Intellectual Property

The Supreme Court of the United States has held that the state government is free to infringe copyrights without fear of retribution. In Allen v. Cooper, the Supreme Court decided whether the state of North Carolina could be held liable under the Copyright Act for infringing filmmaker Frederick Allen’s copyright relating to Queen Anne’s Revenge. If that name sounds familiar, it’s probably because it is, in fact, the flagship of the infamous pirate Blackbeard.

The facts giving rise to this dispute go back to the 1990s. Well, to be clear, the facts giving rise to the dispute go back to 1717 when Blackbeard was using Queen Anne’s Revenge to carry out his plunderous activities. In any event, in the 1990s, a research firm located the shipwreck and hired Frederick Allen to film their recovery efforts. During this process, Allen’s company recorded video and took photographs, which were registered with the United States Copyright Office.

Read More

On March 6, 2020, a Central District Court in UPL NA Inc. f/k/a United Phosphorous, Inc. v. Tide International (USA), Inc. et al, 8-19-cv-01201 (CDCA 2020-03-06, Order) (Ronald S.W. Lew), issued an order that may become more common place across courts.  At the request of the parties, the Court issued a temporary stay of all discovery in the action because of the threat posed by the Coronavirus.

Specifically, the Court noted that the parties had jointly stipulated that “discovery efforts are being significantly impacted by the outbreak of coronavirus. Both parties have sought materials and testimony from witnesses who are located outside of the United States, including in China, and given current travel restrictions and quarantine rules, obtaining the discovery sought at this time is impractical, if not impossible.”  Therefore, the Court found good cause to temporarily vacate the discovery dates presented in the parties’ joint request.

Read More

Is the privately-owned YouTube site really a “state actor” subject to judicial scrutiny under the First Amendment? That’s the claim made in a lawsuit by Prager University, which is not really a university. The Ninth Circuit was recently called upon to address PragerU’s claim that the widely popular internet site operated by a private entity should be treated as a “state actor” subject to the First Amendment.  Unsurprisingly, the Ninth Circuit reaffirmed well-established case authority to hold that the First Amendment’s protections apply only as to protect against governmental action, not to private companies such as YouTube.

PragerU claims that its mission is purportedly “to ‘provide conservative view points and perspective on public issues that it believes are often overlooked.’”  PragerU creates videos that target younger audiences and has posted hundreds of videos on YouTube.

Unless you’ve been living in a cave, you likely have visited YouTube, which is owned by Google LLC. YouTube allows users to post user-generated videos and has approximately 1.3 billion users.  More than 400 hours of video are uploaded to the site every hour of every day and more than 500 million hours of those videos are watched by YouTubers each day.  YouTube invites the public to post video to its platform and states that it is “committed to fostering a community where everyone’s voice can be heard.”  However, the posting of content by users is subject to YouTube’s terms of service and community guidelines, which include the right of YouTube to remove or restrict content that is posted to its platform.

One way that YouTube does this is through its “restricted mode” which allows users to activate this tool to make certain age-inappropriate content unavailable for that user.  Only about 2% of the users of YouTube utilize the restricted mode.  The restricted mode is intended to identify potentially mature content, which is tagged either by an automated algorithm or manually by a user.  Once a particular video is tagged, YouTube will inform the content creator who can then appeal the classification, which is reviewed by a YouTube representative.

YouTube tagged a number of PragerU’s videos for restricted mode and “demonetized” some of their videos, which meant that third parties could no longer advertise on those videos.  PragerU appealed these designations but certain of the videos remained restricted and/or demonetized.  As a result, PragerU sued YouTube (and its parent company, Google) alleging violation of the First Amendment and false advertising under the Lanham Act.  PragerU moved for preliminary injunction, which was denied. The district court then granted YouTube’s motion to dismiss with leave to amend.  Rather than amend its complaint, PragerU appealed the dismissal to the Ninth Circuit.

The Ninth Circuit first analyzed PragerU’s First Amendment claim by noting that it faced “a formidable threshold hurdle: YouTube is a private entity.”  The Ninth Circuit noted that the First Amendment’s Free Speech Clause only prohibits the government – and not a private party such as YouTube – from abridging speech.  Even PragerU admitted that YouTube was a private entity that was able to operate its platform without any state involvement.

