At last year’s Annual Meeting and in my last President’s Corner column, I outlined my theme for the year as one of “outreach,” a word that summarizes what the Association has always aimed to do, and what I aimed to do, with members, non-members who should be members, law students, the community, the judiciary, the administrative agencies, policy makers and the legislature. I noted how the Association has provided and will continue to provide numerous “outreach” opportunities for members, permitting us to participate in the processes of debate, advocacy, policy development and implementation of change, via amicus briefs, legislative action work, continuing legal education programs and the like, all serving the Association’s goals and object:
to maintain the honor and dignity of intellectual property law, including patents, trademarks, copyrights and trade secrets; to promote the development and administration thereof; to advance the education of the members of the bar and the public in that field of law; and to cooperate with foreign associations in harmonizing the substance and interpretation of international conventions for the protection of intellectual property.
I summarized how much has happened in intellectual property law just in the past 30 years alone and how much might change going forward. I encouraged us all to reach out and keep “showing up” to help influence the further development of the law, because, as Aaron Sorkin said, “decisions are made by those who show up.”
Now, I find myself staring at a blank sheet of paper, not sure what to say when I contemplate all that has happened in the world and our communities since I wrote and spoke those words. We are not presently able to literally “show up” to our Annual Meeting, to our annual Summer Moot Court event, to our committee meetings, to our CLE programs, to our dinners, or to our awards ceremonies.We are instead facing many serious problems, significant challenges and uncertainties. What can we as an Association do at times like these?What can we, as members of the Association and of our community, do? Again, I come back to the importance of outreach and showing up.
I have been in awe of how much our Association staff and its members have adapted to the shelter in place requirements and have been continuing to “show up” to serve the Association’s goals using whatever technologies available to help us continue with the work of the Association safely from our home offices. The Association and its members have been working hard to continue to support our membership and the IP community at large.
Our members and especially our Programs Committee leadership quickly pivoted to organize and provide free webinars to members including: An Overview of District Court Responses to Coronavirus; Managing International Patent Portfolios in Wake of the Coronavirus Outbreak; Law Firm Rankings - Why They Matter and How To Improve Your Results; What Law Firms Need to Know About the CARES Act; a Discussion with United States Court District Judge P. Kevin Castel; Patents and COVID-19: Facts and Guidance from the NYIPLA; and a Discussion with the Chief Judge of the District of Delaware Leonard P. Stark.
We figuratively passed the gavel at our Annual Meeting and welcomed our new President Colman Ragan. We also, through the generosity of the Association and its membership, were able to provide not one but two Diversity Scholarships through our affiliated organization the NYIPLEF, helping to support NYIPLEF’s mission to promote intellectual property law education to diverse, outstanding law students in the New York area.
We have continued to monitor cases and legislation, contributing amicus briefs and white papers.We have developed and recorded podcasts on important topics, with more in the works from our various committees. Our Trademark Committee is working to present its annual half-day program in a series of webinars this summer.
The work of the Association continues and your help and participation is needed. In my closing remarks in my last column, I stated my hope to have an opportunity to say hello in person soon at an NYIPLA event near you. That is still my hope. Meanwhile, as our new President stated in his welcome remarks, it is imperative that our regional IP community stands together and works in tandem to overcome the challenges presented by current circumstances. While all of us are challenged at this time, I ask in particular for those of us who have been privileged to work with the Association in the area of IP law for decades to consider and look for ways in which we can help support the students and young lawyers in our Association who could use our mentorship now more than ever. Please continue to reach out with your ideas and support. The PTAB Committee’s ongoing meetings discussing and debating important issues arising in PTAB practice;
the Trademark Committee’s Trademark Update Panel with USPTO officials;
the Amicus’ Committee’s continued support and hard work, with a Supreme Court brief submitted with help from the Trademark Committee on the issue of protection for marks comprised of terms with gTLDs in the Booking.com case;
the selection of The Inventor of the Year by that committee; and
The Legislative Action Committee’s continued important work on monitoring and providing guidance on legislative proposals affecting IP rights including many efforts addressing patents in the pharma space, the formation of a task force on the issue of adding design patents to Customs seizure authority, and with participation from the Trademark Committee, meetings and writings addressing proposed legislation affecting trademark enforcement and applications.
And now this Report issue with timely and important contributions submitted from across the committees. The level of outreach from the members of the Association has been impressive and humbling. Let’s keep it up. Please get involved. Please reach out. Your ideas, contributions, suggestions, involvement, and most of all your outreach, make it all possible.
In This Issue:
NYIPLA President's Corner
Not Just Aereo 2.0: Locast, Free TV, and Section 111's Exemption for Nonprofit Retransmission Services
Mark It or Lose It: The Federal Circuit Clarifies Section 287's Marking Requirement for Infringement Damages
Supreme Court Shuts Door on Appeals Challenging Issues Related to IPR Institution Decisions
Notable Trademark Decisions
Ninth Circuit Rules in Favor of Led Zeppelin in Copyright Case, Rejecting the Inverse Ratio Rule
Moving Up and Moving On
Welcome New Members
There are many possible ways to describe Locast, a streaming app that has digitally retransmitted over-the-air television broadcasts to its users for free since early 2018. The New York Times has called it “perhaps the most audacious media experiment in years.”1 The major U.S. broadcast networks argue it is a service that has been committing “massive” copyright infringement in a nefarious attempt to “devalue the entire market for the rights to retransmit . . . copyrighted content.”2 And Locast itself claims it’s just trying to help Americans exercise their own rights to “free [their] TV.”3 But which of these depictions most accurately captures Locast’s place in today’s ever-evolving and increasingly fractured media landscape?
Of course, the question isn’t so simple. Locast was launched in the aftermath of the Supreme Court’s 2014 decision in American Broadcasting Cos. v. Aereo, Inc., which held that a service that streamed local television broadcasting over the Internet “publicly performed” copyrighted works, despite its attempts to avoid paying licensing fees by designing around a perceived loophole in the courts’ interpretation of the public performance right.4 Like Aereo, Locast offers Internet users the ability to stream over-the-air broadcasts, which it captures, digitizes, and retransmits without the copyright holders’ authorization. But Locast was designed to take advantage of a different provision of U.S. copyright law: a statutory carve-out that exempts from infringement liability nonprofit organizations that retransmit broadcasts for noncommercial purposes.5 The entity that operates Locast,6 a registered New York charity and IRS-approved tax- exempt organization,7 claims that its nonprofit status and noncommercial objective thus relieve it of any obligation to negotiate licensing fees with broadcasters. Locast now faces a copyright lawsuit by the four major American broadcast networks—ABC, NBC, Fox, and CBS—who contend that it is “simply Aereo 2.0, a business built on illegally using broadcaster content.”8 But Locast argues that, unlike Aereo, the service it provides is entirely compliant with the law.
This paper evaluates, from legal and policy perspectives, Locast’s attempt to do what Aereo could not. Part I introduces both the relevant case law, including Aereo and selected federal appellate decisions related to other Internet retransmitters, and the statutory exemption upon which Locast relies. Next, Part II describes the Locast service and the major broadcasters’ lawsuit, considering how the district court might rule in light of relevant precedent. Finally, Part III discusses broader policy concerns surrounding Locast and the nonprofit exemption, proposing that while some of the public policies animating the Aereo decision may also hold true in the case of Locast, this newest legal battle raises issues that go well beyond its predecessor case.
I. LEGAL BACKGROUND
A. CASE LAW
Before turning to the details of the Locast litigation, it’s useful to review a few cases that form the backdrop for the current proceedings. I begin by summarizing the Aereo decision, in which the Supreme Court seemed to reject the possibility that a digital retransmission service could avoid paying licensing fees for copyrighted television broadcasts. I then discuss two federal appellate cases that considered whether Internet retransmitters can be “cable systems” for the purposes of copyright law—a key predicate issue for Locast’s theory of its owncase.
1. Does an Internet Retransmission Service Publicly Perform?
At issue in Aereo was a service that, like Locast, allowed users to stream over-the-air broadcast programs on their Internet-connected devices. Aereo, which first appeared in the New York City metropolitan area in 2012, maintained a system consisting of “servers, transcoders, and thousands of dime-sized antennas housed in a central warehouse.”9 A paying Aereo subscriber could select a program from a listing of the shows then being broadcast live over the air in her localmarket. Once the user made her selection, one of the tiny antennas—designated for that user only—would be tuned to the appropriate broad cast signal, which would be transcoded into a format that could be sent to Internet-connected devices and saved into a user-specific folder on Aereo’s servers. After a few seconds, Aereo would start streaming the saved, user-specific copy of the program to that user’s device, allowing for nearly real-time viewing.10
Aereo was swiftly sued for copyright infringement by many of the same parties who are now challenging Locast. The District Court for the Southern District of New York (affirmed by the Court of Appeals for the Second Circuit) denied the plaintiffs a preliminary injunction in what might have seemed a fairly straight forward application of then-recent Second Circuit precedent.11 The case in question had indicated that transmitting a performance of a work to a single individual does not infringe the copyright owner’s exclusive right to publicly perform the work.12
The Supreme Court reversed, first holding that “[a]n entity that engages in activities like Aereo’s performs” within the meaning of the Copyright Act.13 The Court relied on the legislative history of the Transmit Clause, which Congress had added to the definition of “publicly” in 1976.14 In the Court’s view, Congress enacted that language to clarify that community antenna television (CATV) systems—the equivalent of today’s cable systems—did, in fact, “perform” when they amplified and retransmitted local television broadcasting to their subscribers’ home TV sets. Because “an entity that acts like a CATV system itself performs, even if when doing so, it simply enhances viewers’ ability to receive broadcast television signals,” the Court reasoned that Aereo, whose service outwardly resembled the activitiesofcable systems, must also“perform.”15
Next, the Court determined that not only did Aereo perform, it performs publicly. Aereo argued that, since the only transmissions it made to any individual user were of that user’s “personal copy” of programming, any Aereo transmission was a private, not a public, performance. The Court disagreed, holding that even though several Aereo users might receive a live program through several distinct transmissions of several different copies, if Aereo was communicating the same “contemporaneously perceptible images and sounds” to each of them, it was “transmit[ting] a performance” to all of them.16 And, since these subscribers were presumably “unrelated and unknown” to one another, they constituted “the public.”17 The individual dime-sized antennas and other technical minutiae did not “distinguish Aereo’s system from cable systems,” the Court concluded, nor did they “render Aereo’s commercial objective any different from that of cable companies.”18 The thrust of the Court’s decision, overall, seemed to be that Aereo operated enough like a cable system that it would have to play by the same rules as cable systems when it came to licensing copyrighted broadcasts.19
Given that holding, it can’t have been a surprise when, on remand to the district court, Aereo tried to argue that it actually should be considered a cable system.20 If successful, that argument might have entitled Aereo to avoid liability for copyright infringement by simply paying for a compulsory license under §111 of the Copyright Act.21 But Judge Alison Nathan rejected the §111 defense out of hand, observing that “not all entities that perform publicly are necessarily cable systems, and nothing in the Supreme Court’s opinion indicates otherwise.”22 Moreover, Judge Nathan could point to a Second Circuit precedent that spoke directly to whether an Internet retransmitter could be considered a “cable system”—a case to which I nowturn.
2. Is an Internet Service a Cable System?
One Aereo precursor, known as ivi, launched in September 2010 and was promptly hit with a copyright infringement lawsuit by several broadcasters.23 In response, ivi, which retransmitted over-the-air broadcasts via the Internet to its subscribers for a monthly fee, argued that it was “a cable system entitled to a § 111 license under the Copyright Act.”24 If ivi was indeed a cable system, it could go on retransmitting the plaintiffs’ broadcasts, provided it paid the compulsory license fees; if it was not, it had no defense to the plaintiffs’ infringement claims.25
On appeal from the district court’s grant of a preliminary injunction, the Second Circuit applied the Chevron test to determine whether to defer to the Copyright Office’s interpretation of the statutory term “cable system.” First, the court determined that the definition of “cable system” in §111(f)(3) was ambiguous; it was not clear whether it encompassed “a service that retransmits television programming live and over the Internet.”26 However, the legislative history of § 111 revealed that it was enacted “to address the issue of poor television reception, or more specifically, to mitigate the difficulties that certain communities and households faced in receiving over-the-air broadcast signals by enabling the expansion of cable systems.”27 Because Internet retransmitters like ivi were not intended specifically to mitigate local access problems, the court reasoned, Congress could not have meant to extend the §111 compulsory license to them. Then, even though the court thought Congress’s intent was clear, it proceeded to the second step of Chevron and found confirmation in the interpretation of the Copyright Office, which “has consistently concluded that . . . § 111’s compulsory license for cable systems is intended for localized retransmission services.”28 If ivi was not a cable system, the defendants were unlikely to succeed on the merits, and so the court ultimately affirmed the preliminary injunction. This decision would later enable Judge Nathan to deny that Aereo was a cable system entitled to the §111 license.29
The Second Circuit is not the only circuit to have found that an Internet retransmission service cannot qualify for the § 111 compulsory license for cable systems. After Aereo, a similar service called FilmOn did obtain a partial summary judgment ruling that it was a “cable system” for the purposes of the compulsory license.30 On appeal, however, the Ninth Circuit reversed.31
Like the Second Circuit in ivi, the Ninth Circuit thought that the text itself was unclear and expressed concern that extending the compulsory license to Internet-based services would defy Congressional intent. But whereas the Second Circuit primarily relied on legislative history to conclude that the definition of “cable system” was not ambiguous, the Ninth Circuit conceded that “the array of competing interests at stake does not unambiguously counsel fororagainst a broad reading of § 111” and afforded more weight to the Copyright Office’s views.32 The court found that it was appropriate to acquiesce to “the Office’s decision to reject Internet-based retransmission services because they do not use a localized retransmission medium,” since such a view was both “persuasive” and “reasonable.”33 While the Second and Ninth Circuits differed somewhat in their analysis, both courts were concerned with how an Internet retransmitter fit into the delicately- balanced regime Congress had imagined in §111,34 and both found that the salient distinctionwas between a localized service (cable systems) and a national one (Internet streaming).35 These themes will undoubtedly re-emerge in the Locast litigation.
