Important Changes in U.S. Intellectual Property Law (2016 Update)

Important Changes in U.S. Intellectual Property Law (2016 Update) Seminar Topic: This program examines the various approaches to patents, trademarks, copyrights, and trade secrets through examples of bills, previous litigations, court s decision, etc... This material is intended to be a guide in general and is not legal advice. If you have any specific question regarding the state of the law in any particular jurisdiction, we recommend that you seek legal guidance relating to your particular fact situation. The course materials will provide the attendee with the knowledge and tools necessary to identify the current legal trends with respect to these issues. The course materials are designed to provide the attendee with current law, impending issues and future trends that can be applied in practical situations. Page 1

Copyright 2017 Printed in the United States of America. All rights reserved. No part of this monograph may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, except for citation within legal documents filed with a tribunal, without permission in writing from the publisher. Disclaimer: The views expressed herein are not a legal opinion. Every fact situation is different and the reader is encouraged to seek legal advice for their particular situation. The Apex Jurist, www.apexjurst.com is Published by ApexCLE, Inc. www.apexcle.com 119 South Emerson St., Suite 248 Mount Prospect, Illinois 60056 Ordering Information: Copies of this monograph may be ordered direct from the publisher for $64.95 plus $4.25 shipping and handling. Please enclose your check or money order and shipping information. For educational, government or multiple copy pricing, please contact the publisher. Library of Congress Cataloging-in-Publication Data ApexCLE, Inc. 1. ApexCLE, Inc. 2. Law-United States Guide-books. 3. Legal Guide 4. Legal Education. Page 2

About the Author and Presenter Adrienne Naumann Adrienne Naumann established her own practice in 1996 which is exclusively intellectual property law. Ms. Naumann s practice includes individual entrepreneurs and start-up companies, as well as small and medium sized businesses. Her issued patents include a broad range of technologies including: a razor handle, board game, agricultural method, pneumatically driven trench shoring device, floral containers, electromechanical lock, laminar flow nozzle, portable exercise devices, mechanical bag holder and shelving. She has also filed successful patent application appeals in the Patent & Trademark Office on behalf of clients. Ms. Naumann has obtained trademarks, copyrights and design patents on behalf of artists, writers and companies. In addition to obtaining intellectual property protection through government agencies, Ms. Naumann advises and drafts documents on matters of ownership, shop rights, work for hire, transfers of rights, licenses, permissions, rescission, consents, non-disclosure agreements, releases, trade secrets, proprietary information and web sites. Ms. Naumann judges the Illinois Institute of Technology Interprofessional Projects Program in Chicago. Ms. Naumann also serves on the Board of the University of Chicago, Chicago Women s Alliance and on the e-discovery committee for the Seventh Circuit Court of Appeals. Author s Email Address: adriennebnaumann@uchicago.edu Author s Website: http://home.comcast.net/~adrienne.b.naum ann/ip/ Author s Mailing Address: 8210 Tripp Avenue Skokie, IL 60076 Author s Phone Number: 847-329-8185, 847-329-8750 Page 3

