Westlaw Journal INTELLECTUAL PROPERTY/media/images/news/2016/wl... · 2017. 6. 21. · WHAT’S INSIDE Litigation News and Analysis • Legislation • Regulation • Expert Commentary

WHAT’S INSIDE

Litigation News and Analysis • Legislation • Regulation • Expert Commentary

INTELLECTUAL PROPERTYWestlaw Journal

41969908

VOLUME 24, ISSUE 5 / JUNE 21, 2017

BIOLOGICS5 Supreme Court won’t force

fast-track litigation over biologic drug patents

Sandoz Inc. v. Amgen Inc. (U.S.)

PATENT7 U.S. Supreme Court to rule

on legality of patent review system

Oil States Energy v. Greene’s Energy Group (U.S.)

8 7th Circuit knocks asbestos negligence suit against owner of fire door patent

Pecher v. Owens-Illinois (7th Cir.)

9 Cybersecurity patent suit against Cisco needs revamping, judge says

Finjan Inc. v. Cisco Systems (N.D. Cal.)

10 VoIP patent spat against Google belongs in Texas, complaint says

Uniloc USA v. Google Inc. (E.D. Tex.)

11 NuVasive’s spinal fusion patent revived on appeal

In re NuVasive (Fed. Cir.)

COPYRIGHT12 Dr. Seuss-Star Trek mashup

maker can’t escape copyright claim

Dr. Seuss Enterprises v. ComicMix (S.D. Cal.)

13 LinkedIn wielding its ‘undeniable dominance’ to shut down startup, suit says

HiQ Labs v. LinkedIn Corp. (N.D. Cal.)

TRADEMARK14 Veterinarian loses appeal

over ‘American College’ trademark registration

Lyons v. American College of Veterinary Sports Medicine (Fed. Cir.)

SEE PAGE 3

CONTINUED ON PAGE 16

EXPERT ANALYSIS

Supreme Court parts ways with decades-old precedent on where patent infringement cases can be broughtJoseph M. Kuo, an intellectual property partner at Arnstein & Lehr, speculates on how small, independent patent owners might be harmed by the Supreme Court’s recent decision to limit patent plaintiffs’ venue choices.

TRADEMARK

U.S. top court finds law banning offensive trademarks unconstitutionalIn a decision that could benefit the NFL’s Washington Redskins, the U.S. Supreme Court on June 19 threw out a federal prohibition on disparaging trademarks as a constitutional violation in a major free speech ruling involving a band called The Slants.

Matal v. Tam, No. 15-1293, 2017 WL 2621315 (U.S. June 19, 2017).

The court ruled 8-0 in favor of the Portland, Oregon-based Asian-American dance rock band, which had been denied a trademark because the government deemed its name disparaging to people of Asian descent.

The Slants challenged that rejection as a violation of free speech rights under the U.S. Constitution’s First Amendment, and the Supreme Court agreed.

The ruling likely paves the way for the Redskins to protect trademarks covering the team’s name.

The NFL team, which took the name Redskins in the 1930s, filed a legal challenge to a 2014 decision by a U.S. Patent and Trademark Office tribunal canceling its trademarks as disparaging to Native Americans.

A lower court put the Redskins’ dispute on hold pending the outcome of the band’s case.

REUTERS/Jonathan Ernst

U.S. Supreme Court Justice Samuel Alito wrote the majority decision.

Pro-Football Inc. v. Blackhorse, 112 F. Supp. 3d 439 (E.D. Va. 2015).

Lisa Blatt, a lawyer representing the Redskins, told Reuters the team is thrilled with the June 19 ruling because it resolves “the Redskins’ long-standing dispute with the government.”

Writing for the court, Justice Samuel Alito did not mince words in ruling that the decades-old trademark provision is unconstitutional.

© 2017 Thomson Reuters2 | WESTLAW JOURNAL n INTELLECTUAL PROPERTY

TABLE OF CONTENTSWestlaw Journal Intellectual PropertyPublished since August 1989

Director: Mary Ellen Fox

Editors: Patrick H.J. [email protected]

Kenneth Bradley, Esq.

Managing Desk Editor: Robert W. McSherry

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Trademark: Matal v. TamU.S. top court finds law banning offensive trademarks unconstitutional (U.S.) ..............................................1

Expert Analysis: By Joseph M. Kuo, Esq., Arnstein & LehrSupreme Court parts ways with decades-old precedent on where patent infringement cases can be brought ................................................................................................................................................................ 3

Biologics: Sandoz Inc. v. Amgen Inc.Supreme Court won’t force fast-track litigation over biologic drug patents (U.S.) .........................................5

Patent: Oil States Energy v. Greene’s Energy GroupU.S. Supreme Court to rule on legality of patent review system (U.S.) ........................................................... 7

Patent: Pecher v. Owens-Illinois7th Circuit knocks asbestos negligence suit against owner of fire door patent (7th Cir.) ...............................8

Patent: Finjan Inc. v. Cisco SystemsCybersecurity patent suit against Cisco needs revamping, judge says (N.D. Cal.) .........................................9

Patent: Uniloc USA v. Google Inc.VoIP patent spat against Google belongs in Texas, complaint says (E.D. Tex.) ............................................ 10

Patent: In re NuVasiveNuVasive’s spinal fusion patent revived on appeal (Fed. Cir.) ..........................................................................11

Copyright: Dr. Seuss Enterprises v. ComicMixDr. Seuss-Star Trek mashup maker can’t escape copyright claim (S.D. Cal.) ................................................12

Copyright: HiQ Labs v. LinkedIn Corp.LinkedIn wielding its ‘undeniable dominance’ to shut down startup, suit says (N.D. Cal.) ...........................13

Trademark: Lyons v. American College of Veterinary Sports MedicineVeterinarian loses appeal over ‘American College’ trademark registration (Fed. Cir.) ..................................14

Trademark: Intermountain Health Care v. DelcoreUtah doctor loses domains to health care provider Intermountain (WIPO Arb.) ...........................................15

Case and Document Index ...............................................................................................................................18

JUNE 21, 2017 n VOLUME 24 n ISSUE 5 | 3© 2017 Thomson Reuters

Joseph M. Kuo is a partner at Arnstein & Lehr’s Chicago office, where his practice encompasses litigation and licensing of patents, trademarks and copyrights. On the patent side, he has represented both patent holders and accused infringers in litigation over technologies that include software, automotive products, physiological sensors, medical devices, agricultural equipment, sporting goods, window coverings, heavy machinery, building products and GPS transceivers. He can be reached at [email protected].

EXPERT ANALYSIS

Supreme Court parts ways with decades-old precedent on where patent infringement cases can be broughtBy Joseph M. Kuo, Esq. Arnstein & Lehr

On May 22, the U.S. Supreme Court handed down its decision in TC Heartland LLC v. Kraft Foods Group Brands LLC, No. 16-341, 2017 WL 2216934 (May 22, 2017), regarding the interpretation of the patent venue statute 28 U.S.C.A. § 1400(b).

In a unanimous decision, the Supreme Court reversed the U.S. Court of Appeals for the Federal Circuit’s 27-year-old precedent.

It held that the word “resides” in Section 1400(b) “refers only to the state of incorporation” of the alleged infringer, as opposed to anywhere an alleged infringer may be subject to personal jurisdiction.

The high court’s decision limits where patent infringement lawsuits can be filed, so it is likely to have a significant effect on patent litigation.

Patent holders no longer have the broad ability to choose favorable venues for patent infringement lawsuits.

While this may halt the tide of patent cases being filed in pro-patentee jurisdictions, such as the U.S. District Court for the Eastern District of Texas, it could result in the loss of a home court advantage for some patent owners.

THE DISPUTE

The case involved TC Heartland LLC, an Indiana-based food company that was sued by Kraft Foods in the U.S. District Court for the District of Delaware.

The patents at issue involved “liquid water enhancers” used in flavored drink mixes.

There was no dispute that TC Heartland sold allegedly infringing products in Delaware, where the patent owner Kraft is incorporated.

TC Heartland sought to move the case to Indiana. It claimed that because it was not incorporated in Delaware and had no established place of business there, venue was improper there.

The VE Holding ruling enabled patent owners to bring infringement actions in any district where a defendant had made any sales of an allegedly infringing product.

As a result of the ruling, patent owners filed a large percentage of cases in jurisdictions perceived to be tactically advantageous to them, such as the Eastern District of Texas.

More than one-quarter of all patent cases are filed in that district, even though defendants

The high court’s decision limits where patent infringement lawsuits can be filed, so it is likely to have a significant effect on

patent litigation.

Both the Delaware District Court and the Federal Circuit, which hears all patent appeals, denied TC Heartland’s request, finding venue was proper because TC Heartland had sufficient contacts in Delaware, thus enabling the Delaware court to exercise personal jurisdiction over it.

Prior to the TC Heartland decision, the controlling law on venue in patent cases was the Federal Circuit’s decision in VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed. Cir. 1990).

In VE Holding, the Federal Circuit held that venue in patent cases is proper in any district that has personal jurisdiction over the defendant corporation.

often have little connection to the forum other than having some sales there.

The Supreme Court’s consideration of the TC Heartland case was watched closely by numerous companies, including dozens of internet companies and retailers, as well as trade groups representing bankers, Realtors and software companies.

A number of these companies filed amicus briefs seeking to persuade the high court to require greater venue restrictions for patent cases.

The great interest in TC Heartland was due to the fact that many nonpracticing entities — often referred to as “patent trolls” — forced companies to face allegations of patent infringement in such jurisdictions as the Eastern District of Texas, with which the companies had little contact.

Many patent owners, and especially NPEs, found the Eastern District of Texas to be an attractive forum for patent suits based on a number of factors, including discovery rules and dockets that are difficult on defendants; the general reluctance of judges to grant summary judgment; and the perception that Texas juries are prone to awarding large monetary judgments.

4 | WESTLAW JOURNAL n INTELLECTUAL PROPERTY © 2017 Thomson Reuters

These factors often made it cheaper to settle cases — even frivolous cases — than to fight.

Among the companies that submitted amicus briefs were common targets of NPEs such as Dell, FedEx, Garmin, Newegg, Oracle and SAP America, to name but a few.

In the unanimous 8-0 ruling authored by Justice Clarence Thomas, the Supreme Court agreed with TC Heartland.

WHICH DISTRICT?

Following the Supreme Court’s decision to overrule the Federal Circuit’s decades-old interpretation of the patent venue statute, a patent infringement action against a U.S. corporation may now be filed only:

• In the district where the defendantresides, i.e., is incorporated.

• In a district where the defendanthas an established place of business and has allegedly committed acts of infringement.

Although not discussed in the court’s opinion, it is apparent that this was an intended effect.

Instead, it is likely that more patent lawsuits will now be brought in Delaware, where many companies are incorporated, and in the Northern District of California, where a large number of technology companies — which are often targeted by NPEs — have established places of business.

Forcing patent owners, especially NPEs, to bring suit in a forum where the alleged infringer has the advantage, will likely make it much more difficult to obtain favorable settlements.

The decision will also take away a strategic weapon often used by NPEs: namely, filing suit against multiple defendants simultaneously in a single jurisdiction, rather than filing separate cases in numerous jurisdictions.

With the TC Heartland decision, the ability to capture multiple defendants in a single district has been significantly reduced.

Given that the aggrieved party in such cases is the patent owner, it is inequitable to require that patent owner to seek redress where the alleged infringer has a place of business.

HOW BUSINESS IS CONDUCTED

Perhaps the Supreme Court fails to recognize how business is conducted today.

Unlike in the past, when selling products typically required the seller to establish a place of business where buyers are located, online sales and marketing have enabled companies to offer to sell, sell and market nationwide without establishing a physical place of business outside a small geographic area.

Indeed, under TC Heartland an infringer may be able to force a patent owner, which may not be a well-funded corporation, to pursue claims of infringement in a faraway jurisdiction at higher costs, as opposed to where the harm is felt.

This may have a chilling effect on a patent owner’s willingness or ability to protect the property rights it is entitled to enforce under its patent.

Perhaps this issue can be addressed under the second portion of Section 1400(b), which was not affected by the TC Heartland decision.

Under this second part, an action may be brought in any district where the defendant has an established place of business and has allegedly committed acts of infringement.

After TC Heartland, what constitutes an “established place of business” is likely to be hotly debated. WJ

The great interest in TC Heartland was due to the fact that many nonpracticing entities — often referred

to as “patent trolls” — forced companies to face allegations of patent infringement in such jurisdictions as the

Eastern District of Texas.

This decision largely reinstates the more restrictive venue standard outlined in the Supreme Court decision Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222 (1957).

As a result of the TC Heartland decision, it is very likely that significantly fewer patent infringement cases will be able to be brought in forums perceived to be friendly to NPEs.

While these factors may make it more difficult for NPEs to engage in abusive patent litigation, the decision may also have unintended negative consequences.

Patent owners may be forced to forgo any home-court advantage and bring actions against alleged infringers where the alleged infringers are located.


BIOLOGICS

Supreme Court won’t force fast-track litigation over biologic drug patentsBy Michael Scott Leonard

Makers of name-brand biologic drugs cannot obtain federal injunctions forcing companies that develop copycat versions to initiate the informal prelitigation procedures available under a law aimed at expediting patent disputes over biologics, a unanimous U.S. Supreme Court has decided.

Sandoz Inc. v. Amgen Inc. et al., No. 15- 1039, 2017 WL 2507337 (U.S. June 12, 2017).

In a 9-0 ruling June 12, the high court rejected an attempt by drugmaker Amgen Inc. to shoehorn its dispute with rival Sandoz Inc. over a “biosimilar” version of Amgen’s immune booster Neupogen (filgrastim) into the “complex statutory scheme” established by the Biologics Price Competition and Innovation Act, 42 U.S.C.A. § 262.

REUTERS/Brian Snyder

The litigation concerns drugmaker Amgen Inc.’s dispute with rival Sandoz Inc. over a “biosimilar” version of Amgen’s immune booster Neupogen. Here, a researcher displays a sample of a bacterium used in making an antibiotic drug.

for Sandoz in July 2015. Amgen Inc. v. Sandoz Inc., 794 F.3d 1347 (Fed. Cir. 2015). Sandoz launched the drug the following September.

The Supreme Court partly affirmed June 12.

Writing for the court, Justice Clarence Thomas said an injunction would be improper, given the comprehensive regulatory regime established by the BPCIA, which specifies exactly what happens if a biosimilar applicant opts out of the prelitigation procedures.

Those consequences include making it easier for a brand-name biologics maker to file a patent infringement suit, he noted.

“Where, as here, ‘a statute expressly provides a remedy, courts must be especially reluctant to provide additional remedies’” such as an injunction, Justice Thomas wrote, quoting Karahalios v. National Federation of Federal Employees, 489 U.S. 527 (1989).

“The BPCIA’s ‘carefully crafted and detailed enforcement scheme provides strong

evidence that Congress did not intend to authorize other remedies that it simply forgot to incorporate,’” he added, citing Great-West Life & Annuity Insurance Co. v. Knudson, 534 U.S. 204 (2002).

‘A STATE LAW QUESTION’

Although the high court affirmed that part of the Federal Circuit’s ruling, the justices departed from the appellate court’s reasoning.

The Federal Circuit found that the only consequence for Sandoz’s failure to trigger the expedited procedures was that the company could not take advantage of that process.

Among other things, Sandoz forfeited the right to file a declaratory judgment suit that could clarify the legal landscape before it committed to a costly, risky drug launch, the appeals court noted. Instead, the biosimilar

The Federal Circuit found that the only consequence

for Sandoz’s failure to trigger the expedited

procedures was that the company could not take

advantage of that process.

The BPCIA, enacted as part of the Affordable Care Act, is supposed to streamline patent disputes involving biosimilar versions of biologic drugs — medicines derived from living organisms, typically through advanced genetic engineering, rather than through traditional pharmaceutical chemistry.

The law established informal quasi-discovery mechanisms triggered when a biosimilar maker notifies the brand-name biologic maker that it has filed an application with the U.S. Food and Drug Administration. That notification is known as an act of “artificial infringement” because even though the BPCIA specifically authorizes it, it is supposed to culminate in a patent infringement suit.

After Sandoz tried to introduce a filgrastim biosimilar called Zarxio without going through that process, Amgen sought an injunction ordering its rival to comply with the BPCIA.

The U.S. Court of Appeals for the Federal Circuit, the country’s top patent court, held


Supreme Court sets rules for copycat versions of biologic drugs

Intellectual property attorneys discuss the impact of the U.S. Supreme Court’s holding in Sandoz Inc. v. Amgen Inc., No. 15-1039, 2017 WL 2507337 (U.S. June 12, 2017).

Courtenay Brinckerhoff, Foley & Lardner, Washington

The court’s decision on the premarketing notice issue will mean that biosimilar products can be marketed as soon as they are approved, as long as there are no preliminary injunctions stemming from any still-pending patent litigation. That possibility might encourage biosimilar applicants to participate in the “patent dance,” to increase the likelihood that all patent disputes will be resolved by the time the product is approved.

Paul A. Calvo, Sterne, Kessler, Goldstein & Fox, Washington

While the timing of an effective notice of commercial marketing is settled, the question of whether an injunction might be available under California unfair-competition law to compel participation with the patent dance was left to the Federal Circuit to reconsider. As a backdrop to the decision is the work lawmakers are undertaking to overhaul the Affordable Care Act. The decision begs the question of whether lawmakers will attempt to amend portions of the Biologics Price Competition and Innovation Act to override one or both of the court’s holdings.

Christopher Loh, Fitzpatrick, Cella, Harper & Scinto, New York

At oral argument, Justice Stephen Breyer noted that, under Sandoz’s interpretation of the law, “everyone will be free … to start bringing declaratory judgment actions” following early notice of commercial marketing. While the Supreme Court’s reasoning here relies in part on congressional intent, I’m not so sure that this result was what Congress intended. I think one of the functions of the “patent dance” was to get the parties talking about patents early, and potentially settling certain patent issues, before the start of any litigation. The Sandoz decision has the potential to circumvent that process.

Irena Royzman, Patterson Belknap Webb & Tyler, New York

The decision forces innovators to litigate blind in cases where biosimilar makers do not disclose their regulatory application and manufacturing information. But in the long term, biosimilar makers are likely to follow the patent dance in most cases given the significant benefits of following the statute. As for the notice of commercial marketing, biosimilar makers will undoubtedly provide it prior to approval.

maker had to await Amgen’s patent infringement suit, giving up the potential advantage of litigating on its own terms.

The Supreme Court vacated that part of the decision, noting that in addition to alleging patent infringement, Amgen had accused Sandoz of unfair trade practices under California law, Cal. Bus. & Prof. Code Ann. § 17205.

Although the BPCIA expressly and comprehensively governs patent liability once a biosimilar maker has committed the acts of “artificial infringement” that initiate the law’s streamlined procedures, Justice Thomas said, it is unsettled whether the statute preempts state law claims that could ultimately lead to an injunction.

Because the unfair-trade-practices law penalizes only “unlawful” business conduct, the Federal Circuit should decide on remand whether Sandoz’s decision to forgo the BPCIA’s prelitigation procedures qualifies as “unlawful” in California, he said.

“We decline to resolve this particular dispute definitively because it does not present a question of federal law,” Justice Thomas wrote. “Whether Sandoz’s conduct was ‘unlawful’ under the unfair-competition law is a state law question, and the court below erred in … referring to the BPCIA alone.”

180-DAY WAITING PERIOD

The high court also reversed another part of the Federal Circuit’s decision concerning a BPCIA section, 42 U.S.C.A. § 262(l)(8)(A), that requires biosimilar makers to wait 180 days before selling their products after notifying the brand-name company of their intent to enter the market.

The appeals court found that biosimilar makers must wait until after the FDA licenses their product to trigger that 180-day waiting period, effectively imposing an additional delay.

That was wrong, Justice Thomas said.

“Section 262(l)(8)(A) contains a single timing requirement: The applicant must provide

notice at least 180 days prior to marketing its biosimilar,” he wrote. “The Federal Circuit, however, interpreted the provision to impose two timing requirements: The applicant must provide notice after the FDA licenses the biosimilar and at least 180 days before the applicant markets the biosimilar.

“We disagree,” Justice Thomas added.

Justice Stephen Breyer concurred separately, saying in a one-paragraph opinion that although he agreed with the ruling, the FDA retained the authority to adopt other reasonable interpretations of the BPCIA. WJ

Related Filings:Supreme Court Opinion: 2017 WL 2507337 Federal Circuit opinion 794 F.3d 1347

See Document Section A (P. 19) for the Supreme Court opinion.


