U.S. Supreme Court

October 23, 2020

U.S. Supreme Court Rules “Generic.com” Trademarks May be Trademarkable

Washington, D.C.– A travel-reservation website, Booking.com, filed federal trademark applications for a number of marks including the term “Booking.com.” After being examined, the U.S. Patent and Trademark Office (“USPTO”) refused registration for the mark on the grounds it was a generic name for online reservation services.

However, the District Court, the Fourth Circuit, and the U.S. Supreme Court all found “Booking.com” should be granted registration even though the term “booking” on its own would be generic. The Courts reasoned that because only one entity can occupy an internet domain name at one time, consumers could associate a term styled as “generic.com” with a particular website and source of services.

While the USPTO also argued that allowing trademark protection for “Booking.com” could inhibit competitors from using the term “booking,” the Supreme Court cited multiple doctrines that guard against anticompetitive effects. Those doctrines ensure that a registration for terms such as “Booking.com” would not give the registrant a monopoly on the term “booking.” Therefore, the Supreme Court declined to rule in a manner “that would largely disallow registration of ‘generic.com’ terms and open the door to cancellation of scores of currently registered marks.”

August 18, 2020

Willfulness Not Required for Award of Profits in Trademark Infringement

By Overhauser Law Offices, LLC

The Supreme Court of the United States issued a ruling that a plaintiff alleging trademark infringement does not have to prove willfulness to recover an award of profits. This ruling came down in the case of Romag Fasteners Inc. (“Romag”), versus Fossil Group, Inc. FKA Fossil, Inc. et. al (“Fossil”).

In this case, Romag and Fossil entered into an agreement to use Romag’s fasteners on Fossil’s leather goods. Romag claimed factories in China were making Fossil’s leather goods using counterfeit Romag fasteners. As such, Romag sued Fossil, among other defendants, for trademark infringement, which can trigger an award of a defendant’s profits.

July 13, 2020

U.S. Supreme Court Upheld States’ Sovereign Immunity for Copyright Infringement

By Overhauser Law Offices, LLC

U.S. Supreme Court–Frederick Allen (“Allen”) was hired as a videographer to document the recovery of the Queen Anne’s Revenge shipwreck off the North Carolina coast. Allen worked to document the recovery for over a decade and registered copyrights for his works. When North Carolina published some of Allen’s work online, Allen sued for copyright infringement. North Carolina moved to dismiss the lawsuit on the ground of state sovereign immunity; while Allen argued the Copyright Remedy Clarification Act of 1990 (“CRCA”) removed the States’ sovereign immunity.

The District Court agreed with Allen while the Fourth Circuit Court of Appeals reversed the decision. The U.S. Supreme Court ruled 9-0 in favor of North Carolina on March 23, 2020.

Sovereign immunity has recently been the basis for granting summary judgment in several recent copyright cases in the Southern District of Indiana, namely at least Richard N. Bell v. Jay L. Hess, Case No. 1:16-cv-02463-TWP-DML, (S.D. Ind. March 9, 2018) and Richard N. Bell v. Jason Henderson, Case No. 1:16-cv-02488-RLY-DML, (S.D. Ind. July 23, 2018).

March 4, 2020

Patent Litigation:

By Overhauser Law Offices, LLC

The Supreme Court of the United States has issued an Opinion affirming the decision of the United States Court of Appeals for the Federal Circuit in the case of Laura Peter, Director of the United States Patent and Trademark Office, versus NantKwest, Inc. (“NantKwest”).

Following an adverse decision by the USPTO, an applicant may either appeal directly to the Federal Circuit, 35 U.S.C. § 141, or may file a new civil action against the USPTO Director in the United States District Court for the Eastern District of Virginia, 35 U.S.C. § 145. In this case, NantKwest filed a new civil action in the District Court. Under § 145, the applicant is required to pay “[a]ll the expenses of the proceedings.”

The District Court granted summary judgment for the USPTO affirming the denial of NantKwest’s patent application. The Federal Circuit then affirmed the decision of the District Court. Following this affirmation, the USPTO moved for the reimbursement of its expenses, “including the pro rata salaries of PTO attorneys and a paralegal who worked on the case.” The District Court denied the motion finding “that the statutory language referencing expenses was not sufficient to rebut the ‘American Rule’ presumption that parties are responsible for their own attorney’s fees.” That decision was affirmed by the en banc Federal Circuit.

June 11, 2019

Supreme Court Issues Decision in Mission Product Holdings, Inc. v. Tempnology, LLC

By Overhauser Law Offices, LLC

The United States Supreme Court issued a decision in the case of Mission Product Holdings, Inc. (“Mission”) versus Tempnology, LLC. The original case involved a trademark licensing agreement and whether the Tempnology’s rejection of the agreement during its bankruptcy deprived Mission’s right to use the trademark under the agreement. Justice Kagan delivered the opinion.

