June 2015

Belief That Patent is Invalid is Not a Defense Against Inducing Infringement (Yet, Belief That You Do Not Infringe Remains a Defense!)

The Supreme Court held that a defendant’s good-faith belief that a patent is invalid is not a defense to a claim of induced infringement under 35 U.S.C. 271(b). Commil USA, LLC v. Cisco Systems, Inc., U.S., No. 13-896, 5/26/2015. Accordingly, the long-held principle that a patent is presumptively valid outweighs and undermines any belief of invalidity by a defendant, even if it were in good faith.

Induced infringement typically is made against manufacturers while the customer is the only direct infringers. Under Commil, manufacturers will not be able to avoid inducement liability by relying on a good-faith assumption or belief that the patent was invalid.

Section 271(b) of the Patent Act states: “Whoever actively induces infringement of a patent shall be liable as an infringer.”  In a previous case, Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060 (2011), the Supreme Court held that inducement liability only exists if (1) the defendant knew of the patent and (2) the defendant knew that the induced acts constitute patent infringement.

The Court vacated the Federal Circuit decision which held that evidence of a good-faith belief of invalidity might negate the intent requirement for induced infringement because a jury may find the defendant did not know that “the induced acts constitute patent infringement.”  The Court focused on the difference between infringement and validity; “invalidity is not a defense to infringement, it is a defense to liability.”

The Court also clarified the mental state required for inducement. The Court rejected the argument that mere knowledge of a patent is sufficient to establish intent to induce, without proof of knowledge that the acts were infringing. Global-Tech required that the defendants knew the acts were infringing.

Prior case law, stating that a good-faith belief that an infringer does not infringe remains a defense to inducement.  Thus, patent non-infringement opinions remain a powerful tool to use against claims of inducing infringement.

Unilever Acquires Kate Somerville Skincare

Cislo & Thomas LLP congratulates our client Kate Somerville Skincare for being acquired by Unilever, the world’s third-largest consumer goods company by sales.  Kate Somerville Skincare is a leading independent Prestige skincare brand, featuring unique Active Balance Technology™ which combines advanced active ingredients with natural botanicals.

Vasiliki Petrou, Unilever SVP Prestige Brands, says: “We are excited to be adding Kate Somerville to the Unilever Prestige personal care portfolio. The most photographed faces in Hollywood trust Kate Somerville Skincare for its high quality ingredients, proven results and touch of glamour. It is a highly differentiated brand that is well-placed in the dermocosmetic segment of the skin care category.”

Cislo & Thomas LLP is proud of all that Kate Somerville has accomplished and looks forward to all of her company’s future endeavors.

Federal Circuit Reaffirms Invalidity After Supreme Court’s Ruling in Teva v. Sandoz

The Supreme Court had held in Teva Parmaceuticals USA, Inc. v. Sandoz, Inc. that the Federal Circuit must review fact-findings under a deferential “clear error” standard and remanded the case down to the Federal Circuit to review the case under that requirement. Rule 52(a) of the Federal Rule of Civil Procedure requires deferential “clear error” review over any findings of fact, but when it comes to claim constructions based only on evidence intrinsic to the patent, such as the claims, specifications and prosecution history, the Federal Circuit may review issues de novo, that is without reference to the lower court’s ruling.

In the remanded case, Teva Parma. USA v. Sandoz, Inc., Appeal no. 2012-1567 et al. (Fed. Cir., June 18, 2015), the Federal Circuit panel had reaffirmed that the lower court’s claim construction was incorrect, and the asserted claims were invalid as indefinite.

The majority of the Federal Circuit panel, after giving deference to the lower court’s facts, found as a conclusion-of-law, which they were to review under a de novo standard, that the lower courts incorrectly analyzed and applied the facts.  Therefore, the Federal Circuit made it clear that they are still free to determine if the question of law of “indefiniteness” was decided properly.

After holding that the expert’s opinion at the lower court was not clearly erroneous, the Federal Circuit found that “Teva cannot transform legal analysis about the meaning or significance into a factual question simply by having an expert testify on it…. Understandings that lie outside the patent documents about the meaning of terms … or the science or state of the knowledge … are factual issues.” Slip op. at 13.

The Federal Circuit then only relied on intrinsic evidence provided by the claims, specification and prosecution history to reach the legal conclusion. “The internal coherence and context assessment of the patent, and whether it conveys claim meaning with reasonable certainty are questions of law.” Id.