PATENT

U.S. Supreme Court to rule on legality of patent review system(Reuters) – The U.S. Supreme Court agreed June 12 to decide whether a federal administrative process frequently used by technology companies to ward off patent infringement lawsuits violates the constitutional rights of patent owners.

Oil States Energy Services LLC v. Greene’s Energy Group, No. 16-712, 2017 WL 2507340 (U.S. June 12, 2017).

The justices agreed to hear an appeal by Houston-based oilfield services company Oil States International Inc. of a lower court’s ruling upholding a proceeding called inter partes review in which the U.S. Patent and Trademark Office can cancel patents the agency previously granted.

The company asserts that because the agency’s process does not give patent owners the option of a jury trial, it violates the right to a jury trial enshrined in the U.S. Constitution. Under the agency’s process, administrative law judges review a patent and decide whether the patent office made a mistake in granting it.

The Supreme Court has said there is a right to a jury trial in disputes in which private property can be revoked.

Oil States’ position is that patents are a type of private property so inter partes reviews are unconstitutional.

The patent office used the review process to invalidate one of Oil States’ patents at the request of a competitor it had sued for infringement, Greene’s Energy Group.

The case involves a patent relating to hydraulic fracking but will be closely watched by technology companies because they have frequently used inter partes review to invalidate patents they have been accused of infringing, said Alan Fisch, a patent lawyer at the law firm Fisch Sigler.

Apple Inc., Google Inc. and Samsung Electronics Co. are among the companies that most frequently use inter partes reviews as a defensive strategy in patent disputes.

Congress created inter partes review through the America Invents Act of 2011, a law intended to combat companies that assert patents but do not make products of their own, pejoratively called “patent trolls.”

The inter partes review process was designed to be cheaper and faster than traditional litigation.

Companies hit with patent lawsuits will often respond by initiating a review in the hopes of quickly invalidating the patent at issue.

“Use of these procedures has risen in popularity each year and has been somewhat transformative in the way patent litigation is handled,” said Neel Chatterjee, a patent lawyer at the law firm Goodwin Procter.

The U.S. Court of Appeals for the Federal Circuit rejected Oil States’ argument, finding patents are not private property, so the lack of a jury is not unconstitutional. Oil States Energy Servs. v. Greene’s Energy Grp., 639 Fed. Appx. 639 (Fed. Cir. 2016).

The company then appealed to the Supreme Court. WJ

(Reporting by Jan Wolfe)

Attorneys:Petitioner: C. Erik Hawes and William R. Peterson, Morgan, Lewis & Bockius LLP, Houston, TX

Respondant: George E. Quillin, John J. Feldhaus and Bradley D. Roush, Foley & Lardner LLP, Washington, DC

Related Filings:Reply brief: 2017 WL 604581 Opposition brief: 2017 WL 411377 Petition for cert.: 2016 WL 6995217

U.S. Supreme CourtREUTERS/Jim Bourg


PATENT

7th Circuit knocks asbestos negligence suit against owner of fire door patentBy Kenneth Bradley

Former factory workers who made asbestos-containing fireproof doors and allege the door’s patent designer’s negligence caused them to develop cancer have to show why their now-dismissed claims were not frivolous or face sanctions, a federal appeals court has ruled.

Pecher et al. v. Owens-Illinois Inc. et al., Nos. 16-1799, 16-2376, 16-2377, 16-2378, 16-2379 and 16-2380, 2017 WL 2432392 (7th Cir. June 6, 2017).

The 7th U.S. Circuit Court of Appeals panel said “holding a patent licensor liable for injuries they in no sense could be considered to have ‘caused’ raises serious due process concerns.”

“The patent system is designed to facilitate innovation, to disseminate useful technology far and wide. It is not a substitute for a worker’s compensation system,” the panel said in a June 6 opinion.

had made at Weyerhaeuser. The patent was granted in 1952.

The initial patent did not mention the use of asbestos but later versions of the patent said “boards of asbestos bound with cement” could be used in the fire doors, the opinion said.

Owens-Illinois licensed the ’050 patent to Texas lumber company Roddis Plywood Corp. through an agreement that was set to expire with the patent in 1969, according to the opinion.

Weyerhaeuser bought Roddis in 1960. The Marshfield plant made some fire doors

“The patent system is designed to facilitate innovation, to disseminate useful technology far and wide.

It is not a substitute for a worker’s compensation system,” the 7th Circuit said.

The appeals court was hearing six consolidated lawsuits filed by former workers at a Weyerhaeuser Co. plant in Marshfield, Wisconsin, where they made fireproof doors.

The plaintiffs alleged Owens-Illinois Inc. was negligent in licensing a patent it held on the design of a fireproof door.

They also raised counts for public and private nuisance against Weyerhaeuser, alleging asbestos exposure not at the factory but in the air around the factory was a substantial factor in causing their diseases.

Each of the plaintiffs developed mesothelioma caused by asbestos exposure, according to the opinion.

PATENTED FIRE DOORS

Owens-Illinois is the owner of U.S. Patent No. 2,593,050, a design for a “composite fire door,” one of the door types the plaintiffs

containing asbestos from the 1950s until 1978, the opinion said.

The defendants moved for dismissal.

U.S. District Judge William M. Conley of the Western District of Wisconsin dismissed the patent-based claims. Boyer v. Weyerhaeuser Co., 39 F. Supp. 3d 1036 (W.D. Wis. 2014).

“As a matter of law, the court concludes that plaintiffs cannot state a negligence claim based only on a party’s licensing of a technology, even if used by the licensee to create a product containing asbestos,” Judge Conley said.

He dismissed three plaintiffs’ claims against Weyerhaeuser, finding that they did not live close to the Marshfield factory and were just attempting to avoid the exclusive remedy provisions of workers’ compensation law.

The plaintiffs appealed.

FRIVOLOUS CLAIMS

The 7th Circuit panel said the claims for negligence by patent design were frivolous.

“This theory would hold a patent licensor liable for the injuries caused not merely by the licensees practicing the patented subject matter, but for injuries caused by other, non-essential features of the final product produced by the licensee,” the panel said.

The panel affirmed the dismissal of the claims and ordered the plaintiffs to show why the appeal was not frivolous under Federal Rule of Appellate Procedure 38.

The rule says, “If a court of appeals determines that an appeal is frivolous, it may, after a separately filed motion or notice from the court and reasonable opportunity to respond, award just damages and single or double costs to the appellee.”

In the same opinion the 7th Circuit affirmed the dismissal of three plaintiffs’ claims against Weyerhaeuser.

The panel agreed that the community exposure theory was likely an attempt to avoid the exclusive workers’ compensation remedy for injuries caused by on-the-job exposure.

The District Court did not abuse its discretion when it excluded expert testimony that supported this “highly dubious theory” of causation from non-occupational asbestos exposure, the opinion said. WJ

Attorneys:Plaintiffs: Robert G. McCoy and Cascino Vaughan Law Offices, Chicago, IL

Defendant (Owens-Illinois): Edward Casmere and Robert H. Riley, Riley Safer Holmes & Cancila, Chicago, IL

Defendant (Weyerhaeuser): Joshua Metcalf, Forman Watkins & Krutz, Jackson, MS

Related Filings:Opinion: 2017 WL 2432392


PATENT

Cybersecurity patent suit against Cisco needs revamping, judge saysBy Dave Embree

Cisco Systems Inc. has convinced a California federal judge that a cybersecurity patent suit waged against the technology giant lacks the specificity necessary to support a claim for enhanced damages.

Finjan Inc. v. Cisco Systems Inc., No. 17-cv-72, 2017 WL 2462423 (N.D. Cal. June 6, 2017).

Finjan Inc. failed to show Cisco had accessed the specific cybersecurity patents at issue or that Cisco’s behavior was sufficiently “egregious,” U.S. District Judge Beth Labson Freeman of the Northern District of California said.

The two Silicon Valley tech companies have worked together for two decades and had access to each other’s technology, but that was not enough to show willful infringement, the judge said.

Judge Freeman granted Cisco’s motion to dismiss Finjan’s willful-infringement claims, but gave Finjan 30 days to amend its complaint.

ALLEGATIONS AGAINST CISCO

Palo Alto, California-based Finjan filed suit against Cisco in January.

The complaint said Cisco, based in San Jose, California, had infringed five patents from Finjan’s cybersecurity portfolio: U.S. Patent Nos. 6,154,844; 6,804,780; 7,647,633; 8,141,154; and 8,677,494.

The patents cover various ways of protecting computers from viruses and malicious “downloadables.”

Finjan said Cisco had pre-suit knowledge of the allegedly infringed patents, and such

knowledge made Cisco a willful infringer, liable for enhanced damages.

Finjan said this was evident from the long-standing relationship the two companies had.

As early as 2004, Cisco invested in Finjan, had an observer attend Finjan’s board of director meetings, and attended other presentations where Finjan discussed its patents, the suit said.

Cisco moved to dismiss Finjan’s willful-infringement claims, arguing that the complaint failed to allege sufficient facts about Cisco’s access to the patents.

PRE-SUIT KNOWLEDGE

Judge Freeman agreed with Cisco that Finjan did not sufficiently allege Cisco had pre-suit knowledge of the patents in question.

The judge acknowledged the parties’ longstanding relationship may have given Cisco general knowledge of Finjan’s patent portfolio. However, “knowledge of a patent portfolio generally is not the same thing as knowledge of a specific patent,” the judge said.

The judge also pointed out that many of the events described in the complaint, such as board meetings and presentations, could have taken place before the ’633, ’154, and ’494 patents were issued in 2010.

EGREGIOUS CONDUCT

Judge Freeman also agreed that Finjan did not sufficiently allege that Cisco engaged in conduct so egregious it would warrant enhanced damages.

“Enhanced damages are generally reserved for ‘egregious cases of misconduct beyond typical infringement,’” the judge said, quoting Halo Electronics Inc. v. Pulse Electronics Inc. et al., 136 S. Ct. 1923 (2016).

Finjan made no allegations concerning Cisco’s misconduct other than alleging that Cisco had pre-suit knowledge of the patents, the judge said. WJ

Attorneys:Plaintiff: Paul J. Andre, James R. Hannah and Lisa Kobialka, Kramer Levin Naftalis & Frankel, Menlo Park, CA

Defendant: Louis N. Jameson, Matthew C. Gaudet, David C. Dotson, Jarrad M. Gunther, Jennifer H. Forte, Joseph A. Powers and Patrick S. Salceda, Duane Morris LLP, Atlanta, GA

Related Filings:Order: 2017 WL 2462423

REUTERS/Jim Young


PATENT

VoIP patent spat against Google belongs in Texas, complaint saysBy Dave Embree

Google is facing an infringement suit that says its messaging apps are violating patent law, and the complaint thoroughly spells out why the suit belongs in Texas federal court.

Uniloc USA Inc. et al. v. Google Inc., No. 17-cv-467, complaint filed, 2017 WL 2406785 (E.D. Tex. June 1, 2017).

Plano, Texas-based patent owner Uniloc USA Inc. says it filed suit in the U.S. District Court for the Eastern District of Texas because Google offers its products for sale to district residents and maintains other ties to the area.

The Texas court should find Google liable because the company’s Android Messages app and the Google Jibe platform infringe Uniloc’s instant Voice over Internet Protocol, or VoIP, messaging patents, the complaint says.

GOOGLE’S PRESENCE IN TEXAS

Uniloc USA and its Luxembourg-based parent, Uniloc Luxembourg SA, say Google’s app infringes U.S. Patent Nos. 8,955,433 and 7,535,890.

In addition to describing the allegedly infringing app and the Jibe platform that services it, the complaint lists a slew of unrelated products and services that Google offers to Eastern District residents.

The complaint includes several pages of screenshots of Google offerings, including cellphones, virtual reality goggles, smart watches and other products.

Uniloc says Google collects local sales tax on items that it sells to district residents.

In addition to selling products in the Eastern District, Google generates advertising revenue by tracking the usage patterns of district residents, information that is used to target customers, the suit says. The company records and saves data it collects “fingerprinting” its users, including those who disable cookies.

To enable its Street View service, Google periodically operates a fleet of vehicles to collect images of roadways in the district, the suit says. The complaint includes a screenshot from Google Maps showing an image of the front of the Eastern District courthouse to support this claim.

The suit also says Google collects information and reports on traffic conditions in the district through its Waze app and Google Maps. The complaint includes a set of Google Maps directions from a local McDonald’s restaurant to the Eastern District courthouse.

Google currently maintains office space for hundreds of employees in Texas and previously leased office space for about 50 employees in the Eastern District, the suit says.

TC HEARTLAND

The U.S. Supreme Court recently limited patent owners’ ability to bring suit in plaintiff-friendly jurisdictions such as the

Eastern District of Texas by holding that “a domestic corporation ‘resides’ only in its state of incorporation for purposes of the patent venue statute.” TC Heartland LLC v. Kraft Foods Grp. Brands LLC, No. 16-341, 2017 WL 2216934 (U.S. May 22, 2017).

However, patent suits may still go forward in judicial districts “where the defendant has committed acts of infringement and has a regular and established place of business,” according to the patent venue statute at 28 U.S.C.A. § 1400(b).

The complaint notes the multiple locations Google has in Texas, including offices in Austin and Dallas. This residence plus the company’s alleged infringing activities make venue proper in Texas’ Eastern District, the suit says. WJ

Attorneys:Plaintiff: James L. Etheridge, Ryan S. Loveless, Brett A. Mangrum, Travis L. Richins and Jeffrey Huang, Etheridge Law Group, Southlake, TX

Related Filings:Complaint: 2017 WL 2406785

REUTERS Photographer


PATENT

NuVasive’s spinal fusion patent revived on appealBy Patrick H.J. Hughes

NuVasive Inc. has convinced the U.S. Court of Appeals for the Federal Circuit that the medical device maker’s surgical method patent for curing chronic back pain was unfairly invalidated.

In re NuVasive Inc., No. 2015-1841, 2017 WL 2365257 (Fed. Cir. May 31, 2017).

The Patent Trial and Appeal Board misinterpreted the language of NuVasive’s patent for inserting an implant to replace part of a damaged spinal disk between vertebrae, the Federal Circuit said in a May 31 opinion.

The three-judge Federal Circuit panel vacated and remanded the PTAB’s decision that found the patent obvious to skilled artisans.

SPINAL FUSION

San Diego-based NuVasive owns U.S. Patent No. 8,016,767, which the U.S. Patent and Trademark Office granted in 2011.

The patent discloses a surgical method for inserting a spinal fusion implant using nerve monitoring to avoid damaging muscle tissue.

Medtronic and subsidiary Warsaw Orthopedic sued NuVasive in 2012 in the U.S. District Court for the Southern District of California for infringing several Medtronic patents. Warsaw Orthopedic et al. v. NuVasive Inc., No. 12-cv-2738, complaint filed, 2012 WL 5882408 (S.D. Cal. Aug. 17, 2012).

NuVasive filed counterclaims alleging Medtronic and Warsaw were inducing surgeons to infringe the ’767 patent in violation of Section 271 of the Patent Act, 35 U.S.C.A. § 271.

After claim construction, when both sides offered interpretations of the ’767 patent’s language, Medtronic petitioned for an inter partes review, a procedure the Patent Trial

and Appeal Board uses to evaluate patents for anticipation and obviousness.

In 2014 the PTAB agreed to conduct the IPR, citing a reasonable likelihood that NuVasive’s patented technology was obvious in light of several prior art references. Medtronic Inc. v. NuVasive Inc., No. IPR 2014-75, 2014 WL 1410362 (P.T.A.B. Apr. 8, 2014).

In 2015 the PTAB said that under the broadest reasonable construction of the ’767 patent’s language, “an ordinarily skilled artisan would have been prompted to perform a process having all of the steps and features of [the patent].” Medtronic Inc. v. NuVasive Inc., No. IPR 2014-75, 2015 WL 1546572 (P.T.A.B. Apr. 5, 2015).

NuVasive appealed. While the appeal was pending, Medtronic withdrew from the litigation, and the PTO’s director intervened to defend the PTAB’s decision.

‘LATERAL, TRANS-PSOAS PATH’

The Federal Circuit reversed the PTAB’s decision.

The appeals panel found the PTAB’s claim construction was incorrect with regard to the phrase “lateral, trans-psoas path.” The psoas muscles connect the lower back to the thighs.

Specifically, the PTAB’s analysis of the word “lateral” was “limited,” the panel said.

The prior art the PTAB referenced referred to the entire midsection of a patient, broadly describing “lateral” as a “continuum” going all the way around a patient’s body.

The panel said this interpretation was too broad, running counter to the specification of the ’767 patent.

The patent did not provide a definition of the term “lateral,” but it did “provide meaningful guidance,” according to the court.

NuVasive “repeatedly” suggested that an approach “from the side” was necessarily one that passed through a “nerve-rich portion” of the body that is not accessible by going through certain parts of the midsection, the panel said.

The panel also said NuVasive showed there was a “long-felt need for a safe and reproducible lateral, trans-psoas approach” to spinal surgeries before the company invented the patent. This evidence negated the possibility that the method was obvious at the time of the patent’s issuance.

While the Federal Circuit did not review all aspects of the PTAB’s ruling, the panel remanded the case for the PTAB to reconsider the invalidity ruling in light of the new claim construction. WJ

Attorneys:Appellant: Michael T. Rosato and Sonja R. Gerrard, Wilson, Sonsini, Goodrich & Rosati, Seattle, WA; Paul D. Tripodi and Grace J. Pak, Wilson, Sonsini, Goodrich & Rosati, Los Angeles, CA

U.S. Patent and Trademark Office: Sarah E. Craven and Nathan K. Kelley, Office of the Solicitor General, Alexandria, VA

Related Filings:IPR decision: 2015 WL 1546572 PTAB decision to institute IPR: 2014 WL 1410362 Medtronic complaint: 2012 WL 5882408


COPYRIGHT

Dr. Seuss-Star Trek mashup maker can’t escape copyright claimBy Dave Embree

The publisher of a book featuring Dr. Seuss-like drawings and “Star Trek” characters has failed to convince a San Diego federal judge to toss Dr. Seuss Enterprises’ copyright infringement claims against it.

Dr. Seuss Enterprises LP v. ComicMix LLC et al., No. 16-cv-2779, 2017 WL 2505007 (S.D. Cal. June 9, 2017).

ComicMix LLC could not show that combining the works without the copyright holders’ permission was a fair use, U.S. District Judge Janis Sammartino of the Southern District of California said in a June 9 order.

However, she dismissed the trademark and unfair-competition claims against ComicMix with leave to amend.

‘OH, THE PLACES YOU’LL BOLDLY GO!’

Dr. Seuss Enterprises, based in La Jolla, California, owns the copyrights to the works of Theodor Seuss Geisel, who wrote and illustrated children’s books under the name Dr. Seuss.

According to its complaint, “it is not uncommon” for the company to enter licensing agreements for new works based on Seuss books.

Without seeking a license, Connecticut-based ComicMix started a Kickstarter campaign to raise money for a book called “Oh, the Places You’ll Boldly Go!,” according to the order.

The book combined characters and other elements from the “Star Trek” franchise with Dr. Seuss’ well-known book “Oh, the Places You’ll Go!”

Dr. Seuss Enterprises filed suit in November alleging ComicMix and several others involved in the book’s publication violated copyright, trademark and California unfair-competition laws.

ComicMix moved to dismiss the suit, arguing its work was a parody that fell within the scope of the fair use doctrine.

FAIR USE

Judge Sammartino analyzed the work to see if ComicMix could benefit from the fair use defense available under Section 107 of the Copyright Act, 17 U.S.C.A. § 107.

She said “Oh, the Places You’ll Boldly Go!” did not qualify as a parody. However, she said the book was transformative, meaning it communicated something different from the original works.

“It combines into a completely unique work the two disparate worlds of Dr. Seuss and Star Trek,” the judge said, siding with ComicMix on this issue.

In contrast, the fact that the originals were works of fiction weighed in favor of Dr. Seuss Enterprises, because entirely created works are closer to what is intended to be protected by copyright law, the judge said.

The amount and substantiality of the work that were used weighed against Dr. Seuss, she said. While ComicMax copied many aspects of the original, “each is infused with new meaning and additional illustrations that reframe the Seuss images from a unique Star Trek viewpoint,” the judge said.

