Supreme Court Rules That Designs On Surface Of Cheerleading Uniforms Are Copyright Eligible

On March 22, 2017, the Supreme Court issued its decision in Star Athletica v. Varsity Brands (decision available here). The Court held that the arrangement of “lines, chevrons, and colorful shapes appearing on the surface of [] cheerleading uniforms” are eligible for copyright protection “as separable features of the design of those cheerleading uniforms.” The question was vexing because useful articles—e.g., clothing, shovels—are generally not copyrightable. The designs-at-issue are available here.

The Court articulated the relevant test as follows:

We hold that a feature incorporated into the design of a useful article is eligible for copyright protection only 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 fixed in some other tangible medium of expression—if it were imagined separately from the useful article into which it is incorporated.

As to the first requirement (separate identification), the requirement is “not onerous.” “The decisionmaker need only be able to look at the useful article and spot some two- or three-dimensional element that appears to have pictorial, graphic, or sculptural qualities.”

The second requirement (independent-existance) is “ordinarily more difficult to satisfy. The decisionmaker must determine that the separately identified feature has the capacity to exist apart from the utilitarian aspects of the article. In other words, the feature must be able to exist as its own pictorial, graphic, or sculptural work as defined in §101 once it is imagined apart from the useful article. If the feature is not capable of existing as a pictorial, graphic, or sculptural work once separated from the useful article, then it was not a pictorial, graphic, or sculptural feature of that article, but rather one of its utilitarian aspects.”

“[C]opyright protection extends to pictorial, graphic, and sculptural works regardless of whether they were created as free-standing art or as features of useful articles. The ultimate separability question, then, is whether the feature for which copyright protection is claimed would have been eligible for copyright protection as a pictorial, graphic, or sculptural work had it originally been fixed in some tangible medium other than a useful article before being applied to a useful article.”

Only the designs on the uniforms, not the uniforms themselves, were copyrightable:

To be clear, the only feature of the cheerleading uniform eligible for a copyright in this case is the two-dimensional work of art fixed in the tangible medium of the uniform fabric. Even if respondents ultimately succeed in establishing a valid copyright in the surface decorations at issue here, respondents have no right to prohibit any person from manufacturing a cheerleading uniform of identical shape, cut, and dimensions to the ones on which the decorations in this case appear. They may prohibit only the reproduction of the surface designs in any tangible medium of expression—a uniform or otherwise.

Finally, the Court abandoned a prior test that some courts and commentators had advanced:

Because we reject the view that a useful article must remain after the artistic feature has been imaginatively separated from the article, we necessarily abandon the distinction between “physical” and “conceptual” separability, which some courts and commentators have adopted based on the Copyright Act’s legislative history. According to this view, a feature is physically separable from the underlying useful article if it can “be physically separated from the article by ordinary means while leaving the utilitarian aspects of the article completely intact.” Conceptual separability applies if the feature physically could not be removed from the useful article by ordinary means.

The statutory text indicates that separability is a conceptual undertaking. Because separability does not require the underlying useful article to remain, the physical-conceptual distinction is unnecessary.

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Goodbye Laches Defense In Patent Cases

On March 21, 2017, the Supreme Court issued its decision in SCA Hygiene Products v. First Quality Baby Products (decision available here). In SCA, the patent owner accused the defendant of infringement in 2003. The defendant responded, claiming that the defendant’s own patent invalidated the patent owner’s patent. The patent owner then (in 2004), without notifying the defendant, placed its own patent into reexamination to determine whether the patent was valid in light of the defendant’s patent. In 2007, the PTO issued a certificate confirming the validity of the patent owner’s patent. In 2010, the patent owner filed suit against the defendant (seven years after it had first accused the defendant of infringement). The defendant moved for summary judgment based on laches (i.e., an unreasonable, prejudicial delay in commencing suit), which the district court granted (and the federal circuit upheld).

