On May 12, 2016, the Court of Appeals for the Federal Circuit (“CAFC”) issued an opinion Enfish LLC. v. Microsoft Corporation upholding validity of software patent claims on 35 U.S.C. § 101 grounds. The patents at issue, U.S. Patents Nos. 6,151,604 and 6,163,775, cover a self-referential table for a computer database. Compared to traditional relational tables, where each entity modeled is provided in a separate table, in the self-referential model, all data entities are in a single table, with column definitions provided by rows in that same table. The specification of the patents at issue recited advantages of the self-referential model compared to the relational model, including faster searching of data, more effective storage of data, and more flexibility in configuring the database.
While the District Court of Central District of California ruled the claims of these patents too abstract to be valid, CAFC reached a different conclusion. CAFC held that the claims are not directed to an abstract idea within the meaning of Alice Corp., but are rather directed to a specific improvement to the way computers operate. CAFC further clarified how the analysis of software claim validity under the two-step Alice Corp. test should take place. In particular, the court ruled that not all claims directed to improvements in software are directed to an abstract idea, and thus may not need to be analyzed under the step of Alice Corp. test covering whether the claims amount to significantly more than the abstract idea. Further, the court ruled that an invention’s ability to run on a general-purpose computer does not preclude patentability of the claims covering the invention and neither does the improvement not being defined by reference to physical components.
The Enfish decision is the second CAFC decision since Alice Corp. that upheld patentability of software patent claims under the 35 U.S.C. § 101. While the decision may still be overturned either by an en banc CAFC decision or a Supreme Court decision, for now, the decision provides a ray of hope for software patent and patent application owners.
Last month, Leonid and I discussed intellectual property with two business law classes at Federal Way High School. The business law classes are part of the career and technical education classes now being offered in Washington State schools to help students “graduate from high school globally competitive for work and postsecondary education and prepared for life in the 21st century.” Office of Superintendent of Public Instruction, www.k12.wa.us.
Our discussion included a presentation focusing on patents, trademarks, copyrights, and trade secrets. We also went over examples of each type of intellectual property and facilitated activities in which the students participated. I was amazed at the well-thought-out questions by the students and the (mostly) correct answers, even to our trick questions! I would definitely love to return! Also, we received some pretty awesome thank you letters from the students.
While the Terminator is now one of the most recognizable film characters, this success was hard to predict when the first film in the Terminator franchise was being produced. Thus, James Cameron is reported to have sold his rights to the Terminator to the producer Gale Anne Hurd for a single dollar on the condition that he will be the director of the film. James Cameron left the franchise after directing the first two films and was no longer able to directly influence the creation of the sequel films, having no rights to the franchise, which some say negatively impacted the quality of the later Terminator movies.
Not all hope is lost for the fans of the original two Terminator movies. Under U.S. copyright law, unless a work was made for hire, such as by an employee in the scope of his or her employment, an author of the work can, appropriately enough, terminate an earlier grant of rights to the work after a certain number of years (35-40 years, depending on whether the right to publication was included in the grant). The time for James Cameron to terminate the grant of rights to the franchise that he made back in the 1980s is coming up in 2019. If Mr. Cameron chooses to exercise his right and take control of the future production, then the Terminator may indeed be back.
The popular song, “Happy Birthday To You,” was first copyrighted in 1935 by the Summy Company (“Summy”). Years later, in 1988, Warner/Chappell Music (“Warner”) purchased the company owning the copyright. Warner required that royalties be paid for public performances of the song and claimed that the copyright, which represented an estimated $2M to $5M in royalties annually, did not expire until 2030. Warner wanted to charge Jennifer Nelson, an independent filmmaker, $1500 for using the song in a documentary. She filed suit and, on September 22, 2015, in Rupa Marya v. Warner Chappell Music Inc., Case No. CV 13-4460-GHK (S.D. Cal.), federal Judge George H. King ruled that Warner’s copyright to “Happy Birthday to You” was invalid, as the alleged original authors of the song had never asserted a claim for the lyrics, though they did sue for rights to the original melody. As such, Summy never legally obtained the rights to the lyrics from the authors and therefore Warner’s copyright was invalid.
When I hear the name Marshawn Lynch or his nickname “Beast Mode,” I think of an awesome football player that makes huge running plays and of course, Skittles. However, he is much more than football. Lynch co-founded the charity, Fam 1st Family Foundation, which helps improve the lives of children through mentoring, education, literacy, and self-esteem.
