June 2022

The Manner in Which the Invention was Made

Patent,

by Dennis Crouch

T0day’s oral arguments in Thaler v. Vidal was not too exciting. Court focused on the terms “individual” that was added to the Patent Act during the AIA and likely determinatively ends the case:

The term “inventor” means the individual or, if a joint invention, the individuals collectively who invented or discovered the subject matter of the invention.

35 U.S.C. s100(f).  I am close to 100% sure that the Federal Circuit will affirm that US law requires the patentee to identify a human inventor.

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In the course of oral arguments, the government made two odd claims, neither of which were fully developed.

The first relates to the final sentence of Section 103 indicating that “patentability shall not be negated by the manner in which the invention was made.”  The Gov’t . made the following claim:

The Supreme Court in Graham against John Deere [more than] 50 years ago said that provision, that one sentence, applies only to the part of patentability that is referenced in Section 103.

Thaler Oral Arguments. In Graham, the Court did comment on the phrase and its  Congressionally intended purpose of overruling the flash-of-genius test.  However, I don’t see that the court bound the phrase to only be tied to Section 103 and obviousness.  The court wrote:

It also seems apparent that Congress intended by the last sentence of § 103 to abolish the test it believed this Court announced in the controversial phrase “flash of creative genius,” used in Cuno Engineering Corp. v. Automatic Devices Corp., 314 U. S. 84 (1941).

Graham v. John Deere Co., 383 U.S. 1 (1966).  Although the Graham court found a seemingly apparent Congressional intent, it did not actually interpret the provision as so limited and certainly did not indicate that it should be limited to application only in the context of obviousness analysis.

The second odd claim made by the gov’t in oral arguments is as follows: “One person’s innovation is another person’s step backwards.”  The basic underlying idea  here is apparently that Congress intended to intentionally exclude certain AI-generated inventions from patentability because they thought those innovations would have a negative societal impact.

The full oral arguments should be available shortly at this link: https://cafc.uscourts.gov/home/oral-argument/listen-to-oral-arguments/.

I am the smart one: Sideshow Patent Litigation

Patent

Tod Tumey v. Mycroft AI (8th Cir. 2022)

Tod Tumey is a Houston-based patent attorney who represents Voice Tech Corp.  Back in 2021, VoiceTech sued Mycroft for patent infringement.  The PTO has apparently determined that the asserted claims are not patentable, but that case will be appealed to the Federal Circuit.

Meanwhile, Mycroft allegedly began to a series of “cyberattacks and harassment activity” against Tumey (including hacking attempts and heavy-breathing phone calls).  It is clear that Mycroft repeatedly announced that it was fighting VoiceTech as a patent troll and that Mycroft has a strong anti-troll position:

I don’t like letting these matters go quietly. In my experience, it’s better to be aggressive and ‘stab, shoot and hang’ them, then dissolve them in acid. Or simply nuke them from orbit, it is the only way to be sure.

Troll Hunter—Mycroft’s Position on Patent Trolls (February 5, 2020).

Tumey sued Mycroft as well as Mycroft founder Joshua Montgomery and CEO Michael Lewis on several causes of action: 

  • Racketeering. 18 U.S.C. §§ 1962(c) & 1962(d);
  • Hacking. 18 U.S.C. § 1030;
  • Privacy violations. 18 U.S.C. § 2701; and
  • Additional state and federal claims.

Tumey’s case is pending in the Western District of Missouri (KC).  The lawsuit was originally handled by Judge Ketchmark, but as you’ll read below, the 8th Circuit  recently ordered the case to be reassigned to a different judge. W.D.Mo. Chief Judge Beth Phillips has taken-up the case.

In the case, Tumey requested a preliminary injunction order that Mycroft and its people cease its incitement of cyber-attacks, phishing, and harassing phone calls.  Mycroft responded with sworn declarations promising that no one associated with Mycroft was involved in the cyber-attacks or harassment.  Still, the original district court granted a preliminary injunction barring Mycroft and its people from:

  1. Engaging in, participating in, or recklessly or intentionally inciting any cyberattacks, hacking or other harassment directed at Plaintiffs, including Plaintiffs’ officers, agents, servants, employees, attorneys, witnesses and potential witnesses (including Chilton Webb and Christina Butler), and the family members of any of the foregoing (the “Protected Parties”); and
  2. Using or disclosing any documents, information, or other materials of any kind obtained from Plaintiffs or any other Protected Party through any unauthorized means.

