Legal View: The top IP cases and trends of 2010

By Kirk Teska
The Daily Record Newswire

For intellectual property, 2010 was kind of the year that wasn’t. Several IP cases and even some proposed IP legislation didn’t quite live up to the initial hype. Still, there are a few cases and trends of note.

1. The U.S. Supreme Court’s much-anticipated Bilski decision in June was supposed to decide what the limits are to business method patents and could have adversely impacted bio-tech patents.

But, alas, the decision did not accomplish much of anything. The particular business method in the case was held patent ineligible, but the lower court’s “machine or transformation” test for determining subject matter eligibility was held to be too narrow, meaning the universe of business methods that could be patented actually expanded.

The shakeout of Bilski in the bio-tech arena, if any, will not be known until at least three pending cases on that front are decided next year, one of which includes the appeal of a District Court case that held isolated DNA is not patentable.

2. In Reed Elsevier v. Muchnick, 130 S. Ct. 1237, the Supreme Court decided that a copyright registration is a pre-condition to filing a copyright claim, but the lack of a registration does not restrict a federal court’s subject matter jurisdiction over a copyright case.

The extremely narrow fact pattern where this holding means anything is, well, set forth in Reed Elsevier.

3. And then the Supreme Court took up another patent case late in 2010 to decide whether proof of patent invalidity should be by the clear-and-convincing standard long used by the lower courts, or by the less demanding preponderance-of-the-evidence standard.

Can juries really decide whether or not they are 85 percent sure rather than just 51 percent sure? Will it matter?

Alas, you’ll have to wait until 2011 for the decision in i4i L.P. v. Microsoft Corp. My prediction is lots of hype and then either no change to the existing standard or, if there is a change, no practical effect.

4. This marked yet another year the federal patent reform legislation did not make it into law. The current status of this much-talked-about legislation? In committee — again.
Congress did, however, manage to change the name of the bill from “The Patent Reform Act of 2009” to “The Patent Reform Act of 2010.”

5. Massachusetts is not immune to legislative IP hype either. A proposed bill outlawing employee non-competes in the state made headlines in 2010 until it was quietly dropped in July.

The 1st Circuit, late in 2009, decided that non-competes are, in fact, valid binding contracts in Astro-Med Inc. v. Nihon Kohden America Inc., 591 F.3d 1.

6. The new troll in 2009 was the Patent Marketing Troll. In 2010, it’s the Über Troll.

Funded to the tune of $5 billion and armed with 30,000 patents and patent applications, Intellectual Ventures LLC, located in Bellevue, Wash., urges high-tech companies to become “investors” in the company lest they find themselves defendants in patent litigation lawsuits.

Recently, when a few targeted companies balked, Intellectual Ventures promptly sued them.

A byproduct of the Über Troll are companies like RPX Corp., which is paid by other companies to buy up potentially threatening patents.

Are we to call them “Troll Shields”?

7. Websites selling products that might infringe someone’s IP rights now have a shield in the form of Tiffany, Inc. v. eBay, Inc., 600 F.3d 93 (2d Cir.).

Various eBay listings are for admittedly counterfeit Tiffany products, but, because eBay took significant anti-counterfeiting measures, including a vehicle where Tiffany could notify eBay about a counterfeit listing and eBay would then remove the listing, Tiffany’s trademark infringement suit against eBay largely failed.

8. Is the way our sports leagues license their team logos and other IP a restraint of trade? Think about it, the Patriots and the Jets are competitors (but not equals), and yet the NFL decides, with the consent of both teams, who gets to sell Patriots and Jets jerseys and hats.

The Supreme Court reversed a decision out of the 7th Circuit holding the arrangement was not an anti-trust violation. American Needle, Inc. v National Football League, 130 S.Ct. 2201 (2010).

On remand, the 7th Circuit will be compelled to judge the legality of the NFL’s concerted action licensing activities under the rule of reason.

9. A patent can be invalidated by proving the patent applicant failed to disclose material information concerning the state-of-the-art to the Patent Office.

In 2010, it got a little harder to prove inequitable conduct since, even if something is deemed highly material (and was not disclosed by the patent applicant to the Patent Office), and even if the patent applicant cannot provide a credible explanation for the non-disclosure, the patent applicant’s attempt to deceive the patent officer examiner cannot be presumed.

Instead, the challenger must present evidence upon which a court could find an intent to deceive or mislead the examiner. Optium Corp. v. EMCore Corp., 603 F.3d 1313 (Fed. Cir., 2010). There are a couple other cases in 2010 to the same effect.

10. Beginning in 2009 and continuing into 2010, courts finally put a stop to alleged trademark significance in generic terms when a “.com” designation is added to them.
Thus, for example, “mattress.com” and “advertising.com” are generic and no longer have any legal trademark significance or standing.

Kirk Teska is managing partner of Iandiorio, Teska & Coleman in Waltham. An adjunct professor at Suffolk University Law School, he is the author of “Patent Savvy for Managers” (Nolo) and “Patent Project Management” (ASME Press).

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