The Supreme Court reversed, holding that laches cannot defeat a damages claim brought within the period prescribed by the Patent Act’s statute of limitations. Accordingly, under current law, the patent owner can generally seek up to six years’ worth of damages.

Importantly, the Supreme Court did not address whether laches could serve as a defense to a claim seeking equitable relief. The Supreme Court also suggested that equitable estoppel “provides protection against some of the problems that [defendant] highlights, namely, unscrupulous patentees inducing potential targets of infringement suits to invest in the production of arguably infringing products.”

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Supreme Court’s Life Technologies v. Promega Decision

On February 22, 2017, the Supreme Court issued its Life Technologies v. Promega decision (available here). The Patent Act (Section 271(f)(1)) prohibits the supply from the United States of “all or a substantial portion” of the components of a patented invention for combination abroad. The question before the Court was whether a party that supplies a single component of a multicomponent invention for manufacture abroad can be held liable under § 271(f )(1). The Court held that that a single component does not constitute a substantial portion of the components that can give rise to liability under § 271(f )(1).

Notably, the Court did not consider how to identify the “components” of a patent or whether and how that inquiry relates to the elements of a patent claim. In the instant case, the parties agreed that the accused product contained five components and that all but one component was manufactured in the United Kingdom, so the issue did not present itself.

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Northern District of Texas, Dallas Division, Seeking New Magistrate Judge

The Northern District of Texas has announced a new magistrate judge opening for its Dallas Division. Details concerning the position, and application process, can be found here. The application deadline is May 5, 2017.

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The Brick House and Court Reporting in the Northern District of Texas

The New York Times has published a follow-up article (available here) concerning Judge Kinkeade’s recent Facebook trial. Bottom line: when it comes to technology and courtroom reporting, it’s best to check your individual judge’s rules and procedures as to what is and is not allowed.

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Jurors Award $500 Million In Damages in Zenimax v. Oculus Case

Today, jurors in the Northern District of Texas rendered their verdict in Zenimax Media Inc. v. Oculus et al. (verdict available here). The case has been in the news recently, mainly because Facebook’s founder, Mark Zuckerberg, took the witness stand for the defense. (Another interesting article was recently published concerning the case and the Northern District of Texas’ rules concerning electronics and recording devices in courtrooms.)

The jurors found, among other things, that

  • none of the defendants (including Facebook) misappropriated plaintiffs’ trade secrets;
  • defendant Oculus infringed plaintiffs’ copyrights ($50 million in damages);
  • defendant Oculus committed breach of contract ($200 million in damages);
  • defendant Facebook did not tortiously interfere with plaintiffs’ contract with Palmer Luckey and/or Oculus;
  • defendants Facebook and Oculus did not engage in unfair competition against plaintiffs;
  • Oculus infringed ZeniMax’s trademarks (but Zenimax suffered no damages); and
  • defendants Oculus, Palmer Luckey and Brendan Iribe committed false designation (the jurors awarded $50 million against Oculus, $50 million against Luckey, and $150 million against Iribe).

Accordingly, the jurors awarded a total of $500 million in damages ($300 million against Oculus, a company recently acquired by Facebook; $50 million against Luckey; and $150 million against Iribe).

Judge Kinkeade is presiding over the case.

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Chief Judge Lynn Orders Patent Plaintiff to Pay $440,000 in Defendants’ Attorney Fees

On December 13, 2016, Chief Judge Lynn entered an Order (available here) in Rainere v. Microsoft & AT&T. The Court had previously decided the case in defendants’ favor, and found that the case was exceptional, justifying an award of attorney’s fees against the plaintiff. In this Order, Judge Lynn found that the plaintiff should pay defendants approximately $440,000 in attorney’s fees. Of note, the Court found that:

  • AT&T’s lead counsel’s hourly rates ranging from $375 to $1,030/hour were reasonable;
  • AT&T’s local counsel’s hourly rates ranging from $500 to $600/hour were reasonable; and
  • Microsoft’s lead counsel’s hourly rates ranging from $525 to $1,100/hour were reasonable.
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Amarillo Magistrate Judge Vacancy

The Northern District of Texas has announced that it intends to seek applications for a June 2017 magistrate judge vacancy in Amarillo, as soon as approval is granted to refill the position. Additional details, as well as a copy of the application form, are available here.

