MVS Filewrapper® Blog: New Best Practices for DMCA Takedown Notices from the Department of Commerce

Post by Dan Lorentzen

Under the Digital Millennium Copyright Act (DMCA), online service providers are immunized from liability for copyright infringement so long as they comply with two requirements intended to protect the rights of copyright owners.  Under the DMCA, online service providers include, for example, internet service providers, email providers, news providers, entertainment providers, search engines, e-shopping sites, e-finance or e-banking sites, e-health sites, e-government sites, and Wikipedia.  Congress enacted the DMCA in 1998, which amended the Copyright Act to address issues raised by a rapidly developing Internet by updating rights, exceptions, and enforcement mechanisms.  In order to qualify for immunity under the DMCA, an online service provider must (1) accommodate and not interfere with standard technical measures; and (2) adopt and reasonably implement a policy of addressing and terminating accounts of users who are found to be "repeat infringers"—commonly known as the "takedown" notice process. 

The U.S. Department of Commerce recently released a document titled "DMCA Notice-and-Takedown Processes:  List of Good, Bad and Situational Practices." While the document does not create any new policies or rules, it does set out "good," "bad," and "situational" practices for both senders and recipients of copyright "takedown" notices under the DMCA.  The document is intended to help improve the efficiency of the handling and processing of both "takedown" notices and counter-notices.  Although it is not comprehensive, the document is a good resource for any copyright owner or online service provider looking for basic practical guidance on making or dealing with "takedown" notices. 

The "DMCA Notice-and-Takedown Processes:  List of Good, Bad and Situational Practices" document is available here.  Additional information about copyrights and DMCA "takedown" notices is available here, here, and here.  

MVS Filewrapper® Blog: Blurred Lines in Copyright Law Following 'Blurred Lines' Jury Verdict

Post by Paul S. Mazzola


Under the Copyright Act of 1909, a work was protected when it was published with the notice of copyright protection.  Although changed by the Copyright Act of 1976, releasing a sound recording of a composition under the 1909 act (i.e., musical notes and lyrics) did not constitute “publication” of a musical work.  Thus, for musical works before the 1976 Act, protection was not typically afforded until the owner deposited a manuscript copy of the music in the copyright office.  For copyright infringement cases involving pre-1976 musical works, this aspect of the law presents an interesting issue.  The recent case involving the song Blurred Lines presents such a case.


On March 10, 2015, a jury determined that performers Robin Thicke and Pharrell Williams copied Marvin Gaye's 1977 song Got to Give It Up when the duo created the 2013 hit song Blurred Lines.  The jury found Thicke and Williams liable for copyright infringement and awarded $7.4 million dollar to the children of Gaye.


Although most individuals will compare the two audio recordings and/or listen to a "mashup" of the two songs on YouTube before reaching a conclusion, the legal analysis is not so simple.  From an intellectual property law standpoint, this case is particularly interesting.


Gaye recorded Got to Give It Up in December 1976.  At that time, the Copyright Act of 1976 had been signed into law two months earlier, but did not go into effect until January 1, 1978.  As a result, aspects related to the copyright(s) of Got to Give It Up were governed by the Copyright Act of 1909.


As noted by the judge in a ruling for summary judgment, "in order to claim copyright in a musical work under the 1909 Act, the work had to be reduced to sheet music or other manuscript forum."  The Copyright Act of 1976 broadened the scope of federal copyright protection to include "works of authorship fixed in any tangible medium of expression," thereby encompassing a sound recording of a composition.


Due to the timing of Gaye's recording relative to the effective date of the Copyright Act of 1976, his copyrights were limited to the sheet music compositions.  In fact, the federal district judge granted Thicke and Williams a motion in limine to prevent the full, produced audio recording of Got to Give It Up from being played at the trial; a redacted version consistent with the sheet music was played for the jury.


To succeed at trial, lawyers for the Gayes were tasked with proving that the lyrics, melody and chords contained in the sheet music were copied when composing Blurred Lines.  The sheet music of Got to Give It Up, however, was reportedly missing several elements commonly associated with the produced audio recording, such as, most notably, the well-known drum beat.


