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Intellectual Property Cases to Watch in 2016

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The table is set for 2016 to be another important year for resolution of wide a spectrum of intellectual property issues by the courts.  The United States Supreme Court has already granted four petitions for certiorari, and with more than a dozen additional petitions pending, others are anticipated to be granted.   The Federal Circuit will also consider a bevy of important issues this year, including at least two cases en banc.  The resolution of these cases could have important implications for practitioners and IP owners alike.  We provide a brief discussion of the key issues addressed in these pending cases below or download a presentation here

HaloElectronics, Inc. v. Pulse Electronics, Inc., No. 14-1513, and Stryker Corp. v. Zimmer, Inc., No. 14-1520 (cert. granted October 19, 2015) 

Both cases address the applicable law for awarding enhanced damages for willful infringement under 35 U.S.C. § 284.  Under the current two prong test set forth by the Federal Circuit in In re Seagate, 497 F.3d 1360 (Fed. Cir. 2007), a patent owner must establish that there was an objectively high likelihood that the infringer's actions constituted infringement, and that such likelihood was either known or should have been known to the accused infringer.  The issue presented in the petition for the -1520 case hints at a potential outcome:  “Has the Federal Circuit improperly abrogated the plain meaning of 35 U.S.C. § 284 by forbidding any award of enhanced damages unless there is a finding of willfulness under a rigid, two-part test, when this Court recently rejected an analogous framework imposed on 35 U.S.C. § 285, the statute providing for attorneys' fee awards in exceptional cases?” Argument has been set for February 23, 2016.

Cuozzo Speed Technologies v. Lee, No. 15-446 (cert. granted January 15, 2016

The case concerns the standard for claim construction in inter partes review (IPR) proceedings. Under current law, the United States Patent Office’s Patent Trial and Appeal Board (PTAB) construes claims during IPR proceedings according to their broadest reasonable interpretation, rather than their plain and ordinary meaning as is done in civil litigation.  The granted petition asks the Court to consider whether the use of a different claim construction standard is erroneous, and additionally to consider whether the PTAB’s “decision whether to institute an IPR proceeding is judicially unreviewable,” even if it exceeded its statutory authority in instituting the proceeding. Nine amicus briefs were filed in connection with the petition.

John Wiley & Sons Inc. v. Kirtsaeng, No. 15-375 (cert. granted January 15, 2016)

This case addresses the appropriate standard in awarding attorneys’ fees to a prevailing party under Section 505 of the Copyright Act.  In his petition for certiorari to the Supreme Court, Kirtsaeng identified four different standards for considering fee requests currently employed by federal courts: (1) whether the prevailing party’s successful claim or defense advanced the purposes of the Copyright Act (9th and 11th Circuits); (2) a presumption in favor of attorneys’ fees for a prevailing party (5th and 7th Circuits); (3) the four “non-exclusive factors” listed in Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 n.19 (1994) (3rd, 4th, and 6th Circuits); and (4) the 2nd Circuit’s placement of “substantial weight” on the objective reasonableness of the losing party’s claim.

Life Technologies Corp. v. Promega, No. 14-1538 (cert. pending)

If the Court hears the case, it will consider issues of induced infringement under 35 U.S.C. § 271(f)(1) and extraterritorial patent enforcement.   The Federal Circuit construed “actively induce” to simply mean “cause,” and found that a single entity can “actively induce” itself to infringe a patent by shipping a kit component from the U.S. to its foreign facility where complete kits are assembled and sold.  The petitioner argues that the court failed to apply the Supreme Court’s directive in Microsoft Corp. v. AT&T Corp., 550 U.S. 437 (2007), to construe § 271(f) narrowly and avoid extraterritorial enforcement.  A conference was held on September 28, 2015, and the Solicitor General was invited to file a brief on October 5, 2015.

Daiichi Sankyo Company, Ltd. v. Lee, No. 15-652 (cert. pending)

This case involves whether the United States Patent Office’s procedures for reviewing patent term adjustment are permissible under applicable administrative law.  According to Amicus curiae New York Intellectual Property Law Association, “[t]ens of thousands of patents across industries have been denied [their] statutorily-guaranteed patent term due to the PTO’s failure to adhere to administrative law principles and its mandate.” The Supreme Court has twice extended the time for the Patent Office to respond to the petition, this time to February 18, 2016.

