oracle support website.

Hewlett Packard Enterprise (HPE) provides a “one-stop-shop” for support to its customers, including HPE servers running Solaris. HPE provides this support directly and through its partners. One of HPE’s partners is Terix Computer Company. Terix arranged for joint HPE-Terix customers to have Oracle support for all of their servers through a single server support plan. Terix accomplished this by downloading Solaris software patches, using the customer’s credentials (created using a Terix-supplied credit card), to make copies for servers that were not part of the support contract.

In 2013, Oracle sued Terix for copyright infringement. The court granted Oracle summary judgment, and Terix stipulated to a judgment on the claims without admitting liability. Oracle and HPE entered into an agreement, effective May 6, 2015, to toll the statute of limitations for any claims Oracle might assert against HPE.

In 2016, Oracle sued HPE for direct copyright infringement concerning HPE’s direct support customers, and for indirect infringement concerning joint HPE-Terix customers. Oracle also sued for claims of intentional interference and unfair competition under California state law. The parties did not dispute that the tolling agreement applied, so the court considered whether the copyright infringement claims were barred for conduct before May 6, 2012. The Copyright Act provides that a copyright infringement claim is subject to a three-year statute of limitations, which runs separately for each violation. Under Ninth Circuit law, a copyright infringement claim begins to accrue “when a when a party discovers, or reasonably should have discovered, the alleged infringement.” Importantly, actual or constructive knowledge triggers the statute of limitations. The Ninth Circuit has explained that suspicion of copyright infringement places a duty on the copyright holder to investigate further into possible infringement or lose the claim.

Oracle conceded that it had concerns about Terix and suspicions about HPE as early as 2010, but argued that HPE used fraudulent means to keep Oracle unaware of its actions, so it had no duty to inquire. The district court disagreed, finding that once Oracle had constructive knowledge, the doctrine of fraudulent concealment was no longer an option to toll the limitations. Because Oracle failed to investigate HPE, the court determined that HPE was entitled to summary judgment on the infringement claims for pre-May 6, 2012, conduct. Oracle appealed.

The Ninth Circuit explained that to prove indirect infringement, Oracle had to show that [...]

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Bugs in Space? Star Trek Plotline Does Not Infringe Tardigrade Video Game

by | Aug 27, 2020 |

The US Court of Appeals for the Second Circuit affirmed a district court’s pleadings-stage determination that certain Star Trek: Discovery characters and plotlines did not infringe copyrighted elements of a video game because there was not substantial similarity between protectible elements of the video game and the Discovery episodes. Abdin v. CBS Broad. Inc., Case No. 19-3160 (Fed. Cir. Aug. 17, 2020) (Chin, J.).

Between 2014 and 2017, Plaintiff Abdin posted videos and draft designs online for his sci-fi video game, Tardigrade, a puzzle-based game in which the human protagonist can travel through outer space in the warm embrace of a gigantic blue tardigrade. Tardigrades, also known as water bears, are microscopic animals capable of withstanding extreme climates—including the harsh vacuum and radiation of space. After a 2007 research study confirmed tardigrades’ spacefaring abilities, they became somewhat of a pop culture phenomenon, being featured in numerous literary works and television shows. In June 2018, Abdin registered a copyright for a distillation of his video game concept.

In the latest installment of the Star Trek series, the 2017 season of Discovery features a three-episode storyline involving a creature called Ripper that resembles a giant tardigrade. The crew of the USS Enterprise realizes that Ripper is able to act as a type of supercomputer to improve the performance of their space traveling equipment (the DASH Drive).

Abdin filed suit for copyright infringement against CBS in August 2018, alleging that the Discovery creators copied aspects of his video game, including space-traveling tardigrades. CBS filed a motion to dismiss, which was granted by the district court. The district court concluded that Abdin’s video game was not substantially similar to Discovery. Abdin appealed.

The Second Circuit reviewed the lower court’s dismissal de novo and affirmed the district court’s dismissal, finding that Abdin failed to plausibly allege substantial similarity between protectible elements of his video game and the Discovery episodes. The Court first looked to the two elements of a copyright infringement claim: (1) ownership of a valid copyright, and (2) copying of constituent elements of the work that are original. The Court explained that to satisfy the second element, Abdin must demonstrate that CBS actually copied Abdin’s work, and that a substantial similarity exists between CBS’s work and the “protectible” elements of Abdin’s work.

The Second Circuit identified three elements of Abdin’s video game that were not protectible under copyright law: facts and ideas, scènes à faire and generic character traits. First, the Court found that the scientific facts relating to tardigrades’ survivability are not copyrightable, and that Abdin’s idea of tardigrades moving through space was also unprotectible. While noting the distinction between an idea and its expression is elusive, the Court explained that Abdin’s space-traveling tardigrade was merely a generalized expression of a scientific fact. Second, the Court looked to whether any of Abdin’s otherwise protectible expressions were unprotected scènes à faire—indispensable “stock themes” in a given genre. The Court explained that space travel, supernatural forces and alien encounters are all generic themes that [...]