The legal test for copyright infringement is a two-part analysis, each of which addresses whether the allegedly infringing work is "substantially similar" to the copyrighted work.  Despite the similar verbiage, the analyses are separate and distinct.  The first inquiry is considered to be a lower threshold and involves: (i) showing the alleged infringer had access to the copyrighted work; and (ii) the two works are substantially similar such that the alleged infringing work was copied from the copyrighted work.  In the case of Thicke and Williams, the popularity and distribution of Got to Give It Up no doubt proves access, and Thicke cited the song as inspiration when composing Blurred Lines.  If the first inquiry is answered in the affirmative, the jury determines whether the alleged infringer copied a substantial amount of protectable expression.  Whether Blurred Lines was substantially similar to the protectable expression captured in the sheet music of Got to Give It Up such that it misappropriates the same is certainly a question reasonable minds differ.


The verdict has had some divisive fallout.  Many artists applaud the verdict for advancing strong copyright protection.  Others believe the facts of the case create blurred lines in copyright law, from which the resulting unpredictability may stifle creativity when artists look to features of existing works for inspiration.

MVS Filewrapper® Blog: Supreme Court Determines Internet Service Violates Copyrights

The Supreme Court has issued its much anticipated decision in American Broadcasting Co., Inc. v. Aereo, Inc.  The Court held that an internet service provided by Aereo—which allows subscribes to watch television programs over the internet contemporaneous with the programs as they are broadcasted over the air—violates of a copyright owner's exclusive right to perform a work publicly under the 1976 Copyright Act.  This decision represents an interesting historical development in copyright law. 


Amendment of the Copyright Act in 1976 was motivated, at least in part, in response to previous court decisions relating to systems very similar to the one at issue in Aereo. Specifically, in the 1968 case Fortnight Corp. v. United Artists Television and in the 1974 case Teleprompter Corp. v. Columbia Broadcasting System, Inc. the Supreme Court held operations such as reception and rechanneling of broadcast TV signals for simultaneous viewing to be "viewer functions," and not within the purview of the public performance right.  The 1976 Copyright Act subsequently clarified that to "'perform' an audiovisual work means 'to show its images in any sequence or to make the sounds accompanying it audible.'" Thus, under the 1976 Copyright Act, services that allow subscribers to view television shows contemporaneous or nearly contemporaneous with the broadcasting constitute a performance. 


Aereo argued that rather than performing the work in violation of the Copyright Act, it is merely an "equipment provider." The Supreme Court did acknowledge a technological difference between Aereo's services and the services at issue in Fortnight Corp. and Teleprompter—Aereo's service is "inert" until a subscriber chooses a program, whereas with the cable systems in Fortnight Corp. and Teleprompter transmitted constantly.  However, the Court was not persuaded that this difference mattered, and notably also found Aereo subscribers to constitute "the public" under the Act.


Also notable was the statement by the Court, in the body of the decision, that it does not believe this decision will discourage the emergence or use of different technologies. This seems to signal the Court's understanding that as technology continues to advance, while the Copyright Act remains the same, it will be increasingly important for courts to ensure that the Act does not tread on innovation and artistic creation, but rather to promote their progress as required by Article I, Section 8, Clause 8 of the United States Constitution. 


The full opinion is available here.

MVS Filewrapper® Blog: Copyright 3-year Statute of Limitations Trumps Laches Defense



Frank Petrella wrote two screenplays and one book based on the life of boxing champion Jake LaMotta.  One of the screenplays, registered in 1963, identifies Patrella as the sole author, written in collaboration with LaMotta.  LaMotta and Patrella assigned their rights in the screenplay, including renewal rights, to Chartoff-Winkler Productions, Inc. in 1976, who in turn sold the motion picture rights to Metro-Goldwyn-Mayer, Inc. (MGM).  MGM released the motion picture portrayal of Jake LaMotta in 1980:  Raging Bull, staring Robert DeNiro and directed by Martin Scorcese. 


Patrella died in 1981, during the original term of the copyright in the screenplay.  Under the Supreme Court's decisions in Stewart v. Abend and Miller Music Corp. v. Charles N. Daniels, Inc., the right to renewal of the copyright reverted to Patrella's heirs, unencumbered by any of the assignments previously made by Patrella.  Patrella's daughter filed a renewal of the copyright in the screenplay in 1991.  In 1998, Patrella's daughter notified MGM that she owned the copyright in the screenplay, and any further exploitation of any derivative work, including Raging Bull, infringed that copyright.  A copyright infringement suit was not filed, however, until 2009.