Table of Contents Contents Table of Contents... 4 Timed Agenda:... 6 Important Changes in U.S. Intellectual Property Law You Can t Overlook... 7 Patent law... 7 Pending Congressional Legislation... 7 A. H.R. 9 -The Innovation Act- provides in relevant part:... 7 B. S. 632- Strong Patents Act of 2015 provides in relevant part... 7 C. S.1137- Patent Act provides in relevant part... 7 Recent Supreme Court Decisions... 8 A. Alice Corp. Pty. Ltd. [Alice] v. CLS Bank International [CLS], 573 U.S., 82 L.Ed.2d 296, 2014 U.S. Lexis 4303, 82 U.S.L.W. 4508 (2014)... 8 B. Nautilus, Inc. v. Biosig Instruments, Inc.,572 U.S., 134 S. Ct. 2120; 189 L.Ed.2d 37; 2014 U.S. Lexis 3818, 82 U.S.L.W. 4433 (2014).. 11 C. Limelight Networks, Inc. v. Akamai Techologies, Inc. et al. [Limelight and Akamai], 572 U.S.,134 S.Ct. 2111, 189 L.Ed.2d 52, 2014 U.S. Lexis 3817; 82 U.S.L.W. 4439, 110 U.S.P.Q.2d 1681 (2014)... 12 D. Highmark, Inc. v. Allcare Health Management System, Inc., 572 U.S., 134 S. Ct. 1744, 188 Led.2d 829, 2014 U.S. Lexis 3106, 110 U.S.P.Q.2d 1343 (2014)[Highmark and Allcare]... 14 E. Octane Fitness, LLC. v. Icon Health & Fitness, Inc., 572 U.S., 134 S. Ct. 1749, 188 L.Ed.2d 816, 2014 U.S. Lexis 3107, 110 U.S.P.Q.2d 1337 (2014) [ICON and Octane]... 16 F. Teva v. Sandoz, 574 U.S. (2015)... 17 G. Commil USA, LLC v. Cisco Systems, Inc., 575 U.S. (2015)... 17 H. Kimble et al. v. Marvel Entertainment, LLC., 576 U.S. (2015) 17 I. Cases granted certiorari (willfulness test for enhanced patent infringement damages under 35 U.S.C. 284)... 17 Copyright... 18 1. Laches, Petrella v. Metro-Goldwyn-Mayer et al. [MGM], 572 U.S., 134 S. Ct. 1962, 188 L.E.2d 979, 2014 U.S. Lexis 3311, 110 U.S.P.Q.2d 1605(2014)... 18 A. American Broadcasting Cos. Inc. et al. v. Aereo, Inc. et al., 2014 U.S. Lexis 4496 (June 25, 2014)[ABC and Aereo]... 19 B. The Aereo Supreme Court Decision... 20 Page 4

C. Authors Guild v. Google, Inc., 954 F. Supp. 2d 282, 2013 Dist. Lexis 102198, 108 U.S.P.Q.2d 1074 (S.D.N.Y. 2013), affirmed, Authors Guild v. Google Inc., No. 13-4829 (2d Cir. October 16, 2015)... 21 Trade Dress... 21 H. Apple, Inc. v. Samsung Electronics Co., Ltd. et al.,nos. 2014-1335, 2015-1029(Fed. Cir. 2015)... 21 Page 5

Timed Agenda: Time: Description: 00:00:00 Program Start 00:01:13 Recent Changes in U.S. Intellectual Property Law You Can t Overlook 00:01:37 Patent Law 00:01:41 H.R. 9 -The Innovation Act 00:06:30 S. 632- Strong Patents Act of 2015 00:08:52 S.1137- Patent Act 00:13:25 Recent Supreme Court Decisions 00:13:48 Alice Corp. Pty. Ltd. [Alice] v. CLS Bank International [CLS] 00:25:33 Nautilus, Inc. v. Biosig Instruments, Inc. 00:29:15 Limelight Networks, Inc. v. Akamai Techologies, Inc. et al. [Limelight and Akamai] 00:34:30 Highmark, Inc. v. Allcare Health Management System, Inc., 00:37:48 Octane Fitness, LLC. v. Icon Health & Fitness, Inc. 00:40:33 Teva v. Sandoz 00:41:21 Commil USA, LLC v. Cisco Systems, Inc 00:43:59 Kimble et al. v. Marvel Entertainment, LLC 00:45:41 Cases granted certiorari 00:48:23 Copyright 00:48:38 Laches, Petrella v. Metro-Goldwyn-Mayer et al. [MGM] 00:52:07 American Broadcasting Cos. Inc. et al. v. Aereo, Inc. et al 00:57:06 Authors Guild v. Google, Inc. 01:04:00 Trade Dress 01:04:26 Apple, Inc. v. Samsung Electronics Co., Ltd. et al 01:12:50 Program End Page 6