B. SECTION 111 AND THE NONPROFIT EXEMPTION
In order to understand how Locast intends to distinguish itself from judicially-doomed services like ivi, Aereo, and FilmOn, one must consider a rather arcane provision of the Copyright Act: the exemption of certain secondary broadcast transmissions by government and nonprofit organizations from the statutory scheme governing the cable television industry. The provision, codified at 17 U.S.C. §111(a)(5), is buried within a Frankenstein of a section that represents a hodgepodge of industry compromises; one commentator has called § 111 “the copyright statute’s. . . least comprehensible piece of prose.”36 As Aereo recognized, the basic premise of §111 is that the retransmission of a copyrighted broadcast constitutes a performance—and, unless that performance is authorized by the copyright holder or statutorily exempt, it is an infringement of the copyright holder’s exclusive rights.37 Most significantly, §111 outlines a compulsory licensing regime for secondary transmissions by cable television systems.38 In enacting the compulsory licensing regime, Congress recognized that cable operators served a valuable public interest that had to be balanced against the rights of copyright proprietors.39
Embedded in all this is §111(a)(5), the carve-out for governmental bodies and nonprofit organizations (here in after the “nonprofit exemption” or “§111(a)(5)”). The statute provides that:
The secondary transmission of a performance or display of a work embodied in a primary transmission is not an infringement of copyright if . . . the secondary transmission isnot made by a cable system but is made by a governmental body, or other nonprofit organization, without any purpose of direct or indirect commercial advantage, and without charge to the recipients of the secondary transmission other than assessments necessary to defray the actual and reasonable costs of maintaining and operating the secondary transmission service.40
While plenty of judicial ink has been spilled over §111 as a whole, court decisions and other legal sources interpreting this specific provision are scarce, which suggests that it has not been significantly contested since its adoption. But the brief legislative history of the nonprofit exemption indicates that a few key pieces were disputed leading up to enactment, adverting to the compromises that animate theprovision.
First adopted by the House Judiciary Committee in the process of amending the 1965 revisions of the copyright law,41 the nonprofit exemption was crafted to apply to “nonprofit ‘translators’ or ‘boosters,’ which do nothing more than amplify broadcast signals and retransmit them to everyone in an area for free reception.”42 Originally, the Committee had planned to limit the exemption to services that did not charge retransmission recipients any fees whatsoever, but it was eventually persuaded that cooperatives or other nonprofit services supported by “general community assessments or tax funds” should benefit from the provision as well, “as long as they are completely nonprofit and noncommercial.”43 The final text of the statute thus allows a nonprofit organization to charge a fee “to defray the actual and reasonable costs” of running its retransmission service,44 a detail which may prove crucial for Locast.
Another key compromise embodied in the nonprofit exemption is even more central to the Locast litigation. An early draft of the bill did not include the phrase “not made by a cable system”; by its terms, that version allowed certain “cable systems” to benefit from the carve-out, as long as they were owned by nonprofits or government bodies. This concerned some copyright owners, who considered such an exemption over-broad.45 In a statement submitted to a subcommittee of the Senate Judiciary Committee, the president of the Motion Picture Association of America (MPAA) expressed a fear that “increasing governmental or non-profit ownership of cablesystems may deprive [copyrightowners] of license fees for the use of their product,” adding that “[a] legal requirement that copyrighted film programs be available to nonprofit and governmental users for free is no less repugnant to the purposeofthe copyright system because the user does not intend to make a profit.”46 Apparently in response to arguments like this, Congress specified in the final version of the statute that the nonprofit exemption did not apply to cable television systems.47 Thus, when the provision was enacted, the types of services it covered were effectively limited to non-cable services used to retransmit television programming to underserved rural areas.48
II. AEREO 2.0?: LOCAST & THE BROADCASTERS’ LAWSUIT
A. LOCAST 101: THE BASICS OF THE SERVICE
Given the nonprofit exemption’s seemingly limited application, only a true media policy wonk would be in a position to make it the basis of a promising new startup. Enter David Goodfriend, a lawyer, professor, and former media executive who has also worked at the Federal Communications Commission (FCC).49 Goodfriend thought up Locast as part of a classroom discussion about how the Aereo decision might affect the public interest.50 If, after Aereo’s demise, there were no convenient way for many Americans to access the over-the-air broadcasts they were supposed to get for free, that would be a significant public loss. But if Aereo and similar entities were not legally considered cable systems, then maybe a service that does what Aereo did, but on a nonprofit basis, could shelter under §111(a)(5). Willing to gamble on that possibility, Goodfriend launched Locast in 2018. “We really did our homework,” he told the New York Times. “We are operating under parameters that are designed to be compliant within the law.”51
From the user’s perspective, Locast works similarly to Aereo and other challenged digital retransmitting services.52 Locast receives over-the-air broadcast signals via antennas it has installed in thirteen U.S. media markets.53 It transcodes each broadcast signal into digital formats that can then be streamed to Internet-connected devices within the local market where the signal originated.54 To use the service, an individual located within one of the thirteen markets can download the Locast app or visit the Locast website, register for an account with her Facebook profile or email address, and choose the live programming she wishes to watch.55
Two important features of Locast’s service are worth highlighting. First, a user is—at least in theory—only permitted to view programming that is being broadcast locally. Would-be users who live outside the markets where Locast presently has antennas are not supposed to be able to use the service.56 Second, Locast differs from Aereo and the rest in that it does not charge users any sign-up or monthly subscription fees. Instead, it solicits donations to cover the “considerable costs for equipment, bandwidth, and operational support that helps run Locast.”57 Donations are optional, but a user who does not make a contribution of at least $5 per month will have her stream interrupted by a request for donations every fifteen minutes, after which she must manually restart the stream in order to keep watching.58
B. THE BIG FOUR STRIKE BACK
If Goodfriend had intended to attract the major broadcast networks’ attention, he got his wish in July 2019, when ABC, CBS, Fox, and NBC filed a lawsuit against him and Sports Fans Coalition NY, Inc., in federal court in the Southern District of New York. The plaintiffs’ objection is not merely that Locast, by retransmitting their networks’ copyrighted content without a license, is depriving them of licensing fees they might be able to extract from Locast itself. Rather, the broadcasters detect an even greater threat: that if Locast partners with cable companies and satellite-TV providers to provide free local programming to their subscribers, that could undercut the broadcasters’ negotiating positions vis-a-vis those companies.59 The plaintiffs thus have a strong interest in arguing that Locast cannot possibly qualify for the nonprofit exemption.
To make their case, the plaintiffs point primarily to the language in §111(a)(5) that requires an exempt service to operate “without any purpose of direct or indirect commercial advantage.” Specifically, they argue that “Locast’s founding, funding, and operations reveal its decidedly commercial purpose.”60 “Founding” is, of course, a reference to Goodfriend, whose former position as an executive at DISH Network and continuing lobbying activities for the pay-TV industry the plaintiffs are quick to highlight. The broadcasters allege that Locast is able to operate only because of substantial loans and contributions from Goodfriend’s colleagues in the pay-TV sector, such as DISH and AT&T, and contend that Locast—far from being a “noncommercial, community public service,” is a thinly veiled way for these companies to “gain leverage in negotiations with broadcast stations over retransmission consent rights.”61 Since Locast is merely a tool of self-interested industry players seeking commercial benefits, the plaintiffs argue, it cannot fulfill a key requirement for the protections of § 111(a)(5)—and without that exemption, Locast has no way to escape liability for infringing their exclusiverights.
Locast fired back in September 2019, not only denying that it derives a commercial benefit from the service but also bringing several novel counterclaims against the broadcasters. In response to the plaintiffs’ charge that it cannot qualify for the nonprofit exemption, Locast argues that it meets all the statutory prerequisites, including the requirement of no commercial advantage. It denies that Goodfriend’s lobbying work is expressly for the benefit of DISH or other pay-TV companies, and points out that the broadcasters’ claims that Locast is a tool of the pay-TV industry are somewhat illogical, since the service “will likely encourage cord-cutting and harm pay-TV distributors like DISH and AT&T.”62 Moreover, it reaffirms that any donations Locast receives are “solely to defray the costs of operating the Locast service,”63 and that the purpose of the service is to “extend the reach of, and ease of access to, local over-the-air broadcast signals . . . including to places where tall buildings or other obstructions might interfere with over-the-air reception.”64
Locast’s response goes on to assert a number of counterclaims. For one, it argues that the major networks have colluded to harm Locast’s business, including by threatening to retaliate against potential Locast business partners.65 Even more strikingly, Locast claims that the plaintiffs aren’t just harming Locast’s enterprise, but are misusing their copyrights in breach of their obligations to the public. According to Locast, the major broadcast networks are actively “failing to transmit over-the-air signals strong enough to cover local television markets (as required to fulfill their obligation to operate in the public interest).”66 Consumers who can’t access good- quality over-the-air broadcasts are then forced to pay for cable or satellite programming, online pay TV, or streaming services offered by the broadcasters themselves—and the broadcasters, aware of this reality, can drive up the price of access to their copyrighted content. Ineffect, Locast alleges:
[T]he broadcasters’ intent is to restrain competition in providing over-the-air signals to the public to protect their broadcast franchise and the billions of dollars it allows them to reap from licensing retransmission rights—costs that are then passed on to the consumer. . . . [This] conduct threatens further harm to competition, programming output, and to the pocketbooks of all Americans who are entitled to receive the subject content over-the-air for free.67
C. POSSIBLE OUTCOMES OF THE LOCAST LITIGATION
Assuming that this litigation proceeds to trial,68 the questions around Locast’s funding sources and whether it actually has a commercial purpose mean that any decision on the central issue—whether Locast is exempt under § 111(a)(5) from paying for a license—is likely to be heavily fact-dependent. The broadcasters’ public statements confirm that defeating Locast on the facts is their main strategy; as an attorney for the plaintiffs told the Times, “We trust the courts to see right through this facade and recognize Locast for what it is . . . a creatureofcertain pay-TV interests with an entirely commercial agenda.”69 If Locast’s ties to the pay-TV industry are all that dooms it, though, David Goodfriend’s legal arguments would still stand, and not much would stop a nonprofit organization unburdened by Locast’s baggage from stepping in to fill the void.70
If, on the other hand, the facts bear out that Locast does not have any “purpose of direct or indirect commercial advantage,”71 the plaintiffs’ case may be on legally shaky ground. On a textualist reading of §111(a)(5), Locast should qualify for the exemption. It is a “nonprofit organization,” approved by the IRS as a tax-exempt entity and registered as a charity with the New York State Attorney General’s office. The only “charge” it makes to users is optional (or, atleast, arguably so) and is in any event apparently limited to contributions that are “necessary to defray the actual and reasonable costs of maintaining and operating” the service. And, ironically, since the broadcaster plaintiffs in ivi, Aereo IV, and Aereokiller ensured that an Internet retransmitting service would not be considered a“cable system”for the purposes of § 111,the exclusion of “cable systems” in § 111(a)(5) does not bar Locast from relying on the exemption.
Even if the court deemed the text of §111(a)(5) ambiguous and turned to legislative intent or administrative interpretations, it is not at all clear that the concerns embodied in cases like ivi and Aereokiller would apply in the same way to Locast. First, it bears remembering that those cases were about the application of the § 111 compulsory license and the reachofthe term “cable system”—they did not reach the exemption for nonprofit retransmitters in§111(a)(5), which explicitly excludes cable systems. Moreover, in deciding that Internet retransmission services were not intended to be covered by the compulsory license, the courts in both Aereokiller and ivi dwelled on the distinction between a local service and an arguably global one.72 If Locast can make the argument that it is reasonably well-localized, such that users outside a demarcated geographic area cannot view local programming, it should be able to convince a court that it is more like the local “translators” and “boosters” that Congress seems to have contemplated in enacting the nonprofit exemption. Finally, even if a court would be inclined to defer to the Copyright Office’s interpretation of the contested language, as in ivi and Aereokiller, the Copyright Office does not appear to have stated any official views on the nonprofit exemption in particular.73 All in all, if Congress does not intend for Internet retransmitters like Locast to be covered by the nonprofit exemption, it is up to that body to amend §111(a)(5) to be more specific.
III. “STUFF FOR THE PUBLIC”: THE POLICY INTERESTS AT STAKE
Whether the plaintiffs win or lose, more is at stake in the Locast case than the survival of a single media startup. Even if Locast (or another nonprofit organization that might take up its mantle, sans pay-TV industry baggage) technically meets the requirements to qualify for the §111(a)(5) nonprofit exemption, an important question remains: Should a nonprofit organization with no commercial objective be permitted to retransmit over-the-air television broadcasts for free via the Internet? Or, considering the purposes of the Copyright Act, is the potential for harming the interests of copyright owners and disrupting the broadcast industry just as significant as in a case like Aereo, even when the retransmissions have no commercial purpose? Simply put, is this case really nothing more than Aereo 2.0?
On the one hand, there is an argument that U.S. public policy strongly disfavors non- productive technological “innovations” intentionally crafted to circumvent copyright law, and that something like Locast falls in that category. Locast was plainly and openly designed to fit within a narrow loophole in the Copyright Act74—an exemption that could not have been intended to apply to a type of technology that Congress would not have known about at the time it was enacted. In the face of court decisions that put similar services out of business, Locast deliberately created a model that would eliminate the need to negotiate licenses with copyright owners, while still disseminating their copyrighted content to the public with impunity. In a broader sense, this type of evasive designing around the law is exactly what the Supreme Court condemned in Aereo when it held that the service in question could not escape infringement liability by filling its warehouse with thousands of dime-sized antennas.75 This suggests there is some distinction between being “compliant” with the law, as David Goodfriend claims his service is,76 and avoiding it altogether— and we might view Locast as falling on the wrong side of that line.
Under this view, it would be largely irrelevant that an Internet retransmitter like Locast is owned and operated by a nonprofit organization for a noncommercial purpose. Whether or not Locast derives any commercial advantage, its practice of making copyrighted programming available for free does, to some extent, encroach upon the copyright owners’ exclusive rights and may result in harm to the value their copyrights. In other words, if viewers are accessing the programming via Locast, that is a missed opportunity for a copyright owner to benefit commercially, even if Locast does not. This concern harkens back to MPAA president Jack Valenti’s statement as Congress was reforming the Copyright Act to include §111: “A free ride for [governmental and nonprofit] entities cannot be squared with the achievement of the public purpose which underlies the copyright system.”77 Essentially, if the purpose of copyright law is to provide an incentive for authors to create works for the public good, there is reason to believe unrestricted noncommercial use might undermine that reward no less than infringement committed for a commercial purpose.78 Such concerns are not to be taken lightly.