Judge Sammartino also addressed the effect of the new creation on the potential market.

Dr. Seuss Enterprises said it enters into license agreements for new works based on Dr. Seuss books, and these new works sometimes require “collaborations with other rights holders,” so the judge said the mashup’s market impact counted against the defendants.

However, the record did not contain any evidence supporting Dr. Seuss Enterprises’ claims about licensing, the judge said.

Finding the analysis slightly favored the defendants, the judge nevertheless said she could not dismiss Dr. Seuss Enterprises’ copyright claims.

More evidence must be presented concerning “the emerging ‘mashup’ culture,” in which works are combined “in a new and unique way,” the judge concluded.

TRADEMARK CLAIMS

The judge dismissed Dr. Seuss Enterprises’ trademark claims because the company failed to present a compelling argument that the allegedly infringing work’s title was not permitted under the nominative fair use doctrine.

This defense is allowed when an alleged infringer needs to use another’s mark to describe a particular product. In this case, the judge said the defendants’ nominative fair use defense was reasonable.

Judge Sammartino dismissed the California unfair-competition claim because it depended on the outcome of the trademark claims.

The judge, however, gave Dr. Seuss Enterprises 14 days to amend its trademark and unfair-competition claims. WJ

Attorneys:Plaintiff: Gina L Durham, DLA Piper LLP, San Francisco, CA

Defendants: Daniel G. Booth, Booth Sweet LLP, Cambridge, MA

Related Filings:Order: 2017 WL 2505007

See Document Section B (P. 30) for the order.


COPYRIGHT

LinkedIn wielding its ‘undeniable dominance’ to shut down start-up, suit saysBy Melissa J. Sachs

A “people analytics” and talent management startup has asked a California federal court to find the company does not violate copyright and hacking laws when it accesses LinkedIn members’ public profile data.

HiQ Labs Inc. v. LinkedIn Corp., No. 17-cv-3301, complaint filed, 2017 WL 2493783 (N.D. Cal. June 7, 2017).

LinkedIn abruptly blocked hiQ Labs Inc.’s access to site members’ public profile data after allowing the startup to collect this information for years, according to the declaratory judgment suit hiQ filed in the U.S. District Court for the Northern District of California.

Despite knowledge of hiQ’s business, LinkedIn sent a cease-and-desist letter May 23 accusing the San Francisco-based startup of improperly accessing and using LinkedIn’s website, computer systems and data, the suit says.

In the letter, LinkedIn told hiQ that any continued access to the company’s website would be unauthorized and would violate the Computer Fraud and Abuse Act, 18 U.S.C.A. § 1030, and the Digital Millennium Copyright Act, 17 U.S.C.A. § 1201, the complaint says.

HiQ says anti-competitive behavior motivated LinkedIn’s about-face.

‘NO COMPARABLE DATA SOURCE’

Launched in 2012 and backed by almost $15 million in funding, hiQ offers solutions to help companies invest in employees, lower acquisition costs and motivate their workforce, the suit says.

To offer its analytics services, hiQ relies on public data from LinkedIn, which is the largest professional social network, according to the complaint.

“There is no comparable data source anywhere else in the world,” the suit says.

Under the terms of LinkedIn’s user agreement, the members own their data, hiQ says.

Members may choose to publish the data publicly or restrict who can access their information, the suit explains.

The public information is available to search engines such as Google and Bing or anyone with an internet connection, including hiQ, according to the complaint.

‘UNDENIABLE DOMINANCE’

Before LinkedIn sent the cease-and-desist letter, it knew about hiQ’s business and the startup’s reliance on members’ public profile data, the suit says.

“This [the letter] came as a shock to hiQ, as LinkedIn has been aware of hiQ’s activities for several years and never once objected to hiQ’s use of this public information,” according to the complaint.

And while LinkedIn says the federal digital copyright and computer hacking laws prevent hiQ’s copying of public profile information, LinkedIn — by its own contract terms — has

no proprietary interest in its members’ data, the suit says.

LinkedIn also offers no reasonable basis to block hiQ from accessing a public website, especially when it has been providing access for years and allows other third parties continued access to the site, according to the complaint.

HiQ asserts LinkedIn is wielding its “undeniable dominance” over its members’ public data.

The startup also says LinkedIn is building “people analytics” products that will compete with hiQ’s products.

“LinkedIn, through its cease-and desist-letter and threats of litigation, is attempting to use the law for an improper, anti-competitive purpose and to give itself a competitive advantage,” the suit says.

HiQ asks the court for declaratory and injunctive relief to stop LinkedIn from blocking the startup’s access to public information, as well as damages, attorney fees and costs. WJ

Attorneys:Plaintiff: C. Brandon Wisoff, Deepak Gupta, Rebecca H. Stephens and Jeffrey G. Lau, Farella Braun + Martell, San Francisco, CA; Laurence H. Tribe, Harvard Law School, Cambridge, MA

Related Filings:Complaint: 2017 WL 2493783


TRADEMARK

Veterinarian loses appeal over ‘American College’ trademark registration By Patrick H.J. Hughes

A doctor who primarily treats horses could not convince the U.S. Court of Appeals for the Federal Circuit to stop the cancellation of her registration of a trademark that had been used to describe a veterinary specialist organization.

Lyons v. American College of Veterinary Sports Medicine and Rehabilitation, No. 2015-2055, 2017 WL 2467270 (Fed. Cir. June 8, 2017).

Equine veterinarian Sheila Lyons was not the rightful owner of the mark, the Federal Circuit said, affirming the Trademark Trial and Appeal Board’s decision to reject the registration.

“Although Lyons may have been the first to use the mark, the record shows that her use never rose to the level of use in commerce,” Circuit Judge Alan D. Lourie wrote for the three-judge panel.

AMERICAN COLLEGE

In 1999 Lyons began working with other veterinarians to form a specialty organization for treating athletic animals.

Early on, the organization operated under the name “American College of Veterinary Sports Medicine and Rehabilitation,” according to the appellate panel’s opinion.

While Lyons started as an organizing member, she left the group in July 2004, the opinion said.

Nevertheless, in 2005 she filed an intent-to-use application with the U.S. Patent and Trademark Office, seeking to register the name of the organization she helped found.

While the PTO rejected her initial application to register the mark on the principal register, in 2006 she was issued a trademark registration on the supplemental register, giving her limited rights to the mark.

Meanwhile, the organization she helped found was granted provisional status as an accredited specialist organization by the American Veterinary Medical Association in 2010.

As an AVMA-recognized “college,” the organization said it had exclusive rights to

the mark and petitioned to cancel Lyons’ supplemental registration in April 2011.

The TTAB proceeding was suspended, however, when Lyons filed a trademark infringement suit in December 2011 against the college. Lyons v. Gillete, No. 11-cv-12192, complaint filed, 2011 WL 6401228 (D. Mass. Dec. 12, 2011).

In February 2014 U.S. District Judge William J. Young of the District of Massachusetts dismissed the infringement claims. Lyons v. Am. College of Veterinary Sports Med., 997 F. Supp. 2d 92 (D. Mass 2014).

Lyons failed to acquire the necessary distinctiveness under Section 2(f) of the Lanham Act, 15 U.S.C.A. § 1052(f), to assert the mark in an infringement suit, the judge ruled.

Judge Young then instructed the PTO to reject Lyons’ application to register the mark on the principal register, but said nothing about canceling the supplemental registration.

The college’s cancellation proceeding then resumed at the TTAB, according to the Federal Circuit opinion.

TTAB PROCEEDING

In March 2016 the TTAB granted the college’s petition to cancel the disputed mark. Am. College of Veterinary Sports Med. v. Lyons, No. 92053934, 2016 WL 1380739 (T.T.A.B. Mar. 17, 2016).

According to Section 1(a) of the Lanham Act, 15 U.S.C.A. § 1051(a), only the owner can apply to register a mark, the TTAB said.

Ownership must be established with the mark’s use in commerce, and this use “must be a real activity,” the TTAB said, comparing the mark to an idea at the time Lyons was a member of the organization.

“All the indicia of ownership — intent, public association and quality control” — pointed to

the college as the true owner of the disputed mark, the TTAB said.

Lyons appealed.

LOOKING TO MUSICAL GROUPS

For guidance, the Federal Circuit looked to trademark ownership disputes involving feuding members of musical groups.

In such evaluations, courts should determine if a mark is personal to each group member and whether the public associates that mark with a particular member of a group, the Federal Circuit panel said.

The public would not look to Lyons for services provided by an “American College of Veterinary Sports Medicine and Rehabilitation” trademark holder, the panel said.

While Lyons claimed to have priority by using the mark as early as 1995 in a fundraising document, the panel found her use was, at most, de minimus.

All the parties involved reasonably expected the mark to be used as the name of the college once that organization was accredited, the panel said. Lyons knew this, even if she used the mark first, the opinion said.

“It is clear from the record that the college used the mark in commerce before Lyons, and Lyons cannot in effect appropriate it,” the panel concluded. WJ

Attorneys:Appellant: Stephen J. Lyons, Klieman & Lyons, Boston, MA

Appellee: David A. Kluft and Nicole Kinsey, Foley Hoag LLP, Boston, MA

Related Filings:TTAB: 2016 WL 1380739 District Court opinion: 997 F.Supp.2d 92 Complaint: 2011 WL 6401228


TRADEMARK

Utah doctor loses domains to health care provider IntermountainBy Jason Seashore, J.D.

The World Intellectual Property Organization has awarded Intermountain Health Care Inc. ownership of multiple domain names registered by a Utah physician after the company announced a hospital name change.

Intermountain Health Care Inc. et al. v. Delcore, No. D2017-265, 2017 WL 1832399 (WIPO Arb. May 2, 2017).

Dr. Randy Delcore, of Cedar City, displayed bad faith in registering 10 domain names including cedarcityhospital.co, cedarcityhospital.com and cedarcityhospital.org shortly after Intermountain announced it would change the name of Valley View Medical Center to Cedar City Hospital, the WIPO Arbitration and Mediation Center panel said.

Salt Lake City-based Intermountain is an integrated health care system operating in Utah and Idaho.

Intermountain announced the name change Nov. 16, 2015. Over the next three days, Delcore registered seven domain names incorporating the Intermountain trademark and three incorporating the phrase Cedar City Hospital, according to the panel’s decision.

Intermountain filed the complaint with WIPO on Feb. 10.

Delcore consented to the transfer of the seven domain names containing the Intermountain mark, and the panel ordered him to transfer the other three, according to the decision.

UDRP FACTORS

The Uniform Domain Name Dispute Resolution Policy, commonly called UDRP, is the legal framework established by the Internet Corporation for Assigned Names and Numbers for the resolution of domain name registration disputes.

To succeed under the UDRP rules, a complainant must prove possession of rights to a trademark that is identical or confusingly similar to the disputed domain name.

A complainant must then show the registrant has no rights or legitimate interests in the domain name and that the name was registered in bad faith.

COMMON LAW TRADEMARK RIGHTS

The sole panelist found the three domain names containing the phrase Cedar City Hospital were confusingly similar to a trademark in which Intermountain holds common law trademark rights.

Delcore had argued Intermountain did not acquire common law rights in the Cedar City Hospital name in the time between its Nov. 16, 2015, announcement and his registration.

The panel disagreed, noting that the company went to “considerable lengths” to publicize the name change, including public announcements, updated signage, and amended agreements with doctors, insurers and vendors.

LEGITIMATE PLANS OR LEVERAGE?

The panel also rejected Delcore’s argument that he had a legitimate interest in the domains because he had a long-range plan to open a hospital in Cedar City.

Instead, the panel found Intermountain’s contention more plausible that Delcore had registered the domains in bad faith as leverage to get an Intermountain subsidiary to add his clinic as an in-network health care provider.

The registration of seven domain names containing the Intermountain trademark at the same time as the three Cedar City Hospital registrations undermined Delcore’s credibility, the decision said. WJ

Related Filings:Decision: 2017 WL 1832399

See Document Section C (P. 39) for the decision.

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“It offends a bedrock First Amendment principle: Speech may not be banned on the ground that it expresses ideas that offend,” Justice Alito wrote.

Band frontman Simon Tam has said he chose to call the band The Slants to reclaim a term some consider a derogatory reference to Asian people’s eyes, and wear it as a “badge of pride.”

The band’s lawyers argued that the government cannot use trademark law to impose burdens on free speech to protect listeners from offense.

The American Civil Liberties Union, which filed legal papers supporting the band, hailed the ruling as a major victory for the First Amendment.

ACLU lawyer Lee Rowland said government efforts to protect minorities from disparagement instead hurt members of that very community, in this case the Asian-American band.

“Fortunately, today’s opinion prevents the kind of absurd outcome that results when the government plays speech police,” Rowland said.

‘MARGINALIZED COMMUNITIES’

The band welcomed the ruling.

“After an excruciating legal battle that has spanned nearly eight years, we’re beyond humbled and thrilled to have won this case at the Supreme Court,” the band said in a statement posted to its website June 19. “This journey has always been much bigger than our band: It’s been about the rights of all marginalized communities to determine what’s best for ourselves.”

Patent and Trademark Office spokesman Paul Fucito said the agency was reviewing the decision.

The government previously said a ruling favoring The Slants could lead to a proliferation of racial slurs as sanctioned trademarks.

The SlantsCONTINUED FROM PAGE 1

After the government rejected The Slants’ request, Tam appealed to the U.S. Court of Appeals for the Federal Circuit in Washington, which in 2015 ruled that the so-called disparagement provision of the 1946 law governing trademarks ran afoul of the Constitution’s guarantee of free speech. In re Tam, 808 F.3d 1321 (Fed. Cir. 2015).

The government appealed that ruling to the Supreme Court.

The federal government said in court papers that it should not be required to approve trademarks “containing crude references to women based on parts of their anatomy, the most repellent racial slurs and white-supremacist slogans, and demeaning illustrations of the prophet Mohammed and other religious figures.”

In the separate Redskins case, a trademark board in 2014 canceled the team’s six trademarks at the request of Native American activists on grounds that the team name disparaged Native Americans. Blackhorse v. Pro-Football Inc., No. 92046185, 2014 WL 2757516 (T.T.A.B. June 18, 2014).

The team’s appeal, also on free speech grounds, was put on hold in the 4th Circuit in Richmond, Virginia, pending the outcome of The Slants’ case. Pro-Football Inc. v. Blackhorse, No. 15-1874, 2016 WL 1104587 (4th Cir. Mar. 18, 2016).

Justice Neil Gorsuch joined the court after arguments were heard in the case and did not participate in the June 19 decision.

The Supreme Court also ruled on another free speech case June 19, striking down a North Carolina law banning convicted sex offenders from Facebook and other social media services that play a vital role in modern life. Packingham v. North Carolina, No. 15-1194, 2017 WL 2621313 (June 19, 2017). WJ

(Reporting by Andrew Chung)Attorneys:Petitioner: Deputy Solicitor General Malcolm L. Stewart, Justice Department, Washington, DC

Respondent: John C. Connell, Archer & Greiner, Haddonfield, NJ

Related Filings:Opinion: 2017 WL 2621315 Argument transcript: 2017 WL 201453

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Attorneys predict outcome of Washington Redskins’ trademark spat

The U.S. Supreme Court’s decision over federal registration of “The Slants” trademark has attorneys speculating over the future of the Washington Redskins football team’s trademarks, which were deemed unregistrable in Pro-Football Inc. v. Blackhorse et al., 112 F. Supp. 3d 439 (E.D. Va. 2015).Pro-Football Inc., the holder of many “Redskins” marks, filed a certiorari petition in April 2016. The Supreme Court rejected the petition in October. Pro-Football Inc. v. Blackhorse, No. 15-1311, cert. denied, 137 S. Ct. 44 (Oct. 3, 2016).The justices opted instead to use Lee v. Tam, No. 15-1293, cert. granted, 137 S. Ct. 30 (Sept. 29, 2016), to address the constitutionality of the disparagement clause in Section 2(a) of the Lanham Act, 15 U.S.C.A. § 1052(a).These attorneys were not involved in either dispute.

Gregory C. Chinlund, Marshall, Gerstein & Borun, Chicago

Whether or not there will be a rush to register disparaging marks with the PTO remains to be seen. An uptick may be expected but probably from those otherwise would-be applicants seeking to bring social issues to light (like Slants founder Simon Tam) or simply as a means to protect a controversial (intentional or not) commercial identity.

Luke DeMarte, Michael Best, Chicago

For years, the PTO inconsistently invoked the disparagement clause of the Lanham Act to deny registration to marks which were considered disparaging. This decision will free the PTO from its impossible burden and bring some consistency to the examination process. In pop culture terms, everyone will remember this as the case that paved the way for the Redskins to keep their trademark registrations.

Lauren Emerson, Baker Botts LLP, New York

Today’s decision, while not surprising, is momentous, as any decision striking a long-standing legislative provision based on freedom of speech would be. I have little doubt that in the weeks and months to come, we will see many new filings that will be more challenging to celebrate than Simon Tam’s hard-won victory.

Christopher K. Larus, Robins Kaplan LLP, Minneapolis

The decision has an immediate impact on closely watched efforts to cancel the federal trademark registrations for the NFL’s Washington Redskins. With this decision, those long-standing registrations will stay in place. The net result is that the Trademark Office will likely soon be faced with a host of offensive and profane trademark applications, as applicants attempt to take advantage of this change in long-standing trademark law. The Trademark Official Gazette may soon require a parental advisory on the cover.

Andrew Price, Venable LLP, Washington

The Redskins should consider changing their score-celebrating song from “Hail to the Redskins” to “Hail to The Slants.” As the Redskins cheer and The Slants take a bow, most organizations will go about their business as usual, however, and continue to self-select brands that are most likely to appeal to everyone. It is the marketplace, not the Trademark Office, that decides whether brands really win or lose.

David L. Rein, Erickson Kernell IP, Golden, Colorado

This decision is an enormous boost to Dan Snyder and the Redskins. But, the greater question is whether there are now any restraints to rein in marketing departments that are likely working overtime now to come up with even more jarring brand names to compete in our Kardashian, attention-getting society. It will be interesting to see if the government responds with a new approach to trademark law or leaves it to the wild west of market forces.

Mark Sommers, Finnegan, Washington

The new arbiter over all things disparaging is the court of public opinion, where merchants seeking to exploit the source-identifying function of disparaging words must balance such use against the inherent potential and risk of commercial alienation, blowback and public outrage. The “Redskins” mark will again appear on federal register.

Monica Riva Talley, Sterne, Kessler, Goldstein & Fox, Washington

While the decision is headline-grabbing news for the Redskins and the previously obscure band The Slants, it likely won’t impact the branding practices for most entities. A review of the TTAB database reveals that only a very small number of trademark applications are refused on appeal on the grounds that they are disparaging. It will be interesting to see whether new brands deliberately created to disparage certain groups of individuals have any legs in today’s charged political and social climate.

Marsha Gentner, Dykema, Washington

What I’m interested in seeing is whether and how cases with marks that would not have been registered in the past will fare now in the courts. I’m thinking of cases involving infringement of a mark that includes a swastika, or depicts the prophet Mohammed (or Jesus Christ) in otherwise lewd marks, or the Kathy Griffin example of the president’s severed head.

Erin Hennessy, Bracewell LLP, New York

The Tam decision is certainly good news for the Washington Redskins. Left open for reinterpretation are the “scandalous” and “immoral” bars to registration under Section 2(a) of the Lanham Act. Following the reasoning of Justice Alito, one could surmise that these sections similarly violate the First Amendment’s free speech clause.

Jonathan Hudis, Quarles & Brady, Washigton

The court’s decision in Tam will likely have a profound impact on matters that are currently on appeal wherein the PTO refused or canceled trademark registrations for violating the disparagement clause, most notably, the Washington Redskins’ case. Given the court’s holding, many otherwise offending marks — whether based upon political, religious or other beliefs or sensibilities of the American public — will likely be allowed to register with the PTO going forward.

Jonathan Moskin, Foley & Lardner, New York

As a practical matter, the decision clears the way not only for the Redskins to maintain ownership of their marks (regardless of whether Native Americans find them offensive), but also clears the way for registration of trademarks demeaning of the prophet Muhammad or Islam in general, openly racist and misogynistic slogans, and the like.