Tempnology utilized the brand name “Coolcore” for its manufactured clothing designed to stay cool during exercise. Mission and Tempnology entered into a non-exclusive licensing agreement for Mission to use the Coolcore trademarks anywhere in the world in 2012. While the agreement would have expired in July 2016, Tempnology filed for Chapter 11 bankruptcy in September 2015. Soon after, Tempnology asked for permission to “reject” the licensing agreement it had with Mission under Section 365(a). 11 U.S.C. § 365(a). Pursuant to Section 365 of the Bankruptcy Code, a debtor may reject any contract that neither party has finished performing. That rejection under Section 365 “constitutes a breach of such contract.” 11 U.S.C. § 365(a).

Both parties agreed that Mission has a claim for damages against Tempnology, however, under 365(g), Mission would be in the same boat as an unsecured creditor and would likely not receive its total damages. Tempnology also believed by rejecting the licensing agreement, Mission would no longer be able to utilize the Coolcore trademarks.

March 14, 2019

Supreme Court Delineates What Costs May Be Recovered In Copyright Infringement Litigation

By Overhauser Law Offices, LLC

Washington D.C.- Attorneys for Oracle USA, Inc. and Oracle International Corporation (collectively “Oracle”) of Colorado and California, respectively, filed suit in the District Court of Nevada alleging that Rimini Street, Inc. and Seth Ravin, both of Nevada, infringed the copyrights for Oracle Software and Technology, which have been registered by the U.S. Copyright Office. A jury awarded damages to Oracle upon finding that Rimini had indeed infringed Oracle’s copyrights. The District Court awarded Oracle additional fees and costs, which included $12.8 million dollars for litigation expenses including costs for expert witnesses, e-discovery, and jury consulting. After the award of additional fees and costs was affirmed by the U.S. Court of Appeals for the Ninth Circuit, the U.S. Supreme Court held the additional costs were not appropriate under the Copyright Act.

The Ninth Circuit recognized that in granting the additional damages, they were covering expenses not included in the six categories of costs that the federal statutes, 28 U.S.C. §§ 1821 and 1920 authorize. However, they affirmed the District Court’s award based on the Copyright Act giving district courts discretion to award “full costs” under 17 U.S.C. § 505. The Supreme Court held that while the “term ‘full’ is a term of quantity or amount; it does not expand the categories or kinds of expenses that may be awarded as ‘costs’ under the general costs statute.” Therefore, Oracle was not entitled to the additional $12.8 million dollar award for litigation expenses outside of the six statutory categories.

Practice Tip:

March 7, 2019

SCOTUS Rules That Registration Required to File Copyright Suit

By Overhauser Law Offices, LLC

Washington D.C.– The United States Supreme Court has ruled to affirm the United States Court of Appeals for the Eleventh Circuit’s decision against the Petitioner, Fourth Estate Public Benefit Corp. (“Fourth Estate”) of Delaware. The Petitioner originally filed a copyright infringement lawsuit in the Southern District of Florida, alleging that Wall-Street.com, LLC (“Wall-Street”) of Florida, infringed over 200 articles pending copyright registration.

Fourth Estate filed suit after Wall-Street failed to remove Fourth Street’s licensed works from its news website after Wall-Street canceled the Parties’ licensing agreement. Petitioner had filed to register its articles with the Copyright Office, but the articles had not been registered at the time the action commenced. Pursuant to 17 U.S.C. § 411(a), the District Court dismissed the complaint and the Eleventh Circuit affirmed holding there is no right to civil action for infringement of a copyright in the United States until registration has occurred, and merely filing an application for registration does not meet the registration burden under the statute. While the Register of Copyrights did refuse registration of the articles at issue in this case after the Eleventh Circuit Decision, that was not a factor in this decision.

An author gains rights including the right to reproduce, distribute, and display their work immediately upon the creation of the work pursuant to 17 U.S.C. § 106. However, generally before filing an infringement claim in court, the claimant must comply with the registration requirements of § 411(a). The exceptions to that rule are for those works that are vulnerable to predistribution infringement, typically movies or musical compositions, which are not found here. In this case, the Court had to decide if registration has been made pursuant to § 411(a) when the application, materials, and fee were submitted, or when the registration was granted by the Copyright Office. The Supreme Court in affirming the Eleventh Circuit’s Decision held that “registration has been made” under § 411(a) when the registration is granted by the Register of Copyrights after examination of a properly filed application.