Even so, there is a strong case to be made that the Locast case should not be viewed as Aereo 2.0—reasons why, from a policy perspective, noncommercial services should be free to retransmit over-the-air broadcasts to the American public even though a service like Aereo was not. First, notwithstanding the legitimate fears of copyright proprietors like the MPAA, U.S. copyright law does recognize a distinction between commercial and noncommercial uses, even outside of §111(a)(5). Examples of this distinction abound; for instance, §107’s codification of the fair use doctrine directs courts to consider “whether such use is of a commercial nature or is for nonprofit educational purposes,”79 and the Supreme Court has at least suggested that noncommercial, nonprofit use of copyrighted material is presumptively fair.80 Additionally, §110, which exempts certain public performances and displays from infringement liability, contains a number of exemptions that depend on the not-for-profit character of the use.81 Such allowances for noncommercial use underscore the fact that, while protecting authors’ interests is key to the copyright system, the ultimate goal of copyright law is to benefit the public at large. Noncommercial use of copyrighted material can help recalibrate that balance in situations where the public’s access to valuable information or First Amendment-protected expression may be restricted, without the risk that anyone will be unjustly enriched at the copyright owner’s expense.
With that commercial-noncommercial distinction in the background, the Locast litigation should force courts to reckon directly with an important question: whether U.S. broadcasters are still living up to their public interest mandate in the digital age. One can read the Supreme Court’s decision in Aereo as an attempt to shield an entrenched industry model from upstart competitors in a rapidly changing business environment.82 But, if the federal judiciary is to continue along this incumbent-protective path, it must take stock of whether the modern broadcast-TV industry is still holding up its end of the delicate compromises struck in §111 and the rest of the regulatory framework governing the industry. There is good reason to think this is not the case. In order to obtain an FCC license to broadcast over the public air waves, a radio or television broadcaster must agree to operate in the “public interest, convenience, and necessity.”83 In particular, broadcasters are expected to focus on serving the unique needs of their local communities.84 This is why Locast is able to argue that “broadcasters are required to make free, over-the-air local broadcasting available to the entire American public.”85 The problem, as Goodfriend sees it, is that “society got way over-commercialized in the ‘40s and ‘50s, when media policy was being hammered out,” and as a result, “we don’t have stuff for the public anymore.”86
Even though an essential premise of U.S. media policy is that Americans are entitled to free local programming, many cannot easily take advantage of that guarantee. The reason, inpart, is that our media-consumption habits have changed dramatically since the legal framework governing the broadcast industry was put in place. As streaming services proliferate, more Americans are “cutting the cord”: In the first quarter of 2019 alone, U.S. satellite, cable, and telecommunications companies lost 1.4 million television customers,87 and meanwhile, only 14 percent of U.S. households use an antenna to watch television.88 And although technology allows us to be more globally connected than ever, communities increasingly lack reliable sources of local news.89 A service like Locast, or another nonprofit Internet retransmitter that complies with the requirements of §111(a)(5),can help to fill in the gaps created by this changing media landscape. It could be a boon to the many Americans who do not have a convenient way to access the free, over-the-air local programming they are promised—whether that is because they live in remote rural areas or because they’ve simply become accustomed to consuming media solely on their tablets or smartphones. In short, if the essential bargain between broadcasters and the American public has been compromised in the digital age, §111’s nonprofit exemption could offer a way to reset the system and ensure there’s still “stuff for the public.”
*J.D. Candidate, Columbia Law School, Class of 2020.
1 Edmund Lee, Locast, a Free App Streaming Network TV, Would Love to Get Sued, N.Y. TIMES (Jan. 31, 2019),https://www.nytimes.com/2019/01/31/business/locast-
2 Complaint for Damages and Injunctive Relief at 7–8, Am. Broadcasting Cos., Inc. v. Goodfriend, No. 19-cv-7136, (S.D.N.Y. July 31, 2019) [hereinafter Complaint].
3 Donate, LOCAST,https://www.locast.org/donate (last visited Dec. 10, 2019).
4 Am. Broadcasting Cos., Inc. v. Aereo, Inc., 573 U.S. 431 (2014); see also infra notes 9–19 and accompanying text.
5 See 17 U.S.C. § 111(a)(5) (2019).
6 Locast is operated by the nonprofit organization Sports Fans Coalition NY, Inc., which, along with founder David R. Goodfriend, is one of the named defendants in the July 2019 lawsuit. For simplicity’s sake, I use “Locast” in this paper to refer to both the service and the entity that operates it, unless otherwise specified.
7 Answer and Counterclaims at 43–44, Am. Broadcasting Cos., Inc. v. Goodfriend, No. 19-cv-7136 (S.D.N.Y. Sept. 26, 2019) [hereinafter Answer] (stating that Locast “was incorporated in New York . . . as a ‘charitable corporation’ under New York Not-for-Profit Corporation Law” and has been classified by the IRS as a “public charity” exempt from federal income tax under § 501(c)(3) of the Internal Revenue Code).
8 Eriq Gardner, ABC, CBS, Fox and NBC Sue Locast, a Free Streaming App, HOLLYWOODREP.: THR ESQ. (July 31, 2019), https://www.hollywoodreporter.com/thr-esq/abc-cbs-
fox-nbc-sue-locast-a-free-streaming-app-1228244 (quoting Gerson Zweifach, attorney for the plaintiffs).
9 Aereo, 573 U.S. at 436.
10 Id. at 436–37.
11 Am. Broadcasting Cos., Inc. v. Aereo, Inc., 874 F. Supp. 2d 373 (S.D.N.Y. 2012).
12 Cartoon Network LP, LLLP v. CSC Holdings, Inc. (Cablevision), 536 F.3d 121 (2d Cir. 2008).
13 Aereo, 573 U.S. at 439 (emphasis added).
14 See 17 U.S.C. § 101 (2019) (“To perform or display a work ‘publicly’ means . . . to transmit or otherwise communicate a performance or display of the work . . . to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times.”).
15 Aereo, 573 U.S. at 442.
16 Id.at 447–48.
17 Id.at 448.
18 Id.at 446.
19 This characterization of the Aereo decision echoes Justice Scalia’s dissent, in which he condemned the majority for creating a “guilt-by-resemblance regime.” Id. at 460 (Scalia, J., dissenting).
20 Am. Broadcasting Cos., Inc. v. Aereo, Inc. (Aereo IV), Nos. 12-cv-1540, 12-cv-1543, 2014 WL 5393867, at *2 (S.D.N.Y. Oct. 23, 2014).
21 See infra notes 38–39 and accompanying text.
22 Aereo IV, 2014 WL 5393867 at *4.
23 WPIX, Inc. v. ivi, Inc., 691 F.3d 275, 277 (2d Cir. 2012). The plaintiffs included the broadcasters now involved in the Locast litigation.
24 Id.at 279.
26 Id. at 280.
27 Id. at 282.
28 Id. at 283–84 (emphasis added).
29 See supratext accompanying notes 20–22.
30 Fox Television Stations, Inc. v. Aereokiller, 115 F. Supp. 3d 1152 (C.D. Cal. 2015).
31 Fox Television Stations, Inc. v. Aereokiller, 851 F. 3d 1002 (9th Cir. 2017).
32 Id. at 1011.
33 Id. at 1013, 1015.
34 See WPIX, Inc. v. ivi, Inc., 691 F.3d 275, 281 (2d Cir. 2012) (“Balancing two societal benefits, Congress enacted §111 to enable cable systems to continue providing greater geographical access to television programming while offering some protections to broadcasters to incentivize the continued creation of broadcast television programming.”); Aereokiller, 851 F.3d at 1010 (“Fundamentally . . . §111 was Congress’s attempt to balance the socially useful role cable systems had come to play, on the one hand, against the property interests and creative incentives of copyright holders, on the other.”).
35 See ivi, 691 F.3d at 284 (“[T]he Copyright Office has maintained that § 111’s compulsory license for cable systems is intended for localized retransmission services . . . Under this interpretation, Internet retransmission services cannot constitute cable systems under § 111 because they provide nationwide—and arguably global— services.”);Aereokiller, 851 F. 3d at 1011 (“[C]able systems serve limited geographic communities, but an Internet- based service has no geographic boundary. . . .”).
36 Jessica D. Litman,Copyright Legislation and Technological Change, 68 OR. L. REV. 275, 332 (1989).
37 See 4 WILLIAM PATRY, PATRY ON COPYRIGHT § 14:60 (Thomson Reuters) [hereinafter PATRY ON COPYRIGHT].
38 See 17 U.S.C. § 111(c)–(f); PATRY ON COPYRIGHT, supra note 37, § 14:50.
39 See supra note 34.
40 17 U.S.C. § 111(a)(5) (2019) (emphasis added).
41 PATRY ON COPYRIGHT, supra note 37, § 14:71, n.1 (citing H.R. 4347 § 111(a)(2), 89th Cong. 2d Sess.).
42 H.R. REP. No. 94-1476 at 92 (1976),reprinted in1976 U.S.C.C.A.N. 5659, 5706, 1976 WL 14045. FCC regulations define a “television broadcast translator station” as “a station in the broadcast service operated for the purpose of retransmitting the programs and signals of a television broadcast station, without significantly altering any characteristic of the original signal other than its frequency and amplitude, for the purpose of providing television reception to the general public.”47C.F.R. § 74.701(a) (2019). A “television broadcast booster station” is similar, except that it must be operated by “the licensee or permittee” of the broadcast station whose signals it retransmits and “may only be located such that its entire service area is located within the protected contour” of that station.47 C.F.R. § 74.701(i)(2019).
43 H.R. REP. No. 89-2237 at 82–83 (1966), quoted in PATRY ON COPYRIGHT, supranote 37, § 14:71 n.1.
44 17 U.S.C. § 111(a)(5) (2019).
45 Copyright Law Revision: Hearing on S. 1361 Before the Subcomm. on Patents, Trademarks, & Copyrights of the R.Comm. On the Judiciary, 93d Cong. 283 (1973) [hereinafter Copyright Law Revision] (statement of Jack Valenti, President, Motion Picture Association ofAmerica,Inc.).
46 Id.at 304.
47 See H.R. REP. No. 94-1476 at 92 (1976), reprinted in 1976 U.S.C.C.A.N. 5659, 5706, 1976 WL 14045.
48 See PATRY ON COPYRIGHT, supra note 37, § 14:71.
49 Lee, supra note 1.
52 Under the hood, Locast is technically quite different from Aereo, in that it does not maintain “thousands of dime- sized antennas” that it tunes individually in response to a user’s request, Am. Broadcasting Cos., Inc. v. Aereo, Inc., 573 U.S. 431, 436 (2014). This makes sense for several reasons: (1) There is no technical advantage to maintaining antennas that can be assigned to each user individually, and Aereo almost certainly did this for the sole purpose of circumventing copyright law in light of Cablevision, see Brief for the New York Intellectual Property Law Association as Amicus Curiae in Support of Petitioners at 19–20, Aereo, 573 U.S. 431 (No. 13–461) [hereinafter NYIPLA Brief]; (2) the Supreme Court has now made clear this is not a valid way to avoid the “public” nature of the transmitted performance, Aereo, 573 U.S. at 446–48; and (3) in any event, if Locast’s theory is correct, it could shelter under the nonprofit exemption regardless of whether it is publicly performing copyrighted content.
53 Answer, supra note 7, at 13 (stating that Locast functions, in part, by capturing over-the-air signals); id.at 57 (stating that Locast currently operates in New York, N.Y.; Philadelphia, Pa.; Boston, Mass.; Washington, D.C.; Baltimore, Md.; Chicago, Ill.; Houston, Texas; Dallas-Ft. Worth, Texas; Sioux Falls, S.D.; Denver, Colo.; Rapid City, Iowa; Los Angeles, Calif.; and San Francisco-Oakland-San Jose, Calif.).
54 Id.at 13.
56 See Lee, supra note 1 (“If you live in, say, Miami, you can’t get Locast until Mr. Goodfriend puts up an antenna there.”); Answer, supra note 7, at 37 (stating that Locast uses “ISP geo-location and GPS geo-location” to restrict viewing to users physically located within one of its markets). One might wonder whether a user outside one of the thirteen markets could circumvent the geofence with a VPN or proxy server, effectively tricking the app into thinking the user is local. Locast appears to have implemented at least some safeguards against this. See Jeff Porten, Locast Gives You No Frills Broadcast TV at No Cost, TIDBITS (Feb. 18, 2019), https://tidbits.com/2019/02/18/locast-gives-you-no-frills
-broadcast-tv-at-no-cost/ (“Your location appears to be double-checked against cookies storing past locations—I’ve fiddled with creating multiple accounts and using my VPN service to spoof my location to New York, but I was unable to get that working.”).
57 Donate, supra note 3.
58 Barbara Krasnoff, Locast Review: Free Local Programming with a Catch, THE VERGE(Feb. 25, 2019), https://www.theverge.com/2019/2/25/18236704/locast-
59 See, e.g., Complaint, supra note 2,at 8 (“Locast’s operation is an acknowledged effort to devalue the entiremarket for the rights to retransmit Plaintiffs’ copyrighted content. Indeed, Defendants have candidly admitted that their unauthorized streaming service aids authorized services that pay for the rights to streamorotherwise retransmit over-the-air broadcasts in their efforts to negotiate lower fees for those rights.”). This argument relies on the existence of §325 of the Communications Act, under which cable systems and other pay-TV distributors can be required to directly negotiate retransmission consent rights with broadcasters rather than simply paying the compulsory license fee under §111. See 47 U.S.C. §325(2019).
60 Complaint, supra note 2, at 3.
61 Id. at 4–6.
62 Answer, supra note 7, at 6–7.
63 Id. at 9.
64 Id. at 14.
65 Id. at 63–65.
66 Id. at 23.
67 Id. at 26–27.
68 This is not entirely implausible; although the plaintiffs would surely prefer to settle to avoid drawing further attention to Locast, Goodfriend has suggested that he welcomes the lawsuit—apparently as a means of testing his theory—and will litigate the suit for as long as it’s financially feasible. See Lee, supra note 1.
69 Edmund Lee, Locast, a Free Streaming Service, Sues ABC, CBS, NBC and Fox, N.Y. TIMES (Jan. 31, 2019), https://www.nytimes.com/2019/09/27/business/media/
streaming-locast-sues-abc-cbs-nbc-fox.html (quoting attorney Gerson Zweifach).
70 See Jon Brodkin, TV Networks Sue Nonprofit to Kill Free TV Service, ARSTECHNICA (July 31, 2019), https://arstechnica.com/tech-policy/2019/07/abc-cbs-fox
-nbc-sue-locast-to-stop-free-online-access-to-broadcast-tv/ (quoting law professor Blake Reid’s opinion that “the best [Locast’s funding situation] does for the broadcasters is stop Locast specifically and create a blueprint for another nonprofit to step up and do the same thing”).
71 17 U.S.C. § 111(a)(5) (2019).
72 See supra note 35.
73 See LOCAST: NON-PROFITRETRANSMISSION OFBROADCASTTELEVISION20 (June 2018), https://news.locast.org/app/uploads/2018/11/Locast-White-
Paper.pdf (“The Copyright Office has not expressed any comparable opinion with respect to the non-profit exemption.”).
