Weekly IP Takeaways

Prepared by Cislo & Thomas LLP Attorney Mark D. Nielsen, Ph.D.

1. A recent sua sponte order from the Federal Circuit Court of Appeals on September 16, 2021 in In re Boloro Global Limited extended the Supreme Court’s Arthrex “fix” in connection with inter partes reviews to ex parte appeals of rejected patent applications. We previously wrote about this issue (Takeaway No. 1), the Supreme Court’s Arthrex “fix” (Takeaway No. 2), and how the U.S. Patent and Trademark Office intended to handle the Arthrex Director review requests (Takeaway No. 1). This case from the Federal Circuit simply extends the Arthrex “fix” to Patent Trial and Appeal Board (PTAB) decisions in ex parte appeals of rejected patent applications. Whether the Director (i.e., current Acting Director Hirschfeld) will actually review any PTAB decisions is another question. The takeaway here is that a patent applicant aggrieved by Examiner rejections and the PTAB upholding the rejections has an additional tool in the toolbox to try to turn around the rejections. Likelihood of success is probably very low.

2. A recent Federal Circuit Court of Appeals opinion reversed a jury’s damages award and denials of trial and post-trial motions by Judge Klausner in the Central District of California. In this patent infringement case, the issue with respect to damages was whether the patent owner had marked its patented products with the applicable patent number or provided notice of infringement prior to its filing of the lawsuit. The defendant challenged the marking and notice, and the District Court rejected those arguments, resulting in a reasonable royalty damages award by the jury. On appeal, the Federal Circuit agreed with the defendant that the damages period was incorrect because of the lack of marking or notice of infringement prior to the lawsuit. In other words, the jury’s damages award covered a period of time that was too large. The Federal Circuit remanded the case to have a damages determination limited to the period of time commencing with the filing of the lawsuit, and not earlier. The takeaways here are: (1) if you are a patent owner, it is usually a good idea to mark patented products with your patent number, and (2) if you are a patent defendant, do not overlook possible deficiencies in marking or notice as a means of limiting potential damages exposure.

3. In a recent decision out of the Northern District of California, the Court granted Instagram’s motion to dismiss a copyright claim brought against it in connection with its embedding tool. The plaintiff was an Instagram user that can post images and videos on Instagram. The embedding tool allows third parties to display images and videos posted on Instagram. The issue in the case was whether Instagram can be held secondarily liable for copyright infringement because of its embedding tool. The further issue underlying this main issue is whether a third party’s display of an image or video via Instagram’s embedding tool is a “display” within the meaning of the Copyright Act. Under the Ninth Circuit’s Perfect 10 v. Amazon opinion, if an entity does not store an image or video that is subsequently displayed, it is not violating a copyright owner’s exclusive “display” right. This is known as the “server test.” Here, the Court granted the motion to dismiss because Instagram itself was not improperly displaying the image or video, and the third parties that might display the image or video through Instagram’s embedding tool are not storing the images or videos. In response to arguments that other courts do not follow the “server test,” (see https://cisloandthomas.com/weekly-ip-takeaways-135 – Takeaway No. 3) – Judge Charles Breyer noted that his hands were tied by binding Ninth Circuit precedent, and that the plaintiffs should take it up with the Ninth Circuit or U.S. Supreme Court. The takeaway here is that details of statutes matter, and binding precedent matters, such that what may seem like a clear “display” violation under the Copyright Act on these facts may not be – at least in the Ninth Circuit.