PragerU tried to argue, however, that a private entity becomes a state actor when it operates its private property in a manner that it becomes “a public forum for speech.”  The Ninth Circuit noted that this position had long been rejected.  For instance, nearly 50 years ago in the case, Lloyd Corporation v. Tanner, the U.S. Supreme Court held that “private property does not `lose its private character merely because the public is generally invited to use it for designated purposes’.”  That is, although YouTube is practically a “public square on the internet,” that does not mean that it is transformed into a state actor as a result.

Likewise, in 2000 the Ninth Circuit in Howard v. America Online, and a number of other circuit court decisions since then, have uniformly held that “digital internet platforms that open their property to user generated content do not become state actors” for purposes of the First Amendment.  Faced with this wealth of authority, PragerU tried to argue that YouTube was a state actor “because it performs a public function.”  The Ninth Circuit noted, however, that a private entity could only be deemed a state actor “when it conducts a public function” that “must be both traditionally and exclusively governmental.”  This is a difficult standard to meet.  The Ninth Circuit continued that YouTube hosted speech on a private platform and this was hardly “an activity that only government entities have traditionally performed.”  The Court noted that historically, private parties such as grocery stores and comedy clubs have opened up their private property for speech without transforming themselves into state actors.  The Court noted that to adopt PragerU’s position would subject “every retail and service establishment in the country” to constitutional norms.

PragerU then argued that because YouTube was so popular, it should be bound by the First Amendment like a governmental agency. The Court rejected this claim, too.  PragerU argued that the 1946 U.S. Supreme Court case, Marsh v. Alabama, supported its position but ignored that in Marsh, the defendant was a private entity that operate a “company town” and performed “the full spectrum of municipal powers.”  The Ninth Circuit recognized that YouTube was not the same as the operator of that company town and concluded that YouTube “operates a platform for user generated content.  It does not `perform all the necessary municipal functions’.”

Seeking to salvage its claim, PragerU argued that a private entity could be converted into a public form “if its property is opened up for public discourse.”  The Ninth Circuit recognized that there was no legal authority to support this claim, noting that YouTube was not owned, leased or otherwise controlled by the government.

Finally, PragerU argued that because one of YouTube’s representatives stated for a congressional committee that she considers YouTube “to be a neutral public forum,” this was should convert YouTube into a state actor. The Ninth Circuit disagreed and concluded “whether a property is a public forum is not a matter of election by a private entity.”  In sum, the Ninth Circuit held that the district court properly dismissed PragerU’s First Amendment claim.

The Ninth Circuit then turned to PragerU’s Lanham Act false advertising claim.  The Court concluded that because none of the alleged statements made by YouTube are actionable under the Lanham Act, it would affirm the district court’s dismissal of the claim.

First, the Ninth Circuit held that the statements that YouTube makes concerning its moderation policies do not constitute “commercial advertising or promotion,” which is one of the elements of a Lanham Act violation.  Rather, YouTube’s statements about its restricted mode “were made to explain a user tool, not for a promotional purposes to `penetrate the relevant market’ of the viewing public.” The Court continued that not all commercial speech is promotional and that PragerU failed to overcome the commonsense conclusion that the restricted mode guidelines are not advertisements or part of any promotional campaign.

Likewise, the Court rejected PragerU’s argument that the designation of certain of its videos for restricted mode amounted to a misrepresentation about those videos.  The Court concluded that the fact that they were tagged “does not imply any specific representation about those videos.”  Given that a false advertising claim could be based on implied statements, it was required that the “statement must be both specific and communicated as to `deceive a significant portion of the recipients’.”  The Court concluded that the statement that a particular video is “unavailable with restricted mode enabled” did not have any tendency “to mislead, confuse or deceive” the public.  Thus, the Ninth Circuit held that the district court properly dismissed PragerU’s Lanham Act claim.

The Ninth Circuit’s decision in the PragerU cases reaffirms the long-held principle that private entities, unlike government agencies, are not subject to judicial scrutiny under the First Amendment.  Legal challenges seeking to force internet companies to supposedly allow for more voices are likely to face similar outcomes as the PragerU claims.