Lynch donates valuable time and resources to the foundation, including all money generated from four registered trademarks for “Beast Mode.” The four registrations cover t-shirts, sweatshirts, hats, caps, watches, and sunglasses. Additionally, three more applications for the mark “Beast Mode” are pending for headphones, bracelets, sport bags, candy, and non-alcoholic beverages.
To ensure the “Beast Mode” trademarks remain valuable, they are actively monitored and so far, licensing has been limited. In an article by ESPN, Darren Rovell explains that Lynch turns away about five proposals for licensing a month and every design must be approved by Lynch. Lynch’s strict guidelines regarding use of the mark “Beast Mode” have assisted in protecting the mark and commanding a high royalty fee, which Lynch donates to his foundation to benefit youth. Thus, Marshawn Lynch is not only successful on the field, but off as well!
In Kimble et al. v. Marvel Entertainment, LLC, No. 13–720, decided June 22, 2015, the Supreme Court held that stare decisis requires the Court to adhere to the precedent set by Brulotte v. Thys Co., 379 U. S. 29 (1964), in which the Court held that a patent holder cannot charge royalties for the use of his invention after his patent term has expired. Stephen Kimble obtained a patent in 1990 for a toy that allows role-playing adults and children to get more into their character as “a spider person.” Kimble’s U.S. Patent No. 5,072,856 (‘856) covers a toy web-shooting glove that delivers a pressurized string foam from a hidden container through a valve incorporated into the glove. Kimble entered into an agreement with the predecessor of Marvel Entertainment that provided for their purchase of the ‘856 patent in exchange for a lump sum and a 3% royalty payment on future sales of Marvel’s Web Blaster toy and similar products. The parties set no end date for royalties. In negotiating the agreement, neither party was familiar with the Brulotte decision. Upon discovering Brulotte, Marvel sought a declaratory judgment confirming that the company could cease paying royalties at the end of Kimble’s patent term. The district court granted relief, and the Ninth Circuit affirmed. Kimble asked the Supreme Court to overrule Brulotte, but the Court declined under the principles of stare decisis, whilst observing “in this world, with great power there must also come—great responsibility.”
When can a court’s judgment for intellectual property infringement prevent a party for being sued again for the same type of conduct? In Marcel Fashions Group v. Lucky Brand Dungarees, Inc., the Second Circuit Court of Appeals explored such an issue. Both parties to the case make jeans, with the plaintiff (“Marcel”) owning a federal registration for the mark “Get Lucky” and the defendant (“Lucky Brand”) owning a federal registration for the trademark “Lucky Brand.”
The parties have been previously involved in multiple rounds of litigation over the Lucky Brand’s infringement of the mark “Get Lucky.” In 2003, this litigation resulted in a settlement forbidding Lucky Brand from using the mark “Get Lucky.” In 2005, another litigation ensued over Lucky Brand’s breach of the settlement agreement – Marcel emerged victorious, obtaining money damages against Lucky Brand for all breaches of the settlement since 2003 and a court injunction prohibiting Lucky Brand from using the mark “Get Lucky”; Marcel nevertheless failed to obtain injunctions against Lucky Brand’s use of other trademarks that include the word “lucky,” such as “Lucky Brand.” Leading to the present decision, Marcel and Lucky Brand clashed in litigation again in 2011, with Marcel once again suing Lucky Brand for money damages for infringement of the “Get Lucky” mark and seeking an injunction against the use of the mark “Lucky Brand”. Lucky Brand argued that all claims in this litigation have already been decided in 2005 – that Marcel has already been compensated for all breaches of the 2003 settlement and that Marcel already tried, but failed, to obtain the injunction; accordingly, Lucky Brand argued, the lawsuit should be dismissed.
The Court of Appeals refuted Lucky Brand’s arguments and allowed the case to proceed forward. First, the Court reasoned, there is no sense in construing the 2005 decision as awarding damages for acts of infringement that have not occurred yet at that point of time. The Court also ruled that failing to obtain an injunction in a prior action does not prevent one from seeking the injunction in a later case; on the contrary, if money damages are not enough to stop infringement, the need for the injunction becomes clearer. Thus, being found liable for infringement once does not immunize a party from being sued for new alleged acts of the same type of conduct.
As a Seattlelite, I am trying to move on from the dreaded Super Bowl XLIX, featuring my favorite team, the Seahawks. However, some headlines from the game linger. No, not the last play. No, not another win by the Patriots.
