228 Search Results

October 16, 2020 |
Benchmark Litigation US 2021 Gives Top Marks to Gibson Dunn

Benchmark Litigation US recognized Gibson Dunn in eight national litigation practice areas in its 2021 edition and named 66 partners as Litigation Stars and Future Stars across the U.S.  Nationally, the firm received Tier 1 rankings in the Appellate, Competition/Antitrust, Commercial, Intellectual Property, Labor and Employment, Securities and White Collar Crime categories.  In addition, the firm received a Tier 2 ranking in Product Liability. The publication also named the firm as one of the “Top 20 Trial Firms” in the nation and named four partners to its annual “Top 100 Trial Lawyers in America” list:  New York partners Mitchell KarlanRandy Mastro and Orin Snyder, and Washington DC partner Richard Parker.  Seven partners were also named to its annual “Top 250 Women in Litigation” list: Los Angles partners Theane Evangelis, Perlette Michèle Jura and Deborah Stein, New York partners Mylan Denerstein and Andrea Neuman, Orange County partner Meryl Young and Washington, DC partner Elizabeth Papez. The main rankings were released October 1, 2020. The Top 100 Trial Lawyer rankings were released October 8, 2020. The Top 250 Women in Litigation rankings were released August 13, 2020.

October 6, 2020 |
Where Does Judge Barrett Fall on IP Issues?

Washington, D.C. partners Howard Hogan and Lucas Townsend and associate Max Schulman are the authors of "Where Does Judge Barrett Fall on IP Issues?" [PDF], published by Bloomberg Law on September 30, 2020.

September 30, 2020 |
LMG Life Sciences Awards 2020 Names a Gibson Dunn Win an Impact Case of the Year

LMG Life Sciences named the firm's win in Mayne Pharma v. Merck Sharpe & Dohme as a Patent Impact Case of the Year.  LMG Life Sciences announced the award at its annual awards presentation on September 23, 2020. Gibson Dunn’s Intellectual Property Practice Group offers strategic insights and solutions to companies facing complex intellectual property issues.  We have a deep bench of trial lawyers with technical backgrounds, advanced degrees and industry experience provides the necessary insight to develop and defend against sophisticated claims in a wide range of industries and complex technologies.  Our litigators are recognized throughout the industry as leaders in prosecuting, defending and trying IP claims in federal and state courts, before administrative bodies including the U.S. International Trade Commission and U.S. Patent and Trademark Office (USPTO), as well as before arbitration panels.

August 20, 2020 |
13 Gibson Dunn Partners Named Lawyers of the Year

Best Lawyers® named 13 Gibson Dunn partners as the 2021 Lawyer of the Year in their respective practice areas and cities: Frederick Brown – San Francisco – Trademark Law Lawyer of the Year, Jessica Brown – Denver – Employment Law – Management Lawyer of the Year, Christopher Dillon – San Jose – Corporate Law Lawyer of the Year, Baruch Fellner – Washington, D.C. – Litigation – Labor and Employment Lawyer of the Year, Stewart McDowell – San Francisco – Banking and Finance Law Lawyer of the Year, Peter Modlin – San Francisco – Litigation – Environmental Lawyer of the Year, Kenneth Parker – Orange County – Litigation – Patent Lawyer of the Year, Doug Rayburn – Dallas – Securities/Capital Markets Law Lawyer of the Year, Douglas Smith – San Francisco – Corporate Governance Law Lawyer of the Year, Beau Stark – Denver – Mergers and Acquisitions Law Lawyer of the Year, Daniel Swanson – Los Angeles – Antitrust Law Lawyer of the Year, Jeffrey Thomas – Orange County – Litigation – Antitrust Lawyer of the Year and Robyn Zolman – Denver – Securities/Capital Markets Law Lawyer of the Year. The lawyers that were selected received particularly high ratings in Best Lawyers’ survey by earning a high level of respect among their peers for their abilities, professionalism and integrity. Only one lawyer in each legal community is selected as the Lawyer of the Year for each practice area.  The list was published in August 20, 2020.

June 30, 2020 |
Supreme Court Holds That Adding “.com” To A Generic Term Can Create A Protectable Trademark

Click for PDF Decided June 30, 2020 U.S. Patent and Trademark Office v. Booking.com B.V., No. 19-46

Today, the Supreme Court held 8-1 that under the Lanham Act, the combination of an otherwise generic term and a top-level Internet domain (such as “.com”) can create a protectable mark if consumers recognize the mark as a brand name. 

Background: Under the Lanham Act, 15 U.S.C. § 1051 et seq., generic terms may not be registered as trademarks, but terms that are “merely descriptive” of goods or services may be registered if the public has come to understand them as identifying the trademark owner’s goods or services. Booking.com, a hotel reservation website, applied to register the mark BOOKING.COM. The U.S. Patent and Trademark Office (PTO) determined that “booking” is the generic term for hotel reservation services and denied registration. Booking.com sought judicial review, and the district court overturned the denial. The court held that the mark was protectable because combining the generic term “booking” with the top-level domain name “.com” resulted in a descriptive term, and survey evidence showed that most consumers recognize BOOKING.COM as a brand name, not merely a product category. A divided Fourth Circuit panel affirmed.

Issue: Whether the addition by an online business of a generic top-level domain (“.com”) to an otherwise generic term can create a protectable trademark under the Lanham Act.

Court's Holding: Yes. The addition of “.com” to an otherwise generic term can create a protectable trademark where the evidence shows that consumers understand the combined term as identifying or distinguishing a particular supplier’s goods or services.

“Whether any given ‘generic.com’ term is generic . . . depends on whether consumers in fact perceive that term as the name of a class or, instead, as a term capable of distinguishing among members of the class.

Justice Ginsburg, writing for the Court

Gibson Dunn submitted an amicus brief on behalf of Salesforce.com, Inc. et al. in support of respondent: Booking.com B.V.

What It Means:
  • The Court grounded its decision in the “principle that consumer perception demarcates a term’s meaning.” Slip op. at 7 n.3. That principle applies even to marks that combine generic elements. The Court thus adopted an evidence-based approach consistent with the position advocated in Gibson Dunn’s amicus brief in this case.
  • The Court rejected the PTO’s reliance on Goodyear’s India Rubber Glove v. Goodyear Rubber Co., 128 U.S. 598 (1888), a pre-Lanham Act case in which the Supreme Court held that combining a generic term with a corporate designation such as “Company” or “Inc.” cannot create a protectable common-law trademark. Rather than interpret Goodyear as a bright-line rule, the Court said, “whether a term is generic depends on its meaning to consumers,” thereby relegating Goodyear to stand for the “more modest” principle that “[a] compound of generic elements is generic if the combination yields no additional meaning to consumers capable of distinguishing the goods or services.” Slip op. at 10.
  • The Court also rejected the PTO’s argument that Booking.com’s position would grant it a monopoly on the use of the term “booking.” The Court reasoned that trademark law doctrines such as fair use will provide adequate protection against any potential anti-competitive effects of the ruling, and mark holders still must show a likelihood of consumer confusion to prevail on any trademark infringement claims against competitors.
  • The Court’s decision eschews a bright-line rule that all “.com” marks are protectable, and makes clear that courts and the PTO must consider all relevant evidence in determining how consumers understand a particular term, including consumer surveys, dictionaries, and usage by consumers and competitors. The decision thus continues the Court’s recent trend against establishing bright-line rules in trademark law, as noted in our May 14, 2020 alert on the Court’s decision in Lucky Brand Dungarees v. Marcel Fashions Group, Inc.

The Court's opinion is available here.

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

Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com Mark A. Perry +1 202.887.3667 mperry@gibsondunn.com Thomas G. Hungar +1 202.887.3784 thungar@gibsondunn.com

Related Practice: Intellectual Property

Howard S. Hogan +1 202.887.3640 hhogan@gibsondunn.com

June 26, 2020 |
Update on Intellectual Property-Related Issues in the Response to COVID-19

Click for PDF This Alert reports on recent intellectual property law developments relating to the COVID-19 pandemic.  First, we describe the United States Patent and Trademark Office’s new initiatives to expedite review of initial trademark applications for COVID-19-related trademarks, and to extend additional relief from certain deadlines under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”).  Second, we provide updates on the Open COVID Pledge (a project facilitating the donation of patent rights during the pandemic), and a lawsuit arising from the COVID-prompted creation of a “National Emergency Library.” (1) The United States Patent and Trademark Office (“USPTO”) Prioritizes COVID-19-Related Trademarks and Extends Deadlines Under the CARES Act Expedited Trademark Application Process:  On June 12, 2020, the USPTO announced a new examination procedure that aims to prioritize and expedite review of certain COVID-19-related trademark and service mark applications.  The USPTO ordinarily evaluates trademark applications in the order in which they were received, although applicants can request that the initial examination of their application be advanced out of turn when special circumstances exist.  In view of the need for medical products and services to combat the pandemic, the USPTO Director is leveraging this procedure to accept petitions to advance the initial examination of marks specifically used to identify medical products and services intended to help prevent, diagnose, treat, or cure COVID-19.  Having found that the COVID-19 pandemic presents an “extraordinary situation,” the USPTO director has also agreed to waive application fees for these petitions. Medical products and services that qualify for prioritized examination include “diagnostic tests, ventilators, and personal protective equipment,” that prevent, diagnose, treat, or cure COVID-19, and that are subject to FDA approval, and “medical services or research services” in support of the prevention, diagnosis, treatment of, or cure for COVID-19.  If a petition for prioritized examination is granted, the application will be immediately assigned for attorney review, which is intended to expedite examination by approximately two months. Further CARES Act Deadline Relief:  The USPTO has also expanded the type of relief available under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which granted the USPTO temporary authority to extend statutory deadlines.  The USPTO previously exercised that authority to extend deadlines regarding prosecution and maintenance fees.  Under the USPTO’s latest June 11 notice, certain non-provisional applications can now claim priority to applications filed more than 12 months earlier.  Specifically, non-provisional applications that are filed before July 31, 2020, can claim priority to those applications for which (i) the original priority period expired between March 27, 2020 and July 30, 2020, (ii) the delay in filing “was due to the COVID-19 outbreak” (as defined in the USPTO’s April 28, 2020 notice), and (iii) the applicant meets other formal filing requirements.  The extension applies to U.S. applications only. (2) Growth of The Open COVID Pledge The urgency of the COVID-19 crisis has prompted initiatives like the Open COVID Pledge, which is intended to help businesses make use of technology needed to provide supplies and treatments to combat the pandemic, without running the risk of becoming defendants in patent infringement litigation.  Signatories to the pledge grant a non-exclusive, royalty-free, worldwide license to use their patents and copyrights “for the sole purpose of ending” the COVID-19 pandemic (prior reporting available here). Since it was launched in April, the pledge has garnered support of some of the world’s largest patent owners, collectively holding hundreds of thousands of patents.  That pledged intellectual property now covers a range of applications in health care, diagnostics, and emergency response, such as 3D-printed respirators, methods for designing grocery stores to ensure social distancing, and software for accelerating COVID-19 diagnoses.  Recently, the Open COVID pledge website added a feature providing examples of how pledged technology can be used, reportedly in an effort to boost the project’s ability to spur follow-on innovation, in light of studies finding that pledge efforts that simply publish lists of patents do not boost such innovation. (3) Internet Archive Ends National Emergency Library Project As reported in our last update, four large publishing companies sued Internet Archive in early June 1 for copyright infringement, arising out of Internet Archive’s “National Emergency Library,” implemented during the pandemic.  Internet Archive described the new library as “a temporary collection of books that supports emergency remote teaching, research activities, independent scholarship, and intellectual stimulation while universities, schools, training centers, and libraries are closed.”  The project was intended to run until the end of June, but Internet Archive ended the project on Tuesday, June 23, due to the pending lawsuit. _____________________ Gibson Dunn lawyers regularly counsel clients on the issues raised by this pandemic, and we are working with many of our clients on their response to COVID-19.  For additional information, please contact any member of the firm’s Coronavirus (COVID-19) Response Team.  Please also feel free to contact the Gibson Dunn lawyer with whom you usually work, or the authors: AUTHORS:  Richard Mark (rmark@gibsondunn.com), Joe Evall (jevall@gibsondunn.com), Doran Satanove (dsatanove@gibsondunn.com), and Amanda First (afirst@gibsondunn.com) © 2020 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

June 17, 2020 |
Gibson Dunn Recognized in IAM Patent 2020

Gibson Dunn was recognized by IAM Patent 2020 among the top patent practices nationally and in California, New York, Texas and Washington, D.C.  The guide additionally named 15 Gibson Dunn partners to its list of the “world's leading patent professionals":  Dallas partners Tracey Davies and Mark Reiter, Los Angeles partners Wayne Barsky and Jason Lo, New York partners Benjamin Hershkowitz, Josh Krevitt, Jane Love, Brian Rosenthal, Daniel Thomasch and Robert Trenchard, Orange County partner William Rooklidge, Palo Alto partner Carrie LeRoy, San Francisco partner Karen Spindler, and Washington D.C. partners Brian Buroker and Mark Perry.  The guide was published in June 2020. Gibson Dunn’s Intellectual Property Practice Group offers strategic insights and solutions to companies facing complex intellectual property issues.  We have a deep bench of trial lawyers with technical backgrounds, advanced degrees and industry experience provides the necessary insight to develop and defend against sophisticated claims in a wide range of industries and complex technologies.  Our litigators are recognized throughout the industry as leaders in prosecuting, defending and trying IP claims in federal and state courts, before administrative bodies including the U.S. International Trade Commission and U.S. Patent and Trademark Office (USPTO), as well as before arbitration panels. Our IP Practice Group also provide strategic counselling on all aspects of IP transactions.  We provide critical insight into the complex IP issues that are often the driving factor behind corporate deals powering the modern information economy, including in connection with mergers, acquisitions, financings, strategic alliances, joint ventures and initial public offerings.  Our lawyers have extensive experience drafting and negotiating IP representations, warranties and covenants as well as licensing, cross-licensing and grant-back arrangements.

