Justia U.S. Supreme Court Opinion Summaries

Articles Posted in Intellectual Property
by
WesternGeco owns patents for a system used to survey the ocean floor. ION sold a competing system, built from components manufactured in the U.S., then shipped abroad for assembly into a system indistinguishable from WesternGeco’s. WesternGeco sued for patent infringement, 35 U.S.C. 271(f)(1) and (f)(2). The jury awarded WesternGeco royalties and lost profits under section 284. The Supreme Court reversed the Federal Circuit, holding that WesternGeco’s award for lost profits was a permissible domestic application of section 284 of the Patent Act, not an impermissible extraterritorial application of section 271. To determine whether the case involves a domestic application of the statute, courts must identify the statute’s "focus” and ask whether the conduct relevant to that focus occurred in U.S. territory. If so, the case involves a permissible domestic application of the statute. When determining the statute’s focus, the provision at issue must be assessed in concert with other provisions. Section 284, the general damages provision, focuses on “the infringement.” The “overriding purpose” is “complete compensation” for infringements. Section 271 identifies several ways that a patent can be infringed; to determine section 284’s focus in a given case, the type of infringement must be identified. Section 271(f)(2) was the basis for WesternGeco’s claim and damages. That provision regulates the domestic act of “suppl[ying] in or from the United States,” and vindicates domestic interests, The focus of section 284 in a case involving infringement under section 271(f)(2) is the act of exporting components from the U.S., so the relevant conduct occurred in the U.S. Damages are not the statutory focus but are merely the means by which the statute remedies infringements. The overseas events giving rise to the lost-profit damages here were merely incidental to the infringement. View "WesternGeco LLC v. ION Geophysical Corp." on Justia Law

by
SAS sought inter partes review (35 U.S.C. 311(a)) of ComplementSoft’s software patent, alleging that all 16 of the patent’s claims were unpatentable. The Patent Office instituted review on some of the claims and denied review on the rest. The Federal Circuit rejected SAS’s argument that section 318(a) required the Board to decide the patentability of every claim challenged in the petition. The Supreme Court reversed. When the Patent Office institutes an inter partes review, it must decide the patentability of all of the claims the petitioner has challenged. Section 318(a), which states that the Board “shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner” is mandatory and comprehensive. The Director’s claimed “partial institution” power (37 CFR 42.108(a)) appears nowhere in the statutory text. The statute envisions an inter partes review guided by the initial petition. While section 314(a) invests the Director with discretion on whether to institute review, it does not invest him with discretion regarding what claims that review will encompass. The Director’s policy argument—that partial institution is efficient because it permits the Board to focus on the most promising challenges and avoid spending time and resources on others—is properly addressed to Congress. View "SAS Institute Inc. v. Iancu" on Justia Law

by
Oil States sued Greene's Energy for infringement of a patent relating to technology for protecting wellhead equipment used in hydraulic fracturing. Greene’s challenged the patent’s validity in court and petitioned the Patent Office for inter partes review, 35 U.S.C. 311-319. The district court issued a claim-construction order favoring Oil States; the Board concluded that Oil States’ claims were unpatentable. The Federal Circuit rejected a challenge to the constitutionality of inter partes review. The Supreme Court affirmed. Inter partes review does not violate Article III. Congress may assign adjudication of public rights to entities other than Article III courts. Inter partes review falls within the public-rights doctrine. Patents are “public franchises” and granting patents is a constitutional function that can be carried out by the executive or legislative departments without “judicial determination.’ Inter partes review involves the same basic matter as granting a patent. Patents remain “subject to [the Board’s] authority” to cancel outside of an Article III court. The similarities between the procedures used in inter partes review and judicial procedures does not suggest that inter partes review violates Article III. The Court noted that its decision “should not be misconstrued as suggesting that patents are not property for purposes of the Due Process Clause or the Takings Clause.” When Congress properly assigns a matter to adjudication in a non-Article III tribunal, “the Seventh Amendment poses no independent bar to the adjudication of that action by a nonjury factfinder.” View "Oil States Energy Services, LLC v. Greene's Energy Group, LLC" on Justia Law

