Patent – Patently-O https://patentlyo.com America's leading patent law blog Thu, 30 Mar 2017 03:53:01 +0000 en-US hourly 1 http://www.mbhb.comhttp://patentlyo.com/media/2014/10/mcdonnell-boehnen-hulbert-berghoff-logo2.pngSponsored by MBHB LLP Berry on IP http://feedproxy.google.com/~r/PatentlyO/~3/JnRVD3vecGA/berry-on-ip.html https://patentlyo.com/patent/2017/03/berry-on-ip.html#respond Thu, 30 Mar 2017 03:53:01 +0000 https://patentlyo.com/?p=16290 by Dennis Crouch

Just returned from a quick family spring break visit to Galveston.  Wendell Berry is probably my favorite poet. He focuses mainly on communities and their interaction with the land and conservation efforts, and writes in ways that easily resonate.  He does have some harsh words for intellectual property (as well as property law in general).

He writes:

“Intellectual property” names the deed by which the mind is bought and sold, the world enslaved.

Some Further Words

I have no “intellectual property,” and I think that all claimants to such property are thieves.

Sex, Economy, Freedom, and Community: Eight Essays (1993).

I will note here that Berry has recorded his copyright to more than 100 works, including the Sex, Economy book (but seemingly has never asserted them in court).  My sense of Berry’s life is that he has attempted to live in ways align well with his written works, I would be interested to learn more about this little corner of his vision.

 

 

 

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Sir Edward Coke and International Patent Exhaustion http://feedproxy.google.com/~r/PatentlyO/~3/S8sN0hVjxjE/edward-international-exhaustion.html https://patentlyo.com/patent/2017/03/edward-international-exhaustion.html#comments Mon, 27 Mar 2017 23:29:08 +0000 https://patentlyo.com/?p=16272 GomezArosteguiGuest Post by Professor Tomás Gómez-Arostegui (Lewis & Clark Law School)

One of the questions in Impression Prods., Inc. v. Lexmark Int’l, Inc., on which the Supreme Court recently heard oral argument (March 21), is whether the authorized and foreign first sale of a patented item exhausts a U.S. patent holder’s use and distribution rights. The Patent Act of 1952 contains no pertinent provisions on the effect of the first sale of a patented article, and as a consequence many observers believe that the common law will be especially important in deciding the question. The Petitioner, Impression Products, has gone so far as to argue that the common-law backdrop is dispositive.[1] If the Court agrees and decides that the common law should control or influence the case, then assessing the content of that common law becomes paramount.

So what is the common-law rule? In Kirtsaeng v. John Wiley & Sons, Inc., a copyright case, the Court stated that the first-sale doctrine was a “common-law doctrine with an impeccable historic pedigree” that reached as far back as the 17th century and that made “no geographical distinctions.”[2] In reaching that conclusion, the Court relied in large part on English law, particularly Sir Edward Coke’s 1628 treatise in which he rejected post-sale restraints on the alienation of ordinary chattels. Although Coke was not speaking of chattels encumbered by copyrights or patents, let alone goods made and first sold in a different country, the Court nevertheless stated that this no-restraint principle applied to chattels embodying copyrighted works. Notably, the Court offered no other support for its historical account of the common law, apart from citing its 1908 decision in Bobbs-Merrill Co. v. Straus—which treated national (rather than international) copyright exhaustion.[3]

Not surprisingly, Impression Products refers to Coke repeatedly in its brief,[4] as do many amici who have submitted supporting briefs.[5] And at the oral argument last week, Impression Products began by stating that the “principle goes back, of course, to the 15th century.”[6] It also ended its argument by referring to Coke.[7] But more importantly, as Dennis notes in his recent post recapping the oral argument, Justice Breyer, who wrote the majority opinion in Kirtsaeng, seems very much inclined to continue relying on Coke’s account of English common law. Justice Breyer referred to Coke many times[8] and stated, for example, that a patent rule rejecting mandatory international exhaustion would be “very much contrary to what 300 years of restraints on alienation [doctrine] ha[d] in mind.”[9]