June 12, 2020 |
Update on Intellectual Property-Related Issues in the Response to COVID-19

Click for PDF This Alert reports on recent intellectual property law developments relating to the COVID-19 pandemic.  First, we describe new initiatives launched by the United States Patent and Trademark Office (“USPTO”) and the United States Department of Energy (“DOE”) compiling helpful information for intellectual property stakeholders seeking to combat the pandemic.  Second, we report on a recent copyright infringement lawsuit based in part on circumstances arising from the pandemic, namely, the creation of an online “National Emergency Library.” Finally, we discuss manufacturer 3M’s continued efforts to use trademark law to combat price gouging in connection with the sale of personal protective equipment, such as N95 respirators. (1) The USPTO and DOE Launch New Initiatives to Facilitate COVID-19-Related Innovation The USPTO:  On June 3, 2020, the USPTO launched its “COVID-19 Response Resource Center,” which serves as a “central hub” of information about USPTO initiatives and other intellectual property information related to the pandemic.  The resource center includes links to other sources covering patent applications and licensing, trademark counterfeiting and consumer fraud, and international updates relevant to the COVID-19 pandemic. The linked patent sources include (1) the USPTO’s COVID-19 Prioritized Examination Pilot Program, which seeks to expedite the examination of patent applications submitted by “small” or “micro” entities (including institutions of higher education) that cover products or processes related to combatting COVID-19; and (2) the USPTO’s “Patents 4 Partnerships” program, a platform that allows patent holders (and owners of published patent applications) relating to COVID-19 technologies to list such patents and applications if they are available for licensing (prior discussion of these programs is available here).  The trademark section of the resource center directs consumers to avenues for reporting fraud or counterfeiting related to COVID-19.  Finally, the international section compiles updates from the World Intellectual Property Organization addressing measures foreign intellectual property offices have taken in response to the pandemic. The DOE:  To make DOE resources available to innovators seeking to combat COVID-19, the DOE’s Office of Technology Transitions added a “COVID-19 portal” to the agency’s “Lab Partnering Service” program, and created a new “COVID-19 Technical Assistance Program.”   According to Secretary of Energy Dan Brouillette, these programs “will help transition” the DOE’s resources from its 17 national laboratories “into the hands of America’s motivated and talented innovation community” during the pandemic. First launched in 2018, the DOE’s Lab Partnering Service (“LPS”) is an online tool that provides investors and innovators access to the DOE’s technical expertise and intellectual property.  It consists of main three components:  (1) an “expert search” function, which lists experts working for DOE’s laboratories by specialty, and provides a means to contact these experts; (2) a “technical summaries” function, which provides information about the DOE’s developing technologies, including publications from the agency’s labs and other participating research institutions; and (3) a “visual patent search” tool, which allows users to search the DOE’s U.S. patents and published patent applications resulting from DOE-funded research and development.  The recent addition of LPS’s “COVID-19 portal” allows users to access these functions in a manner more targeted to COVID-19 research and technologies. The DOE stated that its “COVID-19 Technical Assistance Program” (CTAP) will provide “targeted funding” to assist non-DOE entities working with DOE (presumably on COVID-19-fighting efforts).  The agency does not yet appear to have publicly released further information about the program, and directs interested entities to contact its Office of Technology Transfer Office. (2) Publishers Take Legal Action Against Internet Archive’s “National Emergency Library” While 3M Sues Amazon Vendor for Counterfeit N95 Masks On June 1, 2020, four large publishing companies sued Internet Archive for copyright infringement in the Southern District of New York.  Internet Archive is a non-profit organization that provides public access to various digital media collections, including searchable archives of website pages (commonly known as the “Wayback Machine”), and public domain materials. This suit arises from Internet Archive’s “Open Library” service, which lends digital copies of books to the public for free.  The complaint alleges that before the pandemic began, Internet Archive asserted that it could lend digital copies of books without infringing copyrights under a theory of “Controlled Digital Lending,” whereby Internet Archive would ensure that it had in its possession a physical copy of every publication it offered to users online.[1]  In the wake of the pandemic, however, Internet Archive began offering a “National Emergency Library,” which it describes as “a temporary collection of books that supports emergency remote teaching, research activities, independent scholarship, and intellectual stimulation while universities, schools, training centers, and libraries are closed.”  The publishers’ complaint asserts that neither Internet Archive’s controlled digital lending theory nor its “self-appointed role as ‘National Emergency Library’” is a legally cognizable defense to copyright infringement, and that Internet Archive’s actions have disrupted the “carefully calibrated ecosystem that makes books possible in the first place.”[2]  Among other claims, the complaint seeks statutory damages for willful infringement and an accounting of Internet Archive’s “profits, gains, advantages or the value of business opportunities received” from its alleged acts of infringement.[3] The director of the non-profit organization Public Knowledge (which is one of Internet Archive’s supporters and describes its core focus as “advocat[ing] for policies that serve the public interest” with regard to copyright and internet law) has publicly expressed disappointment with the lawsuit, asserting that Internet Archive’s National Emergency Library “is justified under the circumstances of the pandemic, when so many print books paid for by the public are inaccessible.” Separately, manufacturer 3M continues to broaden its global efforts using trademark law to combat price gouging in connection with the sale of PPE.  Last week, the company filed a new action in the Central District of California against an online vendor and several affiliated companies alleging that these defendants operated an unlawful scheme to “advertise and sell counterfeit, damaged, deficient, or otherwise altered respirators to unwitting consumers,” using 3M’s trademarks.[4]  The complaint asserts that the defendants further engaged in price-gouging, “by selling purported 3M-branded N95 respirators . . . at an average price . . . far in excess of 3M Company’s average list prices for N95 respirators.”[5] As of June 8, 3M has filed more than a dozen lawsuits in its fight against price gouging and counterfeiting, and has secured the removal of more than 3,000 websites offering counterfeit products from e-commerce platforms around the world. We are continuing to monitor intellectual property-related updates and trends in the response to COVID-19. ____________________    [1]   Hachette Book Grp., Inc. v. Internet Archive, No. 1:20-cv-04160, Compl. ¶¶ 8-10 (S.D.N.Y. June 1, 2020).    [2]   Id. ¶¶ 9, 13.    [3]   Id. at 52 (Prayer for Relief).    [4]   3M Co. v. KM Bros. Inc., No. 2:20-CV-05049, Compl. ¶ 1  (C.D. Cal. June 8, 2020).    [5]   Id. ¶ 16.


Gibson Dunn lawyers regularly counsel clients on the issues raised by this pandemic, and we are working with many of our clients on their response to COVID-19.  For additional information, please contact any member of the firm’s Coronavirus (COVID-19) Response Team.  Please also feel free to contact the Gibson Dunn lawyer with whom you usually work, or the authors: AUTHORS:  Richard Mark (rmark@gibsondunn.com), Joe Evall (jevall@gibsondunn.com), and Doran Satanove (dsatanove@gibsondunn.com). © 2020 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

May 28, 2020 |
Update on Intellectual Property-Related Issues in the Response to COVID-19

Click for PDF This Alert reports on recent intellectual property law developments relating to the COVID-19 pandemic.  First, we describe a new pilot program of the United States Patent and Trademark Office (“USPTO”), intended to help small businesses obtain expedited review of patent applications on products and processes related to the battle against COVID-19, and the agency’s new platform listing COVID-19 related patents that are available for licensing.  Second, we discuss the World Health Assembly’s COVID-19 resolution calling on countries to rely on patent pooling mechanisms to help develop new technologies to fight the pandemic, and the response by the United States to sections of the resolution. (1) Two USPTO Initiatives Relating to the Fight Against COVID-19 The COVID-19 Prioritized Examination Pilot Program:  On May 14, 2020, the USPTO published a notice in the Federal Register setting forth the eligibility requirements for its previously announced “COVID-19 Prioritized Examination Pilot Program.”  That Pilot Program seeks to expedite the examination of patent applications that cover products or processes related to the fight against COVID-19.  The program, which is restricted to applicants that qualify for either “small entity” or “micro entity” status (pursuant to 37 C.F.R. §§ 1.27 and 1.29), permits such entities to request prioritized examination of patent applications without paying the fees typically associated with such a request.  (Notably, the “small entity” definition includes, among other things, “[a] university or other institution of higher education located in any country” and any Section 501(c)(3) organization that is exempt from taxation under Section 501(a) of the Internal Revenue Code).  While the goal of the prioritized examination under the program “is to provide a final disposition within 12 months, on average, from the date prioritized status has been granted,” the USPTO has stated that it will “endeavor to reduce” that timeframe to six months, if applicants respond within 30 days to “notices and actions” from the agency, once the applicant’s initial request to have its patent applications be considered for prioritized examination has been approved.[1] The pilot program will begin accepting requests for prioritized examination on July 13, 2020, and will continue “until such time as the USPTO has accepted a total of 500 requests.”[2]  To be eligible for the program, qualifying patent applicants must certify that at least one of the pending claims in the patent application(s) for which they seek expedited review is a product or process “subject to an applicable FDA approval for COVID-19 use.”  In addition, in what appears to be an effort to help ensure that the pilot program is limited to applicants seeking patents on more recent inventions, patent applications that claim the benefit of an earlier filing date of two or more U.S. non-provisional applications (or certain international applications) are ineligible for the program. As early commentators have noted, small businesses that qualify for the program will need to carefully weigh its potential benefits against the potential risks of seeking prioritized examination of patent applications within what could be a very short timeframe, given that the program is currently limited to 500 requests.  Although the program’s offer of a cheaper and faster process to apply for patents on inventions like COVID-19 vaccines may be enticing to smaller businesses—especially since patents can help attract further capital—the pressure to get one of the program’s limited slots could potentially lead to the filing of premature applications that require further experimental data and research in order to meet the requirements for patentability.  Small businesses will therefore need to consider whether their inventions are ripe enough to mitigate the possibility that applying for a patent too early will create an unfavorable prosecution record that could impede subsequent renewed efforts to patent those inventions. Patents 4 Partnerships:  Earlier this month, the USPTO created the “Patents 4 Partnerships” program, which is a platform that allows patent holders (and owners of published patent applications) relating to COVID-19 technologies to list such patents and applications if they are available for licensing.  The public can search the platform, including by keyword, issue date, and inventor name.  As described by Andrei Inacu, Undersecretary of Commerce for Intellectual Property and Director of the USPTO, Patent 4 Partnerships “is a meeting place that enables patent owners who want to license their IP rights to connect with the individuals and businesses who can turn those rights into solutions for our health and wellbeing.” Patent holders may list their patents on the platform using the Platform Submission Page.  As of May 26, 2020, the platform includes over 200 patents and published patent applications. (2)  The World Health Assembly’s COVID-19 Resolution Calls for Voluntary Patent Pooling During a virtual meeting last week, the World Health Assembly (“WHA”) passed a resolution pressing for intensified efforts to control the pandemic and seeking equitable distribution of the technologies and products necessary to do so.[3]  The resolution calls on international organizations “to work collaboratively at all levels to develop, test, and scale-up production” of “affordable diagnostics” and “vaccines for the COVID-19 response,” referencing “existing mechanisms for voluntary pooling and licensing of patents in order to facilitate . . . affordable access to them, consistent with the provisions of relevant international treaties[.]”   Existing mechanisms that can facilitate voluntary pooling and licensing of patents include the work of the U.N.-backed nonprofit “The Medicines Patent Pool.”  As reported in a prior alert, that Patent Pool gathers COVID-19 related patent information—such as on products that are tested in clinical trials to treat the virus—and makes that information accessible in a publicly available repository of patent data.  The World Health Organization reports that the WHA resolution is co-sponsored by more than 130 countries. The Resolution cautions that the cooperative efforts it advocates must all “respect” and “be consistent with” the provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS Agreement”) and the Doha Declaration on the TRIPS Agreement and Public Health (“Doha Declaration”).[4]  See Resolution at ¶¶ 4, 8.2, 9.8. In a written statement, the United States Department of State “endorse[d] the call in the resolution for all Member States to provide the WHO with timely, accurate, and sufficiently-detailed public health information related to the COVID-19 pandemic,” but “disassociate[d]” itself from a number of paragraphs in the resolution, including some relating to intellectual property.  For example, the United States objected to paragraphs 4, 8.2, and 9.8 of the resolution.  The United States “disassociates” from those paragraphs because the language in those paragraphs referencing the TRIPS Agreement and the Doha Declaration “does not adequately capture all of the carefully negotiated, and balanced, language” in the TRIPS Agreement and Doha Declaration.  Likewise, the United States objected that those paragraphs “present[] an unbalanced and incomplete picture of that language at a time where all actors need to come together to produce vaccines and other critical health products.”  Finally, the United States emphasized that “[i]t is critical” that the “existing mechanisms for voluntary pooling” of patents referenced in the resolution “be narrowly tailored in scope and duration to the medical needs of the current crisis[.]” We are continuing to monitor developments that may be of interest to businesses who hold, or seek to use, intellectual property rights. ____________________    [1]   COVID–19 Prioritized Examination Pilot Program, 85 Fed. Reg. at 28933 (May 14, 2020).    [2]   Id.    [3]   The WHA, which is comprised of delegations from all WHO Member States, acts as the WHO’s decision-making body, principally determining the WHO’s policies, and appointing the Director-General.    [4]   At the risk of oversimplification, the TRIPS Agreement, which became effective on January 1, 1995, is a multilateral agreement that principally sets forth minimum standards of protection to be provided by Member countries to various types of intellectual property.  The Doha Declaration of 2001 was adopted in response to growing concerns that patent-related terms under TRIPS Agreement could restrict access to affordable medicines in developing countries.  The Declaration endeavored to allay those concerns by, for example, giving each Member the right to grant compulsory licenses (i.e., without the consent of patent holders) to the use of their patented inventions.


