Original news and analysis on international IP policy
Whatever else could be said of 2016, it was undeniably interesting. That’s likely to be true, too, for 2017. Even the staid area of US Intellectual Property Law may face dramatic changes. Here's the likely most important of those changes.
Few were surprised when, earlier this month, the US Supreme Court agreed to hear the appeal in Impression Products, Inc. v. Lexmark International. The case presents two important patent law issues, and the lower court’s ruling on these issues conflicts with Supreme Court precedents, according to many experts.
The US Copyright Office is supposed to balance the interests of copyright owners with the interests of everyone else. However, the Office’s latest regulation, which takes effect 1 December, may be anything but fair and balanced. It could, according to critics, strip Facebook, YouTube, and other online companies of a vital statutory safe harbor, thus making these companies liable when their users post infringing material online. Online companies could face billions in infringement damages, driving them out of business.
On its face, the case is a humdrum, procedural dispute about a patentee’s delay in filing an infringement suit. But if the Supreme Court rules the way most experts expect, the decision will significantly enhance the power of patent trolls and others alleging patent infringement, and it will harm many companies doing business in the US – especially companies in the tech sector. Much hangs in the balance on 1 November, when the Supreme Court hears oral arguments in SCA Hygiene Products AG v. First Quality Baby Products, LLC.
Patent infringers are supposed to pay damages, but the award in this case struck many as ridiculous. Some Samsung smartphones contained one or two purely decorative design elements that had been patented by Apple. But instead of paying modest damages for what many see as a tiny infringement, Samsung was ordered to pay $399 million – all the profits the company had made from its infringing phones. The Federal Circuit said it had no choice but to approve those damages; it was constrained by statute. Critics, however, said that the Federal Circuit had misinterpreted the statute. They fret the court’s error will unleash a wave of design patent infringement suits that will harm innovation, stifle competition, and empower patent trolls. Which is why so many will be paying close attention on 11 October, when this dispute comes before the US Supreme Court.
Pulse Electronics was guilty of patent infringement. That had been decided long ago. The only remaining issue was how much Pulse must pay for its wrongdoing. The company could be liable for treble damages, provided its infringement was willful. Fortunately for Pulse, willful infringement was almost impossible to prove, thanks to a standard established by the Federal Circuit. Unfortunately for Pulse, its lawsuit reached the US Supreme Court. And in its recent ruling on the case, the high court threw out the Federal Circuit’s standard, making it far easier to prove willful infringement. The decision is likely to have an important impact on patent litigation, the courts, and companies doing business in the US.
De minimis non curat lex – the law does not concern itself with trifles. This venerable legal principle is applied throughout the world, but not in one part of US copyright law. Copying any part of a sound recording, no matter how tiny, is actionable copyright infringement, according to an eleven year-old US appellate court ruling. Following that ruling, pop star Madonna found herself sued because her hit song, Vogue, allegedly copied a fraction of a second of another song. That copyright infringement suit was thrown out on 2 June, however, when a different appellate court ruled that de minimis infringements of sound recordings do not create any liability. Now US copyright law is in a muddle.
Fashion in the US generates over $330 billion in annual revenues, but it is more than a business. Fashion is a well-recognized art, displayed in numerous museum exhibitions throughout the world. This art, however, receives little IP protection in the US. But a case before the US Supreme Court could change that.
The US Patent and Trademark Office (USPTO) is not admitting defeat. It is still refusing to register trademarks that disparage people, even though this policy violates the First Amendment’s guarantee of free speech, according to a December decision by the Federal Circuit Court of Appeals. The USPTO has appealed the court ruling, and many experts expect the Supreme Court will soon rule on whether there is constitutional protection for disparaging marks. [Updated!]
The controversial ruling was perhaps to be expected. The Federal Circuit Court of Appeals doggedly hewed to its existing interpretation of patent law. Unfortunately, the court’s decision in Lexmark International v Impression Products conflicts with recent Supreme Court jurisprudence, according to many experts – thus leaving unresolved some important questions about how much control patentees can maintain over their patented products.
The United States has spent over a decade trying to rein in so-called “patent trolls.” Nevertheless, a recent study suggests that patent trolls are a bigger problem than ever.
The United States worked hard over the last five years to reduce patent infringement suits. Congress enacted patent reform, the courts handed down important anti-patentee rulings, and the US Patent and Trademark Office began a campaign of energetically rejecting patents and patent claims. Despite all this, from 2014 to 2015, new patent infringement suits increased 18 percent and the number of defendants sued for patent infringement increased 21 percent. What went wrong?