Important Changes in U.S. Intellectual Property Law You Can t Overlook Patent law Pending Congressional Legislation A. H.R. 9 -The Innovation Act- provides in relevant part: 1. Parties alleging patent infringement in a civil action must establish bona fide standing to allege infringement, as well as the basis for the court s jurisdiction. 2. Courts must award prevailing parties reasonable attorney fees and expenses under most circumstances. 3. Courts may order payment of these fees by a joined party unless a. The non-prevailing party was substantially justified, or b. the award would otherwise be unfair. 4. Under most circumstances a party who unilaterally offers a covenant not to sue is subject to a motion for attorneys fees as if it were a nonprevailing party. 5. Absent the defendant s consent, venue for patent infringement litigation to restricted to locations wherein the defendant a. has its principle place of business b. is incorporated c. has established a physical facility, or d. conducts significant research and manufacturing for the alleged infringed invention. B. S. 632- Strong Patents Act of 2015 provides in relevant part 1. numerous provisions for modification of the post patent grant challlenge process and re-examination requests filed with the United States Patent Office. 1. liability for a. actively inducing infringement of a process patent, or b. contributory infringement of a process patent, and even if individual process steps are not practiced by a single entity. C. S.1137- Patent Act provides in relevant part Page 7

1. Amendment to patent law to add pleading and disclosure requirements for patent infringement litigation. 2. The Federal Trade Commission may prosecute entities for sending fraudulent demand letters alleging patent infringement. 3. Standards for treatment of trademarks under the U.S. bankruptcy code 4. Parties alleging infringement, and whose principle business is patent litigation, must identify entities with a financial interest in the litigation for purposes of paying attorney fee awards. 5. Upon motion, a court must a. stay an action against retailers or end users under specified conditions, b. if this retailer or end user agrees to comply with the outcome in the manufacturer s patent infringement litigation Recent Supreme Court Decisions A. Alice Corp. Pty. Ltd. [Alice] v. CLS Bank International [CLS], 573 U.S., 82 L.Ed.2d 296, 2014 U.S. Lexis 4303, 82 U.S.L.W. 4508 (2014) 1. Representative early decisions addressing patent eligibility of computer related inventions a. Diamond v. Diehr, 450 U.S 175 (1981)(computerized process that determines the time period for curing rubber within a mold is patent eligible) b. Parker v. Flook, 437 U.S. 584, 98 S. Ct. 2522, 57 L.Ed.2d 41 (1978) (computerized updating of alarm limits is not patent eligible) c. In re Alappat, 33 F.3d 1526, 3 U.S.P.Q.2d 1545 (Fed. Cir. 1994)( generic computer programmed for a particular result is patent eligible) d. AT&T Corp. v. Excel Communications, Inc., 172 F.3d 1352, 50 U.S.P.Q.2d 1447(Fed. Cir.), cert. denied, 528 U.S. 946 (1999)(computer implemented process for billing customers of numerous service providers) i. held to be patent eligible without physical transformation of subject matter ii. when there is a useful, tangible and concrete result. e. Ex Parte Carl A. Lundgren, 76 U.S.P.Q.2d 1385 (Bd. Of Pat. Apps. & Ints. 2005) (a business method without apparatus or physical transformation of subject matter.) Page 8

i. the method was patent eligible because there was a practical application with a useful, concrete and tangible result. ii. one judge dissented 2. After Ex Parte Carl A. Lundgren a. Bilski v Kappos, 561 U.S. 593 ( 2010) i. held: a financial business method relating to hedge funds, without more is merely an abstract idea and therefore is not patent eligible, and ii. there was no description of apparatus in the claims or specification by which to implement the abstract idea. b. Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S.,132 S. Ct. 1289 (2012) i. the disputed patent claimed a diagnostic method that measured the metabolites in the patient s blood resulting from injection of specific therapeutics. ii. Held to be patent ineligible because the claim was to a natural phenomenon without additional innovative features, and iii. Natural phenomenon, as well abstract ideas, are per se never patent-eligible. 3. Background of the litigation: lower federal courts. a. Alice s challenged patents in the infringement lawsuit relate to a computerized trading platform for financial transactions that eliminates settlement risks b. The district court granted summary judgment to CLS ( the alleged infringer) because i. Alice s method claims designated an abstract idea of employing an intermediary in a business transaction and ii. this method claim would pre-empt the use of this abstract idea on all computers iii. the result was the same for Alice s media and system claims. 4. The Federal Circuit s en banc decision a. Issues Page 9