Gibson Dunn lawyers regularly counsel clients on the issues raised by this pandemic, and we are working with many of our clients on their response to COVID-19.  For additional information, please contact any member of the firm’s Coronavirus (COVID-19) Response Team.  Please also feel free to contact the Gibson Dunn lawyer with whom you usually work, or the authors: AUTHORS:  Joe Evall (jevall@gibsondunn.com), Richard Mark (rmark@gibsondunn.com), Doran Satanove (dsatanove@gibsondunn.com), and Amanda First (afirst@gibsondunn.com) © 2020 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

May 22, 2020 |
U.S. Copyright Office Releases Report on Recommended Changes to Digital Millennium Copyright Act (DMCA)

Click for PDF On May 21, 2020, the U.S. Copyright Office (the “Office”) released a nearly 200-page report (the “Report”)[1] suggesting changes to the Digital Millennium Copyright Act (17 U.S.C. § 512) (“DMCA”), which governs how online service providers (OSPs) police potential online copyright infringement. The report was the result of a multi-year study of the DMCA—the first comprehensive study by the Office on the DMCA’s operation—and was prepared to analyze whether the DMCA’s safe harbor provisions are successfully balancing the needs of OSPs and copyright holders, “particularly in light of the enormous changes that the internet has undergone in the last twenty-plus years.”[2] The report concludes that the DMCA does not need “wholesale changes,” but may benefit from fine-tuning to better “balance the rights and responsibilities of OSPs and rightsholders in the creative industries.”[3] In particular, the Office “concluded that Congress’ original intended balance has been tilted askew” and “the scale of online copyright infringement and the lack of effectiveness of section 512 notices to address that situation remain significant problems.”[4] Among other things, the Office suggested that Congress consider legislation regarding:

  • What qualifies as “temporary” for 512(c) safe harbor and what activities are appropriately shielded from liability for being “related to” storage;[5]
  • Whether technology services beyond those providing internet infrastructure should be eligible for the safe harbor provisions;[6]
  • Whether unwritten policies regarding the account termination of “repeat infringers” serve the intended deterrent purpose and what constitutes “appropriate circumstances” for a user’s termination for repeated infringement;[7]
  • The distinction between “actual” and “red flag knowledge” and the intended scope of the “willful blindness” doctrine;[8]
  • Whether rightsholders must submit a unique, file-specific URL for every instance of infringing material on an OSP’s service to properly provide “information reasonably sufficient . . . to locate [infringing material]”:[9]
  • The impact of the Ninth Circuit’s decision in Lenz v. Universal Music Corp.,[10] which held that copyright holders must consider fair use in good faith before issuing a takedown notice for content posted on the Internet. In particular, the Office recommended that Congress consider the “knowing misrepresentation” requirement for a lawsuit seeking redress for an improper infringement notification, and whether the Lenz decision reflects Congressional intent on this issue;[11]
  • Appropriate changes to section 512(c)’s notice requirements, given new web-based submission forms and the possibility that some of 512(c)’s current notification standards may become obsolete;[12]
  • Potential avenues to resolve disputes over whether material should be removed and reinstated that do not require a rightsholder to prepare and file a federal lawsuit in the current statutory timeframe of 10–14 days;[13]
  • The parameters of a rightsholder’s ability to subpoena an OSP to identify an alleged infringer under section 512(h);[14] and
  • The possibility and range of injunctive relief available to rightsholders after a takedown;[15]
At present, these remain just proposals for legislative action. And in its report, the Office does not provide non-statutory approaches to alter DMCA provisions or developments involving online intermediary liability in other countries, finding that both issues require further exploration. The Office expressed its intent to explore additional voluntary initiatives to address online infringement and help identify standard technical measures that can be adopted in certain sectors.[16] Additionally, the Senate Judiciary intellectual property subcommittee has announced plans to draft changes to the DMCA by the end of 2020.[17] Whether and to what extend the subcommittee follows the recommendations of this report bears watching for both OSPs and rightsholders. ____________________ [1]   United States Copyright Office, Section 512 of Title 17: A Report on the Register of Copyrights (May 2020), https://www.copyright.gov/policy/section512/section-512-full-report.pdf (the “Report”). [2]   Copyright Office Releases Report on Section 512, Issue No. 824, May 21, 2020, https://www.copyright.gov/newsnet/2020/824.html. [3]   Report at 7. [4]   Id. at 197. [5]   Id. at 84–99. [6]   Id. [7]   Id. at 95–110. [8]   Id. at 110–28. [9]   Id. at 138–44. [10]   801 F.3d 1126, 1154 (9th Cir. 2015). [11]   Section 512 of Title 17 at 145–49. [12]   Id. at 152–59. [13]   Id. at 159–62. [14]   Id. at 163–66 [15]   Id. at 167–170. [16]   Id. at 6. [17]   Margaret Harding McGill, Copyright Office: System for pulling content offline isn’t working, Axios (May 21, 2020), https://www.axios.com/copyright-office-system-for-pulling-content-offline-isnt-working-ed78fe62-eec4-44dc-bcdd-1c593e888fb8.html.
Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments. Please feel free to contact the Gibson Dunn lawyer with whom you usually work in the firm's Intellectual Property or Media, Entertainment and Technology practice groups, or the following authors: Howard S. Hogan - Washington, D.C. (+1 202.887.3640,hhogan@gibsondunn.com) Nathaniel L. Bach - Los Angeles (+1 213-229-7241,nbach@gibsondunn.com) Ciara M. Davis - Washington, D.C. (+1 202-887-3783, cmdavis@gibsondunn.com) Please also feel free to contact the following practice 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) Kevin Masuda - Los Angeles (+1 213-229-7872, kmasuda@gibsondunn.com) Orin Snyder - New York (+1 212-351-2400, osnyder@gibsondunn.com) © 2020 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

May 13, 2020 |
Update on Intellectual Property-Related Issues in the Response to COVID-19

Click for PDF This Alert reports on the steady pace of patent litigation and patent review filings during the COVID-19 pandemic, and notes that some aspects of ongoing patent litigation are also proceeding as usual.  The Alert also discusses intellectual property litigation involving a hand sanitizer manufacturer, and provides brief updates on the Open COVID Pledge, and on manufacturer 3M’s efforts to combat price gouging of personal protective equipment (“PPE”) (earlier developments reported here and here). (1) Patent Lawsuit Filings Continue at a Steady Pace Based on year-to-year filings, the pandemic does not appear to have deterred patent owners from commencing infringement lawsuits.  In March 2020, a total of 313 patent complaints were filed in the federal courts, an increase from the 256 that were filed in March 2019.  Likewise, in April 2020, 380 patent complaints were filed, an increase from the 292 filed in April 2019.  Petitions seeking the review of patent claims before the U.S. Patent Trial and Appeal Board (“PTAB”) also continue to be filed at a level comparable to filings before the pandemic. In March 2020, 100 petitions for review were filed, and in April 2020, 99 petitions were filed.  Although these numbers are lower than the 129 and 104 petitions that were filed in March and April 2019,[1] monthly filing rates in the PTAB varied even before the pandemic.[2]  The simplest take-away is that new patent cases continue to be filed in the United States at rates similar to filing rates before the pandemic. Although patent jury trials previously scheduled for March and April have been postponed, many other court proceedings have continued during the pandemic—with appropriate adaptations.  The Federal Circuit now operates essentially as a virtual court; it held telephonic oral arguments in April, and another 26 telephonic oral arguments are expected in May.  And some district courts are conducting bench trials in patent cases remotely.  Judge Henry Coke Jr. in the U.S. District Court for the Eastern District of Virginia, for example, is currently presiding over a bench trial in a patent infringement case, Centripetal Networks v. Cisco Systems, No. 18-cv-00094-HCM-LRL (E.D. Va. 2018), in which the plaintiff is seeking up to $557 million in damages for alleged infringement of its cybersecurity patents.  Opening statements took place over Zoom on May 7.  The court’s pre-trial order is available here.   One patent case that was originally scheduled for a virtual bench trial in late May, however, was postponed to July 6 at the request of the attorneys.[3] (2) Continued Efforts to Facilitate the Donation of Patent Rights During the COVID-19 Pandemic The Open COVID Pledge, which reflects a commitment by the signers to eliminate intellectual property rights as a potential obstacle to developing products and treatments for fighting against the virus, continues to gain support.  Signatories to the Open COVID-19 pledge grant a non-exclusive, royalty-free, worldwide license to use their patents and copyrights “for the sole purpose of ending” the COVID-19 pandemic.  Companies such as Intel and Mozilla were among the first to subscribe, followed shortly by additional technology giants, such as Amazon, Facebook, HP, IBM, Microsoft, and Sandia National Laboratories.  Since our prior update, several Japan-based technology companies have also signed on, including Canon and Toyota.  AT&T, noting in a press release last week that it “generates roughly 5 patents every business day,” has signed the pledge as well. (3)  The Department of Justice and Manufacturer 3M Obtain Injunctions Associated with, Respectively, the Sale of Hand Sanitizer and the Sale of N95 Masks Last week, Judge Carter of the United States District Court for the Central District of California permanently enjoined Innovative Biodefense, Inc. (“IBD”), which manufacturers hand sanitizers and lotions under the brand name Zylast, from “directly or indirectly manufacturing, processing, packaging, labeling, holding or distributing” certain Zylast products, like the “Zylast Broad Spectrum Antimicrobial Antiseptic” and “Zylast XP (Extended Protection) Antiseptic Foaming Wash.”[4]  The injunction was issued after the Department of Justice (“DOJ”) sued IBD, on behalf of the FDA, alleging that IBD was effectively marketing certain Zylast products as new drugs (by claiming that the products were effective against various infectious diseases like Ebola and norovirus) without the requisite FDA approval, in violation of the Food, Drug, and Cosmetic Act (“FDCA”).  The court previously ruled on summary judgment that IBD and its co-defendants (the company’s CEO and another employee) had violated the FDCA as a matter of law, and then held a bench trial on the defendants’ affirmative defenses of laches and unclean hands—which were based on allegations that the DOJ was selectively enforcing the FDCA against IBD to benefit the makers of the competing Purell hand sanitizer.[5]   The court found that no evidence supported those defenses. The injunction against IBD is effective until either: (a) the company obtains FDA approval to market the Zylast products through a new, abbreviated, or investigational new drug application; or (b) the company retains independent experts to review the formulation and labeling of the products and certify to the FDA (among other things) that the products comply with FDA regulations concerning over-the-counter drug formulations. Finally, as noted in our last alert, the manufacturer 3M previously secured a temporary restraining order (“TRO”) against Defendant Performance Supply, LLC, arising from 3M’s allegations that the defendant had offered to sell New York City’s Office of Citywide Procurement millions of N95 respirators bearing the 3M logo and at inflated prices. Following a telephonic preliminary injunction hearing on May 4, Judge Preska, of the Southern District of New York, converted the TRO into a preliminary injunction against Performance Supply, LLC, enjoining the company from among other things, “using the ‘3M’ trademarks” in connection with “3M-brand N95 respirators” and other 3M goods; from “falsely representing that 3M has increased the price(s) of its 3M-brand N95 respirators”; and from otherwise “offering to sell any of 3M’s products at a price . . . that would constitute a violation of New York General Business Law § 369-[r]” (New York’s price gouging statute).[6]  In addition to concluding that 3M had demonstrated that it met the Second Circuit’s factors for a preliminary injunction, the court emphasized 3M’s efforts to collaborate “with law enforcement, retail partners, and others to help thwart third-party price-gouging, counterfeiting, and fraud in relation to 3M-brand N95 respirators during COVID-19.”[7]  The court also found that 3M has taken active steps to protect the goodwill of the 3M brand, including by filing other trademark suits in California, Florida, Indiana, and Wisconsin. We are continuing to monitor intellectual property-related updates and trends in the response to COVID-19. ____________________ [1]  These figures were obtained from conducting searches in Docket Navigator.  For each of the time frames discussed above, the numerical figures reflect the total number of (1) complaints filed in federal district courts asserting patent infringement and declaratory judgment claims, including claims pursuant to the Hatch Waxman Act and Biologics Price Competition and Innovation Act; and (2) petitions before the PTAB seeking inter partes review, post-grant review, or covered business method review. [2]  United States Patent and Trademark Office, Trial Statistics IPR, PGR, CBM (March 2020), https://www.uspto.gov/sites/default/files/documents/trial_statistics_20200331.pdf. [3]  Ferring Pharm. Inc. v. Serenity Pharm. LLC, No. 17-cv-9922 (CM) (SDA), Order (Dkt. 679) (S.D.N.Y. Apr. 28, 2020). [4]  United States of America v. Innovative Biodefense, Inc., No. 8:18 CV 996-DOC (JDE), Order of Permanent Injunction (Dkt. 215) at 2-3 (C.D. Cal. May 4, 2020). [5]  Id., Findings of Fact and Conclusions of Law (Dkt. 214) at 27-30. [6]  3M Company v. Performance Supply, LLC, No. 20-cv-02949 (LAP)(KNF), Order (Dkt. 22) at 3-4 (S.D.N.Y. May 4, 2020). [7]  Id., Findings of Fact and Conclusions of Law (Dkt. 23) ¶¶ 27-29.


Gibson Dunn lawyers regularly counsel clients on the issues raised by this pandemic, and we are working with many of our clients on their response to COVID-19.  For additional information, please contact any member of the firm’s Coronavirus (COVID-19) Response Team.  Please also feel free to contact the Gibson Dunn lawyer with whom you usually work, or the authors: Joe Evall (jevall@gibsondunn.com), Richard Mark (rmark@gibsondunn.com), Doran Satanove (dsatanove@gibsondunn.com), and Amanda First (afirst@gibsondunn.com) © 2020 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

May 7, 2020 |
Supreme Court Holds That Copyright Protection Does Not Extend To Annotations Accompanying Statutory Text

