The U.S. Supreme Court had a busy 2013-
14 term, especially when it came to
patent cases, granting a record-breaking
six writs of certiorari (see July 23,
2014, column), and this year’s term
promises to be even busier. The court has
already granted certiorari in three intellectual
property cases and will soon decide whether
to grant it in another two. These cases are
‘Teva v. Sandoz’
Question: Should claim construction rulings
be reviewed de novo or should the standard
of review be changed to “clear error,” giving
the district court deference? In Teva v. Sandoz,
the Supreme Court will address this question.
It granted certiorari on March 31 and heard
oral arguments on Oct. 15.
The claims at issue in Teva are directed to
methods for manufacturing copolymer-1, the
active ingredient in Copaxone®, a Teva-marketed
drug used in treating multiple sclerosis.
After Sandoz submitted its abbreviated new
drug application seeking Food and Drug Administration
approval to market a generic version
of Copaxone®, Teva filed a patent infringement
suit against Sandoz.
The primary defense for Sandoz was that
the claim term “average molecular weight”
had multiple possible meanings that rendered
the disputed claims invalid for indefiniteness.
Although “average molecular weight” could,
according to Sandoz, refer to several different
measures, like peak average molecular weight
(Mp), number average molecular weight (Mn),
and weight average molecular weight (Mw),
the district court rejected the indefiniteness
defense holding that a person of ordinary skill
in the art would understand from the specification
that the claim term means Mp even if Teva
offered contradictory definitions of “average
molecular weight” while prosecuting related
On appeal, the U.S. Court of Appeals for the
Federal Circuit reversed, reviewing the issue
of indefiniteness de novo. It stated that the
claims’ “plain language does not indicate which
average molecular weight measure is intended,”
and neither the specification nor the prosecution
history resolved this ambiguity.1 Thus,
according to the Federal Circuit, the claim term
was indefinite and the disputed claims invalid.
Accordingly, the tension to be addressed
by the Supreme Court stems from Rule 52(a)
of the Federal Rules of Civil Procedure, on the
one hand, which requires deferential “clear
error” review over any findings of fact and,
on the other hand, the Federal Circuit’s long
line of cases ruling that claim construction
as a whole, like construction of a contract,
amounts to conclusions of law that allow for
de novo review.2
‘B&B Hardware v. Hargis’
Question: May a likelihood-of-confusion
determination made by the U.S. Patent and
Trademark Office’s Trademark Trial and Appeal
Board be given preclusive effect in a parallel
district court proceeding? In B&B Hardware v.
Hargis Industries, the Supreme Court will decide
this question, and specifically whether a district
court should give any measure of deference
to a board’s determination. The Supreme
Court granted certiorari on July 1 and will hear
oral arguments on Dec. 2.
The parties in this case have been engaged
in litigation for over 18 years with respect to
their marks “Sealtight” (B&B’s) and “Sealtite”
(Hargis’s). B&B manufactures and sells fasteners
called “Sealtight,” which are primarily
used in the aerospace industry, while Hargis
manufactures self-taping and self-drilling metal
screws called “Sealtite,” which are primarily
used in the construction of metal buildings.
Most recently, B&B filed a trademark infringement
suit against Hargis and attempted to have
admitted into evidence a prior board determination
of a likelihood of confusion denying
Hargis’s attempt to register its “Sealtite” mark.
The district court, however, sustained an objection,
holding that the board’s decisions (not
flowing from an Article III court) are not entitled
to preclusive effect. As such, the jury returned
a non-infringement verdict in favor of Hargis.
On appeal, the U.S. Court of Appeals for
the Eighth Circuit affirmed, holding that issue
preclusion was not appropriate because the
board, in denying registration, “did not decide
the same likelihood-of-confusion issues presented
to the district court in this infringement
action.”3 In particular, the board “used
only 6 of the 13 factors from…DuPont” whereas
the courts in the Eighth Circuit “apply the sixfactor
test from SquirtCo.”4 Although some of
these factors are the same or comparable, the
board did not examine the entire marketplace
in its determination. Thus, according to the
Eighth Circuit, the board and the district court
were not deciding the same issues and, consequently,
issue preclusion was not applicable.
