Patents Stock Art

Since the enactment of the America Invents Act (AIA) in 2011, U.S. patent law has undergone a period of transition. Patent cases before the Supreme Court this term, including one already decided, promise that the coming year will be no different. The court also will decide cases concerning trademark and copyright issues. The following cases will continue to reshape IP law in 2017.

Samsung Electronics Co. v. Apple, No. 15-777

Argued in October and decided in December 2016, Samsung Electronics Co. v. Apple ruled that, for design patent infringement, damages may derive from the profits from a component rather than profits from the entire product. Design patents, as opposed to utility patents, protect the unique look of an “article of manufacture.” The court’s opinion interpreted “article of manufacture” and ruled that “article” has a broad meaning and could refer to a particular thing.

This ruling has the potential to dramatically reduce the damages available in design-patent suits. In this particular case, the jury awarded Apple nearly $400 million dollars based on the entire profits from Samsung’s infringing product. That award is likely to now be substantially reduced pending the Federal Circuit’s determination on remand of what Samsung component infringed.

SCA Hygiene Products

Aktiebolag v. First Quality Baby Products, LLC, No. 15-927

In SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC, the court will decide whether the defense of laches is still available as a defense against a patent-infringement claim. The Patent Act sets a six-year statutory period to bring a patent suit. Petitioners argue that the court may not shorten the statutory period by allowing a laches defense. Respondents point out that laches was codified before the Patent Act in 1952 and therefore that Congress acquiesced by not excluding the defense.

This decision will affect patent licenses and the availability of damages.

L-R Virginia Carron and Ashley Winkler of Finnegan, Atlanta.

Impression Products v. Lexmark International, No. 15-1189

The Supreme Court will consider two questions related to patent exhaustion in Impression Prods. v. Lexmark Int’l. Patent exhaustion, also called the first-sale doctrine, is a common-law doctrine limiting the ability of a patent owner to control the use of a patented article after an “authorized sale.”

First, the court will decide whether a “conditional sale” avoids patent exhaustion and allows a patent owner to impose post-sale restrictions. A so-called conditional sale refers to a transaction that transfers title of the patented article but does not complete the sale, such that post-sale restrictions on use are maintained.

Second, the court will decide whether patent exhaustion applies to sales that occur outside the United States in light of the court’s holding in Kirtsaeng v. John Wiley & Sons Inc. In that case, the court held that a similar doctrine under copyright law prevented restraints on alienation for copyrighted works lawfully made abroad.

The outcome of both issues will likely affect licensing practices for patented articles.

TC Heartland LLC v. Kraft Foods Group Brands LLC, No. 16-341

In TC Heartland LLC v. Kraft Foods Group Brands LLC, the court will decide whether venue for patent cases may be determined by the general venue statute under 28 U.S.C. § 1391, in addition to the patent venue statute. The patent venue statute provides that patent infringement cases may be brought were the defendant “resides.” The patent statute does not define what “resides” means for corporate defendants.

Under current practice, patent suits may be brought in any venue in which the corporation is subject to personal jurisdiction, which leads to forum-shopping for districts perceived to be favorable to patents. For example, more than 40 percentof patent complaints last year were filed in the Eastern District of Texas.

The court’s ruling may have significant implications for patent-litigation strategy.

Star Athletica, LLC v. Varsity Brands, No. 15-866

In Star Athletica, LLC v. Varsity Brands, argued in October 2016, the court will fashion the test for determining whether a useful article is protectable under the Copyright Act. Current U.S. law denies copyright protection for “useful articles.” This case involves cheerleading uniforms. The outcome will affect several industries, chief among them the fashion industry, which has not enjoyed significant intellectual-property protection. It is watching with great interest for a new useful-article test that might open the door to future protection.

Lee v. Tam, No. 15-1293

In Lee v. Tam, scheduled for argument this month, the court will consider whether a trademark statute preventing trademark protection for “disparaging” marks violates the Free Speech Clause of the First Amendment. Since 1946, the U.S. Patent and Trademark Office has refused trademark registration for marks consisting of or comprising “immoral, deceptive, or scandalous matter; or matter which may disparage.” The issue may require the court to address whether the First Amendment applies to trademark registration, whether the federal government may regulate what is discriminatory, and whether trademark registration is limited to commercial (and not political) speech.