Section 507(b) of the Copyright Act establishes a three-year limitation on claims seeking relieve for copyright infringement.  The 2009 complaint sought monetary and injunctive relief for violation of the copyright in the 1963 screenplay by using, producing, and distributing Raging Bull.  However, the complaint only sought such relief for acts occurring on or after January 6, 2006—three years prior to filing the suit.  MGM moved for summary judgment based on the doctrine of laches, asserting that even though the three-year limitations period set out in the statute had not run out, the claim was still barred under the equitable principle of laches— the 18 year delay between obtaining the copyright and filing suit was unreasonable and prejudicial.  The district court granted the motion, which was affirmed by the Ninth Circuit Court of Appeals.     


On ultimate appeal, the Supreme Court held that a copyright infringement suit seeking relief solely for conduct occurring within the limitations period cannot be precluded by a claim of laches, so long as the claim for damages is brought within the three-year window.  The Court highlighted that laches is an equitable defense, applicable to claims for which the legislature has not provided a limitation period.  Although laches may not preclude an infringement claim made within the limitations period, the Court made clear that other doctrines such as estoppel may limit the relief awarded.   


The full opinion is available here. 

MVS Filewrapper® Blog: The Ongoing Battle of Copyright Protection and Pre-1972 Sound Recordings

Federal Copyright Law generally protects works that are fixed in a tangible medium from unauthorized use, including copying, performance, exhibition, and broadcasting.  However, sound recordings from before 1972 are treated uniquely under the law—a situation that has resulted in real legal problems.


When enacted, the Federal Copyright Law preempted any state rights relating to copyright protection.  However, because the Copyright Act of 1909 failed to provide protection for sound recordings, and protection for sound recordings was not incorporated into the Federal Copyright Law until 1972, protection for sound recordings prior to 1972 is governed by various state law doctrines. 


In particular, the Federal Copyright Law retains several "safe harbors" concerning certain acts relating solely to sound recordings, such as broadcasting pre-1972 sound recordings over the radio. § 114 of the current Copyright Act allows for broadcast transmission of a protected sound recording.  However, some copyright holders are attempting to hold broadcasting companies liable for "unauthorized broadcast transmission" of pre-1972 sound recordings under various state misappropriation laws. A class action suit filed in September, 2013 in the Central District of California alleges that SiriusXM refuses to obtain licenses for transmission of pre-1972 recordings in violation of common law and California law, seeking payment for the use of thousands of songs.  Two additional class action suits have been filed in the Southern District of New York and the Southern District of Florida, alleging violation of New York and Florida law, respectively.  A fourth suit has also been filed in California state court by Capitol Records, Sony Music, UMG Recordings, Warner Music, and ABKCO Music. 

Currently, the federal courts are split on whether a state's misappropriation law establishes a cause of action to a copyright holder with a pre-1972 sound recording.  The outcome of these cases may help to clarify what protection is afforded to pre-1972 sound recordings, and under what law.

MVS Filewrapper® Blog: 2014 Supreme Court Cases Relating to Intellectual Property

On January 10, 2014 the Supreme Court agreed to review a variety of intellectual property cases in the upcoming session, including two patent cases, a copyright case, and a trademark case (including Lanham Act claim).  A brief overview of these cases is provided and more detail will be available once decisions are entered by the Court.

Limelight Networks, Inc. v. Akamai Technologies, Inc. (U.S., No. 12-786.)

Question Presented to the Supreme Court: Whether the Federal Circuit erred in holding that a defendant may be held liable for inducing patent infringement under 35 U.S.C. § 271(b) even though no one has committed direct infringement under § 271(a).

The Federal Circuit dismissed the “single-entity” rule for finding induced infringement of a method/process claim, finding that steps taken by multiple parties can result in induced infringement. The Federal Circuit stated, “To be clear, we hold that all the steps of a claimed method must be performed in order to find induced infringement, but that it is not necessary to prove that all the steps were committed by a single entity.” If the Supreme Court upholds the Federal Circuit’s ruling, a patentee has increased opportunity to assert induced infringement for method/process claims in the marketplace.

