Other Barks & Bites for Friday, February 13: CAFC Says NHK-Fintiv is General Policy Statement; Second Circuit Adopts Rule on Waiver of DMCA Safe Harbor; and Daren Tang Nominated for Second Term as WIPO Director

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This week in Other Barks & Bites: the U.S. Copyright Office issues a three-year study on small claims filed at the Copyright Claims Board; Commerce Secretary Howard Lutnick publicly retreats from a proposed value-based tax on U.S. patent grants; the Federal Circuit issues several precedential decisions including one nixing Apple’s appeal of the NHK-Fintiv framework for discretionary denials of IPR proceedings; the Court of Justice for the European Union finds that WhatsApp’s challenge to fines for violating the GDPR can be maintained in EU courts; the Second Circuit adopts a rule finding that manual, discretionary review of user-submitted content for aesthetic curation may eliminate the safe harbor to copyright infringement under the Digital Millennium Copyright Act; Sanofi parts ways with CEO Paul Hudson as the company tries to navigate upcoming patent expirations for Dupixent; and Singapore’s Daren Tang is nominated to serve a second term as Director of the World Intellectual Property Organization.

Bites

CAFC Says NHK-Fintiv Precedent at PTAB is General Statement of Policy – On Friday, February 13, the U.S. Court of Appeals for the Federal Circuit issued a precedential ruling in Apple Inc. v. Squires affirming the Northern District of California’s ruling on remand that instructions on discretionary denial factors given by the Director of the U.S. Patent and Trademark Office to the Patent Trial and Appeal Board (PTAB) in the form of precedential decision-making was a general statement of policy that did not require notice-and-comment rulemaking pursuant to 5 U.S.C. § 553. The Federal Circuit found that the NHK-Fintiv instructions do not have binding effect on the USPTO Director or the agency and that Apple’s appeal was a challenge to the non-institution authority of the Director, which is judicially unreviewable absent a constitutional injury that Apple lacked because it has no right to the institution of inter partes review (IPR) proceedings.

CAFC Finds Netflix Claim Construction in IPR Challenge Supported by Grammar, Specification – On Friday, February 13, the Federal Circuit issued a precedential ruling in Netflix, Inc. v. DivX, LLC reversing the PTAB’s claim construction in an IPR ruling petitioned by Netflix to challenge DivX’s patent claims directed to encryption and decryption of streaming media performed to reduce unauthorized access to data. Reviewing principles of grammar, the Federal Circuit applied the default rule that modifiers are presumptively understood to be tied to the nearest available semantically plausible modificand, which supported Netflix’s construction that only the encrypted portions of frames of video and not the encryption information itself needed to be within the requested portions of protected video streams for DivX’s patent claims to be rendered obvious by prior art. This construction was supported by the patent’s specification, with the appellate court noting that the specification expressly considers embodiments of the invention with encrypted information located outside of the video stream.

CAFC Affirms Unlawful Patent Tying Ruling Against Ingevity in Honeycomb Filter Case – On Wednesday, February 11, the Federal Circuit issued a precedential ruling in Ingevity Corp. v. BASF Corp. affirming the District of Delaware’s denial of judgment as a matter of law (JMOL) against high-performance carbon developer Ingevity, which had challenged a jury’s finding that Ingevity violated federal antitrust law by unlawfully conditioning the sale of patented carbon honeycombs used in fuel-vaper canister systems upon the exclusive purchase of unpatented honeycombs used in air-intake systems. The Federal Circuit found that Ingevity’s unpatented honeycombs were staple goods sold for noninfringing purposes, that Ingevity’s tying conduct was not protected under Noerr-Pennington doctrine and that BASF was not required to disaggregate tying damages from Ingevity’s lawful patent enforcement.

Second Circuit Says Manual, Discretionary Content Review Eliminates DMCA Safe Harbor – On Tuesday, February 10, the U.S. Court of Appeals for the Second Circuit issued an opinion in McGucken v. Shutterstock, Inc. vacating-in-part a summary judgement ruling entered by the Southern District of New York extinguishing copyright infringement claims alleged by photographer Elliot McGucken against Shutterstock under the Digital Millennium Copyright Act’s (DMCA) safe harbor to infringement for material residing on systems at the direction of users codified at 17 U.S.C. § 512(c). The Second Circuit ruled that Shutterstock did not satisfy the summary judgment standard for establishing either that infringement by reason of storage at direction of a user or that Shutterstock lacked right and ability to control infringing activity, with the appellate court following Ninth Circuit precedent in adopting the general rule that manual, discretionary review of user content to impose aesthetic or marketing judgments, such as record evidence showing that Shutterstock curates its photo library, results in the infringing work no longer being stored at the user’s direction.