CASE AND DOCUMENT INDEX

Dr. Seuss Enterprises LP v. ComicMix LLC et al., No. 16-cv-2779, 2017 WL 2505007 (S.D. Cal. June 9, 2017) .............................................................. 12 Document Section B .................................................................................................................................................................................................... 30

Finjan Inc. v. Cisco Systems Inc., No. 17-cv-72, 2017 WL 2462423 (N.D. Cal. June 6, 2017) ..............................................................................................9

HiQ Labs Inc. v. LinkedIn Corp., No. 17-cv-3301, complaint filed, 2017 WL 2493783 (N.D. Cal. June 7, 2017) .................................................................13

In re NuVasive Inc., No. 2015-1841, 2017 WL 2365257 (Fed. Cir. May 31, 2017) ................................................................................................................ 11

Intermountain Health Care Inc. et al. v. Delcore, No. D2017-265, 2017 WL 1832399 (WIPO Arb. May 2, 2017) .............................................................. 15 Document Section C .....................................................................................................................................................................................................39

Lyons v. American College of Veterinary Sports Medicine and Rehabilitation, No. 2015-2055, 2017 WL 2467270 (Fed. Cir. June 8, 2017) .................. 14

Matal v. Tam, No. 15-1293, 2017 WL 2621315 (U.S. June 19, 2017).......................................................................................................................................1

Oil States Energy Services LLC v. Greene’s Energy Group, No. 16-712, 2017 WL 2507340 (U.S. June 12, 2017) ................................................................. 7

Pecher et al. v. Owens-Illinois Inc. et al., Nos. 16-1799, 16-2376, 16-2377, 16-2378, 16-2379 and 16-2380, 2017 WL 2432392 (7th Cir. June 6, 2017).............................................................................................................................................................................8

Sandoz Inc. v. Amgen Inc. et al., No. 15-1039, 2017 WL 2507337 (U.S. June 12, 2017) ......................................................................................................5 Document Section A..................................................................................................................................................................................................... 19

Uniloc USA Inc. et al. v. Google Inc., No. 17-cv-467, complaint filed, 2017 WL 2406785 (E.D. Tex. June 1, 2017) ........................................................... 10

SANDOZ

WESTLAW JOURNAL n INTELLECTUAL PROPERTY | 19

DOCUMENT SECTION A

© 2017 Thomson Reuters

2017 WL 2507337Only the Westlaw citation is currently available.

Supreme Court of the United States

SANDOZ INC., Petitionerv.

AMGEN INC., et al.Amgen Inc., et al., Petitioners

v.Sandoz Inc.

Nos. 15–1039, 15–1195.|

Argued April 26, 2017.|

Decided June 12, 2017.

SynopsisBackground: Sponsor of a patented biologic drug brought action against applicant, which was seeking Food and Drug Administration (FDA) approval of a biosimilar drug pursuant to Biologics Price Competition and Innovation Act (BPCIA), for patent infringement and violation of California’s unfair competition statute. The United States District Court for the Northern District of California, Richard Seeborg, J., 2015 WL 1264756, entered judgment in favor of applicant. Sponsor appealed. The United States Court of Appeals for the Federal Circuit, Lourie, Circuit Judge, affirmed in part, vacated in part, and remanded, 794 F.3d 1347. Certiorari was granted.

Holdings: The Supreme Court, Justice Thomas, held that: [1] BPCIA’s requirement that an applicant provide the sponsor with its application and manufacturing information is not enforceable by an injunction under federal law; [2] whether applicant’s failure to provide sponsor with its application and manufacturing information was “unlawful” under California’s unfair competition law was a question of state, rather than federal law; and [3] applicant is not required to provide notice of commercial marketing to the sponsor until after the FDA licenses its biosimilar. Vacated in part, reversed in part, and remanded. Justice Breyer filed concurring opinion.

West Headnotes (8)

[1] Patents Filing of Applications for Drug Approval

The Biologics Price Competition and Innovation Act (BPCIA) facilitates litigation during the period preceding Food and Drug Administration (FDA) approval of a biosimilar drug so that the parties do not have to wait until commercial marketing to resolve their patent disputes; it enables the parties to bring infringement actions at certain points in the application process, even if the applicant has not yet committed an act that would traditionally constitute patent infringement. 35 U.S.C.A. § 271(a), (e)(2)(C)(i, ii), (e)(4).

Cases that cite this headnote

20 | WESTLAW JOURNAL n INTELLECTUAL PROPERTY

DOCUMENT SECTION ASANDOZ


[2] Antitrust and Trade Regulation Source of Prohibition or Obligation; Lawfulness

A business act or practice is “unlawful” under California’s unfair competition law if it violates a rule contained in some other state or federal statute. West’s Ann.Cal.Bus. & Prof.Code § 17200.


[3] Health Generic and Orphan Drugs; Market Exclusivity

The Biologics Price Competition and Innovation Act’s (BPCIA) requirement that an applicant seeking Food and Drug Administration (FDA) approval of a biosimilar drug provide the sponsor of a biologic product with its application and manufacturing information is not enforceable by an injunction under federal law. Public Health Service Act, § 351(l )(2)(A), 42 U.S.C.A. § 262(l ) (2)(A).


[4] Patents Filing of Applications for Drug Approval

An applicant’s noncompliance with Biologics Price Competition and Innovation Act’s (BPCIA) requirement that an applicant seeking Food and Drug Administration (FDA) approval of a biosimilar drug provide the sponsor of a biologic product with its application and manufacturing information is not an element of the act of artificial infringement under the BPCIA. Public Health Service Act, § 351(l )(2)(A), 42 U.S.C.A. § 262(l )(2)(A).


[5] Action Cumulative or Exclusive Remedies

Where a statute expressly provides a remedy, courts must be especially reluctant to provide additional remedies.



The Biologics Price Competition and Innovation Act’s (BPCIA) carefully crafted and detailed enforcement scheme provides strong evidence that Congress did not intend to authorize other remedies that it simply forgot to incorporate expressly. Public Health Service Act, § 351(l )(9)(C), 42 U.S.C.A. § 262(l ) (9)(C).


[7] Federal Courts Antitrust, Unfair Competition, and Consumer Protection

Whether the failure of an applicant seeking Food and Drug Administration (FDA) approval of a biosimilar drug to provide the sponsor of a biologic product with its application and manufacturing information, as required by the Biologics Price Competition and Innovation Act (BPCIA), was “unlawful” under California’s unfair competition law was a question of state, rather than federal law. Public Health Service Act, § 351(l )(2)(A), 42 U.S.C.A. § 262(l )(2)(A); West’s Ann.Cal.Bus. & Prof.Code § 17200.

1 Cases that cite this headnote





Under the Biologics Price Competition and Innovation Act (BPCIA), an applicant seeking Food and Drug Administration (FDA) approval of a biosimilar drug is not required to provide notice of commercial marketing to the sponsor of a biologic product until after the FDA licenses its biosimilar; the applicant may provide notice either before or after receiving FDA approval. Public Health Service Act, § 351(l )(8)(A), 42 U.S.C.A. § 262(l )(8)(A).


Syllabus*

*1 The Biologics Price Competition and Innovation Act of 2009 (BPCIA or Act) provides an abbreviated pathway for obtaining Food and Drug Administration (FDA) approval of a drug that is biosimilar to an already licensed biological product (reference product). 42 U.S.C. § 262(k). It also provides procedures for resolving patent disputes between biosimilar manufacturers (applicants) and manufacturers of reference products (sponsors). § 262(l ). The Act treats the mere submission of a biosimilar application as an “artificial” act of infringement, enabling parties to bring patent infringement actions at certain points in the application process even if the applicant has not committed a traditional act of patent infringement. See 35 U.S.C. §§ 271(e)(2)(C)(i), (ii). Under § 262(l )(2)(A), an applicant seeking FDA approval of a biosimilar must provide its application and manufacturing information to the sponsor within 20 days of the date the FDA notifies the applicant that it has accepted the application for review. This triggers an exchange of information between the applicant and sponsor designed to create lists of relevant patents and flesh out potential legal arguments. § 262(l )(3). The BPCIA then channels the parties into two phases of patent litigation. In the first, the parties collaborate to identify patents on the lists for immediate litigation. The second phase—triggered when the applicant, pursuant to § 262(l )(8)(A), gives the sponsor notice at least 180 days before commercially marketing the biosimilar—involves any listed patents not litigated in the first phase. The applicant has substantial control over the timing and scope of both phases of litigation. Failure to comply with these procedural requirements may lead to two consequences relevant here. Under § 262(l )(9)(C), if an applicant fails to provide its application and manufacturing information to the sponsor under § 262(l )(2)(A), then the sponsor, but not the applicant, may immediately bring an action “for a declaration of infringement, validity, or enforceability of any patent that claims the biological product or a use of the biological product.” And under § 262(l )(9)(B), if an applicant provides the application and manufacturing information but fails to complete a subsequent step in the process, the sponsor, but not the applicant, may bring a declaratory-judgment action with respect to any patent included on the sponsor’s list of relevant patents. *2 Neupogen is a filgrastim product marketed by Amgen, which claims to hold patents on methods of manufacturing and using filgrastim. Sandoz sought FDA approval to market a biosimilar filgrastim product under the brand name Zarxio, with Neupogen as the reference product. A day after the FDA informed Sandoz that its application had been accepted for review, Sandoz notified Amgen that it had submitted an application and that it intended to market Zarxio immediately upon receiving FDA approval. It later informed Amgen that it did not intend to provide the application and manufacturing information required by § 262(l )(2)(A) and that Amgen could sue immediately for infringement under § 262(l )(9)(C). Amgen sued Sandoz for patent infringement and also asserted that Sandoz engaged in “unlawful” conduct in violation of California’s unfair competition law. This latter claim was predicated on two alleged violations of the BPCIA: Sandoz’s failure to provide its application and manufacturing information under § 262(l )(2)(A), and its provision of notice of commercial marketing under § 262(l )(8)(A) prior to obtaining licensure from the FDA. Amgen sought injunctions to enforce both BPCIA requirements. Sandoz counterclaimed for declaratory judgments that the asserted patent was invalid and not infringed and that it had not violated the BPCIA. While the case was pending, the FDA licensed Zarxio, and Sandoz provided Amgen a further notice of commercial marketing. The District Court subsequently granted partial judgment on the pleadings to Sandoz on its BPCIA counterclaims and dismissed Amgen’s unfair competition claims with prejudice. The Federal Circuit affirmed in part, vacated in part, and remanded. The court affirmed the dismissal of Amgen’s state-law claim based on Sandoz’s alleged violation of § 262(l )(2)(A), holding that Sandoz did not violate the BPCIA in failing to disclose its application and manufacturing information and that the BPCIA provides the exclusive remedies for failure to comply with this requirement. The court also held that under § 262(l )(8)(A) an applicant must provide notice of commercial marketing after obtaining licensure, and that this requirement is mandatory. It thus enjoined Sandoz from marketing Zarxio until 180 days after the date it provided its second notice.




*3 Held : Section 262(l )(2)(A) is not enforceable by injunction under federal law, but the Federal Circuit on remand should determine whether a state-law injunction is available. An applicant may provide notice under § 262(l )(8)(A) prior to obtaining licensure. Pp. –––– – ––––. (a) Section 262(l )(2)(A)’s requirement that an applicant provide the sponsor with its application and manufacturing information is not enforceable by an injunction under federal law. The Federal Circuit reached the proper result on this point, but its reasoning was flawed. It cited § 271(e)(4), which expressly provides the “only remedies” for an act of artificial infringement. In light of this language, the court reasoned that no remedy other than those specified in the text—such as an injunction to compel the applicant to provide its application and manufacturing information—was available. The problem with this reasoning is that Sandoz’s failure to disclose was not an act of artificial infringement remediable under § 271(e)(4). Submitting an application constitutes an act of artificial infringement; failing to disclose the application and manufacturing information required by § 262(l )(2)(A) does not. Another provision, § 262(l )(9)(C), provides a remedy for an applicant’s failure to turn over its application and manufacturing information. It authorizes the sponsor, but not the applicant, to bring an immediate declaratory-judgment action for artificial infringement, thus vesting in the sponsor the control that the applicant would otherwise have exercised over the scope and timing of the patent litigation and depriving the applicant of the certainty it could have obtained by bringing a declaratory-judgment action prior to marketing its product. The presence of this remedy, coupled with the absence of any other textually specified remedies, indicates that Congress did not intend sponsors to have access to injunctive relief, at least as a matter of federal law, to enforce the disclosure requirement. See Great–West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 209, 122 S.Ct. 708, 151 L.Ed.2d 635. Statutory context further confirms that Congress did not authorize courts to enforce § 262(l )(2)(A) by injunction. Pp. –––– – ––––. (b) The Federal Circuit should determine on remand whether an injunction is available under state law to enforce § 262(l )(2)(A). Whether Sandoz’s conduct was “unlawful” under California’s unfair competition statute is a question of state law, and the Federal Circuit thus erred in attempting to answer that question by referring only to the BPCIA. There is no dispute about how the federal scheme actually works on the facts of this case: Sandoz failed to disclose the requisite information under § 262(l )(2)(A), and was accordingly subject to the consequence specified in § 262(l )(9)(C). As a result, there is nothing to decide on this point as a matter of federal law. The court on remand should determine whether California law would treat noncompliance with § 262(l )(2)(A) as “unlawful,” and whether the BPCIA pre-empts any additional state-law remedy for failure to comply with § 262(l ) (2)(A). Pp. –––– – ––––. *4 (c) An applicant may provide notice of commercial marketing before obtaining a license. Section 262(l )(8)(A) states that the applicant “shall provide notice to the reference product sponsor not later than 180 days before the date of the first commercial marketing of the biological product licensed under subsection (k).” Because the phrase “of the biological product licensed under subsection (k)” modifies “commercial marketing” rather than “notice,” “commercial marketing” is the point in time by which the biosimilar must be “licensed.” Accordingly, the applicant may provide notice either before or after receiving FDA approval. Statutory context confirms that § 262(l ) (8)(A) contains a single timing requirement (180 days before marketing), rather than the two requirements posited by the Federal Circuit (after licensing, and 180 days before marketing). “Had Congress intended to” impose two timing requirements in § 262(l )(8)(A), “it presumably would have done so expressly as it did in the” adjacent provision, § 262(l )(8)(B). Russello v. United States, 464 U.S. 16, 23, 104 S.Ct. 296, 78 L.Ed.2d 17. Amgen’s contrary arguments are unpersuasive, and its various policy arguments cannot overcome the statute’s plain language. Pp. –––– – ––––. 794 F.3d 1347, vacated in part, reversed in part, and remanded. THOMAS, J., delivered the opinion for a unanimous Court. BREYER, J., filed a concurring opinion.

Attorneys and Law FirmsDeanne E. Maynard, Washington, DC, for Petitioner in No. 15–1039.

Seth P. Waxman, Washington, DC, for Petitioners in No. 15–1195.

Anthony A. Yang, for the United States as amicus curiae, by special leave of the Court, supporting the Petitioner.

Rachel Krevans, Morrison & Foerster LLP, San Francisco, CA, Julie Y. Park, Morrison & Foerster LLP, San Diego, CA, Deanne E.




Maynard, Joseph R. Palmore, Marc A. Hearron, Bryan J. Leitch, Lena Hughes, Morrison & Foerster LLP, Washington, DC, for Petitioner in No. 15–1039.

Jonathan P. Graham, Stuart L. Watt, Wendy A. Whiteford, Lois M. Kwasigroch, Kimberlin L. Morley, Amgen Inc., Thousand Oaks, CA, Seth P. Waxman, Thomas G. Saunders, Daniel Winik, Wilmer Cutler, Pickering Hale and Dorr LLP, Washington, DC, Nicholas Groombridge, Eric Alan Stone, Jennifer H. Wu, Arielle K. Linsey, Stephen A. Maniscalco, Paul, Weiss, Rifkind, Wharton & Garrison LLP, New York, NY, Janine M. Lopez, Wilmer Cutler Pickering Hale and Dorr LLP, Boston, MA, for Cross–Petitioners.

Wendy A. Whiteford, Lois M. Kwasigroch, Kimberlin L. Morley, Amgen Inc., Thousand Oaks, CA, Vernon M. Winters, Alexander D. Baxter, Sidley Austin LLP, San Francisco, CA, Nicholas Groombridge, Eric Alan Stone, Jennifer H. Wu, Jennifer Gordon, Peter Sandel, Arielle K. Linsey, Ana J. Friedman, Stephen A. Maniscalco, Paul, Weiss, Rifkind, Wharton & Garrison LLP, New York, NY, for Cross–Petitioners.

Opinion

Justice THOMAS delivered the opinion of the Court.

These cases involve 42 U.S.C. § 262(l ), which was enacted as part of the Biologics Price Competition and Innovation Act of 2009 (BPCIA), 124 Stat. 808. The BPCIA governs a type of drug called a biosimilar, which is a biologic product that is highly similar to a biologic product that has already been approved by the Food and Drug Administration (FDA). Under § 262(l ), an applicant that seeks FDA approval of a biosimilar must provide its application materials and manufacturing information to the manufacturer of the corresponding biologic within 20 days of the date the FDA notifies the applicant that it has accepted the application for review. The applicant then must give notice to the manufacturer at least 180 days before marketing the biosimilar commercially. *5 The first question presented by these cases is whether the requirement that an applicant provide its application and manufacturing information to the manufacturer of the biologic is enforceable by injunction. We conclude that an injunction is not available under federal law, but we remand for the court below to decide whether an injunction is available under state law. The second question is whether the applicant must give notice to the manufacturer after, rather than before, obtaining a license from the FDA for its biosimilar. We conclude that an applicant may provide notice before obtaining a license.

IThe complex statutory scheme at issue in these cases establishes processes both for obtaining FDA approval of biosimilars and for resolving patent disputes between manufacturers of licensed biologics and manufacturers of biosimilars. Before turning to the questions presented, we first explain the statutory background.

AA biologic is a type of drug derived from natural, biological sources such as animals or microorganisms. Biologics thus differ from traditional drugs, which are typically synthesized from chemicals.1 A manufacturer of a biologic may market the drug only if the FDA has licensed it pursuant to either of two review processes set forth in § 262. The default pathway for approval, used for new biologics, is set forth in § 262(a). Under that subsection, the FDA may license a new biologic if, among other things, the manufacturer demonstrates that it is “safe, pure, and potent.” § 262(a)(2)(C)(i)(I). In addition to this default route, the statute also prescribes an alternative, abbreviated route for FDA approval of biosimilars, which is set forth in § 262(k). To obtain approval through the BPCIA’s abbreviated process, the manufacturer of a biosimilar (applicant) does not need to show that the product is “safe, pure, and potent.” Instead, the applicant may piggyback on the showing made by the manufacturer (sponsor) of a previously licensed biologic (reference product). See § 262(k)(2)(A)(iii). An applicant must show that its product is “highly similar” to the reference product and that there are no “clinically meaningful differences” between the two in terms of “safety, purity, and potency.” §§ 262(i)(2)(A), (B); see also § 262(k)(2)(A)(i)(I). An applicant may not submit an application until 4 years after the reference product is first licensed, and the FDA may not license a biosimilar until 12 years after the reference product is first licensed. §§ 262(k)(7)(A), (B). As a result, the manufacturer of a new biologic enjoys a 12–year period when its biologic may be marketed without competition from biosimilars.




B*6 A sponsor may hold multiple patents covering the biologic, its therapeutic uses, and the processes used to manufacture it. Those patents may constrain an applicant’s ability to market its biosimilar even after the expiration of the 12–year exclusivity period contained in § 262(k)(7)(A). [1] The BPCIA facilitates litigation during the period preceding FDA approval so that the parties do not have to wait until commercial marketing to resolve their patent disputes. It enables the parties to bring infringement actions at certain points in the application process, even if the applicant has not yet committed an act that would traditionally constitute patent infringement. See 35 U.S.C. § 271(a) (traditionally infringing acts include making, using, offering to sell, or selling any patented invention within the United States without authority to do so). Specifically, it provides that the mere submission of a biosimilar application constitutes an act of infringement. §§ 271(e)(2)(C)(i), (ii). We will refer to this kind of preapproval infringement as “artificial” infringement. Section 271(e)(4) provides remedies for artificial infringement, including injunctive relief and damages.

