IP Law Daily, SUPREME COURT DOCKET: Recent decisions, cases, and petitions pending High Court review, (Oct 21, 2020)

By WK Staff

This IP Law Daily feature presents a chart highlighting the decisions, arguments, briefs, and petitions on intellectual property issues before the October 2020 Term of the U.S. Supreme Court.

The Supreme Court in the past two weeks heard oral arguments in the consequential Google LLC v. Oracle America Inc. copyright case and agreed to review the Federal Circuit’s controversial Arthrex decision holding that administrative patent judges were principal officers appointed in violation of the Constitution. The court also turned away several petitions in patent cases, clearing its docket of petitions pending from the 2019 term.

ORAL ARGUMENTS

On October 7, the Supreme Court heard telephonic oral arguments in the highly anticipated Google LLC v. Oracle America Inc. copyright case held over from the last term. The case raises the issue of whether copyright protection extends to software interface code and whether Google’s utilization of 11,000 lines of declaring code from Oracle’s Java Application Programming Interface (API) to develop the Android operating system constituted infringement or fair use. Under review is a Federal Circuit decision overturning a jury’s finding that Google’s use of Oracle’s Java API packages constituted noninfringing fair use. The Federal Circuit found that Google’s use of Java API code was highly commercial and non-transformative. In an earlier phase of the case, the Federal Circuit in 2014 held that the Java API packages were entitled to copyright protection. Google’s petition for review asks the Court to decide: (1) whether copyright protection extends to a software interface and (2) whether Google’s use of a software interface in the context of creating a new computer program was fair use. The Justices seemed concerned that ruling in favor of Oracle would significantly disrupt the software sector. On the other hand, they seemed sympathetic to Oracle’s assertion that computer code is creative and deserving of protection, even if it serves a functional purpose. Several Justices also expressed concern about the Federal Circuit’s review of the jury’s fair use finding (Google LLC v. Oracle America Inc., Dkt. No. 18-956).

NEW PETITION GRANTED

On October 13, the Court agreed to review a decision of the U.S. Court of Appeals for the Federal Circuit holding that the Patent Act’s scheme for appointing Administrative Patent Judges (APJs) to serve on Patent Trial and Appeal Board panels violates the U.S. Constitution because the Act makes the APJs "principal officers" of the United States, requiring appointment by the President rather than the Secretary of Commerce. To cure the violation, the Federal Circuit held that severing the portion of the Patent Act restricting removal of the APJs is sufficient to render the APJs "inferior officers" and remedy the constitutional appointment problem. The full Federal Circuit declined to review the panel decision en banc. Since its Arthrex decision, the Federal Circuit has vacated over 100 PTAB decisions in several cases and remanded them for rehearing before a new PTAB panel. The Chief Administrative Patent Judge has stayed all cases remanded by the Federal Circuit under Arthrex in administrative abeyance until the Supreme Court reaches its decision. The Court granted certiorari and consolidated three petitions seeking review of the Federal Circuit’s decision—United States v. Arthrex, Inc. (Dkt. No. 19-1434); Smith & Nephew, Inc. v. Arthrex, Inc. (Dkt. No. 19-1452); and Arthrex, Inc. v. Smith & Nephew, Inc. (Dkt. No. 19-1458). On July 22, the U.S. Government filed a memorandum summarizing the issues presented in the petitions filed by the parties. The Court indicated that it will consider two of three questions posed by the Government’s memorandum: (1) whether, for purposes of the Appointments Clause, U.S. Const. Art. II, § 2, Cl. 2, APJs are principal officers who must be appointed by the President with the Senate’s advice and consent, or "inferior Officers" whose appointment Congress has permissibly vested in a department head; and (2) if APJs are principal officers, whether the Federal Circuit properly cured any Appointments Clause defect.

DENIED PETITIONS

The Supreme Court denied a handful of petitions in the past couple of weeks, all but one challenging the Federal Circuit’s resolution of patent disputes. A few are noted below.

CDA Section 230. The Supreme Court on October 13 declined to review a decision by the U.S. Court of Appeals for the Ninth Circuit holding that the liability protections for policing third-party content in Section 230 of the Communications Decency Act (CDA) of 1996 do not extend to Internet intermediaries that provide users with the ability to block content for anticompetitive reasons. However, Justice Clarence Thomas, while agreeing with the Court’s decision not to take up the petition, filed a separate statement to express his view that the Court should consider addressing "in an appropriate case" the issue of "whether the text of this increasingly important statute aligns with the current state of immunity enjoyed by Internet platforms" in light of decisions by lower courts. The Ninth Circuit in Malwarebytes held that the "Good Samaritan" immunity from liability provided to computer service providers in Section 230(c)(2) of the CDA does not apply to bar claims based on allegations of removal of "objectionable" content for competitive purposes. Malwarebyes’ petition had asked, "Whether federal courts can derive an implied exception to Communications Decency Act Section 230(c)(2)(B) immunity for blocking or filtering decisions when they are alleged to be ‘driven by anticompetitive animus’" (Malwarebytes, Inc. v. Enigma Software Group USA LLC, Dkt. No. 19-1284).

Patent Act jurisdiction. The Court declined to consider whether the Federal Circuit erred in concluding that a state trade secret lawsuit filed by Intellisoft against Acer America did not implicate significant patent issues to justify removal to federal court. In its petition, Acer contended that IntelliSoft’s theories of trade secret ownership, misappropriation, and damages depended on deciding the patent law issues of inventorship, claim construction, and infringement (Acer America Corp. v. IntelliSoft, Ltd., Dkt. No. 20-313).

Patent Act prevailing party. The Court denied a petition challenged a Federal Circuit decision upholding a district court’s determination that Facebook was the "prevailing party" under the Patent Act’s fee shifting provision. Facebook had obtained dismissal of a patent infringement suit on the ground of mootness after the Patent Trial and Appeal Board concluded that the asserted patent was valid (BE Technology LLC v. Facebook, Inc., Dkt. No. 19-1323).

Subsequent patent invalidity. The Supreme Court denied a petition by PhaZZer Electronics seeking to reverse a Federal Circuit decision affirming a federal district court’s imposition of sanctions in favor of plaintiff Taser International, Inc. in a patent and trademark infringement action involving dart cartridges for stun guns. PhaZZer sought review on the ground that the claims of the patent-in-suit had been subsequently cancelled by the USPTO (PhaZZer Electronics, Inc. v. Taser International, Inc., Dkt. No. 19-1378).

NEW PETITIONS

Only a couple of new petitions in intellectual property cases have been filed in the past two weeks.

Personal jurisdiction in copyright suit. A Russian citizen has filed a new petition seeking review of a Fourth Circuit decision concluding that that his operation of two stream-ripping websites sufficed to subject him to personal jurisdiction in a copyright infringement suit brought by recording companies in federal district court in Virginia (Kurbanov v. UMG Recordings, Inc., Dkt. No. 20-503).

Patentable subject matter. A patent owner filed a petition for review of the Federal Circuit’s summary affirmance of a Virginia federal court’s conclusion that the claims of a patent for a system to provide automated entry to a prospective buyer or renter of real properties were directed to an abstract idea and therefore were ineligible for patent protection under 35 U.S.C. §101 (Consumer 2.0, Inc. v. Tenant Turner, Inc., Dkt. No. 20-453).

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