US Intellectual Property Law In 2016: A Preview

Familiar intellectual property concerns will continue to vex the United States in the coming year. The scope of patent-eligible subject matter, the requirements for safe-harbor protections against copyright infringement, and the registration of disparaging trademarks will be among the top IP issues to watch in 2016, according to experts.

1) After the US Supreme Court’s recent decisions in Alice Corp. v. CLS Bank [pdf] and Association for Molecular Pathology v. Myriad Genetics [pdf] reduced the scope of the patent-eligible subject matter, the lower courts and the US Patent and Trademark Office (USPTO) have been striking down software and business method patents with abandon. Many medical inventions have also been deemed patent-ineligible.

This bloodbath could end in 2016, when the issue of patent eligibility returns once more to the Federal Circuit (often called the nation’s “patent court”).

“There are at least 12 to 15 Federal Circuit cases on this issue,” said Peter J. Toren, a partner in the Washington, DC law firm of Weisbrod Matteis & Copley. “I am hopeful that the Federal Circuit will better define what is patentable and make it harder for district courts to get rid of patents on this basis.”

2) The US, like other developed nations, forbids federal registration of disparaging trademarks. But on 22 December, the Federal Circuit held [pdf] that this prohibition ran afoul of the First Amendment’s guarantee of free speech. This constitutional issue will garner increased attention in 2016, when the 4th Circuit hands down its own ruling on the matter, and the US government asks the Supreme Court to step into the fray (and overrule the Federal Circuit decision).

The cases could have ramifications that stretch far beyond whether disparaging trademarks (such as “Redskins”, the Washington, DC football team) are entitled to federal registration.

“If this [restriction on disparaging marks] is unconstitutional, it is hard to figure out how to save the rest of the Lanham Act,” said Prof. Jessica Litman of University of Michigan Law School. The federal trademark statute’s prohibition on scandalous marks could be thrown out. So, too, could the statute’s restrictions on trademarks that are confusingly similar to others’ marks – which was the original justification for trademark protection.

“The statute may be unconstitutionally overbroad if it tries to protect consumers from confusion,” Litman said.

3) In the first ruling of its kind in the US, a federal district court ruled [pdf] on 1 December that an internet service provider was liable for copyright infringements committed by its customers. Online providers are ordinarily protected against such liability by Section 512 of the Digital Millennium Copyright Act, but the court held that Cox Communications fell outside this safe harbor because the company failed to terminate the accounts of users accused of repeated infringements.

“This will result in more suits against ISPs [internet service providers],” said Lizbeth Hasse, a neutral in the San Francisco office of JAMS, a dispute resolution firm. “These firms have deep pockets, and they are choke points on the internet.”

If ISPs are required to terminate the accounts of users accused of repeat infringement, that will be “an easy way” for movie, music and TV firms to stop lots of online infringements, Hasse added. Prior to the ruling, entertainment firms have had much difficulty fighting online infringement.

Experts anticipate 2016 will bring more suits against ISPs, as well as Cox’s appeal of the precedent-setting ruling against it.

4) On 23 February, the US Supreme Court will hear oral argument in Halo Electronics v. Pulse Electronics and Stryker Corp. v. Zimmer, Inc. These two cases present the same issue: Should it be easier for patentees to receive treble damages against infringers?

Under the current standard, created by the Federal Circuit, it is extremely difficult for a patentee to obtain treble damages. If the Supreme Court relaxes this standard, as many experts expect, patentees will have much greater leverage in infringement disputes, and the dynamics of patent suits will change.

“What a defendant knew and when it knew it will become a lot more important,” said Prof. Arti Rai of Duke Law School.

5) In the US, many states give individuals the right to control the commercial exploitation of their names and likenesses. But this right of publicity doesn’t always fit well with First Amendment’s guarantee of free speech. Electronic Arts Inc. v. Davis [pdf] asks the US Supreme Court to decide if the First Amendment prevents a right of publicity claim where the plaintiff complains about a non-derogatory, realistic portrayal of himself in the defendant’s creative work.

“There are currently at least four different approaches for determining if the right of publicity conflicts with the First Amendment,” said Prof. Mark McKenna of Notre Dame Law School. The Supreme Court is being asked to end this confusion and provide a single test to determine whether the right of publicity is limited by or violates the First Amendment, McKenna added.

The high court is expected to rule on Electronic Arts’ certiorari petition before the court’s current term ends in June.