IP Law Daily, SUPREME COURT DOCKET: Recent decisions, cases, and petitions pending High Court review, (Dec 15, 2021)

By WK Editorial Staff

This IP Law Daily feature presents a chart highlighting the decisions, arguments, briefs, and petitions on intellectual property issues before the October 2021 Term of the U.S. Supreme Court.

In the past few weeks, the Supreme Court has continued this term’s trend of ridding its docket of petitions in IP cases, particularly trademark cases, leaving only a couple of recently filed petitions posing Lanham Act challenges. A couple of new petitions in IP cases have been filed. The Court granted, vacated, and remanded a second patent case in light of its Arthrex decision issued lastJune. The Hight Court has yet to take action on a couple of petitions challenging the controversial Fintiv rule, which protects the Patent Trial and Appeal Board’s discretion in rejecting challenges to issued patents.

Granted Petitions

Patent—grant, vacate, remand. On December 13, the Court granted a pending petition filed by the government in a patent case, vacated the challenged judgment, and remanded a case to the Federal Circuit to reconsider the case in light of the High Court’s recent decision in U.S. v. Arthrex, Inc., 594 U. S. __ (2021), holding that the “unreviewable" authority held by Administrative Patent Judges of the Patent Trial and Appeal Board during inter partes review (IPR ) proceedings was incompatible with their status as "inferior officers" appointed by the Secretary of Commerce. The petition had asked, (1) Whether this Court should vacate the judgment below in view of its recent decision in United States v. Arthrex, Inc., 141 S. Ct. 1970 (2021), and remand so that the United States Court of Appeals for the Federal Circuit may in turn order the Acting Director to decide whether to rehear the petition filed by Chevron Oronite Company LLC. (2) To the extent that this Court’s decision in United States v. Arthrex did not foreclose the Federal Circuit’s conclusion that the remedy ordered by Arthrex v. Smith & Nephew cured the Appointments Clause violation, whether the panel decision was final and effective on the date of that decision such that the Appointments Clause violation was cured prior to the mandate being issued in that case (Infineum USA L.P. v. Chevron Oronite Co. LLC, Dkt. No. 21-350).

Denied Petitions

Patent—indefiniteness. The Supreme Court on December 6 denied a petition filed by a patent holder seeking review of a Federal Circuit decision finding that the asserted claims of four patents directed to use of a fax machine as a personal computer printer or scanner were invalid as indefinite. The patent holder’s petition had asked, “Whether a patent claim is indefinite under § 112, ¶ 2, if conflicting positions about a claim term arise during the patent prosecution process, even if uncontradicted expert testimony established that the term has a reasonably certain meaning to those skilled in the art” (Infinity Computer Products, Inc. v. OKI Data Americas, Inc., Dkt. No. 21-413).

Patent—reverse payment settlements. The Court rejected a petition by generic drug manufacturer Impax Laboratories seeking to overturn a ruling from the U.S. Court of Appeals in New Orleans holding that Impax violated antitrust laws by accepting payments worth more than $100 million to delay entry of its generic opioid pain reliever. Impax had argued that the Fifth Circuit improperly employed an abbreviated form of review of the settlement agreement that considers patent settlements to be conclusively unlawful whenever they convey “valuable consideration” from the branded manufacturer (in this case, Endo Pharmaceuticals) to the generic manufacturer (Impax) rather than a full rule of reason review. Impax’s petition had asked: (1) Whether the presence of a “reverse payment” that exceeds a patentee’s saved litigation costs and the value of any services provided by a patent challenger suffices to render a patent settlement unlawful, despite this Court’s holding to the contrary in Actavis. (2) Whether courts reviewing antitrust challenges to patent settlements can disregard evidence of the strength of the patents at issue, as the Fifth Circuit held here, or instead whether they must consider what “the patent’s strength would otherwise permit,” as the Third Circuit held in King Drug Co. of Florence v. Smithkline Beecham Corp., 791 F.3d 388, 409 (3d Cir. 2015). (Impax Laboratories, Inc. v. FTC, Dkt. 21-406).

