There are now ten Intellectual Property cases under review in the Supreme Court.
The Supreme Court docket demonstrates the accelerating importance of intellectual property. In the decade of the 1990’s the Supreme Court wrote 6 patent opinions. The prior two decades saw a similar volume of patent cases. In the same decade, copyright cases decided in the Supreme Court (six) and trademark cases decided in the Supreme Court (three, including two trade dress cases) were about equally rare.
In the decade from 2000 to 2009, the Supreme Court increased the volume to 10 patent related opinions. Total copyright cases (three) and trademark cases (five, including two trade dress cases) decided in the Supreme Court remained about the same.
In 2010 to 2012 the Supreme Court increased the pace to issue 5 patent opinions in 3 years. The pace of Supreme Court copyright decisions (two) remained about the same as over the last 20 years. The increase in patent litigation appears not to be aberrational.
Last year the Supreme Court again more than doubled the volume of patent cases handled and issued 4 patent related opinions in 1 year. The Supreme Court also decided one copyright case and one trademark case.
This year the Supreme Court has again increased the volume of patent cases and already has accepted for review 6 patent cases – more than half the volume it handled in the entire first decade of the 21st Century. The Court has also accepted for review two copyright and two trademark cases.
Why does the Supreme Court accept review in so many IP cases? Because IP rights have grown in economic importance and clarity is required to maintain that economic value. The Federal Circuit was given exclusive jurisdiction over patent cases to avoid conflicts in treatment among the different Circuit Courts, but clarity (for example on treatment of software related inventions) has not uniformly emerged. Also, abusive assertion of IP rights imposes a substantial cost on the economy. Guidance for the Federal Circuit requires either Supreme Court review or Congressional action.
What Will The Court Do?
Below are summaries of the issues raised.
Two patent cases focus on the scope of what a patent may claim:
Alice Corp. Pty Ltd. v. CLS Bank Int’l, 717 F.3d 1269 (Fed. Cir. 2013), cert granted, 134 S. Ct. 734 (2013) (the test for patentable subject-matter for software inventions). An equally divided court affirmed the District Court holding the claims were not patent eligible. The Federal Circuit generated 7 opinions and could not agree on the appropriate test. Watch for oral argument March 31.
Nautilus Inc. v. Biosig Instruments, Inc., 715 F.3d 891 (Fed. Cir. 2013), cert. granted, 134 S. Ct. 896 (2014) (determining when a claim term is indefinite -- therefore invalidating the claim) There were multiple reasonable interpretations of the claim language “spaced relationship”. The Fed Cir concluded the term was not insolubly ambiguous because “inherent parameters” would allow a person of ordinary skill to understand the term. Particular and distinct patent claiming is required by statute. 35 USC 112. Reversed. The Court will require tighter claim drafting so what is claimed is distinct from what is not claimed and infringement liability is more predictable. Watch for oral argument April 28.
The remaining 4 patent cases focus on enforcement issues:
Medtronic Inc. v. Mirowski Family Ventures LLC, 134 S. Ct. 843 (Jan. 22, 2014). In a declaratory relief suit by a patent licensee the Licensor/Patentee always has the burden to prove infringement. Reversed.
Highmark Inc. v. Allcare Management Systems, Inc., 687 F.3d 1300 (Fed. Cir. 2012), cert. granted, 134 S. Ct. 48 (2013), and Octane Fitness, LLC v. ICON Health & Fitness, Inc., 496 Fed Appx. 57 (Fed. Cir. 2012), cert. granted, 134 S. Ct. 49 (2013) (the standard for awarding attorneys’ fees to the prevailing party). The infringement defendant prevailed in both cases. The Fed Cir found no deference is owed to a district court's finding whether allegations of infringement were objectively unreasonable and neither case was “exceptional” under 35 U.S.C. § 285. The prevailing defendants assert (1) the D Ct is entitled to deference and (2) a showing that the litigation is objectively baseless and brought in subjective bad faith sets too high a standard for prevailing defendants (accused infringers) and conflicts with the lower bar set for prevailing plaintiffs (patent owners) -- a showing “that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent.”). The Court will eliminate the subjective element of the reasonableness test and otherwise affirm the appellate decisions on the objective deference to the Trial Court. Watch for oral argument February 26.
Limelight Networks, Inc. v. Akamai Technologies, Inc., 692 F3d 1301 (Fed. Cir. 2012), cert granted, 134 S. Ct. 895 (2014) (inducing infringement where separate elements of the method claim were carried out by different persons, hence there is no one person who directly infringed). The Fed Cir held can there be inducement liability with no single direct infringer or agency relationship. Affirmed. Inducing multiple actors to infringe collectively is wrong (once the adverse precedent is not controlling). Watch for oral argument April 30.
Both cases deal with defenses to enforcement of copyright protection.
Petrella v. Metro- Goldwyn-Mayer, Inc., 695 F3d 946 (9th Cir. 2012), cert. granted, 134 S. Ct 50 (2013) (laches as a defense to damages incurred for the 3 year period before suit is filed) The Copyright Act has a 3 year statute of limitations, 17 USC 507(b). The Ninth Circuit found claims based on the 1980 film Raging Bull barred by laches. The other Circuits are less receptive to this defense. Affirmed. Damages and injunctive relief are both unavailable for the continuing tort on the facts presented. This case was argued Jan. 21.
American Broadcasting Companies, Inc. v. Aereo, Inc., 712 F3d 676 (2nd Cir. 2013), cert. granted, 134 S. Ct. 896 (2014) (streaming a broadcasted video over the Internet so paid subscribers each subscriber receive transmission of a separate copy). The Second Circuit found no infringement of the public performance right. Both parties asked for review. Even the winner below wants to avoid the possibility of inconsistent decisions in other Circuits. Reversed. The Court will conclude Congress did not intend to permit the “Rube Goldberg” design adopted to avoid infringement. Streaming and recording on demand is a public performance. Congress could amend the statute if it disagrees with the Court. Watch for oral argument April 22.
Both cases involve false advertising under the Lanham Act.
POM Wonderful LLC v. Coca-Cola Co., 679 F.3d 1170 (9th Cir. 2012), cert. granted, 134 S. Ct. 895 (2014), (false advertising claims involving the labeling requirements of the Food Drug and Cosmetics Act). The Ninth Circuit found preemption. Affirmed. Watch for oral argument April 21.
Lexmark Int’l Inc. v. Static Control Components, Inc., 697 F.3d 387 (6th Cir. 2012), cert. granted, 133 S. Ct. 2766 (2013) (the test for standing to maintain a false advertising claim). The Ninth Circuit requires the plaintiff to be an actual competitor. Other Circuits require antitrust standing. The Sixth Circuit and Second Circuit allow the plaintiff to sue if it has a “reasonable interest” in the case. Affirmed. The Court will adopt the reasonable interest standard. This case was argued December 3, 2013.
Only two of the nine remaining cases reversed.