by
The rock group “The Slants,” chose that name to dilute the term’s denigrating force as a derogatory term for Asians. The Patent and Trademark Office (PTO) denied an application for registration of the name under 15 U.S.C. 1052(a), which prohibits the registration of trademarks that may “disparage . . . or bring . . . into contemp[t] or disrepute” any “persons, living or dead.” The Supreme Court affirmed the Federal Circuit in finding the clause unconstitutional. The Court first rejected an argument that the clause applies only to natural or juristic persons. The Court then held that the clause is subject to the Free Speech Clause, which does not regulate government speech. Trademarks are private, not government speech. "If trademarks become government speech when they are registered, the Federal Government is babbling prodigiously and incoherently.” The disparagement clause denies registration to any mark that is offensive to a substantial percentage of the members of any group. That is viewpoint discrimination. The “public expression of ideas may not be prohibited merely because the ideas are themselves offensive to some of their hearers.” The disparagement clause cannot withstand even “relaxed” review. It does not serve a “substantial interest,” nor is it “narrowly drawn.” View "Matal v. Tam" on Justia Law

by
The Biologics Price Competition and Innovation Act, concerning FDA approval of a drug that is biosimilar to an already-licensed biological “reference product,” 42 U.S.C. 262(k), treats submission of a biosimilar application as an “artificial” patent infringement. An applicant must provide its biosimilar application and manufacturing information to the reference product’s sponsor. The parties collaborate to identify patents for immediate litigation. Second phase litigation is triggered when the applicant gives the sponsor notice at least 180 days before commercially marketing the biosimilar. Amgen claims patents on methods of manufacturing and using filgrastim. Sandoz sought FDA approval to market a biosimilar, Zarxio, and notified Amgen that it had submitted an application, that it intended to market Zarxio immediately upon receiving FDA approval, and that it did not intend to provide application and manufacturing information. Amgen sued for patent infringement and asserted that Sandoz engaged in “unlawful” conduct under California law by failure to provide its application and manufacturing information and by notification of commercial marketing before obtaining FDA licensure. The FDA licensed Zarxio. Sandoz provided Amgen another notice of commercial marketing. The Supreme Court unanimously held that section 262(l)(2)(A) is not enforceable by injunction under federal law, but the Federal Circuit should determine whether a state-law injunction is available. Submitting an application constitutes artificial infringement; failing to disclose the application and manufacturing information does not. Section 262(l)(9)(C) provides a remedy for failure to turn over the application and manufacturing information, authorizing the sponsor, but not the applicant, to bring an immediate declaratory-judgment action, thus vesting in the sponsor the control that the applicant would otherwise have exercised over the scope and timing of the patent litigation. An applicant may provide notice under section 262(l)(8)(A) before obtaining FDA licensure. View "Sandoz Inc. v. Amgen Inc." on Justia Law

by
Lexmark holds patents on the components of toner cartridges that it manufactures and sells. Lexmark allows consumers to buy a cartridge at full price, with no restrictions, or to buy a cartridge at a discount through Lexmark’s “Return Program,” by signing a contract agreeing to use the cartridge only once and to refrain from transferring the cartridge to anyone but Lexmark. Remanufacturers acquire empty Lexmark cartridges—including Return Program cartridges—from purchasers in the U.S. and overseas, refill them, and resell them in the U.S. Lexmark sued remanufacturers with respect to Return Program cartridges that Lexmark had sold within the U.S. and cartridges that Lexmark had sold abroad and that remanufacturers imported into the country. The Federal Circuit ruled for Lexmark with respect to both. The Supreme Court reversed. Lexmark exhausted its patent rights (35 U.S.C. 271(a)) in all of the cartridges. A patentee’s decision to sell a product exhausts all of its patent rights in that item, regardless of any restrictions the patentee purports to impose. If a patentee negotiates a contract restricting the purchaser’s right to use or resell an item, it may be able to enforce that restriction as a matter of contract law, but may not do so through a patent infringement lawsuit. The exhaustion doctrine is not a presumption about the authority that comes along with a sale; it is a limit on the scope of the patentee’s rights. The Patent Act just ensures that the patentee receives one reward—of whatever it considers satisfactory compensation—for every item that passes outside the scope of its patent monopoly. View "Impression Products, Inc. v. Lexmark International, Inc." on Justia Law