Two months after the Superbowl, we are still hearing about “Left Shark,” one of the back-up dancers during Katy Perry’s halftime performance. Left shark danced alongside Katy Perry with Right Shark, but appeared to stray from the choreography and at times seemed uncomfortable and awkward on stage. Due to his interesting performance, the hashtag #leftshark immediately began trending and SB Nation even jokingly declared Left Shark, the MVP of the Superbowl. On February 6, 2015, Katy Perry, company Killer Queen applied for the word mark “Left Shark” for use on cell phone covers, stickers, mugs, shirts, and toys, as well as for live performances. Trademark applications were also filed for the phrases “Right Shark,” “Drunk Shark,” and “Basking Shark,” and front and side views of a shark.
Since the fast rise of Left Shark, Katy Perry appears to have been busy enforcing her intellectual property rights and working to market Left Shark merchandise. Through her lawyer, at least one cease and desist letter was sent, to Fernando Sosa, who offered for sale, a 3-D printed sculpture of a shark, shortly after the Superbowl. Also, earlier this month, Katy Perry announced that all Left Shark fans can purchase a #LeftShark onsie for $129.99. Left Shark, I hope to see more of you in the future! You’ll always be my favorite memory from Superbowl XLIX (since the Seahawks didn’t win!).
In Hana Financial, Inc. v. Hana Bank et al., 574 U.S. ___ (2015), the U.S. Supreme Court addressed a split between circuits on determination of whether the “tacking” doctrine is available in a given case. Plaintiff Hana Financial, Inc. sued defendant Hana Bank for trademark infringement. Hana Bank is a Korean entity that was founded in 1971 as the Korea Investment Financial Corporation. In 2002, they began operating in the United States as “Hana Bank.” Hana Financial incorporated in California in 1994 and obtained federal trademark registration of their name two years later. At trial, Hana Bank raised the tacking doctrine in defense and the jury returned a verdict in their favor that was subsequently affirmed by the Ninth Circuit Court of Appeals.
“Tacking” is a lower court doctrine holding that two marks may be tacked when they are considered to be “legal equivalents” that “create the same, continuing commercial impression” such that consumers “consider both as the same mark.” Writing for a unanimous court, Justice Sotomayer observed that when the relevant question is how an ordinary person or community would make an assessment, the jury is generally the decision maker that ought to provide the fact-intensive answer. Since “commercial impression” “must be viewed through the eyes of a consumer,” application of the “tacking” doctrine is a test that “falls comfortably within the ken of a jury.” Thus, when a jury trial has been requested (and the facts neither warrant a JMOL nor summary judgment), whether two trademarks may be tacked for purposes of determining priority will be a question for the jury.
While protection of free speech under the First Amendment remains one of the foundations of American society, the First Amendment is not always a defense against suits for violation of intellectual property, such as the rights to a person’s likeness (publicity rights), as the Ninth Circuit Court of Appeals recently illustrated in the Davis v. Electronic Arts case. Electronic Arts (“EA”) makes the “NFL Madden” football videogame, which allows a player to control virtual likenesses of past and present NFL players. While EA pays significant royalties to NFL for the use of current player’s likenesses, EA does not have a license to use the likenesses of former NFL players. When the former players sued EA for violation of their publicity rights, EA attempted to raise defenses based on the First Amendment, which the court rejected.
One of the defenses was that the use of the players’ likenesses was “transformative,” adding significant creative elements that transform the game into something more than a celebrity imitation; however, as the game replicates physical characteristics of the players and shows the players doing what they are famous for (playing football), the court rejected this defense. Likewise, the court also rejected EA’s statutory and common law “public interest” defenses, which are based on the protection of publishing information in the interest of the public, because “NFL Madden” is not a reference source or a collection of facts about football but rather a game. Likewise, the court rejected EA’s argument that the Roger’s test, a test that limits trademark rights when First Amendment rights are involved, should be extended to publicity rights. Finally, the court rejected EA’s argument that the use of the players’ likenesses was protected as being “incidental” because accurate depictions of the players are central to the game.
Interestingly enough, EA previously brought up most of these arguments, and lost, in a similar case that involved NCAA Football games. EA recycled these arguments to preserve them for a rehearing by the Ninth Circuit Court of Appeals en banc or by the Supreme Court, and whether the arguments gain any traction further in the appeal process remains to be seen.