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U.S. Supreme Court Year in Review

| Category: Intellectual Property News
  1. Romag Fasteners, Inc. v. Fossil, Inc. – Recovering profits for trademark infringement.

In 2002, Fossil and Romag entered into an agreement to use Romag fasteners in Fossil’s products. Fossil agreed to instruct its manufacturers to purchase Romag fasteners. However, in 2010, Romag discovered that Fossil had purchased counterfeit Romag fasteners to implement in Fossil products and therefore, infringed Romag’s intellectual property.

On November 22, 2010, Romag Fasteners, Inc. (“Romag”) sued Fossil Inc., and several of its retailers (collectively, “Fossil”) in the U.S. District Court for the District of Connecticut for patent and trademark infringement. A jury ruled in favor of Romag by finding Fossil liable for both patent and trademark infringement, but it did not willfully infringe. The District of Connecticut, located in the Second Circuit, barred Romag from collecting any of Fossil’s profits incurred during its infringement. Romag subsequently appealed.

On appeal, the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”) affirmed the district court. The Federal Circuit noted that the Second Circuit had not explicitly analyzed the most recent statutory language of section 35 of the Lanham Act, 15 U.S.C. § 1117(a), but rejected the idea of overturning two decades worth of precedent.

In response to the Federal Circuit’s affirmance of the district court, Romag filed a writ of certiorari in the Supreme Court. Accordingly, the question before the Supreme Court is whether under section 35 of the Lanham Act, 15 U.S.C. § 1117(a), willful infringement is a prerequisite for an award of an infringer’s profits for a violation of section 43(a). The U.S. Supreme Court unanimously held that willfulness is not required for trademark owners to recover damages from infringers, settling the circuit split on the matter.

  1. Peter v. NantKwest, Inc. – Recovery of attorneys’ fees by the USPTO under 35 U.S.C. § 145 judicial review.

This case stems from a § 145 proceeding brought by NantKwest, Inc. (“NantKwest”) against the USPTO. During the proceeding, the district court found in favor of the USPTO, and the USPTO moved for reimbursement of $111,696.39 in expenses under § 145, of which $78,592.50 pertained to personnel costs for the time two USPTO attorneys and a paralegal had spent over the course of the proceedings. The district court granted the USPTO’s request for reimbursement except for personnel expenses. The USPTO subsequently appealed.

In response to the Federal Circuit’s denial of personnel expenses, the USPTO filed a writ of certiorari in the Supreme Court. The USPTO argues that is it statutorily permitted to collect personnel expenses by Congress’s Leahy-Smith America Invents Act. Further, the USPTO relies on the assertion that “both in modern usage and when § 145’s first statutory antecedent was enacted, the ‘ordinary meaning of ‘expenses’ encompasses expenditures for personnel.’”

Accordingly, the question before the Supreme Court is whether the phrase “[a]ll the expenses of the proceedings” in § 145 encompasses the personnel expenses the USPTO incurs when its employees, including attorneys, defend the agency in § 145 litigation. The Supreme Court ruled in favor of NantKwest by finding § 145 does not permit the USPTO to collect attorneys’ fees recover attorney’s fees under 35 U.S.C. § 145 judicial review.

  1. United States Patent and Trademark Office v. Booking.com – Obtaining a U.S. federal trademark registration for domain names.

Booking.com operates a website where customers can book travel and hotel accommodations. In 2012, Booking.com filed a U.S. trademark application for the use of BOOKING.COM as a word with the United States Patent and Trademark Office (“USPTO”). During prosecution of the trademark application, the examiner rejected the mark as being generic and therefore, not protectable. In the alternative, the examiner determined that even if the mark was found descriptive, Booking.com had failed to establish it had acquired secondary meaning as required for trademark protection. The Trademark Trial and Appeal Board (“TTAB”) upheld the examiner’s rejection and Booking.com appealed the decision by filing an action in the U.S. District Court for the Eastern District of Virginia (“District Court”) against the USPTO.

The District Court reversed the TTAB decision, finding that the term BOOKING.COM, as a whole, was a descriptive mark. Further, the district court found Booking.com had demonstrated the mark had achieved secondary meaning through a survey in which 74.8% of consumers indicated they recognized BOOKING.COM as a brand rather than a generic service. The USPTO appealed to the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”), which affirmed the district court’s holding. The USPTO timely petitioned for a writ of certiorari with the Supreme Court (SCOTUS) of the U.S.

In its petition for certiorari, the USPTO primarily contended the long standing precedent that the addition of entity designations like “Company,” to an otherwise generic term, is not protectable under trademark law, is similarly applicable to the top-level domain “.com.” Specifically, the USPTO argued “.com” only denotes an online business, like entity designations, such as “Company,” only indicates the type of business, association, or partnership. Additionally, with respect to the finding that BOOKING.COM achieved secondary meaning, the USPTO asserted that “it has long been established that, no matter how successful ‘the user of a generic term’ is ‘in securing public identification’ between the term and its commercial user, the term cannot be federally registered in the U.S.

