Decisions in Brief

DECISIONS IN BRIEF John C. Gatz Copyrights Mere Allegations of Changes in Law Cannot Rebut Strong Presumption of Entitlement to Fees Live Face on Web, LLC v. Cremation Society of Illinois, Inc. , 77 F.4th 630, 2023 U.S.P.Q.2d 937 (7th Cir. 2023). Defendant Cremation Society of Illinois and its codefendants licensed computer code from plaintiff Live Face on Web. Live Face sued the defendants for copyright infringement. Pending a decision on summary judgment, Live Face moved to dismiss its own suit with prejudice on the basis that the recent U.S. Supreme Court case, Google LLC v. Oracle America, Inc. , 141 S. Ct. 1183 (2021), made the defendants’ fair use defense undefeatable. The district court granted the motion, deciding the case in the defendants’ favor. The defendants moved for fees. The district court denied the fees request on the grounds that the defendants did not prevail because of their defenses but rather due to a fortuitous, unforeseen change in the law. The defendants appealed, and the Seventh Circuit vacated the district court’s decision regarding fees and remanded for reconsideration. Prevailing defendants are entitled to a strong presumption in recovering fees in a copyright infringement suit. Courts consider the four nonexclusive factors set forth in Fogerty v. Fantasy, Inc. , 114 S. Ct. 1023 (1994), in determining whether to award a prevailing party its fees, including: (1) the frivolousness of the suit, (2) the losing party’s motivation for bringing or defending against a suit, (3) the objective unreasonableness of the claims advanced by the losing party, and (4) the need to advance considerations of compensation and deterrence. The Seventh Circuit determined that the district court’s reasoning was faulty because the defendants did in fact prevail based on their fair use defense, and the review of the Fogerty factors did not outweigh the presumption of the defendants’ entitlement to fees. Moreover, the Seventh Circuit determined that the district court did not meaningfully consider whether Google in fact changed the applicable law. Live Face provided no explanation as to how Google impacted its claims or the defendants’ defenses. The Seventh Circuit remanded the case back to the district court to reconsider the defendants’ motion for fees in view of the appellate court’s reasoning. VARA Does Not Protect against Concealment of Artwork 33 Kerson v. Vermont Law School, Inc. , 79 F.4th 257, 2023 U.S.P.Q.2d 974 (2d Cir. 2023). Plaintiff Samuel Kerson painted two large murals on the walls of a building at Vermont Law School commemorating Vermont’s role in the Underground Railroad. The law school community raised concerns that the depictions in the murals were offensive. In response, the law school informed Kerson that it planned to erect a paneled wall around the murals to conceal them from the public. Kerson sued the law school on the grounds that the concealment of the murals violated his rights under the Visual Artists Rights Act of 1990 (VARA). The district court granted summary judgment in favor of Vermont Law School, holding that VARA does not protect against the permanent concealment of an artwork, absent physical change to the work. Kerson appealed. Kerson argued that the permanent, paneled wall not only modifies the immovable murals but also destroys them for all intents and purposes. He also argued that the panels could cause damage and destruction to the underlying murals over time. VARA recognizes and protects certain moral rights of authors and provides three actionable rights (with exceptions), including: (1) the right of attribution, (2) the right of integrity, and (3) the right to prevent destruction. Kerson alleged that his rights of moral integrity and to prevent destruction had been violated based on the law school’s actions. VARA protects works of visual art from intentional distortion, mutilation, or other modification prejudicial to an artist’s honor or reputation but protects only works of recognized stature, and any intentional or grossly negligent destruction of the work. The district court relied on the plain meaning of the statute to find that the law school’s concealment of the murals did not amount to modification or destruction of the works. The Second Circuit agreed and concluded that the panels affixed around the murals did not physically alter the works whatsoever and, therefore, the murals were neither destroyed nor modified. Concealment does not change the analysis. The law school did not remove the murals, and they remained intact behind the panels. Additionally, the Second Circuit found Kerson’s argument that the panels may destroy the murals over time unpersuasive because there was no evidence of “intentional” distortion, mutilation, or other modification. Further, the possibility of damage at some unidentifiable time in the