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May 2008
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Meshwers, Inc. v. Toyota Motor Sales U.S.A., Inc.

This case calls on us to apply copyright principles to a relatively new technology: digital modeling. Meshwerks insists that, contrary to the district court’s summary judgment determination, its digital models of Toyota cars and trucks are sufficiently original to warrant copyright protection. Meshwerks’ models, which form the base layers of computerized substitutes for product photographs in advertising, are unadorned, digital wire-frames of Toyota’s vehicles. While fully appreciating that digital media present new frontiers for copyrightable creative expression, in this particular case the uncontested facts reveal that Meshwerks’ models owe their designs and origins to Toyota and deliberately do not include anything original of their own; accordingly, we hold that Meshwerks’ models are not protected by copyright and affirm.

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Richlin v. Metro-Goldwyn Mayer Pictures, Inc.

Inspector Jacques Clouseau, famously unable to crack the simplest of murder cases, would most certainly be confounded by the case we face. While Inspector Clouseau searched for the answer to the question, “Who did it?”, we must search for the answer to the question, “Who owns it?” In 1962, Maurice Richlin coauthored a story treatment (the “Treatment”1 involving the bumbling  inspector. Later that year, before publication, Richlin assigned all rights in the Treatment—including copyright and the right to renew that copyright—to a corporation that used it to create the smash-hit film, The Pink Panther (the “Motion Picture”).  The Richlin heirs now claim federal statutory renewal rights in the Treatment and derivative works, including the Motion Picture. They assert that Richlin’s coauthorship of the Treatment makes him a coauthor of the Motion Picture. Alternatively, they contend that, because the Motion Picture secured statutory protection for the portions of the Treatment incorporated into the Motion Picture, and because the copyright in the Motion Picture was renewed for a second term, they are co-owners of the Motion Picture’s renewal copyright and all derivative works thereof. Although the Richlin heirs have developed several theories that could supply the answer to the question, “Who owns it?”, unlike Inspector Clouseau, they have not quite stumbled upon a theory that favors them. We therefore affirm the district court’s conclusion that the Richlin heirs have no interest in the copyright to the Motion Picture.

 

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Boston Duck Tours, LP v. Super Duck Tours, LLC

In this trademark infringement dispute, defendant-appellant Super Duck Tours ("Super Duck") appeals a preliminary injunction granted in favor of plaintiffappellee Boston Duck Tours ("Boston Duck"). Asserting that the phrase "duck tour" and the image of a duck splashing in water are generic, and therefore that there is no likelihood of confusion between Boston Duck's marks and Super Duck's marks, appellant requests that we dissolve the injunction requiring the alteration of its trade name and logo. Appellee has also cross-appealed the order of the district court, arguing that the court committed clear error by not enjoining Super Duck from using the term "duck" in its trade name.

After carefully reviewing the record in this dispute, we conclude that the district court committed clear error by finding the phrase "duck tour" nongeneric, and thereby according it too much weight in its likelihood of confusion analysis. Consequently, the court erred in issuing a preliminary injunction, which prevented Super Duck from using the phrase "duck tour" in its own trade name. The district court also clearly erred in finding a likelihood of confusion between Super Duck's and Boston Duck's design marks. Therefore, the court also should not have issued an injunction preventing Super Duck from using its design mark. We dismiss Boston Duck's cross-appeal as moot given our resolution of the other issues.

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Scanner Technologies Corp. v. Icos Vision Sys. Corp.

This is an appeal from the United States District Court for the Southern District of New York in a patent infringement action that Scanner Technologies Corp. ("Scanner") brought against ICOS Vision Systems Corp. ("ICOS") in July 2000. ICOS denied infringement and counterclaimed seeking a declaratory judgment of noninfringement, invalidity, and unenforceability. After this court reviewed the district court's Markman ruling in a 2004 interlocutory appeal, Scanner Technologies Corp. v. ICOS Vision Systems Corp., N.V., 365 F.3d 1299, 1300 (Fed. Cir. 2004) ("Scanner I"), the district court, on remand, held a bench trial on infringement, validity and enforceability in March 2005. The district court rendered its findings of fact and conclusions of law in a May 22, 2007 opinion. Scanner Techs. Corp. v. Icos Vision Sys. Corp., N.V., 486 F. Supp. 2d 330 (S.D.N.Y. 2007) ("Scanner II"). The district court entered final judgment on June 1, 2007, finding the asserted patents unenforceable, invalid for obviousness, and not infringed. The final judgment also included a provision that rendered related patents, derived from the same common parent application, unenforceable. Scanner appeals the district court's final judgment. For the reasons stated below, we affirm in part, reverse in part, and vacate in part.

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Tip Systems, LLC v. Phillips & Brooks/Gladwin, Inc.

