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June 7, 2018 |
Jane Love Recognized by LMG Americas Women in Business

New York partner Jane Love was recognized as Best in Patent at the seventh annual Euromoney Legal Media Group Women in Business Law Awards. The awards recognize “the individuals, team and firms setting a new standard in progressive work practices and leading the way in their field.” The awards were held on June 7, 2018.  

May 30, 2018 |
Federal Circuit Update (May 2018)

Click for PDF This May 2018 edition of Gibson Dunn’s Federal Circuit Update discusses the proposed elimination of the broadest reasonable interpretation standard during post-issuance proceedings before the PTAB, provides a summary of the pending WesternGeco case before the Supreme Court regarding extraterritorial damages, and briefly summarizes the differences between precedential and non-precedential opinions. This Update also provides a summary of the pending en banc case involving the PTO’s ability to recover attorneys’ fees.  Also included are summaries of recent decisions regarding the burden in venue disputes, the pleading standard for patent infringement following the abrogation of Form 18, and whether equitable estoppel applies after substantial claim amendments. Federal Circuit News On May 8, 2018, the PTO announced proposed rulemaking that would change its prior policy of using the broadest reasonable interpretation (BRI) standard for construing unexpired and proposed amended patent claims in post-issuance proceedings before the PTAB.  Instead, the PTAB would use the Phillips standard applied in district courts and ITC proceedings.  The Notice of Proposed Rulemaking states:  “The Office’s goal is to implement a fair and balanced approach, providing greater predictability and certainty in the patent system.” Judges Prost, Moore, O’Malley and Reyna, who dissented from the denial of the petition for rehearing en banc in In re Cuozzo Speed Technologies, and Judge Newman, who dissented in the panel opinion and from the denial of the petition for rehearing en banc, have historically supported the use of the Phillips standard in post-issuance proceedings.  The notice of proposed rulemaking is available here. On April 26, 2018, the PTO also released guidance on the impact of SAS Institute Inc. v. Iancu, where the Supreme Court mandated that “the Board [] address every claim the petition has challenged.  138 S. Ct. 1348, 1354, 1358 (2018).  In light of this decision, the PTO announced that the Board will now “institute as to all claims or none” and, in addition, if the Board institutes, it “will institute on all challenges raised in the petition.”  Furthermore, “[t]he final written decision will address, to the extent claims are still pending at the time of decision, all patent claims challenged by the petitioner and all new claims added through the amendment process.”  For pending trials that had only been partially instituted, the panels may “issue an order supplementing the institution decision to institute on all challenges raised in the petition” and “may take further action to manage the trial proceeding, including, for example, permitting additional time, briefing, discovery, and/or oral argument, depending on various circumstances and the stage of the proceeding” and even, in some cases, extend the statutory 12-month deadline.  The PTO’s guidance is available here. Supreme Court.  The Supreme Court has decided two cases from the Federal Circuit this Term (Oil States v. Greene’s Energy and SAS v. Iancu); we are awaiting the Court’s decision on a third case: Case Status Issue WesternGeco LLC (Schlumberger) v. ION Geophysical Corp., No. 16-1011 Argued on Apr. 16, 2018 Recoverability of lost profits for foreign use in cases where patent infringement is proven under 35 U.S.C. § 271(f) Upcoming En Banc Federal Circuit Cases NantKwest, Inc. v. Matal, No. 16-1794 (Fed. Cir.):  Whether the PTO can recover attorneys’ fees in litigation under 35 U.S.C. § 145. After the PTAB affirmed the examiner’s rejection of NantKwest’s patent application, NantKwest appealed to the district court.  The PTO prevailed on the merits of the appeal and moved to recover both attorneys’ fees and expert fees.  Section 145 provides that “[a]ll the expenses of the proceedings shall be paid by the applicant.”  Applying this provision, the district court granted the PTO’s request for expert fees, but rejected the PTO’s request for attorneys’ fees.  A panel of the Federal Circuit reversed the district court’s holding as to attorneys’ fees, holding that the “[a]ll expenses of the proceedings” provision under § 145 authorizes an award of attorneys’ fees.  (Decision available here.) The Federal Circuit sua sponte ordered that the panel decision be vacated and that the case be reheard en banc.  Seven amicus briefs were filed, five in support of NantKwest (the International Trademark Association, the Intellectual Property Owners Association, the Intellectual Property Law Association of Chicago, the Association of Amicus Counsel, and the American Bar Association) and two in support of neither party (Federal Circuit Bar Association and American Intellectual Property Law Association).  Oral argument was held on March 8, 2018.  (Audio recording is available here.) Question presented: Did the panel in NantKwest, Inc. v. Matal, 860 F.3d 1352 (Fed. Cir. 2017) correctly determine that 35 U.S.C. § 145’s “[a]ll the expenses of the proceedings” provision authorizes an award of the United States Patent and Trademark Office’s attorneys’ fees? Federal Circuit Practice Update Precedential vs. Non-Precedential Opinions. Internal Operating Procedure (“IOP”) No. 10 governs the use of precedential opinions vs. non-precedential opinions and Rule 36 affirmances.  IOP No. 10 provides that “the purpose of a precedential disposition is to inform the bar and interested persons other than the parties.”  IOP No. 10 at ¶ 2.  Precedential opinions should not be used merely to explain the reasons for the disposition to the parties; that can be conveyed through the use of a non-precedential opinion.  Id. The IOP identifies fourteen situations in which a precedential opinion is appropriate.  See id. at ¶ 4.  Reasons include:  resolution of an issue of first impression; the criticism, clarification, alteration, or modification of an existing rule of law; an actual or apparent conflict in or with past holdings of the court or other courts that is created, resolved or continued; the correction of procedural errors; or the case has been returned by the Supreme Court for disposition, requiring more than mere ministerial obedience to directions of the Supreme Court.  Id. The decision to make an opinion non-precedential is generally governed by a majority vote of the panel.  But, if the decision includes a dissenting opinion, the judge authoring the dissenting opinion may elect to have the entire opinion issue as precedential, regardless of the preferences of the majority judges.  Id. at ¶ 6.  All three judges must agree to use a Rule 36 judgment in order to do so.  Id. Key Case Summaries (April – May 2018) In re ZTE (USA) Inc., No. 18-113 (Fed. Cir. May 14, 2018) (Motion Panel Order):  Burden of persuasion for venue for foreign defendants. American GNC filed a complaint against ZTE in the Eastern District of Texas, and ZTE moved to dismiss for improper venue under 28 U.S.C. § 1406.  While that motion was pending, ZTE moved to transfer to the Northern District of Texas or the Northern District of California under 28 U.S.C. § 1404(a).  The first magistrate judge denied ZTE’s motion to transfer.  A second magistrate judge denied ZTE’s motion to dismiss for improper venue after finding that ZTE failed to show it did not have a regular and established place of business in the Eastern District of Texas.  The magistrate judge noted the lack of uniformity among courts in who bears the burden of proof with respect to venue but determined that, under Fifth Circuit law, the burden lies with the objecting defendant.  Over ZTE’s objections regarding the burden of proof, the district court denied ZTE’s motion to dismiss. ZTE petitioned for a writ of mandamus, which the Federal Circuit granted.  The Court first determined that Federal Circuit—not regional circuit—law governs the placement of the burden of persuasion on the propriety of venue under § 1400(b).  It then held as a matter of Federal Circuit law that, upon motion by the Defendant challenging venue in a patent case, the Plaintiff bears the burden of establishing proper venue and that this holding  “best aligns with the weight of historical authority among the circuits and best furthers public policy.”  The Court remanded to the district court to consider whether venue was proper in light of its holding that the plaintiff, American GNC, bears the burden. Disc Disease Solutions Inc. v. VGH Solutions, Inc., No. 2017-1483 (Fed. Cir. May 1, 2018):  Pleading standard for patent infringement following the abrogation of Form 18. In December 2015, certain amendments to the Federal Rules of Civil Procedure took effect.  Among them was the abrogation of Rule 84 (stating that the “Forms in the Appendix suffice under these rules”) and Form 18 (a form adequate to plead a direct patent infringement claim).  Absent Form 18, complaints now must meet the Iqbal/Twombly standard for pleading to survive a 12(b)(6) motion. Disc Disease filed its complaint the day before the 2015 amendments became effective.  The district court determined that Iqbal/Twombly—not Form 18—applied to Disc Disease’s complaint and dismissed the complaint for failure to state a claim.  The district court later denied reconsideration because it did not view the 2015 amendments to be an intervening change in the law. The Federal Circuit reversed.  The Federal Circuit did not address whether Form 18 or Iqbal/Twombly governed because, it held, the district court erred in dismissing Disc Disease’s complaint even under Iqbal/Twombly‘s pleading standard.  The Court noted that the case “involves simple technology” with only four independent claims in the asserted patents.  Disc Disease’s complaint “specifically identified the three accused products—by name and by attaching photos of the product packaging as exhibits—and alleged that the accused products meet each and every element of at least one claim” of the asserted patents.  This was sufficient to state a claim for patent infringement in these circumstances. John Bean Technologies Corp. v. Morris & Associates, Inc., No. 17-1502 (Fed. Cir. Apr. 19, 2018):  Equitable estoppel when claims are substantively amended or added following ex parte reexamination. John Bean (and its predecessor) and Morris are competitors in the poultry chiller market.  After the patent-in-suit issued to John Bean, Morris sent John Bean’s counsel a demand letter on June 27, 2002, informing him that John Bean had been contacting Morris’s customers and asserting that Morris’s equipment infringes the recently issued patent.  The letter demanded that John Bean stop telling Morris’s customers that Morris’s products infringe John Bean’s patent and advised John Bean that the patent was invalid over a specific prior art reference.  John Bean did not respond, and Morris continued to develop and sell its product. Eleven years later, on December 18, 2013, John Bean filed a request for ex parte reexamination of the patent-in-suit.  During reexamination, John Bean amended the two original claims and added six additional claims in response to a rejection by the PTO.  Shortly after the reexamination certificate issued, John Bean filed a complaint in the U.S. District Court for the Eastern District of Arkansas against Morris for patent infringement.  The district court granted summary judgment in favor of Morris that John Bean’s infringement action was barred by equitable estoppel given John Bean’s silence after the demand letter. The Federal Circuit (Reyna, J.) reversed, holding that the district court abused its discretion in applying equitable estoppel to bar John Bean’s infringement action without considering how the ex parte reexamination affected the patent claims.  The Court explained that the amendments made during reexamination in this case were both substantial and substantive, including by adding new limitations.  As a result, the asserted claims did not exist at the time of Morris’s demand letter.  But the Court recognized that there may be other cases where the asserted claims may be considered identical for the purposes of infringement and also for applying equitable estoppel.  The Court also acknowledged that Morris may have recourse under the affirmative defenses of absolute and intervening rights. Upcoming Oral Argument Calendar For a list of upcoming arguments at the Federal Circuit, please click here. Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Federal Circuit.  Please contact the Gibson Dunn lawyer with whom you usually work or the authors of this alert: Blaine H. Evanson – Orange County (+1 949-451-3805, bevanson@gibsondunn.com) Blair A. Silver – Washington, D.C. (+1 202-955-8690, bsilver@gibsondunn.com) Please also feel free to contact any of the following practice group co-chairs or any member of the firm’s Appellate and Constitutional Law or Intellectual Property practice groups: Appellate and Constitutional Law Group: Mark A. Perry – Washington, D.C. (+1 202-887-3667, mperry@gibsondunn.com) Caitlin J. Halligan – New York (+1 212-351-4000, challigan@gibsondunn.com) Nicole A. Saharsky – Washington, D.C. (+1 202-887-3669, nsaharsky@gibsondunn.com) Intellectual Property Group: Josh Krevitt – New York (+1 212-351-4000, jkrevitt@gibsondunn.com) Wayne Barsky – Los Angeles (+1 310-552-8500, wbarsky@gibsondunn.com)Mark Reiter – Dallas (+1 214-698-3100, mreiter@gibsondunn.com) © 2018 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

April 24, 2018 |
Supreme Court Clarifies That Inter Partes Review Must Decide All Challenged Claims

Click for PDF SAS Institute, Inc. v. Iancu, No. 16-969 Decided April 24, 2018 Today, the Supreme Court held 5-4 that if the Patent Trial and Appeal Board (PTAB) exercises its discretion to institute inter partes review, it must issue an opinion on all challenged claims. Background: Inter partes review is an administrative process in which the PTAB revisits the patentability of claims in existing patents. The PTAB may institute that review if the petitioner shows a “reasonable likelihood” of success on at least one claim. 35 U.S.C. § 314(a). If the PTAB institutes inter partes review, it “shall issue” a written decision as to the patentability of “any patent claim challenged by the petitioner.” 35 U.S.C. § 318(a). In this case, SAS Institute petitioned the PTAB for inter partes review of a certain patent. The PTAB reviewed only some of the claims, as U.S. Patent and Trademark Office (PTO) regulations permit. SAS Institute argues that the PTAB was required to issue a final decision on all of the claims. Issue: Whether the PTAB must issue a final written decision as to every claim challenged by the petitioner when it institutes an inter partes review. Court’s Holding: Yes, if the PTAB institutes inter partes review, it must rule on all challenged claims. “Even under Chevron, we owe an agency’s interpretation of the law no deference unless, after ‘employing traditional tools of statutory construction,’ we find ourselves unable to discern Congress’s. meaning.” Justice Gorsuch, writing for the majority What It Means: The Court determined that the statute’s plain text does not permit the PTAB to decide which claims to review when it grants inter partes review. Instead, if the PTAB decides that the petitioner is reasonably likely to succeed on at least one claim, the statute requires the PTAB to review all of the claims in the petition. The Court rejected SAS Institute’s invitation to overrule Chevron U.S.A. Inc. v. National Resources Defense Council, Inc., 467 U.S. 837 (1984), under which courts defer to reasonable agency interpretations of an ambiguous statute. Here, the Court held that the PTO is not entitled to deference because the statute is not ambiguous. The majority left open the possibility that the PTAB could deny a petition while noting that one or more claims merit reexamination and permitting the petitioners to file a new petition limited to those claims. The America Invents Act’s estoppel provisions prevent a petitioner from arguing that a claim is invalid, in a district court or before the International Trade Commission, on any ground raised or that reasonably could have been raised on inter partes review if the PTAB issues a final written decision on the claim. As a result of today’s decision, if the PTAB institutes review, every claim raised must be addressed—and so likely will trigger the estoppel provisions. The Supreme Court’s ruling may lead the PTAB to grant fewer petitions—meaning more patent litigation in the district courts. Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Supreme Court. Please feel free to contact the following practice leaders: Appellate and Constitutional Law Practice Caitlin J. Halligan +1 212.351.3909 challigan@gibsondunn.com Mark A. Perry +1 202.887.3667 mperry@gibsondunn.com Nicole A. Saharsky +1 202.887.3669 nsaharsky@gibsondunn.com Related Practice: Intellectual Property Wayne Barsky +1 310.552.8500 wbarsky@gibsondunn.com Josh Krevitt +1 212.351.4000 jkrevitt@gibsondunn.com Mark Reiter +1 214.698.3100 mreiter@gibsondunn.com   © 2018 Gibson, Dunn & Crutcher LLP Attorney Advertising: The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

April 24, 2018 |
Supreme Court Upholds PTO Inter Partes Review of Patent Validity

Click for PDF Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, No. 16-712 Decided April 24, 2018 The Supreme Court held 7-2 that the U.S. Patent and Trademark Office’s inter partes review process does not violate the Constitution. Background: In 2011, Congress passed the America Invents Act, which created a new adversarial process within the U.S. Patent and Trademark Office (PTO), known as inter partes review. This process allows anyone to challenge the validity of an existing patent on the grounds that the patent was anticipated by is or obvious in light of the prior art. Under that process, the Patent Trial and Appeal Board (PTAB) – rather than a federal court – decides whether to cancel or confirm a challenged patent, subject to deferential review by the Federal Circuit. Issue: Whether inter partes review violates Article III’s grant of judicial power to the federal courts and the Seventh Amendment’s right to a jury trial. Court’s Holding: No, patents are public rights, and not purely private rights, so Congress may allow non-Article III tribunals (like the PTAB) to adjudicate those rights. “[T]he decision to grant a patent is a matter involving public rights—specifically, the grant of a public franchise. Inter partes review is simply a reconsideration of that grant, and Congress has permissibly reserved the PTO’s authority to conduct that reconsideration.” Justice Thomas, writing for the majority Gibson Dunn filed an amicus brief defending inter partes review for Dell, Facebook, Hewlett Packard, Twitter and others. What It Means: The Court held that patents are public rights that may be granted, abridged, or withdrawn without adjudication by an Article III court or factfinding by a jury. The Court explained that a patent owner’s property rights in an issued patent are subject to PTO’s authority to reexamine or cancel the patent. Although inter partes review resembles adversarial litigation, it determines a party’s patent right against the government – not liability between private parties. The Court rejected the argument that, historically, the validity of a patent could only be challenged in court. Instead, drawing on the argument that Gibson Dunn made in its amicus brief, the Court concluded that inter partes review is consistent with historical practice under the English patent system. The Court emphasized that its holding is narrow and that it did not decide whether infringement actions or other patent matters could be heard outside of an Article III court or whether the retroactive application of inter partes review is constitutional. Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Supreme Court. Please feel free to contact the following practice leaders: Appellate and Constitutional Law Practice Caitlin J. Halligan +1 212.351.3909 challigan@gibsondunn.com Mark A. Perry +1 202.887.3667 mperry@gibsondunn.com Nicole A. Saharsky +1 202.887.3669 nsaharsky@gibsondunn.com   Related Practice: Intellectual Property Wayne Barsky +1 310.552.8500 wbarsky@gibsondunn.com Josh Krevitt +1 212.351.4000 jkrevitt@gibsondunn.com Mark Reiter +1 214.698.3100 mreiter@gibsondunn.com   © 2018 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

March 29, 2018 |
Federal Circuit Update (March 2018)

Click for PDF This March 2018 edition of Gibson Dunn’s Federal Circuit Update discusses the three pending Federal Circuit cases before the Supreme Court that consider issues regarding inter partes review proceedings and extraterritorial damages, and a brief summary of the process for seeking an interlocutory appeal.  This Update also provides a summary of the pending en banc case involving attorneys’ fees for litigation involving the PTO.  Also included are summaries of recent decisions regarding the fair use defense to copyright infringement, factual issues underlying patent eligibility under 35 U.S.C. § 101, and the jurisdiction of the Federal Circuit over Walker Process antitrust claims. Federal Circuit News On Friday, March 16, 2018, the Judicial Conference of the U.S. Court of Appeals for the Federal Circuit was held in Washington, D.C.  At the Conference, Judge Pauline Newman was recognized with the 2018 American Inns of Court Professionalism Award.  Judge Newman has served on the Federal Circuit in active status for the past 34 years. Supreme Court.  The Supreme Court has heard oral argument on two cases from the Federal Circuit this term, and recently granted certiorari on a third case: Case Status Issue WesternGeco LLC (Schlumberger) v. ION Geophysical Corp., No. 16-1011 Certiorari granted Jan. 12, 2018; Argument Apr. 16, 2018 Recoverability of lost profits for foreign use in cases where patent infringement is proven under 35 U.S.C. § 271(f) Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, No. 16-712 Argued on Nov. 27, 2017 Constitutionality of inter partes review under Article III and the Seventh Amendment SAS Institute Inc. v. Matal, No. 16-969 Argued on Nov. 27, 2017 The number of claims that must be addressed by the Patent Trial and Appeal Board in a final written decision during inter partes review Upcoming En Banc Federal Circuit Cases NantKwest, Inc. v. Matal, No. 16-1794 (Fed. Cir.):  Whether the PTO can recover attorneys’ fees in litigation under 35 U.S.C. § 145. After the PTAB affirmed the examiner’s rejection of NantKwest’s patent application, NantKwest appealed to the United States District Court for the Eastern District of Virginia under 35 U.S.C. § 145.  The PTO prevailed on the merits of the appeal and moved to recover both attorneys’ fees and expert fees.  Section 145 provides that “[a]ll the expenses of the proceedings shall be paid by the applicant.”  Applying this provision, the district court granted the PTO’s request for expert fees, but rejected the PTO’s request for attorneys’ fees.  A panel of the Federal Circuit reversed the district court’s holding as to attorneys’ fees, holding that the “[a]ll expenses of the proceedings” provision under § 145 authorizes an award of attorneys’ fees.  (Decision available here.) The Federal Circuit sua sponte ordered that the panel decision be vacated and that the case be reheard en banc.  Seven amicus briefs were filed, five in support of NantKwest (the International Trademark Association, the Intellectual Property Owners Association, the Intellectual Property Law Association of Chicago, the Association of Amicus Counsel, and the American Bar Association) and two in support of neither party (Federal Circuit Bar Association and American Intellectual Property Law Association).  Oral argument was held on March 8, 2018.  (Audio recording is available here.) Question presented: Did the panel in NantKwest, Inc. v. Matal, 860 F.3d 1352 (Fed. Cir. 2017) correctly determine that 35 U.S.C. § 145’s “[a]ll the expenses of the proceedings” provision authorizes an award of the United States Patent and Trademark Office’s attorneys’ fees? Federal Circuit Practice Update How to Appeal from an Interlocutory Decision.  The Federal Circuit has exclusive jurisdiction over interlocutory orders in patent law cases.  See 28 U.S.C. § 1292(c)(1).  Interlocutory orders are appealable as of right if they relate to an injunction, receivers, or certain admiralty cases.  See § 1292(a)(1)–(3).  All other interlocutory appeals are discretionary and require that both the district court and the appeals court agree to hear the issue on appeal. The district court judge must first certify that the issue “involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation.”  28 U.S.C. § 1292(b).  There is no deadline after the substantive order to move for certification under section 1292(b), but the prospective appellant should move promptly.  If the district court declines to issue such a certification order, that is the end of the road (absent mandamus or other extraordinary relief). If the district court certifies an issue for interlocutory appeal, the appeals court has discretion to permit the appeal.  See § 1292(b); see also Regents of U. of Cal. v. Dako N. Am., Inc., 477 F.3d 1335, 1336 (Fed. Cir. 2007) (“Ultimately, this court must exercise its own discretion in deciding whether it will grant permission to appeal an interlocutory order certified by a trial court.”).  A party has ten days after the district court’s certification order to petition the court of appeals.  See § 1292(b); see also Fed. R. App. P. 5(a)(3).  The petition must contain a summary of relevant facts, the question presented, the relief sought, a statement of the reasons why the appeal should be allowed, and copies of the relevant district court orders.  Fed. R. App. P. 5(b)(1)(A)–(E).  A party then has ten days to file an answer in opposition to the petition.  Fed. R. App. P. 5(b)(2).  The petition is decided without the benefit of oral argument, unless the court of appeals orders otherwise.  Fed. R. App. P. 5(b)(3). Key Case Summaries (February – March 2018) Oracle Am., Inc. v. Google LLC, Nos. 17-1118, 17-1202 (Fed. Cir. Mar. 27, 2018):  Direct copying of a copyrighted work for use in a competing platform using the material for the same purpose and function did not, on the facts of the case, amount to fair use. After a jury had determined that Google’s use of Oracle’s copyright in Java API packages was a fair use, the district court denied Oracle’s post-trial motions for judgment as a matter of law and for a new trial.  Applying the four factors for fair use from 17 U.S.C. § 107, the district court held that a reasonable jury could have concluded that the use was fair because:  (1) the purpose and character of Google’s use was transformational; (2) the nature of the copyrighted work was not “highly creative”; (3) the amount and substantiality of the portion used was only as much of the work as was necessary for its transformative use; and (4) Google’s use of the code did not cause harm to the potential market for the copyrighted work. The Federal Circuit (O’Malley, J.) reversed.  At the outset, the Federal Circuit discussed the standard of review and found that fair use is “primarily a legal exercise” and thus, under the Supreme Court’s recent decision in U.S. Bank Nat’l Ass’n ex rel. CWCapital Asset Mgmt. LLC, No. 15-1509 (U.S. Mar. 5, 2018), the inferences to be drawn from the fair use factors are legal in nature and subject to de novo review. In analyzing the first factor, the court found that Google’s use of the Java APIs to create its Android platform was commercial under Ninth Circuit law even though Google gave a free open source license to Android because direct economic benefit is not required, and Google profited indirectly from the platform.  The court also found that Google’s use was not transformative because Google (1) used the API packages for the same purpose as they were used in the Java platform, (2) made no alterations to the expressive content of the copyrighted material, and (3) did not adapt the material for a “new context” when it provided Android for smartphones.  As to the second factor, the court found that the evidence presented at trial would allow reasonable jurors to conclude that functional considerations were substantial and important.  Addressing the third factor, the court noted that Google directly copied 37 API packages and 11,500 lines of code, even though only 170 lines of code were necessary to write in the Java language.  Although the amount of code was a small percentage of the roughly 2.86 million lines of code in Java libraries, the court found the copying qualitatively substantial because it copied 37 APIs in their entirety—even though Google admitted they could have written their own APIs—in order to make the Android platform familiar and attractive to Java programmers.  Turning to the fourth factor, the court noted that Android competed directly with Oracle’s Java platform and that the free nature of Android caused significant market harm to Oracle’s efforts to license Java. Based on those findings, the court noted that the second factor favored a finding of fair use, whereas the first and fourth factors weighed “heavily against” a finding of fair use.  The court considered the third factor to be neutral “at best.”  In balancing these factors, the court concluded that the factors weighed against a finding of fair use, and the court explained that “[t]here is nothing fair about taking a copyrighted work verbatim and using it for the same purpose and function as the original in a competing platform.”  The court added the caveat that it was “not conclud[ing] that a fair use defense could never be sustained in an action involving the copying of computer code.” Berkheimer v. HP Inc., No. 2017-1437 (Fed Cir. Feb. 8, 2018):  Patent eligibility under section 101 presents issues of fact and, under the facts of that case, summary judgment was not appropriate. The Federal Circuit held that the second prong of the Alice ineligibility inquiry under 35 U.S.C. § 101—whether the claim elements “transform the nature of the claim” into patent-eligible subject matter if they “involve more than performance of well-understood, routine, [and] conventional activities previously known to the industry”—is “a factual determination” that may not be suitable for summary judgment if facts are disputed. The district court ruled on summary judgment that eight claims from U.S. Patent No. 7,447,713 were directed to abstract ideas and thus ineligible for patenting under section 101.  The ‘713 Patent describes a means of digitally processing and archiving files by “parsing” the files into multiple parts, comparing those parts, and eliminating redundant material to allegedly improve storage efficiency and reduce storage costs. The Federal Circuit (Moore, J.) reversed.  Berkheimer alleged that the claims at issue covered linking data so as to facilitate “one-to-many” editing (i.e., allowing a single edit to populate to multiple points that use the same data).  The patentee asserted that this “inventive feature” operated in an “unconventional manner” versus mere “copy-and-paste” functionality in the prior art.  Although the panel agreed that all the challenged claims were directed to the abstract ideas of parsing and comparing data—the first prong of the Supreme Court’s Alice test—the panel reversed the district court’s ruling on the second Alice prong for four claims on the basis that the second prong “is a question of fact.”  Specifically, the Federal Circuit panel held that whether the “one-to-many” editing feature was “well-understood, routine, and conventional” was a disputed factual question that could not be decided on summary judgment.  In light of this, the Federal Circuit panel held that whether this added feature was “well-understood, routine, and conventional” was a disputed factual question that could not be decided on summary judgment. On March 12, HP petitioned for rehearing en banc, supported by several amici curiae.  On March 15, the Federal Circuit invited a response to HP’s petition. Aatrix Software, Inc. v. Green Shades Software, Inc., No. 2017-1452 (Fed. Cir. Feb. 14, 2018):  Patent eligibility presents issues of fact not amenable to a Rule 12 motion to dismiss. Following Berkheimer, the Federal Circuit (Moore, J.) issued a parallel ruling concerning the appropriateness of deciding patent eligibility at the Rule 12 stage.  Judge Reyna wrote separately in partial dissent. Aatrix Software asserted two patents directed to systems and methods for importing data onto a computer to allow that data to be processed and viewed.  The district court granted defendant’s motion to dismiss, holding that the claims were not directed to patentable subject matter. On appeal, the Federal Circuit reversed, holding that the complaint set forth a question of fact as to patentability because the complaint alleged that “the claimed software uses less memory, and results in faster processing speed” and thus is patent eligible because “the claimed invention is directed to an improvement in the computer technology itself.” Judge Reyna dissented, challenging the practical implications of the ruling and arguing that Federal Circuit precedent “is clear that the § 101 inquiry is a legal question” and a question “that can be appropriately decided on a motion to dismiss.” Xitronix Corp. v. KLA-Tencor Corp., No. 2016-2746 (Fed. Cir. Feb. 9, 2018):  Jurisdiction over Walker Process-antitrust claims is in the regional circuits, not the Federal Circuit. Under 28 U.S.C. § 1295(a)(1), the Federal Circuit has appellate jurisdiction over actions arising under “any Act of Congress relating to patents.”  Walker Process claims involve allegations that enforcing a patent procured by fraud on the PTO constitutes an antitrust violation under the Sherman Act.  The Federal Circuit has historically treated such claims as presenting “a substantial question of patent law” and thus accepted jurisdiction over them. In Gunn v. Minton, the Supreme Court held that a state law claim alleging legal malpractice in handling a patent case—which likewise implicates U.S. Patent law—did not itself “arise under” or depend on a question of patent law sufficient to convey jurisdiction to federal courts.  568 U.S. 251, 258 (2013). In Xitronix, both sides asserted that the Federal Circuit had appellate jurisdiction over the Walker Process claim under appeal in that case.  No other patent-related claim was asserted on which to base Federal Circuit jurisdiction.  The Federal Circuit, however, raised the question of jurisdiction sua sponte, ruling that, given the Supreme Court’s analogous view in Gunn, jurisdiction for Walker Process claims rested with the regional circuits.  Accordingly, the Federal Circuit overruled its prior contrary precedent and transferred the appeal to the Fifth Circuit. Upcoming Oral Argument Calendar For a list of upcoming arguments at the Federal Circuit, please click here. Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Federal Circuit.  Please contact the Gibson Dunn lawyer with whom you usually work or the authors of this alert: Blaine H. Evanson – Orange County (+1 949-451-3805, bevanson@gibsondunn.com) Blair A. Silver – Washington, D.C. (+1 202-955-8690, bsilver@gibsondunn.com) Please also feel free to contact any of the following practice group co-chairs or any member of the firm’s Appellate and Constitutional Law or Intellectual Property practice groups: Appellate and Constitutional Law Group: Mark A. Perry – Washington, D.C. (+1 202-887-3667, mperry@gibsondunn.com) Caitlin J. Halligan – New York (+1 212-351-4000, challigan@gibsondunn.com) Nicole A. Saharsky – Washington, D.C. (+1 202-887-3669, nsaharsky@gibsondunn.com) Intellectual Property Group: Josh Krevitt – New York (+1 212-351-4000, jkrevitt@gibsondunn.com) Wayne Barsky – Los Angeles (+1 310-552-8500, wbarsky@gibsondunn.com)Mark Reiter – Dallas (+1 214-698-3100, mreiter@gibsondunn.com) © 2018 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