Nautilus, Inc., v. Biosig Instruments, Inc. (U.S., No. 13-369)

Question Presented to the Supreme Court: Does the Federal Circuit’s acceptance of ambiguous patent claims with multiple reasonable interpretations—so long as the ambiguity is not “insoluble” by a court—defeat the statutory requirement of particular and distinct patent claiming? Does the presumption of validity dilute the requirement of particular and distinct patent claiming?

The Federal Circuit reversed a district court decision that a patent claim to a heart rate monitor was invalid for indefiniteness as a matter of law because of its use of the claim term “spaced relationship” in describing the positioning of two electrodes with respect to each other. The Court held that this claim term was not one that is “insolubly ambiguous” when the intrinsic evidence is considered from the perspective of a person of skill in the art. It considered the functionality of the claimed monitor, as described in the specification, as did the USPTO when the claim was under reexamination. “[T]he claims provide inherent parameters sufficient for a skilled artisan to understand the bounds of ‘spaced relationship.’” Judge Schall concurred in the result but would have used a more narrow analysis, explaining that he would not have used the functional limitation to address the definiteness issue.


POM Wonderful LLC v. The Coca-Cola Company, U.S. (No. 12-761)

Question Presented to the Supreme Court: Whether the court of appeals erred in holding that a private party cannot bring a Lanham Act claim challenging a product label regulated under the Food, Drug, and Cosmetic Act.

The case arising out of the 9th Circuit resulted in affirming judgment in favor of Coca-Cola, finding that POM's Lanham Act challenge to Coca-Cola’s “Pomegranate Blueberry” name was barred under the Food Drug and Cosmetic Act (FDCA).  Applicability of Section 43(a) of the Lanham Act, 15 U.S.C. 1125(a) (authorizing actions of false/misleading description of goods), The FDCA and/or state law claims will be addressed.

American Broadcasting Companies, Inc. v. Aereo, Inc. (U.S., No. 13-461)

Question Presented to the Supreme Court: Does a company “publicly perform” a copyrighted television program when it retransmits a broadcast of that program to thousands of paid subscribers over the Internet?

The Second Circuit denied reviewal of a panel decision that online streaming of TV programs to individual subscribers is not an infringing public performance. The panel found that the creation of a copy of a broadcast that is transmitted to individual subscribes failed to establish infringement as streaming “to the public.”

MVS Filewrapper® Blog: The Role of DVRs in Copyright Infringement

In Fox Broadcasting v. Dish Network, Fox Broadcasting Company ("Fox") appealed a ruling by the District Court of Central District of California that Fox did not demonstrate a likelihood of success on most of its copyright infringement and breach of contract claims, and that Fox was not entitled to a preliminary injunction against Dish Network.  The United States Court of Appeals for the Ninth Circuit affirmed the district court's ruling.

Fox owns copyrights to such television shows as Glee, Bones, The Simpsons, and Family Guy.  Fox contracts with cable and satellite television providers to retransmit these shows for customer viewing.  Fox also separately licenses its shows to companies such as Hulu, Apple, Netflix, and Amazon, which then sell or stream the shows over the internet.

In 2002, Fox and Dish Network entered into a contract that allowed Dish Network to retransmit Fox's shows to their customers.  The contract provides that Dish Network shall not "distribute" Fox programs on an "interactive, time-delayed, video-on-demand or similar basis."  It also provided that Dish Network will not "record, copy, duplicate and/or authorize the recording, copying, duplication or retransmission" of any part of Fox's signal.  An amended version of the 2002 contract stated that Dish Network could provide Fox Video-on-Demand to its subscribers, but Dish Network had to disable the fast forward function during all advertisements.

Dish Network offers two devices that Fox claims constitute copyright infringement:  the "Hopper" and "Joey."  In pertinent part, the Hopper allows the customer to "hop" over commercials.  The Hopper has a feature called PrimeTime Anytime, which allows the user to record prime time shows on their Hopper.  Another added feature to the Hopper is the Autohop that allows users to automatically skip commercials.  Autohop is only available online, and the morning after the prime time show had aired.  To create the Autohop function, Dish Network has technicians manually watch the program each night and mark the beginning and end of each commercial.

Fox sued Dish Network alleging copyright infringement and seeking a preliminary injunction.  The district court denied the preliminary injunction, concluding that Fox did not demonstrate a likelihood of success on either its copyright claims or its breach of contract claims. 

