Weekly IP Takeaways

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

1. In a recent opinion from the Federal Circuit Court of Appeals, the Court reinstated a jury verdict of willful patent infringement and the Court’s resultant doubling of damages based on the willfulness finding. The original jury verdict of willful infringement and the Court’s enhancement of damages was appealed to the Federal Circuit in 2019. The Federal Circuit vacated the willfulness finding and articulated what seemed to be a very high standard for willful infringement (wanton, malicious, bad faith actions). On remand, no willfulness or enhanced damages was applied. The plaintiff then appealed again to the Federal Circuit, to the same panel as the original appeal. In the current opinion, the panel noted that it was not its intention to articulate an elevated standard for willful infringement, but rather, all that was required was deliberate/intentional infringement. Based on this, the jury verdict was reinstated and enhanced damages upheld. The Court also affirmed the district court’s earlier award of attorneys’ fees, finding that it was supported by the willfulness finding, and also the overly aggressive litigation conduct of the defendant. The takeaway here is that there is no heightened standard for willful patent infringement, and that patent litigants need to be careful about going overboard with aggressive tactics and positions because under Octane Fitness, overly aggressive tactics and positions may support a fee award.

2. A very interesting dissent from Judge Pauline Newman of the Federal Circuit Court of Appeals highlighted another possible constitutional defect in the Patent Trial and Appeal Board (PTAB) structure. In a previous blog entry (Takeaway No. 2), we discussed the Supreme Court’s opinion in the Arthrex case, which challenged the constitutionality of PTAB decisions on the basis that the PTAB judges were “inferior officers” not appointed by the Senate and not subject to review by someone who was appointed by the Senate. The Supreme Court did not disagree, but gave the Director of the U.S. Patent and Trademark Office power to review the decisions of the PTAB judges in order to solve the constitutional defect. Here, in dissent, Judge Newman noted, sua sponte, that the same PTAB judges are not subject to Director review in their decisions about whether or not to institute an administrative review of a patent in the PTAB. Because this was a dissent, it does not have the force of law; but, Judge Newman seems to have a valid point that will likely open the door to challenges to the constitutionality of the inter partes review institution decisions. One additional wrinkle to the Arthrex situation (and the additional fallout that may be precipitated by Judge Newman’s dissent here) is that, at present, there is no Senate-confirmed Director of the U.S. Patent and Trademark Office to conduct the reviews. The takeaway here is that, until a court or Congress fixes this issue, it may provide another basis for forestall PTAB review of one’s patent(s).

3. In yet another Instagram embedding decision, Judge Carter of the Southern District of New York denied Buzzfeed’s motion to dismiss a copyright infringement complaint where Buzzfeed raised a fair use defense. More specifically, a group of photographers sued Buzzfeed for embedding, without permission, their photographs from Instagram into a Buzzfeed article. Buzzfeed asserted that what it did was a fair use, but the Court rejected the argument noting that Buzzfeed did not articulate any transformative use of the photographs. The photographs were not altered, and were simply displayed in a Buzzfeed article. The takeaway here, which may be jurisdictionally limited, is that simply embedding someone else’s photographs into your own article, without any change to the appearance, use, or meaning of the photographs, is not a fair use under the Copyright laws. So, just because something is on the Internet does not mean one can take it for his/her own use.