SCOTUS Issues Denials in IP Cases

The U.S. Supreme Court denied the petitions for certiorari in a number of IP cases today, including three the U.S. Solicitor General had recommended rejecting.

Genius v. Google

In Genius v. Google, ML Genius Holdings (Genius) attempted to sue Google for posting song lyrics from its website in Google search results. Genius’s petition asked the High Court to answer the question of whether the Copyright Act’s preemption clause allows a business “to invoke traditional state-law contract remedies to enforce a promise not to copy and use its content?” Genius, an online platform for transcribing and annotating song lyrics, sued Google and LyricFind, which Genius claimed breached its website Terms of Service by “stealing Genius’s work and placing the lyrics on its own competing site, drastically decreasing web traffic to Genius as a result.” In March 2022, the U.S. Court of Appeals for the Second Circuit upheld a district court’s dismissal of Genius’s breach of contract and unfair competition claims as statutorily preempted by the Copyright Act under 17 U.S.C. § 301. Genius then petitioned the Supreme Court.

In their Brief in Opposition to the petition, Google and LyricFind argued that Genius attempted to “invent new rights” by ignoring the true copyright owners of the lyrics and granting itself “copyright-equivalent” rights via its terms of service, even though Google and LyricFind hold licenses from the real copyright owners to reproduce and display the lyrics.

But Genius countered in its November 18 reply that Google purposely misrepresented the petition and Genius’s arguments by accusing it of hiding its terms of service and granting itself copyright-equivalent rights that would make every anonymous visitor to the site vulnerable to a lawsuit.

The U.S. Solicitor General ultimately said the Second Circuit was correct and that the case was a poor vehicle for clarifying Section 301(a)’s application to breach-of-contract claims.

Apple v. Caltech

Similarly, the Solicitor General recommended in May that the Court deny Apple, Inc.’s petition asking it to clarify the proper application of estoppel in inter partes review (IPR) proceedings.

The case stemmed from a February, 2022, Federal Circuit ruling in which the court issued a mixed precedential decision that affirmed, vacated, and remanded in part a decision by the U.S. District Court for the Central District of California. That ruling related to a patent infringement suit filed by the California Institute of Technology (Caltech) against Broadcom Limited, Broadcom Corporation, and Avago Technologies (collectively “Broadcom) and Apple, Inc. concerning Caltech’s U.S. Patent 7,116,710 (‘710 patent), U.S. Patent 7,421,032 (‘032 patent), and U.S. Patent 7,916,781 (‘781 patent).

As part of the decision, the CAFC affirmed the district court’s holding barring raising invalidity challenges based on known prior art after an IPR litigation. The court took the opportunity to overrule Shaw Industries Group, Inc. v. Automated Creel Systems, Inc. (Fed. Cir. 2016) and clarify that estoppel applies to claims and grounds not in the IPR but which reasonably could have been included in the petition.

Later, on February 22, 2022, the CAFC clarified in an errata that “estoppel applies only to the ‘challenged claims,’ i.e., the claims challenged in the IPR petition. Claims not challenged in the petition are not subject to estoppel.”

Apple appealed to the Supreme Court in September 2022, arguing in its petition that when an IPR of a patent claim results in a final written decision, “Section 315(e)(2) estops a petitioner from challenging the validity of that patent claim in district court on ‘any ground that the petitioner raised or reasonably could have raised during that inter partes review.”

The SG said in its brief that Apple’s argument “lacks merit and does not warrant this Court’s review.” While the SG said the phrase “during that inter partes review” in Section 315(e)(2) does refer specifically to post-institution proceedings, Apple still “‘reasonably could have raised’ the patentability challenges at issue here during the instituted reviews.”

Nike v. Adidas

Finally, the Court today denied the petition in Nike, Inc. v. Adidas, AG., which asked “[w]hether, in an inter partes review, the Board sua sponte may identify a reason why, on the existing record, a proposed substitute claim is potentially unpatentable and may decline to accept the substitute claim on that ground after giving the patent owner notice and an opportunity to respond.”

The petition arose from an IPR that was the subject of a recent Merit Systems Protection Board  decision  granting Patent Trial and Appeal Board (PTAB) Administrative Patent Judge (APJ) Michael Fitzpatrick’s request for corrective action with respect to alleged retaliatory personnel actions against him by senior management officials at the Department of Commerce and U.S. Patent and Trademark Office.

The SG, as the Federal Respondent, recommended denying the petition, but said that “the Court may wish to grant, vacate, and remand the case to the Federal Circuit in light of the new information that a pre-decisional panel expansion and unexpansion took place while the case was pending at the Board, as noted publicly for the first time in the MSPB initial decision.”