Supreme Court Corner - Q1 2014

by DLA Piper
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AMERICAN BROADCASTING COMPANIES, INC. V. AEREO, INC.

Copyright: Status: cert. granted

Issue: Does a company “publicly perform” a copyrighted television program when it retransmits a broadcast of that program to paid subscribers over the Internet?

Aereo provides to its subscribers antennae permitting users to watch and record over-the-air broadcast TV programs. Applying Cartoon Network LP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008), the Second Circuit found no public performance because each Aereo subscriber received an individual transmission of the program. Petitioners (several members of the broadcast television industry) argue that Aereo’s transmissions are public performances under the Copyright Act and that the transmissions could harm the broadcast industry.

MEDTRONIC, INC. V. MIROWSKI FAMILY VENTURES, LLC

Patent: Decided: January 22, 2014

Holding: When a licensee seeks declaratory judgment of noninfringement against a patentee, the patentee bears the burden of persuasion.

Medtronic licensed the patentee’s invention but sought a declaration that its newly developed technology does not infringe. Justice Breyer, writing for a unanimous Court, first held that a licensee’s non-infringement declaratory judgment (DJ) action “arises under” the patent law and confers appellate jurisdiction in the Federal Circuit. The Court found that whether a DJ action “arises under” depends on “the nature of the threatened action in the absence of the DJ suit,” which, in this case, was a patent – not contract – action.

Next, the Court found a patentee has the burden of persuasion on infringement, reasoning that the declaratory judgment act is procedural and does not alter a claim’s substantive aspects. Thus, although the licensee brought suit and the license agreement barred the patentee from bringing suit, the patentee retains the burden of persuasion. Accordingly, licensees now have a lesser burden when challenging infringement.

PETRELLA V. METRO-GOLDWYN-MAYER INC.

Copyright: Argument: January 21, 2014

Issue: Is the equitable defense of laches available in a copyright claim filed within the Copyright Act’s three-year statute of limitations?

Petrella, owner of the copyrighted screenplay to the 1980 movie Raging Bull, brought a copyright infringement suit against MGM in 2009. She argues that the equitable defense of laches cannot apply because copyrights are entitled to a three-year statute of limitations. Justice Kagan asked Petrella why a copyright owner should be permitted to delay bringing suit “to maximize her own gain.” The government’s approach, under which laches could bar equitable relief but not legal relief, drew challenging questions. During MGM’s argument, the Justices questioned the Ninth Circuit’s test, which presumes laches if a copyright owner brought suit more than three years after the first act of infringement.

NAUTILUS, INC. V. BIOSIG INSTRUMENTS, INC.

Patent: Status: cert. granted

Issue: Does the Federal Circuit’s “insolubly ambiguous” standard for indefiniteness comport with the statutory requirement of “particular” and “distinct” patent claims?

The patent at issue claims electrodes in a “spaced relationship.” According to Nautilus, the patent does not explain the magnitude of such spacing. The district court held the claims indefinite. On appeal, the Federal Circuit found the claim language amenable to construction by reasoning that a person of ordinary skill in the art would understand “spaced relationship” and could determine such relationship as “pertaining to the function” intended to be performed by the claimed invention. Nautilus argues that such a standard violates the statutory requirement that claims particularly point out and distinctly claim an invention.

ALICE CORPORATION PTY. LTD. V. CLS BANK INT’L

Patent: Argument: March 31, 2014

Issue: Are claims to computer-implemented inventions directed to patent-eligible subject matter within the meaning of 35 U.S.C. §101?

Petitioner Alice Corporation’s patent claims at issue include computerized systems, computerized methods and computer-readable media for creating and exchanging financial instruments. A divided Federal Circuit, sitting en banc, affirmed the trial court’s finding that the asserted claims are not directed to eligible subject matter under §101, but could not agree on the applicable test. Judge Lourie proposed that if the trial court finds the claims preempt an abstract idea, the claims are still §101 eligible if they include an “inventive concept” or human contribution to the abstract idea, and thus found them not §101 eligible because the computer did not meaningfully add to the claims. Chief Judge Rader dissented in part, finding the analysis should focus on determining whether the claim “as a whole” covers merely an abstract idea, and finding the system claims patent eligible because they cover a computer specifically programmed to solve a problem.

On appeal, the petitioner argues the claims at issue are patent eligible and must be read as a whole, as in Diehr and Bilski. Respondent argues the Federal Circuit’s decision should be affirmed because the “generic computer” cited in the claims adds nothing to patent eligibility.

OCTANE FITNESS V. ICON HEALTH & FITNESS*

Patent: Argument: February 26, 2014

Issue: Whether the Federal Circuit’s two-part test for determining whether a case is “exceptional” under 35 U.S.C. § 285 – that it was “objectively baseless” and brought in “subjective bad faith” – contravenes the statute and Supreme Court precedent.

HIGHMARK INC. V. ALLCARE MANAGEMENT SYSTEMS, INC.*

Patent: Argument: February 26, 2014

Issue: Whether a district court’s finding that a case was “exceptional” under 35 U.S.C. § 285 is entitled to deference on appeal.

* We will review these cases in the Q2 2014 IPT News.

 

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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