Trademark—sovereign immunity. The Supreme Court on December 13 turned away a petition filed by a California business that was ordered by a French court to transfer the domain name France.com to the Republic of France. The business had asked the Supreme Court to reinstate a reverse-domain hijacking and trademark infringement lawsuit the business filed in federal district court, which the Fourth Circuit ordered dismissed on sovereign immunity grounds. The appellate court reversed the district court’s determination that the French government’s seizure of the domain constituted conduct falling within either the "commercial activity" or "expropriation" exception to sovereign immunity exception. The petition filed by the California business had asked, “Whether the United States Court of Appeals for the Fourth Circuit and other lower federal courts have misapplied this Court’s decision in OBB Personenverkeher v. Sachs, 577 U.S. 27, 34-35 (2015), as allowing courts to determine the gravamen of Foreign Sovereign Immunities Act ‘commercial activity’ exception suits without analyzing distinct claims presented” (France.com, Inc. v. The French Republic, Dkt. No. 21-448).

Trademark—initial interest confusion. The High Court has denied a petition by bedding manufacturer Dires LLC regarding whether the doctrine of initial interest confusion can be used to determine likelihood of consumer confusion in trademark infringement disputes. A district court had declined to find likelihood of confusion based on Dires’s purchase of search engine keyword advertising using the SLEEP NUMBER trademark owned by competing bedding manufacturer, Select Comfort. The Eighth Circuit reversed, holding that the Lanham Act extends trademark protection beyond point-of-sale confusion to reach pre-sale confusion. Constrained by precedent, the Eighth Circuit exempted from the doctrine instances where the relevant average consumers are “sophisticated at the level of a careful professional purchaser.” Dires’s petition had asked “[w]hether courts can impose liability for a likelihood of consumer confusion in a trademark infringement action based on a consumer’s initial interest in a mark, even where that consumer is not confused as to source at the time the consumer executes a purchase” (Dires, LLC v. Select Comfort Corp., Dkt. No. 21-212).

Trademark—false endorsement. The Supreme Court on November 22 turned down a petition filed by ten models whose false endorsement claims against three Manhattan strip clubs were rejected by the Second Circuit because the models were not publicly prominent enough for use of their likeness to cause consumer confusion. The models had asked the Court to resolve a split in the circuits about what a Lanham Act plaintiff must prove in order to have standing to pursue a viable claim. The models’ petition had asked the Court to reject the approach adopted by the Second and Ninth Circuits (where the two major media centers are located), which focuses on the level of “celebrity,” “recognition,” or “public prominence” that the plaintiff has received in determining the likelihood of consumer confusion, in favor of the approach adopted by the Sixth, Seventh, and Eleventh Circuits, which focuses on the plaintiff’s intent to commercialize her trademark without regard to fame and celebrity (Electra v. 59 Murray Enterprises, Inc., Dkt. 21-415).

New Petitions

A few petitions in IP cases were filed in the past few weeks. The most notable are discussed below.

Copyright—fair use defense. The Andy Warhol Foundation for the Visual Arts has filed a petition asking the Supreme Court to review a Second Circuit decision holding that screenprints depicting the late pop star Prince, made by the late artist Andy Warhol in 1984, could infringe photographer Lynn Goldsmith’s portrait of the musician. The Second Circuit concluded that the district court erred in finding that the doctrine of fair use precluded the artist’s infringement claims against the Foundation. The appellate court made particular note of the fact that Warhol’s prints did not alter or remove protectable elements of Goldsmith’s photo, and that her work was “instantly recognizable” in the Warhol prints. The Foundation’s petition asks, “Whether a work of art is “transformative” when it conveys a different meaning or message from its source material (as this Court, the Ninth Circuit, and other courts of appeals have held), or whether a court is forbidden from considering the meaning of the accused work where it “recognizably deriv[es] from” its source material (as the Second Circuit has held)” (The Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith, Dkt. No. 21-869).

Copyright—unconstitutional taking. A photographer has filed a petition challenging a Texas Supreme Court decision holding that he had no right to sue the University of Houston for an unlawful taking in violation of the Texas and U.S. constitutions because the state’s act of copyright infringement was not a “taking” of property within the meaning of the constitutions. The question posted by the photographer’s petition is: “Whether the petition should be granted, the decision below vacated, and the case remanded for further proceedings in light of Cedar Point Nursery v. Hassid, 141 S. Ct. 2063 (June 23, 2021), which held that a government commits a per se violation of the Takings Clause when it appropriates an owner’s ‘right to exclude’ others from utilizing his property and appropriates for itself ‘a right to invade’ that property. Id. at 2072” (Jim Olive Photography v. University of Houston System, Dkt. No. 21-735).