future does not give rise to a VARA claim. Based on this reasoning, the Second Circuit affirmed the district court’s decision in favor of Vermont Law School. Patents Analogous Art Netflix, Inc. v. DivX, LLC , 80 F.4th 1352 (Fed. Cir. 2023). The Federal Circuit reversed the Patent Trial and Appeal Board’s (PTAB’s) finding that Netflix failed to identify “a field of endeavor” of the patent and a piece of prior art. The Federal Circuit found that the PTAB erred by imposing a higher burden on Netflix than required. The precedent set by the Federal Circuit does not require the use of magic words. The arguments made by Netflix sufficed without explicitly stating the “field of endeavor.” However, the Federal Circuit affirmed that the PTAB’s application of the reasonably pertinent test for analogous art was supported by substantial evidence. Analogousness/Scope of Petitioner’s Reply Corephotonics, Ltd. v. Apple Inc. , 84 F.4th 990, 2023 U.S.P.Q.2d 1202 (Fed. Cir. 2023). The Federal Circuit vacated and remanded the PTAB’s determination that Corephotonics’ patent claims were Published in Landslide, Volume 16, Number 3, 2024. © 2024 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. obvious. Corephotonics argued on appeal that the decision suffered both procedurally and substantively. Procedurally, the Federal Circuit disagreed with Corephotonics that the PTAB abused its discretion by allowing Apple to make certain analogousness arguments in its reply, holding that Apple’s reply arguments were both responsive to the patent owner’s response and did not inject new theories. The Federal Circuit also rejected the argument that the PTAB erred by finding analogousness based on conclusions different from those advocated by Apple, noting that the PTAB may resolve issues via any findings supported by the evidence. Substantively, Corephotonics argued that the PTAB’s analogous findings were not supported by substantial evidence. With respect to one reference, the Federal Circuit could not determine whether the PTAB’s opinion included a mere “typographical error” (as advocated by Apple) or a “potentially-impactful error of substance” (as advocated by Corephotonics) and, therefore, remanded to the PTAB for further explanation and, if needed, further fact-finding. Claim Construction Apple Inc. v. Corephotonics, Ltd. , 81 F.4th 1353 (Fed. Cir. 2023). The Federal Circuit vacated and remanded the PTAB’s decisions relating to patentability based on obviousness. Specifically, the Federal Circuit found that the intrinsic record supported Apple’s claim construction and reversed and remanded back to the PTAB. Another issue was whether an expert declaration showed a reasonable expectation of success of combining two pieces of prior art. Because the PTAB relied on an argument (the declaration was faulty due to typographical errors) that neither side proposed, the Federal Circuit reversed and remanded that issue too. Sisvel International S.A. v. Sierra Wireless, Inc. , 81 F.4th 1231 (Fed. Cir. 2023). The Federal Circuit affirmed the PTAB’s construction of a single claim term. The Federal Circuit agreed with the PTAB on the plain and ordinary meaning of the claim term, as the intrinsic evidence did not limit the terms to a narrower reading. Collateral Estoppel Finjan LLC v. SonicWall, Inc. , 84 F.4th 963, 2023 U.S.P.Q.2d 1198 (Fed. Cir. 2023). The Federal Circuit affirmed in part, vacated in part, and remanded the district court’s judgment. The Federal Circuit affirmed the district court’s grant of summary judgment of noninfringement and the district court’s decision to exclude Finjan’s expert analysis. The Federal Circuit also found that because the district court based its judgment of invalidity on a collateral estoppel decision that the Federal Circuit had since vacated, the judgment of validity was vacated and remanded. Damages/Expert Testimony 33 Cyntec Co., Ltd. v. Chilisin Electronics Corp. , 84 F.4th 979, 2023 U.S.P.Q.2d 1201 (Fed. Cir. 2023). The Federal Circuit vacated a damages award for lost profits after finding that the district court abused its discretion in admitting a damage expert’s opinions. In forming the opinions, the expert relied on SEC filings of customers who purchased the alleged infringing products and third-party data. However, the expert failed to account for irrelevant products and services included in this data or simply assumed that all products contained the allegedly infringing technology. Thus, the Federal Circuit found that the expert’s opinion was derived from unreliable data and built on speculation. Design Patents Columbia Sportswear North America, Inc. v. Seirus Innovative Accessories, Inc. , 80 F.4th 1363 (Fed. Cir. 2023). The Federal Circuit vacated the district court’s findings of noninfringement of the patentee’s design patent. The Federal Circuit found that to qualify as prior...