Click for PDF On April 27, 2020, a divided Supreme Court held in Georgia v. Public.Resource.Org, Inc. that Copyright protection does not extend to the annotations contained in Georgia’s official annotated code. 590 U.S. ___, No. 18-1150, 2020 WL 1978707, at *3 (U.S. Apr. 27, 2020). The “government edicts” doctrine, the Court held, puts Georgia’s annotations outside the reach of copyright protection because they are created by an arm of the Georgia legislature acting in the course of its legislative duties. Id. Background The Official Code of Georgia Annotated (“OCGA”) includes the text of every Georgia statute currently in force. Public.Resource.Org, 2020 WL 1978707, at *3. At issue in this case is a set of annotations that appear beneath each statutory provision, which includes summaries of judicial decisions applying a given provision, pertinent opinions of the state attorney general, a list of related law review articles and similar reference materials, and information about the origins of the statutory text. Id. A state entity established by the Georgia Legislature, called the Code Revision Commission, assembles the OCGA. Id. Pursuant to a work-for-hire agreement with the Commission, Matthew Bender & Co., Inc., a division of the LexisNexis Group, prepared the annotations in the current OCGA in the first instance. Id. at *4. Public.Resource.Org is a nonprofit organization that aims to facilitate public access to government records and legal materials. Id. Without permission, Public.Resource.Org posted a digital version of the OCGA on various websites and distributed copies of the OCGA to a number of organizations and Georgia officials. Id. The Commission sued Public.Resource.Org on behalf of the Georgia Legislature and the State of Georgia for infringement of its copyright in the annotations. Id. Georgia did not contend that its state laws were subject to copyright protection. Public.Resource.Org counterclaimed, seeking a declaratory judgment that the entire OCGA, including the annotations, fell in the public domain. Id. The District Court sided with the Commission but the Eleventh Circuit reversed. In a 5-4 decision, with two dissenting opinions, the Supreme Court affirmed the Eleventh Circuit, albeit for reasons distinct from those relied on by the Court of Appeals. The Supreme Court held that the annotations in Georgia’s Official Code are ineligible for copyright protection. The Government Edicts Doctrine This case is the Supreme Court’s most detailed discussion of the so-called “government edicts” doctrine in more than a century. The government edicts doctrine is a judicially created exception to copyright protection that originated in a trio of cases decided in the 19th century: Wheaton v. Peters, 33 U.S. 591 (1834); Banks v. Manchester, 128 U.S. 244 (1888); and Callaghan v. Myers, 128 U.S. 617 (1888). These cases, addressing works reporting court decisions, held that there can be no copyright in the opinions of the judges or in “whatever work they perform in their capacity as judges,” Banks, 128 U.S. at 253, but that the reporter had a copyright interest in the explanatory materials that the reporter had created himself, Callaghan, 128 U.S. at 647. Georgia urged the Court to read these precedents as limiting the government edicts doctrine to government edicts “having the force of law,” such as state statutes, but not to works lacking the force of law, such as the annotations in the Official Code of Georgia Annotated. See, e.g., Brief for Petitioner at (I), Georgia v. Public.Resource.Org, Inc., 590 U.S. ___ (2020) (No. 18-1150), 2019 WL 4075096, at *I. Public.Resource.Org offered an alternative approach, arguing that the Court’s precedents do not limit the government edicts doctrine to works that have binding legal effect; rather, the legal materials prepared by state court judges were not copyrightable—not because they had the force of law, but because they lacked an “author” for copyright purposes. Brief of Respondent at 27, Georgia v. Public.Resource.Org, Inc., 590 U.S. ___ (2020) (No. 18‑1150), 2019 WL 5188978, at *27. The Court opted for Public.Resource.Org’s “authorship” approach. According to Chief Justice Roberts, writing for the majority, the Court’s “government edicts precedents reveal a straightforward rule based on the identity of the author.” Public.Resource.Org, 2020 WL 1978707, at *5. “Because judges are vested with the authority to make and interpret the law, they cannot be the ‘author’ of the works they prepare ‘in the discharge of their judicial duties.’” Id. at *6 (citing Banks, 128 U.S. at 253). Similarly, legislators cannot be “authors” of the works they prepare in their capacity as legislators. Id. This rule, however, does not apply to “works created by government officials (or private parties) who lack the authority to make or interpret the law, such as court reporters.” Id. (citing Banks, 128 U.S. at 253; Callaghan, 128 U.S. at 647). This rule based on the identity of the author, the Court explained, “applies regardless of whether a given material carries the force of law,” id. at *5 (emphasis added): “appl[ying] both to binding works (such as opinions) and to non-binding works (such as headnotes and syllabi),” id. at *6. Thus, the Court concluded, “copyright does not vest in works that are (1) created by judges and legislators (2) in the course of their judicial and legislative duties.” Id. at *6. Justice Thomas, in dissent, joined by Justice Alito and by Justice Breyer, would have followed Georgia’s “force of law” approach. The trio of cases, Justice Thomas wrote, establishes that “statutes and regulations cannot be copyrighted, but accompanying notes lacking legal force can be.” Id. at *13. Georgia’s Annotations Are Not Subject To Copyright Protection For its purposes, the Court identified the technical “author” of the annotations as Georgia’s Code Revision Commission. The Commission was the technical author even though the work was prepared in the first instance by a private company (Lexis) because Lexis did the work pursuant to a work-for-hire agreement providing that the Commission would be the sole “author” of the annotations. Public.Resource.Org, 2020 WL 1978707, at *7. The parties did not dispute this point. Id.; see also id. at *15 n.3 (Thomas, J., dissenting). Then, applying its two-part “authorship” framework, the Court held that Georgia’s annotations are not subject to copyright protection because (1) the technical author of the annotations, Georgia’s Code Revision Commission, qualifies as a legislator for the purposes of the analysis because it functions as an arm of the Georgia Legislature; and (2) the annotations were created in the discharge of the Legislature’s legislative duties. Id. at *7. 1.   The Court first determined that, for the purpose of preparing and publishing the annotations, the Commission functions as an arm of the Georgia Legislature. Id. Citing a number of factors, the Court concluded that the Commission is an arm of the legislature because:

  • The Commission is created by the legislature, for the legislature;
  • The Commission consists largely of legislators;
  • The Commission receives funding and staff designated by law for the legislative branch; and
  • “Significantly,” the legislature approves the Commission’s annotations before they are “merged” with the statutory text and published in the official code alongside that text at the legislature’s direction. Id.
Justice Thomas maintained that this “test for ascertaining the true nature of these commissions raises far more questions than it answers.” Id. at *13. Although the majority lists a number of factors, Thomas noted, “it does not specify whether these factors are exhaustive or illustrative” nor does it “specify whether some factors weigh more heavily than others when deciding whether to deem an oversight body a legislative adjunct.” Id. Interestingly, although sovereign immunity is not mentioned anywhere in the Justices’ opinions, the majority’s test for determining whether the Commission functions as an arm of the Georgia Legislature resembles the fact-intensive, multifactor inquiry the Court performs when deciding whether a state instrumentality may invoke the State’s immunity under the Eleventh Amendment. See, e.g., Hess v. Port Authority Trans–Hudson Corporation, 513 U.S. 30, 47–51 (1994); Lake Country Estates, Inc. v. Tahoe Regional Planning Agency, 440 U.S. 391, 401–02 (1979). In the arm-of-the-state context, the Court examines the relationship between the state and the entity in question and may look to the “nature of the entity created by state law” to determine whether it should “be treated as an arm of the State.” Regents of the Univ. of California v. Doe, 519 U.S. 425, 429–30 (1997) (citing Mt. Healthy City Bd. of Ed. v. Doyle, 429 U.S. 274, 280 (1977)); see also Port Auth. Trans-Hudson Corp. v. Feeney, 495 U.S. 299, 311–12 (1990) (Brennan, J., concurring) (“immunity applies . . . where the entity being sued is so intricately intertwined with the State that it can best be understood as an ‘arm of the State’”). For example, in Auer v. Robbins, the Court considered whether the state (1) was responsible for the appointment of the board’s members, (2) was responsible for the board’s financial liabilities, or (3) directed or controlled the board in any other respect. 519 U.S. 452, 456 n.1 (1997). 2.   The Court next concluded that the Commission created the annotations in the discharge of its legislative duties. Public.Resource.Org, 2020 WL 1978707, at *7. Although the legislature does not enact the annotations into law through bicameralism and presentment, the annotations provide commentary and resources that the legislature has deemed relevant to understanding its laws and fall within the work legislators perform in their capacity as legislators. Id. Justice Ginsburg, with whom Justice Breyer also joined, disagreed. Justice Ginsburg would have held the annotations copyrightable because, in her view, the Commission did not create them in its legislative capacity for three reasons. Id. at *19. First, because the annotations comment on statutes already enacted, annotating begins only after lawmaking ends. Id. Second, the annotations do not state the legislature’s perception of what a law conveys; rather, they summarize the views of others on a given statute. Id. at *20. Third, the annotations serve as a reference to the public, not the legislature—they do not aid the legislature, for example, in determining whether to amend existing law. Id. The Broader Implications Of The Majority And Dissenting Opinions Given the infrequency with which the government edicts doctrine appears in copyright litigation, the Court’s decision may be most remarkable for the unusual lineups that it produced in the majority and dissenting opinions. Analyzing the reasons for those divisions may reveal clues about the individual Justices’ judicial philosophies. In writing for the Court, Chief Justice Roberts expressed concern with creating the appearance of “first-class” and “economy-class” access to public laws, which could reflect his institutional responsibilities as Chief Justice of the United States (which include presiding over the Judicial Conference and chairing the Board of the Federal Judicial Center). The Chief Justice observed that the “animating principle” behind the common-law limit on copyright protection “is that no one can own the law.” Public.Resource.Org, 2020 WL 1978707, at *6. “Every citizen,” the Chief Justice continued, “is presumed to know the law, and it needs no argument to show that all should have free access to its contents.” Id. (citing Nash v. Lathrop, 142 Mass. 29, 35 (1886)) (internal quotation marks and alterations omitted). The Chief Justice asked readers to “[i]magine a Georgia citizen interested in learning his legal rights and duties.” Id. at *10. If he or she were limited to the “economy-class version of the Georgia Code,” he or she would have no idea that the Georgia Supreme Court has held important aspects of certain laws unconstitutional. Id. By comparison, the Chief Justice noted that “first-class readers with access to the annotations will be assured that these laws are, in crucial respects, unenforceable relics.”   Id.   He added that the decision follows a “clear path forward that avoids these concerns.” Id. at *11. In contrast, Justice Thomas, joined by Justice Alito, expressed a discomfort with judicial policymaking and “meddling.” Id. at *18. For Justice Thomas, “[a]n unwillingness to examine the root of a precedent has led to the sprouting of many noxious weeds that distort the meaning of the Constitution and statutes alike.” Id. at *14. Only after disputing the majority’s extension of the Court’s 19th century precedents did Justice Thomas address the “text of the Copyright Act,” concluding that it “supports” the dissenters’ reading of the precedents. The bright-line nature of the majority’s “straightforward” authorship rule may help to explain why Justices Gorsuch and Kavanaugh joined with Chief Justice Roberts in this holding. As the dissent warned, however, that the rule could be challenging to apply in practice. To determine whether a state body is part of a legislature and discharging its official duties, courts must survey state law to identify factors that either point toward or away such a conclusion. See id. at *7–8. As Justice Thomas noted in his dissent, the courts apparently have discretion to decide what factors are relevant. Id. at *13. The result may be a patchwork of copyright protection for states’ annotated codes, depending on the particulars of each state’s statutory scheme. Conclusion As result of the Court’s decision, state legislatures and publishers trying to enforce copyrights in legal annotations may face increasing scrutiny based on whether their publications were issued by a legislative body discharging an official function. As a result, we may see more state legislatures taking action to restructure the way they create their code annotations and rethink whom they enlist to create them. For example, more publishers may compile annotations independently of the legislature (as some states already do). This, as Justice Thomas predicts, could result in an increase in the cost of annotations and further exacerbate the divide between “first-class” and “economy-class” access to public laws that Chief Justice Roberts worked to avoid. Finally, if Congress is dissatisfied with the government edicts doctrine, Congress may respond to the Court’s invitation to change the meaning of “author.” Of course, predicting whether and on what schedule Congress may act is always difficult, and particularly so under current circumstances. More broadly, the Court’s decision hints at philosophical disputes over the role of precedent and judicial policymaking, statutory construction, and even immunity and governmental function analysis. It will be interesting to see how the Justices use this decision in future cases implicating those issues.
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 Gibson Dunn lawyer with whom you usually work, or the following authors: Jessica A. Hudak - Orange County, CA (+1 949.451.3837, jhudak@gibsondunn.com) Lucas C. Townsend - Washington, D.C. (+1 202.887.3731, ltownsend@gibsondunn.com) Howard S. Hogan - Washington, D.C. (+1 202.887.3640,hhogan@gibsondunn.com) Please also feel free to contact the following practice leaders: Appellate and Constitutional Law Group: Allyson N. Ho - Dallas (+1 214.698.3233, aho@gibsondunn.com) Mark A. Perry - Washington, D.C. (+1 202.887.3667, mperry@gibsondunn.com) 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) © 2020 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

May 6, 2020 |
Federal Circuit Update (May 2020)

Click for PDF This edition of Gibson Dunn’s Federal Circuit Update summarizes the three Supreme Court decisions in cases originating in the Federal Circuit decided in April and key filings for certiorari review. We address the court’s proposed amendment to the Federal Circuit Rules of Practice, announced last month, and observed changes in its Rule 36 disposition practice during the pandemic.  And we discuss the Federal Circuit’s denial of the petitions for rehearing of Arthrex, Inc. v. Smith & Nephew, Inc., No. 18-2140, and other recent Federal Circuit decisions concerning assignor estoppel, § 101 in Rule 50 motions, prevailing parties, and the Patent Office’s § 101 Official Guidance.