i. Do Alice s disputed claims pre-empt an abstract concept? ii. If so, do Alice s claims add significantly more to the abstract, patent in-eligible business concept of reducing financial risk? b. Per curiam method and media claims i. the underlying contended innovation is the implementation of an abstract business concept. ii. the claims lack any express language to define the computer s participation. iii. remaining portions of the method claim, such as creating a shadow record, are insignificant pre-solution activity. iv. the addition of generic computer functions to facilitate performance is insufficient. v. therefore the method claims are invalid as patent ineligible subject matter. vi. similarly, the computer readable media claims designate computer readable storage media in broad terms. vii. the remaining substantive claim limitations designate the same steps recited in the non- patent eligible method claims. c. Decision of equally divided court: System claims for the computer system i. these claims recite tangible but generic devices such as a computer and data storage unit, in general terminology. ii. the system claims also designate the same method claim steps. iii. however, every general purpose computer can perform the same steps to implement abstract methods. 5. The U.S. Supreme Court Decision a. The claims in this case are drawn to a patent ineligible abstract idea Page 10

b. These methods claims are not patent eligible under 35 U.S.C. 101, because the abstract business idea only required generic computer implementation. c. Wholly generic computer implementation is not generally a feature that would otherwise permit the monopolization of an abstract idea. d. Here the claims do not designate an improvement(s) to a computer or computer related technology. e. The system and media claims do not add substantively to the method claims, so they are also patent ineligible for the same reasons. i. Mayo established the two-step framework for determining whether a claim is patent eligible when it is primarily a law of nature. ii. Bilski established that an abstract financial idea per se is not patent eligible. 6. Effect of this Supreme Court decision a. Significantly deceases the patent eligibility of business methods implemented by computer related devices. b. Does not affect computer related inventions per se. c. Merged the concept of pre-emption of an abstract idea with the requirement for an inventive concept in addition to an abstract idea. B. Nautilus, Inc. v. Biosig Instruments, Inc.,572 U.S., 134 S. Ct. 2120; 189 L.Ed.2d 37; 2014 U.S. Lexis 3818, 82 U.S.L.W. 4433 (2014) 1. Background of the litigation a. Upon summary judgment, Biosig s patent was found invalid based upon indefiniteness [ 35 U.S.C. 112(b)] b. The medical device claim in the disputed patent required a spaced relationship between two electrodes. c. However the patent specification did not explicitly define the term spaced relationship. 2. The Federal Circuit decision a. The district court erred because the disputed term was amenable to construction. b. The spaced relationship is indirectly determined by calculating the point at which Page 11

i. EMG signals are substantially removed and(ii) includes size, shape and materials as well as positions of electrodes. c. Therefore the claims provided inherent parameters sufficient for a skilled artisan to understand the bounds of the spaced relationship. 3. Supreme Court decision a. The Federal Circuit s standards i. amendable to construction and ii. insolubly ambiguous do not satisfy section 112 second paragraph s definiteness requirement: b. This degree of imprecision diminishes public notice and increases uncertainty of the invention s boundaries. c. The case was vacated and remanded to the Federal Circuit for a test that was probative of the essential inquiry. C. Limelight Networks, Inc. v. Akamai Techologies, Inc. et al. [Limelight and Akamai], 572 U.S.,134 S.Ct. 2111, 189 L.Ed.2d 52, 2014 U.S. Lexis 3817; 82 U.S.L.W. 4439, 110 U.S.P.Q.2d 1681 (2014) 1. Background of the litigation a. Akamai owns a software patent for a method of efficient delivery of web content. b. Limelight s network of servers also implements efficient content delivery. i. however, Limelight s customers complete the process required for the actual content delivery, by ii. completing the step in the patent known as tagging. c. Consequently, Akamai filed a lawsuit alleging infringement of its patent by Limelight. d. The district court found no direct infringement because i. the customers actually performed several steps within the patented method ii. but not all the steps as is required under 35 U.S.C.271(a) iii. without direct infringement under section 271(a),there could be no indirect infringement under section 271(b). Page 12