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Goodbye, Federal Rules’ Extra 3 Days Due To E-Mail/Electronic Service

On December 1, 2016, the Federal Rules of Civil Procedure were amended (amendments available here). Of most importance to civil federal-court practitioners is that the amendments eliminated the extra 3 days previously added onto a deadline for responding to discovery or pleadings when service had been made by e-mail or other electronic means (e.g., the court’s electronic-filing system).

According to the Committee Notes:

Rule 6(d) is amended to remove service by electronic means under Rule 5(b)(2)(E) from the modes of service that allow 3 added days to act after being served.

Rule 5(b)(2) was amended in 2001 to provide for service by electronic means. Although electronic transmission seemed virtually instantaneous even then, electronic service was included in the modes of service that allow 3 added days to act after being served. There were concerns that the transmission might be delayed for some time, and particular concerns that incompatible systems might make it difficult or impossible to open attachments. Those concerns have been substantially alleviated by advances in technology and in widespread skill in using electronic transmission.

A parallel reason for allowing the 3 added days was that electronic service was authorized only with the consent of the person to be served. Concerns about the reliability of electronic transmission might have led to refusals of consent; the 3 added days were calculated to alleviate these concerns.

Diminution of the concerns that prompted the decision to allow the 3 added days for electronic transmission is not the only reason for discarding this indulgence. Many rules have been changed to ease the task of computing time by adopting 7-, 14-, 21-, and 28-day periods that allow “day-of-the-week” counting. Adding 3 days at the end complicated the counting, and increased the occasions for further complication by invoking the provisions that apply when the last day is a Saturday, Sunday, or legal holiday.

Electronic service after business hours, or just before or during a weekend or holiday, may result in a practical reduction in the time available to respond. Extensions of time may be warranted to prevent prejudice.

Eliminating Rule 5(b) subparagraph (2)(E) from the modes of service that allow 3 added days means that the 3 added days cannot be retained by consenting to service by electronic means. Consent to electronic service in registering for electronic case filing, for example, does not count as consent to service “by any other means” of delivery under subparagraph (F).

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Supreme Court Unanimously Reverses Federal Circuit’s $399 Million Decision in Samsung v. Apple

On December 6, 2016, the Supreme Court issued its (unanimous) opinion in Samsung v. Apple (decision available here). The opinion involved the proper amount of damages for infringement of a design patent. Under 35 U.S.C. § 289, a person who manufactures or sells “any article of manufacture to which [a patented] design or colorable imitation has been applied shall be liable to the owner to the extent of his total profit[.]” (emphasis added). Certain Samsung smartphones were found to infringe three Apple design patents, and the Federal Circuit upheld a damages award of $399 million (which represented the entire profit Samsung made from its sales of the smartphones-at-issue). According to the Federal Circuit, the “entire smartphone” was the only permissible “article of manufacture” for the purpose of calculating damages because “consumers could not separately purchase components of the smartphones.” The Federal Circuit rejected Samsung’s argument that “the profits awarded should have been limited to the infringing ‘article of manufacture’—for example, the screen or case of the smartphone—not the entire infringing product—the smartphone.” (certain quotations omitted).

The Supreme Court reversed the Federal Circuit, holding: “The term ‘article of manufacture,’ as used in §289, encompasses both a product sold to a consumer and a component of that product.” It is “simply a thing made by hand or machine.” The Supreme Court thus reversed the Federal Circuit’s decision, and remanded for the Federal Circuit to address any remaining issues on remand.

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