Willfulness Interplays Between Patent and Copyright

by Dennis Crouch

As with patent law, willful copyright infringement also leads to enhanced damages. In Seagate (Fed. Cir. 2007), the en banc Federal Circuit drew an analogy to copyright doctrine in determining that willfulness in the patent context should also include reckless indifference.  Truthfully though, copyright law was not as uniform in its approach as suggested by the panel decision.

In Olem Shoe Corp. v. Washington Shoe Corp. (11th Cir. 2015), the Eleventh Circuit goes the other way and relies on the Federal Circuit doctrine on willfulness to help it further refine the test for copyright.  In a issue of first impression for the Atlanta-based Court of Appeals, affirmed that willfulness in copyright law also requires proof that the infringer acted “despite an objective high likelihood that the actions taken” constituted infringement and that the risk of infringement was known or should have been known by the infringer.

ShoeCopy
The district court had found infringement but no willfulness. (See comparisons above). On appeal, the panel affirmed — finding that the copyright holder presented no evidence “with regard to actual knowledge that Olem’s boots infringed Washington Shoe’s copyrights. That is, there is no evidence that Olem knew of Washington Shoe’s copyrights and chose to violate them.”  The panel also found insufficient evidence to raise a genuine issue of material fact of reckless disregard.

In particular, Washington Shoe argued that its cease-and-desist letters should have created sufficient notice.  However, that suggestion was rejected because the letters “did not include reference to copyright registration numbers or deposit copies. . . [and thus] provided nothing from which Olem could have determined that the claim was legitimate.”  Washington Shoe also noted the similarity of the boots  – including evidence that the boots are identical – as a clear signpost of infringement.   However, the appellate panel also found that similarity to provide no basis for a willfulness finding.  Finally, for willfulness, the panel refused to place any burden on the infringer to prove that it had an alternative design source.

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A few interesting aspects of the case:

  • First, I should note that, although expounding upon new law, the panel determined that the decision was non-precedential.  This is likely because two of the three panel members were sitting by designation (one from a district court and the other from the USCIT).
  • As part of its deliberative process, the district court requested insight from the register of copyrights regarding whether certain alleged inaccurate information regarding the copyright registration would have caused the register to deny registration. Such a request is permitted under 17 U.S.C. 411(b).  This approach is wildly different from the patent law approach where there is essentially no communication between the patent office and the court of enforcement.
  • The copyright statute only particularly provides for enhanced willfulness damages if the copyright holder first chooses statutory damages (rather than proving actual damages).

17 thoughts on “Willfulness Interplays Between Patent and Copyright

  1. 5

    Only somewhat off topic (as both patent and copyright infringement are implicated), and taking the language in context (the authors are writing for an investment audience), the following story on something that very much reflects the “my big box of electrons, protons, and neutrons” meme may overwhelm other infringement discussions (including this thread) in short order.

    The story: link to fool.com

      1. 4.1.1

        Only partially.

        Ever wonder why “expression” (often in entertainment) merits a criminal aspect, while utility is attempted to be treated with the looseness of some type of ‘efficient breach’…?

        Ever wonder why Infringers’ Rights seems so arse backwards?

        The Golden Rule son, (he who has it…)

        1. 4.1.1.1

          Fair point. I hadn’t really thought of criminal copyright infringement.

          Putting someone in jail for infringing a copyright seems completely absurd to me as well, but as you say, the gold and what-not.

  2. 3

    Well I admit I haven’t read the cases, but it is hard to believe that these look so similar without actual copying.

    1. 3.1

      Right, but one point here is that proving willfulness now requires much more than simply proving copying. Willful infringement requires evidence that the infringer knew of the risk if infringement of a valid right and recklessly disregarded that risk.

      1. 3.1.1

        With validity a legal presumption, would effective notice then suffice?

        What pray tell does the (now AIA emasculated) marking statute have as a role in this discussion, or is (verified) personal notice required?

          1. 3.1.1.1.1

            Dennis: there is no evidence that Olem knew of Washington Shoe’s copyrights and chose to violate them.” The panel also found insufficient evidence to raise a genuine issue of material fact of reckless disregard. In particular, Washington Shoe argued that its cease-and-desist letters should have created sufficient notice. However, that suggestion was rejected because the letters “did not include reference to copyright registration numbers or deposit copies. . . [and thus] provided nothing from which Olem could have determined that the claim was legitimate.” Washington Shoe also noted the similarity of the boots – including evidence that the boots are identical – as a clear signpost of infringement. However, the appellate panel also found that similarity to provide no basis for a willfulness finding. Finally, for willfulness, the panel refused to place any burden on the infringer to prove that it had an alternative design source.

            All this makes perfect sense. Absent some convincing evidence that Washington Shoe knew (or should have known) that it was infringing a valid copyright, there should be no finding of willfulness and no enhancement of damages.

  3. 2

    The similarities are so striking I am a little surprised that the court was not swayed by a “res ipsa loquitor” argument.

    1. 2.1

      I know next to nothing about copyright law, but my first impression here is that Washington Shoe should have put a little more info into their cease-and-desist letter. If they had shown Olem from the very beginning that they had a legitimate copyright claim, then I think that any further production by Olem after learning of this would probably have been seen as willful infringement.

      I would love to learn more about how this plays out in the patent world. Does a cease-and-desist letter regarding a patented invention need to include the patent no. and some kind of reasonable concise explanation of why the recipient’s activity is infringing in order to establish that any post-letter activity was willful infringement? IMO that doesn’t sound like much to ask.

      1. 2.1.1

        Does a cease-and-desist letter regarding a patented invention need to include the patent no. and some kind of reasonable concise explanation of why the recipient’s activity is infringing in order to establish that any post-letter activity was willful infringement?

        Yes. But, that same level of specificity also provides the recipient with enough grounds to file a Declaratory Judgment action, if it wants to ensure that the battle is fought on its own turf. For this reason, many patent owners are reluctant to send letters that are this specific.

          1. 2.1.1.1.1

            Simon,

            What if you have more than one type of notice,

            Per above, let’s say you have effective notice by way of marking, and A similar form of vague notice as the present case weak and ambiguous letter (for this hypo, let’s say that the letter is so in order to avoid inducing a DJ action). Let’s further take validity off the table at this moment with the presumption of validity.

            Can you have it both ways then?

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