In an article posted on SSRN,[10] I examine and reject the Court’s historical account of English common law. Although Kirtsaeng gave the distinct impression that no early cases in England had ever ruled against gray-market importation in an intangible rights case, this is not so in fact. My article discusses two English cases and a few Scottish ones, decided in the long 18th century, and which have thus far escaped the attention of practitioners and scholars. Some of the cases are reported in print, but not all of them appear in traditional law reports, and some of the records only survive in manuscript. I have posted images of the most important manuscripts and less accessible print sources online. The cases demonstrate that the common law did not recognize international exhaustion. On the contrary, the common law observed foreign legal boundaries and permitted right owners and their licensees to stop gray-market goods that embodied intangible rights.

One of the English cases was decided in the Court of Chancery in 1716–1722, and the other in the Chancery and House of Lords in 1802–1804. Both involved patents for the exclusive right of printing, selling, and importing the Holy Bible, New Testament, and Book of Common Prayer. The King held prerogative copyrights in these works and had licensed them by letters patent separately in England and Scotland. At the request of the English licensees, the courts ruled against London booksellers who had imported books printed and sold by the Scottish licensees. Despite the union of the two countries in 1707, the Chancery and House of Lords viewed Scotland as a foreign country for the purpose of prerogative copyrights because the rights granted in the two countries were territorial, legally separate, and potentially distinct. Outside of English common law, a case decided in the Court of Session in Scotland and then in the House of Lords in 1828, extended the proposition to books traveling in the other direction—from England to Scotland.

Notably, these cases considered many of the same arguments that Lexmark and Kirtsaeng raise, such as the territoriality of patent rights; free trade among countries; the potential benefit to consumers of competition from imported gray-market goods; the potential harm to consumers who purchase goods in one country without any notice of their inability to bring those goods into another country; and the potential negative effect that gray-market imports could have on a domestic licensee.

So what do these cases mean for international patent and copyright exhaustion in the United States?

Two consequences follow. First, they call into question the Supreme Court’s decision in Kirtsaeng. Neither the parties nor the Court were aware of these cases and thus the decision issued on an incomplete record of the common law. Second, and most obviously, these newly revealed cases could have an even greater impact in Lexmark. If the Court or any of its members choose to rely on English common law once more—whether presented as controlling, persuasive, or simply historical narrative—that consultation must now occur with a different view of the common law in mind.

= = = = =

[1] Brief for Petitioner at 10–11, 44–47 (Jan. 17, 2017); Reply Brief for Petitioner at 2–3, 16–17 (Mar. 14, 2017).

[2] 133 S. Ct. 1351, 1363 (2013).

[3] Id. at 1363 (citing Bobbs-Merrill Co. v. Straus, 210 U.S. 339 (1908)).

[4] Brief for Petitioner at 10, 13, 42, 45–46 (Jan. 17, 2017).

[5] E.g., Brief of Public Knowledge et al. at 5, 9, 13–14 (Jan. 23, 2017); Brief of Costco Wholesale Corp. et al. at 20–21, 33–34 (Jan. 24, 2017); Brief for HTC Corp. et al. at 12, 17 (Jan. 24, 2017); Brief of the Association of Medical Device Reprocessors at 36 (Jan. 24, 2017); Brief of Auto Car Association et al. at 21 (Jan. 24, 2017); Brief of Intellectual Property Professors et al. at 6, 26–27 (Jan. 24, 2017).

[6] Oral Argument Transcript at 3 (Mar. 21, 2017).

[7] Id. at 53.

[8] Id. at 14, 26, 28, 33–34, 36.

[9] Id. at 28; see also id. at 26.

[10] H. Tomás Gómez-Arostegui, Patent and Copyright Exhaustion in England circa 1800, available at http://ssrn.com/abstract=2905847.