CThe BPCIA sets forth a carefully calibrated scheme for preparing to adjudicate, and then adjudicating, claims of infringement. See 42 U.S.C. § 262(l ). When the FDA accepts an application for review, it notifies the applicant, who within 20 days “shall provide” to the sponsor a copy of the application and information about how the biosimilar is manufactured. § 262(l )(2)(A). The applicant also “may provide” the sponsor with any additional information that it requests. § 262(l )(2)(B). These disclosures enable the sponsor to evaluate the biosimilar for possible infringement of patents it holds on the reference product (i.e., the corresponding biologic). § 262(l ) (1)(D). The information the applicant provides is subject to strict confidentiality rules, enforceable by injunction. See § 262(l )(1)(H). The first question presented by these cases is whether § 262(l )(2)(A)’s requirement—that the applicant provide its application and manufacturing information to the sponsor—is itself enforceable by injunction. After the applicant makes the requisite disclosures, the parties exchange information to identify relevant patents and to flesh out the legal arguments that they might raise in future litigation. Within 60 days of receiving the application and manufacturing information, the sponsor “shall provide” to the applicant “a list of patents” for which it believes it could assert an infringement claim if a person without a license made, used, offered to sell, sold, or imported “the biological product that is the subject of the [biosimilar] application.” § 262(l )(3)(A)(i). The sponsor must also identify any patents on the list that it would be willing to license. § 262(l )(3)(A)(ii). *7 Next, within 60 days of receiving the sponsor’s list, the applicant may provide to the sponsor a list of patents that the applicant believes are relevant but that the sponsor omitted from its own list, § 262(l )(3)(B)(i), and “shall provide” to the sponsor reasons why it could not be held liable for infringing the relevant patents, § 262(l )(3)(B)(ii). The applicant may argue that the relevant patents are invalid, unenforceable, or not infringed, or the applicant may agree not to market the biosimilar until a particular patent has expired. Ibid. The applicant must also respond to the sponsor’s offers to license particular patents. § 262(l )(3)(B)(iii). Then, within 60 days of receiving the applicant’s responses, the sponsor “shall provide” to the applicant its own arguments concerning infringement, enforceability, and validity as to each relevant patent. § 262(l )(3)(C). Following this exchange, the BPCIA channels the parties into two phases of patent litigation. In the first phase, the parties collaborate to identify patents that they would like to litigate immediately. The second phase is triggered by the applicant’s notice of commercial marketing and involves any patents that were included on the parties’ § 262(l )(3) lists but not litigated in the first phase. At the outset of the first phase, the applicant and the sponsor must negotiate to determine which patents included on the § 262(l )(3) lists will be litigated immediately. See §§ 262(l )(4)(A), (l )(6). If they cannot agree, then they must engage in another list exchange. § 262(l )(4)(B). The applicant “shall notify” the sponsor of the number of patents it intends to list for litigation, § 262(l )(5)(A), and, within five days, the parties “shall simultaneously exchange” lists of the patents they would like to litigate immediately. § 262(l )(5)(B)(i). This process gives the applicant substantial control over the scope of the first phase of litigation: The number of patents on the sponsor’s list is limited to the number contained in the applicant’s list, though the sponsor always has the right to list at least one patent. § 262(l )(5)(B)(ii). The parties then proceed to litigate infringement with respect to the patents they agreed to litigate or, if they failed to agree, the patents contained on the lists they simultaneously exchanged under § 262(l )(5). §§ 262(l ) (6)(A), (B). Section 271(e)(2)(C)(i) facilitates this first phase of litigation by making it an act of artificial infringement, with respect to any patent included on the parties’ § 262(l )(3) lists, to submit an application for a license from the FDA. The sponsor “shall bring an action” in court within 30 days of the date




of agreement or the simultaneous list exchange. §§ 262(l )(6)(A), (B). If the sponsor brings a timely action and prevails, it may obtain a remedy provided by § 271(e)(4). *8 The second phase of litigation involves patents that were included on the original § 262(l )(3) lists but not litigated in the first phase (and any patents that the sponsor acquired after the § 262(l )(3) exchange occurred and added to the lists, see § 262(l )(7)). The second phase is commenced by the applicant’s notice of commercial marketing, which the applicant “shall provide” to the sponsor “not later than 180 days before the date of the first commercial marketing of the biological product licensed under subsection (k).” § 262(l )(8)(A). The BPCIA bars any declaratory judgment action prior to this notice. § 262(l )(9)(A) (prohibiting, in situations where the parties have complied with each step of the BPCIA process, either the sponsor or the applicant from seeking a “declaration of infringement, validity, or enforceability of any patent” that was included on the § 262(l )(3) lists but not litigated in the first phase “prior to the date notice is received under paragraph (8)(A)”). Because the applicant (subject to certain constraints) chooses when to begin commercial marketing and when to give notice, it wields substantial control over the timing of the second phase of litigation. The second question presented is whether notice is effective if an applicant provides it prior to the FDA’s decision to license the biosimilar. In this second phase of litigation, either party may sue for declaratory relief. See § 262(l )(9)(A). In addition, prior to the date of first commercial marketing, the sponsor may “seek a preliminary injunction prohibiting the [biosimilar] applicant from engaging in the commercial manufacture or sale of [the biosimilar] until the court decides the issue of patent validity, enforcement, and infringement with respect to any patent that” was included on the § 262(l )(3) lists but not litigated in the first phase. § 262(l )(8)(B).

DIf the parties comply with each step outlined in the BPCIA, they will have the opportunity to litigate the relevant patents before the biosimilar is marketed. To encourage parties to comply with its procedural requirements, the BPCIA includes various consequences for failing to do so. Two of the BPCIA’s remedial provisions are at issue here. Under § 262(l )(9)(C), if an applicant fails to provide its application and manufacturing information to the sponsor—thus effectively pretermitting the entire two-phase litigation process—then the sponsor, but not the applicant, may immediately bring an action “for a declaration of infringement, validity, or enforceability of any patent that claims the biological product or a use of the biological product.” Section 271(e)(2)(C)(ii) facilitates this action by making it an artificial act of infringement, with respect to any patent that could have been included on the § 262(l )(3) lists, to submit a biosimilar application. Similarly, when an applicant provides the application and manufacturing information but fails to complete a subsequent step, § 262(l )(9)(B) provides that the sponsor, but not the applicant, may bring a declaratory-judgment action with respect to any patent included on the sponsor’s § 262(l )(3)(A) list of patents (as well as those it acquired later and added to the list). As noted, it is an act of artificial infringement, with respect to any patent on the § 262(l )(3) lists, to submit an application to the FDA. See § 271(e)(2)(C)(i).

II*9 These cases concern filgrastim, a biologic used to stimulate the production of white blood cells. Amgen, the respondent in No. 15–1039 and the petitioner in No. 15–1195, has marketed a filgrastim product called Neupogen since 1991 and claims to hold patents on methods of manufacturing and using filgrastim. In May 2014, Sandoz, the petitioner in No. 15–1039 and the respondent in No. 15–1195, filed an application with the FDA seeking approval to market a filgrastim biosimilar under the brand name Zarxio, with Neupogen as the reference product. The FDA informed Sandoz on July 7, 2014, that it had accepted the application for review. One day later, Sandoz notified Amgen both that it had submitted an application and that it intended to begin marketing Zarxio immediately upon receiving FDA approval, which it expected in the first half of 2015. Sandoz later confirmed that it did not intend to provide the requisite application and manufacturing information under § 262(l )(2)(A) and informed Amgen that Amgen could sue for infringement immediately under § 262(l )(9)(C). [2] In October 2014, Amgen sued Sandoz for patent infringement. Amgen also asserted two claims under California’s unfair competition law, which prohibits “any unlawful ... business act or practice.” Cal. Bus. & Prof. Code Ann. § 17200 (West 2008). A “business act or practice” is “unlawful” under the unfair competition law if it violates a rule contained in some other state or federal statute. Rose v. Bank of America, N. A., 57 Cal.4th 390, 396, 159 Cal.Rptr.3d 693, 304 P.3d 181, 185 (2013). Amgen alleged that Sandoz engaged in “unlawful” conduct when it failed to provide its application and manufacturing information under § 262(l )(2)(A), and when it provided notice of commercial marketing under § 262(l )(8)(A) before, rather than after, the FDA licensed its biosimilar. Amgen sought injunctions to enforce both requirements. Sandoz counterclaimed for declaratory judgments that the asserted patent was invalid and not infringed and that it had not violated the BPCIA.




While the case was pending in the District Court, the FDA licensed Zarxio, and Sandoz provided Amgen a further notice of commercial marketing. The District Court subsequently granted partial judgment on the pleadings to Sandoz on its BPCIA counterclaims and dismissed Amgen’s unfair competition claims with prejudice. 2015 WL 1264756, *7–*9 (N.D.Cal., Mar. 19, 2015). After the District Court entered final judgment as to these claims, Amgen appealed to the Federal Circuit, which granted an injunction pending appeal against the commercial marketing of Zarxio. *10 A divided Federal Circuit affirmed in part, vacated in part, and remanded. First, the court affirmed the dismissal of Amgen’s state-law claim based on Sandoz’s alleged violation of § 262(l )(2)(A). It held that Sandoz did not violate the BPCIA in failing to disclose its application and manufacturing information. It further held that the remedies contained in the BPCIA are the exclusive remedies for an applicant’s failure to comply with § 262(l )(2)(A). 794 F.3d 1347, 1357, 1360 (2015). Second, the court held that an applicant may provide effective notice of commercial marketing only after the FDA has licensed the biosimilar. Id., at 1358. Accordingly, the 180–day clock began after Sandoz’s second, postlicensure notice. The Federal Circuit further concluded that the notice requirement is mandatory and extended its injunction pending appeal to bar Sandoz from marketing Zarxio until 180 days after the date it provided its second notice. Id., at 1360–1361. We granted Sandoz’s petition for certiorari, No. 15–1039, and Amgen’s conditional cross-petition for certiorari, No. 15–1195, and consolidated the cases. 580 U.S. ––––, 137 S.Ct. 808, 196 L.Ed.2d 594 (2017).

IIIThe first question we must answer is whether § 262(l )(2)(A)’s requirement that an applicant provide the sponsor with its application and manufacturing information is enforceable by an injunction under either federal or state law.

A[3] We agree with the Federal Circuit that an injunction under federal law is not available to enforce § 262(l )(2)(A), though for slightly different reasons than those provided by the court below. The Federal Circuit held that “42 U.S.C. § 262(l )(9)(C) and 35 U.S.C. § 271(e) expressly provide the only remedies” for a violation of § 262(l )(2)(A), 794 F.3d, at 1357, and neither of those provisions authorizes a court to compel compliance with § 262(l )(2)(A). In concluding that the remedies specified in the BPCIA are exclusive, the Federal Circuit relied primarily on § 271(e)(4), which states that it provides “ ‘the only remedies which may be granted by a court for an act of [artificial] infringement.’ ” Id., at 1356 (emphasis deleted). *11 The flaw in the Federal Circuit’s reasoning is that Sandoz’s failure to disclose its application and manufacturing information was not an act of artificial infringement, and thus was not remediable under § 271(e)(4). Submitting an application constitutes an act of artificial infringement. See §§ 271(e)(2)(C)(i), (ii) (“It shall be an act of infringement to submit ... an application seeking approval of a biological product”). Failing to disclose the application and manufacturing information under § 262(l )(2)(A) does not. [4] In reaching the opposite conclusion, the Federal Circuit relied on § 271(e)(2)(C)(ii), which states that “[i]t shall be an act of infringement to submit[,] if the applicant for the application fails to provide the application and information required under [§ 262(l )(2)(A) ], an application seeking approval of a biological product for a patent that could be identified pursuant to [§ 262(l )(3)(A)(i) ].” (Emphasis added.) The court appeared to conclude, based on the italicized language, that an applicant’s noncompliance with § 262(l )(2)(A) is an element of the act of artificial infringement (along with the submission of the application). 794 F.3d, at 1356. We disagree. The italicized language merely assists in identifying which patents will be the subject of the artificial infringement suit. It does not define the act of artificial infringement itself. This conclusion follows from the structure of § 271(e)(2)(C). Clause (i) of § 271(e)(2)(C) defines artificial infringement in the situation where the parties proceed through the list exchange process and the patents subject to suit are those contained in the § 262(l )(3) lists, as supplemented under § 262(l )(7). That clause provides that it is an act of artificial infringement to submit, “with respect to a patent that is identified in the list of patents described in [§ 262(l )(3) ] (including as provided under [§ 262(l )(7) ] ), an application seeking approval of a biological product.” (Emphasis added.) Clause (ii) of § 271(e)(2)(C), in contrast, defines artificial infringement in the situation where an applicant fails to disclose its application and manufacturing information altogether and the parties never prepare the § 262(l )(3) lists. That clause provides that the submission of the application represents an act of artificial infringement




with respect to any patent that could have been included on the lists. *12 In this way, the two clauses of § 271(e)(2)(C) work in tandem. They both treat submission of the application as the act of artificial infringement for which § 271(e)(4) provides the remedies. And they both identify the patents subject to suit, although by different means depending on whether the applicant disclosed its application and manufacturing information under § 262(l )(2)(A). If the applicant made the disclosures, clause (i) applies; if it did not, clause (ii) applies. In neither instance is the applicant’s failure to provide its application and manufacturing information an element of the act of artificial infringement, and in neither instance does § 271(e)(4) provide a remedy for that failure. See Brief for Amgen Inc. et al. 66–67 (conceding both points). A separate provision of § 262, however, does provide a remedy for an applicant’s failure to turn over its application and manufacturing information. When an applicant fails to comply with § 262(l )(2)(A), § 262(l )(9)(C) authorizes the sponsor, but not the applicant, to bring an immediate declaratory-judgment action for artificial infringement as defined in § 271(e)(2)(C)(ii). Section 262(l )(9)(C) thus vests in the sponsor the control that the applicant would otherwise have exercised over the scope and timing of the patent litigation. It also deprives the applicant of the certainty that it could have obtained by bringing a declaratory-judgment action prior to marketing its product. [5] [6] The remedy provided by § 262(l )(9)(C) excludes all other federal remedies, including injunctive relief. Where, as here, “a statute expressly provides a remedy, courts must be especially reluctant to provide additional remedies.” Karahalios v. Federal Employees, 489 U.S. 527, 533, 109 S.Ct. 1282, 103 L.Ed.2d 539 (1989). The BPCIA’s “carefully crafted and detailed enforcement scheme provides strong evidence that Congress did not intend to authorize other remedies that it simply forgot to incorporate expressly.” Great–West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 209, 122 S.Ct. 708, 151 L.Ed.2d 635 (2002) (internal quotation marks omitted). The presence of § 262(l )(9)(C), coupled with the absence of any other textually specified remedies, indicates that Congress did not intend sponsors to have access to injunctive relief, at least as a matter of federal law, to enforce the disclosure requirement. *13 Statutory context further confirms that Congress did not authorize courts to enforce § 262(l )(2)(A) by injunction. Section 262(l )(1)(H) provides that “the court shall consider immediate injunctive relief to be an appropriate and necessary remedy for any violation or threatened violation” of the rules governing the confidentiality of information disclosed under § 262(l ). We assume that Congress acted intentionally when it provided an injunctive remedy for breach of the confidentiality requirements but not for breach of § 262(l )(2)(A)’s disclosure requirement. Cf. Touche Ross & Co. v. Redington, 442 U.S. 560, 572, 99 S.Ct. 2479, 61 L.Ed.2d 82 (1979) (“[W]hen Congress wished to provide a private damage remedy, it knew how to do so and did so expressly”).2 Accordingly, the Federal Circuit properly declined to grant an injunction under federal law.

BThe Federal Circuit rejected Amgen’s request for an injunction under state law for two reasons. First, it interpreted California’s unfair competition law not to provide a remedy when the underlying statute specifies an “expressly ... exclusive” remedy. 794 F.3d, at 1360 (citing Cal. Bus. & Prof. Code Ann. § 17205; Loeffler v. Target Corp., 58 Cal.4th 1081, 1125–1126, 171 Cal.Rptr.3d 189, 324 P.3d 50, 76 (2014)). It further held that § 271(e)(4), by its text, “provides ‘the only remedies’ ” for an applicant’s failure to disclose its application and manufacturing information. 794 F.3d, at 1360 (quoting § 271(e)(4)). The court thus concluded that no state remedy was available for Sandoz’s alleged violation of § 262(l )(2)(A) under the terms of California’s unfair competition law. This state-law holding rests on an incorrect interpretation of federal law. As we have explained, failure to comply with § 262(l )(2)(A) is not an act of artificial infringement. Because § 271(e)(4) provides remedies only for artificial infringement, it provides no remedy at all, much less an “expressly ... exclusive” one, for Sandoz’s failure to comply with § 262(l ) (2)(A). Second, the Federal Circuit held in the alternative that Sandoz’s failure to disclose its application and manufacturing information was not “unlawful” under California’s unfair competition law. In the court’s view, when an applicant declines to provide its application and manufacturing information to the sponsor, it takes a path “expressly contemplated by” § 262(l )(9)(C) and § 271(e)(2)(C)(ii) and thus does not violate the BPCIA. 794 F.3d, at 1357, 1360. In their briefs before this Court, the parties frame this issue as whether the § 262(l )(2)(A) requirement is mandatory in all circumstances, see Brief for Amgen Inc. et al. 58, or merely a condition precedent to the information exchange process, see Reply Brief for Sandoz Inc. 33. If it is only a condition precedent, then an applicant effectively has the option to withhold its application and manufacturing information and does not commit an “unlawful” act in doing so. *14 [7] We decline to resolve this particular dispute definitively because it does not present a question of federal law. The BPCIA, standing alone, does not require a court to decide whether § 262(l )(2)(A) is mandatory or conditional; the court need only determine




whether the applicant supplied the sponsor with the information required under § 262(l )(2)(A). If the applicant failed to provide that information, then the sponsor, but not the applicant, could bring an immediate declaratory-judgment action pursuant to § 262(l )(9)(C). The parties in these cases agree—as did the Federal Circuit—that Sandoz failed to comply with § 262(l )(2)(A), thus subjecting itself to that consequence. There is no dispute about how the federal scheme actually works, and thus nothing for us to decide as a matter of federal law. The mandatory or conditional nature of the BPCIA’s requirements matters only for purposes of California’s unfair competition law, which penalizes “unlawful” conduct. Whether Sandoz’s conduct was “unlawful” under the unfair competition law is a state-law question, and the court below erred in attempting to answer that question by referring to the BPCIA alone. On remand, the Federal Circuit should determine whether California law would treat noncompliance with § 262(l )(2)(A) as “unlawful.” If the answer is yes, then the court should proceed to determine whether the BPCIA pre-empts any additional remedy available under state law for an applicant’s failure to comply with § 262(l )(2)(A) (and whether Sandoz has forfeited any pre-emption defense, see 794 F.3d, at 1360, n. 5). The court is also of course free to address the pre-emption question first by assuming that a remedy under state law exists.

IV[8] The second question at issue in these cases is whether an applicant must provide notice after the FDA licenses its biosimilar, or if it may also provide effective notice before licensure. Section 262(l )(8)(A) states that the applicant “shall provide notice to the reference product sponsor not later than 180 days before the date of the first commercial marketing of the biological product licensed under subsection (k).” The Federal Circuit held that an applicant’s biosimilar must already be “licensed” at the time the applicant gives notice. 794 F.3d, at 1358. We disagree. The applicant must give “notice” at least 180 days “before the date of the first commercial marketing.” “[C]ommercial marketing,” in turn, must be “of the biological product licensed under subsection (k).” § 262(l ) (8)(A). Because this latter phrase modifies “commercial marketing” rather than “notice,” “commercial marketing” is the point in time by which the biosimilar must be “licensed.” The statute’s use of the word “licensed” merely reflects the fact that, on the “date of the first commercial marketing,” the product must be “licensed.” See § 262(a)(1)(A). Accordingly, the applicant may provide notice either before or after receiving FDA approval. *15 Statutory context confirms this interpretation. Section 262(l ) (8)(A) contains a single timing requirement: The applicant must provide notice at least 180 days prior to marketing its biosimilar. The Federal Circuit, however, interpreted the provision to impose two timing requirements: The applicant must provide notice after the FDA licenses the biosimilar and at least 180 days before the applicant markets the biosimilar. An adjacent provision expressly sets forth just that type of dual timing requirement. See § 262(l )(8)(B) (“After receiving notice under subparagraph (A) and before such date of the first commercial marketing of such biological product, the reference product sponsor may seek a preliminary injunction” (emphasis added)). But Congress did not use that structure in § 262(l )(8)(A). “Had Congress intended to” impose two timing requirements in § 262(l )(8)(A), “it presumably would have done so expressly as it did in the immediately following” subparagraph. Russello v. United States, 464 U.S. 16, 23, 104 S.Ct. 296, 78 L.Ed.2d 17 (1983). We are not persuaded by Amgen’s arguments to the contrary. Amgen points out that other provisions refer to “ ‘the biological product that is the subject of ’ ” the application, rather than the “ ‘biological product licensed under subsection (k).’ ” Brief for Amgen Inc. et al. 28 (emphasis added). In its view, this variation “is a strong textual indication that § 262(l )(8)(A), unlike the other provisions, refers to a product that has already been ‘licensed’ by the FDA.” Ibid. Amgen’s interpretation is not necessary to harmonize Congress’ use of the two different phrases. The provision upon which Amgen primarily relies (and that is generally illustrative of the other provisions it cites) requires the applicant to explain why the sponsor’s patents are “ ‘invalid, unenforceable, or will not be infringed by the commercial marketing of the biological product that is the subject of the subsection (k) application.’ ” Id., at 29–30 (quoting § 262(l )(3)(B)(ii)(I); emphasis deleted). This provision uses the phrase “subject of the subsection (k) application” rather than “product licensed under subsection (k)” because the applicant can evaluate validity, enforceability, and infringement with respect to the biosimilar only as it exists when the applicant is conducting the evaluation, which it does before licensure. The applicant cannot make the same evaluation with respect to the biosimilar as it will exist after licensure, because the biosimilar’s specifications may change during the application process. See, e.g., 794 F.3d, at 1358. In contrast, nothing in § 262(l )(8)(A) turns on the precise status or characteristics of the biosimilar application. *16 Amgen also advances a host of policy arguments that prelicensure notice is undesirable. See Brief for Amgen Inc. et al. 35–42.




