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INTELLECTUAL PROPERTY

Already, LLC v. Nike, Inc.

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Oral argument: 
November 7, 2012
Court below: 
United States Court of Appeals for the Second Circuit

Nike, Inc., sued Already, LLC d/b/a Yums, for selling shoes that allegedly infringed on Nike’s trademark covering the Air Force 1 shoe line. Yums counterclaimed to cancel Nike’s trademark. Shortly after Yums’s counterclaim, Nike dropped its claim and promised Yums that Nike would not assert its trademark against any of Yums’s current or previous products. The district court dismissed Yums’s counterclaim and the court of appeals affirmed the dismissal. Yums argues that a controversy remains after Nike’s promise not to sue because Nike’s trademark continues to hinder Yums’s ability to compete in the athletic footwear business. Nike argues that a court cannot hear a trademark claim without a controversy, and that Nike’s promise not to sue eliminated any controversy involving the Air Force 1 trademark. The Supreme Court’s decision here may determine whether intellectual property owners can drop infringement actions without having to defend counterclaims challenging their intellectual property rights. This decision may have a significant impact on intellectual property litigation and on the risks associated with commencing an infringement action.

Questions Presented: 

Whether a federal district court is divested of Article III jurisdiction over a party's challenge to the validity of a federally registered trademark if the registrant promises not to assert its mark against the party's then-existing commercial activities?

Issue

Does a federal district court lose jurisdiction over a trademark cancellation claim after the trademark holder terminates any infringement actions and promises not to assert its trademark against the party seeking the trademark’s cancellation?

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Written by: 
Alexandra Cowen
Chanwoo Park
Edited by: 
Brandon Bodnar
Additional Resources: 

Golan v. Holder (10-545)

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Oral argument: Oct. 5, 2011

Appealed from: United States Court of Appeals for the Tenth Circuit (June 21, 2010)

Congress enacted Section 514 of the Uruguay Round Agreements Act in order to comply with the international copyright standards of the Berne Convention for the Protection of Literary and Artistic Works. Section 514 restores copyright protection to foreign works currently found in the public domain. Lawrence Golan and other performers, educators, and motion picture distributors brought this suit challenging Section 514, arguing that Congress’s removal of works from the public domain exceeded its Copyright Clause powers. Golan also argues that Section 514 violates the First Amendment because the law does not serve any important government interests. Attorney General Holder counters that the Copyright Clause does not restrict Congress’s authority to remove works from the public domain. He further argues that Section 514 does not violate the First Amendment because the government has a substantial interest in complying with the Berne Convention and protecting American works abroad. The Supreme Court’s decision will affect millions of foreign works currently in the public domain, existing and future works based on those foreign works, and the copyright protection of American works in foreign countries.

Microsoft Corp. v. i4i Limited Partnership and Infrastructures for Information, Inc. (10-290)

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Oral argument: Apr. 18, 2011

Appealed from: United States Court of Appeals for the Federal Circuit (Mar. 10, 2010)

Intellectual Property, Patent INFRINGEMENT, Presumption of Validity, Burden of Proof

The software entity i4i Limited Partnership and Infrastructures for Information, Inc. (“i4i”) sued Microsoft, alleging that Microsoft Word's XML processing and editing capabilities infringed on i4i’s patent. Microsoft counterclaimed, contending that i4i's patent was invalid under 35 U.S.C. § 102(b)'s on-sale bar. At trial, the jury was instructed that Microsoft must prove the patent's invalidity by clear and convincing evidence, even though the evidence Microsoft presented had never been reviewed by the United States Patent and Trademark Office ("PTO"). Microsoft argues that this high standard, which longstanding Federal Circuit precedents support, is contrary to congressional intent, at least where the PTO never reviewed the "prior art" on which the alleged invalid patent was based. On the other hand, i4i contends that the Federal Circuit's caselaw, combined with Congress's enduring failure to legislatively overrule it, reveals that Congress intended a higher standard to apply to the presumption of validity. Amici in support of the clear-and-convincing-evidence standard argue that strong patent protection is essential to encourage innovation. Others, however, encourage the Supreme Court to overturn the Federal Circuit's precedent and require only a preponderance of the evidence. The Supreme Court's decision in this case is likely to affect the certainty of all patents, and consequently is likely to affect the calculus faced by all patent-law litigants when deciding whether to settle or litigate a suit.

compulsory license

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 A compulsory license is a statutorily-created license that allows the use of copyrighted materials without the explicit permission of the copyright holder. In exchange, a royalty is paid to the copyright holder.

Bilski v. Kappos (08-964)

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Oral argument: Nov. 9, 2009

Appealed from: United States Court of Appeals for the Federal Circuit (Oct. 30, 2008)

PATENT LAW, PATENTABLE SUBJECT MATTER, INVENTIONS, INTELLECTUAL PROPERTY, MACHINE-OR-TRANSFORMATION TEST

In 1997, the United States Patent and Trademark Office denied Bernard Bilski's patent application for a method of hedging risk in commodities trading. Affirming the rejection on appeal, the Federal Circuit held that a process must be tied to a particular machine or transform an article into a different state to be patentable. The Supreme Court will consider the validity of the machine-or-transformation test for patentability. This case will have implications for the validity of current process patents as well as the availability of future patent protection for business methods. If the court decides that business-methods are not patentable, this would invalidate numerous patents and may curb innovation in the biotechnology and software industry. If, however, the court overturns the machine-or-transformation test and declares that Bilski’s idea is patent-eligible, expensive litigation may continue and uncertainty will mount regarding business-method patents.

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