CAFC Affirms Copyright Judgment Against U.S. Navy; Cruz to Chair Senate Commerce Committee; EUIPO/EPO Joint Study Shows IP Rights Improve Wages

This week in Other Barks and Bites: U.S. District Judge James Selna adds pre-judgment interest, increasing a jury verdict for patent infringement against Western Digital to $553 million; the Copyright Royalty Board provides clarification on the definition of “gross proceeds” for a rate setting proceeding; Senator Ted Cruz (R-TX) will serve for the first time as the Chairman of the Senate Commerce Committee; the Federal Circuit declines to increase a copyright infringement judgment against the U.S. Navy, upholding the Court of Federal Claims’ hypothetical negotiation analysis; Nvidia urges the Biden Administration to drop plans to increase restrictions on AI chip exports; and a joint study from the EUIPO and EPO shows that corporate ownership of IP rights has a positive impact on revenues and employee wages, especially at small- and medium-enterprises.

Bites 

CRB Adopts Expansive Definition of “Gross Proceeds” in BES Rate Setting Proceedings – On Friday, January 10, the Copyright Royalty Board (CRB) published a ruling on regulatory interpretation in the Federal Register to clarify the definition of “gross proceeds” from 37 CFR § 384.3 during a rate setting proceeding for business establishment services (BES). The CRB adopted a broad definition of “gross proceeds” requiring BES providers to calculate royalties using gross proceeds derived from all fees and payments for the use of all licensed ephemeral copies used for operation of the BES, although BES providers need only include in-kind payments in their gross proceeds reporting when such payments are derived from the use of copyrighted sound recordings during the licensing period for the statutory license governed by 17 U.S.C. § 112(e).

EUIPO, EPO Study Shows Link Between IP Rights and Increased Employee Wages – On Thursday, January 9, the European Union Intellectual Property Office (EUIPO) and the European Patent Office (EPO) published the findings of a joint study showing that companies owning intellectual property rights generate 23.8% higher revenue per employee and pay wages that are 22.1% higher than average compared to non-IP-owning firms, with small and medium enterprises (SMEs) in particular seeing 44% more revenue per employee associated with the ownership of IP rights.

CAFC Affirms $155K Copyright Judgment for Military’s Use of 3D Graphics Rendering Software – On Tuesday, January 7, the U.S. Court of Appeals for the Federal Circuit issued a precedential decision in Bitmanagement Software GmbH v. United States in which the appellate court affirmed a judgment entered by the U.S. Court of Federal Claims (CFC) awarding $154,400 in copyright infringement damages for the U.S. Navy’s use of Bitmanagement 3D graphics rendering software in violation of its floating license agreement. The Federal Circuit found no error with the CFC’s hypothetical negotiation analysis, which based damages on each software program use rather than each copy created and available for use, meeting the compensatory damages standard for infringement awards against the U.S. government outlined by the Federal Circuit’s 2015 decision in Gaylord v. United States.

INTA Amicus at EUIPO Grand Board Says Human Faces Can Serve as Source Identifiers – On Tuesday, January 7, the International Trademark Association (INTA) filed an amicus brief at the EUIPO’s Grand Board of Appeal in an appeal of a trademark examiner’s refusal to register a mark consisting of a photographic depiction of the face of Dutch singer and TV personality Johannes Hendricus Maria Smit. INTA’s brief argues that human faces can serve as commercial source identifiers, citing examples of several well-known brands using faces prominently in their logo, including Wendy’s and KFC, and pointing out inconsistencies in the examiner’s reasoning on the impact of Smit’s limited notoriety on the registrability of his face.

CAFC Confirms That Obviousness Doesn’t Require Real-World Examples – On Tuesday, January 7, the Federal Circuit issued a per curiam decision in Sandstrom v. Microsoft Corp. in which the appellate court affirmed final written decisions issued by the Patent Trial and Appeal Board (PTAB) invalidating patent claims covering methods of matching computer tasks to different processors to improve efficiency. The Federal Circuit upheld the PTAB’s evidentiary findings and dismissed Sandstrom’s argument that the PTAB erred by failing to find a practical combination of an asserted prior art reference, noting that there is no authority for the premise that obviousness doctrine requires identification of an existing real-world combination of prior art references.