February 11, 2019

Supreme Court Finds Secret Sales are Prior Art Under the AIA

By Overhauser Law Offices, LLC

The Supreme Court of the United States has affirmed the Federal Circuits’ Decision for the Helsinn Healthcare v. Teva Pharmaceuticals USA case regarding “secret sales” as prior art under the Leahy-Smith America Invents Act (“AIA”). In their Opinion, the Court held that given the pre-AIA precedent that even “secret sales” could invalidate a patent, the same “on sale” language in the AIA provisions should be given the same presumption. Further, the addition of the phrase “or otherwise available to the public” does not allow the Court to conclude that Congress intended to alter the meaning of “on sale,” but instead, means that 35 U.S.C. § 102 could be applied to other non-delineated situations.

Helsinn Healthcare (“Helsinn”) produces a treatment utilizing the chemical palonestron to treat chemotherapy-induced nausea and vomiting. During the development of this product, Helsinn entered into two separate and confidential agreements with MGI Pharma, Inc. (“MGI”) giving MGI the right to distribute, promote, sell, and market a 0.25 g dose of palonosetron in the United States. While the dosage was kept confidential, the agreements were reported to the Securities and Exchange Commission. About two years later, in January 2003, Helsinn filed their provisional patent application covering a 0.25 mg dose of palonestron. Helsinn went on to file four patent applications claiming priority to the January 2003 provisional application, with its fourth patent application being filed in 2013 and being subject to the AIA. This fourth patent application led to the issuance of U.S. Patent No. 8,598,219 (the “‘219 patent”).

Teva Pharmaceutical Industries, Ltd. and Teva Pharmaceuticals USA, Inc. (collectively “Teva”) sought approval to market a generic 0.25 mg palonosetron product. Helsinn, in turn, filed suit against Teva for infringement of the ‘219 patent. Teva claimed that the ‘219 patent was invalid under the AIA because the invention was “in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.” 35 U.S.C. § 102(a)(1).

February 8, 2017

Indiana’s TC Heartland Puts Patent Infringement “Forum Shopping” Issue Before Supreme Court

By Overhauser Law Offices, LLC

The Class Action Fairness Act of 2005, was intended to limit “forum shopping” of class actions lawsuits, or in a court where the law was most favorable to the plaintiff, even if the location was not connected with the underlying facts. However, the Act did not generally apply to patent infringement cases. As a result most patent infringement suits (44% in 2015) are filed in the Eastern District of Texas, which has a reputation for juries that award large verdicts. When a suit is filed there, there is much pressure on a defendant to settle even if the patent owner’s case is weak.

Carmel Indiana’s T.C. Heartland hopes to limit forum shopping. It was sued for patent infringement by Kraft Foods, and the case is now before the U.S. Supreme Court granted certiorari last month on appeal from the Federal Circuit. The dispute revolves around whether the US Court of Appeals for the Federal Circuit opened the floodgates to forum-shopping in 1990 when it adopted an ultra-liberal interpretation of where a defendant business “resides” – and in the proposed solution, which is to interpret Congress’s 2011 amendments to a general venue statute as having implicitly overruled the 1990 ruling.

The American Intellectual Property Law Association has filed an “amicus” brief arguing that the Federal Circuit correctly interpreted the general venue statute at 28 U.S.C. 1391 as providing a definition of “resides” in the patent venue statute at 28 U.S.C. 1400(b) Although the Supreme Court in Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222 (1957), found the two statutes worked independently, Congress changed the law in 1988 by adding to the general venue statute “for purposes of venue under this chapter.” According to the brief, the deletion of that phrase in 2011 did not return the law to the Fourco rule because it was replaced with the phrase “for all venue purposes.” Nor does the added phrase “except as otherwise provided by law” adopt the Supreme Court’s Fourco rule, the brief concluded. The AIPLA’s amicus brief is below.

August 11, 2016

Copyright Law: Awarding Attorney Fees in Copyright Lawsuits May Turn on ‘Objective Reasonableness’

By Overhauser Law Offices, LLC

Washington, D.C. – In the matter of Kirtsaeng v. John Wiley & Sons, Inc., the U.S. Supreme Court unanimously held that, among the factors considered in awarding attorneys’ fees under the Copyright Act, courts must give substantial weight to the objective reasonableness of the losing party’s position.

The Court was not persuaded that special consideration should be given to whether the lawsuit resolved important and close legal issues, expressing doubt that fee shifting will encourage parties to litigate such issues. While the Second Circuit test is close to what the Supreme Court prescribes, Justice Kagan wrote, in the Second Circuit, “substantial weight” has become “dispositive weight.” However, the Court also stressed that all circumstances of the case must be considered in light of the goals of the Copyright Act, acknowledging that fees may be warranted despite the objective reasonableness of the losing party’s position.

The decision is consistent with the position advocated in an AIPLA amicus brief filed in this case.

