Intellectual Property

Last year, Jason M. Allen won first place at the Colorado State Fair (the “Competition”) for the two-dimensional artwork entitled Théâtre D’opéra Spatial (the “Work”), which he produced with the aid of Artificial Intelligence (“AI”). Despite receiving this accolade and Allen’s arguments that he contributed significant creative elements to the AI-generated Work, his attempts to copyright the work have been unsuccessful.

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On July 24, 2023, the United States Patent and Trademark Office changed its procedures for the PTO Director’s review of certain decisions by the Patent Trial and Appeal Board.  The decisions in question are those decisions of the Patent Trial and Appeal Board to deny or grant petitions to institute proceedings under the America Invents Act.  Those proceedings include inter partes review and post grant review.  This change follows two years of an interim process and public comment period.

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The Ninth Circuit recently revisited the issue of “embedding” content by a website and its implication for copyright infringement claims. On July 17, 2023, the Ninth Circuit issued its opinion in Hunley v. Instagram, LLC, and affirmed the trial court’s ruling that Instagram, a social media platform, could not face liability for secondary infringement under the “Server Test” because plaintiffs could not prove infringement of their copyrighted photographs since the third-party news platforms had “embedded,” but did not store, the copyrighted photos on their own websites. The Court ultimately reasoned that because the plaintiff posted their photos on Instagram and essentially stored a copy of those images on Instagram’s servers, Instagram did not violate or infringe on the plaintiff’s rights since Instagram had a sublicense to display photos posted onto their platform and the third-party news sites had “embedded” the content in their articles.

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It has been referred to as one of the top copyright cases to watch this year. This case, Alexis Hunley, et al v. Instagram, LLC, questioned the scope and validity of the Server Test, a copyright doctrine that was established by the 9th Circuit and has since been rejected by a number of courts.

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In Buergofol GmbH v. Omega Liner Company, Inc., 4-22-cv-04112 (DSD Jul. 13, 2023) (Karen E. Schreier), the court granted the defendant’s motion to compel and awarded monetary sanctions after the plaintiff failed to respond at all to discovery requests that the plaintiff had objected to as overbroad because the court ruled the plaintiff “still had an obligation to respond to the extent it did not object.”

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The Supreme Court decision in Andy Warhol Foundation v. Goldsmith changed the way fair use is analyzed. In determining fair use, four factors are examined. The first fair use factor examines the purpose and character of the use. Prior to this case, the focus has been on the transformative nature of the work itself. The Supreme Court in Campbell v. Acuff-Rose Music established this transformative use analysis when it said that the first fair use factor is an inquiry into whether “the new work merely “supersedes the objects” of the original creation, or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message[,]. . . in other words, whether and to what extent the new work is transformative.” This transformative use analysis took on great importance and often eclipsed the other fair use factors. Prior to this case, the focus was on whether the second work had a different aesthetic or conveyed a different meaning. If the work was transformative, it was almost always found to be fair use. 

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In response to Google L.L.C.’s (“Google”) and other’s petitions for inter partes review (“I.P.R.”) of two patents owned by Parus Holdings, Inc. (“Parus”), the Patent Trial and Appeal Board (“PTAB”) of the United States Patent and Trademark Office (“USPTO”) found a number of claims obvious over prior art. The Court of Appeals for the Federal Circuit affirmed the PTAB’s decision, shedding additional light on the requirements and burdens of patent owners when responding to I.P.R. petitions.

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On June 7, 2023, the Ninth Circuit issued its opinion in VHT, Inc. v. Zillow Group, Inc., in which it affirmed the trial court’s findings of infringement against Zillow and the award of statutory damages. In 2019, the Ninth Circuit had previously found mostly in Zillow’s favor as to an earlier trial and had reversed and remanded the case back for further proceedings.

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The Federal Circuit Court of Appeals continues to strike down patents directed to abstract ideas under the Alice test for patent subject matter eligibility. In People.ai, Inc. v. Clari Inc. (Fed. Cir. 2023) U.S. App. LEXIS 8294, the court invalidated seven patents owned by People.ai.

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