March 9, 2018 |
D.C. Circuit Applies U.S. Copyright Law to Video Content Streamed from Abroad

Click for PDF On March 2, 2018, the United States Court of Appeals for the D.C. Circuit decided an important case addressing two separate, still unsettled questions about the scope of copyright infringement liability.  See Spanski Enterprises v. Telewizja Polska, S.A., No. 17-7051 (D.C. Cir. Mar. 2, 2018).  In brief, the court held that the defendant infringed the plaintiff’s exclusive public performance right when, without authorization, it made copyright-protected television programming available to stream inside the United States, even though the stream was hosted outside the United States.  This was the first time a federal court of appeals considered whether streaming content originating extraterritorially is subject to U.S. copyright liability.  Separately, though the defendant insisted that it could not face liability unless it “volitionally” selected the content delivered to each user, the court held that operating a video-on-demand system which allowed members of the public to receive a copyright-protected performance constituted copyright infringement. Spanski Enterprises involved a longstanding licensing agreement between Telewizja Polska (TVP), the national broadcasting company of Poland, and Spanski Enterprises, a Canadian corporation in the business of distributing Polish-language programming.  A 2009 settlement agreement between the parties established that Spanski alone could distribute the programming at issue in North and South America, whether over the Internet or otherwise.  TVP continued to distribute its programming everywhere else in the world, including by offering episodes for streaming on its website, but used geoblocking technology to ensure that no IP address associated with North or South America could access any programming to which Spanski held the license.  However, in 2011 attorneys for Spanski discovered that users in North and South America could still access programming that should have been geoblocked.  Spanski sued TVP for infringement and, after a five-day bench trial, Judge Tanya Chutkan of the United States District Court for the District of Columbia found TVP liable. On appeal, TVP raised two main challenges to the district court’s ruling.  First, it argued that it could not commit copyright infringement because none of its conduct took place within the United States, and the Copyright Act does not apply extraterritorially.  Second, it argued that a defendant only faces copyright liability if its “conduct was volitional.”  Because TVP merely operated an “automatic content delivery system” from which the user “selects the content it will view” without TVP’s involvement in processing that request, TVP insisted it had not violated the law.  The United States filed an amicus brief on behalf of Spanski, urging the court to reject both TVP’s arguments. In an opinion written by Judge Tatel and joined by Judges Griffith and Wilkins, the court of appeals affirmed, holding TVP liable for infringing Spanski’s exclusive rights.  Applying the Copyright Act to TVP’s conduct is not an impermissible extraterritorial application, the Court explained, because “the infringing performances—and consequent violation of Spanski’s copyrights—occurred on the computer screens in the United States on which the episode’s images were shown.”  TVP argued that when a performance originates internationally but is shown to the public within the country, only the domestic viewer was liable for copyright infringement.  The court disagreed, holding that a broadcaster remains liable for “the infringing display of copyrighted images on the viewer’s screen” whenever such a performance occurs “in the United States,” no matter where the broadcaster is located. The court also held that an unauthorized performance via a video-on-demand system like TVP’s infringed Spanski’s exclusive rights, even without proof that TVP took a “volitional” act, because TVP made it possible for end users to select copyright-protected content.  The text of the Copyright Act, the court explained, imposes liability whenever a defendant makes it possible for “members of the public” to “receive[] the performance” of copyrighted content.  The court found it unnecessary to decide whether a “volitional conduct” requirement exists at all or how far it extends, holding that TVP’s conduct constitutes infringement “whatever the scope of any such requirement might otherwise be.” In rejecting TVP’s “volitional conduct” argument, the court of appeals relied heavily on the Supreme Court’s 2014 decision in American Broadcasting Cos. v. Aereo, Inc., 134 S. Ct. 2498 (2014).  In Aereo, the Supreme Court held that an intermediary service that automatically captured and retransmitted broadcast television signals infringed the public performance right, even where the end user and not the service selected which content to capture.  The D.C. Circuit concluded that Aereo “forecloses [TVP’s] argument that the automated nature of its video-on-demand system or the end user’s role in selecting which content to access insulates it from Copyright Act liability.”  The court noted that TVP’s video-on-demand service involved TVP itself even more directly in the infringing performances than did the system in Aereo: unlike in Aereo, TVP itself selected and uploaded the content its system made available. Both holdings are important developments.  No other federal court of appeals has yet squarely held that U.S. copyright law applies to performances originating internationally that can be viewed inside the United States—though, as Professor Nimmer puts it in his copyright treatise, it requires only “a straightforward application of the statute” to hold that such performances are actionable.   5 Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 17.02 (rev. ed. 2017).  This holding will prevent would-be infringers from evading liability simply by relocating across a border. Separately, though the court refused to decide whether a “volitional conduct” requirement exists, its application of Aereo to TVP’s on-demand system adds fuel to the ongoing debate over the Copyright Act’s scope.  Several courts of appeals, both before and since the Supreme Court’s Aereo decision, have held that the Copyright Act only applies to “volitional conduct.”  BWP Media USA, Inc. v. T & S Software Associates, Inc., 852 F.3d 436 (5th Cir. 2017); Perfect 10, Inc. v. Giganews, Inc., 847 F.3d 657 (9th Cir. 2017); CoStar Group, Inc. v. LoopNet, Inc., 373 F.3d 544 (4th Cir. 2004); Parker v. Google, Inc., 242 F. App’x 833 (3d Cir. 2007).  In its amicus brief, however, the Government argued that Aereo “rejected” a volitional-conduct argument.  Thus, it will be up to future courts to decide the ultimate fate of the defense. Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments.  Please contact the Gibson Dunn lawyer with whom you usually work, or the authors: Howard S. Hogan – Washington, D.C. (+1 202-887-3640, hhogan@gibsondunn.com) Connor S. Sullivan* – New York (+1 212-351-2459, cssullivan@gibsondunn.com) *Prior to joining the firm, Connor Sullivan contributed to an amicus curiae brief filed in this appeal in support of Spanski Enterprises. Please also feel free to contact the following practice group leaders: Intellectual Property Group: Wayne Barsky – Los Angeles (+1 310-552-8500, wbarsky@gibsondunn.com) Josh Krevitt – New York (+1 212-351-4000, jkrevitt@gibsondunn.com) Mark Reiter – Dallas (+1 214-698-3100, mreiter@gibsondunn.com) Media, Entertainment and Technology Group: Scott A. Edelman – Los Angeles (+1 310-557-8061, sedelman@gibsondunn.com) Ruth E. Fisher – Los Angeles (+1 310-557-8057, rfisher@gibsondunn.com) Orin Snyder– New York (+1 212-351-2400, osnyder@gibsondunn.com) Appellate and Constitutional Law Group: Mark A. Perry – Washington, D.C. (+1 202-887-3667, mperry@gibsondunn.com) Caitlin J. Halligan – New York (+1 212-351-4000, challigan@gibsondunn.com) Nicole A. Saharsky – Washington, D.C. (+1 202-887-3669, nsaharsky@gibsondunn.com) Technology Transactions Group: David H. Kennedy – Palo Alto (+1 650-849-5304, dkennedy@gibsondunn.com) Daniel Angel – New York (+1 212-351-2329, dangel@gibsondunn.com) Shaalu Mehra – Palo Alto (+1 650-849-5282, smehra@gibsondunn.com) © 2018 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

February 2, 2018 |
Exmark v. Briggs: Role of Claim Language in Damages Apportionment

New York partner Paul Torchia is the author of “Exmark v. Briggs: Role of Claim Language in Damages Apportionment” published by Bloomberg BNA’s Patent, Trademark & Copyright Journal on February 2, 2018.

January 31, 2018 |
Alert – Federal Circuit Update (January 2018)

Click for PDF This January 2018 edition of Gibson Dunn’s Federal Circuit Update discusses the upcoming switch to NextGen CM/ECF at the Federal Circuit, the three pending Federal Circuit cases before the Supreme Court that consider issues regarding inter partes review proceedings and extraterritorial damages, and the Federal Circuit’s motion procedures.  This Update also provides a summary of the pending en banc case involving attorneys’ fees for litigation involving the PTO.  Also included is a summary of the recent en banc decision regarding judicial review of timeliness determinations in inter partes review proceedings and summaries of recent decisions regarding burdens of proof in marking cases and exceptional fees in light of changes in law. Federal Circuit News NextGen CM/ECF.  On March 19, 2018, NextGen CM/ECF will go live for the Federal Circuit.  The new system will streamline logins and simplify access to the website by eliminating, for example, the need for Java plug-ins.  Users may upgrade their PACER accounts by following instructions found here. Supreme Court.  The Supreme Court has heard oral argument on two cases from the Federal Circuit this term, and recently granted certiorari on a third case: Case Status Issue WesternGeco LLC (Schlumberger) v. ION Geophysical Corp., No. 16-1011 Certiorari granted Jan. 12, 2018 Recoverability of lost profits for foreign use in cases where patent infringement is proven under 35 U.S.C. § 271(f) Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, No. 16-712 Argued on Nov. 27, 2017 Constitutionality of inter partes review under Article III and the Seventh Amendment SAS Institute Inc. v. Matal, No. 16-969 Argued on Nov. 27, 2017 The number of claims that must be addressed by the Patent Trial and Appeal Board in a final written decision during inter partes review Upcoming En Banc Federal Circuit Cases NantKwest, Inc. v. Matal, No. 16-1794 (Fed. Cir.):  Whether the PTO can recover attorneys’ fees in litigation under 35 U.S.C. § 145. After the PTAB affirmed the examiner’s rejection of NantKwest’s patent application, NantKwest appealed to the United States District Court for the Eastern District of Virginia under 35 U.S.C. § 145.  The PTO prevailed on the merits of the appeal and moved to recover both attorneys’ fees and expert fees.  Section 145 provides that “[a]ll the expenses of the proceedings shall be paid by the applicant.”  Applying this provision, the district court granted the PTO’s request for expert fees, but rejected the PTO’s request for attorneys’ fees.  A panel of the Federal Circuit reversed the district court’s holding as to attorneys’ fees, holding that “[a]ll expenses of the proceedings,” under § 145, authorizes an award of attorneys’ fees.  (Decision available here.) The Federal Circuit sua sponte ordered that the panel decision be vacated and that the case be reheard en banc.  Four amicus briefs have been filed, two in support of NantKwest (the International Trademark Association and the Intellectual Property Owners Association) and two in support of neither party (Federal Circuit Bar Association and American Intellectual Property Law Association).  Oral argument is scheduled to be heard on March 8, 2018. Question presented: Did the panel in NantKwest, Inc. v. Matal, 860 F.3d 1352 (Fed. Cir. 2017) correctly determine that 35 U.S.C. § 145’s “[a]ll the expenses of the proceedings” provision authorizes an award of the United States Patent and Trademark Office’s attorneys’ fees? Federal Circuit Practice Update Motion Practice before the Federal Circuit.  Motions before the Federal Circuit are governed by Fed. R. App. P. 27 and Fed. Cir. R. 27, as well as IOP #2.  Below is a brief summary of the rules regarding motion practice. Timing.  A motion may generally be filed at any time.  The opposing party must file its response, if any, within 10 days after service of the motion.  Fed. R. App. P. 27(a)(3)(A).  Any reply to a response must be filed within seven days after the response is served.  Fed. R. App. P. 27(a)(4).  However, certain motions must be filed within a certain period of time.  For example, a motion to dismiss generally must be filed before the opening appellate brief is filed—if the party fails to file the motion in a timely manner, that argument must instead be included in the party’s response to the opening appellate brief.  Fed. Cir. R. 27(f) (joint or unopposed motions to dismiss or remand, however, may be made at any time).  As another example, absent “extraordinary circumstances,” motions for extension of time must be filed at least seven days before the brief is due.  Fed. Cir. R. 26(b)(1). Length.  The motion or response must not exceed 5,200 words; the reply must not exceed 2,600 words.  Fed. R. App. P. 27(d)(2)(A), (C).  Certificates of interest, affidavits, and proofs of service do not count in regards to this word count.  Fed. Cir. R. 27(d).  Motions generally cannot not be incorporated into briefs, except as provided in Fed. Cir. R. 27(e)–(f).  See Fed. Cir. R. 27(g). Content.  A motion must contain a statement for the grounds and relief sought.  Fed. R. App. P. 27(a)(2).  The content of a motion filed before the Federal Circuit preferably includes the material outlined in Fed. Cir. R. 27(a), including: (1) the name of this court; (2) the caption; (3) the title of the motion; (4) the grounds for the motion, the relief sought, and the legal argument to support the motion; (5) the movant’s statement of consent or opposition to the motion; (6) counsel’s or pro se party’s signature; (7) the certificate of interest (see Fed. Cir. R. 47.4); (8) supporting affidavit; and (9) the proof of service (see Fed. R. App. P. 25(d)).  A subset of these preferred contents is provided for the opposition and reply filings in Fed. Cir. R. 27(b) and (c). Motions Panel.  Every month, the Chief Judge appoints a motions panel, consisting of three judges with a designated lead judge.  IOP #2(1).  Whether motions are heard by the motions panel or the merits panel depends in large part on the timing of when the motion is filed.  IOP #2(4).  Non-procedural, opposed motions filed before briefs have been delivered to the merits panel are generally heard by the motions panel (procedural or unopposed motions may be decided by the Clerk).  IOP #2(4), (6).  The motions panel may defer the motion to the merits panel.  IOP #2(4).  If the motion is filed after the briefs have been delivered to the merits panel, the merits panel generally will decide the motion.  IOP #2(6), (7).  Motions are generally decided without oral argument.  Fed. R. App. P. 27(e); IOP #2(5). Key Case Summaries (December 2017 – January 2018) Wi-Fi One, LLC v. Broadcom Corp., No. 2015-1944, -1945, -1946 (Fed. Cir. Jan. 8, 2018) (en banc): IPR time bar determinations by the PTAB are appealable. Broadcom filed a petition for IPR.  Wi-Fi One asserted that Broadcom’s petition was time barred under 35 U.S.C. § 315(b) due to Broadcom being in alleged privity with litigants whose cases predated the one-year time limit.  The PTAB disagreed and instituted the IPR.  On appeal from the Board’s subsequent determination of unpatentability, Wi-Fi One again asserted that the Board had no authority to review the claims given the § 315(b) bar.  The Federal Circuit panel rejected this, following Achates that, per § 314(d), such determinations are unreviewable because they are “final and nonappealable.” The en banc Federal Circuit majority (Reyna, J., joined by Prost, C.J., and Newman, Moore, O’Malley, Wallach, Taranto, Chen, and Stoll, JJ.) recognized “the strong presumption in favor of judicial review of agency actions.”  The majority stated that, to overcome this presumption, “Congress must clearly and convincingly indicate its intent to prohibit judicial review,” which it found lacking here. In concurrence, Judge O’Malley would have relied on a more fundamental rationale—namely that, if the PTO “exceeds its statutory authority by instituting an IPR proceeding under circumstances contrary to the language of § 315(b), [the Federal Circuit] … should review those determinations.”  Judges Hughes, Lourie, Bryson, and Dyk dissented, reading § 314(d) as conveying “Congress’s intent to prohibit judicial review of the Board’s IPR institution decision” as a whole. Arctic Cat Inc. v. Bombardier Recreational Prods. Inc., No. 17-1475 (Fed. Cir. Dec. 7, 2017): Defining the burdens of each party when the court considers a marking challenge. Arctic Cat sued Bombardier alleging infringement of two patents relating to a steering system for personal watercraft.  After the district court denied Bombardier’s motions for summary judgment on various issues, including the failure of Arctic Cat’s sole licensee to mark its products with the patent, the case went to trial.  The jury found that Bombardier failed to prove invalidity of the two asserted patents and that it willfully infringed the two patents.  The jury awarded Arctic Cat damages and a royalty, and the district court trebled damages in a subsequent order.  The district court also denied Bombardier’s motion for judgment as a matter of law as to all issues, including invalidity, marking, damages, and willfulness. The Federal Circuit (Moore, J.) affirmed-in-part and vacated-in-part the district court’s rulings.  The court found substantial evidence supporting the jury’s finding regarding validity and further affirmed the royalty and willfulness holdings, but it vacated the district court’s holding relating to marking. The court acknowledged that the allocation of burdens on marking was a question of first impression that had split district courts.  The court held that an alleged infringer who challenges a patentee’s compliance with § 287 bears only “an initial burden of production to articulate the products it believes are unmarked ‘patented articles’ subject to § 287.”  The court explained: “To be clear, this is a low bar.  The alleged infringer need only put the patentee on notice that he or his authorized licensees sold specific unmarked products which the alleged infringer believes practice the patent.” Once the alleged infringer meets its burden, the patentee has the burden to prove that the identified products do not practice the patented invention. Inventor Holdings, LLC v. Bed Bath & Beyond, Inc., No. 16-2442 (Fed. Cir. Dec. 8, 2017): A plaintiff must reevaluate its case after changes in the law to avoid facing an exceptional case fee award for its continued litigation. Inventor Holdings sued Bed Bath & Beyond (“BBB”) for infringement of a patent in April 2014, which was about two months before the Supreme Court’s decision in Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014).  BBB moved for judgment on the pleadings, the district court granted the motion, and the Federal Circuit in an earlier appeal affirmed the district court under Rule 36.  BBB then moved for attorneys’ fees, arguing that, once Alice issued, Inventor Holdings should have reevaluated its case and dismissed the action because its claims were objectively without merit.  The district court awarded BBB its attorneys’ fees beginning from the date of the Supreme Court’s decision in Alice, and Inventor Holdings appealed. The Federal Circuit (Chen, J.) affirmed.  It determined that the district court acted within its discretion in finding the case exceptional because of the weakness of Inventor Holdings’ § 101 arguments after the issuance of Alice and the need “to deter similarly weak arguments in the future.”  The court held that Alice was “a significant change in the law as applied to the facts of this particular case” and that “there is no uncertainty or difficulty in applying the principles set out in Alice to reach the conclusion” that the claims of the patent at issue were ineligible.  The court further explained that it was Inventor Holdings’ “responsibility to reassess its case in view of new controlling law,” so the district court did not abuse its discretion in awarding fees based on Inventor Holdings’ failure to reassess its case after Alice issued. Upcoming Oral Argument Calendar For a list of upcoming arguments at the Federal Circuit, please click here. Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Federal Circuit.  Please contact the Gibson Dunn lawyer with whom you usually work or the authors of this alert: Blaine H. Evanson – Los Angeles (+1 213-229-7228, bevanson@gibsondunn.com) Blair A. Silver – Washington, D.C. (+1 202-955-8690, bsilver@gibsondunn.com) Please also feel free to contact any of the following practice group co-chairs or any member of the firm’s Appellate and Constitutional Law or Intellectual Property practice groups: Appellate and Constitutional Law Group: Mark A. Perry – Washington, D.C. (+1 202-887-3667, mperry@gibsondunn.com) Caitlin J. Halligan – New York (+1 212-351-4000, challigan@gibsondunn.com) Nicole A. Saharsky – Washington, D.C. (+1 202-887-3669, nsaharsky@gibsondunn.com) Intellectual Property Group: Josh Krevitt – New York (+1 212-351-4000, jkrevitt@gibsondunn.com) Wayne Barsky – Los Angeles (+1 310-552-8500, wbarsky@gibsondunn.com)Mark Reiter – Dallas (+1 214-698-3100, mreiter@gibsondunn.com) © 2018 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

January 30, 2018 |
TC Heartland and Hatch-Waxman: Square Peg in a Round Hole

New York partners Jane Love, Robert Trenchard and Paul Torchia are the authors of “TC Heartland and Hatch-Waxman: Square Peg in a Round Hole,” published in Law360 on January 30, 2018.

January 19, 2018 |
2017 Trade Secrets Litigation Round-Up

2017 saw a number of interesting developments in trade secrets law, including the emergence of several trends under the Defend Trade Secrets Act, as courts grappled with the federal civil trade secrets statute enacted just over a year and a half ago.  On the criminal side, we saw the Trump administration aggressively prosecute individuals for trade secret theft and cyberespionage, including an engineer who allegedly sold military trade secrets to an undercover FBI agent whom he believed to be a Russian spy.  We also saw the U.S. Supreme Court deny certiorari in two closely watched trade secrets cases under the Computer Fraud and Abuse Act. Jason Schwartz, Greta Williams, Mia Donnelly and Brittany Raia discuss these and other significant 2017 developments in trade secrets law in their article “2017 Trade Secrets Litigation Round-Up” published in BNA’s Patent, Trademark & Copyright Journal in January 2018. Reprinted with permission from BNA’s Patent, Trademark & Copyright Journal, January 19, 2018.  © 2018, The Bureau of National Affairs, Inc.  Gibson, Dunn & Crutcher’s lawyers are available to assist in addressing any questions you may have regarding the issues discussed in this update.  Please contact the Gibson Dunn lawyer with whom you usually work or the authors in the firm’s Washington, D.C. office: Jason C. Schwartz (+1 202-955-8242, jschwartz@gibsondunn.com) Greta B. Williams (+1 202-887-3745, gbwilliams@gibsondunn.com) Mia C. Donnelly (+1 202-887-3617, mdonnelly@gibsondunn.com) Brittany A. Raia (+1 202-887-3773, braia@gibsondunn.com) Please also feel free to contact any of the following practice group leaders and members: Labor and Employment Group: Catherine A. Conway – Los Angeles (+1 213-229-7822, cconway@gibsondunn.com) Jason C. Schwartz – Washington, D.C. (+1 202-955-8242, jschwartz@gibsondunn.com) Intellectual Property Group: Josh Krevitt – New York (+1 212-351-2490, jkrevitt@gibsondunn.com) Wayne Barsky – Los Angeles (+1 310-557-8183, wbarsky@gibsondunn.com) Mark Reiter – Dallas (+1 214-698-3360, mreiter@gibsondunn.com) Michael Sitzman – San Francisco (+1 415-393-8200, msitzman@gibsondunn.com) Privacy, Cybersecurity and Consumer Protection Group: Alexander H. Southwell – New York (+1 212-351-3981, asouthwell@gibsondunn.com) Benjamin B. Wagner – Palo Alto (+1 650-849-5395, bwagner@gibsondunn.com) © 2018 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

December 8, 2017 |
In re Cray Inc.: The Federal Circuit’s Antidote to Patent-Venue Forum Shopping

​Washington, D.C. partner Matthew McGill and San Francisco associate Alex Harris are the authors of “In re Cray Inc.: The Federal Circuit’s Antidote to Patent-Venue Forum Shopping,” [PDF] published in the Washington Legal Foundation’s Legal Opinion Letters on December 8, 2017.