To establish direct copyright infringement by reproduction, "the plaintiff must show ownership of the copyright and copying by the defendant."  The district court concluded, and the parties did not dispute, that Fox did own the copyrights to the programs.  The focus of the court was on the second prong, "copying by the defendant."  The court noted that the user is "the most significant and important cause of the copy."   

On appeal, the United States Court of Appeals for the Ninth Circuit affirmed the district court.

The Ninth Circuit explained that infringement of the right of reproduction required copying by the defendant.  Thus, the court dismissed Fox’s assertion that Dish was responsible for infringement because Dish’s program creates recordings only in response to the user’s command.  The court concluded that "operating a system used to make copies at the user's command does not mean that the system operator, rather than the user, caused copies to be made."  Thus, Fox failed to show that it had established direct copyright infringement.

Next the appellate court addressed the district court’s conclusion that Fox was unlikely to succeed in its contention regarding secondary liability.  To establish secondary liability the party must first establish direct infringement by a third party.   Fox established a prima facie case of direct infringement by Dish Network customers because Fox owns the copyrights to its shows and the users make copies.  Dish Network had to rebut this by showing that their customers' copying was a "fair use."  In affirming the district court, the Ninth Circuit stated "if recording an entire copyrighted program is a fair use, the fact that viewers do not watch the [commercials] not copyrighted by Fox cannot transform the recording into a copyright violation."  Thus, any analysis of harm to Fox should exclude consideration of Autohop because ad-skipping does not implicate Fox's copyright interests.  Since the alleged harm to Fox is from the automatic commercial skipping and not copying the programs, Fox failed to established secondary liability.

Finally, the Ninth Circuit addressed whether Fox could get a preliminary injunction based upon Dish Network allegedly breaching the 2002 and amended 2002 contract.  The appellate court again affirmed the lower court's decision that a preliminary injunction was improper because the district court had not abused its discretion.  

MVS Filewrapper® Blog: New and Useful - July 8, 2013

·         The Federal Circuit in Ultramercial, Inc. v. Hulu, LLC held that the district court erred in holding that the subject matter of U.S. Patent No. 7,346,545 ('545) is not a "process" within the language and meaning of 35 U.S.C. § 101.  The Federal Circuit reversed and remanded this case stating the claims were not abstract and were patent eligible.

The '545 patent claims a method for distribution of copyrighted products over the Internet where the consumer receive the product for free in exchange for viewing an advertisement, and the advertiser pays for the copyrighted content.  In other words, it is a method for monetizing and distributing copyrighted products over the Internet.

Ultramercial originally sued Hulu, LLC ("Hulu"), YouTube, LLC ("YouTube"), and WildTangent, Inc. ("WildTangent"), alleging infringement of the '545 patent.  Hulu and YouTube were later dismissed from the case.  WildTangent then moved to dismiss for failure to state a claim under Rule 12(b)(6).  The United States District Court for the Central District of California granted the dismissal holding that patent '545 did not claim patent-eligible subject matter.  The Federal Circuit had previously reversed the district court's holding and remanded the case, but that earlier decision was vacated by the United States Supreme Court. 

The district court’s grant of the motion to dismiss was based on its conclusion that there was no reasonable construction that would render the subject matter patent-eligible.  The Federal Circuit took issue with this approach, and explained that inquiries into patent-eligibility under § 101 would often involve factual questions, and that claim construction would often be necessary.   In this case, the Federal Circuit determined that the factual determinations were key to deciding eligibility, and that a construction most favorable to the patentee should be applied. 

In its analysis, the Federal Circuit reiterated that under the “abstract ideas” limitation to patent-eligibility of 35 U.S.C. § 101, a claim is not patent eligible only if, instead of claiming an application of an abstract idea, the claim is instead to the abstract idea itself.  A claim may be premised on an abstract idea and, indeed, the abstract idea may be of central importance to the invention—the question for patent eligibility is whether the claim contains limitations that meaningfully tie that abstract idea to an actual application of that idea through meaningful limitations.  In determining if the claim is abstract or not, the court must look at the claim as a whole and "cannot go hunting for abstractions by ignoring the concrete, palpable, tangible limitations of the invention the patentee actually claims."

