Newsletter Vol. 8, Issue 1 Archives

Fair Use Avoids Takedown

Posted on November 1, 2015 by Kinney & Lange, P.A.

■ Adam E. Szymanski

In Lenz v. Universal Music Corp., Nos. 13-16106 and 16107 (9th Cir. Sept. 14, 2015), a panel of the 9th Circuit held that the Digital Millennium Copyright Act (DMCA) requires a copyright holder to consider fair use before sending a takedown notice to an online service provider, like YouTube® or Google®. Failure to consider fair use, the court determined, raises a triable offense issue as to whether the copyright holder formed a subjective good faith belief that the use was authorized by law.

The claim arose when Universal Music Corp. sent a takedown notice to YouTube to remove a video uploaded by Stephanie Lenz. The 29-second video, entitled “Let’s Go Crazy’ #1”, showed Lenz’s two young children dancing to the song Let’s go Crazy by Prince. YouTube removed the video after notification from Universal and told Lenz on June 5, 2007. Two days later, Lenz sent a counter-notification to YouTube, seeking to reverse the removal of her video. Universal protested and reasserted that the video infringed its copyright. Universal, however, failed to mention fair use. Lenz sued Universal under 17 U.S.C. §512(f) of the DMCA, alleging that Universal misrepresented that her video was infringing its copyright. That section of the DMCA allows an accused infringer to collect damages, including attorneys’ fees.

17 U.S.C. §512(c) sets forth the DMCA’s takedown procedures, which allow service providers to avoid copyright infringement liability for removing allegedly infringing material after receiving a takedown notice. 17 U.S.C. §512(c)(3)(A)(v) requires that a takedown notice include, among other things, a statement of a good faith belief that the allegedly infringing use is “not authorized by the copyright holder, its agent, or the law.” 17 U.S.C. §512(f), under which Lenz sued, provides that anyone who knowingly misrepresents that a material or activity is infringing may be liable.

At issue was whether fair use constitutes an authorization under law—pursuant 17 U.S.C. §512(c)(3)(A)—or, rather, an affirmative defense excusing copyright infringement. Looking to the fair use test codified in 17 U.S.C. §107 as a “limitation on exclusive rights”, the court determined that Congress created a specific type of non-infringing use, thereby authorizing it:

“Although the traditional approach is to view ‘fair use’ as an affirmative defense…it is better viewed as a right granted by the Copyright Act of 1976. Originally, as a judicial doctrine without any statutory basis, fair use was an infringement that was excused—this is presumably why it was treated as a defense. As a statutory doctrine, however, fair use is not an infringement.”

Thus, the court held that fair use is an authorization under law for the purposes of 17 U.S.C. §512(c)(3)(A)(v).

The court refused to impose an objective good faith belief requirement to the existing subjective one, as advocated by Lenz, reasoning that Congress could have done so when enacting the DMCA. The court held that the willful blindness doctrine may be used to show that a copyright holder misrepresented a good faith belief regarding fair use. The court ultimately concluded that “[c]opyright holders cannot shirk their duty to consider—in good faith and prior to sending takedown notification—whether allegedly infringing material constitutes fair use, a use which the DMCA plainly contemplates as authorized by law.”

Laches in Patent and Copyright Law: A Different Calculus

Posted on November 1, 2015 by Kinney & Lange, P.A.

■ Adam E. Szymanski

In SCA Hygiene Prods. Aktiebolag v. First Quality Baby Prods., LLC, No. 2013-1564 (Fed. Cir. Sept. 18, 2015), the Court of Appeals for the Federal Circuit, ruling en banc, held that laches remains a defense to legal relief in a patent infringement suit, despite the Supreme Court’s recent decision in Petrella v. Metro Goldwyn-Mayer, Inc., 134 S. Ct. 1962 (2014) regarding laches in copyright cases.