Sandoz and the Government, in turn, respond with their own bevy of arguments that Amgen’s concerns are misplaced and that prelicensure notice affirmatively furthers Congress’ intent. See Brief for Sandoz Inc. 39–42, 56; Brief for United States as Amicus Curiae 28–29. The plausibility of the contentions on both sides illustrates why such disputes are appropriately addressed to Congress, not the courts. Even if we were persuaded that Amgen had the better of the policy arguments, those arguments could not overcome the statute’s plain language, which is our “primary guide” to Congress’ preferred policy. McFarland v. Scott, 512 U.S. 849, 865, 114 S.Ct. 2568, 129 L.Ed.2d 666 (1994) (THOMAS, J., dissenting). In sum, because Sandoz fully complied with § 262(l )(8)(A) when it first gave notice (before licensure) in July 2014, the Federal Circuit erred in issuing a federal injunction prohibiting Sandoz from marketing Zarxio until 180 days after licensure. Furthermore, because Amgen’s request for state-law relief is predicated on its argument that the BPCIA forbids prelicensure notice, its claim under California’s unfair competition law also fails. We accordingly reverse the Federal Circuit’s judgment as to the notice provision. 3 For the foregoing reasons, the judgment of the Court of Appeals is vacated in part and reversed in part, and the cases are remanded for further proceedings consistent with this opinion. It is so ordered.

Justice BREYER, concurring.

The Court’s interpretation of the statutory terms before us is a reasonable interpretation, and I join its opinion. In my view, Congress implicitly delegated to the Food and Drug Administration authority to interpret those same terms. That being so, if that agency, after greater experience administering this statute, determines that a different interpretation would better serve the statute’s objectives, it may well have authority to depart from, or to modify, today’s interpretation, see National Cable & Telecommunications Assn. v. Brand X Internet Services, 545 U.S. 967, 982–984, 125 S.Ct. 2688, 162 L.Ed.2d 820 (2005), though we need not now decide any such matter.

All Citations--- S.Ct. ----, 2017 WL 2507337

Footnotes

* The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U.S. 321, 337, 26 S.Ct. 282, 50 L.Ed. 499.

1 FDA, What Are “Biologics” Questions and Answers (Aug. 5, 2015), http://www.fda.gov/aboutfda/centersoffices/officeofmedicalproductsandtobacco/cber/ucm133077.htm (as last visited June 6, 2017).

2 In holding that § 262(l )(9)(C) represents the exclusive remedy for an applicant’s failure to provide its application and manufacturing information, we express no view on whether a district court could take into account an applicant’s violation of § 262(l )(2)(A) (or any other BPCIA procedural requirement) in deciding whether to grant a preliminary injunction under 35 U.S.C. § 271(e)(4)(B) or § 283 against marketing the biosimilar. See Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7, 20, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008) (court should consider “balance of equities” in deciding whether to grant a preliminary injunction).

End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works.

DR SEUSS


DOCUMENT SECTION B


2017 WL 2505007Only the Westlaw citation is currently available.

United States District Court,S.D. California.

DR. SEUSS ENTERPRISES, L.P., Plaintiff,v.

COMICMIX LLC; Glenn Hauman; David Jerrold Friedman a/k/a J. David Gerrold; and Ty Templeton, Defendants.Case No.: 16cv2779-JLS (BGS)

|Signed 06/09/2017

Attorneys and Law FirmsGina L. Durham, DLA Piper LLP, San Francisco, CA, James Kevin Spencer Stewart, Ryan Compton, DLA Piper LLP, Washington, DC, Marc E. Miller, Tamar Duvdevani, DLA Piper, LLP, New York, NY, Stanley J. Panikowski, III, DLA Piper, San Diego, CA, for Plaintiff.

Daniel G. Booth, Booth Sweet LLP, Cambridge, MA, Michael Licari, D’Egidio Licari Townsend & Shah, APC, San Diego, CA, for Defendants.

ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS

(ECF No. 8)

Hon. Janis L. Sammartino, United States District Judge*1 Presently before the Court is Defendant ComicMix LLC’s Motion to Dismiss (“MTD”), (ECF No. 8), Plaintiff Dr. Seuss Enterprises, L.P.’s Response in Opposition to the Motion to Dismiss (“Opp’n”), (ECF No. 22), and Defendant’s Reply in Support of the Motion to Dismiss (“Reply”), (ECF No. 32). Also before the Court are Defendant’s Request for Judicial Notice (“RJN”), (ECF No. 8-2), Plaintiff’s Response in Opposition to the Request for Judicial Notice (“RJN Opp’n”), (ECF No. 23), and Defendant’s Reply in Support of the Request for Judicial Notice (“RJN Reply”), (ECF No. 33). The Court previously vacated the hearing on the Motion to Dismiss and took the matters under submission without oral argument pursuant to Civil Local Rule 7.1(d). (ECF No. 35.) After considering the Parties’ arguments and the law, the Court GRANTS IN PART and DENIES IN PART Defendant’s Motion to Dismiss.

BACKGROUNDThis lawsuit concerns two literary works, one of which is alleged to have infringed the other. Plaintiff is the assignee and owner of various copyright registrations for and alleged trademark rights in the works of the late Theodor S. Geisel, better known under his pseudonym “Dr. Seuss.” (E.g., Compl. ¶¶ 1, 3, ECF No. 1.) One of Dr. Seuss’s best-known books—and the one primarily at issue in this suit—is Oh, the Places You’ll Go! (“Go!”). Defendants created a Kickstarter campaign in order to fund printing and distribution of an allegedly infringing work, Oh, the Places You’ll Boldly Go! (“Boldly”). (See id. ¶ 34.) Defendants all took part in the creation of Boldly. (Id. ¶¶ 2, 4–7, 19–22.) Boldy combines aspects of various Dr. Seuss works with “certain characters, imagery, and other elements from Star Trek, the well-known science fiction entertainment franchise created by Gene Roddenberry.” (Id. ¶ 18.) Plaintiff alleges that Boldly “misappropriates key elements” of Go! and four other Dr. Seuss books. (Id. ¶ 26.) Defendants contest this point, and prior to the threat of litigation noted on their Kickstarter page that:

While we firmly believe that our parody, created with love and affection, fully falls within the boundary of fair use, there may be some people who believe that this might be in violation of their intellectual property rights. And we may have to spend time and money proving it to people in black robes. And we may even lose that.


DOCUMENT SECTION BDR SEUSS


(Id. ¶ 35.) Further, Boldly’s copyright page both states that “[t]his is a work of parody, and is not associated with or endorsed by CBS Studios or Dr. Seuss Enterprises, L.P.[,]” and includes the following text: “Copyright Disclaimer under section 107 of the Copyright Act 1976, allowance is made for ‘fair use’ for purposes such as criticism, comment, news reporting, teaching, scholarship, education, research, and parody.” (RJN Ex. 5, ECF No. 15-1, at 2.) Upon learning of Boldly and the corresponding Kickstarter campaign, Plaintiff sent Defendants two letters over the span of approximately ten days asserting their exclusive rights in the relevant Dr. Seuss works. (Id. ¶ 36, 38.) When Defendants did not respond to the first letter, Plaintiff on the same day sent a takedown notice to Kickstarter and a second letter to Plaintiff. (Id. ¶ 37, 39, 40). Kickstarter disabled access to Defendants’ campaign later that day. (Id. ¶ 41.) *2 Several weeks later Plaintiff’s Counsel and Defendants’ Counsel exchanged letters; Defendants argued their use of Dr. Seuss’s intellectual property was fair, threatened suit, and advised Plaintiff that Defendants would send a counter-notice to Kickstarter to reinstate the Boldly campaign. (Id. ¶¶ 42–44.) Plaintiff commenced this suit shortly thereafter. (See generally id.)

LEGAL STANDARDFederal Rule of Civil Procedure 12(b)(6) permits a party to raise by motion the defense that the complaint “fail[s] to state a claim upon which relief can be granted,” generally referred to as a motion to dismiss. The Court evaluates whether a complaint states a cognizable legal theory and sufficient facts in light of Federal Rule of Civil Procedure 8(a), which requires a “short and plain statement of the claim showing that the pleader is entitled to relief.” Although Rule 8 “does not require ‘detailed factual allegations,’ ... it [does] demand more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). In other words, “a plaintiff’s obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555 (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). A complaint will not suffice “if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’ ” Iqbal, 556 U.S. at 677 (citing Twombly, 550 U.S. at 557). In order to survive a motion to dismiss, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Id. (quoting Twombly, 550 U.S. at 570); see also Fed. R. Civ. P. 12(b)(6). A claim is facially plausible when the facts pled “allow the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 677 (citing Twombly, 550 U.S. at 556). That is not to say that the claim must be probable, but there must be “more than a sheer possibility that a defendant has acted unlawfully.” Id. Facts “ ‘merely consistent with’ a defendant’s liability” fall short of a plausible entitlement to relief. Id. (quoting Twombly, 550 U.S. at 557). Further, the Court need not accept as true “legal conclusions” contained in the complaint. Id. This review requires context-specific analysis involving the Court’s “judicial experience and common sense.” Id. at 678 (citation omitted). “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not ‘show[n]’—‘that the pleader is entitled to relief.’ ” Id.

ANALYSISDefendants move to dismiss Plaintiff’s Complaint in its entirety, arguing that: (1) Plaintiff’s copyright claims fail because Defendants’ work is shielded by the fair use doctrine; and (2) Defendants’ use of Plaintiff’s alleged trademarks are shielded by (A) the First Amendment, and (B) the doctrine of nominative fair use such that Plaintiff’s trademark claims fail, thus also causing (C) Plaintiff’s unfair competition claims to fail. (MTD 1–24.) The Court addresses each argument in turn.

I. Copyright Claims and Fair UseOriginally articulated in case law, and later codified by the Copyright Act of 1976, the doctrine of “fair use” shields from infringement particular uses of a copyrighted work. Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 576–77 (1994); 17 U.S.C. § 107. This is because “courts have recognized that when a second author uses another’s protected expression in a creative and inventive way, the result may be the advancement of learning rather than the exploitation of the first writer.” Maxtone-Graham v. Burtchaell, 803 F.2d 1253, 1259 (2d Cir. 1986). *3 “Fair use is a mixed question of law and fact,” and therefore is usually adjudicated either at trial or on a motion for summary judgment where no material facts are in dispute. Leadsinger, Inc. v. BMG Music Pub., 512 F.3d 522, 530 (9th Cir. 2008) (citing Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539, 560 (1985)). However, a fair use defense may occasionally be resolved on a motion




to dismiss when it is appropriately raised and there are no material facts in dispute. Id. Nonetheless, “in light of a court’s narrow inquiry at this stage and limited access to all potentially relevant and material facts needed to undertake the analysis, courts rarely analyze fair use on a 12(b)(6) motion.” Browne v. McCain, 611 F. Supp. 2d 1073, 1078 (C.D. Cal. 2009) (citing Four Navy Seals v. Assoc. Press, 413 F. Supp. 2d 1136, 1148 (S.D. Cal. 2005); Dr. Seuss Enters., L.P. v. Penguin Books USA, Inc., 109 F.3d 1394, 1403 (9th Cir. 1997)). In codifying the fair use doctrine, Congress set forth four non-exclusive factors for courts to consider in evaluating whether a particular use of a copyrighted work is fair:

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

(2) the nature of the copyrighted work;

(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

(4) the effect of the use upon the potential market for or value of the copyrighted work.

Campbell, 510 U.S. at 577; 17 U.S.C. § 107. “The fair use doctrine thus ‘permits [and requires] courts to avoid rigid application of the copyright statute when, on occasion, it would stifle the very creativity which that law is designed to foster.’ ” Campbell, 510 U.S. at 577 (alteration in original) (quoting Stewart v. Abend, 495 U.S. 207, 236 (1990)). Accordingly, “the analysis is a flexible one[,]” to be “perform[ed] on a case-by-case basis” and “in light of the copyright law’s purpose ‘to promote the progress of science and art by protecting artistic and scientific works while encouraging the development and evolution of new works.’ ” Leadsinger, 512 F.3d at 529 (quoting Mattel, Inc. v. Walking Mountain Prods., 353 F.3d 792, 799–800 (9th Cir. 2003)). As a threshold matter, Plaintiff argues that “while possible in rare instances to decide fair use at the pleading stage, it is inappropriate here, where significant material facts are necessary to make a determination of fair use.” (Opp’n 9.) However, the only genuine fact Plaintiff points to is that “the issue of whether the Defendants’ use ... will appreciably harm the value of [Plaintiff’s] Works or ... market simply cannot be made without discovery and further development of the record on this issue.” (Id. at 15–16.) And Defendants point out that Plaintiff’s sole allegation of market harm is that Defendants “usurped DSE’s licensing opportunities.” (Reply 4 (citing Compl. ¶ 32).) Thus, as long as the Court takes Plaintiff’s allegation of market harm as true, Defendants are otherwise correct that “[t]he complaint, and documents sufficiently referenced therein or otherwise subject to judicial notice, are sufficient to enable the Court to evaluate the issue of fair use.” (MTD 6.) In particular, the Complaint itself raises the issue of fair use, (Compl. ¶ 35), and the contents of the two primary books and other relevant works are before the Court and not in reasonable dispute, (RJN Exs. 5, 6).1 Accordingly, the Court concludes that fair use analysis is appropriate on this Motion to Dismiss and addresses each factor in turn.

A. The Purpose and Character of the Use*4 “The central purpose of this [factor] is to see ... whether the new work merely ‘supersede[s] the objects’ of the original creation ... or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message; it asks, in other words, whether and to what extent the new work is ‘transformative.’ ” Campbell, 510 U.S. at 579 (citations omitted) (alteration in original). Because “the goal of copyright, to promote science and the arts, is generally furthered by the creation of transformative works[,]” the “more transformative the new work, the less will be the significance of other factors, like commercialism, that may weigh against a finding of fair use.” Id. “[A]n allegedly infringing work is typically viewed as transformative as long as new expressive content or message is apparent.” Seltzer v. Green Day, Inc., 725 F.3d 1170, 1177 (9th Cir. 2013). “This is so even where ... the allegedly infringing work makes few physical changes to the original or fails to comment on the original.” Id. (collecting cases). However, even when a new use is transformative, “the degree to which the new user exploits the copyright for commercial gain—as opposed to incidental use as part of a commercial enterprise”—affects the overall balance of this factor. See id. at 1178 (quoting Elvis Presley Enters., Inc. v. Passport Video, 349 F.3d 622, 627 (9th Cir. 2003)). In the present case, Defendants initially argue that Boldly classifies as a parody for purposes of fair use analysis, and thus fits within the framework of the many cases recognizing broad protection for such works. (MTD 10–16.) The Court disagrees. “[W]hether a defendant’s work qualifies as a parody ... [i]s one of law to be decided by the court.” Walking Mountain, 353 F.3d at 801. “[T]he heart of any parodist’s claim to quote from existing material ... is the use of some elements of a prior author’s composition to create a new one that, at least in part, comments on that author’s works.” Campbell, 510 U.S. at 580. Otherwise put, a “parody ‘may




loosely target an original’ as long as the parody ‘reasonably could be perceived as commenting on the original or criticizing it, to some degree.’ ” Walking Mountain, 353 F.3d at 801 (quoting Campbell, 510 U.S. at 580–81). In the present case, Defendants’ work is most appropriately termed a literary and pictorial “mash-up.” See, e.g., Mash-up, Merriam-Webster, https://www.merriam-webster.com/dictionary/mash-up (last visited May 3, 2017) (defining term as “something created by combining elements from two or more sources: such as” underlying-work-specific “characters or situations”). Such works may, of course, also be parodies when they juxtapose the underlying works in such a way that it creates “comic effect or ridicule.” Campbell, 510 U.S. at 580. However, there is no such juxtaposition here; Boldly merely uses Go!’s illustration style and story format as a means of conveying particular adventures and tropes from the Star Trek canon. And although Defendants argue generally that “Boldly uses Dr. Seuss’s own works in service of a group-oriented counterpoint to the Go! individualist ideal[,]” (MTD 16), the Court cannot conclude that such a “parodic character may reasonably be perceived.” Campbell, 510 U.S. at 582. But although Boldly fails to qualify as a parody it is no doubt transformative. In particular, it combines into a completely unique work the two disparate worlds of Dr. Seuss and Star Trek. Go! tells the tale of a young boy setting out on adventure and discovering and confronting many strange beings and circumstances along his path. Boldly tells the tale of the similarly strange beings and circumstances encountered during the voyages of the Star Trek Enterprise, and it does so through Go!’s communicative style and method. Go!’s rhyming lines and striking images, as well as other Dr. Seuss works, are often copied by Boldly, but the copied elements are always interspersed with original writing and illustrations that transform Go!’s pages into repurposed, Star-Trek—centric ones. However, as previously mentioned, “[a]nother element of the first factor analysis is whether the work’s ‘purpose’ was commercial or had a non-profit aim.” Walking Mountain, 353 F.3d at 803 (citing Campbell, 510 U.S. at 584). And in the present case there is no question that Defendants created their work for profit. Although this weighs against Defendants in this factor, its weight is slight given both the transformative nature of the work, see Campbell, 510 U.S. at 579 (“[T]he more transformative the new work, the less will be the significance of other factors, like commercialism, that may weigh against a finding of fair use.”), and the fact that Boldly does not supplant the market for Go! or the other relevant Dr. Seuss works, infra Section I.D. *5 Given the foregoing, and on balance, this factor weighs in favor of finding Defendants’ use to be fair.

B. The Nature of the Copyrighted Work“This factor calls for recognition that some works are closer to the core of intended copyright protection than others, with the consequence that fair use is more difficult to establish when [fictional] works are copied.” Campbell, 510 U.S. at 586. However, “this ... factor typically has not been terribly significant in the overall fair use balancing.” Walking Mountain, 353 F.3d at 803 (quoting Dr. Seuss, 109 F.3d at 1402). And although in the present case this factor therefore weighs against Defendants, a Court must also “consider the extent to which a work has been published.” Seltzer, 725 F.3d at 1178. That is, “[p]ublished works are more likely to qualify as fair use because the first appearance of the artist’s expression has already occurred.” Id. (quoting Kelly v. Arriba Soft Corp., 336 F.3d 811, 820 (9th Cir. 2003)). Because in the present case Dr. Seuss published Go! several decades ago—and indeed “Dr. Seuss books have topped may bestseller lists, sold over 650 million copies worldwide, and been translated into more than a dozen languages[,]” (Compl. ¶ 14)—“this factor as a whole ... weighs only slightly in [Plaintiff’s] favor.” Seltzer, 725 F.3d at 1178.

