Other Barks & Bites for Friday, September 20: Biden Administration Announces $3 Billion Advanced Battery Investment; Fifth Circuit Affirms Fair Use Ruling on Dog Art Kits; and California Passes State Bills on Digital Replica Rights

Kevin McNish‘s Basset Hound/ Junior Morale Officer, Flora

This week in Other Barks & Bites: the Federal Circuit reversed a District of Delaware ruling after finding that the court’s sua sponte Section 101 invalidation of patent claims violated the statutory presumption of validity under Section 282; California joins Tennessee and Illinois in enacting state bills providing remedies against unauthorized digital replicas of individuals; the Fifth Circuit affirms a fair use ruling finding that educational art kits made a transformative use of an artist’s series of dog paintings; an Eastern District of New York magistrate judge recommends granting Gilead Sciences’ contempt motion against an individual defendant in an HIV counterfeit drug case who sold property in violation of an asset freeze order; the Second Circuit finds personal jurisdiction over a China-based online retailer selling counterfeit American Girl dolls; and the Biden Administration announces federal funding investments of $3 billion to support domestic advanced battery projects.

Barks

Fifth Circuit Affirms Fair Use SJ Ruling Dismissing IP Claims Against Dog Art Kits – On Wednesday, September 18, the U.S. Court of Appeals for the Fifth Circuit issued a decision in Keck v. Mix Creative Learning Center, L.L.C. in which the appellate court affirmed the Southern District of Texas’ summary judgment ruling dismissing copyright claims filed against educational art kits distributed by Mix Creative Learning Center that reproduced artist Michael Keck’s Dog Art series. The Fifth Circuit also found harmless error in the district court’s sua sponte grant of summary judgment on Keck’s trademark claims, ruling that Keck’s counsel had conceded that his trademark and copyright claims were interchangeable. 

CAFC Says Sua Sponte Section 101 Invalidation Runs Afoul of Statutory Presumption of Validity – On Wednesday, September 18, the U.S. Court of Appeals for the Federal Circuit issued a precedential decision in Astellas Pharma, Inc. v. Sandoz Inc. in which the appellate court vacated a ruling by the District of Delaware, which had sua sponte found that the patent claims asserted by Astellas Pharma were invalid under 35 U.S.C. § 101 for being directed to an abstract idea. The Federal Circuit noted that the district court’s ruling violated the presumption of validity that the court is supposed to apply under 35 U.S.C. § 282. The CAFC also denied Astellas Pharma’s request to reassign the case to a new district court judge, noting that while there were issues with the judge’s legal analysis and statements made without relevance to the case, it was confident that the judge could make a fair adjudication now that the proper course had been clarified.

Second Circuit Finds Personal Jurisdiction Over Chinese Retailer in Counterfeit Doll Case – On Tuesday, September 17, the U.S. Court of Appeals for the Second Circuit issued a decision in American Girl, LLC v. Zembrka in which the the appellate court reversed the Southern District of New York’s ruling dismissing copyright and trademark claims filed over sales of counterfeit American Girl dolls by a Chinese entity operating retail websites online. The Second Circuit found that Zembrka transacted business in New York by completing sales to New York customers through its websites, conferring personal jurisdiction over Zembrka under the terms of the state’s long-arm statute.

CAFC Affirms Section 101 Invalidation, Moots Rest of Appeal for PTAB Invalidation – On Tuesday, September 17, the Federal Circuit entered a ruling in Angel Technologies Group, LLC v. Meta Platforms, Inc. in which the appellate court affirmed the Central District of California’s invalidation of a patent claim owned by Angel Technologies after determining that the claim was directed to the patent-ineligible abstract idea of collecting photos in an album. The Federal Circuit also mooted Angel Technologies’ appeal with respect to all other patent claims in the case due to the invalidation of those claims for obviousness in parallel inter partes review (IPR) proceedings conducted at the Patent Trial and Appeal Board (PTAB).

USPTO Publishes Final Rule Making Motion to Amend Pilot Program Permanent – On Tuesday, September 17, the U.S. Patent and Trademark Office published a final rule in the Federal Register establishing that the agency’s Motion to Amend (MTA) practice in Patent Trial and Appeal Board (PTAB) proceedings would become permanent. The final rule also altered some aspects of MTA practice by allowing petitioners to file a sur-reply in response to the PTAB’s preliminary guidance and providing the PTAB discretion to raise patentability grounds sua sponte during the MTA process.

CAFC Reverses District Court’s Finding That Patent Claims Were Mutually Exclusive – On Monday, September 16, the Federal Circuit issued a precedential decision in Vascular Solutions LLC v. Medtronic, Inc. in which the appellate court reversed an indefiniteness ruling entered by the District of Minnesota invalidating all guide catheter patent claims asserted by Vascular Solutions against Medtronic. The Federal Circuit found that the district court erred in reaching its indefiniteness conclusion after finding that limitations of the asserted patent claims were mutually exclusive, adding that patent claiming is not so restricted that claims cannot vary in the way that they claim the disclosed subject matter.