2. The Federal Circuit per curiam decision a. Limelight was not liable for direct infringement because it did not direct and control the health care providers and patients b. However, Limelight is liable for inducing infringement if i. Limelight knew of the patent ii. performed all but one step of the claimed method, and iii. induced customers to perform the final claimed method steps, and iv. the customers actually performed the final step of the claimed method. 3. The Supreme Court decision a. Liability for inducement requires direct infringement. b. The Federal Circuit s view would deprive section 271(b) of ascertainable standards. c. Courts should not create liability for inducement where Congress has not done so. d. The decision on 271(b) requires a remand where the Federal Circuit may also focus upon interpretation of section 271(a). 4. On remand : Akamai Technologies, Inc. et al. v. Limelight Networks, Inc., F.3d (Fed. Cir. May 13, 2015) a. 35 U.S.C. 271(a) does not include joint tort feasor liability, except for vicarious liability. b. Congress enacted only certain forms of contributory liability in 271(b) and (c). c. The panel relied upon the single entity rule to define the scope of vicarious liability under 271(a). 5. Subsequent Federal Circuit en banc rehearing and per curiam opinion a. 35 U.S.C. 271(a) liability occurs where all the steps of a claimed method are performed or attributable to a single entity. b. That single entity is responsible for performance of all methods steps as direct infringers whenever that entity i. directs or controls others performance, or Page 13

ii. forms a joint enterprise with others. c. vicarious liability law determines whether a single entity directs or controls the acts of another d. for a joint enterprise all are accountable for the acts of the other as if a single actor. e. direct infringement requires that all method steps be attributed to a single entity. f. Limelight in this case directs or controls the customer s remaining method step and so all steps are attributable to Limelight under 271(a). D. Highmark, Inc. v. Allcare Health Management System, Inc., 572 U.S., 134 S. Ct. 1744, 188 Led.2d 829, 2014 U.S. Lexis 3106, 110 U.S.P.Q.2d 1343 (2014)[Highmark and Allcare] 1. Background of the litigation a. Highmark filed a declaratory judgment suit against Allcare for non-infringement, invalidity and unenforceability of Allcare s patent for an electronic payment method. b. The district court found non-infringement in favor of Highmark, and the Federal Circuit affirmed. c. Highmark then requested attorney fees for frivolous claims and litigation misconduct under section 285. i. the district court found the case exceptional and awarded Highmark attorney fees, expenses and sanctions ii. Allcare appealed this award. 2. The Federal Circuit decision a. The Federal Circuit reviewed each claim de novo for exceptional status under the following non-statutory criteria: i. to qualify as exceptional under section 285 and be entitled to attorney fees: (a) The litigation must be brought in subjective bad faith AND (b) The litigation must be objectively baseless ii. The absence of an objective foundation for claims must either be (a) known, or (b) so obvious that it should have been known. Page 14

iii. The subjective state of mind inquiry considers the totality of circumstances. 3. The Federal Circuit decision a. The Federal Circuit reviewed each claim de novo for exceptional status under the following non-statutory criteria: i. to qualify as exceptional under section 285 and be entitled to attorney fees: (a) The litigation must be brought in subjective bad faith AND (b) The litigation must be objectively baseless ii. The absence of an objective foundation for claims must either be (a) known, or (b) so obvious that it should have been known. iii. The subjective state of mind inquiry considers the totality of circumstances. b. The objective and subjective inquiries require a claim by claim approach of the challenged patent. c. Here, at least one of Allcare s patent claim disputes warranted an exceptional case finding because i. there was no evidence that the claim was ever supportable, and ii. therefore the allegation was brought in subjective bad faith. d. Only if litigation is objectively meritless may a court examine subjective motivation. e. The appellate court affirmed the exceptional finding for one patent claim, but it reversed the district court's finding for another claim. 4. Question for the U.S. Supreme Court: Whether a trial court s exceptional case finding under section 285, and which concludes that patent claims are objectively without merit, is entitled to deference upon appellate review. 5. U.S. Supreme Court decision a. Vacated the appellate court judgment and remanded for further proceedings. Page 15