SCA sued First Quality for infringing U.S. Patent No. 6,375,646 directed to absorbent pants-type diapers. SCA sent a letter to First Quality on October 31, 2003, asserting that First Quality’s Prevail® All Nites™ product infringed its ‘646 patent. First Quality responded on November 21, 2003, saying that U.S. Pat. No. 5,415,649 invalidated the ‘646 patent. SCA requested a reexamination, and, in March 2007, the USPTO found the patent patentable over the ‘649 patent. SCA sued First Quality three-years later on August 2010, in response to which First Quality asserted laches.

In Petrella, however, the Supreme Court held that laches cannot be invoked to preclude adjudication of a claim for damages brought within the three-year window established for copyright infringement actions in 17 U.S.C. §507(b). Paula Petrella sued Metro Goldwyn-Mayer nine years after last contacting the Metro asserting infringement to her copyright in the film “Raging Bull.” The Court determined that the statute of limitations in §507(b) takes account of a delay in suing and removes judicial discretion in addressing timeliness.

The Federal Circuit distinguished its holding from Petrella on its reading of 35 U.S.C. §282(b)(1). Section 282 lists the defenses available in a patent invalidity or infringement action and includes a provision stating “[a]ny other fact or act made a defense by this title.” The Federal Circuit relied on the commentary of P.J. Federico, an original drafter of the 1952 Patent Act, which stated that §282 included equitable defenses like laches. Combining that with Senate and House reports stating the breadth of such defenses, the court concluded that Congress had codified a laches defense into §282 of the Patent Act. The court further concluded that laches as codified can be applied to recovery of legal relief rather than just equitable relief, finding that patent case law supported the use of laches to preclude damages.

The Federal Circuit further noted a distinction between patent and copyright law in proving infringement: “copyright infringement requires evidence of copying, but innocence is no defense to patent infringement.” Proof of access, the court found, ensures that a potential infringer is generally aware of the risk of infringement. As a safeguard, a potential infringer can seek to establish evidence of independent creation. The court concluded that for patents “the calculus is different.” Because patent law lacks independent creation, laches provides the only defense against late claims seeking to collect on a commercial windfall.

Perhaps time will tell whether the Supreme Court agrees with the Federal Circuit’s new math.

‘Means’ Or Not ‘Means’, That Is The Question

Posted on November 1, 2015 by Kinney & Lange, P.A.

■ John D. Leighton

The presence or absence of the word “means” in a claim has long been accompanied by one of two comp-lementary presumptions. Using the word “means” in a claim element creates a rebuttable presumption that §112, para. 6 applies and means-plus-function claiming occurs. Conversely, failure to use the word ‘means’ also creates a rebuttable presumption — this time that §112, para. 6 does not apply. Since 2004, however, these presumptions have been asymmetric ones. The Federal Circuit first established this asymmetry with the Lighting World, Inc. v. Birchwood Lighting, Inc., 382 F.3d 1354, 1358 (Fed. Cir. 2004) decision, which established that “the presumption flowing from the absence of the term ‘means’ is a strong one that is not readily overcome.” (Emphasis added).

The Federal Circuit has recently returned symmetry to these complementary presumptions. The Federal Circuit stated in Williamson v. Citrix Online, LLC., No. 13-1130, 15 (Fed. Cir. 2015) that “Henceforth, we will apply the presumption as we have done prior to Lighting World, without requiring any heightened evidentiary showing and expressly overrule the characterization of that presumption as ‘strong.’”

Background and Procedural History:

In 2011, Williamson filed suit in the United States District Court of California against Citrix Online, et al., for infringement of Williamson’s U.S. Patent No. 6,155,840. “The ‘840 patent describes methods and systems for ‘distributed learning’ that utilize industry standard computer hardware and software linked by a network to provide a classroom or auditorium-like metaphor – i.e., a ‘virtual classroom’ environment.” On September 4, 2012, the district court issued a claim construction order, concluding, inter alia, that the “distributed learning control module” limitation of claim 8 was a means-plus-function term under 35 U.S.C. §112, para. 6. Williamson appealed the district court’s construction of this term. Williamson argued “that the district court failed to give appropriate weight to the ‘strong’ presumption against means-plus-function claiming that attaches to claim terms that do not recite the words ‘means.’”

