The U.S. Supreme Court is poised to take on major cases in the copyright, patent, and employment law spaces, with questions about how the newly enlarged conservative wing will weigh in on these issues. Arguments have already been held in a case involving whether Google’s Android platform illegally infringed software code developed by Oracle. Later in the year, the court will consider whether changes made to patent law designed to combat patent trolls are constitutional or not.
The Supreme Court only hears and decides a small number of cases each year, roughly one out of every 60 or 70 cases that are appealed to the court. Consequently, Supreme Court decisions carry extraordinary weight because they represent the final and unappealable outcome of a given legal issue. Court decisions in the intellectual property (IP) space are even less frequent, averaging about five or six a year, but they tend to be blockbusters.
The 2019–2020 court term followed these patterns, with about a half-dozen cases in the IP space, each of which was unique and represented a significant clarification of the law. Among them was the trademark case, USPTO v. Booking.com, which held that a generic word or name, such as “booking” or “hotels,” when combined with “.com” or another top-level domain, can be entitled to trademark protection. The court ruled that adding the domain information changes a generic term to one that consumers can associate with a particular website. As consumer association with a product or service is at the heart of trademark law, the court found that a “generic.com” mark could be eligible for federal trademark protection.
In the copyright space, Georgia v. Public.Resource.Org, Inc. determined that the annotations that accompany an official state statutory code are not entitled to copyright protection, even when produced by a nongovernmental publisher. The court applied the 19th-century “government edicts doctrine,” which holds that “no one can own the law” and is applicable not only to the statutes, but also to “explanatory and procedural materials” (even those created by third parties) that accompany the law. The case was limited to only official state codes (e.g., state-owned or mandated) and would not apply to “unofficial” codes such as the United States Code Annotated, published by Thomson West.
The court also decided two patent cases: Thryv, Inc. v. Click-to-Call Technologies, which addressed whether certain decisions of the United States Patent and Trademark Office (USPTO) can be appealed, and Peter, Deputy Director, USPTO v. NantKwest, Inc., which limits the ability of the USPTO to be reimbursed for attorney fees in litigation over USPTO decisions. The court’s decision in Allen v. Cooper supported a North Carolina state claim that it could not be sued for copyright infringement due to sovereign immunity, which protects states from being sued for official acts.
An interesting note about all of these cases—like many other IP cases out of the Supreme Court—is that the decisions do not generally follow traditional conservative versus liberal lines. The Booking.com case was an 8-1 decision, and Allen v. Cooper was 9-0. The Georgia case was a 5-4 decision, with conservative justices John Roberts, Neil Gorsuch, and Brett Kavanaugh joined by liberal justices Sonia Sotomayor and Elena Kagan. Similarly, Thryv v. Click-to-Call saw liberals Ruth Bader Ginsburg, Kagan, and Stephen Breyer joined by conservatives Roberts, Kavanaugh, Clarence Thomas, and Samuel Alito, with Gorsuch and Sotomayor in dissent.
As such, it is uncertain the extent to which the shift in the court to a 6-3 conservative leaning—caused by the death of Ginsburg and the appointment of Amy Coney Barrett—will impact upcoming court decisions in the IP space.
Upcoming Software Case
One of the most anticipated IP cases of the 2020–2021 term, Google v. Oracle America, was actually argued after Ginsburg’s passing, but before the appointment of Barrett. The case dives deep into software code, with Google asserting that code that “declares” what a computer program will do is not protectable by copyright. Copyright protection does not extend to works that are purely factual or functional, such as a list of instructions, a recipe, or a mathematical formula. Declaring code, Google argues, is only functional.
Google admits that it uses parts of Oracle’s code in Android software, but only parts that are functional and therefore not copyrightable. Google goes on to claim that even if the code were protectable, because the company uses the code in the context of creating a new work, it is upheld by the Fair Use doctrine. Oracle asserts that because of the complexity of the declaring code, it is clearly expressive and therefore protectable, and Google’s use is not transformative as required by fair use—it simply adapted code from one platform to another.
The practice of copying declaring code, without permission or license, is widespread, and it forms the basis of a wide range of software innovation. Consequently, the court’s decision, expected in spring 2021, is widely anticipated.
Upcoming Patent Case
A bit more technical, but with equal potential for broad impact, is the upcoming patent case, Arthrex v. Smith & Nephew, which challenges the constitutionality of a relatively new USPTO practice called an inter partes review (IPR). An IPR is an administrative trial held when someone wants to challenge the validity of an existing patent. It was adopted as a component of the America Invents Act of 2011 and was, in part, intended to give innovators a new weapon against patent trolls—people or companies that own questionably issued patents only for the purpose of threatening costly litigation against alleged infringers and demanding licenses as a “settlement.”
Because the threat alone was often enough to encourage a settlement, Congress created the IPR process so that parties who are at the receiving end of these threats have a less costly alternative to litigation to fight the patent trolls. IPR uses administrative judges within the USPTO to decide on the validity of the patents being challenged.
The court’s case involves a challenge to the constitutionality of the process, specifically the judges who are appointed by the USPTO and its parent, the Department of Commerce. The issue is whether the administrative judges are “principal officers,” which require appointment by the president and confirmation by the Senate, rather than simple hiring by the agency. While technical, the importance of the outcome can’t be understated. If the judges, and therefore the process, are found unconstitutional, not only would IPR be eliminated, but previous IPR decisions may be invalidated. The case is scheduled for argument in March, with a decision expected late in the spring or summer.
While the Supreme Court’s new conservative majority may carry less impact in the IP space, it may provide challenges in other areas. A recent article in Law360 (registration required), pointed out that Trump administration appointees at both the Supreme Court and lower court levels have often sought to limit the power of administrative agencies in interpreting and applying the laws that they implement and enforce. Most of those judges will remain in place during a Biden administration, and while the Senate and House will both be Democratic, the majorities are both narrow enough that the administration may still need to rely on administrative action on climate change, telecommunications policy (such as Net Neutrality), and other issues. Court wonks and watchers will have a blast, but the information industry will need to pay attention as well.