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USPTO Working Group on Regulatory Reform http://feedproxy.google.com/~r/PatentlyO/~3/sRRq_sQSrCs/working-regulatory-reform.html https://patentlyo.com/patent/2017/03/working-regulatory-reform.html#comments Fri, 24 Mar 2017 17:01:07 +0000 https://patentlyo.com/?p=16265 Under the direction of the White House, the USPTO has formed a “Working Group on Regulatory Reform.”  To implement the 2-for-1 regulatory agenda previously outlined on Patently-O. According to a release from Dir. Michelle Lee’s office:

USPTO’s Working Group on Regulatory Reform implements President Donald Trump’s January 30, 2017 Executive Order 13771(link is external), titled “Presidential Executive Order on Reducing Regulation and Controlling Regulatory Costs,” and his February 24, 2017 Executive Order 13777 (link is external), titled “Presidential Executive Order on Enforcing the Regulatory Reform Agenda.”

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Millions of Papers, Papers for Me http://feedproxy.google.com/~r/PatentlyO/~3/mVGqt_M1tc0/millions-papers-for.html https://patentlyo.com/patent/2017/03/millions-papers-for.html#comments Thu, 23 Mar 2017 02:34:20 +0000 https://patentlyo.com/?p=16234 Stuck in the 19th Century, the Federal Circuit Rule 30(a) requires appellants to submit six paper copies of the appendix to the briefs. In a recent filing, pro se appellant Urvashi Bhagat asked the court to waive this requirement in favor of another form of out-dated technology known as “CDROM.”  Bhagat’s argument is that the 1,000+ pages of her appendix, would be cost prohibitive, unwieldy, and an unwarranted consumption of paper.   The copying and delivery cost here really is several thousand dollars — easily outweighing the $500 appeal filing fee.

In any event, the Federal Circuit has rejected the motion: “The motion is denied.  Six paper copies of the joint appendix will be due in accordance with Federal Circuit Rule 30(a)(5).” [CDROMBRIEF] [DenialCDROM]

Despite my suggestion that paper is archaic – I’ll readily admit that I also usually prefer a set of well-tabbed binders over a large PDF — except for keyword searching.  I also don’t have a CDROM device.  Perhaps my difficulty with electronic form is that I do not have the right software/tech on hand – suggestions?

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Lexmark Oral Arguments: A Boon to the Sticker Industry? http://feedproxy.google.com/~r/PatentlyO/~3/ZITKZ2Tc14Q/lexmark-arguments-industry.html https://patentlyo.com/patent/2017/03/lexmark-arguments-industry.html#comments Wed, 22 Mar 2017 18:02:26 +0000 https://patentlyo.com/?p=16226 by Dennis Crouch

This is a follow-up on my earlier post on the oral arguments here:

The Cost of Getting the Law Right

On March 21, 2017, the Supreme Court heard oral arguments in the patent exhaustion case captioned Impression Prods., Inc. v. Lexmark Int’l., Inc., Docket No. 15-1189.  [Transcript: 15-1189_6468]  The two questions presented focus on downstream reuse/resale of a patented product and challenge the Federal Circuit’s rulings that: (1) a US patent is not exhausted when the patented product is sold subject to a no reuse/resale provision but instead can be asserted against downstream users/resellers who violate those original provisions; and (2) a US patent is presumptively not exhausted by an authorized and otherwise unreserved foreign sale of the patented product.  Petitioner Impression Prods., buys after-market ink cartridges, refills them and resells them and the patentee, Lexmark, is attempting to use patent rights to block that form of competition.

We can expect Justice Breyer to side with petitioners in this case:

JUSTICE BREYER: I think, that Lord Coke and his great principle of no alienation [restrictions] on chattels is being laughed at.

Truthfully, most of the oral arguments involve Justice Breyer explaining to other members of the court that Lexmark’s approach violate’s Lord Coke’s 300 year old maxims – “that’s been the kind of basic legal principle for an awfully long time.”  Lexmark’s primary answer: “the common law changed a lot after Lord Coke.”  In the two most recent IP Decisions by the Court – Star Athletica and SCA Hygiene – the majority ruled in favor of the IP rights-holder over Justice Breyer dissents in both cases.