b. Held that the proper standard for review of a district court s award of attorney fees under section 285 is abuse of discretion. E. Octane Fitness, LLC. v. Icon Health & Fitness, Inc., 572 U.S., 134 S. Ct. 1749, 188 L.Ed.2d 816, 2014 U.S. Lexis 3107, 110 U.S.P.Q.2d 1337 (2014) [ICON and Octane] 1. Background of the litigation a. Appeal to the Federal Circuit from a summary judgment of non-infringement, and denial of attorney fees under 35 U.S.C. section 285. b. Octane asserted that ICON s unreasonable claim construction, privilege assertions and e-mails established bad faith of ICON. 2. The Federal Circuit affirmed that the case was not exceptional under section 285. 3. Question presented to the Supreme Court: Does the traditional two-part test (subjective prong and objective prong) for exceptional cases under 35 U.S.C. section 285 encourage frivolous patent infringement litigation? 4. U.S. Supreme Court decision a. Reversed the Federal Circuit and remanded for further proceedings consistent with modified criteria for establishing a case as exceptional under section 285. b. The Court observed that previous decisions impose an inflexible framework onto the exceptional case standard of section 285. c. Instead, patent infringement that is either, but not both (i) subjectively in bad faith or (ii) objectively baseless merits section 285 exceptional status. d. In other words, both kinds of evidence --- subjective AND objective---need not be present for a case to be exceptional. e. Furthermore, evidence of exceptionality need not meet a clear and convincing standard. f. Instead, as with other fee-shifting statutes, a preponderance of the evidence is the satisfactory level of proof for establishing exceptionality. Page 16

F. Teva v. Sandoz, 574 U.S. (2015) 1. The Court held that a district court s resolutions of fact underlying patent claim construction require a clear error, and not a de novo, standard of review. 2. The Court then vacated and remanded the case to the Federal Circuit for a decision compliant with the clear error standard. G. Commil USA, LLC v. Cisco Systems, Inc., 575 U.S. (2015) 1. A defendant s good faith belief regarding patent validity is not a defense to an induced infringement allegation. 2. 35 U.S.C. 271(a)(direct infringement), is a strict liability offense for which mental state is irrelevant. 3. 35 U.S.C. 271(c) (contributory infringement)requires knowledge of the patent and that the induced acts are infringing. 4. 35 U.S.C. 271(b) (induced infringement) also requires (i) knowledge of the patent and (ii) that the induced acts are infringing. 5. A defendant s belief about patent validity is not an defense to a claim of induced infringement, because induced infringement is a different issue from patent validity. 6. Patent invalidity is not a defense to infringement although it is a defense to liability. 7. The Court vacated and remanded the Federal Circuit decision. H. Kimble et al. v. Marvel Entertainment, LLC., 576 U.S. (2015) 1. All patent related benefits end whenever the specific patent term expires. 2. Therefore, in this case the party who had contracted for royalties on sales of the patented invention could not enforce the agreement for those royalties past the patent expiration date. I. Cases granted certiorari (willfulness test for enhanced patent infringement damages under 35 U.S.C. 284) 1. Halo Electronics v. Pulse Electronics, 790 F.3dd 1357(Fed. Cir.) cert. granted no.1453, S.Ct. (October 19, 2015) consolidated for hearing with 2. Stryker Corp. v. Zimmer, Inc., 782 F.3d 649 (Fed. Cir. ) cert. granted no. 14-1520 S.Ct. (October 19, Page 17