Commerce Secretary Lutnick Retreats From Value-Based Patent Tax Proposal – On Tuesday, February 10, U.S. Secretary of Commerce Howard Lutnick testified at a hearing on broadband deployment conducted by the Senate Committee on Appropriations’ Subcommittee on Commerce, Justice, Science, and Related Agencies, making comments indicating that the Commerce Department would not be pursuing plans to implement a value-based tax on granted U.S. patents. Agreeing with Subcommittee member Sen. Chris Coons (D-DE) that such a framework would be unworkable, Secretary Lutnick confirmed that the proposal reported last July to implement a 1% to 5% tax on U.S. patents would not be implemented at the U.S. Patent and Trademark Office.

CJEU Revives WhatsApp Challenge to GDPR Fine, EU General Court to Rule on Merits – On Tuesday, February 10, the Court of Justice for the European Union (CJEU) issued a judgment finding that American messaging service WhatsApp’s challenge to a ruling from the European Data Protection Board (EDPB) imposing €225 million in fines WhatsApp for failing transparency obligations under the General Data Protection Regulation (GDPR) was admissible because the EDPB’s ruling was binding on third parties like the Irish supervisory authority initiating the investigation into WhatsApp’s transparency practices and the ruling was of direct concern to WhatsApp, overturning the EU General Court’s findings that the EDPB’s decision was merely an intermediate act and that WhatsApp could only challenge a final decision by the Irish authority in national court.

Barks

CASE Act Study Shows 1,700 Small Claims Filed at CCB Since Beginning in 2022 – On Friday, February 13, the U.S. Copyright Office issued its first three-year report on the Copyright Claims Board (CCB) established in June 2022 by the Copyright Alternative in Small-Claims Enforcement (CASE) Act, finding that claimants from across the world have filed more than 1,700 claims at the CCB and recommending changes to streamline and simplify CCB processes.

Daren Tang Nominated for Second Term by WIPO’s Coordination Committee – On Thursday, February 12, the World Intellectual Property Organization (WIPO) announced that its Coordination Committee had nominated Daren Tang to serve a second consecutive six-year term as the Director General of WIPO, with the nomination to be confirmed by the WIPO General Assembly during a special session on April 21.

INTA Bolsters Partnerships With UK IP Groups Before 2026 Annual Meeting – On Wednesday, February 11, the International Trademark Association (INTA) announced that it had signed cooperation with four professional IP associations in the UK including The Anti-Counterfeiting Group, The Chartered Institute of Patent Attorneys, The Chartered Institute of Trade Mark Attorneys, and The IP Federation, to improve engagement and joint communications ahead of INTA’s 2026 Annual Meeting in London from May 2 to May 6.

Novo Nordisk Sues Hims in Delaware District Court Over Compounded Wegovy – On Monday, February 9, Danish drug developer Novo Nordisk filed a lawsuit in the District of Delaware against American telehealth company Hims & Hers over a cheaper compounded version of Novo Nordisk’s Wegovy obesity treatment, alleging that such treatment infringes upon the Danish pharmaceutical firm’s patent claims to the glucagon-like peptide 1 receptor agonist (GLP-1) semaglutide.

DoD to Release AI-Powered Version of TechLink Patent Database By End of 2026 – On Monday, February 9, defense industry publication Breaking Defense reported that U.S. Department of Defense (DoD) officials had confirmed that the U.S. military would be releasing an updated version of its TechLink patent database that will include new artificial intelligence-powered features that improve search functionality and improve accessibility for licensing the nation’s defense technologies.

EUIPO’s DesignView Expands Database to Become World’s Largest Design Search Engine – On Monday, February 9, the European Union Intellectual Property Office (EUIPO) announced that the agency’s DesignView search platform has increased its database with images from 44 intellectual property offices, increasing the database to data from 76 IP offices around the world and becoming the world’s largest design image search engine with access to more than 111 million industrial design images.

This Week on Wall Street

Failure to Address Patent Cliff Leads to Ouster of Sanofi CEO – On Thursday, February 12, French pharmaceutical firm Sanofi announced that it had parted ways with Paul Hudson, who had served the company as CEO for six years, thanks in large part to Sanofi’s failure to identify or acquire a successor to its blockbuster eczema treatment Dupixent, which is scheduled to lose key patent protections in the early 2030s. 

Quarterly Earnings – The following firms identified among the IPO’s Top 300 Patent Recipients for 2024 are announcing quarterly earnings next week (2023 rank in parentheses):

• Monday: Bridgestone Corp. (t-263rd)
• Tuesday: Medtronic plc (27th)
• Wednesday: Analog Devices, Inc. (204th)
• Thursday: Airbus SE (99th); Deere & Co. (100th); Walmart Inc. (158th)
• Friday: Berkshire Hathaway Inc. (t-217th)