74 See id. at 7 (“Locast’s service was clearly designed with the Section 111(a)(5) exemption in mind.”).
75 See generally NYIPLA Brief, supra note 52, at 13–20 (discussing a line of cases in which defendants “were not permitted to evade infringement just because they made a technological innovation in the manner in which they transmitted the works,” and arguing that “the Aereo case presents . . . an even stronger [case] for assigning liability”).
76 See supra note 51 and accompanying text.
77 Copyright Law Revision, supra note 45, at 304.
78 See, e.g., Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 450 (1984) (“Even copying for noncommercial purposes may impair the copyright holder’s ability to obtain the rewards that Congress intended him to have.”).
79 17 U.S.C. § 107(1) (2019).
80 Sony, 464 U.S. at 449 (“If the Betamax were used to make copies for a commercial or profit-making purpose, such use would presumptively be unfair. The contrary presumptionis appropriate here, however, because the District Court's findings plainly establish that time-shifting for private home use must be characterized as a noncommercial, nonprofit activity.”) (emphasis added).
81 See, e.g., 17 U.S.C. § 110(4) (2019) (exempting “performance of a nondramatic literaryormusical work otherwise than in a transmission to the public, without any purpose of direct or indirect commercial advantage . . .”). See also Lydia Pallas Loren, The Evolving Role of “For Profit” Use in Copyright Law: Lessons from the 1909 Act, 26 SANTACLARACOMPUTER& HIGHTECH. L.J. 255, 279 n.138 (2010) (cataloging other instances of the “nonprofit” distinction in the copyrightstatute).
82 See, e.g., Orly Lobel, The Law of the Platform, 101 MINN. L.R. 87, 139–42 (2016) (discussing theAereodecision as an instance where an innovative company “took an entrepreneurial risk and lost, in the face of massive established industry players resistant to disruption”).
83 The Public and Broadcasting, FCC, https://www.fcc.gov/media/radio/public-and-
broadcasting (last visited Dec. 19, 2019).
84 See Report on Broadcast Localism and Notice of Proposed Rulemaking, 73 Fed. Reg. 8255 (proposed Feb. 13, 2008) (“The Commission has consistently held that, as temporary trustees of the public’s airwaves, broadcasters are obligated to . . . air programming responsive to the needs and issues of the people in their communities of license.”).
85 Answer, supra note 7, at 22.
86 Lee, supra note 1.
87 American Pay Television Is In Decline, THE ECONOMIST (May 9, 2019), https://www.economist.com/business/2019/05/09/
88 Sarah Perez ,Nielsen: 16M U.S. Homes Now Get TV Over-the-Air, a 48% Increase Over Past 8 Years, TECH CRUNCH(Jan. 15, 2019),https://techcrunch.com/2019/01/15/nielsen-16m-u-s-
89 See, e.g., Clara Hendrickson,Local Journalism In Crisis: Why America Must Revive Its Local Newsrooms, BROOKINGS INSTITUTION (Nov. 12, 2019),https://www.brookings.edu/research/local-journalism-
Not Just Aereo 2.0: Locast, Free TV, and Section 111's
Exemption for Nonprofit Retransmission Services
By: rachel horn
On February 19, 2020, the Federal Circuit decided Arctic Cat Inc. v. Bombardier Recreational Products Inc. (hereinafter “Arctic Cat II”), and clarified that a patentee, in this case Arctic Cat, cannot recover damages during the period before it provided actual notice to the alleged infringer, Bombardier. Neither Arctic Cat’s non-practicing its patents in its own products nor its licensee Honda’s cessation of sales of unmarked patented products excused Arctic Cat’s noncompliance with the notice requirement under Section 287 of the Patent Act. The decision also explained that an alleged infringer’s willful infringement does not establish actual notice for a patentee to recover damages under Section 287.
The decision adds more clarity to the Circuit’s previous decision in Arctic Cat Inc. v. Bombardier Recreational Products Inc. (hereinafter “Arctic Cat I”) in 2017. In Arctic Cat I, the Federal Circuit confirmed that 35 U.S.C.§287 requires that a patentee who makes or sells a patented article must mark the articles or notify the alleged infringer to recover damages. The court further held that, for purpose of calculating when the patentee can recover damages, the alleged infringer must first identify any unmarked products before the burden shifts to the patentee to establish the identified products do not practice the patent. If the patentee cannot establish that, damages cannot be recovered until the alleged infringer is given actual notice of the infringement.
II. Statutory Marking and Notice Requirements
Section 287 of the Patent Act mandates the marking and notice requirements. It provides:
Patentees, and persons making, offering for sale, or selling within the United States any patented article for or under them, or importing any patented article into the United States, may give notice to the public that the same is patented, either by fixing thereon the word “patent” or the abbreviation “pat.”, together with the number of the patent . . . In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice. Filing of an action for infringement shall constitute such notice.
The requirements do not apply to patents directed to processes or methods, nor do they apply when a patentee never makes or sells a patented article. If a patentee makes or sells a patented article and fails to mark pursuant to § 287, the patentee cannot collect damages until she provides actual notice to the alleged infringer and only for the period after notification.
III. Arctic Cat I
Arctic Cat Inc. (“Arctic Cat”) sued Bombardier Recreational Products Inc. (“Bombardier”) for patent infringement, alleging Bombardier infringed two of Arctic Cat’s patents. Apart from non-infringement and invalidity defenses, Bombardier argued that Arctic Cat failed to mark patented products, so any damages calculation should not start until Bombardier received actual notice. At trial, the jury found both patents infringed and not invalid, awarded a royalty to Arctic Cat, and found Bombardier’s infringement to be willful. The main issues in Arctic Cat I were which party bears the burden to identify the allegedly unmarked products and which party bears the burden to prove the alleged unmarked products practice the asserted patent.
Arctic Cat had itself stopped selling products practicing the patents before either patent was issued. In 2002, Arctic Cat entered into a license agreement with Honda, wherein the initial draft included a provision requiring Honda to mark all licensed products, but in the final version the agreement expressly stated that Honda had no marking obligations. Bombardier alleged that Arctic Cat’s licensee, Honda, continued to sell unmarked products practicing the patents until 2009, and that Arctic Cat made no effort to ensure Honda marked the products.
As an initial matter, the Federal Circuit reiterated that a patentee always bears the burden of pleading and proving she complied with § 287(a)’s marking requirement. Furthermore, a patentee’s licensees must also comply with the marking requirement, and courts consider “whether the patentee made reasonable efforts to ensure compliance with the marking requirements.”
Second, the Federal Circuit resolved the split among district courts regarding which party must initially identify the unmarked products. It held that the alleged infringer who challenges the patentee’s compliance with § 287 bears the initial burden to articulate the products it believes are unmarked. According to the Federal Circuit, imposing this burden on the alleged infringer would avoid “a large scale fishing expedition and gamesmanship” by the patent challenger. However, the burden of production presents a “low bar,” and the alleged infringer does not need to produce claim charts. Although the court did not set a threshold, it considered that (1) Bombardier introduced Honda’s license to practice the two patents, (2) Honda continued to sell the products until 2009, and (3) Bombardier’s expert testified that he reviewed the product information and believed Honda’s products practiced the patents, and concluded that Bombardier met its burden.
Third, after the alleged infringer plausibly identifies the unmarked products, the burden shifts to the patentee to prove the products do not practice the patent-at-issue. The court chose the burden-shifting approach because the patentee is in a better position to know whether her products practice the patent. In this case, because Arctic Cat failed to establish Honda’s products did not practice its patents, the court remanded the case.
IV. Arctic Cat II
While Arctic Cat I provided a good framework for analyzing a failure-to-mark defense, questions remained. The first question Arctic Cat II addressed is whether the damages limitation of § 287 applies only while a patentee is actively making, using, or selling unmarked products. The court also addressed whether the cessation of sales of unmarked products excuses noncompliance with the notice requirement of § 287. Additionally, the court provided a ruling on whether Bombardier’s willful infringement establishes actual notice under § 287.
As an initial matter, the Federal Circuit held that although § 287 describes the conduct of the patentee in the present tense, the consequence of a failure to mark is not “so temporally limited.” The statute prohibits a patentee from receiving any damages after a failure to mark, rather than merely a reduced amount of damages in proportion to the amount of time the patentee was actually practicing the asserted patent. However, a patentee or its licensee who is selling unmarked products can become compliant on a going-forward basis by beginning to mark its products in accordance with § 287, and thus begin recovering damages.
Second, the Federal Circuit held that the notice requirement of § 287 cannot be “switched on and off” as the patentee or licensee starts and stops making or selling its products, because some unmarked products may remain on the market creating confusion. Section 287 mandates that once a patentee or its licensee begins making or selling a patented article, actual or constructive notice must be provided. A patentee can provide actual notice to the alleged infringer by “affirmative communication of a specific charge of infringement by a specific accused product or device.” Alternatively, the patentee can provide constructive notice by marking her products.
Finally, the Federal Circuit held that the infringer’s willful infringement does not cure the patentee’s noncompliance. Arctic Cat argued that because the jury found Bombardier willfully infringed its patents, and therefore was found to have had knowledge of the infringement, that knowledge was sufficient to establish actual notice under § 287. However, the court held that whether a patentee provided actual notice under § 287 “must focus on the action of the patentee, not the knowledge or understanding of the infringer,” so Bombardier’s knowledge is irrelevant.
After two episodes of Arctic Cat, the major takeaway is that, if a patentee who makes or sells a patented article, she should mark the products pursuant to § 287 as soon as the patent is issued to be able to recover infringement damages for the full period of an alleged infringement. If the patent is licensed to third parties, she should either delegate the duty in the license agreement or make reasonable efforts to ensure the third parties’ compliance. If unmarked products are discovered, noncompliance can be cured going forward by marking them. Otherwise, in most cases, a court will only grant damages from the date when actual notice is provided to the alleged infringer, potentially negating all pre-complaint damages, regardless of an infringer’s actual knowledge.
 Arctic Cat Inc. v. Bombardier Recreational Prods. Inc., 950 F.3d 860 (Fed. Cir. 2020).
 Arctic Cat Inc. v. Bombardier Recreational Prods. Inc., 876 F.3d 1350 (Fed. Cir. 2017).
 See 35 U.S.C. § 287(a) (2018); Dunlap v. Schofield, 152 U.S. 244, 248 (1894).
 35 U.S.C. § 287(a).
 See Wine Ry. Appliance Co. v. Enter. Ry. Equip. Co., 297 U.S. 387, 395, 398 (1936).
 See Am. Med. Sys., Inc. v. Med. Eng’g Corp., 6 F.3d 1523, 1537 (Fed. Cir. 1993).
 See 876 F.3d at 1366–1367.
 See id. at 1357–1358.
 See id. at 1367.
 See 950 F.3d at 862.
 See id.
 See 876 F.3d at 1366.
 See id. (citing Maxwell v. J. Baker, Inc., 86 F.3d 1098, 1111–12 (Fed. Cir. 1996)).
 See 876 F.3dat 1366 (quoting Maxwell, 86 F.3d at 1111–12).
 See 876 F.3d at 1368.
 See id. at 1368–69.
 See id. at 1368.
 See id. at 1369.
uSee id. at 1368.
 See 950 F.3d at 863.
 See id.
 See id.
 Id. at 865.
 See id.
 See id. at 864.
 Id. at 865.
 See id.
 Id. at 864 (quoting Amsted Indus. Inc. v. Buckeye Steel Castings Co., 24 F.3d 178, 187 (Fed. Cir. 1994)).
 See 950 F.3d at 864.
 See id. at 866.
 See id.
 Id. (quoting Amsted, 24 F.3d at 187).
Make it or Lose it: The Federal Circuit Clarifies Section 287's Marking Requirement for Infringement Damages
By: kyle xu
In Thryv, Inc. v. Click-to-Call Technologies, LP, No. 18–916 (April 20, 2020), the Supreme Court held in a 7–2 decision that PTAB determinations closely related to IPR institution decisions, including specifically whether an IPR is time-barred under the one-year time bar of 35 U.S.C. §315(b), cannot be challenged on appeal under the appeal bar of 35 U.S.C. §314(d).
As explained below, the Supreme Court’s decision in Thryv is significant because it effectively gives more power to the PTAB and the PTO Director with respect to issues closely related to IPR institution decisions. In view of Thryv, virtually all PTAB determinations closely related to institution decisions will likely be shielded from judicial review on appeal.
As a result, PTAB precedential and informative decisions on these issues should become more important. Moreover, patent owners seeking to avoid institution of an IPR based on one of these issues will need to present the strongest case in the preliminary response to persuade the PTAB to deny institution, because they will likely not be able to challenge the PTAB’s decision on these issues on appeal.
Finally, Thryv calls into question existing Federal Circuit precedent that reviewed PTAB determinations related to institution decisions, including the Federal Circuit’s recent Facebook decision addressing IPR joinder issues and its RPX decision addressing real-party-in-interest issues.
2. The Thry v Decision
The Supreme Court’s decision in Thryv analyzed the appeal bar in §314(d), which provides that “[t]he determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.” The Supreme Court previously analyzed §314(d) in Cuozzo Speed Technologies, LLC v. Lee, 136 S. Ct. 2131 (2016). In Cuozzo, the Court held that §314(d) prohibits judicial review of a PTAB institution decision “where the grounds for attacking the decision to institute inter partes review consist of questions that are closely tied to the application and interpretation of statutes related to the Patent Office’s decision to initiate inter partes review.” Cuozzo, 136 S. Ct. at 2141.
In Thryv, Justice Ginsburg, writing for the majority, followed this holding in Cuozzo. Justice Ginsburg explained that a PTAB determination whether an IPR is time-barred under §315(b) cannot be challenged on appeal given “Cuozzo’s holding that §314(d) bars review at least of matters ‘closely tied to the application and interpretation of statutes related to’ the institution decision.” Thryv, slip op. at 7 (quoting Cuozzo, 136 S. Ct. at 2141). According to Justice Ginsburg, “a §315(b) challenge easily meets” this Cuozzo standard because “[s]ection 315(b)’s time limitation is integral to, indeed a condition on, institution.” Id. at 7. In particular, “[b]ecause §315(b) expressly governs institution and nothing more, a contention that a petition fails under §315(b) is a contention that the agency should have refused ‘to institute an inter partes review.’” Id. at 8 (quoting § 314(d)). This is not appealable under §314(d) because it “raises ‘an ordinary dispute about the application of’ an institution-related statute.” Id. (quoting Cuozzo, 136 S. Ct. at 2139).