Federal Circuit News

Supreme Court: In April, the Supreme Court decided three cases originating in the Federal Circuit: Thryv, Inc., fka Dex Media, Inc. v. Click-To-Call Techs., LP, No. 18-916: As we summarized in our alert, on April 20, 2020, the Supreme Court held 7-2 that the Patent Trial and Appeal Board’s decision whether a petition for inter partes review is time-barred is not judicially reviewable. On April 27, 2020, the Court also granted the petitions for writs of certiorari in Superior Communications, Inc. v. Voltstar Technologies, Inc., No. 18-1027, and Atlanta Gas Light Company v. Bennett Regulator Guards, Inc., No. 18-999. The Court vacated the judgments and remanded the cases for further consideration in light of Thryv. Romag Fasteners Inc. v. Fossil Inc., No. 18-1233: On April 23, 2020, the Supreme Court unanimously held that under the Lanham Act, proof of willful trademark infringement is not a precondition to a mark holder’s recovery of the infringer’s profits. Read more in our alert. Maine Community Health Options v. United States, No. 18-1028: As we summarized in our alert, on April 27, 2020, the Supreme Court held 8-1 that Congress failed to effectively repeal the government’s obligation to make more than $12 billion in payments to insurers under the Patient Protection and Affordable Care Act risk corridors program, and insurers may sue to recover the missed payments. Currently, the only Federal Circuit case still pending at the Court is Google LLC v. Oracle America, Inc., No. 18-956. On April 13, 2020, the Court rescheduled argument for the October Term 2020; and on May 4, 2020, the Court ordered supplemental briefing on one of the two questions presented. Gibson Dunn partners Mark Perry and Blaine Evanson serve as counsel for Amicus Curiae Rimini Street, Inc. supporting reversal. Noteworthy Petitions for a Writ of Certiorari: The Supreme Court is currently considering certiorari in a number of potentially impactful cases. Emerson Electric Co. v. SIPCO, LLC, No. 19-966: “Whether 35 U.S.C. 324(e) permits review on appeal of the Director’s threshold determination, as part of the decision to institute [Covered Business Method] review, that the challenged patent qualifies as a CBM patent.” On March 19, 2020, the Supreme Court invited a response from SIPCO. Comcast Corp. v. International Trade Commission, No. 19-1173: (1) “Whether the Federal Circuit’s judgment should be vacated as moot and remanded with instructions to vacate the Commission’s orders, pursuant to United States v. Munsingwear, Inc., 340 U.S. 36 (1950)”; (2) “If the case is not moot, whether the Commission exceeded its authority under 19 U.S.C. § 1337(a)(1)(B), by holding that the set-top boxes are ‘articles that * * * infringe.’”; (3) “If the case is not moot, whether the Commission exceeded its authority under 19 U.S.C. § 1337(a)(1)(B) by finding that Comcast engaged in ‘importation’ of the allegedly infringing articles.”   Willowood, LLC v. Syngenta Crop Protection, LLC, No. 19-1147: (1) “Whether liability for patent infringement under 35 U.S.C. § 271(g) requires that all steps of a patented process must be practiced by, or at least attributable to, a single entity, a requirement that this Court previously recognized is a prerequisite for infringement under 35 U.S.C. § 271(a) and (b) in Limelight Networks, Inc. v. Akamai Technologies, Inc., 572 U.S. 915 (2014)”; (2) “Whether, by requiring EPA to grant expedited review and approval of labels for generic pesticides that are ‘identical or substantially similar’ to the previously approved labels for the same product, Congress intended to preclude claims of copyright infringement with respect to generic pesticide labels.” Chrimar Systems, Inc. v. Ale USA Inc., No. 19-1124: “Whether the Federal Circuit may apply a finality standard for patent cases that conflicts with the standard applied by this Court and all other circuit courts in nonpatent cases”; (2) “Whether a final judgment of liability and damages that has been affirmed on appeal may be reversed based on the decision of an administrative agency, merely because an appeal having nothing to do with liability, damages or the proper calculation of the ongoing royalty rate is pending.” Celgene Corp. v. Peter, No. 19-1074: “Whether retroactive application of inter partes review to patents issued before passage of the America Invents Act violates the Takings Clause of the Fifth Amendment.” The petitions pending in Collabo Innovations, Inc. v. Sony Corp., No. 19-601, and Arthrex, Inc. v. Smith & Nephew, Inc. (not that Arthrex), No. 19-1204, present variations on the theme. Gibson Dunn is co-counsel for Smith & Nephew. Noteworthy Federal Circuit En Banc Petitions: This month we highlight the Federal Circuit’s denial of rehearing en banc in Arthrex, Inc. v. Smith & Nephew, Inc., No. 18-2140. As we summarized in our November 2019 update and in our November 5, 2019 alert, a panel of the Federal Circuit (Moore, J., joined by Reyna and Chen, JJ.) held that Patent Trial & Appeal Board (PTAB) Administrative Patent Judges (APJs) were improperly appointed principal Officers under the Appointments Clause. To remedy this defect, the Court ruled that the statutory provision of for-cause removal for PTO officials is unconstitutional as applied to APJs, and vacated and remanded the PTAB’s Final Written Decision. The Court further held that, on remand, a new panel of APJs must be designated and a new hearing must be granted. The government and both parties to the underlying IPR petitioned for en banc review. Gibson Dunn partner Mark Perry served as co-counsel for Smith & Nephew. On March 23, the Court voted 8-4 to deny rehearing en banc, with a concurring opinion from Judge Moore (the author of the panel opinion) and three different dissenting opinions. Judge Dyk’s dissent argued that the panel’s “draconian” remedy was inconsistent with Congressional intent, that the panel’s remedy does not require invalidation of pre-Athrex PTAB decisions, and that the panel’s holding that APJs are principal officers is “open to question.” Judges Newman and Wallach joined Judge Dyk’s dissent in full, and Judge Hughes joined the part relating to the panel’s remedy being inconsistent with Congressional intent. Judge Hughes’s dissent argued that APJs are inferior Officers and that severing removal protections is inconsistent with Congressional intent. Judge Wallach joined Judge Hughes’s dissent in full. Judge Wallach’s dissent further argued that APJs are inferior Officers. The private parties in Arthrex and in several related cases have indicated their intent to petition the Supreme Court to review both aspects of the Federal Circuit’s decision—i.e., the distinction between principal and inferior Officers, and the appropriate remedy for any Appointments Clause violation. The Solicitor General is also considering whether to seek review on behalf of the United States, which intervened in these cases. On May 1, 2020, the PTAB Chief Judge issued a general order directed to the more than 100 PTAB cases where the final written decisions were vacated and remanded in view of Arthrex. The PTAB ordered all such cases be held “in administrative abeyance until the Supreme Court acts on a petition for certiorari or the time for filing such petitions expires.” Other Federal Circuit News: The COVID-19 pandemic has caused a number of scheduling and other changes at the Federal Circuit.  For instance, the Federal Circuit submitted a number of cases on the briefs rather than holding oral argument for both the April and May court weeks, and held oral arguments over the phone in cases that received oral argument. This marked a significant change from the court’s normal practice, which typically involves oral argument for most patent appeals in which parties are represented by counsel. The court’s change to resolving more cases on the briefs also has impacted the use of Rule 36 affirmances, which has drawn attention in recent years from some court watchers. The court’s informal policy regarding Rule 36 has been to use it only in cases that receive oral argument—nearly all cases submitted on the briefs receive a written opinion. Because the court submitted more cases on the briefs in April, the court’s use of Rule 36 affirmances dropped. The court issued only five Rule 36 affirmances for cases calendared in April, and all five cases had received oral argument (one other Rule 36 affirmance issued in April came from an earlier month and was issued concurrently with an opinion in a related case). By way of comparison, the court’s opinion page shows that the court issued 30 Rule 36 affirmances in March, 15 in February, and 19 in January. As the court continues to submit more cases on the briefs in May due to COVID-19, it will be interesting to see whether the court’s use of Rule 36 continues to decrease and how that affects the court’s practice of issuing opinions in the future. The court continues to schedule telephonic arguments through June.  Aside from not being able to see the judges or counsel, a number of attorneys who engaged in those remote arguments have stated that the court completed the process without any major technical difficulties. The clerk’s office held an orientation for those conducting arguments in advance of their scheduled date.  And the Federal Circuit Bar Association is hosting a webcast, led by Gibson Dunn partner Lucas Townsend, on May 14, 2020, addressing “Perspectives on the Federal Circuit’s Modified Procedures During the COVID-19 Crisis.” As of Monday, March 23, 2020, the clerk’s office reduced its availability to provide assistance by phone. It is available by email at either casequestions@cafc.uscourts.gov (for questions about pending cases) or publicinformation@cafc.uscourts.gov (for all other questions). The annual Federal Circuit Judicial Conference, scheduled for May 15, 2020, has been cancelled.  The annual Federal Circuit Bench and Bar Conference, scheduled to occur this summer in Puerto Rico, has been changed to a virtual format that is tentatively scheduled to occur on June 17 or 18, 2020.

Federal Circuit Practice Update

On April 24, 2020, the Federal Circuit gave notice that it proposes to amend several Federal Circuit Rules of Practice and the Federal Circuit Attorney Discipline Rules. If adopted, the amendments would take effect on July 1, 2020. The deadline to submit Public comments—either by email to FederalCircuitRules@cafc.uscourts.gov or by mail—is May 27, 2020. The proposed amendments are extensive, covering 47 amended or new rules. Many of the changes are stylistic, designed to minimize the differences between the Federal Circuit Rules and the Federal Rules of Appellate Procedures. These stylistic changes include, for example, changes to the format of enumerated lists, when numbers are spelled out, and how parties should refer to the opening brief (i.e., the “principal” brief). One of the most substantive changes is the proposed addition of new Federal Circuit Rule 25.1, which, if adopted, would consolidate all privacy and confidentiality rules into a single rule. The rule would govern both logistical information (including who can view the confidential information and procedures for making it public), as well as substantive information (such as the definition of personally identifiable information and the status of protective orders on appeal). The new rule continues to restrict the parties to only marking up to 15 unique words or numbers as confidential in any one brief, petition, motion, response, or reply. The 15-word limit rule would not apply to appendices, exhibits, or similar attachments. The new rule would also govern the format of confidential filings. For example, the court has proposed requiring parties to provide an “adequate, general descriptor of the material . . . over the deletion or redaction” in filings that contain redacted information. Based on the language of the rule, it seems likely that this new requirement would apply to appendices as well as briefs and other filings, but some commentators have stated that this question remains unanswered. There are other notable proposed changes. Federal Circuit Rule 21 would be amended to add a provision governing the treatment of amicus briefs filed in support of writ petitions, requiring that they be filed, along with a motion for leave to file, no later than four days after the petition is docketed. Rule 25 would be amended to no longer require the filing of courtesy paper copies of documents except in specifically enumerated circumstances. That rule would also be amended to prohibit serving confidential information through the court’s electronic filing system; instead, the party would be required to serve the confidential information via paper, absent agreement by the parties. Rule 28 would be amended to change the required contents of the opening brief, including modification to the jurisdictional statement and the contents of the addendum. Amended Rule 28 also requires parties filing briefs in related cases to “advise the court at the beginning of the brief section” if the briefs contain the duplicative content. The amendments to the Rule 28.1 practice notes concerning cross-appeals seek to limit argument on the appeal issues in the third and fourth briefs to the length permitted if there were no cross-appeal. Finally, Rule 34 would be amended to limit the number of counsel who may argue on behalf of each side and on behalf of each party. Many of the other proposed amendments are ministerial and would not substantively impact an appeal to the Federal Circuit. The full notice and a summary of proposed amendments, a redlined copy of the proposed amendments, and a clean copy of the proposed amendments are available for public review on the court’s website.

Key Case Summaries (February 2020–April 2020)

Hologic, Inc. v. Minerva Surgical, Inc., Nos. 19-2054, 19-2081 (Fed. Cir. Apr. 22, 2020): Assignor estoppel bars an assignor from later challenging the validity of the assigned patent in district court, but not in an inter partes review (IPR). The two asserted patents relate to procedures and devices in endometrial ablation. Inventor, Mr. Truckai, assigned his interest in the patents to Hologic. Mr. Truckai left NovaCept (now Hologic) and founded Minerva, the accused infringer in the case. Hologic moved for summary judgment before the district court arguing that the doctrine of assignor estoppel, which bars an assignor from later challenging the validity of an assigned patent, barred Minerva from challenging the validity of the two patents. The district court granted the motion and entered judgment that the patents were not invalid. The district court also granted summary judgment of infringement. In parallel, Minerva filed an IPR challenging one of the asserted patents and the Board rendered a decision concluding that the patent was invalid as obvious. The Federal Circuit panel (Stoll, J., joined by Wallach and Clevenger, JJ.) affirmed-in-part, vacated-in-part, and remanded. Following Federal Circuit precedent, the panel held that the doctrine of assignor estoppel did not bar Minerva from relying on the Board’s decision that one of the patents was invalid, because the doctrine of assignor estoppel did not apply to IPRs. As a result, Hologic was not entitled to monetary or injunctive relief on that patent. As to the second patent, the panel concluded that the district court did not abuse its discretion in applying assignor estoppel. The panel agreed that Minerva was in privity with the original assignor (Mr. Truckai), and the fact that the patent issued from a continuation application Hologic filed after Mr. Truckai had left NoveCept and founded Minerva did not change the result. The panel reasoned that although Minerva was estopped from raising invalidity defenses, especially against claims resulting from a continuation application filed after the original assignor was no longer associated with the assignee, it was not estopped from successfully defending against infringement, where it could still introduce prior art as evidence to narrow the scope of the claims. Judge Stoll also filed additional views to point out the odd situation that arose in this case where an assignor who could not challenge the invalidity of a patent in district court due to assignor estoppel could circumvent this prohibition by challenging the patent in an IPR. She suggested that it was time for the court to reconsider en banc whether the application of doctrine of assignor estoppel in district court should change or whether the court needed to revisit its interpretation of the AIA to prevent these “odd circumstances” from happening. Ericsson Inc. v. TCL Communication Technology, No. 18-2003 (Fed. Cir. April 14, 2020): Failure to raise § 101 in Rule 50 motion did not waive issue where district court’s denial of summary judgment was effectively a grant of eligibility; claims directed to controlling access are abstract. At the district court, TCL moved for summary judgment that the asserted claims were ineligible under § 101. The district court denied the motion and held that the claims were not directed to an abstract idea. A jury ultimately found that TCL infringed the asserted claims. TCL did not raise any § 101 arguments in its Rule 50 motions. The Federal Circuit panel majority (Prost, C.J., joined by Chen, J.) vacated-in-part and reversed, determining that the asserted claims were ineligible under § 101. The majority reasoned that TCL did not waive the issue of eligibility because the district court’s summary judgment denial was not based on any factual issues that could have been presented at trial. Rather, the district court’s denial was based on its belief that the asserted claims were not directed to an abstract idea. Thus, the district court’s decision “effectively entered judgment of eligibility” and that was sufficient to preserve the issue for appeal. Alternatively, the majority reasoned that it could exercise its discretion to hear the issue because none of the goals underlying waiver would be served where the § 101 issue was fully briefed at the district court and on appeal. As to the substantive issue of eligibility, the majority found that the asserted claims, while “written in technical jargon,” were directed to the abstract idea of controlling access or limiting permission to resources. At step two, the majority determined that none of the alleged inventive concepts were recited in the claims. Judge Newman dissented, arguing that TCL waived the issue of eligibility and that the claims were eligible under § 101. O.F. Mossberg & Sons, Inc. v. Timney Triggers, LLC, No. 19-1134 (Fed. Cir. April 13, 2020): Prevailing party under § 285 requires a final court decision. O.F. Mossberg sued Timney for patent infringement. Timney did not answer the lawsuit, and at Timney’s request, the district court stayed the lawsuit while Timney pursued post-grant proceedings at the Patent Office. Ultimately, the Patent Office invalidated the sole asserted patent. In response, O.F. Mossberg filed a notice of voluntary dismissal under Rule 41(a)(1)(A)(i). Timney sought attorney fees but the court denied the motion finding that Timney was not a “prevailing party” under § 285. The Federal Circuit (Hughes, J., joined by Lourie and Reyna, JJ.) affirmed. The panel reasoned that while a party does not need to win on the merits to be a prevailing party, a party cannot “become a prevailing party without a final court decision.” Since O.F. Mossberg’s voluntary dismissal under Rule 41(a)(1)(A)(i) became effective upon filing, there was not a final court decision. The panel also found that the district court’s decision to allow a stay during the post-grant proceedings did not constitute a final court decision because it “did not change the legal relationship between the parties.” Dragon Intellectual Property, LLC v. DISH Network LLC, No. 19-1283 (Fed. Cir. April 21, 2020): Prevailing party under § 285 does not require a final court decision awarding “actual relief on the merits.” Dragon sued DISH Network and others for patent infringement. The lawsuits proceeded in two parallel tracks. As to DISH and Sirius XM, the district court stayed proceedings pending inter partes review. As to the other defendants, the district court proceeded with claim construction. After the district court’s claim construction ruling, all of the defendants, including DISH and Sirius XM, stipulated to noninfringement and the district court entered judgment in their favor. Shortly after, the PTAB determined that all of the asserted claims were unpatentable. DISH and Sirius XM moved for attorney’s fees in the district court under § 285. Before the district court ruled on the motion, Dragon appealed the district court’s noninfringement judgment and the PTAB’s decision. On appeal, the Federal Circuit affirmed the PTAB’s decision and dismissed the district court appeal as moot. On remand, the district court vacated the noninfringement judgment and dismissed the case as moot. The court denied the motion for attorney fees because DISH and Sirius XM were not awarded “actual relief on the merits.” The Federal Circuit (Moore, J., joined by Lourie and Stoll, JJ.) vacated and remanded. According to the panel, a party can be a prevailing party even if the case is dismissed on procedural grounds. In this case, the panel reasoned that DISH and Sirius XM “successfully rebuffed” Dragon’s patent infringement lawsuit by invalidating the asserted claims before the PTAB. Although the district court vacated the final judgment, the panel determined that in this circumstance, the difference between dismissing a case for mootness and vacating a final judgment did not warrant a different outcome. In re Christopher John Rudy, No. 19-2301, (Fed. Cir. Apr. 24, 2020): The Federal Circuit is not bound by Official Guidance from the PTO; method claims directed to selecting fish hooks based on water conditions are ineligible. The patent at issue recited claims directed to methods of selecting colored or colorless quality fishing hooks based on observed water conditions. The Board concluded under the Alice framework and its 2019 Revised Guidance that the methods were directed to an abstract idea. The Federal Circuit panel (Prost, C.J., joined by O’Malley and Taranto, JJ.) affirmed. As an initial matter, the panel held that the Office Guidance “does not carry the force of the law” and “is not binding in our patent eligibility analysis.” The panel then concluded that the claims at issue were directed to patent-ineligible subject matter. Argentum Pharmaceuticals LLC v. Novartis Pharmaceuticals Corporation, No. 18-2273, (Fed. Cir. Apr. 23, 2020): Article III jurisdiction is not satisfied when a future ANDA would be filed by appellant’s partner without evidence relating to appellant’s involvement in the ANDA process. Gibson Dunn partners Jane Love and Robert Trenchard served as counsel for Appellee Novartis. Argentum and multiple other parties joined an IPR filed by Apotex challenging the validity of a patent owned by Novartis. The Board held that the petitioners had failed to demonstrate unpatentability of the challenged claims, and the petitioners appealed. Each petitioner other than Argentum settled with Novartis, leaving Argentum as the only remaining appellant. The Federal Circuit (Moore, J., joined by Lourie and Reyna, JJ.) dismissed the appeal because Argentum lacked Article III standing. The court rejected Argentum’s argument that it had shown a concrete injury-in-fact based on a real and imminent threat of litigation because a forthcoming ANDA would be filed by Argentum’s “manufacturing and marketing partner,” so Argentum’s partner would face the threat of litigation rather than Argentum. The court concluded that Argentum had failed to provide evidence that it would bear the risk of any infringement suit and had not proffered any other evidence of its involvement in the ANDA process beyond “generic statements.” The court also rejected Argentum’s other arguments because (1) Argentum had failed to demonstrate economic harm it would face based on the generic at issue as opposed to multiple other generics Argentum was developing with its partner and Argentum’s assertions of lost profits harm was “conclusory and speculative”; and (2) future estoppel under 35 U.S.C. § 315(e) is not a sufficient basis for standing.