November 30, 2017 |
Federal Circuit Update (November 2017)

This November 2017 edition of Gibson Dunn’s Federal Circuit Update discusses the recent Friedman Lecture on Appellate Advocacy by Judge Alan Lourie, the two pending Federal Circuit cases before the Supreme Court that consider issues regarding inter partes review proceedings, and the Federal Circuit’s en banc procedures.  This Update also provides summaries of the two pending en banc cases involving judicial review of timeliness determinations in inter partes review proceedings and attorneys’ fees for litigation involving the PTO.  Also included is a summary of the recent en banc decision regarding motions to amend in inter partes review proceedings and a pair of decisions relating to patent venue and patent eligibility. Federal Circuit News On November 17, 2017, Judge Alan Lourie spoke at the Friedman Memorial Lecture on Excellence in Appellate Advocacy put on by the Federal Circuit Bar Association.  In his remarks, Judge Lourie chiefly addressed the Supreme Court’s recent reversal of a number of Federal Circuit decisions, such as TC Heartland LLC v. Kraft Foods Group Brands LLC.  Judge Lourie stated that the Federal Circuit “should not be affronted” by these reversals, as they have not necessarily occurred because the appellate court was “wrong.”  Instead, these reversals may be attributed to factors such as changes in technology and the Supreme Court’s apparent desire “to limit the continued existence of long-established rules specific to patent law, that set it apart from general law.”  Finally, Judge Lourie stated that he believes the Federal Circuit has been and continues to serve its purpose of providing uniformity in patent law. Supreme Court.  The Supreme Court has heard oral argument on two cases from the Federal Circuit this term: Case Status Issue Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, No. 16-712 Argued on Nov. 27, 2017 Constitutionality of inter partes review under Article III and the Seventh Amendment SAS Institute Inc. v. Matal, No. 16-969 Argued on Nov. 27, 2017 The number of claims that must be addressed by the Patent Trial and Appeal Board in a final written decision during inter partes review Upcoming En Banc Federal Circuit Cases Wi-Fi One, LLC v. Broadcom Corp., No. 15-1944 (Fed. Cir.):  The Federal Circuit’s jurisdiction to review the PTAB’s determination that a petitioner is not time-barred under 35 U.S.C. § 315(b). The PTAB instituted an inter partes review proceeding against Wi-Fi One’s patent.  Wi-Fi One argued that Broadcom was time-barred under 35 U.S.C. § 315(b) from seeking review because Broadcom was in privity with time-barred district court litigants.  The PTAB disagreed, determining that Wi-Fi One did not establish that Broadcom had sufficient control over district court litigation to support a privity finding.  On appeal, the Federal Circuit held that it does not have jurisdiction to review the PTAB’s determination that Broadcom was not time-barred, holding that the Supreme Court’s decision in Cuozzo Speed Technologies, LLC v. Lee, 136 S. Ct. 2131 (2016), did not implicitly overrule prior Federal Circuit precedent on the issue (decision available here).  To date, two amicus briefs have been filed in support of Wi-Fi One (WesternGeco LLC and 3DS Innovations, LLC), eight amicus briefs have been filed in support of neither party (Jeremy Cooper Doerre, New York Intellectual Property Law Association, Federal Circuit Bar Association, Intellectual Property Owners Association, Boston Patent Law Association, Professors of Patent and Administrative Law, American Intellectual Property Law Association, and Biotechnology Innovation Organization), and three amicus briefs have been filed in support of Broadcom (Oracle, Intel, and Apple).  Oral argument was heard on May 4, 2017. Question presented: Should this court overrule Achates Reference Publishing, Inc. v. Apple Inc., 803 F.3d 652 (Fed. Cir. 2015) and hold that judicial review is available for a patent owner to challenge the PTO’s determination that the petitioner satisfied the timeliness requirement of 35 U.S.C. § 315(b) governing the filing of petitions for inter partes review? Nantkwest, Inc. v. Matal, No. 16-1794 (Fed. Cir.):  Whether the PTO can recover attorneys’ fees in litigation under 35 U.S.C. § 145. After the PTAB affirmed the examiner’s rejection of Nantkwest’s patent application, Nantkwest appealed to the United States District Court for the Eastern District of Virginia under 35 U.S.C. § 145.  The PTO prevailed on the merits of the appeal and moved to recover both attorneys’ fees and expert fees.  Section 145 provides that “[a]ll the expenses of the proceedings shall be paid by the applicant.”  Applying this provision, the district court granted the PTO’s request for expert fees, but rejected the PTO’s request for attorneys’ fees.  A panel of the Federal Circuit reversed the district court’s holding as to attorneys’ fees, holding that “[a]ll expenses of the proceedings,” under § 145, authorizes an award of attorneys’ fees.  (Decision available here.)  Following the entry of judgment, however, the Federal Circuit sua sponte ordered that the panel decision be vacated and that the case be reheard en banc.  To date, no amicus briefs have been filed, and oral argument has not yet been scheduled. Question presented: Did the panel in NantKwest, Inc. v. Matal, 860 F.3d 1352 (Fed. Cir. 2017) correctly determine that 35 U.S.C. § 145’s “[a]ll the expenses of the proceedings” provision authorizes an award of the United States Patent and Trademark Office’s attorneys’ fees? Federal Circuit Practice Update The Federal Circuit’s Internal Operating Procedure No. 14 governs which judges may vote on whether to take a case en banc, and which judges may participate in the en banc.  Consistent with 28 U.S.C. § 46(c), the composition of the en banc court generally consists of all active judges who are not recused and not disqualified, as well as any senior judge who participated in the panel decision that is now being reviewed by the en banc court.  IOP #14.7.  The decision of whether to rehear a case en banc is made by the active judges and panel judges.  IOP #14.2.  As such, judges sitting by designation on a panel may vote on whether to take a case en banc, but may not participate in the en banc itself.  Decisions for hearings en banc are only made by active judges.  IOP #14.1.  Therefore, it is possible that a highly contentious issue in an en banc case might turn on the composition of the original panel. By way of illustration, the en banc court issued its decision in Aqua Products, Inc. v. Matal (PTO), 2015-1177, on October 4, 2017 (summary of the decisions below).  The decision consisted of five written opinions (Judge Stoll did not participate): An opinion by Judge O’Malley, in which Judges Newman, Lourie, Moore, and Wallach joined, and Judges Dyk and Reyna concurred in the result; An opinion by Judge Moore, in which Judges Newman and O’Malley joined; An opinion by Judge Reyna, in which Judge Dyk joined, and Chief Judge Prost and Judges Taranto, Chen, and Hughes joined in part; An opinion by Judge Taranto, in which Chief Judge Prost and Judges Chen and Hughes joined, and Judges Dyk and Reyna joined in certain respects; and An opinion by Judge Hughes, in which Judge Chen joined. The original panel consisted of Chief Judge Prost, Judge Reyna, and Chief District Judge Stark, sitting by designation.  Judge Stark did not participate in the en banc proceedings because he was sitting by designation.  But if a senior judge had been on the panel instead of Judge Stark, he or she would have been permitted to participate in the en banc proceedings.  And if that judge had joined only Judge O’Malley’s opinion, then no part of Judge Reyna’s opinion or Judge Taranto’s opinion would have commanded a majority of the court’s vote. Key Case Summaries (October – November 2017) In re Aqua Prods., Inc., No. 15-1177 (Fed. Cir. Oct. 4, 2017) (en banc):  Allocation of the burdens of persuasion and production when a patent owner moves to amend in an inter partes review proceeding.  The PTAB instituted an inter partes review proceeding against Aqua’s patent, which relates to automated swimming pool cleaners.  Aqua moved to amend the challenged claims to distinguish the cited prior art.  The PTAB, however, denied Aqua’s motion, determining that Aqua failed to carry its burden of showing patentability of the proposed substitute claims over the prior art of record.  On appeal, the PTO intervened to defend the PTAB’s decision.  A panel of the Federal Circuit affirmed, but the court subsequently granted Aqua’s petition for rehearing en banc. Sitting en banc, the Federal Circuit issued five separate opinions: a lead opinion written by Judge O’Malley, concurring opinions by Judges Moore and Reyna, and dissenting opinions by Judges Taranto and Hughes.  A majority of the Federal Circuit held that the PTO has not set forth an interpretation of 35 U.S.C. § 316(e)—titled “Evidentiary Standards”—that is entitled to deference under Chevron.  The court further held that § 316(e) is ambiguous as to the allocation of the burden of persuasion of establishing the unpatentability of substitute claims, but that the most reasonable interpretation is that the petitioner bears the burden of persuasion.  A majority also held that 35 U.S.C. § 316(d) and 37 C.F.R. § 42.121 place a default burden of production on the patentee.  As to whether the PTAB can sua sponte raise patentability challenges to a substitute claim, a majority concluded that the record before the court did not present the “precise question,” and thus opted not to answer it.  The Federal Circuit thus vacated the PTAB’s denial of Aqua’s motion to amend and remanded for the PTAB to reconsider the motion without placing the burden of persuasion on the patent owner. Two-Way Media Ltd. v. Comcast Cable Commc’ns, LLC, Nos. 16-2531, 16-2532 (Fed. Cir. Nov. 1, 2017): Importance of claim scope in 101 eligibility determinations. Two-Way Media sued Comcast alleging infringement of four patents.  The patents all involved IP multicasting, which provided a way to transmit a packet of information to multiple recipients.  Comcast moved for judgment on the pleadings, arguing that the claims were ineligible under 35 U.S.C. § 101.  Two-Way Media argued that the motion was premature because claim construction was necessary to evaluate the claims, but Two-Way Media also provided proposed claim constructions for certain terms.  Two-Way Media also asked the district court to take judicial notice of expert reports and testimony from other cases addressing the novelty and nonobviousness of the claimed inventions.  The district court adopted Two-Way Media’s proposed claim constructions for its analysis of the motion but denied Two-Way Media’s request to take judicial notice of the expert materials because the evidence was irrelevant to an eligibility analysis under § 101.  The district court then found the claims patent ineligible under § 101, and Two-Way Media appealed. The Federal Circuit (Reyna, J.) affirmed.  The court separated its analysis of the four patents into two groups.  In analyzing step 1 for the first set, the court explained that the representative claim required the functional results of converting, routing, controlling, monitoring, and accumulating records, but the claim did not describe how to achieve those results “in a non-abstract way.”  The court concluded that the claim constructions proposed by Two-Way Media did not change the analysis because the constructions “recite only conventional components” and were not directed to a scalable network architecture—as argued by Two-Way Media—that improved the functioning of the system. Turning to step two, the court held that the claimed elements did not provide an inventive concept to render the claims patent eligible.  The court concluded that, although the specification described the system architecture as a technological innovation, the representative claim failed to recite the purportedly innovative system architecture.  The court explained: “[t]he main problem that Two-Way Media cannot overcome is that the claim—as opposed to something purportedly described in the specification—is missing an inventive concept.”  The court therefore found the representative claim ineligible, even though the specification purportedly described an innovative system architecture, because the claim did not cover the same scope as described in the specification.  The court also rejected Two-Way Media’s argument regarding its evidence of novelty and nonobviousness because such evidence was not material to the eligibility analysis. The court similarly found the second set of patents ineligible under § 101.  According to the court, the district court did not err in citing to the preamble of the patents to determine the “focus” of the claims.  The court noted that the claims were broader than the claims in the first set of patents and were similarly directed to abstract ideas.  The claims also suffered from the same problem as the representative claim of the first set of patents: the claims did not cover an inventive concept, such as the purportedly innovative system architecture, despite the specification’s discussion of that architecture. In re Micron Techs., Inc., No. 2017-138 (Fed. Cir. Nov 15, 2017): The venue defense in TC Heartland was not previously “available” to defendants and thus not waived under Rule 12. In 2016, the President and Fellows of Harvard College filed a patent infringement case in the District of Massachusetts against Micron Technologies, which is incorporated in Delaware.  Under the then-prevailing view of venue articulated in V.E. Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574, 1575 (Fed. Cir. 1990), venue would have been proper.  As such, Micron, like many defendants, did not object to venue with a motion under Rule 12(b)(3). After the Supreme Court’s TC Heartland decision earlier this year, venue under 28 U.S.C. § 1400(b) on the basis of where Micron resides became improper, as the Court determined that “a domestic corporation ‘resides’ only in its State of incorporation for purposes of the patent venue statue” (here, Delaware, not Massachusetts).  The Supreme Court, however, stated that this determination was not a “change” of law, but rather an articulation of what the law always had been (notwithstanding the Federal Circuit’s view in V.E. Holding). Accordingly, when Micron brought a post-TC Heartland motion objecting to venue, the district court held that Micron had waived its venue objection by not raising it in its initial Rule 12 motion, there being no change of law to make waiver inapplicable.  See Rule 12(g)(2), (h)(1)(A).  Other district courts, however, have reached different conclusions, holding that the venue defense stated in TC Heartland was not previously available, and thus waiver does not apply. In Micron, the Federal Circuit resolved the split, holding that, as a matter of “common sense” the venue objection was not “available” until after TC Heartland.  Writing for the panel, Judge Taranto explained:  “[B]efore then, it would have been improper, given controlling precedent, for the district court to dismiss or to transfer for lack of venue.”  Given that the Federal Circuit’s controlling V.E Holding decision precluded district courts from adopting a venue defense or objection of this type, “the defense or objection was not ‘available’ to the movant.” Nevertheless, the panel held that waiver by operation of Rule 12 “is not the sole basis” on which a district court might rule that a defendant had forfeited an otherwise valid venue defense.  Citing a district court’s inherent authority, the panel noted that a court could find forfeiture of a venue objection if not timely raised, barring defendants from taking a “tactical wait-and-see” approach and foregoing earlier opportunities to raise the defense. Upcoming Oral Argument Calendar For a list of upcoming arguments at the Federal Circuit, please click here. Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Federal Circuit.  Please contact the Gibson Dunn lawyer with whom you usually work or the authors of this alert: Blaine H. Evanson – Los Angeles (213-229-7228, bevanson@gibsondunn.com) Blair A. Silver – Washington, D.C. (202-955-8690, bsilver@gibsondunn.com) Please also feel free to contact any of the following practice group co-chairs or any member of the firm’s Appellate and Constitutional Law or Intellectual Property practice groups: Appellate and Constitutional Law Group: Mark A. Perry – Washington, D.C. (202-887-3667, mperry@gibsondunn.com) James C. Ho – Dallas (214-698-3264, jho@gibsondunn.com) Caitlin J. Halligan – New York (212-351-4000, challigan@gibsondunn.com) Nicole A. Saharsky – Washington, D.C. (202-887-3669, nsaharsky@gibsondunn.com) Intellectual Property Group: Josh Krevitt – New York (212-351-4000, jkrevitt@gibsondunn.com) Wayne Barsky – Los Angeles (310-552-8500, wbarsky@gibsondunn.com)Mark Reiter – Dallas (214-698-3100, mreiter@gibsondunn.com) © 2017 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

November 2, 2017 |
2016/2017 Federal Circuit Year in Review

We are pleased to present Gibson Dunn’s fifth “Federal Circuit Year In Review,” providing a statistical overview and substantive summaries of the 124 precedential patent opinions issued by the Federal Circuit over the 2016-2017 year. This term was marked by one en banc decision, a case of first impression regarding the post-AIA on-sale bar (Helsinn Healthcare S.A. v. Teva Pharm. USA, Inc., 855 F.3d 1356 (Fed. Cir. 2017)), and significant decisions in patent law jurisprudence with regard to subject matter eligibility (McRO, Inc. v. Bandai Namco Games America Inc., 837 F.3d 1299 (Fed. Cir. 2016) and Elec. Power Grp. v. Alstom S.A., 830 F.3d 1350 (Fed. Cir. 2017)), the scope of covered business method review (Secure Axcess, LLC v. PNC Bank Nat’l Ass’n, 848 F.3d 1370 (Fed. Cir. 2017) and Unwired Planet, LLC v. Google Inc., 841 F.3d 1376 (Fed. Cir. 2016)), and the Federal Circuit’s jurisdiction to review findings related to the PTAB’s decision to institute IPR (Husky Injection Molding Sys., Ltd. v. Athena Automation Ltd., 838 F.3d 1236 (Fed. Cir. 2016)).  The issues most frequently addressed in precedential decisions by the Court over the last year were: claim construction (39 opinions); obviousness (36 opinions); infringement (26 opinions); anticipation (18 opinions); and written description, enablement, or definiteness (18 opinions). The Year In Review provides a concise, substantive analysis of the Court’s precedential patent decisions. The easy-to-use Table of Contents is organized by issue, so that the reader can easily identify all of the relevant cases bearing on the issue of choice. Use the Federal Circuit Year In Review to find out: Which issues have a better chance on appeal based on the Federal Circuit’s history of affirming or reversing that issue in the past, including the real rate of affirmance on claim construction. The average length of time from issuance of a final decision in the district court and docketing at the Federal Circuit to issuance of a Federal Circuit opinion on appeal. What the likelihood of success is at the Federal Circuit if you are a patentee or the opponent based on the issue being appealed. The Federal Circuit’s history of affirming or reversing cases from a specific district court. How likely a particular panel will be to render a unanimous opinion or a fractured decision with a majority, concurrence, or dissent. The Federal Circuit’s affirmance/reversal rate in cases from the district court, ITC, and the PTO. The Year In Review provides a statistical analysis of how the Federal Circuit has been deciding precedential patent cases, such as affirmance and reversal rates (overall, by issue, and by District Court), average time from lower tribunal decision to key milestones (oral argument, decision), win rate for patentee versus opponent (overall, by issue, and by District Court), decision rate by Judge (number of unanimous, majority, plurality, concurring, or dissenting opinions), and other helpful statistics. The Year In Review is an ideal resource for practitioners seeking an objective report on the Court’s decisions. Please click here to view the FEDERAL CIRCUIT YEAR IN REVIEW Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Federal Circuit.  Please contact the Gibson Dunn lawyer with whom you usually work or the authors of this alert: Mark A. Perry – Washington, D.C. (+1 202-887-3667, mperry@gibsondunn.com) Michael Sitzman – San Francisco (+1 415-393-8200, msitzman@gibsondunn.com) Blair A. Silver – Washington, D.C. (+1 202-955-8500, bsilver@gibsondunn.com) Please also feel free to contact any of the following practice group co-chairs or any member of the firm’s Appellate and Constitutional Law or Intellectual Property practice groups:  Appellate and Constitutional Law Group:Mark A. Perry – Washington, D.C. (+1 202-887-3667, mperry@gibsondunn.com) James C. Ho – Dallas (+1 214-698-3264, jho@gibsondunn.com) Caitlin J. Halligan – New York (+1 212-351-4000, challigan@gibsondunn.com) Nicole A. Saharsky – Washington, D.C. (+1 202-887-3669, nsaharsky@gibsondunn.com) Intellectual Property Group: Josh Krevitt – New York (+1 212-351-4000, jkrevitt@gibsondunn.com) Wayne Barsky – Los Angeles (+1 310-552-8500, wbarsky@gibsondunn.com)Mark Reiter – Dallas (+1 214-698-3100, mreiter@gibsondunn.com) © 2017 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

September 15, 2017 |
Clarity at Long Last: Post-Verdict Compensatory Patent Infringement Damages

​Los Angeles associate Brooke Myers Wallace is the author of "Clarity at Long Last: Post-Verdict Compensatory Patent Infringement Damages," [PDF] published by Bloomberg BNA’s Patent, Trademark & Copyright Journal on September 15, 2017.

September 14, 2017 |
Accelerating Progress Toward a Long-Awaited Federal Regulatory Framework for Autonomous Vehicles in the United States

House Passes the SELF DRIVE Act, Consideration in Senate Committee Hearing on Including Large Commercial Autonomous Vehicles, and New Department of Transportation Guidelines Autonomous vehicles have operated for some time under a patchwork of state and local rules with limited federal oversight, but the last two weeks have seen a number of interesting legal developments towards a national regulatory framework.  The accelerated pace of policy proposals—and debate surrounding them—is set to continue as automakers’ request more autonomous vehicles be put on the road for testing.  While it seems likely that the federal government will step into a leading role by passing initial legislation later this year or early next, autonomous vehicles operating on public roads are likely to remain subject to both federal and state regulation.   SELF DRIVE Act On September 6, 2017, lawmakers in the House took a major step toward advancing the development of autonomous vehicles, approving legislation that would put vehicles onto public roads more quickly and curb states from slowing their spread.  Amid strong bipartisan support the House voted to pass H.R. 3388,[1] a bill which is intended to accelerate the development of self-driving cars.  The "Safely Ensuring Lives Future Deployment and Research In Vehicle Evolution" or "SELF DRIVE" Act empowers the National Highway Traffic Safety Administration (NHTSA) with the oversight of manufacturers of self-driving cars through enactment of future rules and regulations that will set the standards for safety and govern areas of privacy and cybersecurity relating to such vehicles.  One key aspect of the Act is broad preemption of the states from enacting legislation that would conflict with the Act’s provisions or the rules and regulations promulgated under the authority of the Act by the NHTSA.   While state authorities will likely retain their ability to oversee areas involving human driver and autonomous vehicle operation, the Act contemplates that the NHTSA would continue to retain its authority to oversee manufacturers of autonomous vehicles, just as it has with non-autonomous vehicles, to ensure overall safety.  In addition, the NHTSA is required to create a Highly Automated Vehicle Advisory Council to study and report on the performance and progress of autonomous vehicles.  This new council is to include members from a wide range of constituencies, including members of the industry, consumer advocates, researchers, and state and local authorities.  The intention is to have a single body (the NHTSA) develop a consistent set of rules and regulations for manufacturers, rather than continuing to allow the states to adopt a web of potentially widely differing rules and regulations that may ultimately inhibit development and deployment of autonomous vehicles. While a uniform, concrete set of standards for the entire country has been welcomed by automakers and business lobbyists alike,[2] whether the NHTSA has the resources to fulfil its supervisory role as envisaged by the bill remains a real question—echoed by the concerns of a number of consumer advocate groups.[3]  The requirements that manufacturers develop specific privacy and cybersecurity plans before being allowed to sell vehicles, along with specific requirements for disclosures to vehicle purchasers, are likely to please many consumer advocates.  However, while the Act does provide for a phase-in period, it would ultimately increase the possible number of autonomous vehicles on the road dramatically.  Currently, automakers and companies interested in testing self-driving technology must apply to the NHTSA for exemptions in relation to certain safety requirements that non-autonomous vehicles must meet; and the agency only grants 2,500 exemptions per year.  This bill increases that cap to 25,000 per year initially, and expands it up to 100,000 annually in three years’ time.  Although the number of exemptions represents a slight decrease from the original draft bill, the bill passed by the House could still amount to potentially millions of such cars each year: a tall order for an agency which does not yet have an administrator.[4]   Senate Committee Hearing on Large Commercial Autonomous Vehicles The SELF DRIVE Act now moves to the Senate, which has its own self-driving car legislation under review by the Commerce, Science and Transportation Committee.[5]  One key difference between the House and Senate versions of the legislation appears to be in the area of commercial vehicles, as the House version is focused on passenger cars and light trucks, not heavy commercial vehicles over 10,000 pounds (4,536 kg).  The Chair and some other members of the Senate Commerce Committee appear inclined to include large commercial vehicles in any autonomous vehicle legislation that makes its way to the President, and, as a result, scheduled a public hearing on September 13, 2017, to consider the impact of large autonomous vehicles on road safety.[6] Various witnesses at the September 13 hearing—including a trucking trade group, truck maker Navistar International Corp. and a representative from the National Safety Council—urged the Senate panel to develop a clear, uniform federal regulatory framework for autonomous vehicles by including large commercial vehicles in the Senate bill.  Labor union Teamsters opposed such a move,[7] citing concerns that self-driving trucks are subject to a very different set of safety and operational issues—warranting their own regulation and bill—and also raised particular concerns over cybersecurity and the loss of driving jobs.  Senator Gary Peters (D-Mich), who has been working with Republicans to draft self-driving legislation, said at the hearing he did not support including commercial trucks and that safety and job impacts must be addressed further.  Senator John Thune (R-S.D.), the Committee Chair, supports the inclusion of commercial trucks in the legislation, but said no final decision had been made. Thune indicated that he hoped to introduce a bill and get committee approval by early October 2017.[8] Revised Department of Transport Guidelines In addition to the flurry of activity in Congress, on September 12, 2017, the Department of Transportation (DoT) released new safety guidelines[9] for autonomous vehicles to replace those issued by the Obama administration last year.  Transportation Secretary Elaine Chao announced that these purely voluntary guidelines ("a nonregulatory approach to automated vehicle technology safety")[10] are designed to clarify the federal government’s view of best practices for vehicle developers and state legislators and officials as more test cars reach public roads, and offer the lighter regulatory touch for which automakers previously advocated.[11]  Through the guidelines, the DoT avoids any compliance requirement or enforcement mechanism, at least for the time being, as the scope of the guidance is expressly to "support the industry as it develops best practices in the design, development, testing, and deployment of automated vehicle technologies." Under the Obama administration, automakers were asked to follow a 15-point safety assessment before putting test vehicles on the road.[12]  The new, pared-down guidelines reduce the suggested safety assessment to a 12-point voluntary assessment, asking automakers to consider cybersecurity, crash protection, how the vehicle interacts with occupants and backup plans in the event that the vehicle encounters a problem.  Significantly, the DoT is no longer specifically asking automakers to address in a safety assessment any ethical or privacy issues (although a footnote to the guidelines does suggest the DoT recognizes the continued relevance of such issues).  Nor is it requesting that manufacturers share information beyond crash data, apparently reflecting concerns expressed by automakers in response to the previous guidelines, which suggested that automakers collect, store, analyze and share with NHTSA, and potentially with competitors, event reconstruction data from "near misses", i.e. positive outcomes in which the system correctly detects a safety-relevant situation, and successfully avoids an incident.[13]  The federal guidelines are purposely crafted in a way that they can be adapted, and will be updated again next year.  NHTSA has invited public comment on the voluntary guidance and best practices.[14] As may be evident from the goals of the SELF DRIVE Act noted above, the delineation of federal and state regulatory authority has emerged as a key issue, chiefly because autonomous vehicles do not fit neatly into the existing regulatory structure.  Historically, the DoT has regulated and enforced how vehicles are built, particularly with regard to overall safety concerns, but states are typically responsible for the operation of vehicles.  The DoT’s new best practices for state legislatures explicitly seek to continue this basic schema and allocate overarching regulatory authority for autonomous vehicles to the federal level.  ("[A]llowing NHTSA alone to regulate the safety design and performance aspects of ADS technology will help avoid conflicting federal and state laws and regulations that could impede deployment.")[15]  States can still regulate autonomous vehicles, but the guidance encourages states not to pass laws that would "place unnecessary burdens on competition and innovation by limiting [autonomous vehicle] testing or deployment to motor vehicle manufacturers only."  It remains to be seen how the DoT’s proposed strict delineation will cope with issues surrounding liability for auto accidents.[16]   California, as a state that has previously enacted legislation and regulations requiring automakers to publicly report crashes of autonomous test vehicles and which requires and issues approvals prior to testing of autonomous vehicles on California public roads,[17] said it was reviewing the new guidelines.[18] Looking Ahead In addition to putting some limits on roll-out and affording some assurances on security and privacy safeguards, the new legislation and guidelines indicate strong federal intent to provide more uniformity of requirements imposed on manufacturers across the country, and to keep the general oversight of the design and manufacture of autonomous vehicles with the federal government (as it has been) rather than cede such power to the individual states.  As a result, the intent seems to be to speed both development and deployment of autonomous vehicle technologies. If the Senate passes legislation that would amend the SELF DRIVE Act in any significant way, the resulting bills will need to go to Conference to reconcile any differences between the versions passed by the two chambers.  In addition, given the very busy nature of the legislative calendar this year, particularly that of the Senate, it is hard to say whether Congress will be able to send some version of the SELF DRIVE Act to the President for ratification into law before the end of the year, or whether additional time will be required.  However, what does seem to be clearly emerging from recent events is the near-universal, bipartisan support in Congress and the Executive branch for the need to take back the reins from the states and amend federal safety requirements to account for the introduction of autonomous vehicles on U.S. roads in the form of new federal legislation and regulations.   Debate surrounding the regulation of large commercial vehicles is proving more contentious, in large part because the specter of potential job losses resonates strongly with labour groups.  Whether or not large commercial vehicles are ultimately included in the bills currently being considered by Congress, a national regulatory framework for all autonomous vehicles has moved well within reach.  We will continue to carefully monitor these developments and the bevy of unresolved policy issues—safety, ethics, data privacy, cybersecurity, insurance—that will inevitably accompany them. [1] H.R. 3388, 115th Cong. (2017), available at https://www.congress.gov/bill/115th-congress/house-bill/3388/text [2] Cecilia Kang, Self-Driving Cars’ Prospects Rise With Vote by House, N.Y. Times, Sept. 6, 2017, https://www.nytimes.com/2017/09/06/technology/self-driving-cars-prospects-rise-with-vote-by-congress.html. [3] Id. [4] NHTSA Administrator, NHTSA: National Highway Traffic Safety Administrator, https://one.nhtsa.gov/About-NHTSA/About-the-Administrator, (last visited Sept. 12, 2017) ("The position of NHTSA Administrator  is currently unfilled."). [5] U.S. Chamber of Commerce, Senate Self Driving Car Legislation Staff Draft, Sept. 8, 2017, available at https://www.uschamber.com/report/senate-self-driving-car-legislation-staff-draft) [6] U.S. Senate Committee on Commerce, Science and Transportation, Press Release, Sept. 6, 2017, available at https://www.commerce.senate.gov/public/index.cfm/pressreleases?ID=BAC7FBCE-424B-4C61-8082-71B3E3D9333B [7] Gina Chon, Teamsters Union Tries to Slow Self-Driving Truck Push, N.Y. TIMES, Aug. 11, 2017,  https://www.nytimes.com/2017/08/11/business/dealbook/teamsters-union-tries-to-slow-self-driving-truck-push.html?_r=0 [8] Reuters, Trucking Industry, Navistar back U.S. Self-Driving Legislation, N.Y. TIMES, Sept. 13, 2017,  https://www.nytimes.com/reuters/2017/09/13/business/13reuters-autos-selfdriving.html?_r=0 [9] Automated Vehicles for Safety, NHTSA: National Highway Traffic Safety Administrator, https://www.nhtsa.gov/technology-innovation/automated-vehicles. [10] U.S. Dept. of Transp., Automated Driving Systems 2.0: A Vision for Safety ii (September 2017), https://www.nhtsa.gov/sites/nhtsa.dot.gov/files/documents/13069a-ads2.0_090617_v9a_tag.pdf. [11] Patti Waldmeir & Leslie Hook, Trump administration promises light touch on driverless cars, Financial Times, Sept. 12, 2017, https://www.ft.com/content/ff3a02fc-97e6-11e7-a652-cde3f882dd7b. [12] U.S. Dept. of Transp., Federal Automated Vehicles Policy, Sept. 2016, https://www.transportation.gov/AV/federal-automated-vehicles-policy-september-2016 [13] Id., at pp. 17-18. [14] Notice of Public Availability and Request for Comments, Docket No. NHTSA-2017-0082, (signed on Sept. 12, 2017), https://www.nhtsa.gov/sites/nhtsa.dot.gov/files/documents/ads2.0_frn_08312017.pdf [15] U.S. Dept. of Transp., Automated Driving Systems 2.0: A Vision for Safety ii (September 2017), at § 2, https://www.nhtsa.gov/sites/nhtsa.dot.gov/files/documents/automated-driving-systems-2.0-best-practices-for-state-legislatures.pdf [16]  Kang, supra note 2. [17] Testing of Autonomous Vehicles, State of California: Department of Motor Vehicles, https://www.dmv.ca.gov/portal/dmv/detail/vr/autonomous/testing. [18] Russ Mitchell, Driverless cars on public highways? Go for it, Trump administration says, L.A. Times, Sept. 12, 2017, http://www.latimes.com/business/autos/la-fi-hy-driverless-regs-chao-20170912-story.html. Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments.  Please contact the Gibson Dunn lawyer with whom you usually work, or the authors: H. Mark Lyon – Palo Alto (+1 650-849-5307, mlyon@gibsondunn.com)Frances Annika Smithson – Los Angeles (+1 213-229-7914, fsmithson@gibsondunn.com) Please also feel free to contact any of the following:  Automotive/Transportation: Theodore J. Boutrous, Jr. – Los Angeles (+1 213-229-7000, tboutrous@gibsondunn.com) Christopher Chorba – Los Angeles (+1 213-229-7396, cchorba@gibsondunn.com) Theane Evangelis – Los Angeles (+1 213-229-7726, tevangelis@gibsondunn.com) Public Policy: Michael D. Bopp – Washington, D.C. (+1 202-955-8256, mbopp@gibsondunn.com) Mylan L. Denerstein – New York (+1 212-351-3850, mdenerstein@gibsondunn.com)   © 2017 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

