Patent and Copyright Law: Supreme Court to Review Cases on Patent Laches and Copyrightability

The U.S. Supreme Court agreed to review a patent case on the law of laches (SCA Hygiene Products v. First Quality Baby Products, U.S., No. 15-927) and a case on the copyrightability of cheerleader uniforms (Star Athletica, L.L.C. v. Varsity Brands, Inc., U.S., No. 15-866).

Specifically, the question presented in SCA is:

“Whether and to what extent the defense of laches may bar a claim for patent infringement brought within the Patent Act’s six-year statutory limitations period, 35 U.S.C. § 286.” 

The question presented in Star is:

“What is the appropriate test to determine when a feature of a useful article is protectable under § 101 of the Copyright Act?” 

Federal Circuit En Banc Decision in SCA Hygiene

The Federal Circuit granted en banc review to determine if the Supreme Court’s copyright decision in Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 1962 (2014) required a change to the law of laches in patent cases. In Petrella, the Supreme Court held that laches may not bar a copyright infringement suit based on acts that occurred within the statute of limitations period, even though the initial violation occurred years earlier.

In a 6-5 decision, the court held that Petrella did not require a change in the laches rule set out in A.C. Aukerman Co. v. R.L. Chaides Constr. Co., 960 F.2d 1020 (Fed. Cir. 1992), for patent infringement actions to recover damages. The court pointed out that, notwithstanding the provisions of Section 286, Congress codified the laches defense in 35 U.S.C. §282 when it included an unenforceability defense in that statute. Thus, laches could bar a damages claim even for acts occurring within the six-year period of 35 U.S.C. §286. However, the court held that Petrella does require a change in Aukerman‘s rule that only pre-suit damages may be barred by laches. It explained that the availability of injunctive relief or ongoing royalties now depends on an analysis of the circumstances of the delay under eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006).

In its petition for Supreme Court review, SCA argued that the en banc decision conflicts with the Petrella decision that laches cannot bar damages claims brought within a statutory limitations period. It also argued that the Federal Circuit observes a presumption in favor laches that is inconsistent with Supreme Court equity practice.

Sixth Circuit Decision in Star Athletica

Varsity Brands makes and sells cheerleading uniforms bearing graphic designs for which it holds copyright registrations. Varsity sued Star for copyright infringement based on Star’s sales of competition uniforms bearing the same graphic designs. The district court granted a summary judgment for Star, concluding that the copyrights are invalid because the designs at issue are unprotectable designs of “useful articles.” It held that the graphic elements of the designs are not physically or conceptually separable from the utilitarian function of a cheerleading uniform because the “colors, stripes, chevrons, and similar designs typically associated with sports in general, and cheerleading in particular” make the garment they appear on “recognizable as a cheerleading uniform.”

The Sixth Circuit reversed, finding that the arrangement of colors, stripes, chevrons, zigzags, and other designs on a cheerleading uniform are copyrightable, separate from utilitarian aspects of the uniform itself. The appellate court rejected the argument that the pictorial, graphic, or sculptural features are inextricably intertwined with the utilitarian aspects of a cheerleading uniform because they serve a decorative function. According to the court, a rule that a decorative function is a “utilitarian aspect of an article” would make all fabric designs that only serve the function to make a garment more attractive ineligible for copyright protection. Judge McKeague wrote a dissenting opinion remarking that this case turns on how function is defined and hence the designs were not copyrightable.

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