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Diamonds to Dust? Too Many Factual Disputes Precludes Summary Judgment

by | Aug 26, 2020 |

The US Court of Appeals for the Second Circuit vacated a district court’s summary judgment grant in favor of a fine jewelry producer for trademark infringement, counterfeiting and unfair competition because factual disputes exist around whether the accused infringer’s use of the word “Tiffany” was merely descriptive of a particular ring setting, thereby supporting a fair use defense to infringement. Tiffany and Company v. Costco Wholesale Corporation, Case Nos. 17-2798-cv, -19-338, -19-404 (2nd Cir. Aug. 17, 2020) (Livingston, J.).

In 2012, a Costco customer alerted Tiffany that she believed Costco was selling diamond engagement rings advertised as Tiffany rings. When Tiffany approached Costco about the issue in December 2012, Costco asserted that its point-of-sale displays bearing the Tiffany name referred to the diamond setting styles of its rings, and that other similar point-of-sale displays also identified common ring settings such as “bezel” or “cathedral” settings. Costco also claims that within one week after Tiffany’s December 2012 outreach, it voluntarily removed all uses of “Tiffany” from its jewelry displays and has not since used the word “Tiffany” to identify any rings or setting styles.

Nevertheless, in 2013, Tiffany filed suit against Costco for trademark infringement and counterfeiting under the Lanham Act, and unfair competition in violation of New York state law, based on Costco’s sales of otherwise unbranded diamond engagement rings identified by point-of-sale signs containing the word “Tiffany.” In response, Costco raised the affirmative defense of fair use, arguing that its use of “Tiffany” on certain signage for rings was not as a source-identifying trademark, but merely to describe a particular six-prong diamond setting style. Costco also filed a counterclaim seeking to cancel certain federal trademark registrations for the TIFFANY mark as “generic” for a specific jewelry setting, and not entitled to registered trademark protection.

The district court granted Tiffany’s motion for summary judgment finding Costco liable for trademark infringement and counterfeiting as a matter of law. The district court then revised a jury’s damages award finding that Costco was liable for willful or intentional infringement to the tune of more than $21 million. Costco appealed.

On appeal, Costco argued it had successfully raised a question of material fact as to its liability for trademark infringement and counterfeiting and was entitled to present its fair use defense to a jury. The Second Circuit addressed the lower court’s trademark “likelihood of confusion” assessment under its own Polaroid factors and explained that if a factual inference must be drawn to arrive at a particular finding on a Polaroid factor, and if a reasonable trier of fact could reach a different conclusion, the district court may not properly resolve that issue on summary judgment. Here, the Court determined that Costco raised a triable question of fact as to at least three of the Polaroid factors, namely, (1) whether Costco’s customers were actually confused as to the source or affiliation of its diamond engagement rings, (2) whether Costco adopted Tiffany’s trademark in bad faith and (3) whether the relevant population of consumers was sufficiently [...]

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It’s Good to Be the Sovereign, Unless You Have an Exclusive Licensee

by | Aug 5, 2020 |

Addressing the interaction between state sovereign immunity under the 11th Amendment and joinder under the Federal Rules of Civil Procedure, a “fractured majority” of the US Court of Appeals for the Federal Circuit determined that an exclusive licensee could proceed with suit even though state sovereign immunity prohibited involuntary joinder of the patent owner. Gensetix, Inc. v. The Board of Regents of the University of Texas System, Case No. 19-1424 (Fed. Cir. July 24, 2020) (O’Malley, J.) (Newman, J., concurring in part and dissenting in part) (Taranto, J., concurring in part and dissenting in part).

In 2014, Gensetix indirectly licensed two patents covering cancer treatment methods from the University of Texas (UT), a state university. A subsequent confirmation between Gensetix and UT confirmed Gensetix’s exclusive license to the patents-in-suit, which required Gensetix to sue potential infringers and gave UT a secondary right to sue if Gensetix did not bring suit. The parties further agreed to cooperate regarding any infringement suit and that nothing in the agreement would waive UT’s sovereign immunity.

Three years later, Gensetix sued Baylor College of Medicine and others for patent infringement. Before filing the complaint, Gensetix asked UT, the legal patent owner, to join suit. UT declined, and Gensetix named it as an involuntary plaintiff. UT moved to dismiss itself from the lawsuit based on its sovereign immunity, and Baylor moved to dismiss because UT was a required party that could not be joined because of its sovereign immunity. The district court agreed with UT and Baylor, concluding that UT’s sovereign immunity prevented Gensetix from joining UT as a plaintiff and that the suit could not proceed without UT. Gensetix appealed.