August 10, 2017 |
When AI Creates IP: Inventorship Issues To Consider

Palo Alto partner Mark Lyon and associates Alison Watkins and Ryan Iwahashi are the authors of "When AI Creates IP Inventorship: Issues to Consider," [PDF] published by Law360 on August 10, 2017.

August 8, 2017 |
The Continued Relevance of the Intellectual Property Umbrella

​Los Angeles associate Brooke Myers Wallace is the author of "The Continued Relevance of the Intellectual Property Umbrella: What Patent, Copyright, and Trademark Lawyers Can Learn From One Another," [PDF] published by Bloomberg BNA’s Patent, Trademark & Copyright Journal on August 8, 2017.

July 31, 2017 |
Federal Circuit Update (July 2017)

This July 2017 edition of Gibson Dunn’s Federal Circuit Update discusses four recent Supreme Court decisions covering venue, exhaustion, biosimilars, and offensive trademarks, and two Federal Circuit cases regarding inter parties review now pending before the Supreme Court.  This update also includes summaries of the two appeals pending before the en banc court, also regarding inter partes review procedures.  Also included is an overview of the process for cross-appealing before the Federal Circuit, as well as summaries of a pair of key recent decisions relating to fee awards that reach opposite results. Federal Circuit News The Supreme Court continues to be very active in its review of Federal Circuit decisions, issuing four opinions in the last two months. In TC Heartland LLC v. Kraft Foods Group Brands LLC, No. 16-341 (May 22, 2017) (available here) (in-depth analysis by Gibson Dunn available here), the Court reversed the Federal Circuit’s decision and long-standing precedent allowing patent suits to be filed anywhere that personal jurisdiction existed over a defendant.  Consistent with its earlier precedent, the Court held that, instead, a "domestic corporation ‘resides’ only in its State of incorporation for purposes of the patent venue statute [28 U.S.C. § 1400(b)]."                                                                             In Impression Products, Inc. v. Lexmark International, Inc., No. 15-1189 (May 30, 2017) (available here) (earlier Gibson Dunn coverage available here), the Court addressed international patent exhaustion and post-sale restrictions.  The Court held that: (1) "[a] patentee’s decision to sell a product exhausts all of its patent rights in that item, regardless of any restrictions the patentee purports to impose"; and (2) "[a]n authorized sale outside the United States, just as one within the United States, exhausts all rights under the Patent Act."  In Sandoz Inc. v. Amgen Inc., Nos. 15-1039, 15-1195 (June 12, 2017) (available here), the Court held that under 42 U.S.C. § 262(l) from the BPCIA a biosimilar manufacturer does not need to wait for FDA approval before giving its 180-day notice to the manufacturer of the corresponding biologic that it intends to commercially market the biosimilar, and that that the biosimilar manufacturer can give the 180-day notice "before or after receiving FDA approval."  In addition, the Court held that, where a biosimilar manufacturer fails to provide the manufacturer of the corresponding biologic a copy of the biologics application as required under Section 262(l), courts cannot provide recourse through an injunction under federal law.  The Court remanded to the Federal Circuit to determine whether a state-law injunction is available. In Matal v. Tam, No. 15-1293 (June 19, 2017) (available here) (in-depth analysis by Gibson Dunn available here), the Court addressed the constitutionality of the Lanham Act’s disparagement clause.  The Court held the disparagement clause, "which denies registration to any mark that is offensive to a substantial percentage of the members of any group," violates the First Amendment’s free speech clause.  In reaching that conclusion, the Supreme Court held that trademarks "are private, not government speech."  The Supreme Court has also granted certiorari on two cases from the Federal Circuit: Case Status Issue Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, No. 16-712 Cert. granted Constitutionality of inter partes review under Article III and the Seventh Amendment SAS Institute Inc. v. Matal, No. 16-969 Cert. granted The number of claims that must be addressed by the Patent Trial and Appeal Board in a final written decision during inter partes review Upcoming En Banc Federal Circuit Cases In re Aqua Prods., Inc., No. 15-1177 (Fed. Cir.):  Allocations of the burdens of persuasion and production when a patent owner moves to amend in an inter partes review proceeding. The PTAB instituted an inter partes review proceeding against Aqua’s patent, which relates to automated swimming pool cleaners.  Aqua moved to amend the challenged claims to distinguish the cited prior art.  The PTAB, however, denied Aqua’s motion, determining that Aqua failed to carry its burden of showing patentability of the proposed substitute claims over the prior art of record.  On appeal, the PTO intervened to defend the PTAB’s decision.  The Federal Circuit affirmed (decision available here).  Eight amicus briefs have been filed: three in favor of neither party (American Intellectual Property Law Association, Intellectual Property Owners Association, and Houston Intellectual Property Law Association), three in favor of Aqua Products (Case Western Reserve University School of Law Intellectual Property Venture Clinic and Ohio Venture Association, Pharmaceutical Research and Manufacturers of America, and Biotechnology Innovation Organization), and two in favor of the PTO (Askeladden, L.L.C. and Internet Association et al.).  Oral argument was heard on December 9, 2016. Questions Presented: (a)  When the patent owner moves to amend its claims under 35 U.S.C. § 316(d), may the PTO require the patent owner to bear the burden of persuasion, or a burden of production, regarding patentability of the amended claims as a condition of allowing them?  Which burdens are permitted under 35 U.S.C. § 316(e)? (b)  When the petitioner does not challenge the patentability of a proposed amended claim, or the PTAB thinks the challenge is inadequate, may the PTAB sua sponte raise patentability challenges to such a claim?  If so, where would the burden of persuasion, or a burden of production, lie? Wi-Fi One, LLC v. Broadcom Corp., No. 15-1944 (Fed. Cir.):  The Federal Circuit’s jurisdiction to review the PTAB’s determination that a petitioner is not time-barred under 35 U.S.C. § 315(b).  The PTAB instituted an inter partes review proceeding against Wi-Fi One’s patent.  Wi-Fi One argued that Broadcom was time-barred under 35 U.S.C. § 315(b) from seeking review because Broadcom was in privity with time-barred district court litigants.  The PTAB disagreed, determining that Wi-Fi One did not establish that Broadcom had sufficient control over district court litigation to support a privity finding.  On appeal, the Federal Circuit held that it does not have jurisdiction to review the PTAB’s determination that Broadcom was not time-barred, holding that the Supreme Court’s decision in Cuozzo Speed Technologies, LLC v. Lee, 136 S. Ct. 2131 (2016), did not implicitly overrule prior Federal Circuit precedent on the issue (decision available here).  To date, two amicus briefs have been filed in support of Wi-Fi One (WesternGeco LLC and 3DS Innovations, LLC), eight amicus briefs have been filed in support of neither party (Jeremy Cooper Doerre, New York Intellectual Property Law Association, Federal Circuit Bar Association, Intellectual Property Owners Association, Boston Patent Law Association, Professors of Patent and Administrative Law, American Intellectual Property Law Association, and Biotechnology Innovation Organization), and three amicus briefs have been filed in support of Broadcom (Oracle, Intel, and Apple).  Oral argument was heard on May 4, 2017.  Question presented: Should this court overrule Achates Reference Publishing, Inc. v. Apple Inc., 803 F.3d 652 (Fed. Cir. 2015) and hold that judicial review is available for a patent owner to challenge the PTO’s determination that the petitioner satisfied the timeliness requirement of 35 U.S.C. § 315(b) governing the filing of petitions for inter partes review? Federal Circuit Practice Update Cross-Appealing.  Cross-appealing is "only necessary and appropriate" if a party "seeks to enlarge its own rights under the judgment or to lessen the rights of its adversary under the judgment."  Bailey v. Dart Container Corp. of Mich., 292 F.3d 1360, 1362 (Fed. Cir. 2002).  For example, if a district court finds an asserted patent not infringed and not invalid, and the Federal Circuit modifies the non-infringement judgment and remands, the district may only reopen the invalidity judgment on remand if the defendant had cross-appealed the invalidity finding.  Lazare Kaplan Int’l, Inc. v. Photoscribe Techs., Inc., 714 F.3d 1289, 1297 (Fed. Cir. 2013). Unlike other federal courts of appeal, the Federal Circuit does not does not permit "protective" or "conditional" cross-appeals, i.e., appeals that preserve challenges to the trial court or agency’s rulings in the event that the court of appeals modifies the judgment.  Aventis Pharma S.A. v. Hospira, Inc., 637 F.3d 1341, 1343 (Fed. Cir. 2011).  Instead, the appellee is "free to devote as much of [its] responsive briefing as needed to flesh out additional arguments and alternative grounds for affirming the judgment on appeal," but the appellee is "not free . . . to game the system by filing a cross-appeal to obtain the final word: this is neither fair to the appellant nor an efficient use of the appellate process."  Id. Procedurally, the party that first files a notice of appeal is designated the appellant; if the notices of appeal are filed on the same day, the plaintiff below is designated the appellant, and the other party is referred to as either the appellee or the cross-appellant.  Fed. R. App. P. 28.1(b).  The briefing structure in a case that involves a cross-appeal includes four briefs. The Appellant’s Principal Brief.  The Appellant’s Principal Brief addresses issues raised in the appellant’s notice of appeal.  The Appellant’s Principal Brief has a blue cover and is limited to 14,000 words.  Fed. R. App. P. 28.1(d); Fed Cir. R. 28.1(b)(1)(A).  The Appellant’s Principal Brief must at least include the contents specified in Rule 28(a) of the Federal Rules of Appellate Procedure and must comply with Rule 28(a) of the Federal Circuit Rules.  Fed. R. App. P. 28.1(c)(1). The Appellee’s Principal and Response Brief.  Due 40 days after the Appellant’s Principal Brief, the Appellee’s Principal and Response Brief responds to issues raised in the Appellant’s Principal Brief and may address all the issues in the appellee’s notice of appeal. Fed. Cir. R. 31(a)(2); Fed. R. App. P. 28.1(c)(2).  The Appellee’s Principal and Response Brief has a red cover and is limited to 16,500 words.  Fed. R. App. P. 28.1(d); Fed Cir. R. 28.1(b)(2)(A).  The Appellee’s Principal and Response Brief must at least include the contents specified in Rule 28(a) of the Federal Rules of Appellate Procedure and must comply with Rule 28(a) of the Federal Circuit Rules, except that this brief need not include a statement of the case unless the appellee is dissatisfied with the appellant’s statement.  Fed. R. App. P. 28.1(c)(2).         The Appellant’s Response and Reply Brief. The Appellant’s Response and Reply Brief must be filed within 40 days of the Appellee’s Principal and Response Brief and can respond to all issues raised in the Appellee’s Principal and Response Brief.  Fed. Cir. R. 31(a)(3)(A); Fed. R. App. P. 28.1(c)(3).   The Appellant’s Response and Reply Brief has a yellow cover and is limited to 14,000 words.  Fed. R. App. P. 28.1(d); Fed Cir. R. 28.1(b)(1)(A).  The Appellant’s Response and Reply Brief must at least include the contents specified in Rule 28(a)(2)–(8) and (10) of the Federal Rules of Appellate Procedure, except that the following need not appear unless the appellant is dissatisfied with the appellee’s statement: the jurisdictional statement, the statement of the issues, the statement of the case, and the statement of the standard of review.  Fed. R. App. P. 28.1(c)(3).  The Appellee’s Reply Brief.  The Appellee’s Reply Brief is filed 14 days after Appellant’s Response and Reply Brief and may only respond to arguments raised in Appellant’s Response and Reply Brief regarding the issues in the appellee’s notice of appeal.  Fed. Cir. R. 31(a)(3)(B); Fed. R. App. P. 28.1(c)(4).  The Appellee’s Reply Brief has a gray cover and is limited to 7,000 words.  Fed. R. App. P. 28.1(d); Fed Cir. R. 28.1(b)(3).  The Appellee’s Reply Brief must at least include the contents specified in Rule 28(a)(2)–(3) and (10) of the Federal Rules of Appellate Procedure.  Fed. R. App. P. 28.1(c)(4).  Key Case Summaries (June – July 2017)  Rothschild Connected Devices Innovations, LLC v. Guardian Protection Servs., Inc., No. 2016-2521 (Fed. Cir. June 5, 2017):  Deficient early case diligence and motivation for a litigation campaign supports fee award. Plaintiff, part of the Rothschild high-volume patent assertion group, sued over fifty companies in the Eastern District of Texas on U.S. Patent No. 8,788,090, accusing scores of seemingly disparate Internet-related products of infringement.  Rothschild’s fifty-eight lawsuits were consolidated before Judge Gilstrap.  While a number of defendants settled, ADS Security refused to settle.  Instead, ADS served a Rule 11 notice letter, asserting that the ‘090 patent claimed ineligible subject matter, as well providing Rothschild with notice of alleged invalidating prior art.  ADS offered to settle if Rothschild paid ADS’s attorneys’ fees and costs.  After Rothschild refused, ADS filed a motion for judgment on the pleadings and also sent a "Safe Harbor Notice" under Federal Rule of Civil Procedure Rule 11(c)(2).  Rothschild moved to dismiss ADS voluntarily, and ADS moved for its attorneys’ fees under section 285.  The district court denied ADS’s fees motion, holding that Rothschild had set forth "non-conclusory and facially plausible arguments supporting patent eligibility" and that its intent in filing "numerous other suits" did not make the case exceptional.  Rather, the district court held that Rothschild’s voluntary dismissal was "the type of reasonable conduct Rule 11 is designed to encourage."  The Federal Circuit disagreed.  First, the Federal Circuit (Prost, C.J.) held that Rothschild could not have had a good faith belief in the validity of the ‘090 patent after it failed to investigate prior art raised in ADS’s Rule 11 letter.  Second, citing Octane Fitness, the panel reaffirmed that the "motivation" behind a litigation campaign may justify fee shifting, holding that the lower court ignored "undisputed evidence regarding Rothschild’s vexatious [pattern of] litigation."  Third, the panel held that the district court erred by conflating Rule 11 with the standard for fee shifting, which does not require "independently sanctionable" conduct.  Finally, in concurrence, Judge Mayer opined that the ‘090 patent "falls far beyond the bounds of section 101," describing Rothschild’s complaint as "frivolous on its face." Checkpoint Sys., Inc. v. All-Tag Security S.A., No. 2016-1397 (Fed. Cir. June 5, 2017):  Deficient early case diligence and motivation for a litigation campaign does not itself support fee award. On the same day as the Rothschild decision, a different Federal Circuit panel reached the opposite result on fee shifting.  Checkpoint asserted U.S. Patent No. 4,876,555, which claimed security tags for merchandise.  Although Checkpoint’s claims survived summary judgment, Defendant All-Tag prevailed, obtaining a verdict that the patent was invalid, unenforceable, and not infringed.  In seeking fees, All-Tag presented evidence that "Checkpoint never looked at the accused products" before filing suit.  In granting an award of fees, the district court cited this deficient pre-suit investigation, as well as Checkpoint’s motivation behind its litigation campaign, which was allegedly designed to "interfere improperly" with competitors’ businesses "to protect [Checkpoint’s] own competitive advantage."  The Federal Circuit reversed.  The panel (Newman, J.) noted that Checkpoint had sufficient evidence to survive summary judgment, and that "a party is entitled to rely on a court’s denial of summary judgment … as an indication that the party’s claims were objectively reasonable."  In addition, All-Tag had not proven that the unaccused products inspected by Checkpoint before filing suit were materially different from the accused products.  The court then held that the district court abused its discretion in considering Checkpoint’s motivation for its litigation campaign.  "[P]atent law provides the statutory right to exclude those that infringe a patented invention.  Enforcement of this right is not an ‘exceptional case’ under patent law."  The Supreme Court’s statement in Octane Fitness that a party’s "motivation" for filing suit can be considered in determining fees requires a showing of "harassment or abuse," which was lacking in this case.  Upcoming Oral Argument Calendar For a list of upcoming arguments at the Federal Circuit, please click here. Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Federal Circuit.  Please contact the Gibson Dunn lawyer with whom you usually work or the authors of this alert: Blaine H. Evanson – Los Angeles (213-229-7228, bevanson@gibsondunn.com)Blair A. Silver – Washington, D.C. (202-955-8690, bsilver@gibsondunn.com) Please also feel free to contact any of the following practice group co-chairs or any member of the firm’s Appellate and Constitutional Law or Intellectual Property practice groups:  Appellate and Constitutional Law Group:Mark A. Perry – Washington, D.C. (202-887-3667, mperry@gibsondunn.com)James C. Ho – Dallas (214-698-3264, jho@gibsondunn.com) Caitlin J. Halligan – New York (212-351-4000, challigan@gibsondunn.com) Intellectual Property Group:Josh Krevitt – New York (212-351-4000, jkrevitt@gibsondunn.com)Wayne Barsky - Los Angeles (310-552-8500, wbarsky@gibsondunn.com)Mark Reiter – Dallas (214-698-3100, mreiter@gibsondunn.com) © 2017 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