The Supreme Court’s decision in Thryv reversed the Federal Circuit’s position on this issue. In Wi-Fi One, LLC v. Broadcom Corp., 878 F.3d 1364 (Fed. Cir. 2018) (en banc), a majority of the en banc Federal Circuit held that §314(d) does not prohibit appeals challenging PTAB time bar determinations under §315(b). The majority reasoned that because §314(d) prohibits appeals of PTAB institution determinations “under this section,” i.e., section 314, it does not bar appeals of PTAB determinations under other sections. Therefore, although §314(d) prohibits appeals of PTAB determinations under §314(a) regarding whether there is “a reasonable likelihood that the petitioner would prevail” in proving at least one challenged claim is unpatentable, the Federal Circuit held that §314(d) does not prohibit appeals of time bar determinations under §315(b). Wi-Fi One, 878 F.3d at 1372–74.
The Supreme Court majority in Thryv rejected this reasoning (which the dissent in Thryv also set forth) as inconsistent with the explanation in Cuozzo that “the [appeal] bar extends to challenges grounded in ‘statutes related to’ the institution decision.” Thryv, slip op. at 10 (quoting Cuozzo, 136 S. Ct. at 2141). Justice Ginsburg explained that the appeal bar in §314(d) “encompasses the entire determination ‘whether to institute an inter partes review,’” which “is made ‘under’ §314 but must take account of specifications in other provisions—such as the §312(a)(3) particularity requirement at issue in Cuozzo and the §315(b) timeliness requirement at issue” in Thryv. Id. at 11 (quoting §314 (d)).
3. Implications of Thryv
The Supreme Court’s decision in Thryv is significant because it effectively gives more power to the PTAB and the PTO Director, at least with respect to issues closely related to IPR institution decisions. After Thryv, virtually all PTAB determinations closely related to institution decisions will likely be shielded from judicial review, giving the PTAB the last word on these issues. As a result, PTAB decisions on these issues designated as precedential or informative, as well as those issued by the PTAB Precedential Opinion Panel, should become more important and perhaps more frequent.
In view of Thryv, the PTAB determinations barred from judicial review will include not only whether there is a reasonable likelihood that the petitioner will prevail on the merits under §314(a) and whether the petition is time-barred under §315(b), but will likely also include other PTAB determinations related to institution decisions, such as:
•whether the petitioner identified all real parties in interest under §312(a)(2);
•whether a third party is a real party in interest under §312(a)(2), §315(a)(1), §315(a)(2) and §315(b);
•whether a third party is a privy of the petitioner under §315(b);
•whether to permit joinder under §315(c);
•whether institution should be denied based on the General Plastic discretionary factors under §314(a);
•whether institution should be denied based on the Beckton Dickinson discretionary factors under §325(d); and
•whether a reference qualifies as a “printed publication” at the institution stage.
Indeed, less than a month after Thryv, the Federal Circuit has already confirmed that PTAB determinations related to real-party-in-interest issues cannot be reviewed on appeal.In ESIP Series 2, LLC v. Puzhen Life USA, LLC, No. 2019–1659 (Fed. Cir. May 19, 2020), the Federal Circuit held that, under Thryv and Cuozzo, section314(d) barred the Court from reviewing the PTAB’s determination that the petitioner had identified all real parties in interest.
In ESIP, the patent owner ESIP Series 2, Inc., challenged on appeal the PTAB’s determination that the petitioner Puzhen Life USA, LLC, had identified all real parties in interest as required by § 312(a)(2). ESIP argued that Puzhen had failed to identify other entities that are real parties in interest, and that this failure meant the PTAB should not have instituted the IPR.
Judge Reyna, writing for the panel, explained that “ESIP’s contention that the Board failed to comply with § 312(a)(2) is ‘a contention that the agency should have refused to institute an inter partes review.’” ESIP, slip op. at 12 (quoting Thryv, 140 S. Ct. at 1373–74). Therefore, “ESIP’s challenge to the Board’s ‘real parties in interest’ determination ‘raises “an ordinary dispute about the application of” an institution-related statute,’” which the Court is barred from reviewing under § 314(d). ESIP, slip op. at 12 (quoting Thryv, 140 S. Ct. at 1373–74 (quoting Cuozzo, 136 S. Ct. at 2141–42)).
In view of ESIP, it is very likely that the Federal Circuit is not only barred from reviewing PTAB real-party-in-interest determinations, but also PTAB privy determinations.
Patent owners who seek to avoid institution based on any of the issues related to institution that are listed above will need to make the strongest case possible in their preliminary response to persuade the PTAB to deny institution, because they will very likely not be able to challenge the PTAB’s decision on these issues in an appeal from the final written decision. As a result, more patent owners may request rehearing of institution decisions based on these issues. Conversely, petitioners should be even more confident after institution that the IPR and any appeal will turn on the merits of the patentability challenge instead of any of these issues related to institution.
Thryv also calls into question two recent Federal Circuit precedential decisions that reviewed PTAB determinations related to IPR institution decisions: Facebook, Inc. v. Windy City Innovations, LLC, 953 F.3d 1313 (Fed. Cir. 2020); and Applications In Internet Time, LLC v. RPX Corp., 897 F.3d 1336 (Fed. Cir. 2018).
In Facebook, the Federal Circuit held that the joinder provision in §315(c) does not permit a petitioner to join its own previously instituted IPR and does not permit new claims or grounds to be added to an instituted IPR. Facebook, 953 F.3d at 1322–25.
After the Supreme Court issued its decision in Thryv, Facebook filed a notice of supplemental authority in support of its rehearing petition, arguing that under Thryv, the Federal Circuit did not have jurisdiction under §314(d) to review the PTAB determination that permitted joinder because it was closely related to the institution decision. As of this writing, the Federal Circuit has ordered the parties, the Director of the PTO as amicus curiae, and any other amici curiae to submit supplemental briefs to address the impact of Thryv on the Facebook decision. If the Federal Circuit vacates its Facebook decision because of Thryv, the contrary PTAB Precedential Opinion Panel precedent that permits joinder of the same petitioner and additional issues presumably should continue to apply, unless the PTAB revisits this issue.
In RPX, the Federal Circuit vacated the PTAB’s determination that RPX’s IPR petition was not time-barred under §315(b) and remanded for the PTAB to reconsider this issue. The Federal Circuit held that the PTAB had applied an unduly restrictive test in determining that a third party (Salesforce)—which had been sued more than one year before RPX filed its petition—was not a real party in interest under §315(b). The Federal Circuit rejected the PTAB’s real-party-in-interest test in favor of a more flexible analysis. RPX, 897 F.3d at 1351–56.
As of this writing, RPX has filed a motion requesting that the Federal Circuit recall its mandate, vacate its decision, and reinstate the appeal. RPX argues based on Thryv that section 314(d) barred the Federal Circuit from reviewing the PTAB’s determination that RPX’s petition was not time-barred, including its determination that Salesforce was not a real party in interest.
The Federal Circuit’s recent decision in ESIP that PTAB real-party-in-interest determinations cannot be reviewed on appeal should support RPX’s motion to vacate the RPX decision. If the Federal Circuit vacates its RPX decision because of Thryv, PTAB decisions that analyze how to determine who is a real party in interest will become more important.
Finally, depending on the success of these challenges to the Federal Circuit’s decisions in Facebook and RPX, it would not be surprising if patent owners and petitioners debate before the PTAB whether the PTAB remains bound by other Federal Circuit precedent that reviewed PTAB determinations related to institution decisions.
 Mark A. Chapman is a partner in the IP group of Hunton Andrews Kurth LLP in New York. Mark’s practice focuses on patent litigation in district courts and the ITC, PTAB proceedings and Federal Circuit patent appeals. Mark is a member of the NYIPLA PTAB and Amicus Curiae Committees. The views expressed in this article are those of the author and do not represent the views of Hunton Andrews Kurth LLP or any of the firm’s clients.
 The one-year time bar in § 315(b) provides that “[a]n inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.”
 Facebook, Inc. v. Windy City Innovations, LLC, 953 F.3d 1313 (Fed. Cir. 2020); Applications In Internet Time, LLC v. RPX Corp., 897 F.3d 1336 (Fed. Cir. 2018).
 The IPR institution decision in Cuozzo was challenged on appeal on the ground that the PTAB had improperly instituted an IPR for claims not expressly challenged in the petition, contrary to the requirement in § 312(a)(3) to set forth the grounds of the challenge in the petition “with particularity.” Cuozzo, 136 S. Ct. at 2139.
 Facebook, Inc. v. Windy City Innovations, LLC, No. 2018–1400 (Fed. Cir.), Docket No. 101 (April 21, 2020).
 Id., Docket No. 102 (April 30, 2020);id., Docket No. 104 (May 4, 2020).
 Proppant Express Investments, LLC v. Oren Techs., LLC, No. IPR2018–00914, Paper 38 (P.T.A.B. Mar. 13, 2019) (https://www.uspto.gov/sites/default/files/documents/
 Applications In Internet Time, LLC v. RPX Corp., No. 2017–1698 (Fed. Cir.), Docket No. 95 (May 4, 2020). RPX also received permission from the PTAB to file a motion to stay the remand proceedings pending the outcome of its motion requesting that the Federal Circuit recall its mandate.RPX Corp. v. Applications In Internet Time, LLC, No. IPR2015–1750 (P.T.A.B.), Docket No. 116 (May 5, 2020).
Supreme Court Shuts Door on Appeals Challenging Issues Related to IPR Institution Decisions
By: mark chapman
Notable Trademark Decisions
By: Scott Greenberg, frank misiti, and reece brassler
Federal Circuit Affirms Board’s Holding of Likelihood of Confusion Between “STRATUS NETWORKS” and “STRATA NETWORKS”
Stratus Networks, Inc. (“Stratus”) appealed from a decision from the Trademark Trial and Appeal Board (“Board”) that refused registration of its mark STRATUS NETWORKS (“STRATUS Mark”) based on a likelihood of confusion with a prior registered mark by UBTA-UBET Communications, Inc. (“UBTA”) for STRATA NETWORKS (“STRATA Mark”). Both Stratus and UBTA are telecommunication providers.
The Board, after undertaking an analysis of the DuPont factors, found that there was a likelihood of confusion between the two marks and denied registration of the STRATUS Mark. The Board determined that six out of the thirteen DuPont factors were relevant to its determination and held that: (i) two factors (similarity of the parties’ services and similarity of the parties’ trade channels) weighed heavily in favor of finding a likelihood of confusion; (ii) one factor (similarity of the parties’ marks) weighed in favor of finding a likelihood of confusion; (iii) two factors (strength of the opposer’s mark and actual confusion) were neutral; and (iv) one factor (consumer sophistication) weighed slightly against finding a likelihood of confusion.
The Board determined that the modest evidence of sophistication of consumers and the weakness of the STRATA Mark was insufficient to overcome its findings with respect to the fact that the marks are similar in appearance and sound, the services listed under the STRATA mark correspondence with the services listed under the STRATUS Mark, and that the parties moved in the same channels of trade and offered services to the same consumers. As a result, the Board held that UBTA showed, by a preponderance of the evidence, that the STRATUS Mark was “likely to cause consumer confusion when used in association with its services.”
Stratus appealed the Board’s decision and argued that the Board did not rely on substantial evidence in making its determination that there was a likelihood of confusion under the DuPont factors. Stratus requested the court to re-weigh the evidence. The court noted that its role is not to re-weigh evidence, but it is to evaluate whether the Board’s determination was supported by substantial evidence.
The court held that the Board’s determination was supported by substantial evidence. In particular, the court pointed to the evidence in the record considered by the Board, which included dictionary definitions, the applications for registration, the marks themselves, and uncontested declaration testimony from UBTA. The Board determined that such evidence was sufficient and any arguments offered by Stratus as to why there would be no likelihood of confusion between the marks is not supported by the evidence.
Stratus also argued that the Board did not properly consider the evidence submitted regarding consumer sophistication. The court determined that while the Board is required to consider each DuPont factor on which evidence is presented, the Board can focus its analysis on dispositive factors such as similarity of the marks and relatedness of the goods. Additionally, the lack of an explicit finding on a given factor is not reversible error when the record indicates - - as it does here - - that the Board considered the factor and any evidence submitted in connection with that factor. Lastly, Stratus also argued that the Board errored because there was no evidence of actual confusion and this should be considered in light of the fact that the marks co-existed for over six years. The court noted that while the Board found no actual confusion, the Board considered the fact that the parties during the time period at issue were operating in different geographical locations and the record does not demonstrate that any consumers were exposed to both marks.
The court affirmed the Board’s determination that UBTA showed likelihood of confusion by a preponderance of the evidence and refused registration of the STRATUS Mark. Stratus Networks v. UBTA-UBET Communications,2020 USPQ2d 10341 (Fed. Cir. April 14, 2020) [precedential]. [FM]
In re Forney Industries, Inc.: Distinctiveness and Multi-Color Product Packaging Marks
Forney Industries, Inc. (“Forney”) sells accessories and tools for welding and machining in packaging that displays its proposed mark. Forney initially applied for registration of its mark on May 1, 2014 and was refused. In re Forney, 2020 U.S.P.Q.2d 10310 (Fed. Cir. April 8, 2020). Forney Industries appealed the Examining Attorney’s refusal to the Trademark Trial and Appeal Board (the “Board”), but the Board affirmed the refusal on the ground that the mark could never be inherently distinctive. Id. Upon appeal from the USPTO, the United States Court of Appeals for the Federal Circuit found that the Board erred by holding that multi-colored marks and colorful product packaging marks without “well-defined peripheral shapes or boarders” could never be inherently distinctive. Id.
I. Procedural History
In the initial Office Action of September 16, 2014, The USPTO Examining Attorney refused to register Forney’s proposed mark pursuant to Sections 1, 2, and 45 of the Lanham Act because the mark was not inherently distinctive. Id. at *1. The Examining Attorney requested a revised drawing of the mark, but Forney responded to the Office Action with only an updated mark description. Id. at *1-2. The Examining Attorney again refused to register Forney’s proposed mark on the Principal Register on the grounds that it was not inherently distinctive and Forney had not offered proof of acquired distinctiveness. Id. at *2.
Forney appealed the decision, arguing that its proposed mark “should be treated as product packaging claiming multiple colors” and that “product packaging trade dress . . . may be inherently distinctive and, therefore, registrable without proof of acquired distinctiveness.” Id. In affirming the Examining Attorney’s refusal to register the mark, the Board adopted the Examining Attorney’s analysis that Forney’s mark was a color mark used on packaging rather than trade dress. Id.