On appeal, the 8th Circuit vacated the decision finding due process violations (briefing was related to 14-day TRO, but the judge transformed the hearing into a preliminary injunction hearing with only 1-hour notice); and merits problems (“there is a paucity of evidence in this record to find that Mycroft is behind the attacks”).  The appellate panel also concluded that the case should be reassigned to a different judge “[b]ecause a reasonable person aware of all the circumstances and events that have transpired so far would harbor doubts about the judge’s impartiality, reassignment to a different judge is appropriate.”  In particular, the appellate court suggested that “an objective review of the record demonstrates a degree of antagonism against Mycroft that is higher than that being applied against Tumey.”

After the district court allowed Tumey, over Mycroft’s strenuous objection, to transform his motion for a temporary restraining order to a preliminary injunction on one hour’s notice, the court further fanned the flames during the hearing by sua sponte restricting Mycroft’s access to evidence, or lack thereof, connecting Mycroft to the unlawful conduct that took place. Again, over Mycroft’s objection, the court allowed testimony about the disputes between neighbors in Hawaii when the relevance, if any, of this testimony to the current litigation is marginal and tangential. The preliminary injunction that was ultimately issued went beyond the intended use of maintaining the status quo until the claims can be resolved. When Mycroft sought reconsideration of the preliminary injunction, specifically raising claims regarding the breadth and restraint on speech and publication, the court dismissed, without analysis, Mycroft’s constitutional claims.

Slip Op.  On remand, the new district court is considering the defendants summary judgment motion that is currently being briefed.

Meanwhile, Mycroft’s founder Montgomery has sued Tumey in Hawaii alleging tortious abuse of process, conspiracy to extort, defamation, and intentional infliction of emotional distress. “Defendants’ misrepresentations and abuse of the legal and judicial systems intentionally and/or negligently caused Maj. Montgomery severe emotional distress.”  The lawsuit more interesting once we bring in Mongomery’s Hawaii next-door-neighbor, Christina Butler. After a handful of negative encounters with Mongomery, Butler located the pending Tumey lawsuit and offered to testify in support of Tumey’s case “believing she possessed bad character evidence about Montgomery that would discredit Montgomery.”  Mongomery’s Hawaii lawsuit includes Butler as a defendant and alleges:

First, Defendant Butler provided a photo of Maj. Montgomery attached to a sworn affidavit claiming that Maj. Montgomery was attempting to evade service. Then, Defendant Tumey requested and Defendant Butler provided another sworn affidavit claiming Maj. Montgomery committed criminal property damage by purposefully damaging her main water line the night after her initial affidavit was filed. Moreover, Defendant Butler claimed Maj. Montgomery was responsible for “drone harassment” and trespass, without providing a single piece of evidence to support her allegations.

Montgomery complaint.  That case is pending in Hawaii state court.

[quote source]

Thaler v Vidal: Oral Arguments on Monday

Patent,

By Jason Rantanen

On Monday, June 6, the Federal Circuit will hear oral arguments in Thaler v. Vidal,  covered on PatentlyO here.  Dr. Thaler  claims that his AI system, DABUS, has invented a new technology and should be named as its inventor on the patent. Although access to the Federal Courts Building remains restricted, you can listen to the arguments live at https://cafc.uscourts.gov/home/oral-argument/listen-to-oral-arguments/. The court’s long had a practice posting recordings of oral arguments, but it’s great that they’re also making the audio available in real time.

If you’re interested in more context, students in Professor Colleen Chien’s, AI and the Law class wrote a series of blog posts covering the issue, including a post on Dr. Thaler’s legal arguments, a post on the DABUS technology, patents and patent applications, and the results of a small survey of patent prosecutors on AI in their fields.

Read more at Santa Clara’s AI and the Law for Social Impact and Equity blog!

The Spirit of Lehman Brothers

Patent

by Dennis Crouch

Tiger Lily Ventures Ltd v. Barclays Capital Inc. (Fed. Cir. 2022)

LEHMAN BROTHERS has a bad name for triggering the US economic collapse in the mid 2000s.  But, as they say ‘any publicity is good publicity.’

Barclays purchases a number of Lehman Brothers businesses and accompanying goodwill back in 2008 as part of the bankruptcy proceedings.  That exchange included ownership rights of the LEHMAN BROTHERS trademarks.   But, Barclays was not using the marks and allowed their registration to expire.

