Supreme Court Squeezes Patents: TC Heartland v. Kraft Foods & Impression Products v. Lexmark

In a pair of important decisions over the last week, the Supreme Court again changed the patent protection landscape (and again overruled the Federal Circuit). In TC Heartland LLC v. Kraft Foods Group Brands, LLC, the Supreme Court took on the issue of venue for patent infringement litigation. Under previous interpretations of the Patent Act’s venue provisions, defendants were often hailed into far-away jurisdictions that had little connection to them or the infringement. After last week’s decision, defendants can only be sued where (1) the defendant is incorporated or (2) where it committed acts of infringement and has a regular and established place of business. As a result, the district court judges in the Eastern District of Texas will find themselves with many fewer patent cases, and the judges in the District of Delaware will find themselves becoming more knowledgeable about patent law than the Federal Circuit itself.

In Impression Products, Inc. v. Lexmark International, Inc., the Supreme Court took on the issue of patent rights exhaustion. This litigation arises out of Lexmark’s continued battle to control use of its ink jet printer cartridges, which we’ve covered before. Lexmark sued Impression Products for patent infringement, claiming that Impression Products’ reselling of (re-filled) Lexmark printer cartridges constituted patent infringement. In today’s decision, the Court held that once a patent owner (or its authorized licensee) sells a product embodying the patented technology, all patent rights are immediately exhausted, and the patent owner can no longer sue for infringement. Moreover, that exhaustion applies to foreign sales as well, so an importer that imports products that were legitimately produced by the patent holder or its licensee cannot be sued for infringement. However, the Supreme Court decided only whether a patent infringement case could be brought; it did not say that no claim (such as breach of contract) remained, but only that after a first sale, no patent infringement claim could lie against subsequent purchasers.

Expect to see patent holders insist on even more imaginative licensing provisions going forward.

It’s Not Always Sunny in Philadelphia: CertainTeed v. BIPV

2017-05-09 11_18_48-certainteed solar shingles - Google SearchIn CertainTeed v. BIPV, the United States District Court for the Eastern District of Pennsylvania has given us a good reminder that patents (or patent applications) and trade secrets don’t mix well, and also weighed in on the confounding question of whether allegedly confidential information that is not a trade secret can still be protected simply by contract.

CertainTeed manufactures solar roofing panels, and entered into a number of contracts with BIPV, which designs, develops, and sells roofing panels that use solar power generating cells.  As is often the case, CertainTeed and BIPV entered first into a nondisclosure agreement (NDA) to allow them to discuss freely the possibility of doing business together. The parties then entered into a private label agreement to allow BIPV to supply CertainTeed pursuant to CertainTeed’s purchase orders. Later, the parties entered into another NDA, and ultimately CertainTeed decided to purchase some of BIPV’s products, and did so pursuant to purchase orders. But soon after CertainTeed started selling the solar cells it purchased from BIPV, customers started reporting that the panels were igniting on customers’ roofs. Suffice to say, litigation ensued.

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Sis Boom Bah? Cheerleading Uniforms and Copyright Protection—Star Athletica Case Decided!

Can a cheerleader uniform containing combinations of elements like chevrons, lines, stripes, and angles be protected by copyright? Well, the Supreme Court addressed this exact issue on March 22, 2017, in the case of Star Athletica, L.L.C. v. Varsity Brands, Inc. And, ta da, the answer is yes where a design feature of a useful article (1) can be perceived as a two- or three-dimensional work of art separate from the useful article and (2) would qualify as a protectable pictorial, graphic, or sculptural work—either on its own or fixed in some other tangible medium of expression— if it were imagined separately from the useful article in which it is incorporated. And the five member majority (authored by Justice Thomas) agreed that this test was satisfied in the present case.

To appreciate the fuss, and decision, some context is needed. Useful articles are not subject to copyright protection, with the lone exceptions of boat hulls and semi-conductor chips. Section 101 of the Copyright Act in pertinent part states: “the design of a useful article, as defined in this section, shall be considered a pictorial, graphic, or sculptural work only if, and only to the extent that, such design incorporates pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article.” Continue Reading

The Supremes Have Spoken: The Defense of Laches Does Not Apply to Patent Infringement Suits…

but can only collect damages for six years prior to filing suit.

In a stunning upset of years of jurisprudence (Federal Circuit Court of Appeals, prior patent act), the U.S. Supreme Court determined that laches (an equitable remedy) cannot be applied within the “statute of limitations” period of six years (a legal remedy for damages). Laches is an equitable doctrine that is designed to deter rights owners from “sitting on their rights.” So if someone takes no action for a long time, the doctrine of laches can stop that someone from bringing an action many years later because they simply waited too long. This decision pretty much obliterates laches as a defense against a claim for patent infringement.

The case at issue is SCA Hygeine Products Akteibolag v. First Quality Baby Products, decided March 21, 2017. SCA makes adult incontinence products (adult diapers). It has U.S. Patent 6,375,646. In 2003, SCA notified First Quality that it was infringing the SCA patent. First Quality had its own earlier patent (U.S. Patent 5,415,649). First Quality replied by stating that its patent invalidated the SCA patent and, therefore, there was no infringement. SCA did not further respond and First Quality continued to develop and market its products. Continue Reading

The Defend Trade Secrets Act of 2016—A Solution in Search of a Problem?

The Defend Trade Secrets Act of 2016 became the law of the land on May 11, 2016. It was greeted with broad fanfare. Much was written about it, mostly by lawyers, with predictions of how this could change trade-secret litigation. But with nearly a year on the books, and after a close look at its effect, the new law reveals relatively little reported activity.

The substantive trade-secrets portions of the Act mimic the Uniform Trade Secrets Act that all but two states have on their books. So the absence of new substantive law under the Act is not surprising, and attention has focused on the two new parts of the Act—the drastic ex parte seizure order and the whistleblower-protection provisions. But there’s not much to report there, either, as discussed below. The Act may end up being a solution in search of a problem. Continue Reading

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