The Federal Circuit looked to the Supreme Court for guidance on discerning whether or not a claim is an abstraction.  First, the Supreme court in Prometheus stated that a claim is not meaningfully limited if it merely describes an abstract idea or in essence simply adds the words "apply it."  Second, a claim is invalid if the subject matter preempts all practical uses of an abstract idea.  In other words, a claim is invalid if it covers every practical application of that abstract idea.  Finally, the Supreme Court in Prometheus stated "that a claim is not meaningfully limited if its purported limitations provided no real direction, cover all possible ways to achieve the provided result, or are overly-generalized."

With this guidance in mind, the Federal Court held that the claims of '545 were patent eligible and not invalid under § 101.  The court noted that by its terms, patent '545 invokes computers and applications of computer technology.  Even without claim construction, several of the steps require that the method be performed though computers, on the internet, and in a cyber-market environment.  Further, if the products are offered for sale on the internet, they must be restricted by complex computer programming as well.  Viewing the subject matter as a whole, the invention recites a process, it does not pre-empt all use of the abstract idea, the recited steps are not all pre- or post-solution steps, and the claim is not overly generalized.  The claims also do not involve a mathematical algorithm, a series of purely mental steps, or any similarly abstract idea.  Thus the claims of patent '545 were found to be patent-eligible.  


·         In Authors Guild v. Google Inc., the Second Circuit vacated a class certification by the United States District Court for the Southern District of New York, and remanded the case back for further consideration, without prejudice to any renewal of the motion for class certification.

The suit commenced in 2005 when The Authors Guild, an association of authors, and several individual authors sued Google alleging copyright infringement by Google Books.  Google Books would scan and index books and make short snippets of the books available for public viewing without payment to the authors.

Following a course of discovery and settlement agreements, both parties moved for an approval of an amended proposed class settlement agreement.  After the court refused the motion, the plaintiff moved to certify a proposed class of "[a]ll persons residing in the United States who hold a United States copyright interest in one or more books reproduced by Google."  The district court allowed the certification.  Google opposed the motion for class certification and appealed the District Court's grant of class certification to the Second Circuit.  In its appeal, Google stated they intended to raise a "fair use" defense, which might moot the litigation.  Google also raised the defense that the class representatives do not adequately protect the interests of the class as a whole.

The appellate court set aside Google's second defense and chose to just focus on the fair use argument, stating "the resolution of Google's fair use defense in the first instance will necessarily inform and perhaps moot our analysis of many class certification issues."  The court believed that Google's fair use defense should be fully resolved before questions regarding class certification are decided on.  The court vacated the District Court's decision to allow certification of the proposed class and remanded the case back for consideration of the fair use issues, without prejudice to any renewal of the motion for class certification.

·         In Fresenius USA v. Baxter Inter'l, the Federal Circuit decided whether the cancellation of the asserted claims by the United States Patent and Trademark Office ("PTO"), pursuant to the agency's statutory reexamination authority, must be given effect in pending infringement litigation.  The Federal Circuit held that it did, and dismissed the district court's decision and remanded with instructions to dismiss.

The case commenced when Fresenius USA and Fresenius Medical Care Holdings (collectively, "Fresenius") brought a declaratory judgment action against Baxter International and Baxter Healthcare Corporation (collectively "Baxter") alleging that claims of U.S. Patent No. 5, 247, 434 ('434) were invalid and not infringed.  Baxter counterclaimed for infringement.  The district court found in favor of Baxter that Fresenius infringed the claims and that the claims were not invalid.  The Federal Circuit affirmed the district court's ruling, but remanded to reconsider its injunction and post-verdict damages.

While the litigation was pending on remand to the District Court, the PTO completed a reexamination of the patent and determined that all asserted claims were invalid.  After the PTO made its determination, the district court entered judgment against Fresenius in the pending infringement proceeding.  On appeal, Fresenius argued that Baxter no longer had a cause of action because the PTO gave its ruling before the district court gave theirs.

The reexamination statute of 1928 authorized the PTO to reconsider patents of "doubtful" validity, and to cancel "defectively examined and therefore erroneously granted patents."  Looking at the language and legislative history, the court noted that reexamination is supposed to occur concurrently with litigation, and that cancellation of claims during reexamination would be binding on concurrent infringement litigation.  After looking at all applicable precedent, the court concluded that if the PTO confirms the original claim in identical form, a suit based on that claim may continue, but if the original claim is cancelled or amended to cure invalidity, the patentee's cause of action is extinguished and the suit would fail.