Williamson v. Citrix Online, LLC:

To overcome the presumption that a “means”-less limitation is not a means-plus-function element, either: i) the claim term must fail to recite sufficiently definite structure; or ii) the claim term must recite function without reciting sufficient structure for performing that function.

The Federal Circuit then turned its attention to the claim limitation in dispute, which recites:

A distributed learning control module

1) for receiving communications transmitted between the presenter and the audience member computer systems and

2) for relaying the communications to an intended receiving computer system and

3) for coordinating the operation of the streaming data module

The court observed that the claim limitation in dispute is in a format consistent with traditional means-plus-function claim limitations. The term “module” replaces the tradition means-plus-function flag term – “means” – and then recites three functions performed by the “distributed learning control module.”

i) Does the claim term recite sufficient definite structure?

The court then observed that the term “module” is a well-known nonce word that can operate as a substitute for “means” in the context of §112, para. 6. Generic terms such as “module,” “mechanism,” “element,” “device,” etc., typically do not connote sufficiently definite structure, by themselves, to remove a claim limitation from the reach of §112, para. 6 claim construction. The court next held that the prefix “distributed learning control” does not impart structure into the term “module.” To determine this, the court construed the prefix in view of the specification. Although “distributed learning control module” is described in the written description, such descriptions failed to impart any structural significance to the term. Furthermore, the court found nothing in the prosecution history that could lead it to construe the expression as something with “sufficient definite structure as to take the overall claim limitation out of the ambit of §112, para. 6.”

ii) Does the claim term recite function without reciting sufficient structure for performing that function?

Although the court conceded that portions of the disputed limitation do describe certain inputs and outputs at a very high level (e.g., communications between the presenter and the audience member computer systems), the claim does not describe how such the recited functions operate “in a way that might inform the structural character of the limitation-in-question or otherwise impart structure.” Williamson attempted to rescue the sought-for structure by pointing to figures of the specification. But the only figures provided therein were exemplary display interfaces and were not considered disclosures of the algorithm corresponding to the claimed function.

Takeaways:

First takeaway: There is now a heightened risk when claiming elements functionally, that a future court may construe the claims according to §112(f), formerly §112, para. 6. Simply omitting the word “means” may not be enough to avoid a §112(f) construction.

Second takeaway: The court gave a test for attorneys to use to evaluate if a claim term is a “nonce” word. The court articulated the test as follows: “Here, the word [insert test word] does not provide any indication of structure because it sets forth the same black box recitation of structure for providing the same specified function as if the term ‘means’ had been used.”

Third takeaway: The written description must disclose sufficient structure for every claim element recited. Disclosed structure is required: i) to rescue a limitation from the reach of §112(f), if so desired, and ii) in construing a §112(f) means-plus-function element, regardless of whether the limitation was intended to be construed so. The court summarized its §112(f) construction requirement “that the specification [must] disclose an algorithm for performing the claimed function.”

Ex parte Kenichi Miyazaki:

The Williamson decision is further illuminated by the Ex parte Miyazaki, 89 U.S.P.Q.2d 1207 (BPAI 2008), decision of the USPTO Board of Patent Appeals and Interferences (BPAI). In Miyazaki, the BPAI grappled with the proper construction of a claim limitation that “is a purely functional recitation with no limitation of structure.” The BPAI noted that “’purely functional claim language’ is … permissible but only under the conditions of 35 U.S.C. § 112, sixth paragraph.” (emphasis added). “[A]ny claim that includes purely functional claim language, and which is not subject to the limited construction under 35 U.S.C. § 112, sixth paragraph, fails to meet the requirements of 35 U.S.C. 112, first paragraph [].”

The BPAI then articulated some concerns addressed by these rules of construction. One concern related to the Williamson decision “is that such unlimited purely functional claiming may reasonably be construed to encompass any and all structures for performing the recited function, including those which are not what the applicant invented.” The USPTO’s main concern is simply “to guard the public against patents of ambiguous and vague scope. Such patents exact a cost on society due to their ambiguity that is not commensurate with the benefit that the public gains from disclosure of the invention.”

