Posts Tagged: "SCOTUS"

What follows is reaction from a distinguished panel of industry insiders who have been following this case. Each have offered their own instant analysis, several pointing out that important questions remain about what this Supreme Court decision will mean for the many thousands of patent cases already filed, many that are now in inappropriate venues. It is probably fair to say that the ruling did not surprise most of our panel, although several point to the Supreme Court’s decision as more in a decade-plus line of cases that have continually eroded the rights of patent owners.

The Supreme Court reversed the Federal Circuit and ruled that 28 U.S.C. 1400(b) remains the only applicable patent venue statute, that 28 U.S.C. 1391(c) did not modify or amend 1400(b) or the Court’s 1957 ruling in Fourco Glass Co. v. Transmirra Products Corp., and that the term “residence” in 28 U.S.C. 1400(b) means only the state in which a company is incorporated. The importance of this ruling should be immediately felt on patent litigation in the United States. No longer will a patent owner be able to sue an infringing defendant in a district court where the defendant is subject to personal jurisdiction. Instead, patent infringement lawsuits will only be able to be filed in districts within states where the infringing defendant is incorporated, or in districts where there has been an act of infringement and the defendant has a regular and established place of business.

Jenner & Block represented Parallel Networks for 18 months and then lost one of the cases on summary judgment of non-infringement. Four weeks after losing summary judgement, Jenner & Block decided the cases were no longer economically viable, refused to handle the appeal of the adverse summary judgment and advised Parallel Networks that it was terminating its representation in both cases. Parallel Networks retained new legal counsel for the appeal and these new lawyers undid Jenner & Block’s loss when the Federal Circuit vacated the summary judgement order of non-infringement and remanded the case back to Delaware. Parallel Networks eventually settled both cases, including an eight-figure settlement in one of those cases. Incredibly, more than two and a half years after Jenner & Block determined that these cases weren’t economically viable and then decided to abandon its client, Jenner & Block sent a demand letter to Parallel Networks claiming it was entitled to payment of $10.2 million in hourly fees based on the successful outcomes of the cases achieved by a different law firm.

The industry is collapsing all because no one in a black robe has the guts to define the critical term that is the core of a test that is whimsically applied in arbitrary and capricious fashion. And why? The test is whimsical, arbitrary, and capricious precisely because it is unpredictable and never repeatable. Of course, the reason it is unpredictable and never repeatable is because different judges and panel configurations apply it based on their own subjective views because no one has ever taken the time to define the key term; no one cares to even attempt to interject objectivity to what is a hopelessly subjective, unpredictable and arbitrary test.

Because patent trolls prefer filing in the Eastern District of Texas, the thinking goes that it will be a significant blow to patent trolls if the Supreme Court does not agree with the Federal Circuit. In other words, the days will be numbered for patent trolls if the Supreme Court determines that Congress did not expanded patent venue with the 1988 amendment that made the statutory definition of corporate residence found in § 1391 applicable to patent cases. That conventional wisdom is wrong!… Reflection Code has brought patent infringement actions in the Eastern District of Texas, but on March 31, 2017, Reflection Code brought two separate patent infringement lawsuits in the Eastern District of Michigan — one against Bissell, Inc. and the other against Mattel, Inc.

The ruling has wide implications for both the fashion apparel and home furnishings industry, both of which rely on distinctive, eye-catching designs to sell products. The upshot for clothing and furniture companies is that the Varsity Brands ruling gives product manufacturers an additional tool to combat knock-off designs. With that in mind, manufacturers should review their product line to ensure their copyright-eligible products are protected under this new standard.

The remaining vitality of estoppel as a defense against patent infringement after SCA Hygiene Products is also not a hypothetical question. Indeed, the issue of estoppel remains very much “alive and well” in SCA Hygiene Products. Besides laches, the accused infringer in SCA Hygiene Products, First Quality Baby Products, had moved (not surprisingly) for summary judgment based upon an estoppel defense, which was also granted by the district court. Also not too surprisingly, that portion of the ruling by the district court was reversed and remanded by the Federal Circuit panel on the ground that there were “genuine issues of material fact” to be resolved. The Federal Circuit majority in its en banc ruling also reinstated and preserved the Federal Circuit panel’s reversal and remand of the district court’s grant of summary judgment on the estoppel defense. Finally, in footnote 2, SCOTUS’ decision in SCA Hygiene Products expressly states: “We do not address the Federal Circuit’s reversal of the District Court’s equitable estoppel holding.”