Upcoming Oral Argument Calendar

For a list of upcoming arguments at the Federal Circuit, please click here. In May, only about 38% of the court’s scheduled cases are set for telephonic argument, with the court set to decide its remaining cases on the briefs. This is up from April when the court heard argument in only 29% of its scheduled cases. The number of argued cases, however, is still dramatically lower than pre-pandemic numbers. For example, in November 2019, the court heard argument in 83% of its scheduled cases. Cases of Interest: The following cases scheduled for argument in May received at least one amicus brief: Uniloc 2017 LLC v. Hulu, LLC, No. 19-1686 (Arg. May 6, 2020): Whether, in inter partes review, the Board may analyze and determine whether substitute claims submitted by a patent owner in a motion to amend comply with the subject-matter eligibility requirements of § 101. Sellers v. Wilkie, No. 19-1769 (Arg. May 8, 2020) (Court of Appeals for Veterans Claims). Hardy v. US, No. 19-1793 (Arg. May 8, 2020) (United States Court of Federal Claims).
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) Jessica A. Hudak - Orange County (+1 949-451-3837, jhudak@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: Allyson N. Ho - Dallas (+1 214-698-3233, aho@gibsondunn.com) Mark A. Perry - Washington, D.C. (+1 202-887-3667, mperry@gibsondunn.com)

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)

© 2020 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 28, 2020 |
Update on Intellectual Property-Related Issues in the Responses to COVID-19

Click for PDF Institutions around the world continue to grapple with the intellectual property implications associated with their efforts to facilitate the prevention, diagnosis, and treatment of COVID-19.  In a prior alert, we discussed recent initiatives promoting the donation of intellectual property rights in connection with businesses’ efforts to combat the pandemic, such as the Open COVID Pledge and the COVID-19 Technology Access Framework, as well as recent efforts to use trademark law to combat alleged price gouging for personal protective equipment (“PPE”).  In this alert, we provide a brief update on these and other initiatives. (1)  Further Efforts to Facilitate the Donation of Patent Rights During the COVID-19 Pandemic The Open COVID Pledge and the COVID-19 Technology Access Framework, which seek to facilitate the removal of intellectual property obstacles to the fight against the virus, are garnering further support.  Signatories to the Open COVID-19 pledge grant a non-exclusive, royalty-free, worldwide license to use their patents and copyrights “for the sole purpose of ending” the COVID-19 pandemic.  Companies such as Intel and Mozilla were among the first to subscribe.  Since early last week, additional technology titans—Amazon, Facebook, HP, IBM, Microsoft, and Sandia National Laboratories—have also joined the pledge.  The number of patents and patent applications within the scope of the license that signatories of the Open COVID Pledge grant the public is substantial.  IBM, for example, in announcing its commitment to the Open COVID Pledge, asserted that it has over 80,000 existing patents and patent applications to which the pledge would apply, and that it would include new patent applications filed through 2023 as part of its pledge as well. The COVID-19 Technology Access Framework (the “Framework”) encourages research institutions to implement technology transfer strategies to expedite the manufacture and distribution of products that help prevent, diagnose, and treat COVID-19 infections.  Like the Open COVID Pledge, those who sign onto the Framework commit (among other things) to granting non-exclusive, royalty-free licenses to intellectual property rights for the purpose of promoting the development of products to fight the pandemic.  In addition to the initial signatories (Stanford University, Harvard University, and Massachusetts Institute of Technology), and Yale University, which we previously noted joined on April 10, more institutions—including Georgetown University, Northeastern University, and RTI International, a non-profit research institute—have committed to the framework. Finally, the World Intellectual Property Organization (“WIPO”) recently announced the launch of a new search functionality in its global patent database, “Patentscope,” which contains over 83 million patents and related documents.  The new search functionality is directed towards returning documents that may be relevant to innovators focusing on developing new technologies to help prevent and treat the virus. (2)  Manufacturer 3M Obtains Temporary Restraining Order in its Effort to Stop Alleged Price Gouging Last Friday, April 24, 2020, the manufacturing company 3M obtained a temporary restraining order in the Southern District of New York against Performance Supply, LLC enjoining it from, among other things, “using the ‘3M’ trademarks” in connection with “3M-brand N95 respirators” and other 3M goods; from “falsely representing that 3M has increased the price(s) of its 3M-brand N95 respirators”; and from otherwise “offering to sell any of 3M’s products at a price . . . that would constitute a violation of New York General Business Law § 369-[r],” that is, New York’s price gouging statute.  In the lawsuit, 3M alleges that Defendant Performance Supply, LLC offered to sell New York City’s Office of Citywide Procurement millions of N95 respirators bearing the 3M logo and at inflated prices.  3M is asserting nine causes of action against Performance Supply, LLC for violations of federal and state trademark laws, as well as New York State laws addressing deceptive business practices and unfair competition.  A telephonic preliminary injunction hearing has been scheduled for May 4.  We are continuing to monitor for similar suits using trademark law to curb abusive practices relating to the manufacture, distribution, sale, or marketing of trademarked products used in responding to COVID-19.


Gibson Dunn lawyers regularly counsel clients on the issues raised by this pandemic, and we are working with many of our clients on their response to COVID-19.  For additional information, please contact any member of the firm’s Coronavirus (COVID-19) Response Team.  Please also feel free to contact the Gibson Dunn lawyer with whom you usually work, or the authors: Joe Evall (jevall@gibsondunn.com), Richard Mark (rmark@gibsondunn.com), Doran Satanove (dsatanove@gibsondunn.com), and Amanda First (afirst@gibsondunn.com) © 2020 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 23, 2020 |
Supreme Court Holds That Courts Can Order Trademark Infringers To Disgorge Profits Without Proof Of Willful Infringement

Click for PDF Decided April 23, 2020 Romag Fasteners, Inc. v. Fossil, Inc., No. 18-1233

Today, the Supreme Court unanimously held that under the Lanham Act, proof of willful trademark infringement is not a precondition to a mark holder’s recovery of the infringer’s profits. 

Background: Romag Fasteners, Inc. sells magnetic snaps used in handbags, including handbags manufactured and distributed by Fossil, Inc. Romag sued Fossil for trademark infringement under the Lanham Act after discovering that Fossil’s Chinese manufacturer had used counterfeit snaps bearing the Romag mark.  Among other remedies, Romag sought an award of Fossil’s profits from sales of the infringing handbags under Section 35(a) of the Lanham Act, 15 U.S.C. § 1117(a).  A jury found Fossil liable for trademark infringement.  The jury also found that, although Fossil acted “in callous disregard” of Romag’s trademark rights, Fossil did not willfully infringe Romag’s trademarks.  The district court held that Romag’s failure to prove willful infringement barred an award of profits under Section 35(a), and the Federal Circuit affirmed.

Issue: Whether, under Section 35(a) of the Lanham Act, 15 U.S.C. § 1117(a), willful infringement is a precondition for an award of an infringer’s profits for a violation of Section 43(a), id. § 1125(a).

Court's Holding: No. A trademark defendant’s state of mind is a “highly important consideration” in determining whether to award profits, but willfulness is not an “inflexible precondition” to such an award.

“[W]e do not doubt that a trademark defendant’s mental state is a highly important consideration in determining whether an award of profits is appropriate. But acknowledging that much is a far cry from insisting on [an] inflexible precondition to recovery.

Justice Gorsuch, writing for the Court

What It Means:
  • The Court’s decision resolves a split between circuits as to the role that a finding of willfulness plays in determining whether to award a disgorgement of profits in trademark infringement cases, and brings the circuits that had promulgated categorical rules (such as the Second, Eighth, Ninth, and Tenth Circuits) into line with the circuits that have considered willfulness to be only a factor to consider in making the determination. It therefore strengthens the hands of trademark owners in seeking monetary remedies from parties found liable for creating a likelihood of consumer confusion, but also confirms that willfulness is a “highly important” factor for courts to consider.
  • It remains to be seen whether the Court’s decision will meaningfully increase the number of profits awards in cases involving reckless, negligent, or innocent infringement.
  • The Court’s decision does not alter the express statutory requirement that willfulness be proven to obtain an award of profits in trademark dilution cases brought under Section 43(c) of the Lanham Act, 15 U.S.C. U.S.C. § 1125(c).

The Court's opinion is available here.

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

Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com Mark A. Perry +1 202.887.3667 mperry@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
Howard S. Hogan +1 202.887.3640 hhogan@gibsondunn.com
© 2020 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 20, 2020 |
Supreme Court Holds That PTAB’s Timeliness Decisions For Instituting Inter Partes Review Are Not Judicially Reviewable

Click for PDF Decided April 20, 2020 Thryv, Inc. v. Click-To-Call Technologies, LP, No. 18-916

Today, the Supreme Court held 7-2 that the Patent Trial and Appeal Board’s decision whether a petition for inter partes review is time-barred is not judicially reviewable. 

Background: The Leahy-Smith America Invents Act permits any person who is not the patent owner to petition the Patent Trial and Appeal Board (the “Board”) for inter partes review (“IPR”) to reexamine claims in an existing patent and cancel any claim the Board finds unpatentable in light of prior art. The Board may institute an IPR if certain conditions are met, including that the petition was not “filed more than 1 year after the date on which the petitioner . . . is served with a complaint alleging infringement.” 35 U.S.C. § 315(b). The Board’s decision whether to institute an IPR is “final and nonappealable.” Id. § 314(d).

Click-to-Call owns a patent that was previously the subject of an infringement complaint filed in 2001 against Thryv and later voluntarily dismissed. In 2012, Click-to-Call again sued Thryv for infringing the patent, and Thryv petitioned for IPR less than a year later. Click-to-Call challenged the petition as untimely under § 315(b), but the Board, disagreeing, instituted IPR and issued a final written decision finding several claims unpatentable. Click-to-Call appealed the institution decision to the Federal Circuit, which ruled that § 314(d) does not apply to timeliness determinations and held that the petition for IPR had been untimely.

Issue: Whether 35 U.S.C. § 314(d) permits judicial review of the Board’s determination that a petition for IPR was timely under § 315(b).

Court’s Holding: No. The Board’s determination of timeliness under § 315(b) is closely related to its decision whether to institute IPR and is therefore rendered nonappealable by § 314(d).

“The agency’s application of § 315(b)’s time limit, we hold, is closely related to its decision whether to institute inter partes review and is therefore rendered nonappealable by § 314(d).