In addition to the two above articulated reasons that structure must be disclosed, disclosed structure is also required: iii) to rescue a non-§112(f) limitation from a §112(a) rejection which would automatically attach to non-§112(f) limitations that are purely functional.

The Federal Circuit’s Second En Banc Decision In Akamai Technologies v. Limelight Networks

Posted on November 1, 2015 by Kinney & Lange, P.A.

■ John P. Fandrey

In August of 2015, the Federal Circuit Court of Appeals issued its second en banc decision in Akamai Techs., Inc., v. Limelight Networks, Inc., Nos. 2009-1372, 2009-1380, 2009-1416, 2009-1417 (Fed. Cir., August 13, 2015), a case which began in 2006. The underlying issue is whether there is liability for so-called “divided” or “split” infringement involving multiple actors. The Federal Circuit explained that in patent infringement cases the acts of one actor may be attributed to another where the other “conditions participation in an activity or receipt of a benefit upon performance of a step or steps of a patented method and establishes the manner or timing of that performance.” This test is in addition to the agency relationships, contractual relationships, and joint enterprises that may give rise to direct infringement attributable to a single entity. Despite Akamai’s long procedural history, the Supreme Court’s 2014 opinion and the Federal Circuit’s most recent en banc decision provide two straightforward propositions. First, the Supreme Court has stated that a party cannot be liable for induced infringement where no direct infringement has occurred. Second, the Federal Circuit has expanded the scope of what constitutes direct infringement, holding that where “more than one actor is involved in practicing the steps [of a claimed method], a court must determine whether the acts of one are attributable to [another] such that a single entity is responsible for the infringement.”

Procedural History:

In 2006, Akamai Technologies sued Limelight Networks for infringement of three of Akamai’s patents, U.S. Patent No. 6,108,703, U.S. Patent No. 6,553,413, and U.S. Patent No. 7,103,645. Akamai Techs. Inc. v. Limelight Networks, Inc., 629 F.3d 1311, 1316 (Fed. Cir. 2011). Akamai’s patents claim methods for serving web page content over the internet. A jury found that Limelight infringed Akamai’s 6,108,703 patent and awarded over $40 million to Akamai. Akamai Techs. Inc. v. Limelight Networks, Inc., 629 F.3d 1311, 1316 (Fed. Cir. 2011). Akamai proceeded on a theory of joint liability because the defendant, Limelight, did not perform all the steps of the asserted claims itself. Instead, Limelight’s customers performed a step known as tagging. The jury was instructed that Limelight could only be found liable if the jury found that Limelight’s customers were acting under Limelight’s direction and control.

Limelight moved for judgment as a matter of law after the jury returned its verdict. At first, the district court denied the motion. However, shortly after the jury returned its verdict the Federal Circuit Court of Appeals issued its decision in Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318 (Fed. Cir. 2008). Limelight then moved for reconsideration and the district court granted Limelight’s motion finding that Limelight did not infringe Akamai’s patents. On appeal, the Federal Circuit affirmed the district court’s finding of noninfringement citing its decision in Muniauction for the proposition that there can be no infringement unless every step of a patented process is carried out under the control or direction of one party.

The Federal Circuit reheard the case en banc and reversed the district court. Akamai Techs. Inc. v. Limelight Networks, Inc., 629 F.3d 1301 (Fed. Cir. 2012); See also Katherine J. Rahlin, Induced Infringement Broadened, K&L IP News™ (Winter 2012). The Federal Circuit explained that the trial court was correct in its holding that Limelight did not directly infringe Akamai’s patent because it did not direct and control the actions of content providers. However, the Federal Circuit reversed and remanded because it believed Limelight could be liable for inducing infringement.

The United States Supreme Court granted certiorari on the question of “whether a defendant may be liable for inducing infringement of a patent under 35 U.S.C. §271(b) when no one has directly infringed the patent under §271(a) or any other statutory provision.” The Supreme Court, citingAro Mfg. Co. v. Convertible Top Replacement Co., 365 U.S. 336, 341 (1961), provided that one cannot be liable for inducement if there has been no direct infringement. Limelight Networks, Inc. v. Akamai Techs., No. 12-786 (United States Supreme Court, June 2, 2014). The Court also stated that “[a] method patent claims a number of steps; under this Court’s case law, the patent is not infringed unless all the steps are carried out.”

