Supreme Court weighs in on disgorgement of profits for trademark infringement and appealability of IPR institutions.

The Supreme Court has resolved a Circuit split and held that willfulness is not a prerequisite to disgorgement of defendant’s profits in a trademark infringement case.  Willfulness remains a factor to consider, but is no longer a threshold to obtaining profits.  You can read my summary of the case on the L&A website here.

This was not the Supreme Court’s only recent foray into the IP world.  Earlier this week, the Supreme Court determined that the decision of the Patent Office on the timeliness of a petition for inter partes review is  not appealable.  An IPR petition must be filed within one year of the service of a complaint alleging patent infringement of the subject patent.  Should the PTO accept a petition that the patent holder considers to have been untimely, the patent holder has no recourse through the courts as a result of this ruling.  My colleagues Craig Smith and  Peter Evangelatos provide more detail here.  

 

Also, a reminder that we at Lando & Anastasi are tracking the impact of COVID on the USPTO, prominent foreign patent offices, and the Copyright Office, as well as the impact on civil litigation in the Federal Courts of New England and the state courts of Massachusetts.  You can find this information, updated as new information becomes available, here.  

Federal Circuit Modifies Court Operations.

Citing the coronavirus emergency and the resultant reduction in the number of staff members on-site at the Markey National Courts Building, the Federal Circuit announced modifications to its operations. Significant among these modifications, are:

  • The courthouse will be closed to the public, with only arguing counsel, parties, and credentialed members of the press permitted in the building;
  • Individuals who have been diagnosed with COVID-19, been in contact with a person with the virus, who have ben asked to self-quarantine or who are experiencing flu-like symptoms are barred from the courthouse;
  • parties appearing before the Federal Circuit are directed not to provide paper copies of any filings until further notice, other than documents that can only be filed by paper; and
  • travel restrictions due to COVID-19 will not qualify as a scheduling conflict due to the availability of telephonic hearings.

The Court specifically stated that all existing deadlines in cases remain in effect.

Anyone appearing at the Federal Circuit should refer to the court’s website for the specific details and further updates.

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Janssen Biotech Inc. v. Celltrion Healthcare Co. Ltd. (18-2321).

The Federal Circuit upheld Celltrion’s non-infringement victory at the District Court in a summary affirmance, meaning that no opinion was written. Janssen had sought infringement under the doctrine of equivalents, but Judge Wolf found that the claims, if extended to cover the equivalents sought, would have been obvious, and that Celltrion therefore did not infringe.  This should bring the lawsuit to a close.

Brigham and Women’s Hospital, Inc. v. Perrigo Co. (13-cv-11640).

The Federal Circuit upheld Judge Zobel’s grant of JMOL of non-infringement, agreeing that the evidence presented failed as a matter of law to prove that each limitation of the asserted claims was found in the accused product. The patent covered methods for treatment of episodic heartburn by combining known H2-blockers and known antacids to create a product that provides, as the claims recited, immediate and long-lasting relief from heartburn symptoms. The specification defined “immediate” relief as starting within about 5-10 minutes following ingestion. Brigham and Women’s sought to prove infringement by looking to the efficacy data for the commercialized Pepcid Complete® product, which the Perrigo generic (having the same active ingredients and dosages) would necessarily match. The clinical data did not, however, match up with the claim limitations – a first test measuring esophageal pH failed to correlate any particular pH change with relief from symptoms, and the two tests that addressed symptomatic relief did not begin measuring relief until 15 minutes had passed. Brigham and Women’s had asserted only literal infringement, not infringement by equivalents; accordingly, this difference in time was insufficient to prove the product met the claim limitation. The Court declined to rule on Perrigo’s appeal of the denial of JMOL of invalidity, noting that the strong public interest in resolving questions of patentability were absent because the sole patent in suit had had expired in 2012 and there were no related patents in examination and no other lawsuits involving the patent.

Small Justice LLC v. Xcentric Ventures, LLC (1st Cir. Oct. 11, 2017).

Plaintiffs Richard Goren, a Massachusetts attorney, his company Small Justice LLC, and Christian DuPont had sued defendants Xcentric Ventures, LLC and Ripoff Report.com for copyright infringement, libel, interference with a contract, and violation of Massachusetts’ unfair competition statute. Goren had represented DuPont in an unrelated matter; DuPont had subsequently authored two reports critical of Goren and posted them to Ripoff Report, a “consumer protection” website owned by Xcentric that allows users to post complaints about companies or individuals.  As part of the posting process, the user grants Ripoff Report an irrevocable exclusive license to the copyright, and further warns users that, once posted, the post will not be taken down even at the request of the poster.  When DuPont failed to appear in the libel suit that resulted, Goren was granted an injunction prohibiting DuPont from publishing the reports, and was awarded ownership of the copyright of the reports. He then filed the suit that is the subject of this appeal, seeking the enjoin Ripoff Report from continuing to post the complaints and to require them to take all actions necessary to have cached versions and links removed from Bing, Google, and Yahoo.

Xcentric moved to dismiss the complaint, which Judge Casper granted in part. Specifically, Judge Casper dismissed the libel, tortious interference, and parts of the unfair competition counts as blocked by the Communications Decency Act, 47 U.S.C. § 230, which shields interactive computer service providers from liability for information provided by another content provider.  The court rejected Goren’s argument that, by holding itself out as the copyright holder and by having “directed” internet search engines to list the postings, Ripoff Report itself became the information provider.  Following discovery, Judge Casper granted Xcentric summary judgment on the remaining copyright and Ch. 93A claims, finding the “browsewrap” license conclusive on the copyright claims.  Judge Casper modified the judgment to find that the browsewrap license failed to meet the requirements of transferring an exclusive copyright license, and that only an irrevocable non-exclusive license had been granted; this distinction did not, however, change the outcome.  Finally, Judge Casper awarded $124,000 in fees and costs to Xcentric pursuant to 17 U.S.C. § 505.

The First Circuit Court of Appeals reviewed the dismissal of the libel and tortious interference claims de novo and affirmed.  The § 230 immunity is to be liberally construed, to prevent deterrence of on-line speech; so construed, Xcentric could not be considered to be “responsible … for the creation” of the information, and immunity would apply.  Continuing to apply de novo review, the Court affirmed the copyright decision, rejecting Goren’s argument that the license “contract” failed because no consideration was given to DuPont – while consideration is necessary to support an irrevocable license, actually posting the complaints was sufficient consideration under the circumstances.  Notably, the Court determined that it need not decide whether a browsewrap agreement can satisfy the exclusive license writing requirement of 17 U.S.C. § 204, leaving this issue open in the First Circuit.

The Court reviewed the fee award for abuse of discretion. After quickly dismissing Goren’s contentions that Xcentric was not a prevailing party or that its fee motion was untimely, the Court looked to the Supreme Court’s Fogerty factors in analyzing the decision to award fees – “frivolousness, motivation, objective unreasonableness [both factual and legal] and the need in the particular circumstances to advance considerations of compensation and deterrence.”  Characterizing review of the application of these factors as “extremely deferential,”

The Court found no fault with Judge Casper’s characterization of the legal and factual basis for plaintiffs’ claims as “at best questionable,” with its noting that Xcentric fought the case for more than two years without the prospect of a damage award, or with its determination that Xcentric prevailed on all counts. Finally, the Court noted that a showing of bad faith on the plaintiffs’ part is not a requirement for a fee award pursuant to the statute.  The fee award was thus affirmed as well.