July 19, 2017 |
Media, Entertainment and Technology Group – 2017 Mid-Year Update

At the middle of 2017, Gibson Dunn’s Media, Entertainment and Technology practice group has taken stock of another particularly active period in deal-making, developments in both live and on-demand streaming, the rise of eSports, and a plethora of key cases and rulings that together provide a crucial snapshot of trends in these ever dynamic industries.  We are pleased to bring you our latest round-up of events that shaped these industries in early 2017, which hold important lessons for our clients and will drive decision-making in the boardroom and courtroom in the months to come. __________________________ TABLE OF CONTENTS I.     2017 Mid-Year Deal Report A.     Media & Entertainment Deals, Investments & IPOs 1.     Sinclair-Tribune Merger 2.     Fox Continues to Reach for Sky 3.     Verizon Goes For Yahoo! 4.     Vice Media Secures $450 Million Investment 5.     Time Warner Signs Deal with Snap for Advertisements and Original Scripted Content 6.     SiriusXM Invests in Pandora 7.     Cable IPOs Deliver Mixed Results B.     Chinese Investments in Hollywood Experience (A Temporary?) Cooling Period & Some Growing Pains C.     The Global Streaming Race Continues 1.     Netflix’s Continued Expansion 2.     Amazon Continues Its Global Growth 3.     Hulu With Live TV Beta Launch 4.     iflix: An Emerging (Market) Competitor? D.     Field of Streams:  The Rise of OTT Sports Offerings 1.     Amazon Nabs NFL Rights 2.     Hulu’s Sports Offerings 3.     Twitter’s New Sports-Related Partnerships E.     eSports Go Big League 1.     Riot Games Adopts Franchise Model for eSports League 2.     AEG Invests in Immortals eSports Team 3.     NBA Announces NBA 2K eSports League with 17 Teams Participating F.     Strikes Averted as Guilds Reach Deals II.     2017 Mid-Year Litigation Report A.     Hollywood Against the Hackers B.     Copyright Litigation Docket 1.     Fashioning a Key Ruling in Varsity Brands 2.     VidAngel’s Fading Halo 3.     Disney’s Zootopia Sued For Substantial Similarity 4.     Broadcasters Best FilmOn on Appeal 5.     Fees Cases Post-Kirtsaeng C.     Trademark Litigation Goes on Offense 1.     SCOTUS Confronts Ban on Disparaging Trademarks in Matal v. Tam 2.     SpongeBob SquarePants’ Fictional "Krusty Krab" Restaurant Wins In Trademark Infringement Suit 3.     GOOGLE Not Subject to Genericide 4.     Belushi Is Primarily a Surname 5.     Public University Should Have Allowed Student Marijuana-Reform Organization to Use University’s Trademarks D.     First Amendment Cases Speak Loudly 1.     IMDB.com v. Becerra 2.     Virginia Citizens Defense League v. Couric 3.     Fridman v. BuzzFeed 4.     Murray Energy Corp. v. Reorg Research, Inc. E.     Music Litigation 1.     Kesha v. Dr. Luke 2.     Prince’s Estate and Subsequent Legal Battles 3.     Royalties Disputes with Digital Music Streaming Services 4.     Fair Use and Sampling Go Another Round 5.     The Estate of Jimi Hendrix F.     New Efforts to Regulate ISPs 1.     The Right To Be Forgotten __________________________ I.     2017 Mid-Year Deal Report A.     Media & Entertainment Deals, Investments & IPOs 1.     Sinclair-Tribune Merger On May 8, 2017, Sinclair Broadcast Group announced a $3.9 billion cash-and-stock agreement to acquire Tribune Media, resulting in a combined entity that will own 223 television stations serving 108 markets; the new entity’s stations would reach approximately 72% of U.S. television households.  Adding Tribune’s 42 stations to its existing roster, Sinclair would be nearly twice the size of its nearest U.S. non-network broadcast competitors, the closest of which, Nexstar, reaches 39% of homes nationwide.  Sinclair plans to pay Tribune shareholders $43.50 per share, with $35 in cash and the rest in Sinclair stock.[1] On June 15, 2017, the U.S. Court of Appeals for the D.C. Circuit lifted a temporary stay of the FCC’s decision to reinstate the "UHF Discount," which allows television station owners to count only half of the households reached by UHF (ultra high frequency) stations toward their total number of households served.  As Sinclair’s post-merger reach will extend to 72% of homes nationwide, this is particularly relevant for Sinclair and other television conglomerates looking to consolidate, as no one company’s owned television stations may reach more than 39% of U.S. TV households under current FCC ownership rules.[2]  Consolidation efforts have already begun, as Ion Media, a station group that holds the most full-power UHF stations in the U.S., recently acquired three new stations in the wake of the UHF Discount reinstatement, adding 5 million viewers to the network’s audience that currently spans 58 of the largest U.S. markets.[3]  While issues related to the UHF Discount continue to be litigated, the rule is in effect for the time being following the D.C. Circuit’s recent ruling.[4]  With the UHF Discount in place, the pending Sinclair Tribune merger is expected to pass regulatory muster.[5]  2.     Fox Continues to Reach for Sky In late 2016, 21st Century Fox announced an agreement to acquire Sky plc, the largest pay TV provider in Britain, reaching 22 million customers in five European markets.  Fox currently owns 39% of Sky shares, and proposed to purchase the remaining 61% of shares for $14.5 billion.[6]    Ofcom, the U.K.’s government media regulator, recently reviewed the deal for any potential negative effects it believes the deal might have on editorial standards in the U.K., as Fox already controls the newspaper company News Corp, the owner of two major British newspapers.[7]  Ofcom also set out to determine whether Sky would remain a "fit and proper" TV license holder after the Fox acquisition, due to recent legal and corporate governance issues surrounding Fox News.[8]  Following Ofcom’s review, British Culture Secretary Karen Bradley said she was "minded to" send the merger proposal to the U.K. Competition and Markets Authority for further scrutiny.[9]  If the deal is ultimately sent to the Competition and Markets Authority, a final decision on the transaction is expected to be delayed until mid-2018.[10]     3.     Verizon Goes For Yahoo! On June 13, 2017, Verizon Communications Inc. acquired the operating business of Yahoo! Inc. for $4.48 billion.[11]  Verizon will combine Yahoo! with its existing AOL assets to create a new subsidiary, Oath, to be headed by former AOL CEO Tim Armstrong.[12]  Marissa Meyer, former CEO of Yahoo!, has resigned.[13] The deal ends Yahoo! as an operating business, and the company’s remaining assets—including its 15% stake in Chinese e-commerce company Alibaba, Yahoo! Japan, and a noncore portfolio of patents called Excalibur—will be renamed Altaba.[14]  The transaction helps Verizon build its portfolio of online content, whose assets also include The Huffington Post, Engadget, and TechCrunch (all three of which were acquired in last year’s $4.4 billion AOL deal), Tumblr, Flickr, and a mobile video app called go90.[15]  This newest move is seen as a way to advertise across the Verizon digital network, reaching a wider audience and boosting its presence in the mobile and online video space.[16] 4.     Vice Media Secures $450 Million Investment In June 2017, the privately held Vice Media secured a $450 million investment from private equity firm TPG.[17]  Vice will use the new money to finance Vice Studios, which will produce scripted programming for its Viceland Cable Channel, as well as a planned subscription service.[18] Vice’s assets include Viceland, a print magazine, HBO’s documentary series Vice, and daily news show Vice News Tonight.[19]  Walt Disney Co., which owns an 18% stake in Vice, did not participate in the funding round, despite speculation last summer that Disney might purchase all of the company.[20] 5.     Time Warner Signs Deal with Snap for Advertisements and Original Scripted Content In June 2017, following its $3.4 billion IPO, Snap Inc. entered a deal with Time Warner Inc. in which Time Warner’s Turner cable channels and Warner Bros. film studio (and possibly HBO) will create advertisements and up to ten original, scripted shows for Snapchat.[21]  Over the past several months, Snap has signed original content deals with NBCUniversal, Turner, A+E Networks, Discovery, BBC, ABC, ESPN, Vice Media, Vertical Networks, the NFL and Metro-Goldwyn-Mayer Inc., among others.[22]  Snap hopes to air two to three new episodes of original shows per day in its bid to boost its revenue, which comes almost entirely from advertising.[23] The Time Warner deal is seen as a vote of confidence for Snap—whose revenue and growth rate slowed in May—with media companies eager to reach Snap’s young, mobile users, who are shifting their attention from traditional television to mobile apps.[24] 6.     SiriusXM Invests in Pandora In June 2017, SiriusXM agreed to invest $480 million in the music streaming service Pandora, extending its reach into ad-supported digital radio for the first time.  Following the cash-and-stock purchase, SiriusXM will hold a 19% stake in Pandora, with the condition that it cannot acquire more than 31.5% of Pandora stock without approval from the Pandora board.[25]  Under the terms of the agreement, Pandora has terminated a previous deal with private equity firm KKR & Co., which had pledged $150 million to the company in May 2017, and will pay a $22.5 million breakup fee as a result.[26]  In a separate statement on the same day, Pandora announced a $200 million sale of the digital ticketing and marketing platform Ticketfly Inc., which it acquired in 2015, to Eventbrite.[27]  Just over two weeks after the two deals were announced, Pandora announced that co-founder Tim Westergren would be stepping down as CEO of the company.[28] 7.     Cable IPOs Deliver Mixed Results Two U.S. cable companies, Altice USA and WideOpenWest ("WOW"), launched IPOs in 2017, ending a five-year drought in the market for cable IPOs.  The offerings delivered mixed results, with Altice USA exceeding and WOW falling short of expectations. On June 12, 2017, Altice USA, a U.S. subsidiary of Dutch telecommunications company Altice NV, launched a $1.9 billion IPO.[29]  The IPO raised more than any other U.S.-listed telecom since 2000 and was the second-largest U.S. offering this year, after Snap Inc.’s $3.9 billion IPO in March.[30]  Altice USA priced 63.9 million shares at $30 per share, giving the company a market capitalization of approximately $22 billion.[31]  Already the fourth-biggest U.S. cable provider, Altice USA can now use its stock as capital in future acquisitions, and some analysts have speculated that acquisition targets may include cable giants such as Charter Communications and Cox Communications.[32] Altice USA’s IPO comes on the heels of another offering by a U.S. cable company, WOW, whose March offering was the first cable IPO in the last five years.[33]  WOW raised about $310 million after pricing 18.24 million shares at $17 per share, below the 19.05 million shares the company had expected to sell at $20-$22 per share.[34] B.     Chinese Investments in Hollywood Experience (A Temporary?) Cooling Period & Some Growing Pains In the first half of 2017, the surge of Chinese investment in Hollywood slowed from a particularly hot period in 2016.  This cooling trend comes shortly after the Chinese government placed restrictions on domestic capital leaving the country in November 2016, potentially creating an obstacle to Chinese investment in these blockbuster deals.  However, deal-making has continued nonetheless and we expect the trend to continue given the importance of the foreign box office and non-domestic capital to Hollywood. One of the largest Chinese investment deals announced in 2016 was the Dalain Wanda Group ("Wanda") proposed $1 billion purchase of Dick Clark Productions, producer of the "Golden Globes Awards," "Academy of Country Music Awards" and "Dick Clark’s New Year’s Rockin’ Eve with Ryan Seacrest."[35]  The deal would have been Wanda’s first venture into television.[36]  However in early March 2017, Eldridge Industries ("Eldridge), owner of Dick Clark Productions, announced that it called off the agreement because Wanda "failed to honor its contractual obligations."[37]  As a result, Eldridge filed a motion in the Delaware Chancery Court to compel the release of $25 million in escrowed funds as payment for a termination fee and $25 million due to Eldridge for its prior agreement made in January to extend the closing date.[38]  Whether the deal fell apart because Wanda felt that the $1 billion price tag was too high, because of the Chinese government’s tightening of the rules regarding foreign investments,[39] or for other reasons, the news that this deal was scrapped caused rumblings in the industry about the fate of Chinese investments in Hollywood.[40]  Chinese media conglomerate LeEco, often called the "Netflix of China," has found itself in a spiral of legal and financial troubles following its termination of merger negotiations with American television maker Vizio, in April 2017.  On July 4, Chinese courts froze $182 million in assets controlled by LeEco’s chairman Jia Yueting as a result of the company’s aggressive overexpansion and cash-flow shortages.[41]  Mere days thereafter, Vizio filed a lawsuit in California federal court alleging that LeEco was already collapsing when merger talks began, and that LeEco planned to use the merger to create false impressions about its financial health.[42]  Vizio further alleges that LeEco secretly planned as part of the merger to gain access to Vizio’s confidential customer lists and key decision makers, and that LeEco has since engaged in corporate subterfuge in an attempt to reduce its liability for a $100 million break-up fee owed under the merger agreement.[43]  Vizio is seeking the full $100 million break-up fee and punitive damages.[44] Additionally, Voltage Pictures’ recent deal with Anhui Xinke New Materials, valued at $350 million, fall apart and has resulted in litigation.  In December 2016, the deal terminated a month after the new Chinese restrictions on overseas acquisitions were put in place and has since moved to Los Angeles Superior Court as a result of a suit brought by Voltage Pictures over the payment of a $4 million deposit.[45] Despite these recent ups and downs, and the speculation as to the effect of Chinese regulations on foreign investments, there have still been some notable deals announced between Chinese investors and media, entertainment and technology companies in the first half of the year.  Wanda, Weying Technology and Huahua Media all announced investments in Paramount Picture’s Transformers: The Last Knight, giving them merchandising, global revenue and/or marketing rights.[46]  Blumhouse Productions also announced in April that it entered into a film financing agreement with Meridian Entertainment, a Chinese company, which will finance all production outside of Blumhouse’s deal with Universal.[47]  Additionally, in May, CAA launched a long-term film fund with China’s Bona Film Group ("Bona"), with Bona’s initial investment set at a reported $150 million.[48]  The film fund is intended to finance U.S.-China co-productions, in which Bona will retain all distribution right in China and CAA will represent North America and other international territories.[49]  Another deal that left the industry speculating how the tightening of capital controls in China will impact investments in the media, entertainment and technology industry is the $1 billion slate financing deal announced in January 2017 between Paramount and Shanghai Film Co. and Huahua Media.[50]  The deal would fund Paramount’s entire theatrical output over the next three years.[51]  Despite reports that the deal was to be called off in March 2017, Viacom CEO Bob Bakish confirmed in May, during Viacom’s quarterly earnings conference, that the deal was "moving ahead" and that Shanghai Film Co. and Huahua media "have elected to upsize their commitment from 25 to 30 percent" of the total slate.[52] Finally, Hollywood continues to make inroads in China in order to benefit from the country’s booming film market.  In line with this trend, CAA launched CAA China, in partnership with CMC Capital Partners, a Chinese equity firm, to establish itself in the country’s representation landscape.[53] Additionally, UTA partnered with Tang Media Partners, a Los Angeles-based entertainment company, and Joy Pictures, a Chinese film studio, to establish a film fund to distribute approximately twelve U.S. films in China per year.[54]  C.     The Global Streaming Race Continues 1.     Netflix’s Continued Expansion a.     Entering the Chinese Market Previously blocked by regulators from entering China’s entertainment market, global streaming giant Netflix announced in April 2017 that it had reached a content agreement with Beijing-based video service iQiyi.[55]  This deal comes just over a year after Netflix went global, with only a few territories (including China) missing from its roster.[56]  iQiyi is a subsidiary of Chinese search giant Baidu and is currently morphing from an ad-supported video platform into a subscription model (akin to Netflix).[57]  Shows Black Mirror, Stranger Things, Mindhunter, BoJack Horseman, and Ultimate Beastmaster are all included as part of this deal.[58] Netflix saw an early licensing success in China with House of Cards through a deal with local service Sohu, before the show was eventually removed from local streaming services by regulators.[59]  Netflix had also previously tried to move into China as a service operator, but acknowledged last year that the regulatory hurdles were too great.[60]  b.     Growing its Local Content In April 2017, Netflix signed a deal to acquire approximately 600 hours of scripted and unscripted TV shows from South Korea’s JTBC.  Netflix trails behind numerous regional competitors armed with larger local content lineups in several parts of Asia, and this move is consistent with the belief that local content will be key if Netflix is to flourish in these areas.[61] Netflix has also announced two original Korean productions, Love Alarm and Kingdom, which are set to premier in 2018.[62] Netflix has also employed local content strategies in India, and announced the opening of a Mumbai local office in April 2017.  Netflix competes against Hotstar (a popular ad-supported app with channels, fiction and sports) and Amazon Prime Video, among others, in India.[63]  c.     Deal with Altice Netflix signed a multi-year deal with Altice, the telco group of Patrick Drahi, to start distributing Netflix content in France, Portugal, Israel, and the Dominican Republic.  This deal emphasizes the content-driven strategy Altice is now favoring, with the launch of Altice Studio and the acquisitions of sports, series, and films rights and assorted deals with right-holders.[64] d.     Additional Capital Raise In April 2017, Netflix announced its plan to raise 1 billion euros (about $1.08 billion) in new debt financing from international lenders.[65]  It upped the size of its debt offering to 1.3 billion euros ($1.4 billion) shortly thereafter.[66]  This new offering was in addition to its $3.37 billion in existing long-term obligations.[67]  Netflix successfully closed its $1.4 billion in new debt financing in May 2017, marking the third time in a little over two years that Netflix has raised more than $1 billion.[68] 2.     Amazon Continues Its Global Growth a.     Launch of Amazon Channels in the U.K. and Germany Amazon Channels, a full pay-TV service which was unveiled in the U.S. last year, recently launched in the U.K. and Germany.  Prime members in the U.K. and Germany now can watch premium TV channels without a bundle or a contract.[69]  With this launch, Amazon offered its services as an alternative to Sky, the largest pay-TV operator in both countries.  Included in the offerings in the U.K. version are Discovery, ITV Hub+, and NBCUniversal’s reality-TV streaming service Hayu.  The roster of the German service includes three NBCU nets: E! Entertainment, Studio Universal Classics, and Syfy.[70] b.     Expansion of Amazon Prime Video in India Amazon launched Amazon Prime Video in India at the end of last year at a lower subscription rate than Netflix.  Since then, Amazon has moved quickly in recent months to expand its user base in the country through partnerships.  For example, Amazon recently worked with telecom provider Vodafone to provide its customers with access to Amazon Prime Video at promotional rates.[71]  Prior to launching Amazon Prime Video, Amazon India signed deals for existing and yet-to-be-produced films with Bollywood studios.[72]  Amazon India has also arranged a streaming deal with Paramount Pictures for various titles including Teenage Mutant Ninja Turtles: Out of the Shadows and Star Trek Beyond.  The deal also covers the studio’s library franchises, like Transformers, Indiana Jones, and others.  Terms of the deal, including price, were not disclosed.[73]  This deal builds on Amazon India’s offerings of Hollywood content after a recent deal with Lionsgate for titles such as La La Land and Deepwater Horizon.[74]  Most recently, Amazon India also signed a content deal with Warner Brothers covering a range of films and TV shows including Fantastic Beasts and Where to Find Them, Suicide Squad, and TV shows Lethal Weapon, Blindspot, and Two and a Half Men.  As with the other deals, no financial details were disclosed.[75]  3.     Hulu With Live TV Beta Launch Hulu recently announced the beta launch of Hulu With Live TV, a package that includes all four major broadcast networks, the top-rated cable news channels, and a substantial sports offering.[76]  The package also includes the 3,500-plus TV and movie titles in Hulu’s basic on-demand package.[77]  The service is priced starting at $39.99 monthly and includes approximately 50 channels.[78]  Subscribers have access to ABC, CBS, Fox, NBC programming (with the availability of local TV stations varying by market), and cable networks including ESPN, CNN, MSNBC, TNT, and USA Network.  The service also carries regional sports networks from Comcast and Fox in several markets.  Showtime is available for an additional $9.[79] As of May 2017, Hulu’s live TV menu did not include HBO, AMC Networks, Viacom’s Comedy Central, or Nickelodeon, among others.  However, in early July, Hulu announced that it will allow HBO and Cinemax as add-ons to its subscription plan.[80]  Hulu has also announced that it is working to arrange deals with network station groups to augment its lineup and plans to add more local channels over time.[81] Its new skinny bundle puts Hulu directly in competition with the cable, satellite, and telco TV distributors that comprise some of the biggest customers of Hulu’s parent companies Disney, 21st Century Fox, Comcast’s NBCUniversal, and Time Warner.[82]  Notwithstanding its new skinny bundle, Hulu has confirmed that it will continue to rely on a strategy of obtaining "the iconic shows that are timeless," as shown by the recent deal for Golden Girls (a classic NBC comedy), while also continuing with its roster of original productions.[83]  4.     iflix: An Emerging (Market) Competitor? iflix, a streaming service that launched in Asia in 2015, is positioning itself as a low-cost alternative to Netflix in emerging markets.  Boasting a subscriber base of just under 5 million and armed with a recent $90-million infusion from investors including Sky and Liberty Global, iflix is focusing on local content.  It is co-producing the first high-end Arabic online series, a comedy entitled Tough Luck, set in a Cairo tenement and boasting an all-star Arab cast.  iflix also recently expanded, through a joint venture with Kuwait-based telco Zain, into the Middle East and North Africa.[84] D.     Field of Streams:  The Rise of OTT Sports Offerings The trend of cord-cutting continues to disrupt the sports media industry.  Major players, including the NFL and MLB, as well as sports networks such as ESPN, are adapting to accommodate the preferences of their viewers by embracing over-the-top ("OTT") distribution of their games and other content.  Though Netflix has indicated that it intends to remain on the sidelines and has no interest in acquiring rights to live sports programming,[85] the following recent deals highlight the increase in live-streaming arrangements between content producers and social media networks in the world of sports. 1.     Amazon Nabs NFL Rights In April 2017, Amazon finalized a deal with the National Football League to stream ten NFL "Thursday Night Football" games next season.  These games will be streamed to Amazon Prime members, including international members in more than 200 countries, via the Amazon Prime Video app.  These games will also be shown on either CBS or NBC and simulcast on the NFL Network, as part of a distribution deal with those networks last year.[86] The NFL has not disclosed the value of this one-year deal, but several reports citing unidentified sources place the deal at $50 million, an increase in value from the $10 million Twitter paid last year to stream ten NFL games,[87] which had marked the first time the league made a deal for a package of games with an online-only partner.[88] 2.     Hulu’s Sports Offerings In May, Hulu launched its new streaming live television service (discussed above), which includes a collection of sports networks.  Hulu With Live TV allows users to watch their favorite cable channels (including national sports networks ESPN, NBCSN, and FS1, as well as certain regional sports networks) online without a traditional cable subscription.  This service is similar to Sling TV, which last year became the first OTT provider of the NHL Network.[89] 3.     Twitter’s New Sports-Related Partnerships On May 1, 2017, Twitter announced more than a dozen new live streaming content deals, including several sports-related partnerships.  The WNBA will live-stream a weekly regular season game on Twitter, twenty per season, for the next three seasons.  In addition to the weekly live MLB games streaming on Twitter this season, the MLB will also stream a new three-hour program once a week featuring live MLB game highlights and analyzing stories as they trend.[90] Twitter’s Stadium, a new and original 24-hour video network, "combine[s] exclusive live college sporting events with highlights, classic games, and daily live studio programming."[91]  Twitter will also provide live pregame video and on-demand highlights of key NFL games.  In addition to the existing live-streaming deal between Twitter and PGA Tour Live, the PGA Tour live-streamed 360-degree video of the 17th hole at TPC Sawgrass during The Players Championship on Periscope and Twitter.[92] E.     eSports Go Big League eSports—the professional competitive video gaming industry—is projected by analysts to grow to a $1.5 billion market by year 2020.[93]  Recent activity in the eSports industry continues to signal the industry’s rapid growth and unrelenting push into the mainstream. 1.     Riot Games Adopts Franchise Model for eSports League Riot Games, Inc., developer and publisher of the highly popular League of Legends video game, has announced that its U.S. eSports league, the North America League of Legends Championship Series (the "NA LCS"), will adopt a franchise model, positioning the league closer to traditional sports leagues such as the NBA and NFL.  Under the new franchise model, teams will apply to become permanent partners and, once approved, will pay a fee ($10 million for current league teams and $13 million for newcomers) to solidify their spot.[94]  Similar to mainstream sports leagues, the NA LCS will also adopt revenue sharing financial incentives for good team performance, a players’ association to give players a voice in the NA LCS’s decisions, and more robust team and player development programs to ensure the growth and development of league play.[95]  All-in-all, the NA LCS changes are being celebrated for bringing eSports closer in line with traditional sports leagues and helping solidify eSports in the competitive sports arena. 2.     AEG Invests in Immortals eSports Team AEG, owner of the Los Angeles Staples Center and L.A. LIVE complexes, has further expanded into the realm of eSports by announcing a strategic investment in eSports team organization Immortals, which currently has teams competing in League of Legends, Counter-Strike: Global Offensive, Overwatch and Super Smash Bros.[96]  With the investment, AEG hopes to make L.A. LIVE the home of Los Angeles’s eSports scene and to draw tournaments to its many other live entertainment venues.[97]  AEG’s investment in Immortals is its second foray into eSports, the first being a global partnership with ESL (f/k/a Electronic Sports League), the world’s largest eSports competition organizer.[98] 3.     NBA Announces NBA 2K eSports League with 17 Teams Participating Seventeen of the NBA’s 30 franchises have signed on to operate teams in the inaugural season of the NBA 2K eSports league in 2018.[99]  Gamers will compete in a format resembling that of the NBA basketball season, with an initial draft to place gamers on teams, followed by regular season matches and bracketed tournament play for the championship.[100]  The league is the result of a co-venture with NBA 2K game developer Take-Two Interactive Software, Inc., which had announced plans to launch a professional gaming league in February.[101] F.     Strikes Averted as Guilds Reach Deals A Writer’s Guild of America ("WGA") strike was averted in early May, when the Alliance of Motion Picture and Television Producers ("AMPTP") and the WGA reached a deal on the eve of the threatened strike.[102]  Until then, the negotiation sticking points involved employer contributions to the WGA’s health plan, compensation for short-order series, wage increases and job protection on parental leave.[103]  In a letter to its members, the WGA noted that they "were able to achieve a deal that will net [its] members $130 million more, over the life of the contract, than the pattern [they] were expected to accept."[104] Additionally, a SAG-AFTRA strike was averted on July 4, 2017, when the union and the Hollywood production companies reached an agreement on the three-year master deal.