SCA Hygiene v. First Quality Baby Products LLC, No. 15A546 (cert. pending)

This case addressed the availability of Laches as a defense in patent cases.  As discussed in our Breaking News alert on September 18, 2015, a heavily divided en banc Federal Court ruled that laches can prevent recovery of damages from before a suit is filed.  In doing so, the court distinguished the Supreme Court’s “raging bull” decision Petrella v. Metro-Goldwyn-Mayer, 134 S. Ct. 1962 (2014), which found laches inapplicable to copyright cases, and relied on commentary by one of the draftspersons of the statute. The dissent questioned whether the uniform limitation period of 35 U.S.C. § 286 should be altered by a case-specific period under laches.  A petition for certiorari was filed on January 19, 2016.

Lexmark v. Impression, No. 2014-1617 (Fed. Cir. 2015)

This case involves patent exhaustion for products sold outside the United States. In Jazz Photo Corp. v. International Trade Commission, 264 F.3d 1094 (Fed. Cir. 2001), the court ruled that a sale of a patented item outside the United States never gives rise to patent exhaustion. On April 14, 2015, the court sue sponte ordered briefing on whether it should overrule Jazz Photo Corp. v. International Trade Commission, 264 F.3d 1094 (Fed. Cir. 2001), to the extent the court ruled that a sale of a patented item outside the United States never gives rise to patent exhaustion, in view of the Supreme Court’s decision in Kirtsaeng v. John Wiley & Sons, Inc., 133 S. Ct. 1351 (2012). Oral arguments were heard on October 2, 2015, and a decision is anticipated in early 2016.

The Medicines Company v. Hospira, Inc., Nos. 2015-1169 & 1504 (Fed. Cir. 2015)

This case involves the scope of the so-called on-sale bar in the context of whether an order placed with a pharmaceutical supplier can be an invalidating offer for sale. The panel found that indeed it could be. On November 13, 2015, the court granted Medicines’ petition for rehearing en banc and ordered further briefing, including on the issue of whether the court overrule or revise the principle in Special Devices, Inc. v. OEA, Inc., 270 F.3d 1353 (Fed. Cir. 2001), that there is no "supplier exception" to the on-sale bar of 35 U.S.C. § 102(b). Oral arguments and a decision are anticipated in 2016.

Acorda Therapeutics Inc. v. Mylan Pharmaceuticals Inc., No. 15-1456 (Fed. Cir. 2015), and AstraZeneca AB v. Mylan Pharmaceuticals Inc., No. 15-1460 (Fed. Cir. 2015)

Both cases involve the exercise of personal jurisdiction over generic pharmaceutical manufacturers in ANDA litigation. In Daimler AG v. Bauman, 134 S. Ct. 746 (2014), the Supreme Court instructed that for proper exercise of general personal jurisdiction, a defendant should have connections “so ‘continuous and systematic’ as to render them essentially at home in the forum state.”   In the wake of Daimler, the district court in Acorda found general personal jurisdiction over Mylan as the company had voluntarily registered to do business there.  The court also found specific personal jurisdiction based on Mylan’s sending a Paragraph IV notice letter to the Delaware-incorporated Acorda. The district court in AstraZenica found specific personal jurisdiction on a similar basis, but held that Mylan’s registration to do business in Delaware was not sufficient to establish general personal jurisdiction. Oral argument in both cases was held on January 4, and decisions are anticipated in 2016.

Fox Television Stations, Inc., et al. v. Aereokiller, LLC, et al., No. 15-56420 (9th Cir. 2015) and Fox Television Stations, Inc., et al. v. FilmOn X LLC et. al., No. 1:13-cv-00758 (D.D.C.)

These cases involve whether online television streaming services are eligible for compulsory licenses. Section 111 of the Copyright Act provides that television companies must allow cable systems to retransmit their programming for a set rate. The Central District of California did not see a reason to differentiate traditional cable and online-based services, but the District of D.C. denied a similar argument.  The former decision has already been appealed to the 9th Circuit, and the latter has been certified for appeal to the D.C. Circuit. These cases may impact the way television content is packaged and sold.

In re: Simon Shiao Tam, No. 14-1203 (Fed. Cir. 2014) and Pro-Football Inc. v. Blackhorse, et al., No. 15-1874 (4th Cir. 2015)

These cases involve the constitutionality of a provision in the Lanham Act (Section 2(a)) regarding the federal registration of scandalous, immoral, or disparaging marks. The district court in Blackhorse affirmed the Trademark Trial and Appeal Board’s (TTAB’s) decision to cancel the Washington Redskin’s registration on the team name, additionally finding that trademark registrations are “government speech” not subject to First Amendment scrutiny. In December, however, the Federal Circuit en banc in In re Tam found Section 2(a) to violate the First Amendment. The Redskins have appealed the district court’s opinion to the 4th Circuit.

Baker Botts will continue to monitor these important cases, and will provide future reports as that law continues to develop.

 

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