C. The Amount and Substantiality of the Portion Used“The third factor looks to the quantitative amount and qualitative value of the original work used in relation to the justification for that use.” Seltzer, 725 F.3d at 1178. This is because “the extent of permissible copying varies with the purpose and character of the use.” Campbell, 510 U.S. at 586–87 (citing Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 449–50 (1984), and Harper & Row, 471 U.S. at 564). In the present case, there is no dispute that Boldly copies many aspects of Go!’s and other Dr. Seuss illustrations. However Boldly does not copy them in their entirety; each is infused with new meaning and additional illustrations that reframe the Seuss images from a unique Star-Trek viewpoint. Nor does Boldly copy more than is necessary to accomplish its transformative purpose. The final image comparison in Plaintiff’s Complaint is illustrative. (Compl. ¶ 28.) Plaintiff’s work depicts two similar-looking, fanciful “Zax” creatures arguing in the middle of a desert, with footprints to mark their arrival. Boldly takes the same desert landscape and footprints, and in the fanciful creatures’ place puts two similar-looking beings of seemingly Vulcan descent—one of which is drawn in the same position as his Dr. Seuss counterpart and one of which is transformed from the Dr. Seuss creatures’ aggressive stance




into a contemplative pose—deep in the midst of playing some type of alien board game.2 Additionally, Boldly’s text reveals that the two Vulcan creatures are, in fact, the same person, unlike Go!’s distinct “North-Going” and “South-Going” Zaxes. Boldly therefore transforms the argumentative Zaxes and their corresponding depiction into a cloned Vulcan matching wits with himself over an alien boardgame. One Vulcan is positioned almost identically to his Zax counterpart to “conjure up” the Dr. Seuss work, while the other Vulcan is drawn anew and a board-game added in order to fully accomplish the work’s overall transformative purpose. *6 Given the foregoing, the Court concludes that this factor does not weigh against Defendants. Seltzer, 725 F.3d at 1178 (“[T]his factor will not weigh against an alleged infringer, even when he copies the whole work, if he takes no more than is necessary for his intended use.”).

D. The Effect of the Use Upon the Potential MarketThis factor considers “not only the extent of market harm caused by the particular actions of the alleged infringer, but also ‘whether unrestricted and widespread conduct of the sort engaged in by the defendant ... would result in a substantially adverse impact on the potential market’ for the original.” Campbell, 510 U.S. at 590 (citing Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 13.05[A][4] ). “Where the allegedly infringing use does not substitute for the original and serves a ‘different market function,’ such factor weighs in favor of fair use.” Seltzer, 725 F.3d at 1179 (citing Campbell, 510 U.S. at 591). However, “[t]his factor also considers any impact on ‘traditional, reasonable, or likely to be developed markets.’ ” Id. (quoting Ringgold v. Black Entm’t Television, Inc., 126 F.3d 70, 81 (2d Cir. 1997)). In the current procedural posture Defendants are at a clear disadvantage under this factor’s required analysis. Campbell, 510 U.S. at 590 (“Since fair use is an affirmative defense, its proponent would have difficulty carrying the burden of demonstrating fair use without favorable evidence about relevant markets.”). In particular, Plaintiff’s Complaint alleges that “[i]t is not uncommon for DSE to license” its works, including in “collaborations with other rights holders.” (Compl. ¶ 32.) And although Defendants might well be able to ultimately disprove this statement as it applies works of Boldly’s type, there is not currently any record evidence on this point. Plaintiff’s allegations are taken as true, and therefore a potential harm to Plaintiff’s licensing opportunities is presumed. However, this presumed harm is neutralized somewhat by the fact that Boldly does not substitute for the original and serves a different market function than Go!. Kelly, 336 F.3d at 821 (“A transformative work is less likely to have an adverse impact on the market of the original than a work that merely supersedes the copyrighted work.”). Indeed, Boldly’s market relies on consumers who have already read and greatly appreciated Go! and Dr. Seuss’s other works, and who simultaneously have a strong working knowledge of the Star Trek series. It is therefore unlikely that Boldly would severely impact the market for Dr. Seuss’s works. Given the foregoing, and on balance, this factor therefore weighs in favor of Plaintiff.

E. Additional Considerations and ConclusionAs previously noted, the factors above must be weighed “in light of the purposes of copyright.” Walking Mountain, 353 F.3d at 800 (quoting Campbell, 510 U.S. at 578). In order “[t]o promote the Progress of Science and useful Arts,” Article one, Section eight, Clause eight of the United States Constitution empowers Congress to “secur[e] for limited Times to Authors and Inventors the exclusive Right to their respective” works. Effectively, by ensuring that creators of artistic and scientific works are entitled to a period of exclusivity where they may capitalize on their creative production, the various Copyright Acts and predecessor statutes have attempted to fulfill that purpose. *7 But this period of exclusivity has always been balanced against the understanding that “ ‘[i]n truth, in literature, in science and in art, there are, and can be, few, if any, things, which in an abstract sense, are strictly new and original throughout. Every book in literature, science and art, borrows, and must necessarily borrow, and use much which was well known and used before.’ ” Campbell, 510 U.S. at 575 (quoting Emerson v. Davies, 8 F. Cas. 615, 619 (No. 4,436) (C.C.D. Mass. 1845) (Story, J.)). Accordingly, “[r]ecognizing that science and art generally rely on works that came before them and rarely spring forth in a vacuum, the Act limits the rights of a copyright owner regarding works that build upon, reinterpret, and reconceive existing works.” Walking Mountain, 353 F.3d at 799. This case presents an important question regarding the emerging “mash-up” culture where artists combine two independent works in a new and unique way. See, e.g., Art Term, Postmodernism, Tate, http://www.tate.org.uk/art/art-terms/p/postmodernism (last visited Apr. 28, 2017) (“Often mixing different artistic and popular styles and media, postmodernist art can also consciously and self-consciously borrow from or ironically comment on a range of styles from the past.”). Applying the fair use factors in the manner Plaintiff outlines would almost always preclude a finding of fair use under these circumstances. However, if fair use was not viable in a




case such as this, an entire body of highly creative work would be effectively foreclosed. Of course that is not to say that all mash-ups will or should succeed on a fair use defense; the level of creativity, variance from the original source materials, resulting commentary, and intended market will necessarily make evaluation particularized. In this regard, mash-ups are no different than the usual fair use case. However, in this particular case the Court has before it a highly transformative work that takes no more than necessary to accomplish its transformative purpose and will not impinge on the original market for Plaintiff’s underlying work. And the Court is especially mindful that “[i]t would be a dangerous undertaking for persons trained only to the law to constitute themselves final judges of the worth of [a work], outside of the narrowest and most obvious limits.” Campbell, 510 U.S. at 582 (alteration in original) (quoting Bleistein v. Donaldson Lithographing Co., 188 U.S. 239, 251 (1903)). At the same time, “[d]epending on the particular facts, some factors may weigh more heavily than others.” Walking Mountain, 353 F.3d at 800. As it stands in this case, factors one and four—which “have ‘dominated the case law’ and are generally viewed as the most important factors[,]” Seltzer, 725 F.3d at 1179—currently stand in equipoise. Factor two weighs slightly in favor of Plaintiff, and factor three is neutral. And although it would appear that the purposes of copyright favor Defendants, that determination is also a close and unsettled call. Ultimately, given the procedural posture of this motion and near-perfect balancing of the factors, the Court DENIES Defendants’ Motion to Dismiss. Specifically, without relevant evidence regarding factor four the Court concludes that Defendants’ fair use defense currently fails as a matter of law.

II. Trademark and Corresponding Unfair Competition ClaimsIn addition to its copyright claims, Plaintiff asserts claims based on alleged trademark rights under federal trademark and California unfair-competition law. (Compl. ¶¶ 51–62.) Specifically, Plaintiff alleges trademark rights in (1) the title Oh, the Places You’ll Go!; (2) “the stylized font” used in Dr. Seuss’s books; and (3) “the unique illustration style of the characters and backgrounds” of Dr. Seuss’s books. (Id. ¶ 17.) Plaintiff has produced no federal trademark registrations, (see id. ¶ 59 (“DSE is the exclusive owner of common law trademark rights in the Dr. Seuss marks.”)), and therefore alleges that each of the three items listed above “are distinctive and have acquired secondary meaning” such that they serve as “indicators of source ... and make ... goods immediately recognizable as deriving from Dr. Seuss.” (Id. ¶ 17.) And although Defendants argue in part that Plaintiff does not or cannot own valid trademark rights in these three items, (MTD 19–21), the Court need only address the issues of whether (A) the claims here are inherently precluded by the First Amendment and (B) the doctrine of nominative fair use bars Plaintiff’s claims regarding Go!’s title. The Court then briefly concludes this Part by discussing (C) Plaintiff’s unfair competition claims, which rely entirely on Plaintiff’s trademark allegations.

A. The Scope of Trademark Rights Pursuant to Rogers v. Grimaldi*8 Defendants argue that Plaintiff’s trademark claims cannot survive First Amendment scrutiny. (MTD 21–23.) This is because trademark rights, even when validly granted, are not absolute; they at times must yield to the First Amendment. In order to analyze this trademark and First Amendment intersection, the Ninth Circuit has “adopted the Second Circuit’s approach from Rogers v. Grimaldi, which ‘requires courts to construe the Lanham Act “to apply to artistic works only where the public interest in avoiding consumer confusion outweighs the public interest in free expression.” ’ ” E.S.S. Entm’t 2000, Inc. v. Rock Star Videos, Inc., 547 F.3d 1095, 1099 (9th Cir. 2008) (quoting Walking Mountain, 353 F.3d at 807 (emphasis in original), and Rogers v. Grimaldi, 875 F.2d 994, 999 (2d Cir. 1989)). Analysis is two pronged and disjunctive. Brown v. Elec. Arts, Inc., 724 F.3d 1235, 1242 (9th Cir. 2013); E.S.S. Entm’t, 547 F.3d at 1099. The baseline is that—for allegedly infringing expressive works—“use of a trademark that otherwise would violate the Lanham Act is not actionable....” E.S.S. Entm’t, 547 F.3d at 1099. However, this baseline may be refuted if either of two circumstances are established: ‘ “[ (1) ] the [use of the mark] has no artistic relevance to the underlying work whatsoever, or, [ (2) ] if [the use of the mark] has some artistic relevance, ... [the use nonetheless] explicitly misleads as to the source or the content of the work.’ ” Id. (second alteration in original) (quoting Mattel, Inc. v. MCA Records, Inc., 296 F.3d 894, 902 (9th Cir. 2002), and Rogers, 875 F.2d at 999). The test applies to trademark use both in the title and the body of the allegedly infringing work. Id. As a threshold matter, Plaintiff argues that this entire framework is inapplicable in the present case because Rogers itself dictates that First Amendment analysis “inherently requires a determination of consumer confusion....” (Opp’n 20.) But the Ninth Circuit has previously directly rejected this contention. Brown, 724 F.3d at 1241–42 (explaining that “our precedents dictate that we apply the Rogers test in § 43(a) cases involving expressive works[,]” that “[w]e have previously rejected the ‘likelihood of confusion’ test as ‘fail[ing] to account for the full weight of the public’s interest in free expression’ when expressive works are involved” and that “[t]he only relevant legal framework for balancing the public’s right to be free from consumer confusion ... with ... First Amendment rights in the context of [a] § 43(a) claim is the Rogers test”). Accordingly, Plaintiff’s argument on this front fails and the Ninth Circuit’s articulation of Rogers applies.




Regarding Rogers’s first prong, in the present case there is no question that Defendants’ invocation of Plaintiff’s alleged trademarks is relevant to Boldly’ s artistic purpose. Boldly is designed as a mash-up of two creative worlds, and Go!’s title, font, and Dr. Seuss’s illustration style must be employed to evoke Go! and the other Dr. Seuss works here at issue. This is enough to place Boldly in the second prong of analysis. E.S.S. Entm’t, 547 F.3d at 1100 (“[T]he level of relevance merely must be above zero.”); Brown, 724 F.3d at 1243 (same). *9 The only remaining question is therefore whether Boldly explicitly misleads as to its source or content. The Court finds that it does not. Specifically, “[i]t is key here that the creator must explicitly mislead consumers.” Brown, 724 F.3d at 1245 (emphasis in original). This requires “an ‘explicit indication,’ ‘overt claim,’ or ‘explicit misstatement’ that caused ... consumer confusion....” Id. (quoting Rogers, 875 F.2d at 1001). But in the present case, Boldly—aside from changing the cover imagery and title to invoke Star Trek characters and the famous, split-infinitive opening line, To Boldly Go: Star Trek & the Split Infinitive, Merriam-Webster, https://www.merriam-webster.com/words-at-play/to-boldly-split-infinitives (last visited May 2, 2017) (“ ‘[T]o boldly go’ is almost invariably the first example that comes to mind whenever one is asked for an example of a split infinitive....”)—explicitly announces on its cover that it is authored not by Dr. Seuss but instead “by David Gerrold & Ty Templeton.” (ECF No. 15, at 1.) And Boldly’s copyright page even includes an explicit disclaimer that “[t]his is a work of parody, and is not associated with or endorsed by CBS Studios or Dr. Seuss Enterprises, L.P.” (Id. at 2.) These changes and disclosures, in the absence of any factual allegations to the contrary,3 establish that Boldly does not explicitly mislead as to its source or content. Brown, 724 F.3d at 1245 (“[T]he slight risk that ... use ... might implicitly suggest endorsement or sponsorship to some people is outweighed by the danger of restricting artistic expression, and [in cases where there is no explicit misleading] the Lanham Act is not applicable.” (alterations in original)). Plaintiff attempts to limit the First Amendment’s application to these facts by offering several limiting principles, (Opp’n 19–22), but none are persuasive. Prior litigants have asserted similar arguments, such as that aspects of the test as outlined above result in “an inflexible and mechanical rule that more or less automatically protects expressive works regardless of the deception involved.” Brown, 724 F.3d at 1245. However, our Circuit has previously declined to alter this framework:

[A] balance need not be designed to find each of the sides weightier with equal frequency. The language in Rogers is clear. “[T]hat balance will normally not support application of the [Lanham] Act unless the [use of the trademark or other identifying material] has no artistic relevance to the underlying work whatsoever ....” 875 F.2d at 999 (emphasis added). The Rogers test is applicable when First Amendment rights are at their height—when expressive works are involved—so it is no surprise that the test puts such emphasis on even the slightest artistic relevance. “Intellectual property rights aren’t free: They’re imposed at the expense of future creators and of the public at large,” White v. Samsung Elecs. Am., Inc., 989 F.2d 1512, 1516 (9th Cir. 1993) (Kozinski, J., dissenting from denial of rehearing en banc), and the Rogers test applies when this expense is most significant.

Id. (alterations in original). This Court both agrees with and is bound by this analysis. However, Plaintiff notes that Rogers explicitly incorporates an exception for “misleading titles that are confusingly similar to other titles.” Rogers, 875 F.2d at 999 n.5. Although the Ninth Circuit has not directly addressed this exception, even as Rogers has arguably expanded in reach over several rounds of Ninth Circuit interpretation, several district courts have concluded that the exception is applicable. E.g., Kiedis v. Showtime Networks, No. CV078185DSFMANX, 2008 WL 11173143, at *5 (C.D. Cal. Feb. 19, 2008) (“But as the risk of consumer confusion is higher when ‘confusingly similar’ titles are involved, the Court cannot hold, as a matter of law, that Defendants are entitled to the across-the-board protection of the two-part test used in the [Rogers] case.”). And Defendants here do not address this in their Reply. (See Reply 7–10.) Accordingly, the Court will not on these grounds grant Defendants’ Motion to Dismiss regarding Plaintiff’s alleged trademark in Go!’s title.

B. Nominative Fair Use*10 Defendants assert that nominative fair use shields Boldly’s use of Go!’ s title. (MTD 23–24.) Plaintiff does not argue that the nominative fair use framework is inapplicable to the works here at issue, but instead argues that analysis is premature on a motion to dismiss. (Opp’n 22–24.) However, Courts in our Circuit have considered and dismissed causes of action on nominative fair use grounds at the motion to dismiss stage. Beachbody, LLC v. Universal Nutrients, LLC, No. CV 16-02015-R, 2016 WL 3912014 (C.D. Cal. July 18, 2016); see 1800 GET THIN, LLC v. Hiltzik, No. CV11-00505 ODW PJWX, 2011 WL 3206486, (C.D. Cal. July 25, 2011) (analyzing nominative fair use, determining “the three requirements of the nominative fair use defense have been satisfied by Defendants[,]” and noting that even “in the alternative ... the Court still finds Plaintiff’s argument without merit”). Indeed, it makes sense that where a “[p]laintiff does not allege sufficient facts to defeat [a] [d]efendants’ nominative fair use defense,” a plaintiff’s “trademark infringement claim [may be] dismissed.” Beachbody, LLC, 2016 WL 3912014, at *2; see Leadsinger, Inc. v. BMG Music Pub., 512 F.3d 522, 530 (9th Cir. 2008) (noting in copyright context that “fair use may be considered on a motion to dismiss, which requires the




court to consider all allegations to be true, in a manner substantially similar to consideration of the same issue on a motion for summary judgment, when no material facts are in dispute”). Accordingly, the Court here considers Defendants’ Motion to Dismiss Plaintiff’s trademark claims on nominative fair use grounds. The Ninth Circuit recognizes two distinct fair use defenses within the context of trademark law—classic fair use and nominative fair use.Cairns v. Franklin Mint Co., 292 F.3d 1139, 1150 (9th Cir. 2002). Nominative fair use analysis is appropriate when a “defendant has used [a] plaintiff’s mark ‘to describe the plaintiff’s product’ for the purpose of, for example, comparison to the defendant’s product.” Id. (emphasis in original) (quoting New Kids on the Block v. News Am. Pub., Inc., 971 F.2d 302, 308 (9th Cir. 1992)). “Such nominative use of a mark—where the only word reasonably available to describe a particular thing is pressed into service—lies outside the strictures of trademark law: Because it does not implicate the source-identification function that is the purpose of trademark, it does not constitute unfair competition; such use is fair because it does not imply sponsorship or endorsement by the trademark holder.” New Kids on the Block, 971 F.2d at 308 (emphasis removed). “In cases where a nominative fair use defense is raised,” a court must determine “whether (1) the product was ‘readily identifiable’ without use of the mark; (2) defendant used more of the mark than necessary; or (3) defendant falsely suggested he was sponsored or endorsed by the trademark holder.” Toyota Motor Sales, U.S.A., Inc. v. Tabari, 610 F.3d 1171, 1175–76 (9th Cir. 2010) (quoting Playboy Enters., Inc. v. Welles, 279 F.3d 796, 801 (9th Cir. 2002)). Once nominative fair use is sufficiently raised, the defendant “bear[s] the burden of establishing that the ... use of the ... mark was not nominative fair use.” Id. at 1182. In the present case, Defendants offer a reasoned application of each prong of the nominative fair use inquiry. (See MTD 23–24.) And Plaintiff’s sole argument against nominative fair use is that it should not “appl[y] as a matter of law on a motion to dismiss.” (Opp’n 23.) Accordingly, because the Court concludes that analysis on a motion to dismiss is appropriate, and because Plaintiff does not oppose the substance of Defendants’ argument, the Court therefore GRANTS Defendants’ Motion to Dismiss Plaintiff’s trademark cause of action.4

C. Unfair Competition*11 The Ninth Circuit “has consistently held that state common law claims of unfair competition and actions pursuant to California Business and Professions Code § 17200 are ‘substantially congruent’ to claims made under the Lanham Act.” Cleary v. News Corp., 30 F.3d 1255, 1262–63 (9th Cir. 1994). This means that if claims relying on the exact same factual conduct are validly dismissed under the Lanham Act, they should also be dismissed under California Unfair Competition law. E.S.S. Entm’t, 547 F.3d at 1101 (“[T]he First Amendment[, Rogers] defense applies equally to ESS’s state law claims as to its Lanham Act claim....”); Playboy Enters., Inc. v. Welles, Inc., 78 F. Supp. 2d 1066, 1076 n.4 (S.D. Cal. 1999) (fair use analysis is identical), aff’d in part, rev’d on other grounds in Playboy Enters., Inc. v. Welles, 279 F.3d 796 (9th Cir. 2002). In the present case, the Court concludes that Defendants’ nominative fair use defense precludes Plaintiff’s trademark causes of action, (supra Sections II.A–B); accordingly, the same result inures regarding Plaintiff’s unfair competition claims. (See Compl. ¶¶ 58–62 (alleging unfair competition under California Business and Professions Code § 17200 with all supporting allegations regarding trademark rights).)