At that point Tiger Lily entered the stage and applied to register the LEHMAN BROTHERS mark for its use its whisky. The spirit of the Lehman Brothers.  Barclays opposed the whisky registration and also applied to re-register its mark.  The TTAB agreed with Barclays holding particularly that (1) Barclays had not abandoned its common law mark; (2) there is a likelihood of confusion between the marks; and (3) Barclays provided sufficient evidence that it has a good faith intent to eventually begin using the mark again.

With regard to likelihood of confusion, the TTAB pointed particularly to the fact that lots of LEHMAN BROTHERS branded collectable items (including some alcohol) are still being traded by collectors–its like the new Nazi paraphernalia?  This collector  conclusion raises a number of interesting questions about the role of trademarks. Even if this is a good theory, I would suggest that collectors are among the most sophisticated buyers, always on the lookout for counterfeits and so would require a fairly high level of confusion.

On appeal, the Federal Circuit has affirmed — The Whisky mark is cancelled, and Barclay’s mark remains.

It is clear here that whisky registration was seeking to free-ride upon consumer recognition of the Lehman Brothers name.  But, Tiger Lilly suggests that its case here is different because it is lampooning Lehman Brothers.  It is not trading on the “goodwill” but rather the “bad will.”  On appeal, the Federal Circuit rejected this claim — finding “no legal support for these subtle distinctions.”  Rather, “Tiger Lily’s attempts to capitalize on the fame of the LEHMAN BROTHERS mark  weighs in favor of finding a likelihood of confusion.”

The court’s other important ruling in the case focuses on the expectation that owners of trademarks will extend their use of the mark into other fields.

[I]n modern consumer markets commercial trademarks are often licensed for use on products that may differ from the original source of the trademark. . . . As a legal principle, because the LEHMAN BROTHERS mark has achieved a high degree of fame, it is afforded a broad scope of protection. Our precedent makes clear that a famous mark “casts a long shadow which competitors must avoid.”

Slip Op.

 

 

Supreme Court Continues Preliminary Injunction of HB20 – with dissent

Patent,

by Dennis Crouch

NetChoice, LLC v. Paxton, 21A720, 596 U.S. ___, 2022 WL 1743668 (U.S. May 31, 2022)

The most recent news in this case is that a 5-4 Supreme Court has sided against Texas–issuing an emergency order to reinstitute the preliminary injunction against enforcement of the Social Media Censorship law known as HB20.  The case is now back before the 5th Circuit who review the preliminary injunction order in a non-emergency fashion.

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The State of Texas enacted HB20 to regulate large social media platforms (>50 million users).  The law has a number of reporting requirements and also prohibits large social media platforms from censoring users based upon  that user’s viewpoint viewpoint. Here, “censor” is broadly defined “to mean to block, ban, remove, deplatform, demonetize, de-boost, restrict, deny equal access or visibility to, or otherwise discriminate against expression.”

NetChoice is a lobbying organization controlled by large media companies, including Google, Facebook, TikTok, Amazon & Twitter.  Those companies argue that HB20 impinges upon their Constitutionally protected free speech rights.  In particular, the large social media platforms argue that the First Amendment protects their rights to operate as editors making publication decisions.

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The Supreme Court’s decision against Texas was issued without an opinion by a 5-judge majority of Chief Justice Roberts along with Justices Breyer, Sotomayor, Kavanaugh and Barrett.  Four justices dissented, including Justice Kagan who did so without any opinion. The only opinion then came from Justice Alito’s dissent that was joined by Justices Thomas and Gorsuch.  This sort of decision here is quite wonky — it is an emergency order to vacate the 5th Circuit’s order to temporarily stay the district court’s preliminary injunction.  Here, I want to just focus a bit on Justice Alito’s First Amendment suggestions, which he notes have not been finalized at this preliminary and emergency stage.

Justice Alito’s opinion identifies the first amendment issues at stake here to be important and novel. “It is not at all obvious how our existing precedents, which predate the age of the internet, should apply to large social media companies.”  Although editorial control is certainly within the First Amendment, the court has previously allowed requirements to be placed on broadcast and cable television and even a shopping center. See PruneYard Shopping Center v. Robins, 447 U. S. 74 (1980) and Turner Broadcasting System, Inc. v. FCC, 512 U. S. 622 (1994).

Next step in the case is for the 5th Circuit to decide whether to cancel the preliminary injunction.  I expect that the court will at least narrow the injunction if not entirely eliminate it.  At that point the case will move back down to the district court.  If Texas does begin enforcement then there will likely be a number of cases moving up through both State and Federal courts.