Decisions in Brief

• Author: John C. Gatz
• Position: John C. Gatz is a member of the firm Nixon Peabody in Chicago, Illinois. Column contributors include the following writers: Copyrights:Zachary J. Smolinski, Smolinski Rosario Law P.C.; Michael N. Spink, Brinks, Hofer, Gilson & Lione; and Mark R. Anderson, Akerman LLP. Patents:Cynthia K. Barnett, Johnson & Johnson; R. Trevor Carter, Daniel M. ...
• Pages: 61-65

©2019. Published in Landslide®, Vol. 11, No. 5, May/June 2019, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or

disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder. 59

PATENTS

Decisions in Brief

COPYRIGHTS By John C. Gatz

Attorney Fees

Spineology, Inc. v. Wright Medical Technology, Inc., 910 F.3d

1227, 128 U.S.P.Q.2d 1822 (Fed. Cir. 2018). The Federal Cir-

cuit upheld the district court’s denial of the alleged infringer’s

motion for attorney fees. The alleged infringer moved for attor-

ney fees based on the patentee’s claim construction, damages

theory, and litigation conduct. The Federal Circuit disagreed,

nding that although the district court did not adopt the paten-

tee’s claim construction, the attempt was not meritless.

Collateral Estoppel

VirnetX Inc. v. Apple, Inc., 909 F.3d 1375, 128 U.S.P.Q.2d 1803

(Fed. Cir. 2018). The Federal Circuit afrmed the Patent Trial

and Appeal Board’s (PTAB’s) decision that certain claims were

Artists Falter in Preemption Battle over Resale

Royalties

Close v. Sotheby’s, Inc., 909 F.3d 1204, 128 U.S.P.Q.2d 1769

(9th Cir. 2018). The plaintiffs, a collection of individual art-

ists, previously sued multiple defendants who sold their art,

including Sotheby’s and eBay (dealers), under the California

Resale Royalties Act of 1976 (CRRA). The CRRA requires

the seller of a work of ne art to withhold 5 percent of the

sale price and pay it to the artist. On appeal, the Ninth Circuit

ruled that claims under the CRRA were expressly preempted

by the Copyright Act’s preemption provision, 17 U.S.C.

§ 301(a). However, the Ninth Circuit also found that claims

prior to the 1976 Act’s effective date (January 1, 1978) were

not preempted because the prior version of the Copyright Act

at that time did not contain an express preemption provision.

The CRRA also provides for attorney fee-shifting, namely

the prevailing party is entitled to reasonable attorney fees.

The parties were again before the Ninth Circuit after the deal-

ers sought attorney fees from the artists. The artists argued

that the CRRA fee-shifting provision was preempted by the

Copyright Act, and that at least some of the dealers were not

prevailing parties. The Ninth Circuit ruled that the fee-shift-

ing provision was not preempted because: (1) the ruling did

not render the state law null and void, but rather the CRRA

became unenforceable; and (2) the Copyright Act does not

expressly preempt fee-shifting, and the right to seek fee-shift-

ing does not conict with similar provision in the Copyright

Act because both the federal and state fee-shifting provisions

were limited to their own acts. The Ninth Circuit also ruled

that, despite the case under the CRRA continuing for a few

sales that occurred prior to 1978, the dealers were still the

prevailing party for all claims on sales after 1978 since they

won a determination on the merits, and hence were entitled to

a fee award under the CRRA fee-shifting provision.

Fair Use Can’t Trump Photographer’s Copyright

Otto v. Hearst Communications, Inc., 345 F. Supp. 3d 412, 129

U.S.P.Q.2d 1056 (S.D.N.Y. 2018). Otto attended a wedding at

the Trump National Golf Club in June 2017. President Trump

made an unscheduled appearance at the wedding. Otto took a

photo of President Trump at the wedding and texted the photo

to a friend. The next morning, the photo appeared on several

websites, including the Esquire website owned by Hearst. Otto

sued Hearst for copyright infringement and moved for sum-

mary judgment. The district court granted Otto’s motion for

summary judgment of copyright infringement. To obtain sum-

mary judgment of copyright infringement, Otto needed to show

that he owned a valid copyright and that copying occurred. The

district court found that Otto had registered the photo with the

Copyright Ofce, and that Hearst copied the photo for use on

the Esquire website. Next, the district court analyzed Hearst’s

fair use defense. The district court determined that Otto was

entitled to summary judgment that Hearst’s use of the photo

did not qualify as a fair use.

Platform Allowing Resale of Digital Music Files Found

to Involve Unlawful Reproduction

Capitol Records, LLC v. ReDigi, Inc., 910 F.3d 649, 128

U.S.P.Q.2d 1793 (2d Cir. 2018). ReDigi created a platform

that allowed users to sell lawfully purchased music les to

others, with the goal of enabling lawful sales under the resale

doctrine. The plaintiffs, record companies, sued ReDigi

for copyright infringement, arguing that the ReDigi system

resulted in unlawful reproduction and distribution of the com-

panies’ copyrighted works. The plaintiffs prevailed and were

awarded $3,500,000. ReDigi appealed, seeking a judgment

that its system falls under the resale doctrine and does not

result in unlawful reproduction or distribution.

The Second Circuit sided with the plaintiffs, nding that

“ReDigi’s process itself involves the making of unauthorized

reproductions that infringe the exclusive reproduction right unless

justied under fair use.” No fair use was found, as the Second Cir-

cuit remarked on the substantial harm ReDigi inicts on the value

of the plaintiffs’ copyrights by its direct competition in the market.

unpatentable as obvious. The Federal Circuit found that the

patentee was collaterally estopped from appealing whether a

certain piece of prior art was a printed publication because it

was a threshold issue in a prior litigation.

Damages

WesternGeco LLC v. ION Geophysical Corp., 913 F.3d 1067,

129 U.S.P.Q.2d 1206 (Fed. Cir. 2019). The Federal Circuit

afrmed in part, vacated in part, and remanded to the district

court. The case returned to the Federal Circuit from the U.S.

Supreme Court, which remanded the sole claim of the lost prots

award. In the intervening appeal period, four of the ve asserted

patent claims were invalidated. ION argued that the reasonable