This remanded case further proves that the Teva Supreme Court case did not fully resolve the issues relating to the standards of review for questions of law and questions of fact when it comes to indefiniteness of patent claims.

En Banc Garcia v. Google: Actors Have No Copyright Interest in Their Movie Performances

Corresponding to a long-standing copyright law policy, the Ninth Circuit, en banc, in Garcia v.  Google, Inc., (9th Cir., No. 12-57302, May 18, 2015) 2015 U.S.App. Lexis 8105, issued a new opinion affirming the district court.

At the Ninth Circuit Court of Appeals, a majority of the panel reversed the trial court holding that an actor owns a copyright interest in his or her performance, regardless of the type of role, in a film.  Plaintiff actress Cindy Lee Garcia spent less than four days on a film that was never released, yet a scene from it was later inserted into a film that was available on YouTube.

Plaintiff sought a preliminary injunction in the federal district court but was denied. At the appellate level, Garcia was able to establish a likelihood of success on the action, such as injunctive relief, based on an alleged copyright interest Garcia had in her brief performance.

In the issued en banc opinion, Judge McKeown of the Ninth Circuit stated succinctly that “[t]he appeal teaches a simple lesson – a weak copyright claim cannot justify censorship in the guise of authorship.”

Judge McKeown also noted that the Copyright Office had denied Garcia’s claim of copyright as well.  According to the Copyright Office, “[f]or copyright registration purposes, a motion picture is a single integrated work . . . .”

In contract, Canadian copyright law does offer copyright protection for actors’ performances. Only time will tell if the Supreme Court will decide to take up this matter to determine if the United States will shift the paradigm of our copyright system.

En Banc Federal Circuit Holds Functional Language in a Claim May Impute Means-Plus-Function Limitation

In a revision to a Nov. 5, 2014 opinion for Williamson v. Citrix Online, LLC, the court stated en banc that there is no “strong” presumption that the term “means” is required in patent claims to signal that a patent applicant intended interpretation under 35 U.S.C. 112(f) (35 U.S.C. 112 ¶ 6, prior to the America Invents Act).  Where a “means plus function” is imputed in a claim, the claim can be very much limited by what is specifically disclosed in the patent’s specification or could be invalidated as indefinite.

The Federal Circuit affirmed the district court’s interpretation of the claim limitation “distributed learning control module” as a means-plus-function claim despite not having the term “means” in the claim.

Means-plus-function claiming, guidelines set forth in §112(f), occurs when the claim is purposefully drafted to specify function without expressly reciting any corresponding structure disclosed in the specification.

Congress enables means-plus-function claiming but restricts the scope of resulting claim limitations to “only the structure, materials, or acts described in the specification as corresponding to the claimed function and equivalents thereof.”

The U.S. Patent No. 6,155,840 (‘840 Patent) disclosed and claimed methods and systems that utilize a network to provide a digital classroom or auditorium-like metaphor—i.e., a “virtual classroom” environment for “distributed learning” using industry standard computer hardware and software.

The district court concluded that the limitation “distributed learning control module” was a means-plus-function term and analyzed that the specification of the ‘840 Patent did not adequately disclose sufficient structure or an algorithm corresponding to the claimed functions.

The majority affirmed the district court’s conclusion and further concluded that the specification failed to show how the distributed learning control module was structure “by its interaction with the other components in the distributed learning control server.”

In lowering the barrier to invoking the analysis of whether a means-plus-function claim had the proper structural limitations in the specification, the Federal Circuit made it more difficult for inventors to claim protection using functional language, particularly for software implemented inventions.

Consequently, the courts can now use §112(f) in a similar manner as §101 (the requirement that a claim be directed to statutory subject matter) for invalidating software patent claims issued by the U.S. Patent and Trademark Office (USPTO).  Another sad day for software patents.

Going forward, the validity of many patents may now be called into question if the specification does not disclose sufficient structure corresponding to claimed functions regardless of having the term “means” in the claims.

Federal Circuit Reversed and Remanded First Final Decision of the Patent Office’s New Inter Partes Review 

In Microsoft Corporation v. Proxyconn, Inc., No. 14-1543, the Federal Circuit panel held that the Patent Trial and Appeal Board (“PTAB”) unreasonably broadened the construction of the phrases “two other computers,” “sender/computer,” and “receiver/computer” and reversed and remanded its first final decision from a inter partes review case at the PTAB.  The PTAB has been referred to by many as the patent death squad, as it routinely invalidates patent claims.

