Supreme Court Corner: Q4 2013

by DLA Piper
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CASES TO WATCH

Petrella v. Metro-Goldwyn-Mayer Inc.

Copyright: Status: cert. granted

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

Petrella owns the rights to the screenplay for Raging Bull, and brought a copyright suit against MGM in 2009 for its ongoing reproduction, marketing and distribution of the 1980 movie based on her father’s 1963 screenplay. Though Petrella only sought damages within the three-year statute of limitations prescribed by the Copyright Act, the Central District of California found Petrella’s suit was barred by laches, i.e., that she had unreasonably delayed her case. The Ninth Circuit affirmed.

Petrella argues a Circuit split: (1) the Ninth Circuit applies a presumption in favor of laches when any infringement occurred outside the three-year limitation; (2) the Fourth, Eleventh and Second Circuits hold that laches cannot bar relief from infringement occurring within the statutory limitations period; (3) the Sixth and Tenth Circuits strongly disfavor laches in light of the statutorily mandated limitations period. MGM argues the Circuits are not split; instead, each trial court exercised its discretion under different facts resulting in disparate holdings. The Court may narrow its holding to the copyright context; however, the Court could also speak broadly about when laches is applicable to a cause of action with a statute of limitations.

Limelight Networks, Inc. v. Akamai Techs., Inc., and Akamai Techs., Inc. v. Limelight Networks, Inc.

Patent: Status: certs. Pending

Issues: Does liability for indirect infringement under section 271(b) require a finding of direct infringement by a single entity? And may a party be liable for direct infringement under section 271(a), and accordingly indirect infringement under section 271(b), when two or more entities join to satisfy each limitation of a patent claim?

Akamai accused Limelight of infringing a patented method claim. Limelight performed each claimed method step except one, which Limelight’s customers performed. The lower court found no direct infringement because Limelight did not direct its customers to perform the missing step. The district court could not find the claim indirectly infringed because it did not find that Limelight had directly infringed. The Federal Circuit initially affirmed.

Upon rehearing en banc, the Federal Circuit reversed and remanded, asking whether Limelight was liable as an indirect infringer for inducing its customers to perform the missing step. The court said Limelight would be liable for indirect infringement under section 271(b) if: (1) it knew of the patent; (2) it performed all but one of the steps; (3) it induced its customers to perform the missing step that it did not perform; and (4) its customers in fact performed that step. A party can be liable for indirect infringement when all steps of a claimed method are performed, but such liability does not require that a single party perform each claimed step.

Limelight argues for a stricter standard: that a party may be liable for induced infringement only if it, by itself, satisfies each limitation. Akamai urges a looser view: there is no basis to restrict direct infringement to require one entity to satisfy each limitation. Akamai also argues the Federal Circuit’s imposition of agency requirement “is a significant restriction on the broader control or direction standard.”

Pom Wonderful LLC v. The Coca-Cola Co.

Trademark: Status: cert. granted

Issue: Can a private party bring a Lanham Act claim challenging a product label regulated under the Food, Drug, and Cosmetic Act?

Pom brought a Lanham Act challenge against Coca-Cola alleging its “Pomegranate Blueberry” juice misleads customers, containing only 0.3 percent pomegranate and 0.2 percent blueberry juice. The Lanham Act permits challenges to misleading labeling on any goods or service to curb unfair competition. Also, the Food, Drug, and Cosmetic Act (FDCA) regulates beverage labeling and FDA regulations promulgated thereunder govern juice labeling. The parties agree that the “Pomegranate Blueberry” label meets FDA requirements.

The Ninth Circuit affirmed the lower court dismissal of Pom’s Lanham Act challenge, finding FDA regulations authorize the label. Pom argues the Ninth Circuit found the FDCA to implicitly displace the Lanham Act with regard to beverage labeling; and the decision conflicts with precedent in the Third, Eighth and Tenth Circuits. Coca-Cola argues there is no circuit split and that the Ninth Circuit did not create a blanket pre-emption, but found a label specifically authorized by the FDA is not subject to a Lanham Act challenge.

RECENT DECISION

Medtronic, Inc. v. Boston Scientific

Patent:
Argument: November 5, 2013

Issue: Does a patent licensee seeking declaratory judgment (DJ) bear the burden to prove non-infringement?

In 1991, Medtronic entered into a patent licensing agreement allowing (1) the patent-holder to request licensing fees for any new Medtronic products covered by the patents; and (2) Medtronic to challenge new product infringement via a declaratory judgment action without terminating the license. Medtronic exercised this provision in 2007.

The Federal Circuit found the trial court incorrectly placed burden of proof for infringement on the DJ-defendant (the patent holder) and not on the DJ-plaintiff (the alleged infringer). Though infringement is normally proven by the patent holder, the Federal Circuit found Medtronic must prove non-infringement because it is seeking relief. Medtronic argues this undercuts MedImmune v. Genentech. MedImmune, however, did not address the burden of proof in such a DJ action. Amicus briefs were filed by the US and legal scholars in support of Medtronic, arguing that the burden of proof normally rests with the patent holder and that public interest and case management favor the burden remaining that way.

 

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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