It has become commonplace for companies such as Google to use local servers to provide faster service to customers.  This practice has raised the question as to whether those local servers constitute “a regular and established place of business” for the purposes of establishing venue in patent infringement suits in the districts where the servers are located.

Specifically, the patent venue statute, 28 U.S.C. § 1400(b), limits the districts where patent infringement cases can be filed to either (1) where the defendant resides, which for a corporation is where it is incorporated, or (2) where the defendant has a regular and established place of business and has committed acts of infringement.

In Super Interconnect Technologies, LLC v. Google LLC, Super Interconnect sued Google for patent infringement in the Eastern District of Texas.  Google filed a motion to dismiss or transfer for improper venue.  Prong (1) of the patent venue statute does not apply because Google is not incorporated in Texas, and Google argued Prong (2) is not satisfied because Google does not have “a regular and established place of business” in the district.  At the time the complaint was filed, Google did have Global Cache servers in the district for local data caching.  These servers were hosted and operated by local internet service providers (“ISPs”) rather than by Google.  The District Court ruled that the servers, along with the alleged acts of infringement, satisfied the second prong of the venue statute and thus denied Google’s motion to dismiss.

In a prior case, the Eastern District had similarly found Google’s servers in the district to be sufficient to establish venue.  The Federal Circuit denied Google’s petition for a writ of mandamus in this prior case.  However, in dissent, Judge Reyna warned the “majority fails to recognize the far-reaching implications” of its decision.

In Super Interconnect, Google again petitioned for a writ of mandamus.  In considering the petition, the Federal Circuit noted its previous denial was based on the observation that it was not known at the time if the district court’s ruling involved the type of broad and fundamental legal questions appropriate for mandamus, and there was a lack of disagreement among district courts.  However, since that decision, Judge Reyna’s prior concern proved accurate and inconsistencies arose in the district courts’ decisions.

As a result, the Federal Circuit considered whether Google had a regular and established place of business in the district.  In In re Cray, Inc., the Federal Circuit previously ruled that “’a regular and established place of business’ under the venue statute must be: (1) ‘a physical place in the district’; (2) ‘regular and established’; and (3) ‘the place of the defendant.’”

First, the Court determined that a physical place in the district does not necessarily need to be owned or leased by the defendant, but instead “merely needs to be a ‘physical, geographical location in the district from which the business of the defendant is carried out.”  Here the servers are physically located in the district in “a fixed, geographic location” and thus were found to satisfy the first prong in In re Cray.

Next the Court considered whether the servers are a “place of business.”  The Court determined a “‘place of business’ generally requires an employee or other agent of the defendant conducting the business at that place.”  As the Court stated, this “is apparent from the service statute for patent cases, now codified at 28 U.S.C. § 1694,” which is intricately linked with the patent venue statute.  The service statute points out that if a “suit is brought in a district of which the defendant is not an inhabitant, but in which such defendant has a regular and established place of business, service upon a defendant may be made by service upon the agent or agents engaged in conducting such business.”  The Court stated that “[t]he service statute plainly assumes that the defendant will have a ‘regular and established place of business’ within the meaning of the venue statute only if the defendant also has an ‘agent … engaged in conducting such business.’”  Therefore, the Court concluded that “a ‘regular and established place of business’ requires the regular, physical presence of an employee or other agent of the defendant conducting the defendant’s business at the alleged ‘place of business.’”

The Court then addressed the question of “whether Google had an employee or agent with a regular, physical presence at its ‘place of business’ and whether that employee or agent was conducting Google’s business.”  Google did not have any employees in the Eastern District of Texas, but Super Interconnect argued that the ISPs were Google’s agents.  The ISPs, however, were only obligated to perform on-site installation and maintenance of the servers within their datacenters and to provide network access.  The Federal Circuit found these activities are “meaningfully different from” and “only ancillary to” “the actual producing, storing, and furnishing to customers of what [Google’s] business offers.”  Therefore, the Court concluded that “the Eastern District of Texas was not a proper venue because Google lacked a ‘regular and established place of business’ within the district since it has no employee or agent regularly conducting its business at its alleged ‘place of business’ within the district.”  Therefore, the Federal Circuit ordered District Judge Gilstrap to dismiss or transfer the case.