This is a patent infringement case pertaining to wall-mounted telephones designed for use by prison inmates. TIP Systems, LLC (“TIP”) filed suit in the United States District Court for the Southern District of Texas against: Phillips & Brooks/Gladwin, Inc., Acoustics Development Corporation, and PBG, Inc.; Independent Technologies, Inc. (“Independent Technologies”); TZ Holdings, Inc., T-Netix Telecommunications Services, Inc., T-Netix, Inc., Evercom Holdings, Inc., Evercom Systems, Inc., and Evercom, Inc. (collectively “Evercom”); JCW Electronics, Inc.; and Myrmidon Corporation for infringement of two patents. TIP appeals the district court’s claim construction order, TIP Systems, LLC v. Phillips & Brooks/Gladwin, Inc., No. 04-CV-3718 (S.D. Tex. Feb. 22, 2006) (“Claim Constr. Order”), and the district court’s grant of Independent Technologies’ and Evercom’s motion for summary judgment of non-infringement. TIP Systems, LLC v. Phillips & Brooks/Gladwin, Inc., No. 04-CV-3718 (S.D. Tex. Mar. 1, 2007) (granting Independent Technologies’ Mot. for Summ. J.) (“Indep. Techs.’ Summ. J. Order”); TIP Systems, LLC v. Phillips & Brooks/Gladwin, Inc., No. 04-CV-3718 (S.D. Tex. Mar. 1, 2007) (granting Evercom’s Mot. for Summ. J.) (“Evercom’s Summ. J. Order”). Because we find no error in the district court’s claim construction and its holding that the accused devices do not infringe literally or under the doctrine of equivalents, we affirm.

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Nilssen v. Osram Sylvania, Inc.

Ole K. Nilssen (“Nilssen”) and Geo Foundation, Ltd. (collectively “appellants”) appeal from the judgment of the U.S. District Court for the Northern District of Illinois denying appellants’ motion for expert witness fees pursuant to Federal Rule of Civil Procedure 26(b)(4)(C)(i) and granting a motion for attorney fees to Osram Sylvania, Inc. and Osram Sylvania Products, Inc. (collectively “Osram”) pursuant to 35 U.S.C. § 285. Nilssen v. Osram Sylvania, Inc., No. 1:01cv3585, 2007 U.S. Dist. LEXIS 5792 (N.D. Ill. Jan. 23, 2007). Because the district court did not abuse its discretion in awarding Osram its attorney fees and denying appellants’ expert fees, we affirm.

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Derek Andrew, Inc. v. Poof Apparel Corp.

Poof Apparel Corporation (“Poof”) appeals the district court’s award to Derek Andrew, Inc. (“Andrew”) of $15,000 in statutory damages under the Copyright Act, along with $296,090.50 in attorneys’ fees. We have jurisdiction pursuant to 28 U.S.C. § 1291, and for the following reasons, REVERSE and REMAND.

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Burandt v. Dudas

Corliss O. Burandt (“Burandt”) appeals from the decision of the United States District Court for the Eastern District of Virginia granting summary judgment in favor of the Director (“Director”) of the U.S. Patent and Trademark Office (“PTO”) and affirming the Director’s denial of Burandt’s request to reinstate his patent for failure to pay the maintenance fee. Because the district court did not err in upholding the Director’s denial of Burandt’s request for reinstatement, we affirm.

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Quanta Computer, Inc. v. LG Electronics, Inc.

The longstanding doctrine of patent exhaustion limits the patent rights that survive the initial authorized sale of a patented item. Respondent (LGE) purchased, inter alia, the computer technology patents at issue (LGE Patents): One discloses a system for ensuring that most current data are retrieved from main memory, one relates to the coordination of requests to read from and write to main memory, and one addresses the problem of managing data traffic on a set of wires, or “bus,” connecting two computer components. LGE licensed the patents to Intel Corporation (Intel), in an agreement (License Agreement) that authorizes Intel to manufacture and sell microprocessors and chipsets using the LGE Patents (Intel Products) and that does not purport to alter patent exhaustion rules. A separate agreement(Master Agreement) required Intel to give its customers written notice that the license does not extend to a product made by combining an Intel Product with a non-Intel product, and provided that a breach of the agreement would not affect the License Agreement. Petitioner computer manufacturers (Quanta) purchased microprocessors and chipsets from Intel. Quanta then manufactured computers using Intel parts in combination with non-Intel parts, but did not modify the Intel components. LGE sued, asserting that this combination infringed the LGE Patents. The District Court granted Quanta summary judgment, but on reconsideration, denied summary judgment as to the LGE Patents because they contained method claims. The Federal Circuit affirmed in part and reversed in part, agreeing with the District Court that the patent exhaustion doctrine does not apply to method patents, which describe operations to make or use a product; and concluding, in the alternative, that exhaustion did not apply because LGE did not license Intel to sell the Intel Products to Quanta to combine with non-Intel products.

