Other Barks & Bites for Friday, July 17: CAFC Says Invalidity Challenge Can’t Rescind ITC Exclusion Order, 83% of PTAB Motions to Amend in Pilot Program Seek Board Guidance

This week in Other Barks & Bites: the Federal Circuit holds that obviousness and anticipation invalidity contentions are not “changed conditions” for rescinding an exclusion order entered by the International Trade Commission; Google becomes the latest American tech company to make a major investment in India’s Jio Platforms; the European General Court rescinds tax rulings against Apple for Irish state aid related to IP licensing practices; the USPTO issues an update to PTAB motion to amend statistics showing that 83% of pilot program-eligible motions have sought Board guidance; the Copyright Office issues a proposed rule on royalty reporting obligations for digital music providers during the Music Modernization Act’s transition period; the D.C. Circuit vacates the denial of a Rule 26(d)(1) motion to subpoena info because of erroneous analysis regarding the salacious nature of the plaintiff’s copyrighted adult films; and Drew Hirshfeld is appointed to serve a second five-year term as the USPTO’s Commissioner of Patents.

Bites

Copyright Office Proposes Rule on Royalty Reporting Duties During MMA’s Transition Period – On Friday, July 17, the U.S. Copyright Office published a notice of proposed rulemaking in the Federal Register regarding the obligations of digital music providers in reporting and transferring accrued royalties to the Mechanical Licensing Collective during the transition period prior to the establishment of blanket licenses under the Hatch-Goodlatte Music Modernization Act to remain eligible for limited liability provisions of that law. 

CAFC Says Invalidity Challenge Not Permissible Basis to Rescind ITC Exclusion Order – On Thursday, July 16, the U.S. Court of Appeals for the Federal Circuit issued a precedential decision in Mayborn Group, Ltd. v. International Trade Commission in which the appellate court affirmed the ITC’s decision to deny Mayborn’s petition to rescind a general exclusion order. The Federal Circuit affirmed the ITC’s reasoning that an assertion of patent invalidity, while an affirmative defense to legal proceedings on infringement, is not a “changed condition” providing a basis to rescind a general exclusion order under 19 U.S.C. § 1337(k)(1).

EU Advocate General Says YouTube Not Directly Liable for Infringing Videos Uploaded by Users – On Thursday, July 16, Advocate General Saugmandsgaard Øe issued an opinion in a pair of cases before the Court of Justice of the European Union indicating that, under EU law, online platform operators like YouTube are not directly liable for the illegal uploading of videos to their platforms by users. 

USPTO Study on Motions to Amend Shows 83 Percent of Pilot-Eligible Motions Seek Board Guidance – On Wednesday, July 15, the U.S. Patent and Trademark Office issued its latest study on motion to amend practice at the Patent Trial and Appeal Board (PTAB) which showed that, of 58 filed motions to amend patent claims which are eligible for the USPTO’s motion to amend pilot program, 48 motions (83%) requested preliminary guidance from the PTAB available through the pilot program.

CAFC Affirms Joint Inventorship Finding on Cancer Treatment Patents – On Tuesday, July 14, the Federal Circuit issued a precedential decision in Dana-Farber Cancer Institute, Inc. v. Ono Pharmaceutical Co., Ltd. in which the appellate court affirmed a ruling from the District of Massachusetts ordering that two inventors be added to a series of six patents covering cancer treatment technologies over Ono Pharmaceutical’s argument that inventive contributions made public through publication in a medical journal no longer qualified that contribution as a significant one to conception.

EPO, JPO and KIPO Issue Joint Messages on Innovation and Covid-19 Recovery – European Patent Office (EPO) President António Campinos, Japan Patent Office (JPO) Commissioner Akira Matsunaga and Korean Intellectual Property Office (KIPO) Commissioner Park Wonjoo have issued joint messages on the Offices’ responses to the Covid-19 pandemic, saying that “innovation will play a central role in the recovery from the impact of the pandemic.” They emphasized the importance of cooperation and reaffirmed their commitment to addressing the current challenges together. Similar joint messages have been issued between the EPO and USPTO and the EPO and the China National Intellectual Property Administration.

D.C. Circuit Reverses District Court in Adult Films Copyright Case – On Tuesday, July 14, the U.S. Court of Appeals for the D.C. Circuit issued a decision in Strike 3 Holdings, LLC v. Doe in which the appellate court vacated the District of D.C.’s denial of a Rule 26(d)(1) motion by Strike 3 to subpoena information from Comcast about a John Doe subscriber. The D.C. Circuit found that the district court applied improper weight to the “aberrantly salacious nature” of Strike 3’s adult films in concluding that Strike 3 couldn’t state a plausible claim for infringement and in drawing negative inferences about Strike 3’s litigation tactics.

CAFC Vacates Pre-Suit Damages, Reyna Dissent Argues Section 101 Invalidity – On Tuesday, July 14, a majority panel of the Federal Circuit issued a precedential decision in Packet Intelligence LLC v. NetScout Systems, Inc. in which the appellate court affirmed most of a patent infringement ruling by the Eastern District of Texas except for a pre-suit damages award to Packet Intelligence which was vacated due to improper product marking. Circuit Judge Jimmie Reyna authored a dissenting opinion arguing that Packet Intelligence’s patent claims are invalid under 35 U.S.C. § 101 for being directed to the abstract idea of identifying data packets as belonging to conversational flows.