[105] II.     2017 Mid-Year Litigation Report There was no shortage of watershed rulings and key litigation developments in the entertainment industry in the first half of 2017.  The Supreme Court weighed in with highly anticipated copyright and trademark rulings, first amendment cases received increased attention and concern, and music played its role on dockets nationwide.  Keeping up with the deluge of key cases is no easy task, and we have highlighted those rulings and developments that should be top of mind for our clients. A.     Hollywood Against the Hackers Beyond the courtroom, Hollywood faces renewed challenges in safeguarding its intellectual property from cybercriminals.  In the aftermath of the 2015 Sony hack, entertainment studios continue to experience serious and significant threats from hackers seeking to illegally obtain their content.  This spring, Netflix and Disney/ABC were reported victims of a hacker collective named The Dark Overlord which demanded the companies pay an unspecified ransom to prevent content being prematurely released online.[106]  When the studios balked at the ransom demand, the hackers went ahead and released the content.  Now the hacker collective claims to have additional unaired films and television series.  The Dark Overlord has stated that "Hollywood is under attack, and we’re at the forefront of this most recent offensive. We’re not in the business to scare anyone.  We’re in the business of earning vast amounts of internet money."[107]  The FBI is attempting to identify who is behind this hacking collective, but even if a culprit is located, hackers will surely remain a menace to studios going forward, and security throughout the production chain including with third-party vendors remains a primary concern for studios.[108] B.     Copyright Litigation Docket 1.     Fashioning a Key Ruling in Varsity Brands This spring, in its first case on fashion copyrights, the Supreme Court issued a sweeping opinion validating broad copyright in designs affixed to apparel products in Star Athletica v. Varsity Brands.[109]  The case involved cheerleader uniforms designed by Varsity Brands, Inc., the market leader.  Many of these uniforms are emblazoned with two-dimensional designs, such as chevrons, stripes, or zigzags, giving them that distinctive "cheerleading" look.  Varsity holds copyrights for many of these designs.  The company brought suit for copyright infringement against Star Athletica, L.L.C., alleging that it was infringing several of its copyrights by selling cheerleading uniforms that bore similar two-dimensional designs.[110] The Copyright Act extends protection not only to works of music and literature, but also to "pictorial, graphic, or sculptural" works, but only so long as those works "can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article."[111]  Star Athletica argued that the particular combinations of chevrons, zigzags and stripes that characterize Varsity’s uniforms were influenced by utilitarian considerations, and thus did not warrant copyright protection.[112]  Specifically, Star Athletica argued that the artistic aspects of the uniform designs were not "separable" from the utilitarian function of the uniform itself, and thus were not copyrightable.[113]   The district court agreed with Star Athletica, but the Sixth Circuit reversed, holding that the designs were separable.[114]  Star Athletica then sought a writ of certiorari from the Supreme Court, supported by amici who noted that courts had enumerated no fewer than nine distinct tests for conceptual separability and urged the Supreme Court to create a uniform test.[115] In a textualist opinion written by Justice Thomas, the Supreme Court affirmed the Sixth Circuit, holding that Varsity’s two-dimensional cheerleading-uniform designs are "separable features . . . of those cheerleading uniforms."[116]  The court established a two-prong test, deciding that such elements are eligible for copyright "only if the feature (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 into which it is incorporated."[117] The Court rejected Star Athletica’s argument that only "solely artistic"—as opposed to utilitarian—features of useful articles can be separable.[118]  It was therefore irrelevant whether the cheerleading uniforms remain "equally useful," or even "similarly useful," once the designs are imaginatively removed.  According to Justice Thomas’s opinion, the Court "necessarily abandon[ed] the distinction between ‘physical’ and ‘conceptual’ separability, which some courts and commentators h[ad] adopted based on the Copyright Act’s legislative history."[119]  The Court then applied this test to Varsity’s uniforms and concluded that the chevron, stripes, and stars—if separated from the uniform and applied to canvas—would qualify as works of art eligible for copyright.[120]  At the same time, the Court emphasized the limits of its ruling.  Varsity Brands and its related entities "have no right to prohibit any person from manufacturing a cheerleading uniform of identical shape, cut, and dimensions to the ones on which the decorations in this case appear.  They may prohibit only the reproduction of the surface designs in any tangible medium of expression—a uniform or otherwise."[121] In dissent, Justice Breyer focused on policy concerns—writing that by extending copyright protection to basic forms of surface designs, the majority would restrict competition for the underlying item.[122]  Indeed, many commentators and scholars, in discussing the impact of this case, have predicted that the fashion industry may use the Court’s formulation of copyright law, along with trademark law, to protect their designs from copy-cats and knockoffs.[123] 2.     VidAngel’s Fading Halo The major Hollywood studios have been waging a successful battle against VidAngel, which launched in 2014, with a business model in which the company buys DVDs sold by the studios and "sells" them to consumers, who receive the programming in a digital form that allows any objectionable content such as nudity and violence to be edited out by the consumer. This battle began in December of 2016, when the studios won a preliminary injunction, thereby shutting down VidAngel, after a California federal judge said it was likely that VidAngel was infringing their copyrights and violating the Digital Millennium Copyright Act’s ban on the circumvention of digital encryption measures.[124]  Though VidAngel requires the user to purchase a physical DVD, Judge Andre Birotte said the service still illegally bypassed locks on the disc in order to upload it and stream it to those users.  "The purchase of a DVD only conveys the authority to view the DVD, not to decrypt it," the Court wrote.[125]  Moreover, VidAngel failed to present any evidence that the Hollywood studios either "explicitly or implicitly authorized DVD buyers to circumvent encryption technology" in order to watch the DVD on another platform, such as VidAngel.[126]  Judge Birotte also rejected VidAngel’s claim that its service was shielded by the Family Home Movie Act, a 2005 statute aimed at allowing for technology to edit objectionable material from videos at home.[127]  Judge Birotte further ruled that VidAngel’s omission of objectionable material from movies did not render its use "transformative" such that it would qualify for the fair use exception under copyright law.[128]  VidAngel was then held in contempt when it did not immediately comply with the preliminary injunction order requiring it to take down the studios’ films: the order issued on December 12, 2016, but VidAngel did not comply until December 29.[129]  VidAngel’s motion to the Ninth Circuit for an emergency stay pending appeal of the preliminary injunction was denied.[130]  Although the Ninth Circuit has not yet ruled on the injunction, VidAngel in the meantime released a new filtering app on June 13, 2017, that purports to offer the same functionality, except instead of using DVDs, the app links to users’ Netflix and Amazon accounts.[131]  VidAngel filed a motion with the district court seeking clarification regarding whether the injunction order applies to this new service, but the studios are vigorously opposing VidAngel’s effort, arguing that the new service is an end run around the court’s preliminary injunction and threatens to confuse consumers regarding the legitimate streaming market.[132]  Hollywood studios remain keenly invested in guarding their intellectual property against companies like VidAngel that seek to create unauthorized copies or derivative works in order to separately monetize the studios’ films.  Thus far, the studios are prevailing in this fight. 3.     Disney’s Zootopia Sued For Substantial Similarity A recent lawsuit filed against Disney alleges that Disney copied the work of Gary L. Goldman in its Oscar-winning film, Zootopia.[133]  Some of Goldman’s other work includes Total Recall and Minority Report.  The lawsuit, brought by Esplanade Productions, alleges that Goldman twice pitched Disney his similar project—titled "Looney"—in 2000 and 2009.[134]  During those pitches, Goldman provided a title, synopsis, character descriptions and even illustrations.  Disney, however, declined to pursue Goldman’s proposal.  Shortly afterward, the lawsuit alleges, Disney began production on its own Zootopia project, which went on to gross more than $1 billion at the box office.[135]  On July 11, 2017, the Court granted Disney’s motion to dismiss with leave to amend, finding, based on the inclusion in the complaint of both the asserted and the allegedly infringing materials that "[t]he differences between the character designs outnumber the similarities."[136] 4.     Broadcasters Best FilmOn on Appeal In a significant victory for cable broadcasters, the Ninth Circuit Court of Appeals reversed a victory in favor of streaming company FilmOn, handing significant relief to broadcasters like CBS, Fox, NBC and ABC, who objected to a California federal judge’s decision in July 2015 that streamers can be deemed to be a "cable system," eligible to obtain a compulsory license to broadcasters’ content under Section 111 of the Copyright Act.[137] The Ninth Circuit held that a service that captures copyright-protected works broadcast over the air, and that then retransmits them to paying subscribers over the internet without the consent of copyright holders, is not a "cable system" eligible for a compulsory license.[138]  The panel found that even if the statute may be ambiguous, it was appropriate to defer to the guidance of the Copyright Office, which has consistently found that internet-based services do not qualify as "cable systems" under the law.[139] After the ruling, FilmOn and the cable broadcasters reached a settlement.[140]  The details are confidential, but FilmOn has withdrawn pending appeals in the DC and Seventh Circuits.[141]  5.     Fees Cases Post-Kirtsaeng In 2016, the Supreme Court issued a decision Kirtsaeng v. John Wiley & Sons, Inc., holding that in deciding whether to award attorney’s fees under the Copyright Act, a district court should give substantial weight to the "objective reasonableness" of the losing party’s position, while still taking into account all other circumstances relevant to granting fees.[142]  Since then, lower courts have endeavored to apply this new standard, including in the "Stairway to Heaven" appeal and the "Who’s On First" litigation. a.     Led Zeppelin’s "Stairway to Heaven" Last summer, a jury found that guitarist Jimmy Page did not copy "Stairway to Heaven’s" iconic opening from a 1968 instrumental piece by the band Spirit, which for a time had toured with Led Zeppelin.  However, Spirit songwriter Randy Wolfe’s trustee and lawyer, Michael Skidmore, refused to accept the loss, and filed a voluminous appeal in the Ninth Circuit.  Led Zeppelin’s attorney cross-appealed, asking the Ninth Circuit to reverse the District Judge’s order on fees, and to assess the defendants’ attorneys’ fees against the Wolfe estate.[143]  In August 2016, District Judge Gary Klausner ruled that the Wolfe estate’s claims were neither frivolous nor "objectively unreasonable" enough to force paying defendants’ legal bill of nearly $800,000, despite allegations of litigation misconduct by the Wolfe estate’s attorney.[144]  Judge Klausner’s ruling came just months after the Supreme Court’s decision in Kirtsaeng. On appeal, Zeppelin and Warner/Chappell argue that Judge Klausner erred in treating litigation misconduct with equal weight as the Fogerty factors, a set of standards that were established for evaluating fee awards in copyright cases in a 1994 U.S. Supreme Court case involving singer John Fogerty.[145]  A ruling from the Ninth Circuit is pending, and expected later this year. b.     "Who’s On First" In early June, a federal magistrate judge recommended that the heirs of the famed comedy duo, Abbott and Costello, pay more than $50,000 in attorneys’ fees for filing an unsuccessful copyright lawsuit against the producers of a Broadway play that featured the duo’s famous "Who’s On First" comedy routine.[146]  United States Magistrate Judge James C. Francis said the estate’s claim that it continued to own the rights to that iconic bit was precisely the kind of "objectively unreasonable" position that the Kirtsaeng opinion had indicated can result in an award of fees.[147]  But the heirs pushed back, saying the suit had, after all, survived a motion to dismiss, and did not end until the Second Circuit shot down their claim to the rights in October 2016, in a decision that created "new law relative to this technical copyright issue."[148]  The heirs argued that a later decision cannot retroactively transform the heirs’ claim from valid to objectively unreasonable at the time of filing.[149]  No decision has been reached on this issue, but it remains clear that even under the post-Kirtsaeng standards, courts continue to be reluctant to award fees in copyright cases in the absence of clear showing that a party advanced a position it knew to be inconsistent with the law. C.     Trademark Litigation Goes on Offense 1.     SCOTUS Confronts Ban on Disparaging Trademarks in Matal v. Tam On June 19, 2017, the Supreme Court handed down its opinion in Matal v. Tam (fka Lee v. Tam), ruling that the federal government’s ban on "disparaging" trademark registrations, which was enacted into law in 1946, violates the First Amendment.[150]  Under what became known as the "disparagement clause," the Lanham Act prohibited the federal registration of trademarks on the "principal register" that may "disparage . . . persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute."[151]  To determine if a trademark application was disparaging, the United States Patent and Trademark Office ("PTO") examiner would employ a two-part test.  First, the examiner would determine "the likely meaning of the matter in question," and then, "[i]f that meaning is found to refer to identifiable persons, institutions, beliefs or national symbols," the examiner considers if the meaning could be disparaging "to a substantial composite of the referenced group."[152] In the case at issue, Simon Tam, the lead singer of the band The Slants, applied to register the band’s name on the principal register in 2010.[153]  The band, whose members are of Asian descent, sought to "reclaim" the derogatory racial slur.  However, the PTO examiner denied the registration, citing "numerous dictionaries" that define the term as derogatory, online bloggers and commentators who wrote about the name being offensive, and a performance that was canceled due to the band’s name.[154] Tam challenged the denial, but initially lost before the PTO’s Trademark Trial and Appeal Board (the "Board").[155]  On appeal, the U.S. Court of Appeals for the Federal Circuit found that the Lanham Act’s disparagement clause was facially unconstitutional under the Free Speech Clause of the First Amendment.[156]  Justice Alito announced the judgment of the Court, which was unanimous with respect to the conclusion that, despite the role of government in the registration process, trademarks constitute private rather than government speech.  The Court reasoned that the government merely registers the contents of others’ trademarks; it "does not dream up these marks," "it does not edit marks submitted for registration," and the PTO has made clear in the past that registration does not constitute government approval of a particular mark.  The Court also found that prior Supreme Court precedents fail to support trademark registration as a form of government speech.  According to the opinion, trademarks are different from speech used to convey a government message—as was the case with selected monuments placed on governmental property in Pleasant Grove City v. Summum—and there is no evidence the public associates trademarks with the government itself—as was the case with specialty license plates in Walker v. Texas Division, Sons of Confederate Veterans.  Further backing away from Walker, which the Court noted "likely marks the outer bounds of the government-speech doctrine," the Court emphasized that government registrations in other, related contexts like copyright registration do not constitute government speech. Justice Alito went on to reject the remainder of the government’s arguments, writing only for himself, Chief Justice Roberts, Justice Thomas, and Justice Breyer.  First, Justice Alito explained that trademark registration is not a form of government subsidy, which would permit the government to subsidize speech expressing a particular viewpoint while refusing to subsidize activities it does not wish to promote.[157]  He also refused to create a new "government-program" doctrine for trademarks that would allow for some content- and speaker-based restrictions.[158]  Finally, Justice Alito explained that it is unnecessary to decide whether the relaxed-scrutiny afforded commercial speech under the First Amendment applies here, because the disparagement clause is too broad to withstand even that lesser standard of review.[159] Justice Kennedy, in a separate opinion joined by Justices Ginsburg, Sotomayor and Kagan, emphasized in greater detail why the First Amendment protects "THE SLANTS" trademark from governmental disapproval of a viewpoint the government finds unacceptable.  He reasoned that the case involved viewpoint discrimination that warranted heightened scrutiny, without undertaking a commercial speech analysis as in Justice Alito’s opinion.[160] Justice Thomas filed a short concurrence in part and in the judgment, reiterating his view that whenever the government seeks to restrict truthful speech in order to suppress the ideas conveyed, strict scrutiny applies.[161] Tam’s central holding—that the Lanham Act’s disparagement clause is unconstitutional—is likely to have only a limited impact, as most trademarks are not accused of disparagement.  The ruling has already had implications in the sports world, however, as the government has conceded in a filing to the Fourth Circuit that because the Tam case "controls the disposition of" the government’s effort to cancel the registration of the team name and other trademarks owned by the Washington Redskins professional football team, the team will likely prevail.[162] 2.     SpongeBob SquarePants’ Fictional "Krusty Krab" Restaurant Wins In Trademark Infringement Suit On March 17, 2017, the District Court of the Southern District of Texas granted Viacom International Inc.’s motion for summary judgment on its common law trademark infringement and unfair competition claims against IJR Capital Investments, LLC.[163]  IJR had filed a federal trademark application for THE KRUSTY KRAB mark under restaurant services.  Viacom, which owns the popular Nickelodeon cartoon SpongeBob SquarePants, issued a cease and desist letter, demanding that IJR withdraw the application because the proposed mark would cause a likelihood of consumer confusion with the fictional Krusty Krab restaurant that repeatedly appears in the SpongeBob cartoon series.  IJR rejected the request, and Viacom sued, alleging, among other things, common law trademark infringement, dilution, and unfair competition.[164] To succeed on its common law trademark infringement claim, Viacom needed to establish that it possessed a valid mark in The Krusty Krab and that IJR’s use created a likelihood of confusion as to the source of the mark.[165]  To prove a valid mark, Viacom had to show that it uses the mark in commerce and that the mark is either "inherently distinctive" or has "acquired distinctiveness through secondary meaning."[166] The court first found that Viacom possessed a valid mark, even though it never registered The Krusty Krab mark and The Krusty Krab is a fictional restaurant.  Trademark ownership "is established by use in the market, not by registration," the court stated.  The Krusty Krab has appeared in 166 episodes of SpongeBob since 1999, was depicted in both SpongeBob feature films (which grossed over $470 million), and has appeared on various licensed consumer products.[167]  The Court analogized The Krusty Krab to "Kryptonite" and the "Daily Planet," two fictional components of the Superman universe that have been ruled to possess common law trademark protections because they have "regularly appeared on licensed consumer merchandise over the years."[168] Second, Viacom demonstrated that the mark had "acquired distinctiveness through secondary meaning."[169]  The Court found that Viacom has "shown by a preponderance of the evidence that it has met several of the" factors courts use to determine distinctiveness through secondary meaning.  Krusty Krab-licensed merchandise has appeared in "numerous print and Internet advertisements," declarations and exhibits summarizing SpongeBob’s eleven seasons proved the length and manner in which The Krusty Krab had been used, and the amount and manner of advertising the mark was shown by the $197 million in advertising spent on the two SpongeBob movies.[170] Finally, Viacom established a likelihood of confusion, primarily based on the strength and continued use of its own mark and "the identical spelling and pronunciation of the two marks, including the unconventional way of spelling the words with a ‘K’ instead of a ‘C.’"[171]  The Court also found that the "sales and forms of advertising are likely to overlap" and that evidence existed that the creator of IJR’s mark "was aware of Viacom’s mark."[172]  As such, Viacom’s motion for summary judgment was granted, both as to Viacom’s claim for trademark infringement and for its claim of unfair competition.[173]  The Court entered its final judgment on April 11, 2017,[174] and IJR appealed on May 9, 2017.[175] 3.     GOOGLE Not Subject to Genericide On May 16, 2017, the Ninth Circuit Court of Appeals affirmed a district court grant of summary judgment for Google against claims that its registered GOOGLE mark had become generic and should be canceled.[176] Plaintiffs had registered hundreds of domain names that included the word "google."  After Google filed a complaint with the National Arbitration Forum, the two plaintiffs initiated a federal lawsuit in Arizona, petitioning to cancel the GOOGLE mark pursuant to 15 U.S.C. § 1064(3), "which allows [for] cancellation of a registered trademark if it is primarily understood as a ‘generic name for the goods or services . . . for which it is registered.’"[177]  Generic terms are not protectable as trademarks, and this process, which has affected aspirin, cellophane, and escalator, has become known as "genericide." Plaintiffs argued that "a majority of the relevant public uses the word ‘google’ as a verb" and that "verb use constitutes generic use as a matter of law."  Google, on the other hand, "argued that [Plaintiffs] failed to present sufficient evidence to support a jury finding that the relevant public primarily understands the word ‘google’ as a generic name for internet search engines."  On appeal, the Ninth Circuit agreed with Google’s position, and affirmed the district court’s decision.[178] The Ninth Circuit concluded that widespread use of "Google" as a verb has not caused "Google" to become a generic term like "aspirin" or "thermos."[179]  The court explained that a claim of genericide must relate to a particular type of product or service, not simply to the word itself.[180]  Accordingly, the proper question was not whether "Google" had become a generic term for the "act" of search, but instead whether it had become a generic name consumers use for internet search engines.[181] 4.     Belushi Is Primarily a Surname Applicant Beds & Bars Limited applied to register the mark BELUSHI’S for travel and hotel services, but the Trademark Examining Attorney refused the application, citing 15 U.S.C. § 1052(e)(4), which "precludes registration of a mark on the Principal Register that is ‘primarily merely a surname’ without a showing of acquired distinctiveness."[182]  Applicant appealed, and the Trademark Trial and Appeal Board affirmed the Examining Attorney’s refusal, concluding "that BELUSHI’S is a surname that "has no other ‘ordinary language meaning.’"[183] Proposed marks are considered "primarily merely a surname if, when viewed in relation to the goods or services for which registration is sought, its primary significant to the purchasing public is that of a surname."[184]  To assist in this analysis, examiners consider if "the applicant adopted a principal’s name," whether the proposed mark has a "nonsurname, ‘ordinary language’ meaning," and how common the surname is.[185] On appeal, Bed & Bars argued two points:  first, that "Belushi" is an extremely rare surname and second, "if BELUSHI’S brings to mind the famous Belushi brothers, then it cannot be primarily merely a surname."[186]  But Applicant did not present "any evidence showing that BELUSHI has a meaning other than as a surname."[187]  Consequently, although the Board agreed that use of the name BELUSHI as a surname is "rare"—with only five people in the United States using it as a surname—BELUSHI is "so well-known as a result of media publicity" over the years because of the actors Jim and John Belushi "that it would be immediately recognized as a surname."[188]  And therefore, even though it is "a rare surname" its "primary significance to purchasers is that of a surname."[189] 5.     Public University Should Have Allowed Student Marijuana-Reform Organization to Use University’s Trademarks On June 13, 2017, the Eight Circuit Court of Appeals affirmed a district court’s ruling that Iowa State University ("ISU") "violated plaintiffs’ First Amendment rights because [ISU] engaged in viewpoint discrimination" when ISU repeatedly denied the student chapter of the National Organization for the Reform of Marijuana Laws’ ("NORML ISU") requests to use ISU’s trademarks in connection with designs that included cannabis leaves.[190]  The Court also affirmed the district court’s ruling that the defendants were not entitled to qualified immunity.[191] ISU recognizes NORML ISU as one of the university’s approximate 800 official student organizations.[192]  NORML ISU advocates for reforming laws that prohibit marijuana use, and as an official student organization, it can submit to ISU’s Trademark Office proposed merchandise that incorporates ISU’s trademarks with the group’s name and message.[193]  If the proposed merchandise complies with ISU’s Trademark Guidelines, the application is approved.[194] In October 2012, NORML ISU submitted a t-shirt design with a cannabis leaf to ISU’s Trademark Office, and the Trademark Office initially approved the submission.[195]  Shortly thereafter, however, the Des Moines Register published a front-page article about efforts to legalize marijuana and quoted NORML ISU’s president.[196]  This article caught the attention of the Iowa House Republican caucus and the Governor’s Office of Drug Control Policy, and both groups pushed back against the school’s policy.[197]  Ultimately, ISU placed NORML ISU’s reorder of the t-shirt design on hold, required the group to seek special approval before submitting applications to the ISU Trademark Office, revised its Trademark Guidelines to prohibit "designs that suggest promotion of . . . illegal or unhealthy products . . . [or] drugs and drug paraphernalia," and rejected all of NORML ISU’s subsequent design applications that included cannabis leaves.[198] In affirming that ISU violated plaintiffs’ First Amendment rights, the Court ruled that "ISU created a limited public forum when it made its trademarks available for student organizations to use if they abided by certain conditions."[199]  Viewpoint discrimination—regulating speech due to the speaker’s message—is permissible in limited public forums only when "the government demonstrates that its regulation is narrowly drawn and is necessary to effectuate a compelling state interest."[200]  Here, however, the Court concluded that ISU’s "discriminatory motive [was] evidenced by the unique scrutiny [it] imposed on NORML ISU."[201]  ISU placed the t-shirt reorder on hold, required the group to obtain pre-approval before submitting future designs to the Trademark Office, NORML ISU was the only student organization "to have had its trademark application denied for fear that the university would be endorsing a political cause," and "[t]he record [was] replete with statements from defendants regarding their political motives."[202] An ISU spokesman has stated that ISU is reviewing whether it will appeal the decision.[203] D.     First Amendment Cases Speak Loudly First Amendment cases and concerns featured heavily in the national news cycle in the first half of 2017, which saw a journalist for The Guardian body-slammed by a congressional candidate on the eve of Montana’s special election to fill a vacated seat.  And courts around the country are working through difficult questions surrounding the rights and responsibilities of journalists and the often controversial struggle to balance rights of privacy with access to newsworthy information.  In California, a federal judge weighed whether a new law can prevent IMDB from publishing actors’ ages.  