The Court noted, however, that it was not addressing whether “a ‘regular and established place of business’ will always require a human agent, that is, whether a machine could be an ‘agent.’”

Joining and concurring, Judge Wallach also noted that “[g]iven the absence from the record of information sufficient to understand Google’s business model, the question remains for the District Courts to determine whether Google’s end users become agents of Google in furtherance of its business by virtue of voluntarily or involuntarily sharing information generated on Google’s servers.  If, for example, by entering searches and selecting results a Google consumer is continuously providing data which Google monetizes as the core aspect of its business model, it may be that … Google is indeed doing business at the computer of each of its users/customers.”  We will likely see plaintiffs using Judge Wallach’s concurrence as a basis for venue arguments in upcoming matters.

There are a number of requirements that must be met for an invention to be patentable. The invention must be novel (unique) and nonobvious (i.e., a person skilled in the field of the invention would not have found the invention obvious based on the existing knowledge in the field). In addition, the patent application must meet other requirements, including written description (the application must contain a detailed, clear, and definite written description of the invention) and enablement (the application must describe how to make and use the invention). If the patent application satisfies all of the requirements, a patent is issued.

A third party can challenge an issued patent on several different grounds, either in litigation or in the Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB). If the challenge is successful, some or all of the patent’s claims will be invalidated. If only some of the claims are invalidated, those claims will be cancelled from the patent and the remaining claims will be enforceable.

An inter partes review (IPR) is one of the procedures used to challenge a patent in the PTAB. In an IPR, however, the challenger may only assert two grounds of invalidity: novelty and nonobviousness. In ruling on an IPR, the PTAB cannot invalidate the patent on any other grounds.

This issue was recently addressed by the Federal Circuit Court of Appeals in Samsung Electronics America, Inc. v. Prisua Engineering Corp, 2020 U.S. App. LEXIS 3292 (February 4, 2020). Prisua obtained a patent for editing a video data stream, and sued Samsung for patent infringement. Prisua alleged that Samsung’s cell phones and other devices used Prisua’s patented technology. The jury found that Samsung had willfully infringed Prisua’s patent, and awarded Prisua damages of $4.3 million. The action was then stayed because, in the meantime, Samsung had filed a petition in the PTAB for IPR.

In its petition, Samsung challenged several claims of Prisua’s patent on obviousness grounds. The PTAB invalidated one claim as obvious, but said that it could not review the other claims for obviousness because those claims were indefinite (i.e., not clear). The PTAB said that it could not determine the scope of those claims, and therefore could not determine whether those claims were obvious.

Samsung appealed. On appeal, Samsung argued that the PTAB should have either invalidated the indefinite claims, because definiteness is also a requirement for a patent, or gone ahead and determined whether the claims were obvious even if their scope could not be determined. Prisua argued that the patent statutes do not permit the PTAB to invalidate claims for indefiniteness in an IPR.

The Federal Circuit agreed with Prisua. The court held that in an IPR, the PTAB can only invalidate a patent’s claims on the grounds of novelty and nonobviousness; it cannot invalidate a claim for indefiniteness. The court also held that the PTAB should determine whether a challenged claim is obvious even if it is indefinite.

Thus, the court made it clear that an IPR can only be used to challenge a patent for novelty and nonobviousness. The patent statutes do not authorize the PTAB to decide indefiniteness in an IPR. There are other procedures that a challenger can use for that purpose.

Lil Nas X broke onto the scene in spectacular fashion when he released the viral sensation “Old Town Road,” featuring Billy Ray Cyrus. Old Town Road broke the prior record for most consecutive weeks at No. 1 on the Billboard Hot 100 charts and eventually resulted in Lil Nas X receiving a Grammy award. Unfortunately, fortune and fame comes with its share of problems.