Here, the tension to be ad-dressed by the
Supreme Court involves the desire for consistent
enforcement of the traditional doctrines of
issue preclusion and trademark enforcement.
‘Hana Financial v. Hana Bank’
In Hana Financial v. Hana Bank, the Supreme
Court will address whether the use of an older
mark in a different manner may be “tacked on”
to the use of a newer one for purposes of determining
priority. The court granted certiorari on
June 23 and will hear oral arguments on Dec. 3.
The respondent Hana Bank underwent a
number of name changes over the years, nota-
SERVING THE BENCH
AND BAR SINCE 1888
Volume 252—NO. 102 wEdnesday, november 26, 2014
U.S. Supreme Court Takes On
More Intellectual Property Cases
Patent and Trademark Law Expert Analysis
Robert C. Scheinfeld is the partner-in-charge of the New
York office of Baker Botts. Eric W. Lin, an associate at the
firm, assisted in the preparation of this article.
bly establishing a financial services firm called
“Hana Overseas Korean Club” in 1994 and then
starting operations of an agency called “Hana
Bank” in 2002. The petitioner Hana Financial
began using its name in 1995 and later obtained
a federal trademark registration in 1996 for a
pyramid logo with the words “Hana Financial”
in association with financial services.
Hana Financial sued Hana Bank for trademark
infringement, and lost on summary
judgment regarding priority of its mark. On
appeal, the U.S. Court of Appeals for the
Ninth Circuit reversed on priority because
the Bank’s exhibits in support of its priority
claim were not presented in admissible form
and were subject to competing inferences.
Upon remand and an unsuccessful attempt
by Financial to exclude the Bank’s aforementioned
exhibits from evidence, the jury
returned a verdict for Hana Bank because of
its earlier use of the “Hana” word.
On appeal, the Ninth Circuit affirmed, holding
that “[t]he jury could have reasonably
concluded that [ordinary] purchasers [of
financial services] associated ‘Hana Bank’
with the ‘Hana Overseas Korean Club’ when
‘Hana Overseas Korean Club’ appeared, in
English, next to ‘Hana Bank,’ in Korean, and
the dancing man logo in the advertisements.”5
Although the court noted “tacking” could be
a question of law in other circuits, the court
relied on Ninth Circuit decisions to characterize
“tacking” as a question of fact, determining
that the “jury could have reasonably concluded
that the ordinary purchasers of the financial
services at issue likely had a consistent, continuous
commercial impression of the services”
of the later “Hana Bank” and the earlier “Hana
Overseas Korean Club.” Thus, according to the
Ninth Circuit, sufficient evidence supported the
jury verdict that Hana Bank could “tack” its use
of its present mark “Hana Bank” to its earlier
use of the “Hana Overseas Korean Club” mark,
which began in 1994 before the petitioner’s use
of its “Hana Financial” mark in 1995.
‘Commil v. Cisco’
In Commil v. Cisco, the Supreme Court will
consider addressing whether a good-faith or
reasonable belief that a patent is invalid is a
defense to inducement under 35 U.S.C. §271(b);
and whether certain jury instructions related
to inducement satisfy Global-Tech Appliances
v. SEB, 131 S. Ct. 2060 (2011). The court is
scheduled to decide on the petition this week.
The claims at issue in Commil are directed to
a method for implementing wireless networks.
Commil sued Cisco for making and using allegedly
infringing networking equipment, and for
inducing others’ infringement. A jury returned
a verdict in favor of Commil for direct infringement
but not for inducement—
and the judge
granted a retrial on inducement.
During retrial, the district court excluded
certain evidence related to Cisco’s good-faith
belief that the patent was invalid and subsequently
instructed the jury to find for inducement
if Cisco “actually intended to cause the
acts that constitute direct infringement,” and
“knew or should have known that its actions
would induce actual infringement.”6 Subsequently,
the jury returned a verdict for Commil
and found Cisco liable for inducement.
On appeal, the Federal Circuit vacated in
relevant part and remanded for a new trial on
inducement. Citing Global-Tech, it stated that
“inducement requires both knowledge of the
existence of the patent and ‘knowledge that
the induced acts constitute patent infringement.’”