In an 8-1 decision released on June 30th, 2020, the Supreme Court of the U.S. (SCOTUS) affirmed the decision of the Court of Appeals for the Fourth Circuit that "Booking.com" is eligible for trademark registration. 

SCOTUS held that adding ".com" to a generic term does not per se result in a generic term. Looking to the principles of the Lanham Act, Justice Ginsburg emphasized the importance of consumer perception in deciding the generic character of a term. Here, the district court found that consumers did not find "Booking.com" to be a generic term. The appellate court affirmed, finding no error in the district court's assessment. SCOTUS agreed, rejecting the argument that adding ".com" to a generic term can convey no source-identifying meaning, and concluding that "Booking.com" is not a generic name to consumers. 

Given that only one entity can occupy an internet domain at a time, SCOTUS found that consumers may associate a particular website with an entity. SCOTUS also rejected the PTO's arguments that internet domain owners have existing competitive advantages and that other remedies exist outside of trademark law on the grounds that no basis exists to deny them benefits accorded to other non-generic terms. 

  1. Google LLC v. Oracle America, Inc. – U.S. copyright protection for software interfaces.

In 2008, Google LLC (“Google”) released Android, “an open-source platform designed to enable mobile devices such as smartphones and tablets. The Android platform was built using the Java programming language developed by Sun Microsystems, which was later acquired by Oracle American, Inc. (“Oracle”). Prior to Oracle’s acquisition of Sun Microsystems, Google replicated the syntax and structure of the Java application programming interface (“API”) within the Android platform to ensure third-party developers could utilize the prewritten methods and declarations known within Java’s API libraries. Google replicated “37 Java API libraries that were determined by Google to be ‘key to mobile devices,’” which attributed to only 3% of the Android environment. Google independently wrote the remainder of the code to “accommodate the unique challenges” of the mobile device environment. Upon its acquisition of Sun Microsystems, Oracle sued Google in the U.S. District Court for the Northern District of California (“District Court”), alleging copyright infringement for the replicated code.

At the end of trial, the District Court held the Java API was not copyrightable and rejected Google’s fair use defense, which permits the unlicensed use of copyright-protected works in certain circumstances. On appeal, the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”) reversed and remanded the district court’s decision. Specifically, the Federal Circuit found the Java API was subject to copyright protection and remanded the case because there was a lack of sufficient factual findings to resolve the fair use issue raised by Google in the District Court. On remand, the jury concluded Google’s use of the Java API constituted fair use. Oracle timely appealed. Once again on appeal in the Federal Circuit, the court overturned the jury’s verdict, finding Google did not engage in fair use as a matter of law. Google subsequently petitioned for certiorari, which the Supreme Court granted.

As noted, the questions before the Supreme Court are whether copyright protection extends to a software interface, and whether Google’s use of a software interface in the context of creating a new computer program constitutes fair use. In its petition for certiorari, Google asserts that if the Federal Circuit’s approach is allowed to stand, “developers will be forced to abandon their traditional building-block approach to software interface development,” and in turn, “would have a devastating impact on the development of computer software.” Nevertheless, Oracle asserts that a finding in favor of Google would penalize software developers for simply creating a software interface popular enough since that would allow other companies to use it without consequence under the fair use doctrine.

  1. Automotive Body Parts Association v. Ford Global Technologies. – Petition for Certiorari denied in design patent case.

The U.S. Supreme Court denied the Automotive Body Parts Association’s petition for certiorari from the Federal Circuit’s decision upholding Ford design patents for “new, original and ornamental design” headlamp and hood designs on certain models of Ford’s F-150 trucks.

The Federal Circuit had rejected the argument presented by the Automotive Body Parts Association (ABPA) at the district court level that Ford’s design patents were primarily functional and therefore invalid. The Federal Circuit held that ABPA’s argument that “Ford’s hood and headlamp designs are functional because they aesthetically match the F-150 truck”… “was inadequate to render that design functional”.

The Federal Circuit rejected the ABPA argument to limit the enforcement of Ford’s design patents to “the initial marked for sale of the F-150 and not in the market for replacement parts”. The Federal Circuit also rejected ABPA’s argument that Ford’s patent rights were unenforceable under the related doctrines of exhaustion and repair. As Ford’s design patents claimed designs as applied to portions of particular components rather than in conjunction with the whole truck, the Federal Circuit upheld the district court’s decision that purchasing a vehicle does not permit the purchaser to have new auto parts made covered by Ford’s design patents.

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