Lil Nas X was sued by producers Don Lee and Glen Keith (the “Producers”) in October 2019 for allegedly infringing their copyrighted material with his track “Rodeo.” According to the Producers, Rodeo bears a substantial similarity to their 2017 song “GwenXdonlee4-142[,]” which was subsequently incorporated into a song called “Broad Day” by PuertoReefa and Sakrite Duexe. Specifically, the lawsuit claims that there are substantial similarities between the chord progression, use of instruments, drumbeats, and other protectable characteristics from “GwenXdonlee4-142” and “Broad Day.” According to the Producers, the song was widely distributed in locations including Lil Nas X’s

Lil Nas X’s legal team responded to the lawsuit last week by filing a motion to dismiss. In the motion, Lil Nas X’s attorneys argue that Rodeo was created independently of Broad Day and without knowledge of the allegedly infringed work. Moreover, Lil Nas X’s team argued, without admitting use of copyrighted material, that the conduct of which the Producers complain was pursuant to an implied or express license.

Given that Lil Nas X’s motion was only filed last week, the Producers have yet to file an opposition. However, Pitchfork, the self-proclaimed most trusted voice in music, reached out to the Producers’ attorneys, who stated, generally, that the filing fails to dispute or rebut the Producers’ claim for copyright infringement, and that the Producers look forward to their day in court. Of course, he wasn’t going to respond that the motion disproves the Producer’s theories of liability and raises issues dispositive to their case. Nonetheless, we will see how the Court feels about the motion and whether it presents a meritorious defense to the case.

Generally, the title to a single motion picture is not entitled to trademark protection.  This is the same for the title to single books, songs and other singular creative works.  Most non-trademark attorneys are surprised when I tell them this.  I am sure you may be scratching your head as well.  The logic behind the legal principle that the title to a single creative work cannot function as a trademark is as follows:  a title to a single creative work such as a book serves to identify only the book and not the source of that book.  Another reason trademark law generally refuses to acknowledge trademark rights in the title to a single creative work, such as a book, results from the interplay between copyright and trademark law. While trademarks endure as long as the mark is used, copyrights eventually expire. When a work falls into the public domain, others would have the right to reproduce the literary work.  However, if the title to the book enjoyed trademark protection, this would compromise the policy of public domain under copyright law because a book with a trademarked title could only be published under a different title.

Read More

In Guardant Health, Inc. v. Foundation Medicine, Inc., 1-17-cv-01616 (DDE 2020-01-07, Order), the Court rejected the Plaintiff’s argument that an inequitable conduct claim must be related only to the prosecution of the patent-at-issue in ruling on plaintiff’s motion to dismiss defendants’ infectious unenforceability counterclaims.  In the case, the Defendants’ theory as to the unenforceability of U.S. Patent No. 9,902,992 (the ’992 patent) was not based on inequitable conduct said to have occurred during the ’992 patent’s prosecution.  Instead, it rested on the relationship between the ’992 patent and the prosecution of other related patents.

As some background, inequitable conduct regarding any single claim in the prosecution of a patent renders the entire patent unenforceable, not just that specific claim. Moreover, a finding of inequitable conduct can affect not just the improperly-prosecuted patent, but can also render unenforceable any other related patents and applications in the same patent family. This concept is what courts have referred to as the doctrine of “infectious unenforceability.”

Pursuant to this infectious unenforceability doctrine, inequitable conduct associated with one patent may render a related patent unenforceable so long as the inequitable conduct at issue bears “an immediate and necessary relation” to the enforcement of the related patent.  And, an “immediate and necessary relation” requires that “the inequitable conduct that occurred earlier in the chain [of issued patents] ‘must be related to the targeted claims of the ultimately-issued patent or patents sought to be enforced.’”

Turning to the specifics of this case, the Plaintiff made three arguments for dismissal of Defendants’ infectious unenforceability counterclaims.  First, the Plaintiff argued that as to the ’992 patent (unlike the allegedly improper patents), the alleged missing inventor is actually listed as an inventor on the face of the ’992 patent.  Therefore, Plaintiff asserted that there can be no inequitable conduct with respect to the ’992 patent based on misnaming of inventors because it is undisputed that the right inventors are named.  Second, Plaintiff argued that there is not a sufficient relationship between the alleged inequitable conduct at issue and the prosecution of the ’992 patent.  Third, Plaintiff argues that differences between the ’992 patent and the allegedly improper patents preclude a finding of infectious unenforceability.