Thus, it held that the district court’s
jury instructions were wrong because the
instructions “knew or should have known”
had allowed the jury to “find the defendant
liable based on mere negligence where knowledge
The court also held that the district court
should not have excluded evidence of Cisco’s
good-faith belief of invalidity to rebut inducement
because a “good-faith belief of invalidity
is evidence that may negate the specific intent
to encourage another’s infringement, which is
required for induced infringement.” Is this so?
At least the Department of Justice does not
think so, having argued in its amicus curiae
brief that recognizing a “good-faith belief in
invalidity” defense to inducement is “flawed”
and undermines a patentee’s ability to enforce
its patent. The Supreme Court will hopefully
let us know who is right.
‘Kimble v. Marvel’
Question: Should the court overrule Brulotte
v. Thys, 379 U.S. 29 (1964), which held that a
royalty agreement for use of a patented invention
that “projects beyond the expiration date
of the patent is unlawful per se?”7
The patent claims at issue in Kimble are
directed to a “Spider-Man” glove that mimics,
using foam string, the comic book hero’s webshooting
abilities. Marvel began manufacturing
a similar contraption called the “Web Blaster.”
Eventually, Marvel purchased Kimble’s patent
in exchange for a lump-sum payment and a
running royalty that had no time limit or expiration
date. After a few years, Kimble and Marvel
disputed the royalties due, and litigation
commenced. The district court found in favor
of Marvel and held that under Brulotte, the
royalty provision was unenforceable beyond
the patent’s expiration date.
On appeal, the Ninth Circuit affirmed, holding
that Brulotte established that “a license
for inseparable patent and non-patent rights
involving royalty payments that extends
beyond a patent term is unenforceable for the
post-expiration period unless the agreement
provides a discount for the non-patent rights
from the patent-protected rate.”8 Because the
agreement did not distinguish between patent
and non-patent rights (it provided instead only
one uniform royalty rate), the court was thus
bound to follow Brulotte and find the royalty
The court, however, did acknowledge the
U.S. Court of Appeals for the Seventh Circuit’s
criticism of Brulotte by noting that its application
of Brulotte “arguably deprives Kimble of
part of the benefit of his bargain based upon
a technical detail that both parties regarded
as insignificant at the time of the agreement.”9
The Supreme Court has been requested to
resolve this dispute.
In today’s fast-paced world, where innovation
and advances in the energy, technology,
health and science sectors are the driving
forces propelling our economy forward, and
where local and global competition is fierce,
it is imperative to have laws that provide a
fair, predictable and consistent framework
for all participants. Otherwise, confidence
and, consequently, investment, research and
development would suffer. That the Supreme
Court is taking a more active role in IP cases
signals a growing recognition that intellectual
property, and its consistent application,
plays a critical and welcome role in today’s
1. Teva Pharms. USA, v. Sandoz, 723 F.3d 1363, 1369 (Fed.
2. See, e.g., Lighting Ballast Control v. Philips Elecs. N. Am.
Corp., 744 F.3d 1272, 1276-77 (Fed. Cir. 2014) (en banc); Cybor
Corp. v. FAS Techs., 138 F.3d 1448 (Fed. Cir. 1998) (en banc).
3. B&B Hardware v. Hargis Indus., 716 F.3d 1020, 1026 (8th
4. In re E.I. DuPont DeNemours & Co., 476 F.2d 1357, 1361
(C.C.P.A. 1973); SquirtCo v. Seven-Up Co., 628 F.2d 1086, 1091
(8th Cir. 1980).
5. Hana Fin. v. Hana Bank, 735 F.3d 1158, 1167 (9th Cir.
6. Commil USA, v. Cisco Sys., 720 F.3d 1361, 1366 (Fed. Cir.
7. Brulotte, 379 U.S. at 32.
8. Kimble v. Marvel Enters., 727 F.3d 856, 863 (9th Cir. 2013).
9. Id. at 866. See also Scheiber v. Dolby Labs., 293 F.3d 1014,
1017 (7th Cir. 2002).
wEdnesday, november 26, 2014
Should claim construction rulings
be reviewed de novo or should the
standard of review be changed
to “clear error,” giving the district
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