The Supreme Court heard oral argument on the cloudy Wednesday morning of January 18, 2017. Although the Justices posed tough questions and intricate hypotheticals to both sides, the tone of each Justice’s questions and their individual jurisprudences indicate an even 4-4 split, with Justices Breyer, Ginsberg, Kagan, and Sotomayor favoring the USPTO, and Justices Alito, Kennedy, Thomas, and Chief Justice Roberts favoring Tam. Of course, oral argument is often shaky, at best, when predicting the outcome of a case, especially one with such potential for a drastic overhaul of a body of law… Although no one can know for certain the outcome of Lee v. Tam, one consequence that appears very likely is that, if the Court does rule in favor Tam, it would strike the entirety of Section 2(a), not just the portion prohibiting disparaging marks that forms the central issue of the case. John C. Connell, counsel for Tam, went so far as to call that result “inevitable” in response to Justice Ginsberg’s question on the topic.

On Monday, March 27th, the U.S. Supreme Court heard oral arguments in TC Heartland LLC v. Kraft Food Group Brands LLC. The case, arising from allegations of patent infringement over liquid water enhancement products, will ask the court to decide whether 28 U.S.C. Section 1400(b), the patent venue statute which provides that judicial actions for patent suits take place in the district within which the defendant resides, is supplemented by 28 U.S.C. Section 1391(c), which provides that an entity may reside in multiple districts.

Authors who are making a wage that is at or below the poverty line create a burdensome charge for readers? Well when you put it that way what Justice Breyer wrote just sounds stupid… There is a cost associated with discovering whether there are previous copyrights and securing permission to copy? Is Justice Breyer really suggesting that the grant of rights to copyright holders is too onerous for copycats and plagiarists to bear? What about this radical idea Justice Breyer – don’t copy what you didn’t create! If you cannot acquire the rights then just don’t copy, period… There is a reason judges, and in particular Justices of the Supreme Court, are not supposed to say more than is necessary to decide a case. Without consideration of a multitude of important issues seemingly innocuous statements can easily be absurd in the broader context, not to mention set bad precedent.

On Tuesday, March 21st, the U.S. Supreme Court heard oral arguments in Impression Products, Inc. v. Lexmark International, Inc. The case surrounding the sale and resale of printer ink cartridges will require the Supreme Court to decide whether U.S. law surrounding patent exhaustion allows post-sale restrictions and if sales of a patented article outside of the U.S. exhausts the U.S. patent rights in that article… Arguing on behalf of petitioner Impression Products was Andrew Pincus who led off by noting that the first sale doctrine, in which an initial authorized sale of a patented item terminates all patent rights to that item, was a principle that goes all the way back to the 15th century… Appearing next in oral arguments was deputy U.S. solicitor general Malcolm L. Stewart supporting reversal in part and vacatur in part… Following Stewart was Constantine Trela, arguing on behalf of respondent Lexmark International. Trela agreed with the government in a limited sense in that the Federal Circuit properly looked to the statute to find origins and limits on the exhaustion doctrine.

In Star Athletica Breyer laments that the majority is ignoring the statute, refers to copyrights as a monopoly, and explains that copyrights are a tax on consumers… These seemingly innocent comments demonstrate a breathtaking dishonesty, which is hardly a newsworthy conclusion, or even much of a revelation to anyone in the patent community. Still, over the past few days the drivel that has been sprinkled into Supreme Court opinions has been particularly nauseating. The ends justify the means for the Supreme Court. When it is convenient they defer to Congress and wax poetically about the importance of stare decisis, as they actually had the gall to do in Kimble v. Marvel Entertainment. When adhering to well-established rules and expectations of an entire industry is inconvenient, they create exceptions to statutes, ignore statutory schemes altogether, and overrule generations of well-established law.

On Wednesday, March 22nd, the U.S. Supreme Court handed down a decision in a copyright case, which clarifies federal copyright law surrounding whether features incorporated into the design of a useful article are eligible for copyright protection. In a 6-2 decision, the Supreme Court held in Star Athletica, LLC v. Varsity Brands, Inc. that such features are eligible for copyright protection if they can be perceived as a work of art separate from the useful article and would qualify as an protectable work if imagined separately from the useful article.

The fact that laches cannot be used as a defense to a patent infringement action brought during the statute of limitations is most definitely a pro-patent decision. Presently patents are much weaker than they have been at any time over the last 36 years. But patent law has always swung like a pendulum, and this low point will not last forever. Thus, in the wake of the Supreme Court’s decision in SCA Hygiene, patent owners would do well to consider forgoing patent enforcement. Instead, allow infringement to accrue and then sue for infringement in several years when the law may be quite a bit more favorable. After all, patents can last for 20 years, the statute of limitations is six-years, and without a laches defense available to infringers you will be able to seek damages going back six years from whenever you choose to sue.

On Tuesday, March 21st, the U.S. Supreme Court issued a decision in SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC, a case which looked at the issue of whether and to what extent the defense of laches may bar a claim for patent infringement brought within the six-year statutory limitations period, as defined by 35 U.S.C. Section 286. In a 7-1 vote, the Supreme Court decided that the equitable defense of laches cannot be invoked against claims for infringement occurring during the statutory period.