Copyright Office Pushes Coronavirus-Related Deadline Extensions to September 8 – On Friday, July 10, the U.S. Copyright Office announced that it was exercising its authority under the Coronavirus Aid, Relief, and Economic Security (CARES) Act to extend various deadlines related to certain registration claims, notices of termination, and Section 115 notices of intention and statements of account to September 8, an additional 60 days after the previous extended deadline.

Barks 

ITC Institutes Section 337 Investigation of Massage Devices – On Thursday, July 16, the U.S. International Trade Commission issued a notice of institution of a Section 337 investigation into certain percussive massage devices imported and sold by nearly 20 companies from the U.S., China and Hong Kong based on claims of utility and design patent infringement by physical recovery and movement enhancement technology firm Hyperice of Irvine, CA.

EU General Court Annuls Tax Rulings Against Apple for IP Licensing Activities – On Wednesday, July 15, the General Court of the European Union issued a decision annulling a pair of tax rulings issued in 2016 against Apple. The General Court found that the European Commission incorrectly concluded that Irish tax authorities provided an advantage through state aid to Apple as a result of not having allocated certain intellectual property licenses to a pair of Ireland-based Apple subsidiaries.

Netflix, “Stranger Things” Creators Face Copyright Lawsuit – On Wednesday, July 15, Irish Rover Entertainment filed a lawsuit in the Central District of California alleging claims of copyright infringement against Netflix and the creators of the television series “Stranger Things,” which Irish Rover claims copied concept art and various other elements from a screenplay by Jeffrey Kennedy titled “Totem.”

Seventh Circuit Says Personal Jurisdiction Sinks Trade Secret Suit – On Monday, July 13, the U.S. Court of Appeals for the Federal Circuit issued a decision in J.S.T. Corp. v. Foxconn Interconnect Technology Ltd. in which the appellate court affirmed the Northern District of Illinois’ dismissal of J.S.T.’s trade secret claims for lack of personal jurisdiction. The court found that Foxconn’s only link to Illinois was sales of connectors to Bosch for use in General Motors cars sold in Illinois.

Drew Hirshfeld Appointed to Serve Another Five Years as Commissioner of Patents – On Monday, July 13, the USPTO announced that Commissioner of Patents Drew Hirshfeld had been appointed to serve a second five-year term in that same role.

Copyright, Trade Secret Case Over Saints Locker Room Redesign Survives Motion to Dismiss – On Monday, July 13, U.S. District Judge Ed Kinkeade of the Northern District of Texas issued a ruling denying most of a motion to dismiss copyright infringement and trade secret misappropriation claims stemming from a confidential bidding process among contractors for a 2016 locker room redesign for the NFL’s New Orleans Saints.

Judge Caproni Finds Fair Use of Van Halen Photo by Metropolitan Museum of Art – On Monday, July 13, U.S. District Judge Valerie Caproni of the Southern District of New York issued a ruling dismissing a copyright case filed by a photographer against the Metropolitan Museum of Art after Judge Caproni found that the factors on fair use, especially the scholarly use of the copyrighted work, formed a defense to the museum’s use of a photograph of Eddie Van Halen.

Ninth Circuit Cites Separate Accrual Rule in Affirming Denial of Statute of Limitations Defense – On Monday, July 13, the U.S. Court of Appeals for the Ninth Circuit issued a decision in WB Music Corp. v. Stolz affirming the Central District of California’s decision to deny the defendant’s motion for judgment on the pleadings based on statute of limitations and laches defenses. The appellate court found that Stolz’s argument that a 2012 ASCAP notice of a radio license termination was not the relevant date for the three-year statute of limitations under the Copyright Act because of the separate accrual rule creating a new statute running from each infringing broadcast occurring after the 2012 notice. 

This Week on Wall Street

Netflix Misses on New Subscriber Guidance Despite Pandemic Surge in Users – On Thursday, July 16, shares of Netflix stock dropped by nearly 9% in after hours trading after it issued guidance on expectations for 2.5 million net new subscribers during the third quarter, well short of analyst expectations of 5.27 million, despite reporting a surge in users owing to the COVID-19 pandemic.

Google Becomes Latest American Tech Giant to Invest in India’s Jio Platforms – On Wednesday, July 15, Indian billionaire Mukesh Ambani, the largest shareholder in Reliance Industries and the richest man in Asia, announced a $4.5 billion deal between Google parent company Alphabet and Reliance subsidiary Jio Platforms to develop affordable smartphones for Indian consumers. This is the latest major investment this year into Jio Platforms this year among American tech companies including Facebook, Qualcomm and Intel.

Quarterly Earnings – The following firms identified among the IPO’s Top 300 Patent Recipients for 2019 are announcing quarterly earnings next week (2019 rank in parentheses):

• Monday: Halliburton Co. (41st); Hyundai Motor Co. (23rd); Koninklijke Philips N.V. (40th)
• Tuesday: AB SKF (t-287th); Intuitive Surgical (245th); Lockheed Martin (141st); Nidec Corp. (190th); Novartis AG (195th); Texas Instruments Inc. (50th)
• Wednesday: ABB Ltd. (119th); LG Innotek Co. (123rd); Microsoft Corp. (5th); Thermo Fisher Scientific Inc. (137th); Whirlpool Corp. (160th)
• Thursday: AT&T Inc. (27th); Dow Inc. (90th); Intel Corp. (4th); LG Display Co. (53rd); SK Hynix Inc. (58th); Skyworks Solutions Inc. (166th); STMicroelectronics N.V. (61st)
• Friday: Honeywell International Inc. (35th); Schlumberger N.V. (51st); Signify N.V. (t-142nd); Verizon Communications Inc. (76th)

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