In New York, courts considered whether a small-scale, highly targeted subscription-based news source should be compelled to reveal its sources and whether BuzzFeed should face legal ramifications for publishing the infamous Trump dossier.  1.     IMDB.com v. Becerra In an attempt to reduce age discrimination against professionals in the entertainment industry, California recently passed legislation requiring that commercial online entertainment employment services providers remove information about an individual’s age or birth date upon their request.  The new law, known as AB 1687, requires service providers to remove the offending information within 5 days of such request and to ensure that any companion sites under their control remove the same.[204] Although the language of the law applies generally to all commercial online entertainment employment service providers, it appears that the Amazon-owned IMDB and IMDB Pro are the only sites affected and were intended to be the targets.[205]  While other such databases exist, they already remove age-related information from their websites upon an actor’s request.[206]  IMDB, in contrast, has resisted calls to redact such information and, according to the company’s policy, "do[es] not remove valid dates of birth."[207]  SAG-AFTRA reportedly receives hundreds of member claims each year about IMDB’s practice of publishing actors’ ages and the impact such public information may have on casting decisions.[208]  In November 2016, IMDB filed suit to enjoin enforcement of the law on the grounds that it amounts to an unconstitutional restriction on speech.  In February, a federal district court issued a preliminary injunction enjoining the state from enforcing AB 1687 while the lawsuit is pending.[209]  In the order issuing the injunction, Judge Chhabria wrote that "it’s difficult to imagine how AB 1687 could not violate the First Amendment."[210]  The court held that the law restricted non-commercial speech on the basis of content.[211]  Under First Amendment jurisprudence, the government is therefore required to demonstrate that the restriction is actually necessary to serve a compelling government interest. While preventing age discrimination is a compelling government interest, Judge Chhabria held that the law was not necessary to serve that goal and expressed doubt that the law could "meaningfully combat discrimination at all."[212]  He also noted that the government could achieve the same ends through "more direct, more effective, and less speech-restrictive ways," including enforcing existing anti-discrimination laws more strongly.[213] Following the issuance of the preliminary injunction, the court ruled that no discovery would be permitted in the case until the government filed a motion "describing with specificity the discovery it wished to conduct and the reasons why it would be appropriate to do so."[214]  The government filed a motion for discovery seeking permission to serve various document request, interrogatories and depositions of IMDB representatives.  The government asked specifically for information regarding any policies at IMDB regarding the posting of age information on the site and any efforts by IMDB to lobby against AB 1687.[215]  In June 2017, the court issued a strongly worded denial of the discovery motion, calling the government’s request "irrelevant and burdensome," and given the First Amendment concerns in the case, "disturbing."[216]  Judge Chhabria accused the government of imposing a strict restriction on speech and then "hop[ing] a justification materialized in discovery."[217] 2.     Virginia Citizens Defense League v. Couric In 2016, Katie Couric appeared in and executive produced a documentary film, Under the Gun, which deals with the social issues surrounding gun control.  The film highlights the absences of significant changes to the nation’s gun laws following the 2012 massacre at Sandy Hook elementary school in Newtown, Connecticut.  Footage in the documentary includes an interview between Couric and nine members of the Virginia Citizens Defense League ("VCDL"), which describes itself as a "non-partisan, grassroots organization dedicated to advancing the rights of responsible gun owners under the Second Amendment and Virginia Constitution."[218]  During an interview scene, Couric asked "If there are no background checks for gun purchasers, how do you prevent felons or terrorists from purchasing guns?"[219]  The film then depicts the interview panel sitting in an awkward silence; no one appears to respond to Couric’s question.  Following the film’s release, two members of VCDL who participated in the interview sued Couric, along with the director and distributor of the film, for defamation. The plaintiffs, a gun store owner and an attorney who practices litigation related to firearms and personal defense, alleged that Couric and the co-defendants manipulated footage of the interview and that the resulting segment defamed them, both directly and by implication.[220]  Contrary to what was portrayed in the final film, plaintiffs insisted that multiple members of the interview panel, including both named plaintiffs, responded to Couric’s query.  Plaintiffs alleged that Couric’s failure to include their responses to her question was defamatory because the silence suggested that they: "(1) had no basis for their opposition to background checks, (2) are uninformed notwithstanding their expertise in the areas of gun regulations and rights, (3) were stumped by Couric’s question and (4) are ignorant or unfit in their trades."[221] Ruling on defendants’ motion to dismiss, the court dismissed plaintiff’s defamation claims, noting that defamation requires an actionable statement that is both false and defamatory.[222]  The judge found that while plaintiffs did respond to Couric’s question, they did not answer it; rather, the Court explained, "[t]hey talked about background checks and gun laws generally, but did not answer the question of how to prevent felons or terrorists from purchasing guns without background checks."[223]  Thus, the Court found that the presentation of the interview in the film was not false but instead a "dramatize[d]" rendering of the reality that the plaintiffs did not have a responsive answer to Couric’s direct question.[224]  Further, the Court held that the statement at issue was not defamatory as a matter of law. Taken in context, the scene suggests that the plaintiffs oppose background checks and at worse, that they could not or would not answer Couric’s question regarding possible methods of restricting gun sales to felons or terrorists.[225]  The Court held that the inability or refusal to answer to a question about "difficult and complex issues" neither carried the necessary sting to be defamatory nor implied that either plaintiff was unfit for their respective profession.[226] 3.     Fridman v. BuzzFeed In January 2017, BuzzFeed made the controversial decision to publish an unverified dossier detailing, among other things, allegations of long-standing attempts by the Russian government and financial sector to influence then President-elect Trump.  Owners of Alfa Bank, a Russian Bank named in the dossier, filed a defamation action against the website in May, in New York state court, seeking unspecified damages.  The complaint alleges that BuzzFeed decided to publish the unverified allegations contained in the dossier, including that "Alfa and its officials and employees ‘co-operated’ with a Kremlin campaign to interfere in the U.S. Presidential election, "with "knowledge of their falsity or with reckless disregard of whether they were true or false."[227]  BuzzFeed has defended its decision to publish the dossier, citing the ongoing congressional and FBI investigations into allegations of Russian attempts to influence the election and the fact that two successive presidents received official briefings on the dossier.[228] This is the second lawsuit filed against BuzzFeed over the publication of the dossier.  Earlier this year, Russian technology entrepreneur Aleksej Gubarev filed a similar defamation action against the website in Florida.[229]  The dossier included claims that he and his companies conducted cyber operations against the Democratic Party.[230]  Shortly after the suit was filed, BuzzFeed redacted portions of the dossier naming Gubarev and issued an apology.[231] 4.     Murray Energy Corp. v. Reorg Research, Inc. In February 2017, a New York trial court issued a ruling requiring Reorg Research, Inc., a company that provides distressed debt market intelligence to paying subscribers, to disclose the identities of several anonymous sources.[232]  The individuals in question allegedly provided to the subscription news service confidential information about coal company Murray Energy’s ongoing negotiations with its creditors.  Reorg initially refused to reveal the names of its sources, citing the New York Shield Law, which protects professional journalists from being held in contempt of court for refusing to reveal the identities of their confidential sources.[233]  The trial court, however, held that the Shield Law’s protections did not extend to the employees and sources of a commercial subscription alert service with a relatively small subscriber base.[234]  The court noted that the purpose of the Shield Law is to promote "news intended for dissemination to the public," while the value in Reorg’s alerts is that subscribers receive access to otherwise non-public information before it is widely known by the general public.[235]  The trial court also noted that Reorg’s subscription terms bar subscribers from sharing the information with non-subscribers.[236]  Therefore, the trial court held that Reorg did not fit into any of the enumerated categories of news organizations protected by the Shield Law.[237]  Reorg appealed the trial court decision and was granted a stay of the order pending appeal.  In July 2017, the Appellate Division of the Supreme Court of New York issued an order reversing the trial court decision and dismissed the case, holding that Reorg is "a professional medium or agency which has as one of its main functions the dissemination of news to the public" and is therefore protected from revealing its sources by the Shield Law.[238]  Reorg and supporting amici successfully argued that its subscription model is "essential to the economic viability of specialty or niche publications that target relatively narrow audiences."[239]  In addition, the court held that the public receives secondary benefits from the service’s news alerts, despite the restrictions on subscribers ability to share the information, because its subscribers are "the people who are most interested in this information and most able to use and benefit from it."[240]  While the trial court viewed Reorg’s high subscription fees and small user base with suspicion, the appeals court noted that given the substantial investment necessary to report on a niche subject with a small number of interested readers, the alternative to the subscription model "is not broader coverage but no coverage at all."[241]  In its conclusion, court affirmatively extended the protection of the Shield Law to Reorg and other niche subscription news services while cautioning that conditioning the Shield Law’s protection on a "fact-intensive inquiry" regarding the number of subscribers, fees, and any restrictions on disclosing the information is "unworkable" and may lead "to a potential ‘chilling’ effect."[242] E.     Music Litigation 1.     Kesha v. Dr. Luke The long-running legal battle between singer Kesha and producer Lukasz "Dr. Luke" Gottwald, now spans multiple lawsuits and counterclaims.  In October 2014, Kesha filed a civil suit against Dr. Luke in California for infliction of emotional distress, gender-based hate crimes, employment discrimination and other causes of action.[243]  In response, Dr. Luke sued Kesha and her mother, Pebe Sebert, in New York, for defamation and breach of contract.[244]  Specifically, Dr. Luke alleged that Kesha failed to work on a third album as required under her contract. The New York lawsuit resulted in the staying of the California lawsuit, which Kesha later dropped, in August 2016.  Kesha filed a countersuit in the New York action seeking to be released from her contract on the basis that Dr. Luke had allegedly "sexually, physically, and verbally and emotionally" abused her since the beginning of their professional relationship.[245]  Last year, the New York court denied Kesha’s motion for preliminary injunction that would have allowed her to record an album outside of her contract.[246]  Months later, the court dismissed all of her counterclaims.  In January 2017, Kesha’s attorneys sought to amend her original counterclaim, alleging that Dr. Luke was refusing to send accounting statements and delaying her new album’s release.[247]  The following month, Dr. Luke argued that Kesha was attempting to litigate these disputes as part of a smear campaign to blacklist him from the music industry, and that she owed him $1.3 million in royalties. Dr. Luke also asked the court to allow him to amend his complaint to include allegations concerning additional defamatory statements made by Kesha and her representatives in the media, falsely claiming that Dr. Luke had raped another recording artist, and encouraging Internet petitions to pressure Sony Music Entertainment to release Dr. Luke from his contract.[248]  In March 2017, the New York court rejected Kesha’s attempt to amend her counterclaims, citing its prior finding that Kesha did not perform her obligations under her recording contract.[249]  The court also denied her request for declaratory relief, holding that it was "speculative, not justiciable" whether Sony Music Entertainment’s contract with Dr. Luke was ending and "whether [the deal] would be able to assist" Kesha in fulfilling her contractual duties.[250]  Finally, the court rejected Kesha’s effort to assert California’s seven-year rule on personal service contracts because the parties chose New York law to govern their dealings and there was no overriding public policy interest from another jurisdiction that was materially greater than New York’s interest in enforcing the parties’ choice of New York law.[251] Kesha has since filed a notice of appeal seeking to reverse the New York Supreme Court’s dismissal of her request to amend her counterclaims.[252]  It is now pending before the New York Appellate Division.  (Disclosure: Gibson Dunn represents Sony Music Entertainment in this matter.) 2.     Prince’s Estate and Subsequent Legal Battles  Following the pop star Prince’s unexpected passing in April 2016, his estate and legacy have been the subject of a fair amount of litigation.  While Prince was well known for strictly controlling his intellectual property rights during his lifetime, he died without a will and thereby left no specific instructions about how his much-discussed "vault" of music should be handled.  Since the overwhelming majority of his estate’s value is from the copyrights in his songs, we anticipate that additional lawsuits may crop up concerning Prince’s works in the future. a.     Universal Music Group Obtains Rescission of Deal That Included Conflicted Rights In February 2017, Prince’s Estate and Universal Music Group announced that they had inked a deal that would give UMG the rights to distribute much of Prince’s catalog as well as unreleased masters from the artist’s storied vault.[253]  But immediately after the deal was announced, Warner Bros. Records informed UMG that it held rights that conflicted with those that the Estate had purportedly sold to UMG, despite the Estate’s representatives’ assurances that UMG would receive those rights.[254]  As a result of those misrepresentations, UMG sought rescission of the licensing agreement,[255] and on July 13, 2017, the Minnesota probate court overseeing the administration of Prince’s Estate approved the rescission agreement over the strident objections of several parties, including three of Prince’s heirs.[256]  (Disclosure: Gibson Dunn represents UMG in this matter.) b.     Prince’s Estate Blocks Engineer’s Attempt to Release New Prince EP In April 2017, just a few weeks before the first anniversary of Prince’s death, his estate obtained an injunction against audio engineer and Prince’s former collaborator George Ian Boxill, blocking the unauthorized release of a new six-song EP entitled Deliverance, credited to the singer.[257]   The estate claimed that Boxill unlawfully held onto recordings made between 2006 and 2008 and that he does not have the authorization to release them.  Specifically, the estate points to a confidentiality agreement that Boxill signed with Prince which states that the pair’s recordings "would remain Prince’s sole and exclusive property" and that Boxill "would not use any recordings or property in any way whatsoever."[258]  c.     Andy Warhol Foundation v. Lynn Goldsmith The estate of pop artist Andy Warhol preemptively brought suit in New York federal court seeking declaratory judgment against photographer Lynn Goldsmith over certain artworks featuring Prince’s image "to protect the works and legacy of Andy Warhol."[259]  The complaint came after Goldsmith asserted that Warhol violated the copyright of her photographs of Prince, taken in 1981 for a Vanity Fair article, when they were used to make Warhol’s screen prints.[260]  The Warhol Foundation alleged that the works in Warhol’s "Prince" series do not infringe upon Goldsmith’s copyright in the photograph and are in fact "transformative or are otherwise protected fair use."[261]  The complaint goes into great detail to distinguish Goldsmith’s photo and Warhol’s prints, pointing to changes in color, depth, cropping, and more.  The Warhol Foundation further argues that Goldsmith’s claims are barred by the three-year statute of limitations of the Copyright Act.  Goldsmith responded in a Facebook post to the lawsuit by arguing that she only learned of the Warhol series’ existence following Prince’s death last year.[262]  In June 2017, Goldsmith filed her answer and counterclaims asserting infringement related to a May 2016 special Prince tribute magazine, alleging the lack of transformative nature through the following comparison between the image used for the magazine cover and the original image:[263]   3.     Royalties Disputes with Digital Music Streaming Services New technology streaming services like Spotify, Pandora, and SiriusXM have recently faced multiple royalty disputes from songwriters and artists for allegedly failing to obtain proper licenses and/or pay complete royalty payments.  For instance, in May 2017, Spotify agreed to a $43 million settlement in a class action lawsuit brought by singer-songwriter Melissa Ferrick, who alleged that the streaming service Spotify infringed upon thousands of songwriters’ copyrights rather than follow the proper procedures to obtain mechanical royalties.[264]  Specifically, Ferrick alleged that, as required for mechanical royalties under section 115 of the Copyright Act, Spotify did not file the formal "notice of intent" to obtain many licenses.  In a separate suit, last year, Spotify agreed to settle a suit from the National Music Publishers’ Association for $30 million over unmatched and unpaid song royalties.[265]  Mechanical royalties are currently of considerable interest to the industry because later this year, the Copyright Royalty Board—the panel of judges who describe the royalty rates paid to songwriters and music publishers for the sale of each musical composition to any streaming services—will decide the new mechanical royalty rates for 2018 to 2022.  The current mechanical rates are 9.1 cents for a sale, which is split by the music publisher and songwriter, and rates for streaming are fractions of a cent per play.  A hearing on the matter was held in March 2017, and the Copyright Royalty Board will issue its decision in December 2017.[266]  4.     Fair Use and Sampling Go Another Round Questions over the use and copying of older songs remained a hot-button issue in the aftermath of the 2015 "Blurred Lines" trial, where a jury awarded Marvin Gaye’s family nearly $7.4 million after determining that singers Robin Thicke and Pharrell Williams had copied Gaye’s music in creating their hit song.  This year, the plaintiffs in a different case were less successful in establishing copyright infringement when a New York district court held that the artist Drake’s sample of a spoken word Jimmy Smith track constituted non-infringing fair use.[267]  In 2014, the estate of jazz musician Jimmy Smith brought a copyright infringement suit against Drake over the spoken word sample that opens Drake’s track "Pound Cake/Paris Morton Music 2" on his album Nothing Was the Same.[268]  The lawsuit alleged that Jimmy Smith’s 1982 song "Jimmy Smith Rap" was so prominently sampled on Drake’s track that it amounted to infringement.  In the original track, Smith says, "Jazz is the only real music that’s gonna last.  All that other bull— is here today and gone tomorrow.  But jazz was, is, and always will be."  In Drake’s version, the words are cut down to "[o]nly real music’s gonna last.  All that other bull— is here today and gone tomorrow." The court held that Drake’s sample did not constitute copyright infringement.  When comparing the original against Drake’s version, the court found that Smith’s original was "an unequivocal statement on the primacy of jazz over all other forms of popular music" while Drake’s version transforms it into a "statement that ‘real music’ with no qualifiers, is ‘the only thing that’s gonna last.’"[269]  Because the purpose of the "Pound Cake" track was "sharply different" from Smith’s original message, it added something new and was thereby "transformative."[270]  On July 13, Smith’s motion for reconsideration was denied.[271]  Notably, while the "Blurred Lines" case revolved around the musical composition underlying the song, the Drake case focused on the prose of only a spoken word sample and the meaning of that prose in both songs, providing a contrast between music that was allegedly copied, on the one hand, and a brief sample of actual lyrics, on the other hand.  (Disclosure: Gibson Dunn represents Apple Inc. in this matter.) 5.     The Estate of Jimi Hendrix  For years, entertainment litigators have seen estates of famous celebrities move aggressively to safeguard the legacy of the deceased.  Experience Hendrix, LLC, the estate for legendary guitarist Jimi Hendrix, has been particularly vocal in raising legal challenges to protect his reputation and brand, as evidenced by two recent cases. In Experience Hendrix, LLC v. Tiger Paw Distributors, LLC, the Hendrix estate alleged that the liquor company Tiger Paw committed trademark infringement and disparagement, unfair competition, and other unlawful acts by using Hendrix’s trademarks on an unauthorized promotion of Purple Haze Liqueur.[272]  As part of a settlement, the U.S. District Court for the Southern District of Georgia entered a permanent injunction against the defendants in January 2017, prohibiting them from using the names "Jimi Hendrix" and "Jimi," the initials "JH," and any of the Hendrix estate’s trademarks that incorporate an image or likeness of Hendrix.[273]  The judgment, however, specified that Tiger Paw could nevertheless continue to sell spirits under titles that explicitly referenced several of Hendrix’s songs, and may in fact reference Hendrix directly, as long as those references have a smaller type face and do not infer any endorsement by or affiliation with Hendrix’s estate. Separately, the California Court of Appeal also recently resolved a long-standing contract dispute over whether a film documenting Hendrix’s February 1969 performances at the Royal Albert Hall in London would ever be released.  More than four decades after the performances, the Hendrix estate and film documentarian Gerald Goldstein formed a joint venture to distribute a film of the concert.  But the following year, the estate rescinded the deal, claiming that Goldstein breached it by unreasonably refusing to consent to Sony Pictures Entertainment’s distribution offer.  As a result, the Hendrix estate sued Goldstein seeking $5 million in restitution.  Goldstein responded by arguing that he envisioned a wide release of at least 1,500 movie theaters for the film and did not want to take the Sony deal, which only offered a limited release of about a half-dozen screens and allegedly would result in minimal, if any, profits. The Los Angeles Superior Court ruled in Goldstein’s favor in October 2014, finding that "[w]hile it appears unlikely that he would have been able to attract sufficient financing to achieve the wide release he had envisioned, Goldstein was not given the opportunity to attempt to obtain third party financing."[274]  The lower court also ordered the Hendrix estate to pay more than $300,000 in attorneys’ fees.  On appeal, in May 2017, the court of appeal rejected the estate’s arguments and held that Goldstein was within his contractual rights when he rejected Sony Pictures’ plans to distribute.[275]  The court affirmed the trial court’s finding that Goldstein’s longstanding vision for a wide release of the film may not have been a sound business decision, but was within his rights under the contractual terms.[276]  F.     New Efforts to Regulate ISPs So far, 2017 has seen a number of interesting developments in areas where social media and the internet intersect with speech and privacy rights.  One such development occurred in New York, where lawmakers are considering enacting a version of the European "Right to Be Forgotten" law, which raises a host of First Amendment considerations not implicated in Europe. 1.     The Right To Be Forgotten In May 2014, the European Court of Justice ruled that internet search engines must honor an individual’s right to be forgotten and delete links that do not serve a compelling public interest and which harm privacy rights.[277]  Since then, European Union policymakers have approved a general data protection regulation ("GDPR"), which goes into effect in May 2018.  The GDPR will require internet providers to balance takedown requests against other competing interests and rights.[278] One issue currently surrounding the European version of the law is its jurisdictional reach.  In France, the Commission Nationale de l’Informatique et des Libertés ("CNIL") has ordered Google to globally erase content subject to removal regardless of what country the request came from.[279]  Google maintains that it need only remove content from the European versions of its search engine, but government officials disagree, and similar fights would likely result from the New York law, which is styled to apply "regardless of whether such content also was or is published elsewhere."[280] On February 8, 2017, New York State Assemblyman David I. Weprin introduced The Right to Be Forgotten Act.[281]  Bill A05323, as currently written, would amend the state’s civil rights laws so that "[u]pon the request from an individual, all search engines, indexers, publishers and any other persons or entities that make available, on or through the internet . . . , information about the requester, shall remove information, articles, identifying information and other content about such individual . . . that is ‘inaccurate’, ‘irrelevant’, ‘inadequate’ or ‘excessive’ within thirty days of such request."[282]  The bill proceeds to collectively define "inaccurate," "irrelevant," "inadequate," or "excessive" as "content, which after a significant lapse in time from its first publication, is no longer material to current public debate or discourse, especially when considered in light of the financial, reputational and/or demonstrable other harm that the . . . content is causing to the requester’s . . . interest."[283]  However, the bill excludes "content related to convicted felonies, legal matters relating to violence, or a matter that is of significant current public interest."[284] In addition, the New York law does not appear to sufficiently account for First Amendment free-speech considerations or the need to preserve information that remains in the public’s interest, calling into question the bill’s constitutionality even before its enactment.[285]  In the United States, non-defamatory social media posts, news articles, and search engine histories are forms of protected speech under the First Amendment, and courts have repeatedly held that the freedom of speech extends to hateful and disagreeable speech.[286]  Therefore, were the law to be enacted, without clearer limitations, New York’s Right to Be Forgotten Act is likely to face constitutional challenges. Even putting aside such constitutional issues, experience with similar laws in Europe has shown that these laws have created uncertainty for internet companies.  And the proposed New York law is likely to raise similar issues.  In particular, critics have raised questions as to the  jurisdictional breadth of the proposed law and the burdens that it would place on the internet companies that would be forced to attempt to interpret and comply with it.  As written, the bill could result in fines of $250 per day against violators after a thirty-day grace period.