CONCLUSIONGiven the foregoing, the Court cannot say as a matter of law that Defendants’ use of Plaintiff’s copyrighted material was fair. The Court therefore DENIES Defendants’ Motion to Dismiss Plaintiff’s claim of copyright infringement. But Plaintiff’s trademark and unfair competition claims stand on different footing. Plaintiff does not oppose the substance of Defendants’ trademark-based argument regarding nominative fair use, and the Court therefore GRANTS Defendants’ Motion to Dismiss Plaintiff’s claims of trademark infringement and unfair competition. However, given Plaintiff’s lack of nominative-fair-use opposition and Defendants’ failure to respond to Plaintiff’s confusingly-similar-titles argument under Rogers v. Grimaldi, the Court grants Plaintiff LEAVE TO AMEND its Complaint regarding the second and third causes of action. DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992) (holding that a Court should freely grant leave to amend “unless the court determines that the allegation of other facts consistent with the challenged pleading could not possibly cure the deficiency” (quoting Schriber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986))). Any such amendment must be within fourteen days of the date on which this Order is electronically docketed. IT IS SO ORDERED.

All Citations




Slip Copy, 2017 WL 2505007

Footnotes

1 Plaintiff, despite explicitly referencing Go! and Boldly and attaching exemplars from both works in its Complaint, argues that the Court may not consider the full versions of the two works that Defendants attached to their Request for Judicial Notice. (RJN Opp’n 7–8.) But Plaintiff does not dispute the authenticity of the two works. (See id.) And “in order to ‘[p]revent [ ] plaintiffs from surviving a Rule 12(b)(6) motion by deliberately omitting ... documents upon which their claims are based,’ a court may consider a writing referenced in a complaint but not explicitly incorporated therein if the complaint relies on the document and its authenticity is unquestioned.” Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007) (alterations in original) (citing Parrino v. FHP, Inc., 146 F.3d 699, 706 (9th Cir. 1998)). Otherwise put, Defendants “cannot now seek to delay potential resolution of this action by asserting that this Court may not review the material it claims is infringing and has specifically identified in its Complaint.” City of Inglewood v. Teixeira, No. CV1501815MWFMRWX, 2015 WL 5025839, at *2 (C.D. Cal. Aug. 20, 2015). Accordingly, the Court GRANTS Plaintiff’s Request for Judicial Notice regarding Go! and Boldly and incorporates by reference the other Dr. Seuss works listed in paragraph 26 of the Complaint.

2 Boldly also adds similar-looking children playing in the background near a slide-like structure and a green, rather than Go!’s deep blue, sky.

3 Plaintiff asserts that because it alleges that Defendants’ conduct was “intentional and willful and is calculated specifically to trade off the goodwill that DSE has developed in its Dr. Seuss Marks[,]” it therefore must be taken as true that Defendants intended to explicitly mislead the public. (Opp’n 22.) But a defendant may intend to or willfully use a mark without any desire to explicitly mislead consumers. And the only other section of the Complaint with relevant allegations states that “Defendants deliberately wrote and illustrated [Boldly] with the intention of imitating the Seuss Marks, and in creating confusion in the minds of the relevant public as to the origin of [Boldly] and/or deceiving the public as to Dr. Seuss’s approval or licensing of [Boldly].” (Compl. ¶ 31.) However, this statement is “no more than [a] conclusion[ ] ... not entitled to the assumption of truth.” Iqbal, 556 U.S. at 679.

4 The only other argument Plaintiff advances against nominative fair use is regarding the third factor, which Plaintiff argues “requires an assessment of likelihood of confusion....” (Opp’n 24.) The Court disagrees. “In cases in which the defendant raises a nominative use defense, the above three-factor test should be applied instead of the test for likelihood of confusion set forth in Sleekcraft.” Welles, 279 F.3d at 801; Cairns, 292 F.3d 1139, 1151 (9th Cir. 2002) (“[N]ominative fair use analysis ... replaces the likelihood of customer confusion analysis set forth in Sleekcraft.” (emphasis in original)). And the third factor does not analyze likelihood of confusion, but instead simply requires “that the user do ‘nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder.’ ” Welles, 279 F.3d at 803 (quoting New Kids, 971 F.2d at 308).


INTERMOUNTAIN


DOCUMENT SECTION C


2017 WL 1832399 (UDRP-ARB Dec.)

INTERMOUNTAIN HEALTH CARE, INC., IHC HEALTH SERVICES, INC. v. RANDY DELCORE

WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

INTERMOUNTAIN HEALTH CARE, INC., IHC HEALTH SERVICES, INC. v. RANDY DELCORECase No. D2017-0265

*1 Doman Name: cedarcityhospital.coIndustry: General Medical and Surgical HospitalsCase Type: Domain NameAward Amount: Equitable*7 Award Date: May 2, 2017Arbitrator: Robert A. Badgley 1. The Parties Complainants are Intermountain Health Care, Inc. and IHC Health Services, Inc., both of Salt Lake City, Utah, United States of America (’United States’), represented by Stoel Rives, LLP, United States.Respondent is Randy Delcore of Cedar City, Utah, United States, represented by Mudd Law Offices, United States. 2. The Domain Names and Registrar The disputed domain names ‹cedarcityhospital.co›, ‹cedarcityhospital.com›, ‹ cedarcityhospital.org›, ‹intermountaincedarcityhospital.co›, ‹ intermountaincedarcityhospital.com›, ‹intermountaincedarcityhospital.net›, ‹ intermountaincedarcityhospital.org›, ‹intermountainstgeorgehospital.com›, ‹ intermountainstgeorgehospital.net›, and ‹intermountainstgeorgehospital.org› (the ‘Domain Names’) are registered with GoDaddy.com, LLC (the ‘Registrar’). 3. Procedural History The Complaint was filed with the WIPO Arbitration and Mediation Center (the ‘Center’) on February 10, 2017. On February 13, 2017, the Center transmitted by e-mail to the Registrar a request for registrar verification in connection with the Domain Names. On February 14, 2017, the Registrar transmitted by e-mail to the Center its verification response confirming that Respondent is listed as the registrant and providing the contact details. The Center verified that the Complaint satisfied the formal requirements of the Uniform Domain Name Dispute Resolution Policy (the ‘Policy’ or ‘UDRP’), the Rules for Uniform Domain Name Dispute Resolution Policy (the ‘Rules’), and the WIPO Supplemental Rules for Uniform Domain Name Dispute Resolution Policy (the ‘Supplemental Rules’). In accordance with the Rules, paragraphs 2 and 4, the Center formally notified Respondent of the Complaint, and the proceedings commenced on February 21, 2017. In accordance with the Rules, paragraph 5, the due date for Response was March 13, 2017. On March 13, 2017, Respondent requested an automatic four-day extension of the deadline to file a Response. The Center granted the requested extension and confirmed that the new deadline for Response was March 17, 2017. On March 16, 2017, Respondent requested an extension of time to file the Response to March 31, 2017. On March 17, 2017, the Center granted Respondent an extension of time to file the Response, confirming the new deadline for Response was March 27, 2017. The Response was filed with the Center on March 27, 2017. On April 3, 2017, Complainant filed an unsolicited Supplemental Filing. On April 5, 2017, Respondent filed an unsolicited Supplemental Filing. *2 The Center appointed Robert A. Badgley as the sole panelist in this matter on April 18, 2017. The Panel finds that it was properly constituted. The Panel has submitted the Statement of Acceptance and Declaration of Impartiality and Independence, as required


DOCUMENT SECTION CINTERMOUNTAIN


by the Center to ensure compliance with the Rules, paragraph 7. 4. Factual Background Complainant, comprised of two entities, describes itself as a ‘well-known not-for-profit system of hospitals, surgery centers, doctors, clinics, homecare and hospice providers in the United States.’ Complainant has 22 hospitals, more than 185 clinics, 1,400 multi-specialty doctors and caregivers, and more than 37,000 employees. Complainant holds numerous trademark registrations featuring the word ‘Intermountain.’ One such mark, INTERMOUNTAIN HEALTH CARE, was registered with the United States Patent & Trademark Office (’USPTO’) in 1995 and indicates a first use in commerce in 1975. Other USPTO registrations held by Complainant include INTERMOUNTAIN MEDICAL CENTER and INTERMOUNTAIN CLINICS. Complainant also maintains an Internet presence, with its main website at ‘www.intermountainhealthcare.org’. One of Complainant’s hospitals is the Cedar City Hospital located in Cedar City, Utah. That hospital had been known as Valley View Medical Center since 1963. On November 16, 2015, Complainant announced that Valley View Medical Center was changing its name to Cedar City Hospital. Respondent is a physician who operates a medical service in Cedar City, Utah. He performs surgical procedures at Cedar City Hospital as well. Respondent registered all of the Domain Names on November 17, 18 and 19, 2015, shortly after Complainant’s announcement that it was changing the name of Valley View Medical Center to Cedar City Hospital. SelectHealth, Inc. (’SelectHealth’) is a subsidiary of Complainant which provides health insurance coverage to members enrolled in an integrated healthcare plan through Complainant’s health system. According to a SelectHealth officer, Respondent said he registered the Domain Names as leverage in order to induce SelectHealth to add Respondent’s clinic as an ‘in-network’ health care provider. A Cedar City Hospital administrator also recounted a discussion with Respondent in November 2016 during which the latter reiterated that he would sell the Domain Names to Complainant if SelectHealth would add Respondent’s clinic as an ‘in-network’ provider. The Domain Names containing the word ‘Intermountain’ and ‹ cedarcityhospital.co› do not resolve to an active website. The other two Domain Names ‹cedarcityhospital.com› and ‹cedarcityhospital.org› are redirected to Respondent’s main website, located at ‘www.delcore.org’. 5. Parties’ Contentions A. Complainants According to Complainant, Respondent registered the Domain Names with no legitimate interest and in bad faith because he is seeking leverage in his efforts to have his clinic added to the SelectHealth list of ‘in-network’ health care providers. In addition, Complainant contends that Respondent’s redirection of some of the Domain Names to Respondent’s main website is in bad faith because Respondent offers medical services in competition with Complainant’s services. *3 With respect to the issue whether Complainant has protectable rights in the unregistered CEDAR CITY HOSPITAL mark, Complainant asserts that prior decisions under the Policy have recognized trademark rights in the context of geographically descriptive terms. Moreover, Complainant asserts that prior decisions under the Policy have found a respondent in bad faith where the respondent registers a domain name upon learning that a trademark owner is about to change its mark or create a new mark. B. Respondent Respondent has consented to the transfer of the Domain Names which contain the word ‘Intermountain.’ With respect to the three remaining Domain Names, however, Respondent contends that Complainant is not entitled to a transfer of those Domain Names. According to Respondent, he registered the ‘Cedar City Hospital’ Domain Names because he plans to open a hospital in Cedar City. Respondent purchased property years ago, allegedly for this purpose, and Respondent offers into the record the affidavits of two doctors who confirm that Respondent has discussed with them his plans to open a hospital.




Respondent also contends that Complainant lacks trademark rights in the alleged and unregistered mark CEDAR CITY HOSPITAL, because that term is merely descriptive of a hospital located in Cedar City, and that, in any event, Complainant had not acquired any common law rights in such a mark during the hours between Complainant’s announcement of the name change of Valley View Medical Center and Respondent’s registration of the Domain Names. 6. Discussion and Findings Paragraph 4(a) of the Policy lists the three elements which Complainant must satisfy with respect to each of the Domain Names: (i) the Domain Name is identical or confusingly similar to a trademark or service mark in which Complainant has rights; and (ii) Respondent has no rights or legitimate interests in respect of the Domain Name; and (iii) the Domain Name has been registered and is being used in bad faith. The Panel will not discuss the merits of the Domain Names ‹ intermountaincedarcityhospital.co›, ‹intermountaincedarcityhospital.com›, ‹ intermountaincedarcityhospital.net›, ‹intermountaincedarcityhospital.org›, ‹ intermountainstgeorgehospital.com›, ‹intermountainstgeorgehospital.net›, and ‹ intermountainstgeorgehospital.org›, because Respondent has consented to the transfer of those Domain Names. The Panel will confine its discussion and findings to the merits of the Domain Names ‹cedarcityhospital.co›, ‹ cedarcityhospital.com›, and ‹cedarcityhospital.org›, which remain in dispute. A. Supplemental Filings Both Parties have submitted unsolicited Supplemental Filings. Complainant’s Supplemental Filing (’Complainant’s Reply’) responds to arguments made in Respondent’s Response, and Respondent’s Supplemental Filing consists of a sworn affidavit signed by Respondent providing additional factual allegations. *4 Paragraphs 10 and 12 of the Rules grant the Panel sole discretion to determine the admissibility of Supplemental Filings. In this case, the Panel will exercise its discretion to admit both Supplemental Filings to account for new arguments and new information that could not have been addressed in the Parties’ initial Complaint and Response submissions. B. Identical or Confusingly Similar In prior decisions under the Policy, panels have exceptionally recognized common law trademark rights in the context of geographical terms or phrases to satisfy the first element of the Policy if the complainant is able to show that it has rights in the term sufficient to demonstrate consumer recognition of the mark in relation to the complainant’s goods or services. See, e.g., BAA plc, Aberdeen Airport Limited v. Mr. H. Hashimi, WIPO Case No. D2004-0717 (‹aberdeenairport.com›), and Thompson Island Outward Bound Education Center v. Larrie Noble/Dirty Mackn Entertainment Corp, WIPO Case No. D2013-1144 (‹thompsonisland.org›). In this case, the Panel concludes that Complainant has rights in the mark CEDAR CITY HOSPITAL. Complainant’s main website advertises Cedar City Hospital as ‘providing excellence in healthcare in Iron County.’ Moreover, Complainant went to considerable lengths to publicize the name change of an established, 52 year-old hospital, Valley View Medical Center, to Cedar City Hospital. Complainant issued e-mail announcements, amended agreements with doctors, insurers, vendors, etc., replaced signs, banners, etc., and noted the change in its advertising and promotional materials. The Domain Names ‹cedarcityhospital.co›, ‹cedarcityhospital.com›, and ‹ cedarcityhospital.org› reproduce the CEDAR CITY HOSPITAL mark in its entirety, and accordingly the Panel finds that the Domain Names are confusingly similar to a trademark in which Complainant holds common law trademark rights. Complainant has established Policy paragraph 4(a)(i). C. Rights or Legitimate Interests For each of the Domain Names, pursuant to paragraph 4(c) of the Policy, Respondent may establish its rights or legitimate interests




in the Domain Name, among other circumstances, by showing any of the following elements: (i) before any notice to you [Respondent] of the dispute, your use of, or demonstrable preparations to use, the Domain Name or a name corresponding to the Domain Name in connection with a bona fide offering of goods or services; or (ii) you [Respondent] (as an individual, business, or other organization) have been commonly known by the Domain Name, even if you have acquired no trademark or service mark rights; or (iii) you [Respondent] are making a legitimate noncommercial or fair use of the Domain Name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark or service mark at issue. The Panel concludes on balance that Respondent lacks rights or legitimate interests in respect of the Domain Name. Respondent contends that he registered the ‘Cedar City Hospital’ Domain Names in aid of his long-range plan to open a hospital in Cedar City, Utah. This goal may be genuine, but there is no evidence that Respondent intended to call such a hospital Cedar City Hospital. *5 More importantly, Respondent’s credibility suffers from the fact that he also registered seven Domain Names containing Complainant’s longstanding and registered trademark INTERMOUNTAIN. Although he does not contest the transfer of these Domain Names in this proceeding, the fact that he registered them at the same time as he registered the ‘Cedar City Hospital’ Domain Names remains part of the story. The registration of the seven INTERMOUNTAIN-formative Domain Names renders far more plausible the assertion by Complainant that Respondent’s motivation here was to leverage the Domain Names in exchange for ‘in-network’ status within Complainant’s health insurance system. Complainant has established Policy paragraph 4(a)(ii). D. Registered and Used in Bad Faith For each of the Domain Names, paragraph 4(b) of the Policy provides that the following circumstances, ‘in particular but without limitation,’ are evidence of the registration and use of the Domain Name in ‘bad faith’: (i) circumstances indicating that Respondent has registered or has acquired the Domain Name primarily for the purpose of selling, renting, or otherwise transferring the Domain Name registration to Complainant who is the owner of the trademark or service mark or to a competitor of that Complainant, for valuable consideration in excess of its documented out of pocket costs directly related to the Domain Name; or (ii) that Respondent has registered the Domain Name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that Respondent has engaged in a pattern of such conduct; or (iii) that Respondent has registered the Domain Name primarily for the purpose of disrupting the business of a competitor; or (iv) that by using the Domain Name, Respondent has intentionally attempted to attract, for commercial gain, Internet users to Respondent’s website or other on line location, by creating a likelihood of confusion with Complainant’s mark as to the source, sponsorship, affiliation, or endorsement of Respondent’s website or location or of a product or service on Respondent’s website or location. Respondent asserts that he cannot have registered the Domain Names in bad faith under the Policy because at the time he registered the Domain Names Complainant lacked trademark rights in CEDAR CITY HOSPITAL. This type of situation has been addressed in the WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Second Edition (’WIPO Overview 2.0’). In response to Question 3.1 (’Can bad faith be found if the disputed domain name was registered before the trademark was registered or before unregistered trademark rights were acquired?’), the WIPO Overview 2.0 states: ’Consensus view: Generally speaking, although a trademark can form a basis for a UDRP action under the first element irrespective of its date [see further paragraph 1.4 above], when a domain name is registered by the respondent before the complainant’s relied-upon trademark right is shown to have been first established (whether on a registered or unregistered basis), the registration of the domain name would not have been in bad faith because the registrant could not have contemplated the complainant’s then non-




existent right. *6 However: In certain situations, when the respondent is clearly aware of the complainant, and it is clear that the aim of the registration was to take advantage of the confusion between the domain name and any potential complainant rights, bad faith can be found. This has been found to occur: shortly before or after a publicized merger between companies, but before any new trademark rights in the combined entity have arisen; or when the respondent (e.g., as a former employee or business partner, or other informed source) seeks to take advantage of any rights that may arise from the complainant’s enterprises; or where the potential mark in question is the subject of substantial media attention (e.g., in connection with a widely anticipated product or service launch) of which the respondent is aware, and before the complainant is able to obtain registration of an applied-for trademark, the respondent registers the domain name in order to take advantage of the complainant’s likely rights in that mark. (In all such cases, in order to have a chance to succeed in any filed UDRP complaint, the complainant must actually demonstrate relevant trademark rights, as these are a precondition for satisfying the standing requirement under the first element of the UDRP for rights in a mark.)’ The Panel concludes that Respondent registered the Domain Names in bad faith. It is undisputed that Respondent was aware of Complainant’s recent announcement that it was changing the name of Valley View Medical Center to Cedar City Hospital at the time he registered the Domain Names. Moreover, although Respondent denies that he ever intended to sell the Domain Names to Complainant, he does not deny the repeated allegation that he was using the Domain Names as leverage in his negotiations to become listed as an ‘in-network’ provider in Complainant’s health insurance system. The Panel concludes that Respondent’s intended use of the Domain Names as bargaining leverage to qualify for Complainant’s health insurance network constitutes bad faith within the meaning of Policy paragraph 4(b)(i), quoted above. The benefits that would accrue to Respondent’s business from being an ‘in-network’ provider presumably outweigh by a great margin the cost of registering the Domain Names. In addition, the current use of the Domain Names, either to resolve to pay-per-click pages or to redirect to Respondent’s website, is further evidence of bad faith use. The Panel concludes, on the record before it, that Respondent registered and has used the Domain Names in bad faith. Complainant has established Policy paragraph 4(a)(iii). 7. Decision For the foregoing reasons, in accordance with paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the Domain Names ‹ cedarcityhospital.co›, ‹cedarcityhospital.com›, ‹cedarcityhospital.org›, ‹ intermountaincedarcityhospital.co›, ‹intermountaincedarcityhospital.com›, ‹ intermountaincedarcityhospital.net›, ‹intermountaincedarcityhospital.org›, ‹ intermountainstgeorgehospital.com›, ‹intermountainstgeorgehospital.net›, and ‹ intermountainstgeorgehospital.org› be transferred to Complainant.

Date: May 2, 2017Arbitrator: Robert A. BadgleySole Panelist

Copyright © 2001 World Intellectual Property Organization (WIPO)

Copyright (c) 2011 West Group2017 WL 1832399 (UDRP-ARB Dec.)


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