Posts in Courts

In last week’s Halo Elecs. v. Pulse Elecs. decision, the Supreme Court unanimously rejected the Federal Circuit’s Seagate standard for awarding enhanced damages in patent cases under Section 284, finding the Federal Circuit’s two-part test “impermissibly encumbers the statutory grant of discretion to district courts.” Slip Op. at 9. The Supreme Court’s decision, which vacated and remanded, means that the award of treble damage may very well be reinstated in that case, and reversals of enhanced patent damages rulings – both awards and denial – may become less common.

David Kappos, the director of the USPTO under President Obama from 2009 to 2013, recently called for congress to repeal section 101 of the patent act. According to Kappos, the current chaotic “I know it when I see it” 101 test that must be somehow consistently applied by thousands of USPTO examiners and hundreds of judges, means American inventors are better off seeking protection in China and Europe. While America “is providing less protection than other countries”, European countries are “putting their foot down in favor of innovation”.

AIA trials have been sought over 5,000 times to challenge patents and are widely used to resolve patent disputes. Many patent owners complained that these proceedings were unfairly tilted in favor of those challenging patents. Cuozzo sought Supreme Court review of two such practices that it felt went too far and were inappropriate given the language and intent of the AIA. However, the Court sided with the PTAB on both issues, leaving the AIA trial process, as practitioners have come to know it over the last four years, intact.

Just how much knowledge about piracy on its system does an online service provider need before it loses its safe harbor protection, which severely limits its potential liability for copyright infringement, under the Digital Millennium Copyright Act (DMCA)? In Capitol Records v. Vimeo, the Second Circuit sets the bar very high, further blurring one of most important lines in copyright law—the line between actual and red flag knowledge—and protecting a not-so-innocent service provider in the process. Worse still, the Second Circuit leaves copyright owners with little chance of a remedy in the face of rampant piracy, even against a service provider that welcomes the infringement.

Jericho’s access control model was first used as the blueprint for the Department of Defense Global Information grid in 2007. The software was later deployed across two Department of Defense secure network enterprises, providing access control to over six million persons and entities. Five years later, President Obama mandated the use of this model in every U.S. Government enterprise. The district court found the patent claims to be patent ineligible under the abstract idea doctrine, saying it did not matter that the system operated faster and more efficiently. The Federal Circuit affirmed without opinion in a Rule 36 summary affirmance.

Justice Kagan stated as one primary factor that a District Court should put substantial weight on the reasonableness of the losing party’s position. The lower courts are in a good position to review and administer this factor, and it encourages parties with meritorious positions to advance them. Justice Kagan quite rightly stated that this was not the only factor, and that other previously articulated factors set forth in Fogerty also need to be evaluated. These include the “frivolousness [of the losing party’s position], [such party’s] motivation, objective unreasonableness, and the need in particular circumstances to advance considerations of compensation and deterrence.” Fogerty at 534, n.19.

“This is obviously a victory for some who challenge a patent’s validity in IPR proceedings since broadly construed claims are more vulnerable to attack than narrowly construed claims” remarked Scott Daniels, partner at Westerman Hattori Daniels & Adrian, LLP. “Still, the great majority of IPR decisions do not turn on claim construction and for those cases Cuozzo simply makes no difference.”… Levy, who was similarly dead on accurate with his predictions, raises an important point that so many in the patent community who were rooting for Cuozzo failed to keep in mind. Those challenging the action of an agency face a substantial uphill battle when they seek a judicial determination overriding agency rulemaking and statutory implementation.

In a unanimous decision delivered by Justice Breyer in Cuozzo Speed Technologies, LLC v. Lee, the United States Supreme Court upheld the United States Patent Office’s regulation requiring the Patent Trial and Appeal Board to apply the broadest reasonable interpretation (BRI) standard in Inter Partes Review (IPR) proceedings. The Supreme Court also held that the Patent Office’s decision to institute an IPR proceeding is not appealable to the Federal courts.

The reason why net neutrality came up in the American political discourse in late 2014 has much to do with paid prioritization. Paid prioritization is an agreement in which a broadband service provider negotiates an arrangement with a content provider that results in the content provider being given priority access at congested Internet nodes. The Obama administration came out strongly on the topic of paid prioritization, calling for it to be explicitly banned by the FCC. The White House also called for rules preventing ISPs from blocking content or intentionally throttling any kind of data transmission. By the end of September 2014, the FCC had received 3.7 million public comments on the subject of net neutrality.

The Lumbee Tribe’s lawsuit alleges trademark infringement, unfair competition, and deceptive trade practices for Anheuser-Busch’s use of the tribe’s HERITAGE, PRIDE & STRENGTH slogan and related logo design. According to the Complaint, Budweiser allegedly began using the tribe’s logo as early as 2004 and the HERITAGE, PRIDE & STRENGTH mark in 2015.

In light of Commil, the Supreme Court granted certiorari, vacated the judgment, and remanded the case to the Federal Circuit… First, the Court concluded that Warsaw’s non-infringement theory was objectively unreasonable. Second, the Court concluded that NuVasive had presented sufficient evidence such that a jury could conclude that Warsaw knew it was inducing doctors to infringe NuVasive’s patent. In a concurrence, Judge Reyna expressed several concerns about the court’s reasoning in reaching this conclusion.

The Court agreed with Facebook in that these claim terms had no accepted meaning in the art, which meant that they cannot be construed broader than the specification disclosuses. The Court noted that the prosecution history also provided support for the district court’s construction. Further, because the other evidence was persuasive, there was no need to determine whether certain statements made by the patentees during prosecution rose to clear and unmistakable disclaimer, which is what Facebook argued in the alternative.

In exercising this discretion the Supreme Court held that district courts should consider the objective reasonableness of the losing party’s position, but that the objective reasonableness was not the only factor, or even the predominant factor, for district courts to consider. Rather, the Supreme Court explained that district courts retain broad discretion to make an award even when the losing party advanced a reasonable claim or defense.

The Court found that “fractionation” referred only to distillation-based techniques. The specification’s use of the term “fractionation” controlled even if the definition was idiosyncratic. By that standard, the Court found that “fractionation” did not encompass solubility-based techniques. The specification identified the limits of “conventional fractionation” which were only limits of “conventional distillation,” and no other fractionation techniques known in the art were mentioned. Therefore, the specification equated “conventional fractionation” and “conventional distillation.” More broadly, this demonstrated that the specification equated the terms “fractionation” and “distillation.” This finding was further supported by the repeated and consistent use of the term “fractionation” in discussion of processes to separate mixtures by distillation.

Essentially, the Supreme Court told the Federal Circuit that they needed remedial reading lessons. The statute is clear: “may” means district courts have discretion. The Supreme Court also seemed instruct the Federal Circuit to stop making stuff up that clearly isn’t found within the statute. It is truly ironic, even downright funny, how the Supreme Court can so clearly see that the Federal Circuit is not being true to the simple, easy to understand, straight-forward terms of a statute but at the same time lack the capacity to similarly see that they are themselves doing the very same thing. If intellectual honesty means anything the Supreme Court would hold themselves to the same standard and stop applying judicial exceptions to patent eligibility that enjoy no textual support in the statute.