Apart from Justice Breyer’s ‘heat’, the rest of the bench was clearly cold on this case – with few questions being asked of any of the parties.

 

In 2013, the Supreme Court decided the parallel copyright case of Kirtsaeng – siding with the accused infringers on the issue of international exhaustion.  A major difference though, is that exhaustion is codified by the copyright statute – but not in the Patent Act.

JUSTICE KENNEDY: Why hasn’t this been codified? . . . Too buys or what?  . . .

Arguing for the petitioner, Andrew Pincus avoided the question and instead focused on the long history of precedent.

MR. PINCUS: I think the Court’s enunciation of the rule in the cases prior to 1952 was very clear and specific. There’s really no doubt that when Congress enacted the law in 1952, it did so with the knowledge that there was the principle that I’ve recited, and the Bowman recitation is consistent with many, many decisions of this Court dating back to the 1800s that say the same thing, that when there is an authorized sale, the patent rights are exhausted. The Court said in some cases, the — the article falls out of the patent laws and all that applies is State law.

And most importantly, the Court’s sole decision upholding these sort of restrictions, A.B. Dick was expressly overruled a few years later in the motion picture patents case. So we not only have the Court’s consistent enunciation of the doctrine, we have the fact that there was this deviation and then an immediate correction.

Answering this same codification question for the Government, Mr. Stewart pointed to an implicit exception in 35 U.S.C. 154(a)(1). That provision provides “the right to exclude others from making, using, offering for sale, or selling the invention throughout the United States or importing the invention into the United States.”

MR. STEWART: The Court’s historic cases in the domestic exhaustion field have located the exhaustion principle in the language of the predecessors of what is now 35 U.S.C. 154(a)(1). That is the provision of the Patent Act that says the patent owner has the right to exclude others from making, using, selling, offering for sale, or importing the patented invention. And in addressing predecessor versions of that language, this Court said those exclusive rights in essence don’t encompass the right to control resale or use of a lawfully sold article.

Finally, upon his turn to argue Mr. Trela suggested the statute goes further – it “provides that infringement occurs when someone makes, sells, uses, offers to sell, or imports into this country a patented article without authority from the patent owner.”

The Lexmark oral arguments actually began with a realization that a loss here for the patentee is not a total loss because an enforceable contract may remain.

MR. PINCUS: The contract law, with its limitations, would allow the enforcement those restrictions if they were a valid contract. This is all about whether the patent law remedies apply.

[later]  CHIEF JUSTICE ROBERTS: Why is normal contract law and normal State law inadequate, for your purposes?

MR. TRELA: If your only remedy is contract and you can’t enforce these limitations downstream . . . there’s going to be an arbitrage.

JUSTICE BREYER: Why can’t you enforce the contract downstream?

MR. TRELA: Well, because you — you don’t have privity, Justice Breyer.

JUSTICE BREYER: Then why don’t you require the person who sells it to just resell it with the requirement that they promise not to, you know, whatever it is? . . . one of the reasons that it’s hard to get away with that is the antitrust laws in the contract area. And another reason is because Lord Coke said 300 years ago, you know, you get into a lot of trouble when you start trying to restrict this buyer who’s got the widget and he would like to use it as he wishes. Now, that’s been the kind of basic legal principle for an awfully long time.

 

Justice Alito offered some perspective on the extraterritoriality aspects of the case – noting the preference of the court for interpreting US statutes to avoid extraterritorial application.

JUSTICE ALITO: And it’s somewhat surprising to me that none of the briefs in this case talk about our cases regarding extraterritoriality. In recent years, we have said that a statute does not apply outside the United States unless it says that it applies outside the United States. I don’t see why that shouldn’t be the same for a common-law rule like the rule here. And if what’s involved here is the application of U.S. patent law abroad, where is the clear statement that the exhaustion rule applies outside of the borders of the United States? I don’t see where that can be found.

