United States: U.S. Supreme Court Grants Certiorari For Two Cases Having Important Consequences For Patent And Copyright Litigation

Diapers and cheerleader uniforms—those are the intellectual-property rights that the United States Supreme Court agreed to adjudicate on May 2, 2016. The Court's decisions in these two cases—SCA Hygiene Products v. First Quality Baby Products and Star Athletica LLC v. Varsity Brands, Inc.—will unquestionably have significant ramifications for future patent and copyright litigation.

In SCA, a case involving a patent on diapers, the Supreme Court agreed to review the Federal Circuit's 6–5 en banc decision in order to consider "[w]hether and to what extent the defense of laches may bar a claim for patent infringement brought within the Patent Act's six-year statutory limitations period." The en banc Federal Circuit upheld the viability of the laches defense in patent litigation after considering whether the Supreme Court's recent decision in the "Raging Bull" copyright case of Petrella v. Metro-Goldwyn-Mayer, 134 S. Ct. 1962 (2014)—holding that laches is inapplicable when a copyright-infringement action is brought within the Copyright Act's statutory limitations period—warranted a similar conclusion for patent cases. Petrella explained that laches is a "gap-filling, not legislation-overriding" defense, id. at 1974, and therefore does not apply when "an infringement suit seeks relief solely for conduct occurring within the limitations period." Id. at 1967. The Court in Petrella reserved the question of whether the same rule applied in the patent context, noting that it did not have "occasion to review the Federal Circuit's position" regarding applicability of the laches defense to patent-infringement actions. Id. at 1974 n.15.

In SCA, Chief Judge Sharon Prost—writing for herself and five other judges—concluded that, besides the bar in 35 U.S.C. § 286 against damages more than six years prior to suit, "Congress codified a laches defense in 35 U.S.C. § 282(b)(1) that may bar legal remedies." SCA Hygiene Prods. Aktiebolag v. First Quality Baby Prods., LLC, 807 F.3d 1311, 1315 (Fed. Cir. 2015). The majority distinguished Petrella as resting on differently worded statutory provisions in the Copyright Act and the Patent Act. The majority further explained that, unlike copyright law, "[i]ndependent invention is no defense in patent law, so without laches, innovators have no safeguard against tardy claims demanding a portion of their success." Id. at 1330.

Judge Todd Hughes, dissenting in part and writing on behalf of himself and four other judges, explained that patent law "is governed by the same common-law principles, methods of statutory interpretation, and procedural rules as other areas of civil litigation." Id. at 1333. He noted that the majority opinion "adopts a patent-specific approach to the equitable doctrine of laches" and "overlooks Congress' intent and Supreme Court precedent, which demonstrate that laches is no defense to a claim for damages filed within the statutory limitations period established by [Section 286]." Id. According to Judge Hughes, Petrella "emphasized that [the Supreme Court] had never approved the use of laches to bar a claim for legal damages brought within a statutory limitations period" and "the majority has no sound basis for finding that Congress intended to displace the uniform limitations period in § 286 with the case-specific doctrine of laches." Id. at 1334.

A complete summary of the Federal Circuit's en banc SCA decision is available here. (Jones Day submitted an amicus brief on behalf of the Intellectual Property Owners Association before the en banc Federal Circuit.)

In Star Athletica, the Supreme Court will consider the "appropriate test to determine when a feature of a useful article is protectable under § 101 of the Copyright Act." Although the case specifically involves whether the "pictorial, graphic, and sculptural features" of cheerleading uniforms are copyrightable, the Supreme Court's decision will have broad implications for the fashion and apparel industries, given the limited protection typically afforded to clothing under U.S. intellectual property law. Clothing items have long been considered to be "useful articles" not subject to copyright protection, but in certain circumstances pictorial, graphic, or sculptural features of clothing designs and other useful articles that exist separately and independent of the utilitarian aspects of the article, such as printed patterns, may be independently copyrightable. 17 U.S.C. § 101. As Judge Karen Nelson Moore noted in the Sixth Circuit panel's 2–1 majority opinion, delineating the boundaries of these features has long "confounded courts and scholars" alike and resulted in an inconsistent patchwork of legal tests across the Circuit courts. Varsity Brands, Inc. v. Star Athletica, LLC, 799 F.3d 468, 471 (6th Cir. 2015).

The Copyright Act expressly protects "original works of authorship fixed in any tangible medium of expression," which encompasses "pictorial, graphic, and sculptural works." 17 U.S.C. § 102(a)(5). Section 101 of the Copyright Act defines "pictorial, graphic, and sculptural works" as including "two-dimensional and three-dimensional works of fine, graphic, and applied art, photographs, prints and art reproductions, maps, globes, charts, diagrams, models, and technical drawings, including architectural plans." 17 U.S.C. § 101. However, the Copyright Act provides that such "works shall include works of artistic craftsmanship insofar as their form but not their mechanical or utilitarian aspects are concerned; the design of a useful article, as defined in this section, shall be considered a pictorial, graphic, or sculptural work only if, and only to the extent that, such design incorporates pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article." Id. The Copyright Act defines a "useful article" as "an article having an intrinsic utilitarian function that is not merely to portray the appearance of the article or to convey information." Id. In a syllogistic definition that contributes to and highlights the confusion and disparate approaches applied by various courts for separating artistic craftsmanship from utilitarian aspects, the Copyright Act states that an "article that is normally a part of a useful article is considered a 'useful article."' Id.

Addressing the proper framework for analyzing the separability issue, the Sixth Circuit noted that "[c]ourts, scholars, and students have endeavored to create a test to determine whether pictorial, graphic or sculptural features 'can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article.'" Varsity Brands, 799 F.3d at 481. The majority opinion canvassed nine different approaches that have been adopted or urged. Id. at 484-85. Recognizing that the Sixth Circuit had not yet addressed the issue, the majority then added a tenth, articulating its own five-prong test:

  1. "Is the design a pictorial, graphic, or sculptural work?"
  2. "If the design is a pictorial, graphic, or sculptural work, then is it a design of a useful article—'an article having an intrinsic utilitarian function that is not merely to portray the appearance of the article or to convey information'?"
  3. "What are the utilitarian aspects of the useful article?"
  4. "Can the viewer of the design identify 'pictorial, graphic, or sculptural features' 'separately from ... the utilitarian aspects of the [useful] article[?]'"
  5. "Can 'the pictorial, graphic, or sculptural features' of the design of the useful article 'exist[ ] independently of [ ] the utilitarian aspects of the [useful] article[?]'"
Id.

at 487-88. Applying these factors to the case at hand, the majority concluded "that the graphic features of [asserted] designs 'can be identified separately from, and are capable of existing independently of, the utilitarian aspects'" of the cheerleading uniforms, and, as a result, the uniforms are copyrightable. Id. at 492.

In dissent, Judge McKeague noted that the "majority presents a thoughtful approach to this difficult 'metaphysical quandary' that courts have wrestled with for years" and "agree[d] with the majority's general approach." Id. at 494. Judge McKeague, however, "depart[ed] with the majority's analysis [ ] in how the function of these designs is defined," and therefore concluded that the cheerleading uniforms "are not copyrightable." Id. at 495.

The cases will be briefed on the merits over the summer recess and arguments likely held in the fall. Decisions in each of these cases will likely be rendered by June 2017.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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