Copyright 1. Laches, Petrella v. Metro-Goldwyn-Mayer et al. [MGM], 572 U.S., 134 S. Ct. 1962, 188 L.E.2d 979, 2014 U.S. Lexis 3311, 110 U.S.P.Q.2d 1605(2014) A. History of the litigation 1. Two screenplays and a book about Jake LaMotta were registered with the United States Copyright Office. 2. The renewal copyright application for a screenplay was filed in 1991 on behalf of the owner of the renewal rights [Petrella]. 3. Petrella did not initiate a copyright infringement lawsuit until 2009. 4. The lower court granted summary judgment for MGM on the basis of laches. 5. 2015) B. The appellate court s decision 1. Laches a. The relevant delay is the period from (i) when Petrella knew or should have known of any infringement (ii) until the lawsuit commences. b. There is no credible evidence for justification of failure to file the lawsuit from 1990 to 2009. c. MGM was prejudiced by the delay because: i. The film was distributed with substantial financial and other resources, as well as agreements to license the film. 2. Accounting and unjust enrichment were denied to Petrella because there was no evidence of willful infringement. 3. Issue for the Supreme Court: Whether Petrella is barred by laches from filing a copyright infringement lawsuit within the statute of limitations. C. U.S. Supreme Court decision 1. Reversed the Ninth Circuit and reinstated Ms. Petrella s complaint. 2. Held: there was no viable affirmative defense of laches when Ms. Petrella filed her compliant within the applicable three-year statute of limitations for copyright infringement. 3. In dicta the court observed that a proper affirmative defense may be estoppel if Page 18

a. A copyright owner engages in intentionally misleading representations about abstention from suit and b. The alleged infringer detrimentally relies upon these misleading representations. c. Petrella notified MGM of her claims d. Before MGM invested in a new edition of Raging Bull. 4. In this case, there are no extraordinary circumstances or intentional misrepresentation. II. Public performance and unlawful reproduction A. American Broadcasting Cos. Inc. et al. v. Aereo, Inc. et al., 2014 U.S. Lexis 4496 (June 25, 2014)[ABC and Aereo] 1. Background of the litigation a. Holders of copyrights in broadcast works filed a copyright infringement lawsuit against Aereo. b. Copyright holders also moved for a preliminary injunction to i. prevent Aereo from transmitting programs ii. while the programs were initially airing, iii. claiming that these transmissions infringed their exclusive right to publicly perform their works. c. Aereo s antenna are sent signals by Aereo s antenna server. i. With Aereo s technology, a copy of the specifically requested program is transmitted to that requesting Aero user. ii. Each copy of a program is only accessible to the user who requested that the copy d. The district court concluded that the copyright holders were unlikely to prevail on the merits. 2. The appellate court s decision a. Prior Second Circuit law had interpreted the transmit clause of the 1976 Copyright Act for the public performance right i. under this interpretation, use of a single unique copy limits the potential audience of a corresponding single transmission to a single user which is therefore not to the public. ii. for Aereo s system there is a unique copy of a program that is exclusively assigned to only one user through signals from a single antenna. Page 19

b. It is the underlying transmission and not the underlying work, that determines whether the transmission is to the public. i. in this case, no single Aereo user can receive a transmission from another user s copy for a particular program. c. Consequently, Aereo s transmission to each individual customer is not public d. Therefore, because the copyright holders will not succeed on the merits of public performance, denial of a preliminary injunction was affirmed. B. The Aereo Supreme Court Decision 1. Held: The correct definition of public performance is the underlying work approach of the broadcast companies that originally requested a preliminary injunction. a. Aereo transmits a performance whenever at least one subscriber views a program. b. Aereo s technological differences do not distinguish Aereo s system from cable systems which perform to the public under well settled law. c. It is irrelevant whether there is an individual communication and/or copy for each viewer. 2. Aereo s subscribers are the public because a. There are a large number of transmittal recipients who are unrelated and unknown to each other, and b. These subscribers do not receive performances as owners or possessors of the underlying works, and c. The copyright statutes expressly provides that subscriber i. may receive the same programs at different times and locations and ii. still remain within the scope of the exclusive right of public performances. 3. The Court reversed and remanded the case for further proceedings in the Second Circuit under its statutory interpretation of the transmittal provision. Page 20