After eighteen straight affirmances of PTAB rules (fifteen of which were affirmed without an opinion issued), the Federal Circuit stated that PTAB incorrectly used the broadest reasonable interpretation (“BRI”) standard, giving claims an unreasonably broad or legally incorrect interpretation.

In the underlying proceedings, Microsoft challenged Proxyconn’s patent directed toward a system for increasing access speed in a packet-switched network. The PTAB held that all of the challenged claims, except one, were unpatentable and both parties appealed.

The Federal Circuit reviewed PTAB’s claim constructions de novo and articulated a detailed interpretation of the claim language that was appealled by both parties.  The detailed interpretation confirms that “unreasonably broad” claim interpretations are reversible on appeal at the Federal Circuit.

Class Action Granted Class Certification for Copyright Infringement Claim Against SiriusXM For Pre-1972 Sound Recordings

Flo & Eddie, owner of the copyright to the entire back catalogue by The Turtles, brought a copyright infringement suit against SiriusXM for playing pre-1972 songs by The Turtles without the band’s permission, including songs like “Happy Together” and “It Ain’t Me Babe.”

Judge Philip Gutierrez, at the U.S. District Court for the Central District of California, granted The Turtle’s motion for class certification on May 27th.

Flo & Eddie successfully argued that despite the pre-1972 works not being protected by the 1976 Copyright Act, the works were protected from reproduction under California’s Civil Code.

SiriusXM unsuccessfully argue that the court would have a difficult time “establishing ownership of pre-1972 recordings … because there is no registration system creating a presumption of ownership.”

Judge Gutierrez did not find that to be an issue and stated that even though there will need to be evidentiary showings of rightful ownership, SiriusXM failed to show such a process would be “drawn out” and result in unnecessary delays.  On the contrary, it would be inefficient to litigate separately possibly thousands of other such cases of pre-1972 work played without permission on SiriusXM.

Flo & Eddie has filed lawsuits in various jurisdictions seeking more than $100 million for Sirius’ alleged infringements.

A New Patent Reform Act Makes Its Way To the U.S. Congress’ House Floor for Full Vote

Soon after the Senate Judiciary Committee passed its patent reform bill, the PATENT Act (S. 1137), on June 11th, the House Judiciary Committee favorably reported H.R. 9, the Innovation Act with a vote of 24 to 8. The Innovation Act would allegedly address abusive practices by patent trolls and their often-illegitimate claims of patent infringement.

The bill would require plaintiffs to disclose the owner of a patent before a lawsuit is filed and explain why they are suing, while also requiring courts to determine the validity of patent cases early in the process.

The Innovation Act includes provisions aimed at protecting those being brought to court for substantively meritless patent cases, including, among others: (i) heightened pleading requirements, (ii) limits on discovery until after a claim construction ruling, and (iii) a presumptive award of attorneys’ fees to the prevailing party, including possible “joinder” of “interested parties.”

Supporters like Senator Chuck Grassley believe that “the meaningful reforms in our bipartisan bill are needed to ensure that the innovation and entrepreneurship our patent system was designed to protect isn’t undermined” and that “frivolous lawsuits cost [small businesses] millions of dollars and force them to settle despite having a strong defense.”

Opponents, like Rep. Thomas Masse, say Congress is over-correcting an isolated problem, which then weakens small innovators’ abilities to assert their patent rights while lawmakers focus on reining in “patent trolls”; trolls are mostly shell companies that buy up vague patents with the intent of suing other companies for infringement.

“It’s a broad-spectrum weed killer, but it’s killing plants, too,” states Rep. Masse, a Kentucky Republican and MIT graduate who said he holds 29 patents. “The problem,” he said, “is everything this does to a troll, it does to a legitimate inventor.”  He also said the bill would drag out the discovery process during litigation, making it more costly and onerous.

Some scholars argue that Congress should enact reasonable legislation that specifically target bad actors and deceptive behaviors – not overly broad provisions that apply to all litigants seeking to assert patents. Cislo & Thomas LLP agrees that this legislation will hurt inventors and small company innovators who do not steal others’ technologies.