MR. PINCUS: Your Honor, I don’t think this is a question of extraterritorial application anything — any more than the issue in Kirtsaeng was a question of extraterritorial application of the Copyright Act.

The question here is whether the patentee’s acts outside the United States have an impact on its ability to enforce its rights within the United States. No one is saying that the sales outside the United States are governed by the U.S. patent law, they’re obviously not, just as the sales outside the United States under the Copyright Act are not governed by the Copyright Act.

In thinking through the patent infringement claim, one question is that of notice.  What notice is required to limit resale/reuse? Is notice only required at the point of first-sale, or must notice also be provided to subsequent purchasers.

JUSTICE KENNEDY: Can they put a sticker on the products — “Do not sell”? This would be a great boom to the sticker business, right?

Hard for me to predict an outcome at this point, but get your stickers ready.

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Supreme Court Cheers on Copyright Separability http://feedproxy.google.com/~r/PatentlyO/~3/ZCLkLtkvI54/supreme-copyright-separability.html https://patentlyo.com/patent/2017/03/supreme-copyright-separability.html#comments Wed, 22 Mar 2017 14:34:41 +0000 https://patentlyo.com/?p=16235 Screen-Shot-2016-05-02-at-2.27.31-PM1[1]by Dennis Crouch

Star Athletica v. Varsity Brands (Supreme Court 2017)

In a new Copyright decision, the Supreme Court has modified the doctrine of separability that allows for copyright of works of authorship associated with useful articles.

Under the statute:

The design of a useful article … shall be considered a [copyrightable] pictorial, graphic, or sculptural work only if, and only to the extent that, such design incorporates pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article.

17 USC 101.  Interpreting that statute, the Court here holds that the statute requires that an ‘artisitc feature’ of a useful article may be copyrighted:

if the feature (1) can be perceived as a two- or three-dimensional work of art separate from the useful article and (2) would qualify as a protectable pictorial, graphic, or sculptural work either on its own or in some other medium if imagined separately from the useful article.

In walking through this, the court held that two-dimensional surface decorations will not always be separable, but the ‘artwork’ applied to the cheerleader uniforms at issue here did pass the test.

The Star Athletica decision will further blur the line between the intellectual property spheres and savvy IP strategists will continue to layer overlapping IP rights.  A challenging aspect of the decision will be the “work of art” requirement.

Read the Decision: 15-866_0971

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The Cost of Getting the Law Right http://feedproxy.google.com/~r/PatentlyO/~3/n8QqyL1zyxI/cost-getting-right.html https://patentlyo.com/patent/2017/03/cost-getting-right.html#comments Tue, 21 Mar 2017 18:34:17 +0000 https://patentlyo.com/?p=16227 Andrew Pincus (arguing today in Lexmark):

If you look at the Alice case, for example, that obviously had tremendous implications for both the patentees and for people who had entered into license agreements and were paying money for patents that turned out to be invalid. But that was just a consequence of this Court getting the law right.

https://www.supremecourt.gov/oral_arguments/argument_transcripts/2016/15-1189_6468.pdf

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Doctrine of Laches Cannot Bar Legal Damages Claims in Patent Cases http://feedproxy.google.com/~r/PatentlyO/~3/d-A_md6pnfo/doctrine-laches-mostly.html https://patentlyo.com/patent/2017/03/doctrine-laches-mostly.html#comments Tue, 21 Mar 2017 14:40:19 +0000 https://patentlyo.com/?p=16217 SCA Hygiene Prods. V. First Quality Baby Prods. (Supreme Court. 2017)

In a 7-1 decision delivered by Justice Alito, the Supreme Court has expanded its recent copyright decision in Petrella to now hold that laches cannot be invoked as a defense in patent cases to prevent legal damages within the statutory 6-year limitations period of 35 U.S.C. § 286.

The basic idea is that Laches is a judge-made remedy created by the court of equity in the absence of any statute of limitations.  However, when Congress acts to create a statute of limitations – as it did with §286 – the judge-made law no longer has a role to play.