C. Authors Guild v. Google, Inc., 954 F. Supp. 2d 282, 2013 Dist. Lexis 102198, 108 U.S.P.Q.2d 1074 (S.D.N.Y. 2013), affirmed, Authors Guild v. Google Inc., No. 13-4829 (2d Cir. October 16, 2015) 1. District court proceedings a. Google had not compensated copyright owners for its copying and/or display of verbatim written copyrighted works in a library project. b. District court decision i. Google s snippets without compensation or permission of the copyright owners, and ii. its complete digital copies of unauthorized written works for download. iii. were sufficiently transformative and in the public interest to qualify as fair use under the U.S. Copyright Act. 2. The Second Circuit review of the four fair use factors a. transformative purpose i. the court found that the purpose of the new search project was to assist in research with keywords and snippets, and not provide the texts of entire written works. ii. that Google is a for profit business was not determinative because the project was not commercial in nature. b. nature of copyrighted work: not determinative in this case or generally. c. Amount and substantial nature of the copied portion compared to the work as a whole i. although entire works were copied, ii. no works were exposed to the public in their entireties. d. Effect of copying upon potential market or value of the copyrighted work i. Google s snippets, which are discoverable by a word search, are isolated facts which are not protected by copyright. ii. the public can obtain limited data about books with allowing substantial text disclosure Trade Dress H. Apple, Inc. v. Samsung Electronics Co., Ltd. et al.,nos. 2014-1335, 2015-1029(Fed. Cir. 2015) A. Trade dress 1. may be Page 21

a. product configuration, or b. packaging, and 2. Similarly to trademarks, designates the source of a produce or service. Examples: interior décor of a restaurant; paper wrapper on a popsicle; bottle shape. 3. Product configuration is more likely to comprise functional features than packaging 4. However, protection of functional features is exclusively within the scope of U.S. utility patents 5. Reason: otherwise a person could exclusively own a useful feature forever a. instead of for a limited time pursuant to a patent, and b. which is twenty years from submission of the patent application. 6. Compare the limited period of patent enforceability to successive renewal of trade dress registration without a time limitation. B. Design patents 1. Protect the ornamental features of manufactured articles for a limited time duration. C. Litigation background 1. Apple filed a lawsuit against Samsung for a. dilution of registered and unregistered trade dress and b. infringement of design patents for its iphones 3G and 3GS. 2. Apple was awarded damages for trade dress dilution as well as design patent infringement, and Samsung appealed. D. The Federal Circuit opinion 1. The Federal Circuit relied upon trade dress judicial decisions of the Ninth Circuit as well as U.S. Supreme Court decisions. a. a feature is functional if it (i) is essential to the use or purpose of the article or (ii) affects the cost or qualify of the article 2. In the Ninth Circuit a product configuration feature with any element of functionality is not protectable as trade dress. 3. The factors to evaluate in the Ninth Circuit when determining functionality/utility of a product configuration: a. the design yields a utilitarian advantage b. was advertised as including superior utilitarian features c. provides benefits that are not available in alternative designs, and d. provides significant cost-effective manufacture. Page 22

4. The justices concluded that Apple had not provided evidence that the phone features were promoted as superior in utility. 5. They also found that exterior features of both iphones, such as icons, icon arrangement and rounded corners, had a utilitarian purpose even though they were aesthetically pleasing. 6. In contrast, design patents protect ornamental features of manufactured items. 35 U.S.C.171(a). 7. Because design patents exclusively claim the ornamental features, then functional features need not be explicitly omitted from a jury instruction for design patent infringement. 8. The court affirmed the design patent infringement verdict. a. Rationale: most manufactured articles have a utilitarian purpose. b. Many of these articles also have ornamentation Example: ornamentation for a mirror 9. Rationale: We are now disregarding the utility of the icons and iphones as a whole. Instead we are looking only at the ornamentation of a useful object a. there is ornamentation of each icon and their arrangement upon a flat surface. b. that an iphone or its exterior surface features are useful is implicit but not relevant, because that is the nature of the protection of the design patent statute. Page 23