Justice Ginsburg, writing for the Court

What It Means:
  • The Court reaffirmed the holding of Cuozzo Speed Technologies, LLC v. Lee, 136 S. Ct. 2131 (2016), that § 314(d) bars review of questions “closely tied to the application and interpretation of statutes related to” the decision to institute IPR. That category includes § 315(b) timing decisions.
  • As in Cuozzo, the Court did not establish the outer boundary of § 314(d)’s prohibition against appealability or foreclose the possibility of mandamus review in extraordinary cases. But the Court again disapproved review of Board decisions preceding the issuance of a final written decision.
  • Today’s ruling extends a series of decisions interpreting the America Invents Act, a statute in which the Court continues to take particular interest (deciding six cases in the last five Terms).

The Court's opinion is available here.

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

Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com Mark A. Perry +1 202.887.3667 mperry@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
Brian M. Buroker +1 202.955.8541 bburoker@gibsondunn.com

April 14, 2020 |
Recent Trends Involving Intellectual Property Rights in the Responses to COVID-19

Click for PDF As the pandemic continues, organizations around the world are grappling with the intellectual property implications associated with encouraging the rapid distribution of personal protective equipment (“PPE”) and the development of pharmaceutical treatments to help fight COVID-19.  Increasing public attention is also being directed to misconduct associated with some of these efforts, such as price gouging for PPE, or the distribution of fake or ineffective products.  In this alert, we review recent initiatives promoting the donation of intellectual property rights that entities may use in connection with their efforts to combat COVID-19, related pending legislation, and how some entities are using trademark law to combat what they regard as price gouging for PPE and false marketing of coronavirus testing kits. (1) Continuing Efforts to Facilitate the Donation of Patent Rights During the COVID-19 Pandemic As discussed in a prior alert, the urgency of the COVID-19 crisis has prompted initiatives such as the Open COVID-19 Pledge, which would permit businesses to provide urgently needed supplies without running the risk of finding themselves defendants in patent infringement litigation.  Signatories to the Open COVID-19 Pledge grant a non-exclusive, royalty-free, worldwide license to use their patents and copyrights “for the sole purpose of ending” the COVID-19 pandemic.  Companies such as Intel and Mozilla have subscribed to this Pledge. Academic institutions have taken similar steps.  Last week, Stanford University, Harvard University, and the Massachusetts Institute of Technology established the “COVID-19 Technology Access Framework” to encourage research institutions to implement technology transfer strategies to help in the fight against COVID-19.  The principal component of the framework provides “rapidly executable non-exclusive royalty free licenses . . . for the purpose of making and distributing products to prevent, diagnose and treat COVID-19 infection during the pandemic and for a short period thereafter.”  In exchange for the rights granted under these licenses, the framework requests that licensees broadly distribute products developed with the licensed technology at low cost during the term of the license.  On April 10, 2020, Yale University also signed onto the framework. International organizations, such as the U.N.-backed nonprofit “The Medicines Patent Pool,” are also working to facilitate patent sharing and streamline access to information about patents as a way to accelerate the fight against COVID-19.  The Medicines Patent Pool has begun to gather patent information relating to products that are tested in clinical trials to treat COVID-19, such as the biologic tocilizumab and the antiviral remdesivir.  By publishing the information on its website, the organization provides a publicly available repository of patent data that companies around the world can consult as they work on medical innovations. Finally, the outgoing Director General of the World Intellectual Property Organization (WIPO), Francis Gurry, is reported to have stated publicly that he will make an announcement this week regarding a “special mechanism to share drug patents.”  More than 135 organizations, representing more than 32.5 million educators in 199 countries, signed a letter requesting that Director Gurry facilitate the removal of licensing restrictions by intellectual property rights owners to “achieve universal and equitable access to COVID-19 medicines and medical technologies.” Gibson Dunn will continue to monitor developments that may be of interest to businesses who hold, or seek to use, intellectual property rights. (2) Pending and Existing Legislation Intended to Promote the Development of COVID-19 Treatments Several efforts by the U.S. government to expedite development of medical treatments for COVID-19 involve intellectual property or implicate intellectual property rights.  For example, Section 4017 of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act includes programs aimed at facilitating the distribution of PPE by providing appropriations for government purchases of PPE through the Defense Production Act.  A prior alert discussing the interplay between the Defense Production Act and a federal provision addressing immunity from infringement suits, 28 U.S.C. § 1498(a), is available here.  Title II of the CARES Act also includes appropriations for the National Institutes of Health to support research on COVID-19 treatments. Since the CARES Act was enacted, Senator Sasse (R-Neb.) proposed a bill intended to encourage investment into research and development for COVID-19 treatments.  With respect to any “patent issued for a new or existing pharmaceutical, medical device, or other process . . . used or intended for use in the treatment of the Coronavirus Disease,” the bill (among other things) would extend patent exclusivity “for 10 years longer” than the term patent owners would otherwise receive under the Patent Act (typically, exclusivity expires 20 years from the date on which the patent application was filed in the United States, see 35 U.S.C. § 154). The bill specifies that “the term of the patent shall not begin until the date on which the [coronavirus] national emergency terminates”—and thus effectively seeks to suspend certain patent rights on the foregoing medical products during the pendency of the COVID-19 national emergency, in exchange for a 10-year extension on the “tail end” of the patent. Finally, the federal government has also used legislation enacted prior to the coronavirus outbreak—i.e., the Public Readiness and Emergency Preparedness Act (“PREP Act”)—to provide immunities to certain businesses seeking to meet the nation’s emergency needs.  The March 2020 Declaration activating the PREP Act, issued by the Secretary of the Department of Health and Human Services, extended immunity “from suit and liability under federal and state law with respect to all claims for loss caused by, arising out of, relating to, or resulting from” manufacture, testing, development, distribution, administration or use of qualifying products used to combat or reduce the spread of COVID-19 (the “PREP Declaration”).  A prior alert describing the activities and products that come within PREP Act immunity is available here, and another prior alert discussing the immunity in the context of patent infringement claims is available here. (3) Trademark Suits to Protect Against Price Gouging and False Marketing As demand for personal protective equipment, testing kits, and other products important to the fight against COVID-19 continues to soar, so too does the risk of price gouging, false advertising, and other misconduct relating to the manufacture, distribution, or sale of such products.  Some companies have asserted their copyrights and trademarks in litigation that targets some of this alleged misconduct. In Florida, CoronaCide LLC, a COVID-19 test manufacturer, has accused healthcare company Wellness Matrix Group of falsely marketing CoronaCide’s test kits for at-home use.  A complaint filed by CoronaCide in the U.S. District Court for the Middle District of Florida asserts that WM Group lifted text and images from CoronaCide’s materials to advertise CoronaCide’s test kits for use by consumers at home, but that the kits are only intended for use by licensed healthcare professionals. And at least one company has used trademark law to protect against alleged price gouging for personal protective equipment.  In a lawsuit filed in federal court in Manhattan, 3M claims that New Jersey company Performance Supply LLC misused the 3M trademark and employed other misleading tactics in order to “exploit the increased demand for Plaintiffs’ 3M-brand N95 respirators by offering to sell them for exorbitant prices.”  Compl. ¶ 34. New York’s price-gouging statute, N.Y. Gen. Bus. Law § 369-R, allows the State Attorney General to bring an action to stop the practice when there is “any abnormal disruption of the market for consumer goods and services vital and necessary for the health, safety and welfare of consumers.”  3M’s complaint, however, asserts private causes of action under state and federal trademark law to attack the defendant’s alleged resale of the goods at an excessive price. We may see additional suits brought by companies seeking to stop abusive practices relating to the manufacture, distribution, sale, or marketing of their trademarked products used to combat COVID-19.


Gibson Dunn lawyers regularly counsel clients on the issues raised by this pandemic, and we are working with many of our clients on their response to COVID-19.  For additional information, please contact any member of the firm’s Coronavirus (COVID-19) Response Team.  Please also feel free to contact the Gibson Dunn lawyer with whom you usually work, or the authors:

Joe Evall (jevall@gibsondunn.com), Richard Mark (rmark@gibsondunn.com), Doran Satanove (dsatanove@gibsondunn.com), and Amanda First (afirst@gibsondunn.com)

© 2020 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 8, 2020 |
Some Protection from Patent Infringement Suits Is Available to Those Who Make and Provide Personal Protective Equipment and Ventilators in Response to the COVID-19 Crisis

Click for PDF Many companies have retooled (or are considering retooling) their businesses to meet the rising demand for personal protective equipment (“PPE”), ventilators, and other products or services to address the COVID-19 pandemic.  Moreover, on April 2, 2020, the President ordered the Department of Health and Human Services to use its authority under the Defense Production Act (“DPA”) of 1950, as amended, 50 U.S.C. §§ 4501 et seq., to facilitate the supply of materials for the production of ventilators by several companies operating in the United States.[1]  This alert reviews the limited protection against potential patent infringement lawsuits and damages that the law provides for infringement that occurs during the production, use, or sale of products or services in response to these emergency declarations. Under the Patent Act, “whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.” 35 U.S.C. § 271(a).  The Act further provides for an award of damages “adequate to compensate for the infringement,”  which may be trebled in certain instances, 35 U.S.C. § 284; injunctive relief is also available.  35 U.S.C. § 283. The Patent Act creates no exceptions for patent infringement damages during public health crises or pandemics such as COVID-19, but several other statutes and doctrines may provide some protections for businesses responding to urgent demands for products or services.  As discussed below, some protections may be available for manufacturers and providers of emergency equipment under a Declaration pursuant to  the Public Readiness and Emergency Preparedness Act (“PREP Act”), 42 U.S.C. § 247d-6d; the DPA; and a statute relating to government use of patents, 28 U.S.C. § 1498(a).  This alert also considers arguments that might be advanced to minimize damages for the infringement of patent claims that might cover certain emergency equipment.  Although the principles discussed here are relevant to many emergency activities taken during the COVID-19 pandemic, the development and marketing of new pharmaceutical treatments for COVID-19 raises additional patent issues that this alert does not address.

I.    Potential Protection from Patent Infringement Liability

A.    The PREP Act and PREP Declaration

As described in a previous client alert, on March 17, 2020, Alex Azar, Secretary of the Department of Health and Human Services (HHS), issued a Declaration activating the PREP Act, 42 U.S.C. § 247d-6d.  The Declaration extends immunity “from suit and liability under federal and state law with respect to all claims for loss caused by, arising out of, relating to, or resulting from” administration or use of qualifying products used to combat or reduce the spread of COVID-19 (the “PREP Declaration”).[2]  Along with other recent FDA guidance relaxing regulatory oversight for certain COVID-19-fighting products, the PREP Declaration protects manufacturers, suppliers, distributors, and others helping to mitigate supply shortages during the current crisis. There are several pertinent limitations on the applicability of the PREP Declaration to the circumstances described here.  First, no court has yet determined that  immunity under the PREP Act extends to immunity from liability for patent infringement.  Although the PREP Act confers “immun[ity] from suit and liability under Federal and State law,” nothing in the Act or legislative history shows specific consideration of intellectual property laws.  There is also no express exclusion of patent suits, however, and potential defendants would be expected to argue that in view of the broad language of the statute, combined with courts’ frequent treatment of patent law as a species of statutory tort law,  PREP Act immunity from suit “under Federal . . . law” includes claims of patent infringement.[3] Second, even if the PREP Act applies to patent infringement, not every product used in response to COVID-19 is a qualified product under the PREP Declaration.  For example, a qualified product must be FDA approved, licensed for use under the Public Health Service Act, or cleared for use under a FDA emergency use authorization (EUA).[4] Thus, activities directed towards masks and ventilators that are not approved by FDA or NIOSH (or otherwise authorized by FDA based on compliance with foreign agency standards), and that are not created pursuant to a federal contract or governmental response, are not likely to be afforded PREP Act immunity.  In short, protections under the PREP Act are limited, and businesses should consider these limitations when evaluating whether the PREP Declaration protects their activities.[5]

B.    The Defense Production Act and 28 U.S.C. § 1498(a)

Individuals or businesses that facilitate the production of COVID-19 response products through contracts with the federal government, including those arising from the President’s recent invocation of the DPA, are granted certain protections from patent infringement liability under 28 U.S.C. § 1498(a).

1.    The DPA

The DPA authorizes the President to require businesses to prioritize any of their government contracts deemed “necessary or appropriate to promote the national defense” “over performance under any other contract,” and “to require” private businesses to “accept[] and perform[]” such government contracts where the President finds those businesses capable of performance.  50 U.S.C. § 4511(a)(1).  The DPA also confers on the President the authority “to allocate materials, services, and facilities, to such extent as he shall deem necessary or appropriate.”  50 U.S.C. § 4511(a)(2).  These powers can be used to control the distribution of materials in the United States market, but only where the President first finds that those materials are “a scarce and critical material essential to the national defense,” and that “the requirements of the national defense for such material cannot otherwise be met without creating a significant dislocation of the normal distribution of such material . . . .”  50 U.S.C. § 4511(b). This is the case with personal protective equipment and ventilators used to combat the COVID-19 virus:  the President’s March 18, 2020 Executive Order specifically found that “personal protective equipment and ventilators” met “the criteria specified in [§ 4511(b)],” and further delegated the Secretary of Health and Human Services to “identify additional specific health and medical resources” that met § 4511(b)’s criteria.  The President then invoked the DPA on March 27, 2020, ordering “General Motors Company to accept, perform and prioritize contracts or orders for the number of ventilators that the Secretary determines to be appropriate.”  And on April 2, 2020, as previously noted, the President again invoked the DPA, ordering the Secretary of Health and Human Services to use its DPA authority to facilitate the supply of materials for the production of ventilators by a handful of companies in addition to General Motors.

