Recapping the Recently Completed Supreme Court Term: IP Decisions, Denials and Deferrals

The recently-concluded term of the U.S. Supreme Court featured four intellectual property decisions: one patent case, two trademark cases, and one copyright case. Three of the four opinions were unanimous, citing fundamental and time-honored precedents for support. The only dissent involved a copyright dispute centering on Andy Warhol’s use of a third-party photograph of Prince in his work. That case resulted in a highly charged debate between Justices Sotomayor and Kagan as to whether Warhol’s copying constituted transformative fair use.

Patent: The patent decision in Amgen v. Sanofi involved patents covering antibodies that help reduced cholesterol levels by inhibiting a particular protein. An Amgen patent purported to claim an entire genus of antibodies but identified the amino acid sequences of only 26 such antibodies. To address the rest of the genus, the patent specification described two methods of discovering the other members of the genus.

In response to an infringement lawsuit from Amgen, Sanofi argued that the patent was not enabling with respect to the entire genus. Sanofi’s argument succeeded at trial at the Federal Circuit of Appeals.

The Supreme Court appeal attracted nearly three dozen amicus briefs. Not surprisingly, some major drug companies supported Amgen’s position. So did a slew of law professors headed by Mark Lemley, who argued that genus claims in life sciences should be allowed so that competitors would not be able to avoid them by making minor changes to the claimed chemical while “capturing the heart of the invention.”

Justice Gorsuch, writing for a unanimous Court, harkened back to a patent that Robert Morse obtained in 1840. While most of his claims were upheld, one claim that was not limited to any specific machinery for transmitting symbols electronically was disallowed as too broad. Consistent with that example, the Court’s opinion dismissed as “little more than research assignments” the methods set forth in the patent specification for discovering the other antibodies that might be effective in inhibiting a cholesterol-related protein.

Thus, Amgen v. Sanofi makes existing genus claims in life science patent quite vulnerable to attack and makes new ones unlikely to be issued.

Trademark: The Court issued two trademark decisions in June. In Jack Daniel’s Properties Inc. v. VIP Products LLC, the Court considered an infringement action brought by a whiskey maker against the maker of a chewable dog toy designed to look humorously like the famous whiskey bottle. At trial, Jack Daniel’s prevailed. Based upon survey evidence presented by the plaintiff, the trial court found that consumers were likely to be confused about the source of the dog toy.

On appeal, the Ninth Circuit disagreed, holding that First Amendment considerations would protect the “commercial speech” of the chew toy maker if it could satisfy the test expressed in Rogers v. Grimaldi. The Supreme Court neither endorsed nor disputed the Rogers v. Grimaldi’s holding, but confined it to cases in which there is little chance of confusion about the origin of goods. Where, as in the case before it, confusion exists, neither the First Amendment nor judge’s a sense of humor can protect the infringer.

While the opinion of the Court was unanimous, Justices Sotomayor and Alito filed a concurring opinion suggesting that, in evaluating parodies of famous marks, consumer surveys should be viewed with some skepticism. They pointed out that consumers might be confused more about the legality of the parody more than about the actual source of the humorously named product. Tilting the other way, Justices Gorsuch, Thomas and Barrett joined in a concurrence questioning the validity of Rogers v. Grimaldi.

Abitron Austria v. Hetronic International concerned the global reach of the Lanham Act. The Court decided that the Lanham Act does not extend to infringing conduct that solely occurs abroad, no matter how much confusion that conduct may lead to in the United States. Although the ruling itself was a 9-0 decision, Justice Sotomayor filed a concurring opinion that was joined by Justices Roberts, Kagan and Barrett and that reads much like a dissent. While she agreed with the ultimate outcome vacating the 10^th Circuit decision, Justice Sotomayor took fundamental issue with the framework applied by the majority.