Baxter contends that this rule does not apply to the present case because their case was conclusively decided before PTO gave their decision.  The Federal Circuit disagreed. The court stated that their original decision was not sufficiently final as to immunize it from the PTO's decision.  The court's original decision left open many aspects that still needed to be decided upon by the lower court.  The court explained "it is well-established that where the scope of relief remains to be determined, there is no final judgment binding the parties or the court."  For the PTO's decision to have no effect, a final decree must have been given, leaving nothing further to be done except the execution of it.  Since the PTO invalidated the claims before the lower court decided the injunction and post-verdict damages issues, Baxter no longer had a cause of action and the suit would fail.

MVS Filewrapper® Blog: New and Useful - April 5, 2013

·         In Power Integrations, Inc. v. Fairchild Semiconductor International, Inc. the Federal Circuit clarified several points relating to claim construction, determinations of non-obviousness, and calculation of damages.   The court confirmed that claiming a “circuit” in conjunction with a sufficiently definite structure for performing the identified function is adequate to bar means-plus-function claiming.  The court also confirmed that secondary considerations of non-obviousness could constitute evidence sufficient to support a finding of non-obviousness.  Finally, the court held that plaintiffs are not entitled to compensatory damages for injury caused by infringing activity that occurred outside the territory of the United States, regardless of any foreseeability of world-wide damages.  A more in-depth analysis of this case will be posted shortly.

·         In Rubin v. The General Hospital Corp., Dr. Berish Y. Rubin and Dr. Sylvia L. Anderson (collectively, Rubin) sued The General Hospital Corporation (GH Corp.) in the U.S. District Court for the District of Massachusetts requesting correction of inventorship of two patents assigned to GH Corp., or alternatively invalidation of the two patents.  Rubin alleged that the inventors named in the patents used confidential information—from a manuscript and abstract submitted by Rubin to the American Journal of Human Genetics—to complete the inventions described and claimed in the patents.   The district court granted summary judgment to GH Corp.

The Federal Circuit affirmed the grant of summary judgment, reasoning that the dispute was fundamentally a question of priority of the invention.  The court ultimately agreed with the district court, concluding that Rubin and Anderson could not be added as joint inventors or be substituted for the named inventors of the patents because they did not meet the requirements of 35 U.S.C. § 116 for joint invention or §256 for correction of inventorship, and that the issue of priority is appropriately determined by PTO interference proceedings.    

·         The U.S. District Court for the Southern District of N.Y. has handed down its decision in Capitol Records, llc. V. ReDigi Inc.  ReDigi considers itself the "world's first and only online marketplace for digital used music."   ReDigi's website "invites users to sell their legally acquired digital music files, and buy used digital music from others at a fraction of the price currently available on iTunes."   ReDigi's website sold various records belonging to Capitol Records.  Capitol Records brought an action against ReDigi, alleging direct copyright infringement, inducement of copyright infringement, contributory and vicarious copyright infringement.  In its defense, ReDigi asserted that the “first sale” doctrine precluded a finding of copyright infringement.  The district court disagreed, however, holding that the very nature of transferring digital files over the internet constituted copyright infringement because in order to transfer a file, a copy of the file must be made on the transferring computer.  Because the “first sale” doctrine does not protect against reproduction of copyrighted material, ReDigi could not successfully assert the defense for the present action.   

MVS Filewrapper® Blog: Supreme Court Decides Foreign First Sale Doctrine

            The Supreme Court recently decided a much anticipated case, finally answering a long awaited question:  Does the first sale doctrine apply to copyrighted works manufactured in other countries?  According to the Supreme Court in Kirtsaeng v. John Wiley & Sons, Inc., the answer to this question is yes.

            John Wiley & Sons sued Supap Kirtsaeng for selling textbooks on eBay that he imported from foreign countries.  The books were printed by a wholly-owned subsidiary of Wiley, Wiley Asia, and were marked with a legend designating them for sale only in Europe, Asia, Africa, and the Middle East.  Wiley alleged that selling the foreign textbooks in the United States infringed its U.S. copyrights on its American editions.  Kirtsaeng attempted to assert that the first sale doctrine precluded liability, but was denied the ability to raise the defense by the district court judge.  The jury found that Kirtsaeng was liable for willful copyright infringement for eight works and awarded $75,000 in damages for each work.