Bites

EDNY Unseals Grant of Contempt Motion in Gilead’s HIV Drug Anti-Counterfeiting Case – On Thursday, September 19, the Eastern District of New York unsealed a report and recommendation filed by U.S. Magistrate Judge Joseph Marutollo favoring the grant of a contempt motion filed by American pharmaceutical developer Gilead Sciences against an individual defendant in Gilead’s case against parties distributing counterfeit versions of branded HIV treatments. Judge Marutollo recommends that Yisel Lopez deposit more than $400,000 for sums secreted in violation of the court’s asset freeze order through Lopez’s sale of property that was subject to that order.

Continuous Pumping Fracking Patents Asserted in District Court Survive IPRs – On Wednesday, September 18, patent law firm Haynes Boone announced that it had successfully defended a pair of patents owned by client Downing Wellhead Equipment covering continuous pumping technology for use in hydraulic fracturing applications in IPR proceedings petitioned by Intelligent Wellhead Systems, which had been accused of infringing those patents in a complaint filed in Colorado District Court. The PTAB denied institution to one petition challenging the patents for novelty and obviousness, finding that the petitioner did not show all elements of Downing’s patent claims disclosed by the prior art, and rejected another IPR petition as a parallel challenge.

California Becomes Latest State to Enact Right of Publicity Law Regulating Gen AI – On Tuesday, September 17, California Governor Gavin Newsom signed a pair of bills amending state law to prohibit the distribution of unauthorized digital replicas, becoming the third state in the U.S. to do so behind Tennessee and Illinois. Assembly Bill 1836 increases civil penalties against parties who make unauthorized distributions of digital replicas of a deceased personality’s voice or likeness, and Assembly Bill 2602 provides that contracts to produce performances by digital replicas are unenforceable as against public policy if those contracts fail to include a reasonably specific description of the digital replica’s intended uses.

Universities, VCs, Startups and More Express Support for Trio of Pro-Patent Bills in Congress – This week, several letters were addressed to the leadership of the U.S. Senate Committee on the Judiciary expressing support for several patent bills being marked up at a committee hearing on September 19, including the Promoting and Respecting Economically Vital American Innovation Leadership (PREVAIL) Act, the Patent Eligibility Restoration Act (PERA), and the Inventor Diversity for Economic Advancement (IDEA) Act. Organizations supporting these bills include the Association for American Universities, the Association of University Technology Managers, the American Intellectual Property Law Association, the Council for Innovation Promotion, the Alliance of U.S. Startups for Inventors and Jobs, the Innovation Alliance, and the Medical Device Manufacturers Association. 

Zynga Hit With $45M Verdict for Infringement of Web Communications Patents by “Farmville” – On Friday, September 13, a jury verdict entered in the District of Delaware awarded $44.9 million in damages to software giant IBM after finding that Zynga infringed a pair of patents covering web-based methods of communication by publishing several mobile video games, including several titles in the popular “Farmville” series. The vast majority of those damages, $40 million worth, were attributable to Zynga’s infringement of U.S. Patent No. 7072849, Method for Presenting Advertising in an Interactive Service.

EUIPO, EU Commission Partner on IP Training for Influencers – On Friday, September 13, the European Union Intellectual Property Office (EUIPO) announced that it would be partnering with the European Commission to offer intellectual property (IP) training courses available through the Influencer Legal Hub that are designed specifically for social media influencers. These courses will focus on protecting IP created by influencers, respecting the IP of others and avoiding the promotion of counterfeit goods or pirated services.

Minor League Hockey Teams Face Copyright Lawsuit Over Social Media Posts – On Thursday, September 12, music company Associated Production Music (APM) filed a lawsuit in the Central District of California against the American Hockey League (AHL) and nine AHL franchises, alleging that the hockey teams infringed upon copyright in more than 230 posts on various social media channels using APM’s music without any license.

This Week on Wall Street

Biden Administration Announces $3B Investment in Advanced Battery Projects – On Friday, September 20, the U.S. Department of Energy announced that it would implement a plan by the Biden Administration to invest more than $3 billion of federal funding into 25 advanced battery projects being conducted across 14 states to improve the domestic supply chain for battery technologies. The funds are expected to support the creation of up to 8,000 construction jobs and 4,000 operating jobs.

Quarterly Earnings – The following firms identified among the IPO’s Top 300 Patent Recipients for 2023 are announcing quarterly earnings next week (2023 rank in parentheses):

• Monday: None
• Tuesday: None
• Wednesday: Micron Technology Inc. (11th)
• Thursday: Accenture plc (t-244th)
• Friday: None