The Board weaved through the precedential Supreme Court cases, Two Pesos, 505 U.S. 763 (1992), Qualitex, 514 U.S. 159 (1995), and Wal-Mart, 529 U.S. 205 (2000), and held that while trade dress can be inherently distinctive, “Wal-Mart and Qualitex together make clear that ‘a particular color on a product or its packaging’ . . . can never be inherently distinctive and may only be registered on a showing of acquired distinctiveness.” Id. The Board focused on the lack of shapes or designs in Forney’s proposed mark in finding that “well-defined peripheral shape or border” is necessary for a color mark to be inherently distinctive.” Id.
II. Federal Circuit Analysis
The Federal Circuit Court found that both the Examining Attorney and the Board overreached in their analysis of Forney’s proposed mark by holding that “color, whether used on a product or packaging, can never be inherently distinctive.” Id. at 3. Rather than focusing on the composition of Forney’s proposed mark, the Federal Circuit Court focused on whether Forney’s proposed mark could indicate the source of its goods to a consumer and therefore be inherently distinctive.
The Federal Circuit began its analysis with Two Pesos, noting that the Two Pesos Court did not decide the issue of whether the trade dress at issue was inherently distinctive, but rather decided that trade dress can indeed be inherently distinctive. Id. at *4.
Next, the Federal Circuit turned to Qualitex, finding that although the Qualitex Court implied that acquired distinctiveness may be required to afford protections to color marks, it did not expressly hold that acquired distinctiveness was a pre-requisite to color mark protection. Id.
Finally, the Federal Circuit considered Wal-Mart, and found that the Wal-Mart Court’s language concerning the source-identifying qualities of product packaging to be persuasive. The Federal Circuit found that Forney’s proposed mark is a product-packaging mark “more akin to the mark at issue in Two Pesos than those at issue in Qualitex and Wal-mart” because it is not product design trade dress or merely a color mark. Id. at *5. Accordingly, the Federal Circuit held that Forney’s mark “can be perceived by consumers to suggest the source of the goods in that type of packaging.” Id. The Federal Circuit further stated that the Board should have analyzed Forney’s mark under its criteria for inherent distinctiveness rather than broadly concluding it was a color mark incapable of inherent distinctiveness. Id.
The Forney Court also disagreed with the Board’s holding that color marks could only be capable of inherent distinctiveness “when used in conjunction with a distinctive peripheral shape or border.” Id. at 5-6. Putting aside the Board’s failure to rationalize that bright-line rule, the Federal Circuit found contradictory the Board’s dual conclusions that color marks could bothneverbe inherently distinctive while also being capable of inherent distinctiveness by simply having “a distinctive peripheral shape or border.” Id. at 6. The Federal Circuit found that the Board should have instead assessed the question of whether Forney’s mark could capably indicate the source of its goods by analyzing “the overall impression created by both the colors employed and the pattern created by those colors.” Id.
Accordingly, the Federal Circuit vacated and remanded the case and instructed the Board to employ the Seabrook factors and the overall impression of Forney’s proposed mark to determine whether it is inherently distinctive. In re Forney, 2020 U.S.P.Q.2d 10310 (Fed. Cir. 2020) [precedential]. [RB]
TTAB Finds No Likelihood of Confusion Between Two Shades of Green Proposed as Marks for Medical Gloves
Medline Industries, Inc. (“Medline”) applied to register the following mark on the Supplemental Register in connection with “medical examination gloves” (the Supplemental Register is for words, symbols or other matter proposed as a trademark that, although capable of functioning as a mark, is not yet distinctive as a source-indicating trademark):
The mark is described in the application as consisting of"the color green (Pantone 2274 C) as applied to the gloves”, with the broken lines in the drawing serving only to show the positioning of the mark. The Examining Attorney refused registration under Section 2(d) of the Lanham Act (15 U.S.C. § 1052(d)) on the ground of likelihood of confusion the following mark, previously registered on the Supplemental Register in connection with“gloves for medical use; protective gloves for medical use”:
The cited mark is described in the registration as “the color green Pantone 7488U as applied to the exterior of gloves”, with the broken lines showing the positioning of the mark. On appeal, the Trademark Trial and Appeal Board reversed the refusal in a precedential decision. In re Medline Industries, Inc., 2020 USPQ2d 10237 (TTAB March 25, 2020).
The Board noted that (1) a mark on the Supplemental Register can be cited as a basis for refusing registration to another mark under Section 2(d) of the Act, and (2) in the ex parte context, the USPTO does not and cannot question the validity of a mark in a registration cited against another under Section 2(d), including cited Supplemental registrations. Id.at *3.
The Board then observed that it determines likelihood of confusion based on an analysis of all probative facts in the record that are relevant to the likelihood of confusion factors set forth in In re E.I. DuPont de Nemours & Co.,476 F.2d 1357,177 USPQ 563, 567(CCPA 1973). The Board considers each DuPont factor for which there is evidence and argument, although two key factors in every Section 2(d) case are the similarity or dissimilarity of the marks and the goods or services, because the "fundamental inquiry mandated by § 2(d) goes to the cumulative effect of differences in the essential characteristics of the goods and differences in the marks." Federated Foods, Inc. v. Fort Howard Paper Co.,544 F.2d 1098,192 USPQ 24, 29 (CCPA 1976). Id.at 3.
The Board held that the factors of similarity of the goods and their trade channels, the second and third DuPont factors, strongly favor likelihood of confusion because the wording of the respective identifications of goods renders them legally identical, and because there are no limitations in the respective identifications as to the channels of trade or classes of consumers, the channels of trade and classes of consumers must also be presumed identical. Id.at 4.
Medline’s arguments against likelihood of confusion were based mainly on (1) the differences between the two shades of green in the two proposed marks, as evidenced by the respective appearance of the marks and the references to the two different Pantone shade designations in the parties’ filings, i.e. the registered mark is a dark bright green and Medline’s mark is a light pale green; and (2) the fact that green-colored medical gloves were a crowded field, with Medline submitting evidence of numerous third-party medical gloves in various shades of green. Id. at 4.
The Board held that the evidence of third-party use of various shades of green on the surface of medical gloves did not weigh in Medline’s favor on the sixth DuPont factor, i.e. the number and nature of similar marks in use on similar goods, because there was no indication either in the reproductions of the gloves or in accompanying advertising text that these third parties were identifying or designating the product-colors as source-indicating “marks”. Id. at *6-7.
However, the Board did consider this third-party evidence of use to be highly relevant to the thirteenth DuPont factor, i.e. any other established fact probative of the effect of use. First, the Board noted that marks registered on the Supplemental Register are generally categorized as weak, and in the present case this presumed weakness was corroborated by the evidence of third-party non-trademark uses of various shades of green on medical gloves. In particular, the widespread use of shades of green on medical gloves tends to “impair the cited Supplemental Register mark's ability to acquire distinctiveness, and to limit its scope of protection if it did acquire distinctiveness.” Id. at 7. Therefore, the thirteenth DuPont factor was found to weigh against a likelihood of confusion.
Finally, when considering the crucial first DuPont factor, the similarity or dissimilarity of the marks, in the light of the weakness and limited scope of protection to which the registered mark is entitled, the Board concluded that confusion was not likely. To begin with, the Board considered it relevant to take into account the respective appearance of the two marks in the respective filings as well as the reference to the two different Pantone shades of green. Rejecting the Examining Attorney’s arguments to the contrary, the Board held that the display of the marks combined with the references to the two different Pantone shades made it clear that each party was only claiming a specific shade of green as its mark, notwithstanding the unqualified use of the word “green” in both of the mark descriptions. Id. at *10-11.
The Board then found that “consumers with an imperfect or even dim recollection of Registrant's bright shade, and who have been exposed to the use of multiple other shades of green on medical gloves and are then exposed to Applicant's pale shade, are not likely to view the two shades as similar, or to view gloves bearing them as being the product of one and the same producer.” Id. at *13. The Board therefore reversed the refusal. In re Medline Industries, Inc., 2020 USPQ2d 10237, 2020 BL 116377 (TTAB March 25, 2020) [precedential]. [SG]
TTAB Finds Likelihood of Confusion Between Uses of “ENGIRLNEER” For Commercially Related Goods and Services
Celeste Ortiz (“Applicant”) sought registration of the standard character mark ENGIRLNEER on an intent to use basis for the following goods: cups, coffee cups, mugs, lanyards, hoodies, sweatshirts, and shirts.Ms. Ortiz registration was opposed by Shannon DeVivo (“Opposer”) based on her continuous use of the mark ENGIRLNEER in association with providing information services to young women and girls seeking a career in the fields of science, technology, engineering, and math (“STEM”), providing a website with educational information in STEM fields, providing online non-downloadable educational information in STEM fields, and in association with books.
The Trademark Trial and Appeal Board (“Board”) first addressed whether the Opposer had standing to challenge the registration.The Board noted that the Opposer needed a “real interest” in the outcome of the proceeding. A “real interest” is a direct and personal stake in the interest of the proceeding. The Board determined that Opposer had such an interest because the Opposer had been using the same ENGIRLNEER mark in connection with various goods and services prior to the date of the Applicant’s application and is the owner of two applications for the ENGIRLNEER mark that were both suspended due to a likelihood of confusion with the Applicant’s mark.
The Board next examined whether the Opposer had priority. Priority is established by showing the mark is “distinctive, inherently or otherwise, and that the Opposer must show proprietary rights in a mark as to which Applicant's mark gives rise to a likelihood of confusion.” The Board noted that the Opposer relied upon her common law rights to ENGIRLNEER and that the Opposer was required to show first use before the filing date of the Applicant’s application.
The Opposer, relying on a declaration, stated that before the Applicant’s application date she: (1) coined the term ENGIRLNEER; (2) registered engirlneer.com as a domain name; (3) started publishing information on her www.engirlneer.com website; and (4) was using ENGIRLNEER to describe fictional characters on her website, which eventually were used in a published book.The Board found that such use was regular or reoccurring activity in connection with ENGIRLNEER before the date of filing of the Applicant’s application.
The Board also addressed the fact that the use of the term ENGIRLNEER in association with Opposer’s book was a trademark use because the mark acted as a source identifier. In fact, the term was used in a seal design on the front and back pages of the book, was part of the title of the book, and identified one or more fictional characters in the book. Thus, the Opposer was able to establish priority in the ENGIRLNEER mark.
The Board then undertook a likelihood of confusion analysis based on the factors set forth in DuPont. The Board determined that there was a likelihood of confusion between the two marks and stated that since the marks are identical, the similarity of the marks weighed heavily in favor of the finding of a likelihood of confusion. The Board next looked at the similarity of the goods being offered and held that even though the Opposer submitted evidence of her use of the mark on clothing, cups, mugs, stickers, and other items after the date of the Applicant’s application, such evidence showed that the use of the mark on clothing, mugs, and lanyards are commercially related to the use of the term in books and educational services. The Board held that this factor also weighed in favor of the finding of likelihood of confusion.
The Board next addressed the similarity of trade channels and held that the consumers of the Opposer’s goods and services and those identified in the Applicant’s application may overlap because they were both marketed to girls and young women seeking careers and information about STEM and professions related to STEM. While the evidence does not show the goods and services were in the same trade channels, there was enough overlap that this factor weighed slightly in favor of finding a likelihood of confusion.
The Board also found that there was a likelihood of confusion under the factor relating to conditions of sale because of the low price point of the Opposer’s product. Additionally, the fact that certain of the services offered by Opposer were free also supported a finding of likelihood of confusion. The Board determined that the DuPont factors relating to the variety on which the goods are used and the right to exclude others were neutral.
In sum, the Board determined that in light of the above factors, there was a likelihood of confusion between the two marks, and since Opposer has demonstrated priority of use, the opposition was sustained and the Applicant’s mark was refused for registration. Shannon DeVivo v. Celeste Ortiz, 2020 U.S.P.Q.2d 101153 (T.T.A.B. March 11, 2020) [precedential].FM
In re Carlton Cellars, LLC: The Danger of Unpaid Filing Fees
Carlton Cellars (“Carlton”) is a winery, tasting room, and wine cellar located in Carlton, Oregon.On May 5, 2017, Carlton sought registration of the mark “SEVEN DEVILS” in connection with: (1) wine related accessories; (2) glassware; (3) clothing; and (4) and wine. In re Carlton Cellars, LLC, 2020 U.S.P.Q.2d 10150at *1 (TTAB 2020). Carlton, however, left the international class field of its application blank and paid only one filing fee for the application, despite seeking registration of its mark in four international classes. See Trademark Application Serial No. 8738793. As a result, pursuant to §§ 1 and 44 of the Trademark Act, the United States Patent and Trademark Office (“USPTO”) designated Carlton’s application in International Class 8 which covers wine-related accessories. Carlton, 2020 U.S.P.Q.2d 10150 at *1. Even so, the Examining Attorney initially refused registration on the grounds that the identification of goods was indefinite and filed an office action explaining the refusal. Id. Carlton responded by listing the goods in a single identification statement and stating that it would pay filing fees for the application in each international class, but in fact never paid the additional filing fees. Id.
I. Procedural History
The Examining attorney issued a Final Action denying registration both on the grounds that Carlton failed to meet the filing requirements and under Section 2(d) of the Trademark Act because Carlton’s “SEVEN DEVILS” mark was confusingly similar to a SEVEN DEVILS mark registered for international class 33, “Distilled Spirits; Spirits; Whiskey spirits.”Id. Carlton filed a Request for Reconsideration, stating again that it would pay for the additional classes of goods once the Examining Attorney informed them of whether its mark for those goods were approved. Id. The Board suspended Carlton’s appeal and remanded to the Examining Attorney for a determination on the Request for Reconsideration, but Carlton never communicated with the Examining Attorney, and therefore the Examining Attorney denied Carlton’s Request for Reconsideration. Id. at *1-2.
The Board resumed the Appeal and Carlton filed a brief that addressed only its failure to pay the required filing fees for all international classes in which it sought registration, but not the Examining Attorney’s denial of the mark under Section 2(d). Id. at *2. Accordingly, the Board affirmed the Examining Attorney’s requirement of a definite identification of goods and sufficient payment of fees for the four classes in which Carlton sought registration.
II. Requirement for Sufficient Fees
Under Trademark Rule 2.86(a)(2), trademark registration applicants are required to “submit the application filing fee required by § 2.6 for each class.” In affirming the Examining Attorney’s refusal to register Carlton’s mark, the Board found that while Carlton’s payment of sufficient fees for only one of the four classes in which it sought registration did not prohibit the Examining Attorney from prosecuting the application, it did justify the Examining Attorney’s refusal to register Carlton’s mark. Id.