by
The “pictorial, graphic, or sculptural features” of a “design of a useful article” are eligible for copyright protection as artistic works if those features “can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article,” 17 U.S.C. 101. Plaintiffs have copyright registrations for two-dimensional designs, consisting of lines, chevrons, and colorful shapes, appearing on cheerleading uniforms that they design, make, and sell. They sued a competitor for infringement. The district court rejected the claims on summary judgment. The Sixth Circuit reversed. The Supreme Court affirmed. A feature incorporated into the design of a useful article is eligible for copyright protection only if the feature can be perceived as a two- or three-dimensional work of art separate from the useful article and 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. That test is satisfied here. The feature cannot be a useful article or “[a]n article that is normally a part of a useful article,” nor the replica of a useful article in another medium. While plaintiffs have no right to prevent anyone from manufacturing a cheerleading uniform that is identical in shape, cut, or dimensions to the uniforms at issue here, an artistic feature that is eligible for copyright protection on its own does not lose that protection simply because it was first created as a feature of the design of a useful article, even if it makes that article more useful. View "Star Athletica, L. L. C. v. Varsity Brands, Inc." on Justia Law

by
Promega sublicensed a patent, which claims a toolkit for genetic testing, to Life Technologies for the manufacture and sale of kits for use in licensed law enforcement fields worldwide. One of the kit’s five components, an enzyme, was manufactured by Life Technologies in the U.S. and shipped to the United Kingdom, where the other components were made, for combination there. When Life Technologies began selling kits outside the licensed fields of use, Promega sued, citing section 271(f)(1) of the Patent Act, which prohibits the supply from the U.S. of “all or a substantial portion of the components of a patented invention” for combination abroad. The district court held that the section did not encompass the supply of a single component of a multicomponent invention. The Federal Circuit reversed, reasoning that a single important component could constitute a “substantial portion” of the components of an invention. The Supreme Court reversed. The supply of a single component of a multicomponent invention for manufacture abroad does not give rise to liability under section 271(f)(1), which refers to a quantitative measurement. The Court rejected Promega’s proffered “case-specific approach,” which would require a factfinder to decipher whether the components at issue are a “substantial portion” under either a qualitative or a quantitative test. When a product is made abroad and all components but a single commodity article are supplied from abroad, the activity is outside the statute’s scope. View "Life Technologies Corp. v. Promega Corp." on Justia Law

by
The Patent Act prohibits the manufacture or sale an “article of manufacture” to which a patented design or a colorable imitation thereof has been applied and makes an infringer liable “to the extent of his total profit,” 35 U.S.C. 289. A jury found that Samsung smartphones infringed Apple's design patents, which covered a rectangular front face with rounded edges and a grid of colorful icons on a black screen. Apple was awarded $399 million—Samsung’s entire profit from the sale of its infringing smartphones. The Federal Circuit affirmed the award. A unanimous Supreme Court reversed and remanded. In the case of a multicomponent product, the relevant “article of manufacture” for a section 289 damages award need not be the end product sold to the consumer but may be only a component of that product. The Court noted Patent Act section 171(a), which makes certain “design[s] for an article of manufacture” eligible for design patent protection and permits a design patent that extends to only a component of a multicomponent product. The term “article of manufacture” is broad enough to embrace both a product sold to a consumer and a component of that product, whether sold separately or not. The Court declined to resolve whether the relevant article of manufacture for each design patent at issue is the smartphone or a particular smartphone component. View "Samsung Electronics Co. v. Apple Inc." on Justia Law

by
Marvel Entertainment’s corporate predecessor agreed to purchase Kimble’s patent for a Spider-Man toy in exchange for a lump sum plus a 3% royalty on future sales. The agreement set no end date for royalties. As the patent neared the end of its statutory 20-year term, Marvel discovered Brulotte v. Thys Co., in which the Supreme Court held that a patentee cannot continue to receive royalties for sales made after his patent expires and sought a declaratory judgment that it could stop paying Kimble royalties. The district court granted relief. The Ninth Circuit and Supreme Court affirmed, adhering to Brulotte. A patent typically expires 20 years from its application date. 35 U S.C. 154(a)(2). At that point, the unrestricted right to make or use the article passes to the public. The Brulotte rule may prevent some parties from entering into deals they desire, but parties can often find ways to achieve similar outcomes. Congress, moreover, has had multiple opportunities to reverse Brulotte and has even rejected bills that would have replaced Brulotte’s per se rule with the rule of reason standard. Congress, not the Court, gets to make patent policy. View "Kimble v. Marvel Entertainment, LLC" on Justia Law