In her view, the Lanham Act should extend to activities carried out abroad when there is a likelihood of consumer confusion in the United States. This was not the analysis of the majority, however, which found no clear evidence that Congress intended extraterritorial application of the Lanham Act. Absent such evidence, the Court said, the law should not be applied to conduct beyond the borders of the United Sates.

Copyright: The Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith involved copyright’s fair use doctrine. In 1984, Andy Warhol used a photograph of Prince to create a series of prints. Mr. Warhol had obtained a very limited license from Lynn Goldsmith, the photographer, which he greatly exceeded in creating his print series. After his death, the Andy Warhol Foundation (AWF) licensed Condé Nast to reproduce one of the prints on the cover of a commemorative edition of Vanity Fair to be devoted to Prince. Ms. Goldsmith sued for infringement and the Warhol foundation claimed fair use as a defense.

The Court’s 7-2 opinion was based upon the question of whether Mr. Warhol’s print was sufficiently transformative (thus suggesting fair use) to overcome the commercial nature of the license to Condé Nast (suggesting that the use that was not “fair”). The District Court had determined that “[t]he Prince Series … can reasonably be perceived to have transformed Prince from a vulnerable, uncomfortable person to an iconic, larger-than-life figure.” The Court of Appeals disagreed, chiding the trial court for making itself into an art critic to determine the transformative nature of the Warhol print.

The majority of the Supreme Court focused less on the claimed transformation of the photograph and much more on the commercial nature of the use of the Warhol print – a for-profit publisher trying to sell magazines using Prince as the lure. Using that lens, the majority held that Condé Nast’s use of the Warhol print was not fair and infringed the photographer’s copyright.

In an usually strident dissent, Justice Kagan said that “[t]here is precious little evidence in today’s opinion that the majority has actually looked at these images, much less that it has engaged with the expert views of their aesthetics and meaning.” Instead, “the majority plants itself firmly in the ‘I could paint that’ school of art criticism.” In reply, Justice Sotomayor’s majority opinion accused Justice Kagan of a “series of misstatement and exaggerations, from the dissent’s very first sentence… to its very last.”

Denials and Deferrals

The Court’s recently concluded session was also noteworthy for the cases that it declined to hear. Late in the session, it denied certiorari to Apple and Broadcom, which were seeking to invalidate Cal Tech patents that had been the subject of a $1.1 billion jury verdict against them. The Solicitor General recommended against granting cert, supporting a lower court decision that Apple could not raise in court a legal challenge that it failed to raise in a related inter partes review.

In Thaler v. Vidal, the plaintiff challenged a ruling from the USPTO that an artificial intelligence (AI) engine could not be named as an inventor. Harvard Law School professor Lawrence Lessig submitted an amicus brief in favor of a grant of cert, but the Court turned the petition down.

The Court has granted cert in Vidal v. Elster, a case involving an attempt to register TRUMP TOO SMALL as a trademark. The USPTO refused to register the mark because 15 USC section 1052 requires the consent of a person whose name is part of a proposed trademark registration, and Donald Trump had not consented to the registration. The Federal Circuit Court of Appeals reversed, holding that the statute is an unconstitutional restriction on free speech when applied to a mark that is critical of government officials or public figures. It is that ruling that the Court will consider on appeal and likely decide in its next session.

In Killian v. Vidal, the petitioner challenges the Court’s decision in Alice v. CLS Bank and full gamut of judge-made exceptions to patentability, arguing that they have given rise to capricious case law and violations of the U.S. Constitution and the Administrative Procedure Act. Given the Court’s reluctance to revisit Alice, a denial of cert in this case seems likely, but it has not yet happened.

Looking Ahead

The Court’s recent session resulted in decisions that clarified important questions of law. Its handling of the fair use doctrine in Warhol may make lower courts less inclined to rule on the transformative nature of a work that involves copying another artist, but the Court drew no bright lines there. Its remaining docket has few IP cases at the moment, but that is likely to change.

Image Source: Deposit Photos
Author: etienjones
Image ID: 52674523