2.    Section 28 U.S.C. 1498(a) Protects Certain Federal Contractors from Liability

Although the DPA does not itself create immunity from claims of patent infringement against those ordered to perform contracts under the DPA,[6] another federal statute effectively supplies an affirmative defense for federal government contractors who face patent infringement claims.  That protection, codified at 28 U.S.C. § 1498(a), limits a patent owner’s remedy for infringement of inventions “used or manufactured by or for the United States”—i.e., inventions used or manufactured “with the authorization and consent of the Government”—to an “action against the United States in the United States Court of Federal Claims for the recovery of . . . reasonable and entire compensation for such use and manufacture.” 28 U.S.C. § 1498(a).[7]  That section requires the United States government to defend such actions, waiving its sovereign immunity in the process.  The U.S. government’s “consent and authorization” for a contractor to use and manufacture a patented invention can be expressly made in the applicable contract, pursuant to Federal Acquisition Regulation (“FAR”) 52.227-1.[8]  Accordingly, federal contractors cannot be held directly liable for patent infringement claims arising from conduct undertaken for the benefit of the federal government, with that government’s authorization and consent.[9] But the protections of § 1498(a) only go so far.  A federal contractor nevertheless may be required to indemnify the government for any damages assessed in a suit that proceeds by virtue of  § 1498(a).  Indeed, FAR 27.201-1(d) authorizes the Government to require certain contractors to reimburse it for patent infringement “liability” and “costs” incurred in performing the contract by inserting an indemnity clause into the contract.[10]  It would thus behoove federal contractors to try to exclude that clause from government contracts—if possible.  Moreover, parties to federal contracts arising from the DPA might argue that such an indemnity clause is unenforceable under FAR-52.227-3(b)(1), which provides that the indemnity clause does not apply to infringement claims where, among other things, the infringement results from “the Contracting Officer . . . directing a manner of performance of the contract not normally used by the Contractor.”  Although the scope of that exception does not appear to have been tested in the context of the DPA, it is expected that contractors ordered to facilitate the manufacture of products they do not normally produce would argue for its application in these circumstances. In short,  a federal contract for the manufacture, supply, and distribution of PPE and ventilators may help insulate manufacturers and others from direct claims of patent infringement for certain activities, but that protection may be of limited value if they are thereafter required to indemnify the government against such claims.

II.    Businesses Meeting the Urgent Needs of the COVID-19 Pandemic May Be Expected to Argue That Any Patent Damages for Their Activities Should Be Minimal

The expected arguments for minimizing patent damages and other remedies for the production, sale, or use of infringing PPE and ventilators during the pandemic—even in the absence of a federal contract—find some support in existing Federal Circuit case law.

A.    Injunctive Relief Would Be Unlikely

As an initial matter, it is unlikely that patent owners could obtain injunctive relief against infringers of patents on PPE and ventilators in the context of the COVID-19 crisis.  To obtain a permanent injunction against an infringer, a patentee must satisfy the well-established four-factor test, by showing that: “(1) it has suffered an irreparable injury; (2) remedies available at law are inadequate to compensate for that injury; (3) considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) the public interest would not be “disserved” by a permanent injunction.”[11]  Patentees would have tremendous difficulty meeting their burden for the seemingly obvious reason that enjoining the production of supplies that prevent the spread of COVID-19 and treat infected individuals would disserve the public interest.  Indeed, the Federal Circuit has held that the public interest would be disserved by a reduction in availability of cancer and hepatitis test kits, and pacemakers—at times where no comparable global health pandemics were declared.[12]  A patentee’s expected failure to meet the public interest prong would almost certainly be fatal to any claim for injunctive relief.[13]

B.    Defendants’ Arguments for Reduced Damages Might Find Purchase with a Court

A patent owner who prevails in patent litigation is entitled to “damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer,” 35 U.S.C. § 284.  Moreover, “the court may increase the damages up to three times the amount found or assessed,” an enhancement that typically involves a finding of willful infringement.  Id.  The circumstances of the COVID-19 pandemic would render unlikely any award of lost profits damages or enhanced damages for willful infringement.  Lost profits damages require the patentee to show (among other things) that it had the manufacturing and marketing capability to meet public demand for the product.[14]  The extraordinary present need for PPE and ventilators, as two examples, would militate against such a showing. An award of enhanced damages for willful infringement rests within the district court’s discretion for “egregious cases of misconduct beyond typical infringement.”[15]  Even during a pandemic, the question of whether infringement directed toward preventing the spread of COVID-19 meets the “egregious” standard may depend on a variety of factors, among them whether the government directed production of the product or service—in which case a court may very well find the infringing conduct does not constitute the “malicious, bad-faith” conduct the egregious standard is intended to capture.[16]  Likewise, the Patent Act provides that the “court in exceptional cases may award reasonable attorney fees to the prevailing party.”  35 U.S.C. §  285.  We do not expect courts to find that cases arising out of the COVID-19 pandemic are “exceptional” such that prevailing plaintiffs are entitled to fees—but in circumstances where defendants prevail, courts might use a finding that the case was “exceptional” to deter meritless suits against companies attempting to address the COVID-19 pandemic. The minimum damages to which prevailing patent-holders are entitled are a “reasonable royalty.”  Manufacturers, distributors, and users of COVID-19 response products who are found liable for patent infringement would be expected to argue that any such reasonable royalty would be minimal under the circumstances.[17]

C.    Commentators Have Suggested Other Ways to Permit Businesses to Respond to the Current Emergency Without the Risk of Infringement Suits and Liability

The urgency of the COVID-19 crisis has given rise to other suggestions for ways to permit businesses to provide urgently-needed supplies without the risk of defending against expensive patent infringement litigation and being assessed damages.  One suggestion calls for the donation of intellectual property rights to the fight against COVID-19.  For example, on March 31, 2020, a group of prominent scientists, lawyers, and entrepreneurs introduced the “Open COVID Pledge,” in an effort to promote the removal of obstacles involving intellectual property in the fight against COVID-19.  The pledge, available on the group’s website, is intended for signature by “patent, copyright and other intellectual and industrial property rights (other than trademarks and trade secrets)” and would grant a non-exclusive, royalty-free, worldwide license to such intellectual property “for the sole purpose of ending” the COVID-19 pandemic.  The license would be limited in time to the period of December 1, 2019 until one year after the World Health Organization declares the pandemic to have ended. Companies such as Intel and Mozilla have reportedly joined the Open COVID-19 pledge. While it remains to be seen how many patent holders ultimately do so, the pledge itself reflects a sentiment that companies contribute to the fight against the pandemic by forgoing the enforcement of their intellectual property rights—in essence, by donating them.  But that sentiment—which may dissuade intellectual property owners from bringing suit now—may ultimately be significantly less valuable than an enforceable pledge or right.  Because even if a non-binding spirit of public contribution (and public pressure) prevents patent owners from asserting infringement claims during the current climate, businesses should bear in mind that the current emergency will (hopefully) abate, and that patent-holders may typically seek damages for six years of pre-suit damages—meaning that activities now may not be the subject of suits until 2026, when the climate may be different. In sum, businesses or individuals facilitating the manufacture, supply, distribution, and use of COVID-19 response products should be mindful that many of these products are subject to patents.  While the PREP Act and PREP Declaration may afford immunity from patent infringement claims in limited instances, and while federal contractors may rely on 28 U.S.C. § 1498 as an affirmative defense to such claims, other persons and entities that infringe patent claims on PPE and ventilator components could conceivably face reasonable royalty damages.  Those considering aiding in the production or distribution of PPE and ventilators should consider doing so through federal government contracts, and by negotiating license agreements with patent holders upfront.  Likewise, legislative and regulatory solutions (such as, for example, clear tax benefits for the donation of intellectual property for use by businesses trying to meet emergency needs), and business philanthropy, may help address the emergency, and businesses are advised to monitor any such developments.  We will report on any advances of note.  Government actions impacting intellectual property rights owners may also raise constitutional issues concerning property rights more broadly, as addressed in a prior client alert available here. ______________________ [1]  These companies include General Electric Company; Hill-Rom Holdings, Inc.; Medtronic Public Limited Company; ResMed Inc.; Royal Philips N.V.; and Vyaire Medical, Inc.  The President previously invoked his powers under the DPA, on March 27, 2020, by requiring that General Motors Company “accept, perform and prioritize contracts or orders for the number of ventilators that the Secretary [of Health and Human Services] determines to be appropriate.” [2]  85 Fed. Reg. 15198 (March 17, 2020). [3]  See Carbice Corp. of Am. v. Am. Patents Dev. Corp., 283 U.S. 27, 33 (1931); Akamai v. Limelight Networks Inc., 786 F.3d 899, 905 (Fed. Cir. 2015), rev’d on other grounds, 797 F.3d 1020 (Fed. Cir. 2015) (en banc) (per curiam); Mars, Inc. v. Coin Acceptors, Inc., 527 F.3d 1359, 1365 (Fed. Cir. 2008); Orthokinetics Inc. v. Safety Travel Chairs Inc., 806 F.2d 1565, 1579 (Fed. Cir. 1986). [4]  85 Fed. Reg. 15198 § VI (“Covered Countermeasures”) (“To be a Covered Countermeasure, qualified pandemic or epidemic products or security countermeasures also must be approved or cleared under the FD&C Act; licensed under the PHS Act, or authorized for emergency use under Sections 564, 564A, or 564B of the FD&C Act.”) [5]  85 Fed. Reg. 15198 (March 17, 2020). [6]  The DPA states that “[n]o person shall be held liable for damages or penalties for any act or failure to act resulting directly or indirectly from compliance with a rule, regulation, or order issued pursuant to this chapter[.]”  50 U.S.C. § 4557.  But that provision has been interpreted to apply only to third-party breach of contract claims against parties whose performances of their contracts were frustrated under a DPA order.  See Hercules, Inc. v. United States, 24 F.3d 188, 203-04 (Fed. Cir. 1994), aff’d, 516 U.S. 417 (1996).  [7]  The full text of 28 U.S.C. § 1498(a) provides:  “Whenever an invention described in and covered by a patent of the United States is used or manufactured by or for the United States without license of the owner thereof or lawful right to use or manufacture the same, the owner’s remedy shall be by action against the United States in the United States Court of Federal Claims for the recovery of his reasonable and entire compensation for such use and manufacture . . . For the purposes of this section, the use or manufacture of an invention described in and covered by a patent of the United States by a contractor, a subcontractor, or any person, firm, or corporation for the Government and with the authorization or consent of the Government, shall be construed as use or manufacture for the United States.”; see also Liberty Ammunition, Inc. v. United States, 835 F.3d 1388, 1394 n.3 (Fed. Cir. 2016) (noting that § 1498 effects a waiver of the government’s sovereign immunity). [8]  FAR 52.227-1 more specifically sets forth an express grant of “authorization and consent” for contractors and subcontractors for the use and manufacture of any patented invention (1) embodied in the structure or composition of any article delivered to and accepted by the government related to a government contract; or (2) used in machinery, tools, or methods necessary for a contractor to comply with the specifications of a contract, or if such use is directed by a contracting officer’s specific written instructions. [9]  IRIS Corp. v. Japan Airlines Corp., 769 F.3d 1359 (Fed. Cir. 2014); Zoltek Corp. v. United States, 672 F.3d 1309, 1322-23 (Fed. Cir. 2012) (en banc); Advanced Software Design Corp. v. Federal Reserve Bank of St. Louis, 583 F.3d 1371, 1376-77 (Fed. Cir. 2009). [10]  The indemnity clause is set forth in FAR 52.227-3 (titled “Patent Indemnity”) and provides that “[t]he contractor shall indemnify the Government and its officers, agents, and employees against liability, including costs, for any infringement of any United States patent . . . arising out of the manufacture or delivery of supplies, the performance of services, or the construction, alteration, modification, or repair of real property . . . or out of the use or disposal by or for the account of the Government of such supplies or construction work.” [11]  i4i Ltd. Ptrp. v. Microsoft Corp., 598 F.3d 831, 861 (Fed. Cir. 2010) (citing eBay v. MercExchange L.L.C, 547 U.S. 388, 391 (2006)). [12]  Hybritech Inc. v. Abbott Laboratories, 849 F.2d 1446, 1458 (Fed. Cir. 1988); Cordis Corp. v. Medtronic, Inc., 835 F.2d 859, 864 (Fed. Cir. 1986). [13]  See Amgen Inc. v. Sanofi, 872 F.3d 1367, 1381 (Fed. Cir. 2017) (finding district court erred in granting permanent injunction where it found that the public interest would be disserved by one).  The same is true with respect to obtaining preliminary injunctive relief, which similarly requires that the patentee establish that the balance of equities weighs in its favor, that the injunction serves the public interest, that it is likely to succeed on the merits, and that it will suffer irreparable harm in the absence of an injunction.  Trebro Mfg., Inc. v. Firefly Equipment, LLC, 748 F.3d 1159, 1165 (Fed. Cir. 2014). [14]  Mentor Graphics Corp. v. EVE-USA, Inc., 851 F.3d 1275, 1285 (Fed. Cir. 2017) (citing Panduit Corp. v. Stahlin Bros. Fibre Works, Inc., 575 F.2d 1152 (6th Cir. 1978)).  The patentee must also show demand for the patented product, an absence of acceptable non-infringing alternatives, and the amount of profit it would have made.  See id. [15]  Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923, 1929 (2016). [16]  Id. at 1932. [17]  See 35 U.S.C. § 284 (providing that a court “shall award the claimant damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer”).  The reasonable royalty is commonly calculated by attempting “to ascertain the royalty upon which the parties would have agreed had they successfully negotiated an agreement just before infringement began.” Lucent Technologies, Inc. v. Gateway, Inc., 580 F.3d 1301, 1324 (Fed. Cir. 2009).  In cases where only components of a product infringe a patent, the patentee must “apportion or separate the damages” between the patented and unpatented parts of the multicomponent product.  Exmark Mfg. Co. v. Briggs & Stratton Power Prods. Grp., 879 F.3d 1332, 1349 (Fed. Cir. 2018).
Gibson Dunn lawyers regularly counsel clients on the issues raised by this pandemic, and we are working with many of our clients on their response to COVID-19.  For additional information, please contact any member of the firm’s Coronavirus (COVID-19) Response Team.  Please also feel free to contact the Gibson Dunn lawyer with whom you usually work, or the authors: Authors:  Joe Evall (jevall@gibsondunn.com), Richard Mark (rmark@gibsondunn.com), and Doran Satanove (dsatanove@gibsondunn.com) © 2020 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 26, 2020 |
Gibson Dunn Wins Two Awards in Managing IP Americas Awards 2020

Managing IP recognized Gibson Dunn at its Americas Awards 2020 with two awards. The firm was selected as the United States Patent Contentious Firm of the Year.  In addition, Rimini Street v. Oracle USA - in which Gibson Dunn represented Rimini Street - was recognized as an Impact Case, with Washington, D.C. partner Mark Perry highlighted for his work on the case. Awards were announced on March 26, 2020. Gibson Dunn’s Intellectual Property Practice Group’s lawyers offer strategic insights and solutions to companies facing complex intellectual property issues. Our deep bench of trial lawyers with technical backgrounds, advanced degrees and industry experience provides the necessary insight to develop and defend against sophisticated claims in a wide range of industries and complex technologies. Our litigators are recognized throughout the industry as leaders in prosecuting, defending and trying IP claims in federal and state courts, before administrative bodies including the U.S. International Trade Commission and U.S. Patent and Trademark Office (USPTO), as well as before arbitration panels.