Teva Files IRA Challenge amid Second Round of Medicare Negotiations; Ninth Circuit Says Kinetic Sculptures Can Be Sufficiently ‘Fixed’ for Copyright; Second Circuit Affirms DMCA Safe Harbor Win for Vimeo

This week in Other Barks and Bites: the Copyright Royalty Board announces audits into Section 112 and Section 114 statutory license royalty payments by iHeartMedia and others; the Ninth Circuit finds that kinetic, moveable sculptures may be sufficiently “fixed” to establish copyright protection; the USPTO publishes findings from economic studies showing that small and micro entity discounts are not doing enough to promote new patent applications; Teva files a lawsuit containing Administrative Procedure Act and due process challenges to the Medicare drug negotiation framework under the Inflation Reduction Act as the Biden Administration announces the second round of drugs for negotiation; and the Second Circuit affirms a district court’s ruling that Vimeo is shielded from liability for video uploads containing copyrighted music under the DMCA’s Section 512(c) safe harbor.

Bites

CAFC Denies Mandamus Petition for Viasat – On Friday, January 17, the U.S. Court of Appeals for the Federal Circuit (CAFC) denied Viasat, Inc.’s petition for a writ of mandamus asking the CAFC to order the U.S. District Court for the Western District of Texas to to schedule trial “as soon as practicable” or to expedite oral argument in its patent infringement case against Kioxia America, Inc. In a parallel Patent Trial and Appeal Board proceeding, several claims of Viasat’s patent were found unpatentable. Viasat narrowed its suit to one claim that survived and Kioxia appealed the PTAB’s finding that it had failed to prove several other claims of the patent unpatentable. The district court moved to stay its proceedings pending the decision in that appeal and Viasat moved for reconsideration of that motion. One month later, Viasat filed the mandamus petition, but the CAFC said because “the availability of reconsideration ordinarily weighs heavily against granting a writ,” the petition was denied without prejudice.

USPTO Publishes New Inventorship Guidance FAQs for AI-Assisted Inventions – On Thursday, January 16, the USPTO announced that it had published a webpage including a series of frequently asked questions (FAQs) providing additional information to both patent examiners and stakeholders on how inventorship is analyzed for inventions developed in part from contributions by artificial intelligence (AI) systems.

UAIA Studies Show Small, Micro Entity Discounts Aren’t Incentivizing Innovation – On Thursday, January 16, the U.S. Patent and Trademark Office announced findings from third-party economist reports mandated under the Unleashing American Innovators Act (UAIA) of 2022 looking at the effect of application fees on entry into patenting and analyzing U.S. patent fee structure options. The reports collectively found that patent application fee discounts for small and micro entities are not properly incentivizing higher levels of patent filings from those entities, many of which are discouraged by non-fee-related factors like COVID-19 and shifts in U.S. patent legislation, and that the USPTO should consider additional fees for continuation patents to help recover costs of issuing patents that lapse before all maintenance payments are due.

Teva Launches APA, Due Process Challenge to Drug Negotiation Program Under IRA – On Wednesday, January 15, Israeli drugmaker Teva Pharmaceuticals filed a lawsuit in the U.S. District Court for the District of Columbia against U.S. Health Secretary Xavier Becerra and the Centers for Medicare & Medicaid Services (CMS), raising challenges to CMS’ implementation of the Drug Price Negotiation Program established by the Inflation Reduction Act as arbitrary and capricious in violation of the Administrative Procedures Act (APA) and for depriving property interests in violation of the Due Process Clause of the Fifth Amendment. Policy institute Patients for Affordable Drugs issued a statement disparaging Teva’s timing of the suit just prior to CMS selecting a second round of drugs for Medicare negotiation, which were announced by the Biden Administration today, calling it “part of a coordinated effort by several big drug companies to overturn Medicare’s negotiating power.” But the U.S. Chamber’s Global Innovation Policy Center (GIPC) on Thursday published a blog post arguing that “price controls on medicines may seem like a quick fix, but they come with significant drawbacks.”

Fourth Circuit Remands “MOKE” Genericide Ruling, Judge Richardson Dissent Finds Mark Distinctive – On Wednesday, January 15, the U.S. Court of Appeals for the Fourth Circuit issued a ruling in Moke America LLC v. Moke International Ltd. in which the appellate court vacated and remanded the Eastern District of Virginia’s May 2023 post-trial opinion finding that “MOKE” is a generic term for the style of vehicles sold by both parties. The Fourth Circuit panel majority found that the parties’ briefing record did not properly address genericide issues raised by the court and that a more fully developed factual record was required to decide the issue. Circuit Judge Julius Richardson authored a dissent arguing that the Fourth Circuit should have reversed the district court’s genericide analysis based on clear and uncontroverted distinctiveness of the “MOKE” mark. 

Ninth Circuit Finds Plausible Copyright Claim to Kinetic Sculpture – On Tuesday, January 14, the U.S. Court of Appeals for the Ninth Circuit issued a published opinion in Tangle, Inc. v. Aritzia, Inc. in which the appellate court reversed the Northern District of California’s grant of summary judgment dismissing kinetic sculpture developer Tangle’s copyright infringement claim against luxury retailer Aritzia. The panel found that Tangle’s sculpture, which has many segments that can be manipulated into different poses, was not uncopyrightable per se because it had movable parts, finding that the sculpture could be sufficiently “fixed” to merit copyright protection.