Background

Supap Kirtsaeng, born in Thailand, attended college in the United States. While he was studying in the United States, Kirtsaeng asked his friends and family in Thailand to buy and mail to him copies of foreign edition English language textbooks at Thai book shops, where they are sold at low prices. When publisher John Wiley & Sons (“Wiley”) learned about Kirtsaeng’s sales in the United States at low prices, it sued Kirtsaeng for copyright infringement.

In 2013, the Supreme Court ruled in favor of Kirtsaeng, concluding that Wiley’s sales of the books in Thailand exhausted its copyright interest in the U.S. sales under the first sale doctrine. On remand, Kirtsaeng’s motion for attorneys’ fees was denied. In affirming the decision, the Second Circuit relied on the objective reasonableness of Wiley’s position that the first sale doctrine did not apply to extra-territorial transactions.

Kirtsaeng asked the Supreme Court to review the attorney fee decision.

Competing Factors

Justice Kagan noted that Section 505 of the Copyright Act states that district courts “may” award attorneys’ fees to the prevailing party in copyright litigation, but said that the statute provides no standards for deciding when such awards are appropriate. Guidance for fee awards can be found in the Court’s decision in Fogerty v. Fantasy, Inc, she added, which includes a non-exclusive list of factors that further the goals of the Copyright Act.

In this litigation, each party asserted a factor believed to merit substantial weight: for Kirtsaeng, it is whether the lawsuit resolved an important and close legal issue; for Wiley, it is whether the position unsuccessfully argued by the losing party was objectively reasonable.

The Court concluded that the objective reasonableness of the losing party’s position is more important than the lawsuit’s role in settling a significant and uncertain legal issue. According to Justice Kagan, Wiley’s proposal “both encourages parties with strong legal positions to stand on their rights and deters those with weak ones from proceeding with litigation.” The copyright holder with no reasonable infringement claim has good reason not to sue in the first instance, she explained, and the infringer with no reasonable defense has every reason to give in quickly, before each side’s litigation costs mount.

By contrast, the Court continued, Kirtsaeng’s proposal would not produce any sure benefits. While litigation of close cases can advance the public interest by helping to clearly demarcate the boundaries of copyright law, it is not clear that fee shifting will necessarily, or even usually, encourage parties to litigate those cases to judgment, according to the Court. Justice Kagan explained as follows:

Fee awards are a double-edged sword: They increase the reward for a victory–but also enhance the penalty for a defeat. And the hallmark of hard cases is that no party can be confident if he will win or lose. That means Kirtsaeng’s approach could just as easily discourage as encourage parties to pursue the kinds of suits that “meaningfully clarif[y]” copyright law. … It would (by definition) raise the stakes of such suits; but whether those higher stakes would provide an incentive–or instead a disincentive–to litigate hinges on a party’s attitude toward risk. Is the person risk-preferring or risk-averse–a high-roller or a penny-ante type? Only the former would litigate more in Kirtsaeng’s world. … And Kirtsaeng offers no reason to think that serious gamblers predominate. … So the value of his standard, unlike Wiley’s, is entirely speculative.

What is more, Wiley’s approach is more administrable than Kirtsaeng’s. A district court that has ruled on the merits of a copyright case can easily assess whether the losing party advanced an unreasonable claim or defense. That is closely related to what the court has already done: In deciding any case, a judge cannot help but consider the strength and weakness of each side’s arguments. By contrast, a judge may not know at the conclusion of a suit whether a newly decided issue will have, as Kirtsaeng thinks critical, broad legal significance. The precedent-setting, law-clarifying value of a decision may become apparent only in retrospect–sometimes, not until many years later. And so too a decision’s practical impact (to the extent Kirtsaeng would have courts separately consider that factor). District courts are not accustomed to evaluating in real time either the jurisprudential or the on-the-ground import of their rulings. Exactly how they would do so is uncertain (Kirtsaeng points to no other context in which courts undertake such an analysis), but we fear that the inquiry would implicate our oft-stated concern that an application for attorney’s fees “should not result in a second major litigation.”

Substantial, But Not Dispositive, Factor

All of that said, objective reasonableness can be only an important factor in assessing fee applications–not the controlling one, Justice Kagan cautioned. “Although objective reasonableness carries significant weight, courts must view all the circumstances of a case on their own terms, in light of the Copyright Act’s essential goals,” she wrote.

The Court particularly acknowledged the serious concerns raised over the Second Circuit approach. While it frames the inquiry in a similar way, the Second Circuit language at times suggests that a presumption against a fee award arises from a finding of reasonableness. That perspective goes too far in limiting the district court’s analysis, according to the Court, observing that district courts in the Second Circuit appear to have turned “substantial” weight into something closer to “dispositive” weight. In particular, the Court acknowledged that hardly any of those decisions have granted fees when the losing party raised a reasonable argument (and none have denied fees when the losing party failed to do so).

Without suggesting that a different conclusion be reached, the Court vacated and remanded the case for further consideration in line with this analysis.