            Kirtsaeng appealed the jury's verdict to the Second Circuit Court of Appeals.  The Second Circuit concluded that the district court was correct to preclude Kirtsaeng from raising the first sale doctrine because the books at issue were manufactured outside the United States.  The appellate court based its decision on the language of the 1976 Copyright Act and the Supreme Court's decision in Quality King Distributors, Inc. v. L'anza Research Int'l, Inc., 523 U.S. 135 (1998).  In Quality King, the Supreme Court held that § 602(a)(1), by referencing the exclusive distribution right of § 106(3), incorporates the later subsections' limitations including, in particular, the "first sale" doctrine of § 109.  However, the Supreme Court in Quality King expressly decided not to answer the question of whether or not a copyright work manufactured abroad was eligible for the first sale doctrine exemption of § 109. 

            In reviewing the Second Circuit’s decision, the Supreme Court took Quality King one step further, holding that the first sale doctrine applies to copyrighted works both manufactured in the U.S. and abroad, notwithstanding the 1976 Act's provision against importation of copyrighted works in §§ 602 and 603.  As some have noted, this unique situation occurred because, as written, the 1976 Act—as it relates to the importation of foreign works and the first sale doctrine—has two equally plausible statutory constructions, as evidenced by the fact that the circuit courts are divided on the issue.

            The Supreme Court's decision in Kirtsaeng focused mainly on the correct statutory interpretation of § 109(a) of the 1976 Act. Specifically, the Court answered "whether the words 'lawfully made under this title' restrict the scope of §109(a)'s 'first sale' doctrine geographically." Wiley's interpretation of  § 109(a) follows the Second and Ninth Circuit which apply "a form of geographical limitation" on the imposition of the first sale doctrine, stating that the doctrine only covers works manufactured and created in America.  Kirtsaeng, on the other hand, suggests the words "lawfully made under this title" impose a "non-geographical limitation" on the first sale doctrine.  The Supreme Court agreed, stating:

In our view, §109(a)'s language, its context, and the common-law history of the "first sale" doctrine, taken together, favor a non-geographical interpretation. We also doubt that Congress would have intended to create the practical copyright-related harms with which a geographic interpretation would threaten ordinary scholarly, artistic, commercial and consumer activities. We consequently conclude that Kirtsaeng's nongeographical reading is the better reading of the [1976] Act.

In making its decision, the Court relied on what it considered to be a proper reading of “'lawfully made under this title” in § 109(a) of the 1976 Act.  The Court found "linguistic difficulty" with previous circuit's interpretations of § 109(a).  The Ninth Circuit's interpretation was particularly difficult to reconcile in the Court's opinion, as the interpretation contained a "half-geographical/half-nongeographical interpretation" of the phrase "lawfully made under this title."  The Ninth Circuit, for example in Denbicare U.S.A. Inc. v. Toys "R" Us, Inc., has interpreted the first sale doctrine to cover both (1) copies manufactured aboard but first sold in the United States and (2) copies manufactured abroad but first sold in the United States with the American copyright owner's permission.  According to the Court, "it would seem that those five words either do cover copies lawfully made abroad or they do not" and declined an attempt to read a half-geographic limitation in § 109(a) of the Act.

The Court also looked to the common law to solidify what it held to be the proper statutory interpretation of § 109(a).  "The 'first sale' doctrine is a common-law doctrine with an impeccable historic pedigree . . . [and] makes no geographical distinctions [in the application of the 'first sale' doctrine."  The Court drew on the conclusion reached in Bobbs-Merrill v. Straus, the first case to discuss and interpret the 'first sale' doctrine.  In Bobbs-Merril the Court stated "that the copyright laws were not 'intended to create a right which would permit the holder of the copyright to fasten, by notice in a book . . . a restriction upon the subsequent alienation of the subject-matter of copyright after the owner had parted with the title to one who had acquired full dominion over it."

           The Court's decision in Kirtsaeng provides a clarification of the 'first sale' doctrine as it applies to copyrighted works manufactured in other countries.  It remains to be seen how this long-awaited decision will affect both book publishers and the public at large.

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