February 2017 IP Update

The high court ended 2016 with the attention-grabbing decision in Samsung Electronics v. Applepertaining to the calculation of design patent damages. The judgment reversed the Federal Circuit’s holding that an award could be calculated based on the product as a whole despite infringement found only on individual components. The present docket proves to be no less important, with the Court poised to answer questions of great interest to patent, trademark, and copyright practitioners.

Laches defense in patent infringement claims

In SCA Hygiene Products v. First Quality Baby Products (No. 15-927), the question is whether the defense of laches, or unreasonable delay in bringing a claim, can bar a patent infringement claim brought within the six-year statutory period of 35 U.S.C. § 286. The Federal Circuit found that the presumption of laches applied due to SCA’s six-year-plus delay in suing First Quality for infringement. SCA Hygiene filed a petition to the Supreme Court based on the high court’s decision in Petrella v. Metro-Goldwyn Mayer, 134 S. Ct. 1962 (2014), which held that laches is not available as defense to copyright infringement.

SCA argued that although the Federal Circuit agreed that there is “no substantive distinction material to the Petrellaanalysis” between copyright and patent, the court perplexingly held that laches may be used to bar patent infringement claims even if they’re commenced within the statutory six-year period. Thus, according to SCA and the numerous amicus briefs, there should be no substantive difference between copyright and patent law with respect to the laches defense. Arguments in SCA Hygiene were heard November 1, 2016.

Here are links to the petition for certiorari and the question that the Court agreed to consider.

Inducing infringement outside of the United States

In Life Technologies Corporation v. Promega Corporation (No. 14-1538), the question is whether supplying a single commodity component of a multi-component invention is an infringing act under 35 U.S.C. § 271(f)(1). The statute is concerned with the supply from the United States of “all or a substantial portion” of the components of a patented invention to induce the combination of components outside the United States.

The term “substantial” is causing much of the concern, with parties alternately arguing for “substantial” to be defined in terms of quantity (for example, the number of components) or quality (the importance of the component to the end product). In Life Technologies, the specific question is whether the US export of the commodity Taq polymerase is a “substantial” enough portion of a genetic testing kit assembled in the UK. Arguments were heard December 6, 2016.

Here are links to the petition for certiorari and the question that the Court agreed to consider.

Trademark application refusal

In Michelle K. Lee, Director, United States Patent and Trademark Office, v. Simon Shiao Tam (No. 15-1293), the question presented is whether Section 2(a) of the Lanham Act, which reads that no trademark shall be refused registration on account of its nature unless it “consists of or comprises…matter which may disparage…persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute,” is invalid under the First Amendment protection of free speech. The trademark examiner cited this statute in refusing registration of “THE SLANTS” for an Asian-American rock band. Arguments in Lee v. Tam were heard January 18, 2017.

Here are links to the petition for certiorari and the question that the Court agreed to consider.

Domestic and international patent exhaustion

The “patent exhaustion” doctrine provides that once a patented product has been sold by a patent owner (“the first unrestricted sale”), the patent owner’s control over the sold product is exhausted. In Impression Products, Inc. v. Lexmark International, Inc. (No. 15-1189), the questions presented are (1) whether the patent exhaustion doctrine applies to a conditional sale of a patented item that transfers title to the item while specifying post-sale restrictions on the item’s use or resale, and (2) whether a sale of a patented item that takes place outside of the United States exhausts the U.S. patent rights on that item. Arguments are scheduled for March 21, 2017.

Here are links to the petition for certiorari and the questions that the Court agreed to consider.

Biologics notice of commercial marketing

The Biologics Price Competition and Innovation Act of 2009 (“BPCIA”) created an abbreviated regulatory pathway for the Food and Drug Administration to approve biological products that are similar (“biosimilar”) to a previously approved biological product. The “notice of commercial marketing” provision of the BPCIA requires a would-be competitor (to the established biologic provider) seeking approval for a biosimilar to provide a notice of intent to market the biosimilar. The notice allows the provider of the reference biologic to seek a preliminary injunction.

The Federal Circuit held that, while the biosimilar provider does not have to hand over application information to the reference biologic provider (in a process known as the “patent dance”), the notice itself was mandatory. The notice, which can be given only after the biosimilar application is approved, effectively adds 180 days of exclusivity for the reference biologic provider.

In Sandoz Inc. v. Amgen Inc., the first question deals with whether the notice of commercial marketing can be given before FDA approval (thus starting the 180-day clock in parallel with the lengthy FDA approval process). The second question is whether the delaying of all biosimilars to market by 180 days improperly grants an additional six months of exclusivity to the reference biologic provider.

Here are links to the petition for certiorari and the questions that the Court agreed to consider.

Venue choice

The choice of where one can bring a suit affects any domestic company or individual subject to a patent infringement claim. The Eastern District of Texas has infamously evolved over time into a haven for patent holders, especially of the non-practicing type. Interestingly, the Supreme Court has previously considered this question in a 1957 case, Fourco Glass Co. v. Transmirra Products Corp., holding that venue was governed by 28 U.S.C. § 1400(b), a statute that defines narrowly where infringement suits may be brought: only in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.

Since 1957, Congress has tweaked laws concerning venue, and the Federal Circuit ruled contrary to the Supreme Court decision. TC Heartland LLC v. Kraft Foods Group Brands LLC (No. 16-341) revisits the same question 60 years later: whether the narrower patent venue statute is the exclusive authority on venue, or whether it is supplemented by the broader venue statute, 28 U.S.C. § 1391(c). Amicus briefs have been filed, most arguing that the Court should put a stop to forum-shopping in patent cases. Although the case doesn’t actually involve the Eastern District of Texas, a decision restricting venue would keep most suits out of the district, since few patent defendants are based there. Arguments are scheduled for March 27, 2017.

Here are links to the petition for certiorari and the question that the Court agreed to consider.

Copyrighting a feature of a useful article

Copyright law extends its protection to the “design of a useful article” only to the extent the design stands apart from the utilitarian aspects of the article. In Star Athletica, LLC v. Varsity Brands, Inc., et al. (No. 15-866), the question is whether the decorative elements of cheerleading uniforms can be distinguished from the functionality afforded by the decorative elements. For example, are the color blocks and chevrons that distinguish cheerleading uniforms copyrightable, or is functionality their sole purpose?

Hence, the question presented to the high court is: what is the appropriate test in determining the protectability, by copyright, of a feature of a useful article? A Supreme Court ruling that determines that certain patterns and features of designer clothing are not copyrightable could have a major impact on the fashion industry. On the other hand, a ruling that determines a test for separating a copyrightable design from its function could clarify this murky area of law. Arguments in Star Athletica were heard October 31, 2016.

Here are links to the petition for certiorari and the question that the Court agreed to consider.