On remand a three judge panel of the Federal Circuit affirmed the district court’s finding of non-infringement. Akamai Techs. Inc. v. Limelight Networks, Inc., 786 F.3d 899 (Fed. Cir. 2015). The panel, with one judge dissenting, held that Akamai did not show that the allegedly infringing activities of Limelight’s customers could be attributed to Limelight. The panel relied on the fact that Akamai did not show that Limelight’s customers were Limelight’s agents, that they were contractually obligated to Limelight or that they were acting in a joint enterprise with Limelight.

2015 En Banc Decision:

The Federal Circuit granted rehearing en banc and ultimately reversed the district court, holding that the jury had substantial evidence upon which to base its verdict of infringement. Akamai Techs. Inc. v. Limelight Networks, Inc., Nos. 2009-1372, 2009-1380, 2009-1416, 2009-1417 (Fed. Cir. August 13, 2015).

The Federal Circuit stated that in a case of divided infringement “a court must determine whether the acts of one entity or party are attributable to another such that a single entity is responsible for the infringement.”

The Court explained that in applying the direction or control test it continues to consider general principles of vicarious liability, such as agency, contractual relationships and joint enterprises. Direction or control will be found if there is an agency relationship or one party contracts with another to perform one or more steps of a claimed method. However, the Court added that liability can also be found when a party “conditions participation in an activity or receipt of a benefit upon performance of a step or steps of a patented method and establishes the manner or timing of that performance. In those instances, the third party’s actions are attributed to the alleged infringer such that the alleged infringer becomes the single actor chargeable with direct infringement.”

In supporting this rule, the court cited Metro-Goldwyn-Mayer Studios, Inc. v. Grokster. 545 U.S. 913 (2005). In Grokster, the Supreme Court found that distributors of software could be held liable for inducing copyright infringement where the distributors knew their software was primarily used for copyright infringement and the distributors encouraged such use.

In applying the test above the Federal Circuit, in Akamai, focused on several facts to find that the jury had substantial evidence to support a finding that performance of the claimed steps was a condition to participating in Limelight’s service. Specifically, Limelight’s contract with its customers outlined the steps that customers had to perform in order to use the service. Limelight’s contract also required that customers provide Limelight with all the “cooperation and information reasonably necessary” for Limelight to implement its service. The court also found that there was substantial evidence to support a finding that the timing or manner of performance was established by Limelight. Here the court highlighted: Limelight’s assignment of a technical account manager to each customer to implement Limelight’s service; Limelight providing a hostname for customers to integrate into their webpages; and Limelight’s engineers assisting with installation and performing quality assurance testing.

Implications:

It’s easy to see that some method claims provided little protection to patentees. Prior to the Federal Circuit’s most recent Akamai decision, a would-be infringer could avoid infringement liability by doing two things: 1) allowing a third party to practice some of the steps of a claimed method while 2) avoiding creating an agency relationship, a contractual relationship, or a joint enterprise with the third party.

The most recent Akamai decision may strengthen some patents that were not previously seen as being infringed by the acts of single entities or persons. This is because the decision adds to the list of ways to establish liability for direct infringement when the alleged infringement involves more than one actor. In its second en banc opinion the Federal Circuit provided that “a court must determine whether the acts of one are attributable to [another] such that a single entity is responsible for the infringement.” In addition to the traditional tests of vicarious liability such as, agency and contractual relationships, now an entity that “conditions participation in an activity or receipt of a benefit upon performance of a step or steps of a patented method and [establishes] the manner or timing of that performance” may be liable for direct infringement.

Akamai may strengthen some method claims. However, attorneys drafting claims should always try to structure the claims so that only one actor’s conduct will be needed to establish direct infringement. This may not always be possible. If the claims involve computer networks this may be extremely difficult. This is because of the ease with which the steps can be distributed among different actors.