Earlier this year Rep. Bob Goodlatte, Virginia Republican and chairman of the House Judiciary Committee, reintroduced the Innovation Act, which passed the House in the last Congress but died in the Senate.  However, the new Innovation Act shows signs that it may in fact become law by the end of the year.

Kimble v. Marvel: Supreme Court Affirms Long-Standing Precedent of Unenforceability of Royalties Charged Beyond Patent’s Term

The Supreme Court upheld a long-standing precedent set in Brulotte v. Thys Co., a 1964 decision, which restricted the ability of a patent holder from charging a royalty beyond the term of the patent.

Petitioner Kimble owned a patent for a toy that shot pressurize foam string form the palm of one’s hand, which imitates Spiderman’s web shooter. Kimble sued Marble in 1997 for infringing on the patent and the parties settled for a lump sum payment as well as a 3% royalty on Marvel’s future sales of the accused product.

The issue was that the parties failed to set an end date for the royalties and apparently contemplated that the royalties would continue for as long as the product was being sold.

Marvel filed a declaratory judgement that it could cease paying royalties once Kimble’s patent’s term ended, in 2010.  In the declaratory judgement, the district court agreed with Marvel and the Ninth Circuit also affirmed the case, citing Brulotte.

The Supreme Court reasoned that “…when the patent expires, the patentee’s prerogatives expire too, and the right to make or use the article, free from all restriction, passes to the public.”  Further, the Court acknowledged that it was sticking with Brulotte under the principle of stare decisis, which provides that the Court should generally stand by prior decisions.

The Court did however encourage the critics of Kimble to “take their objections to the street, and Congress can correct any mistakes it sees” and that sometimes, stare decisis results in “some wrong decisions.”

Facebook Opposes Trademarks with “Face” or “Book” 

Facebook claims that its “famous” trademark would be diluted and cause confusion when trademarks applications request for trademarks that include “face” or “book.”  In May 2015, Facebook opposed the trademark “Designbook” at the Trademark Trial and Appeal Board (TTAB) at the United States Patent and Trademark Office (USPTO).

Designbook contends that it offers a completely different service from Facebook because it connects start-up businesses with investors and collaborators.

In 2013, Facebook opposed an application for “Facepets” at the TTAB for the same reasons. Facepets was for a pet-themed social network where users could discuss and post pictures of their pets. The results of that case are not publically disclosed.

With such cases surfacing, some consider Facebook’s aggressive approach to its trademark protection as being overzealous, while others consider Facebook’s action as necessary to avoid a likelihood of consumer confusion, dilution, and other harms to its mark.

Do Photographs of Restaurant Dishes Constitute Intellectual Property Violations?

Do you recognize this scene?  A couple’s meal arrives at their table, but instead of diving straight into their food, they pause, not for a prayer, but for a picture.  The practice of photographing restaurant dishes is commonplace nowadays, but often upsets chefs.  Some of them cite bad etiquette, marketing, or disturbance of dining ambiance.  A repeated complaint, however, is that photographing a dish and publishing that picture on the internet constitutes a violation of the chef’s intellectual property.

Three-starred chef Gilles Goujon stated in a France TV Info report that online pictures of his food take away “a little bit of (his) intellectual property.”  Other chefs agree with this notion.  RJ Cooper, for example, states:  “If you’re publishing something in a public forum without written consent, that’s problematic.”  For this reason, some of them insert a “no camera” provision to their menus.

Unfortunately for them, there is no way for chefs to protect their works in the established categories of IP protection.  According to an article published by Eric von Hippel and Emmanuele Fauchart, chefs operate on a “norms-based” IP system, which is founded on community social norms.  Norms-based IP protection between chefs means:

  • not copying exactly an innovative recipe created by a colleague
  • not passing on recipe-related secret information without permission
  •  giving credit to developers of significant recipes

Those who do not hold to these norms suffer informal consequences such as withholding of information or community exclusion.  Though this system works from chef-to-chef, the industry has failed to establish such a standard between chefs and their clientele.  The trouble is that there is no legal basis for claiming intellectual property infringement.  Dishes are not protected works or articles.  They are generally not permanent, fixated, utilitarian, or original enough to get around various design or copyright qualification requirements.

Even if the dishes had IP embodiments, it would be difficult to prove that taking photographs of them truly constitutes infringement as opposed to fair use.