Again playing on a decade-long-theme of no-patent-exceptionalism, the court wrote:

Indeed, it would be exceedingly unusual, if not unprecedented, if Congress chose to include in the Patent Act both a statute of limitations for damages and a laches provision applicable to a damages claim. Neither the Federal Circuit, nor First Quality, nor any of First Quality’s amici has identified a single federal statute that provides such dual protection against untimely claims.

https://www.supremecourt.gov/opinions/16pdf/15-927_6j37.pdf

Justice Breyer dissented – arguing that “for more than a century courts with virtual unanimity have applied laches in patent damages cases” in order to fill an important gap in the statutory regime.

 

 

= = = = =

Supreme Court to Review (and likely Reject) Laches as a Defense in Patent Infringement Cases

SCA Hygiene Laches Oral Arguments: How Do we Interpret Congressional Silence?

Court Maintains Laches Defense for Back Damages in Patent Cases

 

 

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Federal Circuit Affirms Potentially Inconsistent Verdict http://feedproxy.google.com/~r/PatentlyO/~3/YUd3lTOZd0w/federal-potentially-inconsistent.html https://patentlyo.com/patent/2017/03/federal-potentially-inconsistent.html#comments Tue, 21 Mar 2017 14:36:43 +0000 https://patentlyo.com/?p=16214 TVIIM v. McAfee (Fed. Cir. 2017) [tviim]

A N.D. California jury held that TVIIM’s U.S. Patent No. 6,889,168 was both invalid as anticipated and not infringed.  On appeal, the Federal Circuit affirmed.

Here, the patentee argued that the jury’s verdict applied an inconsistent claim construction since, if the claims were broad enough to be anticipated then they would have also been infringed.  Likewise, IVIIM argues that if the claims were so narrow as to not be infringed, then they also would not have been anticipated by the prior art.  On appeal, however, the Federal Circuit rejected that approach for several reasons – most notably, that any error was harmless since “On appeal, TVIIM concedes that substantial evidence supports the jury’s finding for either non-infringement or invalidity but argues it does not support both.”

The result here is that a potentially inconsistent verdict is not improper so long as any possible resolution of the inconsistency reaches the same outcome (here, that the patentee loses).  In this case, any proposed construction of the claim terms resulted in either the patent being invalid or being not infringed.

= = = =

Claim 1 of the asserted patent is listed below:

1. A security system for a computer apparatus, wherein said computer apparatus includes a processor and system memory, said security system comprising:

at least one security module which under direction from the processor accesses and analyzes selected portions of the computer apparatus to identify vulnerabilities;

at least one utility module which under the direction from the processor, performs various utility functions with regards to the computer apparatus in response to the identified vulnerabilities; and

a security system memory which contains security information for performing the analysis of the computer apparatus.

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Patentlyo Bits and Bytes by Anthony McCain http://feedproxy.google.com/~r/PatentlyO/~3/Zfdc1c5YanU/patentlyo-bits-and-bytes-by-anthony-mccain-31.html https://patentlyo.com/patent/2017/03/patentlyo-bits-and-bytes-by-anthony-mccain-31.html#comments Mon, 20 Mar 2017 18:39:18 +0000 https://patentlyo.com/?p=16209
  • Nancy Urizar: Supreme Court Of The United States To Hear Oral Arguments In Patent Exhaustion Case
  • Andy Lucas & Robyn Chatwood: Intellectual Property Rights In A Virtual World
  • Deanna Okun: US Must Bolster Fight With China Over Intellectual Property Rights
  • Matthew Humphries: Sony Patent Wants Every Gadget To Double As A Wireless Charger
  • Evan Engstrom: In Apple v. Samsung, SCOTUS Sided With Reason Over Rounded Corners
  • Michael Fleming, Glenn Vanzura, & William Briggs: Patent Owners Face Increased Fraud Liability Risk
  • Get a Job doing Patent Law                  

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