The Board reasoned that for purposes of administrative recordkeeping, i.e. accurate and efficient public searches, and facilitating examinations of applications by aligning fees with USPTO costs, Carlton was required to pay fees for all goods identified in the application. [GA1] The Board further reasoned that because Carlton was adamant about its intent to obtain registration in four separate classes and had repeatedly failed to pay the associated fees or authorize the Examining Attorney to charge it with the fees, the Examining Attorney properly denied Carlton’s application for failure “to submit sufficient fees or restrict the identification of goods in the application to a single class.” Id. at*2-3.
III. Requirement for a Definite Identification of Goods
Under the Trademark Act, applicants seeking registration of marks must explicitly specify the particular associated goods or services with which an applicant uses the mark or intends to use the mark. 15 U.S.C. §§ 1051(a)(2), 1051(b)(2), 1053; Trademark Rule 2.32(a)(6); TMEP § 1402.01. The Board assessed Carlton’s application by applying these rules and precedent set out in In re Societe Generale des Eaux Minerales de Vittel S.A., 1 U.S.P.Q.2d 1296 (TTAB 1986) which held that “[t]he identification of goods must be specific, definite, clear, accurate, and concise.” Societe, 1 U.S.P.Q. 1296.
The Board affirmed the Examining Attorney’s refusal based on Carlton’s indefinite identification of goods. Carlton’s identification of goods was deemed indefinite for two reasons: 1) it improperly refers to specific class numbers (TMEP §1402.01); and 2) Carlton refused to either delete goods in the application to limit it to a single class or to submit filing fees to allow the registration in multiple classes. Forney at *3.
The Board reasoned that Carlton failed to specify the goods or services for which it sought registration because its wording was so broad that it may include goods or services in more than one class. Id. at *4. Therefore, although the wording of Carlton’s application was specific and the individual goods listed were definite as a whole, the identification was indefinite because it referred to more than one class of goods pursuant to TMEP § 1402.01. Id. While the Examining Attorney applied the application in International Class 8 “for administrative convenience,” the Board held that it would not amend Carlton’s application to limit it to Class 8 because doing so would require the Board to disregard the remaining goods and their class designations, including Class 8. Id. This is because TMEP 1402.03 states that an applicant who fails to respond to an Office Action concerning amendment of the application and related payment of additional fees abandons the entire application. Id.
The Board affirmed the Examining Attorney’s refusal for Carlton’s failure to pay sufficient fees and failure to specifically identify the goods or services for which its mark was associated. The Board did not consider the Examining Attorneys refusal of the application under Section 2(d). Id. at *5. After questioning whether Carlton simply misapprehended or blatantly disregarded USPTO policy and procedure, the Board definitively stated that upon issuance of its decision on the merits, the case could not be reopened. Id. In re Carlton Cellars, LLC, 2020 U.S.P.Q.2d 10150 (TTAB March 11, 2020) [precedential]. RB
TTAB Rejects Claim of Abandonment Based on Foreign Registrant’s Proof of Intent to Commence Use of Mark in the U.S.
Striatum Ventures B.V. (“Striatum”), a foreign company, had obtained a U.S. trademark registration under Section 66(a) of the Lanham Act (15 U.S.C. § 1141f) as an extension of its International Registration pursuant to the Madrid Protocol, for the mark ZUPR and Design in connection goods and services in Classes 9, 35 and 42 consisting essentially of a retail platform, comprising software and databases (Class 9), related business services (Class 35) and computer services (Class 42), which allow consumers to connect to multiple retailers to locate specific goods in physical retail stores within specific geographic areas. Wirecard AG (“Wirecard”) filed an application for the mark “SUPR” for various computer goods and services, which was refused based on Striatum’s prior registration.Wirecard petitioned to cancel Striatum’s registration on the ground of abandonment. The parties agreed to have the case determined pursuant to the Trademark Trial and Appeal Board’s Accelerated Case Procedure, waiving disclosures and discovery and agreeing to have the case determined by the TTAB based in part on stipulated facts as well as testimony and evidence submitted with their briefs, in lieu of trial. Based on these submissions, the Board determined, in a precedential decision, that Striatum had sufficiently established an intention to commence use of its mark in the U.S., and therefore the Board denied the petition to cancel. Wirecard AG v. Striatum Ventures B.V., 2020 USPQ2d 10086 (TTAB February 28, 2020).
The Board noted that, although use in commerce is not required for registration by qualifying foreign registrants under Section 66(a), after registration issues, it is subject to the same grounds for cancellation as those registrations issued under Section 1 or Section 44(e), including abandonment. Id. at *3.
The Board then noted that Section 45 of the Lanham Act (15 U.S.C. § 1127) provides that (a) abandonment occurs when "use [of a mark] has been discontinued with intent not to resume such use”, (b) “intent not to resume use may be inferred from circumstances", (c) "[n]onuse for 3 consecutive years shall be prima facie evidence of abandonment” and (d) “use” of a mark means the "bona fide use of such mark made in the ordinary course of trade, and not made merely to reserve a right in a mark." Under this statutory provision, a presumption of abandonment based on three years nonuse may be invoked against a registrant who never begins use of the mark or who discontinues using the mark. Thus, introduction of evidence of nonuse of a mark for three consecutive years constitutes a prima facie showing of abandonment and triggers a rebuttable presumption that a mark was abandoned without intent to resume use. The rebuttable presumption shifts the burden of production to the party contesting the abandonment to submit evidence of either: (1) use of the mark during the statutory period of nonuse; or (2) activities reflecting an intent to resume (or commence) use during the nonuse period. The burden of persuasion however, always remains with the party asserting abandonment, which must prove it by a preponderance of evidence. In the present case, to cancel Striatum’s entire registration, Wirecard would have to prove abandonment of the mark as to each of the three classes of goods and services. Id. at *4.
The Board held that, based on the parties’ stipulations and evidence, Wirecard successfully established that the ZUPR mark was never used in commerce by Striatum during the more than three-year period following registration, thus triggering a rebuttable presumption that the mark had been abandoned without intent to resume use. Id. at *5.
Striatum’s first assertion in its attempted rebut of the presumption was a claim that it had in fact used the mark in commerce during the time in question, based mainly on the posting of a YouTube video discussing the subject goods and services. However, the Board rejected this claim, holding that the YouTube video merely described goods and services to be offered in the future, and did not evidence the present sale of goods or rendering of services. Id. at 6.
Regarding an intent to commence use sufficient to rebut the resumption of abandonment, the registrant may show "special circumstances" relevant to its nonuse, which has been equated with the doctrine of “excusable nonuse” and has been held to apply both to cases such as the present case, where a mark was never used in commerce, and cases where a mark once in use has allegedly been abandoned. Id. at *6 (citing, inter alia, Imperial Tobacco Ltd. v. Philip Morris Inc., 899 F.2d 1575 , 14 USPQ2d 1390, 1395 (Fed. Cir. 1990)). In particular, in order to prove the requisite intent to commence use, Striatum would have to “produce evidence showing that, under its particular circumstances, its activities are those that a reasonable business with a bona fide intent to use the mark in United States commerce would have undertaken.” Id. at *7.
The Board concluded that Striatum’s evidence satisfied this requirement in connection with the subject goods and services and was therefore sufficient to rebut the presumption of abandonment. Specifically, Striatum showed that, following registration, it entered into a contract with a public relations agency with strong ties to the U.S. market to develop a U.S. marketing strategy, retooled its platform in response to that U.S. marketing strategy, demonstrated the retooled products to its public relations firm, and reached agreement at least orally with a retailer's representative to use the ZUPR goods and services in the U.S. following the planned product launch in 2019. Id. at *7-8.
The Board also found it reasonable that Striatum’s activities focused primarily on the technical computer software and design services of the ZUPR platform, and that the strongest evidence of intent to commence use was shown in connection with the Class 9 goods and Class 42 services. These activities of Striatum were also found sufficient to demonstrate an intent to commence use of the mark in connection with the Class 35 business services described in the registration, essentially consisting of the collection and compilation of retailer data, because those services “are dependent on the software and software design for the automatized collection and compilation of retail information and search engine marketing, and would be deployed together in the platform.” Id. at *8. Moreover, the Board found it reasonable that Striatum did not go forward with the planned launch in 2019, because Wirecard commenced the subject cancellation proceeding in October of 2018. “[I]n in view of the filing of the petition to cancel, the failure to launch does not detract from the activities demonstrating intent to commence use.” Id. at 9.
The Board therefore denied the petition to cancel. Wirecard AG v. Striatum Ventures B.V., 2020 USPQ2d 10086, 2020 BL 77246 (TTAB February 28, 2020) [precedential]. [SG]
On March 9, the Ninth Circuit, en banc, ruled in favor of Led Zeppelin in a copyright infringement lawsuit involving its famous song “Stairway to Heaven.” Michael Skidmore, the trustee of Randy Wolfe, a guitarist in the band Spirit, had sued Led Zeppelin for copyright infringement of Spirit’s song “Taurus.” In its decision, the Ninth Circuit rejected the long-standing copyright “inverse ratio rule,” which requires a lower standard of proof of substantial similarity between two works when a high degree of access to the copyrighted work is shown.
In 1966 or 1967, Randy Wolfe wrote the instrumental song “Taurus.” After Wolfe entered into an Exclusive Songwriter’s and Composer’s Agreement with Hollenbeck Music Co., Hollenbeck deposited one sheet of page music of “Taurus” with the United States Copyright Office, which wasrequired for registration of an unpublished work. In 1971, Led Zeppelin, founded by Jimmy Page, Robert Plant, John Paul Jones, and John Bonham, released the album “Led Zeppelin IV,” which contained the “now iconic” song “Stairway to Heaven.” 43 years later, in May 2014, Skidmore sued Led Zeppelin for direct, contributory, and vicarious copyright infringement. Skidmore alleged that the opening notes of “Stairway to Heaven” were substantially similar to the eight-measure passage at the beginning of the “Taurus” deposit copy.
The district court granted summary judgment in part to Led Zeppelin, ruling that under the 1909 Copyright Act, only the one-page “Taurus” deposit copy, and not a sound recording, sufficed to prove substantial similarity between “Taurus” and “Stairway to Heaven.” Two key issues were deliberated at trial: access to “Taurus” by Led Zeppelin band members and substantial similarities between the two songs. The jury found that Led Zeppelin had access to “Taurus” because, at trial, Jimmy Page testified to owning a copy of the Spirit album that contains “Taurus.” However, the jury did not find that the original elements of the musical composition “Taurus” were substantially similar to those in “Stairway to Heaven.” In his appeal, Skidmore objected to the grant of summary judgment. Skidmore also objected to several jury instructions, includingthe failure to give an inverse ratio rule instruction.
Skidmore argued that he should have been able to play sound recordings at trial to prove substantial similarity between “Taurus” and “Stairway to Heaven.” According to the 1976 Copyright Act, composers can submit a sound recording rather than sheet music when registering with the Copyright Office. However, the Ninth Circuit held that because Wolfe’s copyright was registered in 1967, the earlier 1909 Copyright Act controlled. The Ninth Circuit concluded that under the 1909 Copyright Act, Congress had not intended that “copyrighted works could be anything other than sheet music or, for an unpublished work, the musical composition transcribed in the deposit copy.” Therefore, only the deposit copy of Taurus could be used to prove substantial similarity.
In addition, the Ninth Circuit upheld the district court’s decision to not include jury instructions on the inverse ratio rule. According to the inverse ratio rule, “the stronger the evidence of access, the less compelling the similarities between the two works need be in order to give rise to an inference of copying.” In its Skidmore decision, the Ninth Circuit rejected the inverse ratio rule and overruled prior cases, writing that the rule, “which is not part of the copyright statute, defies logic, and creates uncertainty for the courts and the parties . . . .” Specifically, the Ninth Circuit explained that “[c]omplete access without any similarity should never result in infringement liability because there is no infringement.” In addition, the “concept of ‘access’ is increasingly diluted in our digitally interconnected world. . . . Given the ubiquity of ways to access media online, from YouTube to subscription services like Netflix and Spotify, access may be established by a trivial showing that the work is available on demand.” The inverse ratio rule also benefits those whose works are most accessible, but “nothing in copyright law suggests that a work deserves stronger legal protection simply because it is more popular or owned by better-funded rights holders.” The Ninth Circuit held that access could still serve as circumstantial evidence of copying, but access in and of itself could not be used to prove copying.
The Ninth Circuit’s rejection of the inverse ratio rule is expected to reverberate across the music industry. Several famous musicians have recently been hit with major copyright infringement lawsuits, some of whom may have benefited from the Ninth Circuit’s new case law. In 2015, Pharrell and Robin Thicke were sued over their song “Blurred Lines” for copyright infringement of Marvin Gaye’s “Got to Give It Up,” and they had to pay $5 million in damages. In 2019, a jury awarded $2.8 million in damages to Christian rapper Flame, who alleged that Katy Perry’s song “Dark Horse” infringed his copyright in the song “Joyful Noise.” Other accused infringers may benefit from the Skidmore decision. In 2017, Ed Sheeran was sued for $100 million for infringing another Marvin Gaye song, “Let’s Get It On,” with his song “Thinking Out Loud.” The court in that case has now indicated that the sound recording of Gaye’s song will be inadmissible at trial. Eliminating the inverse ratio rule will increase the burden of proof of substantial similarity, likely better protecting musicians from costly suits and burdensome damages going forward.
Skidmore as Tr. for Randy Craig Wolfe Tr. v. Zeppelin,952 F.3d 1051, 1056 (9th Cir. 2020).
Id. at 1057
Id. at 1058.
Id. at 1059.
Id. at 1065.
Id. at 1060.
Id. at 1062.
Id. at 1060–1061.
Id. at 1061.
Id. at 1064.
Id. at 1066 (citingRentmeester v. Nike, Inc., 883 F.3d 1111, 1124 (9th Cir. 2018)).
Id. at 1068.
Id. at 1069.
On March 16, Judge Snyder vacated the jury verdict as to damages. Gray v. Perry, No. 2:15-CV-05642-CAS-JCX, 2020 WL 1275221, at *18 (C.D. Cal. Mar. 16, 2020).
Griffin v. Sheeran, 351 F.Supp.3d 492, 494 (S.D.N.Y. 2019).
Judge Louis L. Stanton paused litigation to await the Ninth Circuit’s decision inSkidmore, stating, “Whatever the Ninth Circuit says, it’s going to be damned educational.” Bill Donahue, After ‘Stairway,’ Ed Sheeran Judge Largely Bans Gaye Track, Law360, Mar. 25, 2020, https://www.law360.com/articles/1256883?e_id=7c4149ea-66cb-42ea-8a89-1d396c2d75a6&utm_source=engagement-alerts&utm
_medium=email&utm_campaign=case_updates. In a ruling on March 24, Judge Stanton cited the Skidmore decision, writing that the sound recording of “Let’s Get It On” would likely be inadmissible at trial. Id.