Ted Cruz Selected to Chair Senate Commerce Committee – On Tuesday, January 7, U.S. Senator Ted Cruz (R-TX) was ratified by the Senate Republican Conference to serve as the Chairman of the U.S. Senate Committee on Commerce, Science, and Transportation. A statement released by Sen. Cruz indicated that top priorities for the Senate Commerce Committee during the 119th Congress would be expanding commercial access to electromagnetic spectrum, increasing human and commercial space exploration, and ensuring the future viability of college athletics.

Barks

Judge Selna Adds $237M in Pre-Judgment Interest to $316M Jury Award for SPEX – On Wednesday, January 8, U.S. District Judge James V. Selna of the Central District of California issued a judgment awarding a total of $237 million in pre-judgment interest to SPEX Technologies following a jury verdict awarding $316 million to SPEX for patent infringement by various Western Digital hard drive storage solutions.

White House Honors 2024 NMTI Laureates for Device Camera and Medical Innovations – On Wednesday, January 8, the White House held a ceremony to honor the 2024 recipients of the National Medal of Technology and Innovation (NMTI) featuring remarks by U.S. Patent and Trademark Office (USPTO) Acting Director Derrick Brent. This year’s laureates include nine individuals and two companies for their respective developments in smartphone “camera-on-a-chip” technology, breast cancer diagnostics and mRNA vaccines.

Authors Add Allegations of Llama LLM Training on Copyrighted Material to Meta Lawsuit – On Wednesday, January 8, a third amended complaint was filed in Kadrey v. Meta Platforms, a copyright infringement suit brought by a collection of bestselling authors against the parent company of Facebook and filed in the Northern District of California, augmenting the previous allegations based on new information that Meta trained its Llama large language models (LLMs) using a data links aggregator that is well-known for providing access to copyrighted content from book publishers.

Major Robotics Firms Announce Settlement to Patent Litigation – On Wednesday, January 8, robotics industry rivals Boston Dynamics and Ghost Robotics announced that the two companies had entered into an agreement to settle patent litigation previously ongoing in U.S. district court over legged robotics created by Ghost Robotics that allegedly infringed upon Boston Dynamics’ patent rights. 

USPTO Announces New PPAC, TPAC Membership – On Tuesday, January 7, the USPTO announced new members for the agency’s Patent Public Advisory Committee (PPAC) and Trademark Public Advisory Committee (TPAC) who began serving three-year terms in December. The new members of PPAC include Maria Anderson, Partner at Knobbe Martens; Idris McKelvey, Vice President and Lead (Chief) Patent Counsel at The Estée Lauder Companies; and Jennifer Yokoyama, Senior Vice President and Deputy General Counsel, Legal Innovation and Strategy at Cisco Systems. The new members of TPAC include Thad Chaloemtiarana, Partner at Pattishall, McAullife, Newbury, Hilliard and Geraldson; Michael Moore, Vice President, Assistant General Counsel and Global Head of Intellectual Property of Content and Brands at Mattel.

IBM, GlobalFoundries Settle Trade Secret Litigation Stemming from Failed Microchip Partnership – On Thursday, January 2, American information technology giant IBM and multinational semiconductor contract manufacturer GlobalFoundries announced that the two companies had settled breach of contract and trade secret litigation following a failed business plan between the companies under which IBM sold a chip manufacturing facility to GlobalFoundries and paid that company $1.5 billion to produce high-performance microchips at the factory.

This Week on Wall Street

Nvidia Urges Biden Administration to Drop Last-Minute AI Chip Restrictions – On Thursday, January 9, American semiconductor company Nvidia Corp. issued public remarks seeking to dissuade the outgoing Biden Administration from implementing new restrictions on the exports of computing chips for artificial intelligence applications, stating that such new measures would preempt the incoming Trump Administration days before it begins while harming the U.S. economy. 

Sumitomo Rubber’s $701M Purchase of Goodyear Includes $526M for IP Rights – On Tuesday, January 7, American tire manufacturer Goodyear announced that it had entered into an agreement to sell its Dunlop tire brand to Japanese rubber manufacturer Sumitomo Rubber in a $701 million cash deal, including $526 million for the cost of the Dunlop brand as well as associated IP rights.

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: None
• Wednesday: JPMorgan Chase & Co. (t-189th); Wells Fargo & Co. (76th)
• Thursday: Bank of America Corp. (64th); Taiwan Semiconductor Manufacturing Co. (5th)
• Friday: None