June 2015

On Monday, the United States Supreme Court Audrey-Millemann-03_webupheld the longstanding case law that prohibits a patent owner from receiving royalties after a patent has expired. In Kimble v. Marvel Entertainment, LLC (June 22, 2015) 2015 U.S. LEXIS 4067, the Court ruled in favor of Marvel, the licensee of a patent for a Spiderman web-shooting toy.

The plaintiff, Stephen Kimble, had patented the web-shooting toy. Kimble had talked to Marvel about licensing his patent, but Marvel declined to take a license. Shortly thereafter, Marvel began selling a suspiciously similar web-shooting toy.

Kimble sued Marvel for patent infringement. The parties settled. Pursuant to the settlement, Marvel bought the patent from Kimble for a lump sum and a three-percent royalty on future sells of the toys.

Marvel later filed a declaratory judgement action in the district court, seeking a judgment that Marvel could stop paying Kimble royalties when the patent expired in 2010. Marvel relied on Brulotte v. Thys Co., 379 U.S. 29 (1964), in which the Supreme Court had held that a patent owner could not receive royalty payments after the patent had expired, and that agreements that provided for post-term patent royalties were per se unlawful.Continue Reading Everything Old is New Again: Post-Expiration Patent Royalties are a Bad Idea!

Richard Prince is either on the very edge of fair use or is engaging in Scott-Hervey-10-webblatant copyright infringement. Unlike most however, Prince has been down this road before; accused of infringement and a defense based entirely on fair use. What is different about Prince, and what might explain the sheer boldness of his recent project, is the last time Prince was accused of copyright infringement, he ultimately prevailed on appeal to the 2nd Circuit.

Prince is a practitioner of what has come to be known as “appropriation art,” that is, art – mainly visual art – that incorporates and utilizes third-party images and photographs, which are often the subject of copyright.

In 2008, Prince created thirty works of art that comprised a series he called Canal Zone. The works in Canal Zone made use of a number of images from Patrick Cariou’s photography book on Rastafarians in Jamaica called “Yes Rasta”. In the Canal Zone works, Prince had enlarged, cut up, and painted over Cariou’s images, as well as placed them with other images. While not directly a factor in the Court’s infringement analysis but certainly a motivating factor behind Cariou’s lawsuit, while Cariou had little commercial success with his book, Yes Rasta, Prince sold eight of the Canal Zone works for a total of over $10 million.

Cariou initially won on summary judgment at the district court level, and obtained a permanent injunction compelling Prince to turn over all of the unsold Canal Zone works for sale, disposal or destruction. In its ruling, the United States District Court for the Southern District of New York held that Prince’s works did not qualify as a “fair use” because, among other things, they were not transformative in that they did not “comment on” Cariou’s photographs or the subjects of the photographs, and Prince himself did not articulate any transformative intent in connection with the use of the images. Pic2

On appeal, Prince challenged the lower court’s analysis of the first fair use factor, the purpose and character of the use. The purpose of this factor is to test whether the allegedly infringing work is “transformative”. A work is transformative when it adds something new to the work allegedly infringed, with a further purpose or different character, altering the original work with new expression, meaning, or message. A work is transformative if it does something more than repackage or republish the original copyrighted work. A transformative work is one that serves a new and different function from the original work and is not a substitute for it. As the Supreme Court noted in Campbell v. Acuff-Rose Music, Inc., “the more transformative the new work, the less will be the significance of other factors, … that may weigh against a finding of fair use.”Continue Reading Richard Prince once again pushes the limits of fair use

A U.S. patent is “presumed” valid. Audrey-Millemann-03_webThat means a patent owner does not need to prove the patent is valid in a suit for infringement. And, as the U.S. Supreme Court just explained in Commil United States, LLC v. Cisco Systems, Inc., 2015 U.S. LEXIS 3406 (May 26, 2015), a defendant’s belief that the patent is invalid is not a defense to infringement.

Commil owned a patent that covered a method for increasing the speed of wireless networks. Commil sued Cisco for patent infringement, alleging that Cisco directly infringed the patent by making and using certain network equipment. Commil also alleged that Cisco indirectly infringed the patent by inducing infringement, that is, by selling the equipment to others and instructing them how to use the equipment, causing them to thereby infringe the patent.

At trial, the jury found that Cisco had directly infringed the patent. With respect to the claim of indirect infringement, Cisco contended that it did not have the required specific intent to induce infringement because it believed in good faith that the patent was invalid. The district court for the Eastern District of Texas ruled that Cisco’s evidence of its good faith belief was not admissible as a defense to infringement. The jury found Cisco liable to Commil and awarded Commil $63.7 million in damages.

Cisco appealed to the Federal Circuit Court of Appeals, arguing that the district court’s ruling was erroneous. The appellate court reversed the district court, holding that a good faith belief that a patent is invalid is sufficient to negate the required specific intent to induce infringement.Continue Reading Just Because You Think It’s Invalid Doesn’t Mean You Don’t Infringe!

Cindy Lee Garcia thought she was playing a bit part in “Desert Warrior,” an adventure film being made by an amateur film maker. The film was never completed. Instead, Ms. Garcia’s performance was re-purposed, and her physical on screen appearance was used in a film titled “Innocence of Muslims,” with her voice redubbed, changing her speaking part so that she appeared to being asking, “Is your Mohammed a child molester?” The film was uploaded to YouTube. An outraged Muslim cleric saw the video and thereafter issued a fatwa directing his followers to kill everyone involved with the film. Ms. Garcia was nonplussed.

Garcia filed suit seeking, among other things, a restraining order directing Google to remove the film from YouTube. Primarily, Garcia claimed that the video infringed a copyright which gave her the exclusive right to control the use of her performance. Granting the injunction, the district court ruled that Garcia was likely to succeed on her copyright claim because it believed she held a valid copyright interest in her performance, and that the film maker had exceeded the terms of a license granted by plaintiff when she was misled into acting in “Innocent Muslim,” under the false pretense that she was playing in “Desert Warrior.” The court also determined that Garcia faced irreparable harm because Garcia had been receiving death threats. Google appealed to the Ninth Circuit. Initially the Ninth Circuit agreed with Garcia, however on May 18th, sitting en banc, the Ninth Circuit reversed.Continue Reading “Desert Warrior” Vanquished: Google Defeats Cindy Lee Garcia’s Copyright Claims