Patent—enablement. Patent owner Amgen Inc. has filed a petition asking the Court to decide whether the Federal Circuit improperly found that broad genus claims for antibody compounds for lowering cholesterol disclosed in an Amgen, Inc., patent were invalid for lack of enablement. A jury had determined that Sanofi Aventisub, accused of infringing Amgen’s patent, failed to prove that the asserted claims were invalid for lack of written description and enablement. The district court, however, granted Sanofi’s motion for judgment as a matter of law for lack of enablement, concluding that the patents are invalid. The Federal Circuit affirmed, agreeing that the patent claims are not enabled because they require undue experimentation. Amgen’s petition asks: (1) Whether enablement is “a question of fact to be determined by the jury,” Wood v. Underhill, 46 U.S. (5 How.) 1, 4 (1846), as this Court has held, or “a question of law that [the court] review[s] without deference,” as the Federal Circuit holds. (2) Whether enablement is governed by the statutory requirement that the specification teach those skilled in the art to “make and use” the claimed invention, 35 U.S.C. § 112, or whether it must instead enable those skilled in the art “to reach the full scope of claimed embodiments” without undue experimentation—i.e., to cumulatively identify and make all or nearly all embodiments of the invention without substantial “time and effort” (Amgen Inc. v. Sanofi, Aventisub LLC, Dkt. No. 21-757).

Patent—prior art, IPR appeals. A patent holder has asked the Supreme Court to review a Federal Circuit decision holding that the Patent Trial Appeal Board erred in finding that a claim for a computerized system for remote pharmacist supervision of the preparation of pharmaceuticals was not invalid as obvious. The Federal Circuit determined that the Board had construed the prior art too narrowly and had not allowed for a reasonable amount of creativity in the person of reasonable skill in the art. The patent holder’s petition asks: (1) Whether the Federal Circuit’s practice of allowing IPR petitioners to rely on evidence other than patents and printed publications, such as expert testimony, to fill in gaps in the prior art violates the plain text of § 311(b). (2) Whether the Federal Circuit’s practice of resolving contested issues of patentability on appeal from Board decisions—rather than remanding those issues for the agency to decide in the first instance—violates the “ordinary remand rule” (Baxter Corporation Englewood v. Becton, Dickinson and Co., Dkt. No. 21-819).

Patent—licensee standing. Apple, Inc., has filed a petition asking, “Whether a licensee has Article III standing to challenge the validity of a patent covered by a license agreement that covers multiple patents.” At issue as a Federal Circuit decision dismissing Apple’s appeal of four PTAB decisions on the ground that a global settlement agreement between Apple Inc. and Qualcomm, Inc. precludes Apple from challenging in that court the Patent Trial and Appeal Board’s decision about the patentability of certain Qualcomm, Inc. patents. The Federal Circuit followed its April 2021 decision, which had reached the same conclusion (Apple Inc. v. Qualcomm Inc., Dkt. No. 21-746).

Trademark—color mark functionality. A manufacturer of colored dental tips has asked the Supreme Court to weigh in on the parameters of the functionality doctrine. At issue is a decision of the U.S. Court of Appeals for the Second Circuit holding that the manufacturer’s use of colors on tips used in a system for mixing dental adhesives was functional because it aided users in matching the tips to the appropriate cartridge. In reversing the district court’s finding that the color marks were protectable, the Second Circuit noted that the district court should have applied the Louboutin test for functionality from when considering whether the system’s color scheme was entitled to trade dress protection. See Christian Louboutin S.A. v. Yves Saint Laurent Am. Holding, Inc., 696 F.3d 206, 219 3 (2d Cir. 2012). A few amicus briefs have been filed—including one by the International Trademark Association (INTA) and another by the International Anticounterfeiting Coalition—urging the Court to intervene in the case. The manufacturer’s petition asks, “Whether any degree of utility categorically renders a product feature functional and thus ineligible for federal trademark protection under the Lanham Act, 15 U.S.C. § 1127” (Sulzer Mixpac AG v. A&N Trading Co., Dkt. No. 21-417).

For details about these and other petitions and cases pending before the Supreme Court, please consult the IP Law Daily Supreme Court Docket chart.

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