The Federal Circuit reversed. The majority opinion, authored by Judge O’Malley, held that UT’s sovereign immunity prohibited its joinder as an involuntary plaintiff, but that Gensetix could proceed in its suit against Baylor notwithstanding UT’s absence. The Court affirmed the district court’s conclusion that UT’s 11th Amendment state sovereign immunity prohibited UT’s involuntary joinder. Reasoning that “[i]t is immaterial that there are no claims against UT, or that UT is named an involuntary plaintiff rather than an involuntary defendant,” the Court held that “Rule 19(a)(2) cannot be used to drag an unwilling UT into federal court” because “[t]he Eleventh Amendment serves to prevent ‘the indignity of subjecting a State to the coercive process of judicial tribunals’ against its will.” As for the exclusive licensee’s ability to proceed without UT, the Court explained that the district court abused its discretion by giving “controlling weight” to UT’s sovereign immunity, by failing to appreciate the alignment of interests between Gensetix and UT, and by ignoring that the license eliminated the risk of multiple suits because UT could not sue after Gensetix had done so.

Although both conclusions commanded a majority, they were different majorities. In a separate opinion, Judge Taranto agreed that UT could not be joined, but would also have held that Republic of Philippines v. Pimentel—a Supreme Court case requiring dismissal of claims where an absent [...]

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“Salacious” Content Doesn’t Bar Discovery in Copyright Infringement Suit

by | Jul 30, 2020 |

The US Court of Appeals for the District of Columbia Circuit preserved discovery options for copyright owners fighting online piracy when it reversed the district court’s refusal to allow a subpoena of an alleged online infringer’s internet service provider. The DC Circuit found that the district court abused its discretion by relying heavily on the copyright owner’s litigation history and the nature of its films rather than the relevant legal standards under the Federal Rules of Civil Procedure. Strike 3 Holdings, LLC v. John Doe, Subscriber Assigned IP Address 73.180.154.14 (DC Cir. July 14, 2020) (Rao, J.).

Strike 3 is a producer and online distributor of adult films. Like most of its industry peers, the company faces significant online piracy that is often facilitated by peer-to-peer file sharing. To combat this infringement, Strike 3 regularly files copyright infringement lawsuits against “John Doe” defendants based on the internet protocol (IP) address (and the associated physical address) tied to an online infringer’s illegal file sharing and downloads.

In 2018, Strike 3 filed a copyright infringement lawsuit against the IP address 73.180.154.14 John Doe subscriber located in the District of Columbia after the IP address was associated with 22 instances of infringement in the course of one year. To properly identify the defendant and serve the complaint, Strike 3 also filed a Rule 26(d)(1) motion seeking leave to subpoena Comcast, the subscriber’s internet service provider, for records identifying the John Doe IP address subscriber. But, in applying a multifactor balancing test adopted by the US Court of Appeals for the Second Circuit in Arista Records v. Doe, the district court denied Strike 3’s discovery motion on grounds that Strike 3’s need for the subpoenaed information was outweighed by defendant’s right to be anonymous, which the court found to be notably relevant given the risk of defendant misidentification and the “particularly prurient pornography” at issue.

On appeal, the DC Circuit acknowledged the district court’s broad discretion over the structure, timing and scope of discovery. In Strike 3’s case, however, the DC Circuit found that three aspects of the lower court’s analysis were an abuse of this broad discretion.

First, it was improper and “not supported by the relevant legal standards” for the district court to treat the pornographic content of Strike 3’s copyrighted works as relevant to its entitlement to early discovery. None of the supporting case law suggests that a potentially non-infringing defendant’s privacy interests vary depending on the content of the copyrighted work at issue. The Court warned that a plaintiff’s ability to defend its copyrights cannot turn on a court’s subjective view of the copyrighted material, and held that the content of a copyrighted work is per se irrelevant to a Rule 26(d)(1) motion seeking discovery to identify an anonymous infringer.

The district court’s second abuse of discretion was in its conclusion that, even if the discovery request was granted, Strike 3 could not “identify a copyright infringer who can be sued” for purposes of stating a plausible claim against the [...]

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Knock It Off, Knockoffs? Ninth Circuit Affirms Trade Dress Rights but Not Fame

by | Jul 9, 2020 |

Taking on issues of functionality and fame relating to trade dress rights, the US Court of Appeals for the Ninth Circuit affirmed in part and reversed in part the district court’s judgment after a jury trial on claims of infringement and dilution of trade dress rights in furniture. The Ninth Circuit distinguished utilitarian functionality from aesthetic functionality, and reaffirmed the high burden on the proponent of dilution to establish that the mark has become a “household name.” Blumenthal Distributing, Inc. DBA Office Star v. Herman Miller, Inc., Case Nos. 18-56471, -56493 (9th Cir. June 25, 2020) (Korman, J.).

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