Held: Because the doctrine of patent exhaustion applies to method patents, and because the License Agreement authorizes the sale of components that substantially embody the patents in suit, the exhaustion doctrine prevents LGE from further asserting its patent rights with respect to the patents substantially embodied by those products. Pp. 5–19.

(a) The patent exhaustion doctrine provides that a patented item’s initial authorized sale terminates all patent rights to that item. See, e.g., Bloomer v. McQuewan, 14 How. 539. In the Court’s most recent discussion of the doctrine, United States v. Univis Lens Co., 316 U. S. 241, patents for finished eyeglass lenses, held by the respondent(Univis), did not survive the sale of lens blanks by the licensed manufacturer to wholesalers and finishing retailers who ground the blanks into patented finished lenses. The Court assumed that Univis’ patents were practiced in part by the wholesalers and finishing retailers,concluding that the traditional bar on patent restrictions following an item’s sale applies when the item sufficiently embodies the patent—even if it does not completely practice the patent—such that its only and intended use is to be finished under the patent’s terms. The parties’ arguments here are addressed with this patent exhaustion history in mind. Pp. 5–8.

(b) Nothing in this Court’s approach to patent exhaustion supports LGE’s argument that method claims, as a category, are never exhaustible. A patented method may not be sold in the same way as an article or device, but methods nonetheless may be “embodied” in a product, the sale of which exhausts patent rights. The Court has repeatedly found method patents exhausted by the sale of an item embodying the method. See Ethyl Gasoline Corp. v. United States, 309 U. S. 436, 446, 457; Univis, supra, at 248–251. These cases rest on solid footing. Eliminating exhaustion for method patents would seriously undermine the exhaustion doctrine, since patentees seeking to avoid exhaustion could simply draft their claims to describe a method rather than an apparatus. On LGE’s theory here, for example, although Intel is authorized to sell a completed computer system that practices the LGE Patents, downstream purchasers could be liable for patent infringement, which would violate the longstanding principle that, when a patented item is “once lawfully made and sold,there is no restriction on [its] use to be implied for the [patentee’s] benefit,” Adams v. Burke, 17 Wall. 453, 457. Pp. 9–11.

(c) The Intel Products embodied the patents here. Univis governs this case. There, exhaustion was triggered by the sale of the lens blanks because their only reasonable and intended use was to practice the patent and because they “embodie[d] essential features of [the] patented invention,” 316 U. S., at 249–251. Each of those attributes is shared by the microprocessors and chipsets Intel sold to Quanta under the License Agreement. First, LGE has suggested no reasonable use for the Intel Products other than incorporating them into computer systems that practice the LGE Patents: A microprocessor or chipset cannot function until it is connected to buses and memory. And as in Univis, the only apparent object of Intel’s sales was to permit Quanta to incorporate the Intel Products into computers that would practice the patents. Second, like the Univis lens blanks, the Intel Products constitute a material part of the patented invention and all but completely practice the patent. The only step necessary to practice the patent is the application of common processes or the addition of standard parts. Everything inventive about each patent is embodied in the Intel Products. LGE’s attempts to distinguish Univis are unavailing. Pp. 11–16.

(d) Intel’s sale to Quanta exhausted LGE’s patent rights. Exhaustion is triggered only by a sale authorized by the patent holder. Univis, supra, at 249. LGE argues that this sale was not authorized because the License Agreement does not permit Intel to sell its products for use in combination with non-Intel products to practice the LGE Patents. But the License Agreement does not restrict Intel’s right to sell its products to purchasers who intend to combine them with non-Intel parts. Intel was required to give its customers notice that LGE had not licensed those customers to practice its patents,but neither party contends that Intel breached that agreement. In any event, the notice provision is in the Master Agreement, and LGE does not suggest that a breach of that agreement would constitute aLicense Agreement breach. Contrary to LGE’s position, the question whether third parties may have received implied licenses is irrelevant, because Quanta asserts its right to practice the patents based not on implied license but on exhaustion, and exhaustion turns only on Intel’s own license to sell products practicing the LGE Patents. LGE’s alternative argument, invoking the principle that patent exhaustion does not apply to post sale restrictions on “making” an article, is simply a rephrasing of its argument that combining the Intel Products with other components adds more than standard finishing to complete a patented article. Pp. 16–18.

453 F. 3d 1364, reversed.

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UT Lighthouse Ministry v. Found. for Apologetic Info. and Research

Utah Lighthouse Ministry (UTLM) appeals from a decision of the district court granting Defendants’ motion for summary judgment on UTLM’s claims of trademark infringement, unfair competition, and cybersquatting.

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