In considering Plaintiff’s first argument-that Defendants’ counterclaim fails because the alleged missing inventor on the other patents is listed as an inventor on the ’992 patent, the Court found this argument unpersuasive.  This is because, as noted above, Defendants’ theory as to the unenforceability of the ‘992 patent was not based on inequitable conduct in the ’992 patent prosecution itself. Instead, the theory relies on the premise that inequitable conduct with regard to other, previously-filed patent applications are sufficiently related to the enforcement of the ‘992 patent, such that the ‘992 patent is also unenforceable.

In other words, the Court reasoned, merely disclosing, in a subsequent patent application, material that was previously withheld with intent to deceive the USPTO does not save the later issued patent from the consequences of the misconduct.  Instead, to adequately cure any inequitable conduct that occurred during earlier prosecution, the applicant would have to: (1) expressly advise the USPTO of the existence of the misrepresentation; (2) advise the USPTO of what the actual facts are and make clear that further examination in light thereof may be required if any USPTO action has been based on the misrepresentation; and (3) establish patentability on the basis of the factually accurate record.  And, Plaintiff did not assert it took these “curing” steps here.

Next, Plaintiff’s second argument was that Defendants fail to sufficiently plead infectious unenforceability because that doctrine requires a relationship between the alleged inequitable conduct and the prosecution of the ’992 patent.  However, the Court also dismissed this argument because the law on infectious unenforceability requires no direct linkage between the inequitable conduct at issue and the prosecution of the ‘992 patent. The Court first reasoned Plaintiffs position is undercut by the Federal Circuit’s description of the doctrine of infectious unenforceability.  Second, requiring an immediate and necessary relation between the inequitable conduct at issue and the prosecution of the allegedly infected patent would render the doctrine of infectious unenforceability superfluous.

The Court also rejected Plaintiff’s third argument that the doctrine of infectious unenforceability is inapplicable because there are too many differences between the allegedly improper patents and the ’992 patent. Instead, the Court concluded that Defendants had pleaded sufficient facts to demonstrate the required “immediate and necessary relation” between the inequitable conduct at issue and the targeted claims of the ‘992 patent.  The Court found there is a close relationship between the content of the respective patents and the inequitable conduct allegations at issue, particularly given the family history and the priority relationship of the respective patents.  Specifically, there are at least sufficient facts pleaded to plausibly allege that the at-issue patents are part of the same family and that they all share the same priority date.

Thus, in sum, the Court found Defendants had pleaded facts demonstrating an extremely close connection between the content of the ‘992 patent and the other patents and, relatedly, between the nature of the inequitable conduct allegations and the content of the ‘992 patent’s claims.  Thus, Defendants had sufficiently alleged that the ‘992 patent is potentially unenforceable pursuant to the doctrine of infectious unenforceability.

This case is a strong reminder that assertions of inequitable conduct can extend to not just the claims at issue, but to all claims in the patent, and even all patents in the family.  Thus, it goes without saying that extreme care must be taken at all times during the prosecution of all patents.

In February 1996, faced with increasing public concern about the availability of pornography on the internet, as well as recent court decisions that seem to deter efforts to filter out such content, Congress enacted the Communications Decency Act (“CDA”).  As part of the CDA, Congress granted immunity to internet service providers from liability for actions they took to help users block online content that a user found to be offensive or objectionable.  Congress further declared its goals in enacting the CDA, and its immunity provision, were “to encourage the development of technologies which maximize user control;” “to empower parents to restrict their children’s access to objectionable or inappropriate online content;” and “to preserve the vibrant and competitive free market that presently exists for the internet and other interactive computer services.”  In 2009, the Ninth Circuit decided the case, Zango, Inc. v. Kaspersky Lab, Inc., 568 F.3d 1169, which held that the immunity provisions of the CDA applied to computer software developers whose programs were intended to help users filter out or block objectionable material.  It is against the backdrop of the history of the CDA and its decision in the Zango case that the Ninth Circuit was called upon to explore the limits of the immunity provided by the CDA in the case, Enigma Software Group USA, LLC v. Malwarebytes, Inc., decided December 31, 2019.  In essence, the Ninth Circuit was called upon to determine whether the immunity provisions of the CDA, specifically section 230(c)(2), immunizes a software company whose blocking and filtering decisions are driven “by anti-competitive animus,” i.e., to deter users from accessing or using a competitor’s software products.

Read More