Ninth Circuit Rules in Favor of Led Zeppelin in Copyright Case, Rejecting the Inverse Ratio Rule
By: jessica blanton
MINUTES OF APRIL 7, 2020
MEETING OF THE BOARD OF DIRECTORS OF THE
NEW YORK INTELLECTUAL PROPERTY LAW ASSOCIATION
The Board meeting was held via videoconference. President Kathleen McCarthy called the meeting to order at approximately 4:00 p.m. In attendance were:
Peter Thurlow, Dyan Finguerra-DuCharme, Alicia Russo and Marc Pensabene we absent and excused from the meeting. Feikje van Rein attended from the Association’s executive office. The meeting was called to order by President McCarthy. The Board approved the minutes of the prior meeting.
Ms. Langsam provided an update on finances, including the deposits that have been provided to the Hilton and Conrad for the Judge’s Dinner. There were no new members for this session.
The Amicus Briefs committee has no new briefs to report, but is watching the Arthrex case. The Legislative Action Committee and the pharma subcommittee have been following the CARES Act and issues relating to IP and Bayh-Dole. The Programs Committee has been working on free webinars for members. One new idea includes copyrights related to Allen v. Cooper or Led Zeppelin. The committee is also working on something relating to cease & desist and other trademark issues during the pandemic.
The Board discussed the nominations and the proxy voting process. The Board then discussed the Conner Writing Competition entrants and approved the committee’s recommendation that Horn is 1st Place.
The Board discussed the new auditing firm, Satty, which accepted the engagement. The Board then discussed refunds for the Judges Dinner, and is holding October 2, 2020 at the Hilton in case the dinner can be rescheduled.
The Association will proceed with the Annual Meeting via video, and recognize the Inventor of the Year, Conner Writing Competition winners, the Giles S. Rich Diversity recipient, and the NYIPLEF Diversity Scholarship award winner on the Association website and in The Report. The awards to volunteers of the year and impact award will be pushed to a later date.
The Board discussed the IPR Center, which President McCarthy, Anthony Lo Cicero, and Chris Israel will discuss including as part of the Half-Day trademark CLE. The Board then discussed the webinars, including webinars with judges, which we will make free for the year for members. The July Half-Day trademark session will likely be online, and the Board will continue to discuss the One-Day Patent CLE and other events. The meeting was adjourned at approximately 5:20 p.m. The next Board meeting will take place on May 12, 2020 via videoconference in conjunction with the Annual Meeting.
The Board meeting was held via videoconference. President Colman Ragan called the meeting to order at approximately 5:00 p.m. In attendance were:
Feikje van Rein attended from the Association’s Executive Office.
The meeting was called to order by President Colman Ragan. The Board welcomed its new members. The Board approved the minutes of the prior meeting.
Abigail Langsam provided an update on finances. The Judge’s Dinner loss is a big hit. Deposits for the dinner will be refunded. More income is needed.
The Board discussed updating our Whistleblower Policy as recommended by the auditors. Heather Schneider, Robert, and Colman Ragan will draft an updated policy.
The Board discussed ways to encourage members to pay dues, including the importance of leveraging events & programming, taking a personalized tone with messaging, and whether to offer a discount. Motions were made for President Colman to write a letter to members to kick-off the term. The Board approved the motion.
There were 17 new members between April 7, 2020 – May 12, 2020 for this session, including the winner of the NYIPLEF diversity scholarship. Motions were made to waive reading of new members’ names. The Board approved the motion and admitted the new members.
Amicus Brief Committee: Robert Isackson reported that the Supreme Court disagreed with the NYIPLA amicus brief in Thryv, Inc. There was one request for support in the Chamberlain case but it is such a fact intensive case and the Supreme Court has rejected every other Section 101 petition, so the committee will wait to see if cert is granted. No recommendations pending before the Board. ABC will watch for decisions in the Booking.com cases and keep an eye on recent efforts to cut back on the doctrine of equivalents. The committee will watch Arthrex where second petition for cert is expected; petition for rehearing in PTAB en banc was not granted; if cert is granted, the committee will consider weighing in on the merits.
Legislative Action Committee: Colman Ragan recommended that new members carefully review the Conflict of Interest policy given that this seems to be a heavy legislative year. Robert Isackson then discussed how Congress’s CARES Act seeks to up level scrutiny of counterfeits in China, including design patent enforcement through the CBP. LAC will also be monitoring recent efforts to change copyright law. The Board discussed the benefits of launching a harmonized IP glossary, whether it would create an impression of bias to only involve Pharma, and how many other organizations to collaborate with. The Board agreed to hold off on a vote.
Patent Litigation Committee: Public comments to new changes and rules must be received before May 27th. Due to the time constraints, Marc Pensabene noted the committee is unlikely to formally submit anything but perhaps can comment via webinar.
Programs: Heather Schneider spoke about the CARES Act webinar and the webinars with Judge Castel from SDNY and Chief Judge Stark from Delaware. These were well-attended, generated some new members and the judges seemed to really enjoy the discussions. Colman Ragan spoke about the well-attended webinar on Section 1498 - Defense Production Act and IP rights, which had 35-40 attendees. For upcoming events, there is the Trademark webinar with Commissioner Iancu in June. Kathleen McCarthy reported that the Hot Topics in IP Law July 23rd, likely to be virtual, needs a new speaker due to scheduling conflict with INTA.
Committee Reports: Colman Ragan discussed the role of board liaisons and noted most committees have not yet met. Patrice Jean spoke about the NYIPLEF scholarship award. Kathleen McCarthy noted the Copyright committee is working on a couple of podcast episodes.
No new business to discuss. The Board briefly discussed the Judge’s Dinner and the Centennial event. The Board will hold off on any decisions until there is more guidance from the Governor.
The meeting was adjourned at approximately 6:00 p.m.
MINUTES OF MAY 12, 2020
MEETING OF THE BOARD OF DIRECTORS OF THE
NEW YORK INTELLECTUAL PROPERTY LAW ASSOCIATION
The Board meeting was held via videoconference. President Colman Ragan called the meeting to order at approximately 4:00 p.m. In attendance were:
John T. Moehringer
Marc J. Pensabene
Feikje van Rein attended from the Association’s executive office. Paul Bondor was unable to join; Gene Lee and Rob Rando joined later in the meeting.
The meeting was called to order by President Colman Ragan. The Board waived reading the minutes and approved the minutes of the prior meeting.
Abigail Langsam provided an update on finances. The Judge’s Dinner loss means primary source of revenue is down with a net loss of over $500k from past year. The $1.2m in assets enables the organization to keep going for a while. Abigail noted, without objection from the Board, that she will be moving money to the checking account. The Board discussed the magnitude of expenditures, which were a bit higher last month at $60k due to the award. Although expenses are low, it cannot make up lost revenue. The Board members agreed that likelihood of holding in-person events would continue to depend on the global and public health situation.
The Board discussed various incentives in light of low membership numbers, e.g., providing discounts, bulk rates for multi-year membership vs offering 2 years for the price of 1. There was general agreement to start with corporate membership incentives since law firms are more hesitant right now and to include option to extend membership at a discounted rate option for those who have paid already. The Board members will work together on calculating the numbers and will put together testimonials to highlight the networking opportunities and added benefits of membership.
The Board discussed revised Whistleblower Policy and whether to roll out a Code of Conduct. There was broad agreement that there should be a policy that generally requires members to conduct themselves in a professional and courteous manner.
There were 6 new members between May 12, 2020 – June 16, 2020 for this session. Correction of new member name from Teva. The Board approved the motion to admit the new members.
Amicus Brief Committee: Nothing in prep right now. Arthrex case is still pending but will participate if and when it happens. Watching Chamberlain case; waiting for petition on merits.
Legislative Action Committee: Colman Ragan noted that there is not much happening in Congress right now. The committee has been working on an IP glossary draft and pending comments, it will be circulated to the Board for review and approval by end of the week. There is a CA proposal where CA would become manufacturer of generic medication. LAC could consider the issue of whether state can be liable for patent infringement.
Copyright Committee: House Judiciary Committee reached out to Colman to have a listen-in session for the comments to release on DMCA. The Committee will send 1 rep to attend the Copyright Office Hearings. Mitch the co-chair will work with Colman on that.
Patent Litigation Committee: Rob discussed PTAB rule changes –PLC proposed draft comments on the changes in terms of presumption will ultimately taking neutral position and endorse the idea there should be no presumption in either direction. June 26th deadline to submit comments. Feikje will circulate latest draft for Board to review and vote via email by Friday.
Privacy Committee: The Board agreed that the Privacy Whitepaper should focus on creating a framework rather than appearing to advise or counsel NY State. The Board discussed There was various intended audiences such as Dept of Education or Governor’s desk. The Board discussed the proposed name change in light of the Committee’s view that “big data” does not capture essence of its mission and replacing with “ownership” provides broader appeal within IP space. Motion entertained for name change and Board approved.
Fed Circuit Amended Rules: Marc Pensabene & Heather Schneider; on track for July 8th.
Hatch Waxman Program: Colman received request from judges interested in understanding how best to deal with Hatch Waxman litigation in light of CO-VID. The Board agreed to implement 2 programs and pending approval from each jurisdiction whether each program can cover both jurisdictions. Chief Judge Wolsun will be in touch with Colman about accepting NJ and Judge Stark from Delaware has indicated interest as well. Rob Isackson will send proposal to Judge Stark as Colman has case before Judge Stark.
Judge’s Dinner: Feikje noted that for auditing purposes it would be make sense for the Board to vote on cancelling 2020 dinner. The Board discussed moving the deposit to 2023 to have dinner at Hilton Midtown venue or applying it to 2021 with members generally in favor of applying to 2021 contingent upon revision of force majeure to allow for evolving pandemic conditions. Quorum reached for cancelling Judge’s Dinner 2020.
Previous / Upcoming Scheduled Programs
-6/4 Discussion: Colman reported over 60 attendees for talk with USPTO Andrei Iancu. Feikje reported that webinars are well-attended and podcasts are doing okay.
-6/22 or 6/29 USPTO Chief Economist Data Highlight: Jonathan Berschadsky invited a MN colleague who wrote a great memo on the issues to hold webinar discussion of patent examination after Burkheimer.
-07/15 Trivia Game: Connor Inn and Patrice Jean, who reported only 2 firm groups have volunteers. Patrice discussed changes to incentivize participation such as 1) allowing associates & summer associates to participate, which provides opportunities for substantive practice; 2) including judges for each firm/family group; and 3) adding non-patent IP questions. Event will likely move to later fall date to allow time to implement changes.
-07/22 What’s Data Got to Do With It: Diana Santos has been in touch with person putting the panel together and has not yet heard back from the privacy panel.
-07/23 Hot Topics in IP Law: Kathleen McCarthy discussed event format which will lead off with summary of recent trademark cases. She noted the program is in good shape given that INTA ended up having to cancel their paid event.
-Mediation/ADR: Heather discussed time frame & content, potential speakers for panel
-Diversity Program: Heather & Patrice discussed putting a Diversity program together through NYIPLEF, expanding upon the scholarship award efforts.
No new business to discuss. The meeting was adjourned at approximately 5:50 p.m.
MINUTES OF JUNE 16, 2020
MEETING OF THE BOARD OF DIRECTORS OF THE
NEW YORK INTELLECTUAL PROPERTY LAW ASSOCIATION
MOVING UP & MOVING ON
Formerly of Haug Partners LLP, has joined Quinn Emanuel Urquhart & Sullivan as Partner.
e. bradley gould
Formerly of Dorsey & Whitney LLP, has joined Fox Rothschild LLP as a Partner.
Formerly of Norton Rose Fulbright, has joined Allen & Overy LLP as a Partner.
jeffrey i.d. lewis
Formerly of Norton Rose Fulbright, has joined Foley Hoag LLP as a Partner.
arlene chow & ernest yakob
Formerly of Hogan Lovells, have joined Latham & Watkins LLP as Partners.
Formerly of Cleary Gottlieb Steen & Hamilton LLP, has joined Cooley LLP as Partner.
Formerly of Boies Schiller Flexner LLP, has joined Mintz Levin Cohn Ferris Glovsky and Popeo PC as a Member.
Last First Membership Firm/Company/Law School State
Amin Armando Student Cornell Law School New York
Anderson Joseph Student St. John's University School of Law New York
Bechtold Karen Corporate Teva Pharmaceuticals Industries Ltd. Utah
Besl William Student Georgetown University Law Center District of Columbia
Birdwell William Associate Birdwell & Janke LLP Oregon
Bloomfield Andrew Student St. John's University School of Law New York
Bonnett Bronson Student New York Law School New York
Chang Cindy Active 3+ Goodwin Procter LLP New York
Coffey Lawrence Student Fordham University School of Law New York
Council Saphya Student Loyola Law School California
Farrag Sherif Student Fordham University School of Law New York
Goykhman Daniela Student New York Law School New York
Hatch-Miller Mark Active 3+ Susman Godfrey LLP New York
Jordan Akinyele Student Benjamin N. Cardozo School of Law New York
Kostro Katarzyna Student Fordham University School of Law New York
Krishnan Srinidhi Student Maurice A. Deane School of Law New York
Kusnierz Amanda Active 3- Ladas & Parry LLP New York
McLaughlin Roger Active 3- Venable LLP New York
Merino Gonzalo Corporate Regeneron Pharmaceuticals, Inc. New York
Mitchell Joshua Active 3+ King & Spalding LLP District of Columbia
Moore Heidi Student New York Law School New York
Mugambi Annette Student Moi University School of Law New York
Neilson Sigrid Corporate Equinox Holdings, Inc. New York
Scholnick Leah Student Benjamin N. Cardozo School of Law New York
Sephton Gregory Active 3+ Haug Partners LLP New York
Shpigelman Zoya Student Benjamin N. Cardozo School of Law New York
Slater Brian Active 3+ Haug Partners LLP New York
Staiano Teresa Student Maurice A. Deane School of Law New York
Whyte Jasmine Student Columbia Law School New York
Wohlhieter Brian Student Benjamin N. Cardozo School of Law New York
Woo Eileen Corporate Regeneron Pharmaceuticals, Inc. New York
WELCOME NEW MEMBERS
NYIPLA Publications Committee Editorial Team
Jessica Sblendorio and Margaret Welsh
NYIPLA Executive Office
2125 Center Avenue
Fort Lee, NJ 07024