[287]   [1] Cynthia Littleton, Sinclair Broadcast Group Sets $3.9 Billion Deal to Acquire Tribune Media, Variety, May 8, 2017, http://variety.com/2017/tv/news/sinclair-tribune-merger-station-group-1202416416/. [2] Jenna Ebersole, DC Circuit Lifts Halt on FCC TV Ownership Shift, Law360, June 15, 2017, https://www.law360.com/articles/935104/dc-circuit-lifts-halt-on-fcc-tv-ownership-shift. [3] Etan Vlessing, Ion Media Buys Three TV Stations, Bringing Total to 63, The Hollywood Rep., June 20, 2017, http://www.hollywoodreporter.com/news/ion-media-buys-three-tv-stations-bringing-total-63-1015058. [4] Ebersole, supra note 2. [5] Cynthia Littleton, Appeals Court Removes FCC Roadblock to Sinclair-Tribune Merger, Variety, June 15, 2017, http://variety.com/2017/tv/news/fcc-sinclair-tribune-uhf-discount-appeals-court-1202467351/. [6] George Szalai, Fox’s Sky Deal: Regulators Submit Reports, U.K. Government to Decide by June 29, The Hollywood Rep., June 20, 2017, http://www.hollywoodreporter.com/news/foxs-sky-deal-regulators-submit-reports-uk-government-1014630. [7] Ivana Kottasova & Alanna Petroff, Murdoch’s Fox-Sky Deal in Hands of U.K. Government, CNN Money, June 20, 2017, http://money.cnn.com/2017/06/20/media/sky-fox-deal-rupert-murdoch/index.html. [8] Szalai, supra note 6. [9] Jason Douglas & Stu Woo, Fox’s Bid for Sky Set for More U.K. Scrutiny, Wall St. J., June 29, 2017, https://www.wsj.com/articles/foxs-bid-for-sky-set-for-more-u-k-scrutiny-1498735307. [10] Id. [11] Arjun Kharpal, Verizon Completes Its $4.48 Billion Acquisition of Yahoo; Marissa Meyer Leaves with $23 Million, CNBC, June 13, 2017, http://www.cnbc.com/2017/06/13/verizon-completes-yahoo-acquisition-marissa-mayer-resigns.html. [12] Id. [13] Id. [14] Id. [15] Ryan Knutson, et al., Verizon Doubles Down on Media with Yahoo Deal, Wall St. J., June 13, 2017, https://www.wsj.com/articles/verizon-doubles-down-on-media-with-yahoo-deal-1469465120. [16] Kharpal, supra note 11. [17] Lukas I. Alpert & Shalini Ramachandran, Vice Media Secures $450 Million Investment from Private-Equity Firm TPG, Wall St. J., June 19, 2017, https://www.wsj.com/articles/vice-media-secures-450-million-investment-from-private-equity-firm-tpg-1497882405. [18] Id. [19] David Lieberman, Vice Media Grips $450M Investment That CEO Says Raises Valuation to $5.7B, Deadline Hollywood, June 19, 2017, http://deadline.com/2017/06/vice-media-grips-450m-investment-ceo-says-raises-valuation-1202115714/. [20] Id. [21] Shalini Ramachandran & Georgia Wells, Time Warner Signs $100 Million Deal With Snap for Shows and Ads, Wall St. J., June 19, 2017, https://www.wsj.com/articles/time-warner-signs-100-million-deal-with-snap-for-shows-and-ads-1497885737. [22] Shalini Ramachandran, Media Companies Line Up to Make Shows for Snap TV, Wall St. J., May 4, 2017, https://www.wsj.com/articles/media-companies-line-up-to-make-shows-for-snap-tv-1493890205. [23] Id. [24] Ramachandran & Wells, supra note 21. [25] Variety Staff, SiriusXM Sets $480 Million Investment in Pandora, Variety, June 9, 2017, http://variety.com/2017/music/news/siriusxm-480-million-investment-pandora-1202459872/. [26] Benjamin Horney, 4 Firms Assist On SiriusXM’s $480M Investment In Pandora, Law360, June 9, 2017, https://www.law360.com/articles/933029/4-firms-assist-on-siriusxm-s-480m-investment-in-pandora. [27] Id.; see also Chelsea Naso, Pandora Inks $450M Deal For Event Ticketing Service, Law360, Oct. 7, 2015, https://www.law360.com/articles/711861/pandora-inks-450m-deal-for-event-ticketing-service. [28]    Brian Heater, Pandora CEO Tim Westergren is Officially Out Amid Company Shakeup, TechCruch, June 27, 2017, https://techcrunch.com/2017/06/27/pandora-ceo-tim-westergren-is-officially-amid-company-shakeup/. [29] Nick Kostov & Corrie Driebusch, Cable Operator Delivers Biggest U.S. Telecom IPO in 17 Years, Wall St. J., June 21, 2017, https://www.wsj.com/articles/altice-usa-a-mashup-of-telecoms-set-to-be-one-of-the-biggest-ipos-of-the-year-1498053660. [30] Id. [31] Alex Barinka & Gerry Smith, Altice USA CEO Goei Thinks Ahead to M&A on First Day of Trading, Bloomberg Tech., June 21, 2017, https://www.bloomberg.com/news/articles/2017-06-21/altice-usa-raises-1-9-billion-in-year-s-second-biggest-u-s-ipo. [32] Lauren Hirsch & Liana B. Baker, Cable Operator Altice USA Raises $1.9 bln in IPO, Reuters, June 21, 2017, available at http://www.cnbc.com/2017/06/21/reuters-america-update-1-cable-operator-altice-usa-raises-19-bln-in-ipo.html. [33] Id. [34] Sruthi Shankar & Laharee Chatterjee, WideOpenWest Shares Fail to Wow in Debut, Reuters, May 25, 2017, http://www.reuters.com/article/us-wideopenwest-ipo-idUSKBN18L1YT. [35] Ryan Faughnder & David Pierson, The $1-billion deal to sell Dick Clark Productions to China’s Wand Group is dead, L.A. Times, March 10, 2017, http://www.latimes.com/business/hollywood/la-fi-ct-wanda-dick-clark-deal-20170309-story.html. [36] Id. [37] Sherisse Pham, Dick Clark Productions owner pulls the plug on $1 billion sale to China’s Wanda Group, CNN Money, March 13, 2017, http://money.cnn.com/2017/03/13/news/companies/dalian-wanda-dick-clark-deal-dead/index.html. [38] David Lieberman, Dick Clark Productions Owner Scraps $1B Sale to Wanda Group, Deadline, March 10, 2017, http://deadline.com/2017/03/dick-clark-productions-owner-scraps-sale-wanda-group-1202040693/. [39] Id. [40] Brent Lang & Gene Maddaus, After Dick Clark Productions Deal Fails to Close, What’s Next for Dalain Wanda, Variety, March 14, 2017, http://variety.com/2017/film/news/wanda-dick-clark-productions-deal-failure-hollywood-1202007964/. [41] Patrick Brzeski, Crisis Grows at China’s LeEco After Courts Freeze Chairman’s Millions, The Hollywood Rep., July 4, 2017, http://www.hollywoodreporter.com/news/crisis-grows-at-chinas-leeco-courts-freeze-chairmans-millions-1018664. [42] Eriq Gardner, Vizio Files Fraud Lawsuit Against China’s LeEco After $2 Billion Merger Fails, The Hollywood Rep., July 11, 2017, http://www.hollywoodreporter.com/thr-esq/vizio-files-fraud-lawsuit-chinas-leeco-2-billion-merger-fails-1020120. [43] Id. [44] Id. [45] Gene Maddaus, Chinese Metals Firm in Busted Voltage Deal Says It Can’t Be Sued in U.S. Court, Variety, June 2, 2017, http://variety.com/2017/biz/news/anhui-xinke-new-materials-voltage-china-lawsuit-1202452301/. [46] Patrick Brzeki, Wanda Boards Paramount’s ‘Transformer 5’ as Marketing Partner in China, The Hollywood Rep., June 19, 2017, http://www.hollywoodreporter.com/news/wanda-boards-paramounts-transformers-5-as-marketing-partner-china-1014635. [47] Mila Galuppo, Blumhouse Inks Multiyear Co-Financing Deal with China’s Meridian, The Hollywood Rep., Apr. 25, 2017, http://www.hollywoodreporter.com/news/blumhouse-inks-multiyear-financing-deal-chinas-meridian-997293. [48] Rebecca Sun, CAA and China’s Bona Film Group Establish $150 Million Film Fund, The Hollywood Rep., May 25, 2017, http://www.hollywoodreporter.com/news/caa-chinas-bona-film-group-establish-150-million-film-fund-1007809. [49] Id. [50] Patrick Frater, Paramount’s Billion-Dollar Deal With Chinese Partners Hits Major Snag, Variety, March 8, 2017, http://variety.com/2017/film/asia/paramount-slate-deal-chinese-partners-hits-road-bump-1202003483/. [51] Id. [52] George Szalai, Paramount’s China Partners Now Financing 30 Percent of Slate, The Hollywood Rep. May 4, 2017, http://www.hollywoodreporter.com/news/viacom-paramounts-china-deal-is-operation-partners-financing-30-percent-slate-1000160. [53] Rebecca Sun & Patrick Brzeski, CAA’s New China Frontier; Strong Investor Now, Possible IPO Later?, The Hollywood Rep., Apr. 26, 2017, http://www.hollywoodreporter.com/news/caas-new-china-frontier-strong-investor-ipo-997497. [54] Patrick Brzeski, Cannes: UTA, Tan Media Partners Tem on China Distribution Fund,  The Hollywood Rep., May 21, 2017, http://www.hollywoodreporter.com/news/cannes-uta-tang-media-partners-team-china-distribution-fund-1005959. [55] Patrick Brzeski, Netflix Signs Licensing Deal with China’s iQiyi, The Hollywood Rep., Apr. 24, 2017, http://www.hollywoodreporter.com/news/netflix-signs-licensing-deal-chinas-iqiyi-997071. [56] Patrick Frater, Netflix to Debut in China Via Original Content Licensing Deal with iQIYI, The Hollywood Rep., Apr. 24, 2017, http://variety.com/2017/digital/asia/netflix-strikes-streaming-deal-with-china-iqiyi-1202394504/. [57] Brzeski, supra note 54. [58] Id. [59] Id. [60] Frater, supra note 56. [61] Patrick Frater, Global Streaming Giant Netflix Plays Catch-Up in Asia, The Hollywood Rep., Apr. 27, 2017, http://variety.com/2017/digital/asia/netflix-plays-catch-up-in-asia-1202401071/. [62] Id. [63] Id.; Abhishek Madhavan, How Netflix Lost Big to Amazon in India, Wired, Jan. 12, 2017, https://www.wired.com/2017/01/how-netflix-lost-big-to-amazon-in-india/. [64] Elsa Keslassy, Patrick Drahi’s Telco Group Altice Inks Multi-Year Deal with Netflix, Variety, June 12, 2017, http://variety.com/2017/digital/global/patrick-drahis-telco-group-altice-inks-multi-year-deal-with-netflix-1202462301/; see also Section I.A.7, supra. [65] Todd Spangler, Netflix to Raise $1.1 Billion in New Debt From Non-U.S. Lenders, Variety, Apr. 24, 2017, http://variety.com/2017/digital/news/netflix-1-billion-debt-non-us-content-expansion-1202393530/. [66] Todd Spangler, Netflix Ups Size of Latest Debt Offering to $1.4 Billion to Fund Content Deals, Variety, Apr. 26, 2017, http://variety.com/2017/digital/news/netflix-debt-offering-1-4-billion-1202399657/. [67] Todd Spangler, Netflix Streams More Debt as Investors Wait to See Payoff, Variety, May 4, 2017, http://variety.com/2017/biz/news/netflix-more-debt-1202408166/. [68] Id. [69] Georg Szalai, Amazon Channels Launches in U.K. With Discovery, NBCU, ITV Content, The Hollywood Rep., May 23, 2017, http://www.hollywoodreporter.com/news/amazon-channels-launches-uk-discovery-nbcu-itv-content-1006625. [70] Stewart Clarke, Amazon Launches Channels in U.K. and Germany with Discovery, ITV, NBCU, RTL, Variety May 23, 2017, http://variety.com/2017/tv/global/amazon-channels-in-uk-and-germany-discovery-itv-nbcu-rtl-tele-munchen-mgm-bfi-hopster-1202441171/. [71] Trefis Team, Here’s How Amazon Is Expanding Prime Video In India, Forbes, March 20, 2017, https://www.forbes.com/sites/greatspeculations/2017/03/20/heres-how-amazon-is-expanding-prime-video-in-india/#74c6c8fe2ece. [72] Naman Ramachandran, Amazon Prepares to Launch Prime Video in India, Variety, December 13, 2016, http://variety.com/2016/digital/asia/amazon-prepares-launch-prime-video-india-1201940612/. [73] Nyay Bhushan, Paramount, Amazon India Strike Licensing Deal, The Hollywood Rep., Apr. 10, 2017, http://www.hollywoodreporter.com/news/paramount-amazon-india-strike-licensing-deal-992360. [74] Id. [75] Nyay Bhushan, Amazon India, Warner Bros. Ink Licensing Deal, The Hollywood Rep., June 5, 2017, http://www.hollywoodreporter.com/news/amazon-india-warner-ink-licensing-deal-1010113. [76] Todd Spangler, Hulu Live TV Service Launches With 50 Channels for $40 Monthly, Variety, May 3, 2017, http://variety.com/2017/digital/news/hulu-live-tv-service-launch-channels-1202407778/; Daniel Holloway, Hulu Sets Live TV Carriage Pact for NBCUniversal Channels, Variety, May 1, 2017, http://variety.com/2017/tv/news/hulu-nbcuniversal-carriage-pact-1202404615/. [77] Spangler, supra note 76. [78] Id. [79] Id.   [80] Andrew Wallenstein Hulu Offers HBO, Cinemax as Subscription Add-Ons, Variety, July 6, 2017,  http://variety.com/2017/tv/news/hulu-offers-hbo-cinemax-as-subscription-add-ons-1202488341/ [81] Id.   [82] Id. [83] Michael O’Connell, Hulu Chief Says Library Acquisitions, Like ‘Golden Girls,’ Still a Key to Streamer’s Strategy, The Hollywood Rep., Jan. 17, 2017, http://www.hollywoodreporter.com/live-feed/hulu-chief-says-library-acquisitions-like-golden-girls-still-key-965005. [84] Nick Vivarelli, iflix Looks to Take On Netflix in Emerging Markets, Variety, May 30, 2017, http://variety.com/2017/digital/news/iflix-middle-east-chief-nader-sobhan-netflix-emerging-markets-1202447431/. [85] Todd Spangler, Netflix CEO Reed Hastings on Amazon: ‘They’re Awfully Scary’, Variety, May 31, 2017, http://variety.com/2017/digital/news/netflix-reed-hastings-amazon-awfully-scary-1202448694. [86] Zachary Zagger, Amazon Grabs NFL Thursday Streaming Rights In $50M Deal, Law360, Apr. 5, 2017, https://www.law360.com/media/articles/910148/amazon-grabs-nfl-thursday-streaming-rights-in-50m-deal. [87] Id. [88] Cynthia Littleton, Amazon Nabs Streaming Rights to NFL’s ‘Thursday Night Football’ Games, Variety, Apr. 4, 2017, http://variety.com/2017/biz/news/amazon-streaming-nfl-thursday-night-football-deal-1202023105/. [89] Zachary Zagger, Hulu, Twitter Add Live Sports Options In Cord-Cutting Trend, Law360, May 3, 2017, https://www.law360.com/media/articles/920063/hulu-twitter-add-live-sports-options-in-cord-cutting-trend. [90] Todd Spangler, Twitter Pushes Live-Video Deals With MLB, NFL, Viacom, BuzzFeed, Live Nation, WNBA and More, Variety, May 1, 2017, http://variety.com/2017/digital/news/twitter-pushes-live-video-deals-with-mlb-buzzfeed-live-nation-wnba-and-others-1202405236/. [91] Id. [92] Id. [93] Peter Warman, eSports Revenues Will Reach $696 Million This Year and Grow to $1.5 Billion by 2020 As Brand Investment Doubles, NewZoo, Feb 14, 2017, https://newzoo.com/insights/articles/esports-revenues-will-reach-696-million-in-2017/. [94] Evolution of the NA LCS, Esports, June 1, 2017, http://www.lolesports.com/en_US/articles/evolution-of-the-na-lcs. [95] Id. [96] AEG Announces Investment in Leading eSports Franchise Immortals, Business Wire, June 20, 2017, http://www.businesswire.com/news/home/20170620005597/en/AEG-Announces-Investment-Leading-Esports-Franchise-Immortals. [97] Id. [98] Id. [99] Jacob Wolf, NBA Announces 17 Teams Will Participate in NBA 2K League, ESPN, May 4, 2017, http://www.espn.com/esports/story/_/id/19305330/nba-announces-17-teams-participate-nba-2k-esports-league. [100] Id. [101] Id. [102] Dave McNary, Writers Guild Strike Averted Without Fanfare, Variety, May 2, 2017, http://variety.com/2017/film/news/writers-guild-strike-averted-1202406222/. [103] Id. [104] Id. [105] David Robb & Erik Pedersen, DEAL! SAG-AFTRA & Producers Reach Tentative Agreement on New Film & TV Contracts; Read The Terms, Deadline, July 4, 2017, http://deadline.com/2017/07/screen-actors-guild-strike-averted-tentative-deal-film-tv-contract-sag-amptp-1202123068/; Jonathan Handel, SAG-AFTRA Reaches Deal with NPR, Strike Averted, The Hollywood Rep., July 16, 2017, http://www.hollywoodreporter.com/news/sag-aftra-reaches-deal-npr-strike-averted-1021565. [106] Hacker Releases New Episodes of "Orange Is The New Black," The Hollywood Rep., Apr. 28, 2017, http://www.hollywoodreporter.com/news/hacker-threatens-release-new-episodes-orange-is-new-black-998670;  Abid Rahman, Hacker Leaks Episodes of Steve Harvey’s ABC Game Show, ‘Funderdome,‘ The Hollywood Rep., June 7, 2017, http://www.hollywoodreporter.com/news/hacker-leaks-episodes-steve-harveys-abc-game-show-funderdome-1010101. [107] Tatiana Siegel, Netflix, ABC Hacker Promises More Leaks: ‘Hollywood Is Under Attack,‘ The Hollywood Rep., June 6, 2017, http://www.hollywoodreporter.com/news/netflix-abc-hacker-promises-more-leaks-hollywood-is-under-attack-1010789. [108]   Janko Roettgers, ‘Orange Is the New Black’ Leak Shows: Hollywood Cybersecurity Lives and Dies With Third-Party Vendors, Variety, Apr. 29, 2017, http://variety.com/2017/digital/news/oitnb-leak-hack-hollywood-security-1202403886/. [109]   Star Athletica, L.L.C. v. Varsity Brands, Inc., 580 U.S. ___, *1 (2017) ("Op."). [110]   Id. at *2. [111]  17 U.S.C. § 101. [112]   Id. [113]   Id. (citing 17 U.S.C. § 101).  [114]   Id. [115]   Id. at *4. [116]   Id. [117]   Id. at *1-*2. [118]   Id. at *12-*15. [119]   Id. at *15. [120]   Id. at *17. [121] Id. at *12. [122]   Id. at *9 (Stevens, J., dissenting). [123]  Steff Yotka, What the Supreme Court’s First Ruling on Fashion Copyrights Means for the Runway, Vogue, March 23, 2017, http://www.vogue.com/article/supreme-court-star-athletica-varsity-brands-ruling-fashion-industry ("Designers have relied mostly on trademarks to protect themselves, but now they can argue that more conceptual, less obvious aspects of their designs should be protected by copyright too…You can expect to see designers relying on copyright law more often to challenge what they perceive to be knock-offs."). [124]   Order Granting Plaintiffs’ Motion for Preliminary Injunction, Disney Enterprises, Inc. et al v. VidAngel Inc., Case No. 2:16-cv-04109 – AB (PLAx) at *1-*2 (C.D. Cal. Dec. 12, 2016). [125]   Id. at *7. [126]   Id. [127]   Id. at *7-*8. [128]   Id. at *13-*14 ("VidAngel’s service does not add anything to plaintiff’s works. It simply omits portions that viewers find objectionable."). [129] Ashley Cullins, VidAngel Found in Contempt for Delay in Removing Disputed Films, The Hollywood Rep., Jan. 6, 2017, http://www.hollywoodreporter.com/thr-esq/vidangel-found-contempt-delay-removing-disputed-films-961609. [130]   Bill Donahue, 9th Circ. Rejects VidAngel’s Emergency Stay Bid, Law360, Jan. 5, 2017, https://www.law360.com/articles/877896. [131]   Eriq Gardner, Hollywood Studios are Suspicious of VidAngel’s New Filtering App, The Hollywood Rep., June 21, 2017, http://www.hollywoodreporter.com/thr-esq/hollywood-studios-are-suspicious-vidangels-new-filtering-app-1015521.   [132] Ashley Cullins, Hollywood Studios Rip VidAngel’s New Service in Filtering Fight, The Hollywood Rep., July 3, 2017, http://www.hollywoodreporter.com/thr-esq/hollywood-studios-rip-vidangels-new-service-filtering-fight-1018550. [133]   Eriq Gardner, Disney Hit With Lawsuit Claiming ‘Zootopia’ Ripped Off ‘Total Recall’ Writer, The Hollywood Rep., Mar. 21, 2017, http://www.hollywoodreporter.com/thr-esq/disney-hit-lawsuit-claiming-zootopia-ripped-total-recall-writer-987660. [134]   Complaint, Esplanade Prods., Inc. v. The Walt Disney Company et al.,  Case No. 2:17-cv-02185 at *1-2, *11-13. (C.D. Cal. Mar. 21, 2017). [135]   Id. at *13. [136] Eriq Gardner, Disney Wins Dismissal of ‘Zootopia’ Copyright Lawsuit (For Now), The Hollywood Rep., July 11, 2017, http://www.hollywoodreporter.com/thr-esq/disney-wins-dismissal-zootopia-copyright-lawsuit-1020026. [137] Eriq Gardner, Appeals Court Rules TV Streamers Don’t Get Compulsory License to Broadcast Networks, The Hollywood Rep., Mar. 21, 2017, http://www.hollywoodreporter.com/thr-esq/appeals-court-rules-tv-streamers-dont-get-compulsory-license-broadcast-networks-987614.   [138] Opinion, Fox Television Stations Inc. et al. v. Aereokiller LLC et al., Case No. 15-56420 at *25 (9th Cir. Mar. 21, 2017). [139] Id. ("The Copyright Office says they are not eligible. Because the Office’s views are persuasive, and because they are reasonable, we defer to them."). [140] Eriq Gardner, Broadcasters Settle Copyright Dispute With FilmOn, The Hollywood Rep., May 15, 2017, http://www.hollywoodreporter.com/thr-esq/broadcasters-settle-copyright-dispute-filmon-1003980.  [141] Id. [142] Kirtsaeng v. John Wiley & Sons, Inc., 136 S.Ct. 1979 (2016).  [143] Ashley Cullins, Led Zeppelin Asks Appeals Court to Award Fees for "Stairway" Trial Win, The Hollywood Rep., June 7, 2017, http://www.hollywoodreporter.com/thr-esq/led-zeppelin-asks-appeals-court-award-fees-stairway-trial-win-1011116. [144] Order re: Defendants’ Motion for Attorney’s Fees and Costs, Michael Skidmore v. Led Zeppelin et al,  Case No. CV 15-03462 RGK (AGRx) at *2-*5 (C.D. Cal. Aug. 8, 2016). [145] Combined Answering and Opening Brief, Michael Skidmore v. Led Zeppelin et al., Case Nos. 16-56057 & 16-56287 (9th Cir. June 2, 2017), at *82-*89 ("The District Court — without considering whether its ruling furthered the purposes of the Copyright Act — identified the following Fogerty factors: ‘(1) "the degree of success obtained on the claim"; (2) "frivolousness"; (3) "motivation"; (4) "objective reasonableness of factual and legal arguments"; and (5) "need for compensation and deterrence."’). [146] TCA Television Corp. et al v. McCollum et al, Report and Recommendation, Case No. 15 Civ. 4325 (GBD) (JCF) at *24 (S.D.N.Y. June 5, 2017). [147] Id.  [148] Objections to Report and Recommendation, TCA Television Corp. et al v. McCollum et al,  Case No. 15 Civ. 4325 (GBD) (JCF) at *5-*6 (S.D.N.Y. Jun. 19, 2017). [149] Id. at *6. [150] 582 U.S. ___, Slip Op. No. 15-1293, at *1, *3, *6 (Jun. 19, 2017). [151] Id. at *5-*6 (citing 15 U.S.C. § 1052(a)). [152] Id. at *6 (quoting Trademark Manual of Examining Procedure § 1203.03(b)(i) (Apr. 2017), p. 1200-150, available at http://tmep.uspto.gov). [153] Id. at *7; In re Tam, 808 F.3d 1321, 1331 n.2 (CA Fed. 2015) (en banc). [154] Tam, Slip Op. No. 15-1293, at *7. [155] Id. [156] In re Tam, 808 F.3d at 1321-32, 1334-39. [157] Tam, Slip Op. No. 15-1293, at *18-*19. [158] Id. at *20-*23. [159] Id. at *24. [160] Id. at *1-*8 (Kennedy, J., concurring). [161] See id. at *1 (Thomas, J., concurring). [162] Blackhorse v. Pro-Football, Inc., Cancellation No. 92046185 at 81 (T.T.A.B. 2014); Josh Gerstein, Feds Give Up Fight Against Redskins Trademarks, Politico, June 28, 2017, http://www.politico.com/blogs/under-the-radar/2017/06/28/washington-redskins-trademarks-240066. [163] Viacom Int’l Inc. v. IJR Capital Invs., LLC, — F.Supp.3d —, 2017 WL 1037294 (S.D. Tx. 2017). [164] Id. at *1-*2. [165] Id. at *2. [166] Id. at *3-*4. [167] Id. at *3. [168] Id. (internal quotations omitted). [169] Id. at *4. [170] Id. [171] Id. at *5. [172] Id. at *5-*6. [173] Id. at *8.  However, Viacom’s motion for summary judgement on its dilution claim was denied because "IJR has not used the mark in commerce, and the alleged threats of future dilution are speculative."  Id. [174] Final Judgment, Viacom Int’l Inc. v. IJR Capital Invs., LLC, No. 4:16-CV-00257 (S.D. Tx. Apr. 11, 2017), ECF at No. 49. [175] Notice of Appeal, Viacom Int’l Inc. v. IJR Capital Invs., LLC, No. 4:16-CV-00257 (S.D. Tx. May 9, 2017), ECF at No. 53. [176] Elliott v. Google, Inc., — F.3d —-, 2017 WL 2655528 (9th Cir. 2017) (original opinion amended on June 14, 2017). [177] Id. at *1 (quoting 15 U.S.C. § 1064(3)). [178] Id. at *2. [179] Id. at *3. [180] Id. at *4-*5. [181] Id. at *5, *9. [182] In re Beds & Bars Ltd., No. 85597669, at *1-*3 (T.T.A.B., May 5, 2017). [183] Id. at *13. [184] Id. at *4. [185] Id. at *4. [186] Id. at *9. [187] Id. at *8. [188] Id. at *11. [189] Id. [190] Gerlich v. Leath, — F.3d —, 2017 WL 2543363, at *1, *7 (8th Cir. 2017).  ISU also failed to "argue that [its] administration of the trademark licensing program was narrowly tailored to satisfy a compelling government interest."  Id. at *7. [191] Id. at *9. [192] Id. at *1. [193] Id. [194] Id. [195] Id. [196] Id. [197] Id. at *2, *6. [198] Id. at *3-*5. [199] Id. at *4. [200] Id. [201] Id. [202] Id. at *5-*6.  "NORML ISU’s use of the cannabis leaf does not violate ISU’s trademark policies because the organization advocates for reform to marijuana laws, not the illegal use of marijuana."  Id. at *9. [203] See Bill Donahue, 8th Cir. Again Says Pot TM Ban Violated First Amendment, Law360, June 13, 2017, https://www.law360.com/articles/934127/8th-circ-again-says-pot-tm-ban-violated-first-amendment. [204] Cal. Civ. Code §1798.83.5 (2016). [205] Jonathan Handel. "New California IMDB Age Law Probably Unconstitutional, Experts Say," The Hollywood Rep.,  Sept. 27, 2016, http://www.hollywoodreporter.com/thr-esq/new-california-imdb-age-law-932808. [206] Id. [207] "Submission Guides: Biographical Information," IMDB, (last visited June 25, 2017) available at http://www.imdb.com/help/search?domain=helpdesk_faq&index=2&file=bio_all_guides&ref_=hlp_sr_2#birthdeath [208] Handel, supra note 205. [209] IMDB.COM, Inc. v. Becerra. No. 16-cv-06535-VC, 2017 WL 772346 at *2 (N.D.Cal. Feb. 22, 2017). [210] Id. at *1. [211] Id. [212] Id. [213] Id. [214] IMDB.COM, Inc. v. Becerra, No. 16-cv-06535-VC, 2017 WL 2859063, at 1 (N.D.Cal. June 27, 2017). [215] Id. at *3. [216] Id. [217] Id. [218] Vir. Citizens Def. League v. Couric. No. 3:16-cv-00757-JAG 2017 WL 2364198 at *1 (May 31, 2017). [219] Id. at *2. [220] Id. at *3. [221] Id. at *4. [222] Id. [223] Id. at *3. [224] Id. [225] Id. at *5. [226] Id. [227] Complaint, Fridman. v. Buzzfeed., Inc., No. 154895/2017 (N.Y. Sup. Ct. N.Y. Cty. 2017). [228] Paul Colgan. "BuzzFeed CEO Jonah Peretti says Lawsuit Over Trump Dossier is an ‘Outrageous Attempt’ to Silence Media" Business Insider, May 30, 2017, http://www.businessinsider.com/buzzfeed-ceo-says-trump-dossier-lawsuit-is-an-attempt-to-silence-media-2017-5. [229] Peter Kafka, After Being Sued, BuzzFeed has Apologies to a Russian Executive Named in the Unverified Trump Dossier, Recode, Feb. 3, 2017, https://www.recode.net/2017/2/3/14505574/buzzfeed-russian-trump-dossier-defamation-suit-apology. [230] Complaint for Damages, Gubarev v. Buzzfeed, Inc., No. 0:17-cv-60426-UU (S.D.Fla. Feb. 3, 2017). [231] Kafka, supra note 229. [232] Murray Energy Corp. v. Reorg Research, Inc., 47 N.Y.S.3d 871 (N.Y. Cty. 2017). [233] N.Y. Civ. Rights L. §79-h (1970). [234] 47 N.Y.S.3d at 881-82. [235] Id. at 879. [236] Id. [237] Id. at 879-82. [238] Murray Energy Corp. v. Reorg Research, Inc., 2017 WL 2977781 at *1 (July, 13 2017). [239] Id. [240] Id. [241] Id. [242] Id. at *2. [243] Sebert v. Gottwald, No. BC560468 (L.A. Super. Ct. Oct. 10, 2014). [244] Gottwald v. Sebert, No. 653118/2014, Dkt. 1 (N.Y. Sup. Ct. Oct. 14, 2014). [245] Gottwald v. Sebert, No. 653118/2014, Dkt. 252 at 13 (N.Y. Sup. Ct. July 7, 2015). [246] Gottwald v. Sebert, No. 653118/2014, Dkt. 496 (N.Y. Sup. Ct. Feb. 9, 2016). [247] Gottwald v. Sebert, No. 653118/2014, Dkt. 626-630 (N.Y. Sup. Ct. Jan. 30, 2017). [248] Gottwald v. Sebert, No. 653118/2014, Dkt. 621-625 (N.Y. Sup. Ct. Jan. 30, 2017). [249] Gottwald v. Sebert, No. 653118/2014, Dkt. 808 at 10 (N.Y. Sup. Ct. Mar. 21, 2017). [250] Id. at 9. [251] Id. at 9-11. [252] Gottwald v. Sebert, No. 653118/2014, Dkt. 828-832 (N.Y. Sup. Ct. Apr. 21, 2017). [253] Ben Sisario, Prince’s Post-1995 Albums and Music From His Vault Will Be Released by Universal, The New York Times, Feb. 9, 2017, https://www.nytimes.com/2017/02/09/arts/music/prince-estate-universal-music-group-vault.html. [254] Jem Aswad, Universal May Try to Nullify Recorded-Music Deal With Prince Estate, Variety, Apr. 14, 2017, http://variety.com/2017/music/news/prince-recorded-music-universal-music-group-warner-bros-records-1202031182/. [255] Jem Aswad, It’s Official: Prince’s Estate Manager and Universal Music Group Move to Nullify Recorded-Music Deal, Variety, May 19, 2017, http://variety.com/2017/music/news/prince-recorded-music-universal-music-group-warner-bros-records-1202031182/. [256] Jem Aswad, Universal’s Move to Nullify $31 Million Prince Deal Approved by Judge, Variety, July 13, 2017, http://variety.com/2017/music/news/universals-move-to-nullify-31-million-prince-deal-approved-by-judge-1202495369/. [257] Paisley Park Enterprises, Inc. v. Boxill, No. 0:17-cv-01212, Dkt. 18-2 (D. Minn. Apr. 19, 2017). [258] Id. at 1. [259] Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith, No. 1:17-cv-02532, Dkt. 6 at 1 (S.D.N.Y. Apr. 7, 2017). [260] Id. at 2. [261] Id. [262] Lynn Goldsmith, Facebook (Apr. 9, 2017), https://www.facebook.com/lynn.goldsmith/posts/10155098104516758. [263] Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith, No. 1:17-cv-02532, Dkt. 20 (S.D.N.Y. July 10, 2017). [264] Ferrick v. Spotify USA Inc., No. 1:16-cv-08412-AJN, at Dkt. 165 (S.D.N.Y. May 26, 2017). [265] Ed Christman, Spotify and Publishing Group Reach $30 Million Settlement Agreement Over Unpaid Royalties, Billboard, Mar. 17, 2016, http://www.billboard.com/articles/business/7263747/spotify-nmpa-publishing-30-million-settlement-unpaid-royalties. [266] Emmanuel Legrand, US Copyright Royalty Board holds hearings on mechanical rates, Music Week, Mar. 8, 2017, http://www.musicweek.com/publishing/read/us-copyright-royalty-board-holds-hearings-on-mechanical-rates/067751. [267] Estate of James Oscar Smith v. Cash Money Records, Inc., No. 1:14-cv-02703-WHP, Dkt. 135 at 21 (S.D.N.Y. May 30, 2017). [268] Estate of James Oscar Smith v. Cash Money Records, Inc., No. 1:14-cv-02703-WHP, Dkt. 2 (S.D.N.Y. Apr. 16, 2014). [269] Estate of James Oscar Smith v. Cash Money Records, Inc., No. 1:14-cv-02703-WHP, Dkt. 135 at 16 (S.D.N.Y. May 30, 2017). [270] Id. at 17. [271] Estate of James Oscar Smith v. Cash Money Records, Inc., No. 1:14-cv-02703-WHP, Dkt. 157 (S.D.N.Y. July 13, 2017). [272] Experience Hendrix, LLC v. Tiger Paw Distributors, LLC, No. 4:16-cv-00107-JRH-GRS, Dkt. 1 (S.D. Ga. Feb. 29, 2016). [273] Experience Hendrix, LLC v. Tiger Paw Distributors, LLC, No. 4:16-cv-00107-JRH-GRS, Dkt. 206 at 2-6 (S.D. Ga. Jan. 27, 2017); see also Kevin Penton, Jimi Hendrix Estate, Booze Co. Settle TM Row, Law360, Jan. 30, 2017, https://www.law360.com/articles/885939.  [274] Experience Hendrix, LLC v. The Last Experience, Inc., No. BC460695 (L.A. Super. Ct. Aug. 5, 2015). [275] Experience Hendrix, LLC v. The Last Experience, Inc., No. B268414 at 2 (Cal. Ct. App. May 8, 2017). [276] Id. at 10. [277] Allison Grande, NY’s ‘Right To Be Forgotten’ Bill Needs Narrower Focus, Law360, Mar. 28, 2017, https://www.law360.com/articles/906491/ny-s-right-to-be-forgotten-bill-needs-narrower-focus. [278] Id. [279] See Shanti Salas, Conducting Due Diligence In A ‘Right To Be Forgotten’ Age, Law360, May 30, 2017, https://www.law360.com/articles/928932/conducting-due-diligence-in-a-right-to-be-forgotten-age. [280] Grande, supra note 277; see also Bill A05323, available at http://nyassembly.gov/leg/?default_fld=&leg_video=&bn=A05323&term=&Summary=Y&Text=Y. [281] Bill A05323. [282] Id. [283] Id. [284] Id. [285] See Grande, supra note 277. [286] See, e.g., Matal v. Tam, 582 U.S. ___, Slip Op. No. 15-1293, at 25 (Jun. 19, 2017) (the First Amendment "protect[s] the freedom to express ‘the thought[s] that we hate.’" (quoting United States v. Schwimmer, 279 U. S. 644, 655 (1929) (Holmes, J., dissenting))). [287] See id. The following Gibson Dunn lawyers assisted in the preparation of this client update: Ruth Fisher, Scott Edelman, Howard Hogan, Nathaniel Bach, Corey Singer, Sean O’Neill, Anthony Vita, Jerry Tower, Sara Ciccolari-Micaldi, Lauryn Togioka, DeDe Mann, and Joseph Ireland. Gibson Dunn lawyers are available to assist in addressing any questions you may have regarding these developments.  Please contact the Gibson Dunn lawyer with whom you usually work, the authors, or the following leaders and members of the firm’s Media, Entertainment & Technology Practice Group: Scott A. Edelman – Co-Chair, Los Angeles (+1 310-557-8061, sedelman@gibsondunn.com)Ruth E. Fisher – Co-Chair, Los Angeles (+1 310-557-8057, rfisher@gibsondunn.com)Orin Snyder– Co-Chair, New York (+1 212-351-2400, osnyder@gibsondunn.com)Howard S. Hogan – Washington, D.C. (+1 202-887-3640, hhogan@gibsondunn.com) Ari Lanin – Los Angeles (+1 310-552-8581, alanin@gibsondunn.com)Benyamin S. Ross – Los Angeles (+1 213-229-7048, bross@gibsondunn.com)Helgi C. Walker – Washington, D.C. (+1 202-887-3599, hwalker@gibsondunn.com) © 2017 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

July 14, 2017 |
Patent Assignments and Licenses: The Grant Clause and Related Patents

​Orange County partner William Rooklidge and Los Angeles associate Brooke Myers Wallace are the authors of "Patent Assignments and Licenses: The Grant Clause and Related Patents," [PDF] published in Bloomberg BNA: Patent, Trademark & Copyright Journal on July 14, 2017.