CAFC Says Published Patent Applications are Pre-AIA Prior Art As Of Filing Date – On Tuesday, January 14, the U.S. Court of Appeals for the Federal Circuit issued a precedential ruling in Lynk Labs, Inc. v. Samsung Electronics Co., Ltd. in which the appellate court affirmed a final written decision by the Patent Trial and Appeal Board (PTAB) invalidating Lynk Labs’ LED lighting system claims. The Federal Circuit found no error with the PTAB’s determination that published patent applications qualify as prior art under pre-America Invents Act (AIA) 35 U.S.C. § 102 as of their filing date over Lynk Labs’ argument that such patent applications cannot be considered “printed publications” under Section 102 if they remain confidential and are published after the challenged patent’s priority date.

Second Circuit Affirms DMCA Safe Harbor Win for Vimeo Over Music Publishers – On Monday, January 13, the U.S. Court of Appeals for the Second Circuit issued a ruling in Capitol Records, LLC v. Vimeo, Inc. in which the appellate court affirmed the Southern District of New York’s grant of summary judgment dismissing copyright infringement claims filed by affiliates of music publishing conglomerate EMI against video sharing platform Vimeo. The Second Circuit agreed that Vimeo was shielded from liability for copyright infringing video uploads by the Digital Millenium Copyright Act (DMCA) safe harbor codified at 17 U.S.C. § 512(c), ruling that general information about copyright infringement possessed by Vimeo employees did not equate to actual or red flag knowledge of infringement as it wouldn’t be readily apparent that the videos did not constitute fair use, and that Vimeo did not exercise enough control over its content to show the right and ability to control infringing material.

Barks 

USPTO Seeks Public Comments on WIPO Genetic Resources and Traditional Knowledge Treaty – On Thursday, January 16, the U.S. Patent and Trademark Office announced that it was seeking input from interested parties on the potential impacts of the United States signing the Treaty on Intellectual Property, Genetic Resources and Traditional Knowledge adopted by the member states of the World Intellectual Property Office (WIPO) last May.

WIPO Seeks Startup, SME and Spinout Applicants for Global Awards 2025 – On Wednesday, January 15, WIPO announced that it had opened the application period for the WIPO Global Awards 2025 competition seeking startup, small- and medium-enterprise (SME) and university spinout applicants, selecting ten to honor for their strategic commercialization of intellectual property at this July’s WIPO Assemblies. Applications will be accepted by WIPO until March 31.

USPTO Signs New CBA With NTE Union Chapter Representing Paralegal, IT Support Staff – On Wednesday, January 15, both the USPTO and National Treasury Employees (NTE) Union Chapter 243 signed a new collective bargaining agreement (CBA) covering the more than 1,300 non-professional support staff employees working at the federal agency in paralegal, IT and budget support staff. This CBA takes effect immediately for a five-year period with rollover provisions.

CRB Announces iHeartMedia Audit for Section 112 and Section 114 Royalty Payments – On Tuesday, January 14, the Copyright Royalty Board (CRB) published a notice in the Federal Register announcing that SoundExchange, the collective responsible for collecting and administering statutory royalties for digital audio transmissions under 17 U.S.C. § 114 and ephemeral reproductions to facilitate digital transmissions under 17 U.S.C. § 112, sent notices of intent to audit royalty payments for both statutory licenses by several webcasters including iHeartMedia, Hubbard Broadcasting, Beasley Mezzanine Holdings, Midwest Communications and Family Stations.

USPTO Announces Broad Strategy Framework to Advance AI Innovation and Capabilities – On Tuesday, January 14, the USPTO published the agency’s official Artificial Intelligence Strategy establishing a broad five-part framework for advancing IP policies that promote inclusive AI innovation, improve AI capabilities at the USPTO while promoting their responsible use, and developing AI expertise within the USPTO’s workforce.

This Week on Wall Street

Executive Order on Cryptocurrency Expected in Early Days of Trump Administration – On Thursday, January 16, business news publisher Bloomberg reported that President-elect Donald Trump plans to issue an executive order shortly after inauguration expected to declare that cryptocurrency is a national imperative and establish a crypto industry advisory council to develop policies surrounding cryptocurrencies.

Quarterly Earnings – The following firms identified among the IPO’s Top 300 Patent Recipients for 2023 are announcing quarterly earnings next week (2023 rank in parentheses):

• Monday: None
• Tuesday: 3M Co. (104th); Seagate Technology plc (t-248th); Telefonaktiebolaget LM Ericsson (t-24th); United Microelectronics Corp. (138th)
• Wednesday: Abbott Laboratories (124th); Halliburton Co. (51st); Johnson & Johnson (20th); Procter & Gamble Co. (97th); Resmed Inc. (265th); SAP SE (83rd); Textron Inc. (142nd)
• Thursday: Capital One Financial Corp. (32nd); General Electric Co. (26th); Hyundai Motor Co. (15th); LG Corp. (2nd); Nidec Corp. (t-219th); Nokia Corp. (t-61st); STMicroelectronics N.V. (56th); Texas Instruments (34th); Western Digital Corp. (59th); Xerox Holdings Corp. (t-160th)
• Friday: Samsung Electro-Mechanics Co., Ltd. (t-90th); Samsung SDI Co., Ltd. (t-166th); Signify N.V. (t-284th); Verizon Communications Inc. (75th); AB Volvo (141st