The U.S. Supreme Court's interest in intellectual property cases shows no sign of waning, with four argued already this term and two more added to the list in December alone. With the high court down a justice and ideologically split, IP cases offer a chance for consensus: Of the three cases heard last term, two were unanimous decisions and one was a 7-1 split. However, that's not to say that all intellectual property cases offer a haven from controversy.
Consider the first IP case the court will hear in 2017 - a trademark case, true, but mostly a First Amendment battle over government control of offensive speech. Then there's the latest patent law case the court agreed to hear: technically, a procedural question about where to file suit, but widely seen as a broadside across the bow of so-called patent trolls and the courts that make them feel most comfortable.
Here's a look at five of the cases to watch in the year ahead.
RACIAL SLUR OR 'BADGE OF PRIDE'? On Jan. 18, the U.S. Patent and Trademark Office ("USPTO") will argue to the Supreme Court that a 1946 ban on trademark registration of racial slurs is not unconstitutional.
Simon Tam, frontman for an Asian-American rock band called The Slants, considers the name "a badge of pride." The USPTO refused to register it as a trademark, saying a provision of the Lanham Act bars registration of disparaging terms. In 2015, the full U.S. Court of Appeals for the Federal Circuit found the disparagement provision was an impermissible regulation of speech.
The USPTO has told the Supreme Court that the provision regulates access to the trademark register - a federal benefit - and not speech, since Tam is free to use and enforce the mark without registering it.
In a similar case before the 4th U.S. Circuit Court of Appeals, Pro-Football Inc, which owns and operates the NFL's Washington Redskins, is challenging the cancellation of the Redskins' marks. That case has been stayed until Tam's is decided. At least 30 friend-of-the court briefs have been filed in Tam's case, including one from Pro-Football (for Tam) and several Native American organizations (for the PTO).
* The Slants case is Lee v. Tam, U.S. Supreme Court, No. 15-1293. The Redskins case is Pro-Football Inc v Amanda Blackhorse, 4th U.S. Circuit Court of Appeals, No. 15-874.
CHOOSING THE BATTLEFIELD: The Supreme Court on Dec. 14 agreed to decide whether to limit where patent lawsuits may be filed - a move that petitioner TC Heartland hopes will cure a "plague of forum shopping" by patent-assertion entities.
Heartland and Kraft Foods Group Brands make competing brands of liquid water enhancers. Kraft sued Heartland for patent infringement in U.S. District Court in Delaware. Heartland wants the case transferred to federal court in its home state, Indiana. However, the case could have its biggest impact in plaintiff-friendly East Texas, where about 40 percent of U.S. patent lawsuits are filed.
According to Heartland, patent-infringement suits must be filed in the defendant's home state. Kraft says that was the rule until 1988, when Congress rewrote the venue laws. In April, the Federal Circuit agreed with Kraft.
Heartland's certiorari petition drew support from dozens of companies and groups, including the Electronic Frontier Foundation, Adobe Systems, Dell, FedEx, Garmin and HP, and from Paul Michel, a former chief judge of the Federal Circuit. Now that the high court has taken the case, additional amicus briefs are expected for both sides.
The court has not yet scheduled argument.
* The case is TC Heartland v. Kraft Foods Group Brands LLC, U.S. Supreme Court, No. 16-341.
SOLD BUT NOT EXHAUSTED: If you buy a product, can you be sued for patent infringement if you fix it up and resell it?
The Federal Circuit, in a 10-2 decision in February, said that Impression Products of West Virginia infringed Lexmark International's patents by selling refurbished "single use" printer cartridges in the U.S. and abroad. The Supreme Court granted Impression's certiorari petition on Dec. 2 to consider the scope of the exhaustion doctrine, under which the right to sue for patent infringement ends when a product is first sold.
The Federal Circuit ruled that the doctrine did not apply to any foreign sales, nor to U.S. sales that expressly included a single-use restriction. Drug manufacturers hailed the ruling, saying it protected their ability to provide low-cost drugs to poor countries. However, the Electronic Frontier Foundation, Sandisk, Intel and other tech companies filed briefs supporting Impression, warning of trade restrictions and increased prices.
Acting U.S. Solicitor General Ian Gershengorn also filed an amicus brief, saying the Federal Circuit misread 150 years of patent law and that its ruling could subject unsuspecting downstream purchasers to the risk of patent infringement suits.
The court has not yet scheduled argument.
* The case is Impression Products v. Lexmark, U.S. Supreme Court No. 15-1189.
ACTIVE INDUCEMENT: QUANTITY OR QUALITY? The Supreme Court heard argument on Dec. 6 in an appeal by biotech firm Life Technologies (now a part of Thermo Fisher Scientific) from a finding that it "actively induced" foreign infringement of Promega's patent on a genetic-testing kit. A decision is expected by the end of June.
The Patent Act limits active-inducement liability to those who export "all or substantially all" of a patented invention's components to be assembled abroad. Life Technologies had shipped an enzyme - one of five ingredients in the kit - from the U.S. to its U.K. manufacturing plant.
The justices are considering whether "substantially all" refers to quantity, as Life Technologies argued, or to the importance of the ingredient, as the 2-1 Federal Circuit ruled in December 2014. The panel found that the enzyme was substantial because it amplified the DNA sample, which was necessary for the test to run.
Acting U.S. Solicitor General Ian Gershengorn, in an amicus brief, said the Federal Circuit's approach "subjects domestic exporters to the threat of liability for supplying a single staple article into the global stream of commerce."
Agilent Technologies, the Federation of German Industries and several intellectual property law professors also supported Life Technologies' position. Promega, with amici including the Intellectual Property Owners Association, the American Intellectual Property Law Association, New York Intellectual Property Law Association and the Wisconsin Alumni Research Foundation, said the Federal Circuit interpreted the law properly.
* The case is Life Technologies v. Promega, Supreme Court No. 14-1538.
SHIFTING BURDENS DURING IPR: The full Federal Circuit on Dec. 9 heard a challenge to the USPTO's regulation governing amendment of patent claims during inter partes review (IPR).
Aqua Products, a subsidiary of the Spanish firm Fluidra S.A., is appealing the Patent Trial and Appeal Board's invalidation of its patent on a robotic pool cleaner. The company says the PTAB is ignoring the terms of the America Invents Act by shifting the burden to Aqua to prove that its amended claims were eligible for a patent.
The America Invents Act, which created IPRs, puts the burden of establishing invalidity on the challenger. The law also gives the patent-holder one chance to shrink the size of the target during the IPR by narrowing challenged claims. At that point, the PTO's regulation shifts the burden to the patent holder to show the amended claims are patentable.
The Federal Circuit upheld the regulation 2-1 in May, but the full court granted Aqua's petition for en banc review in August.
Aqua argued that if Congress had intended to shift the burden, it would have said so. Several groups agreed in amicus briefs, including BIO and the Pharmaceutical Research and Manufacturers of America, the Intellectual Property Owners association and AIPLA.
The PTO said the regulation protects patent quality and is entitled to deference as the agency's reasonable interpretation of the law. It drew amicus support from the Internet Association, the Computer & Communications Industry Association, and firms including Dell, Intel and Samsung.
* The case is In re Aqua Products, U.S. Court of Appeals for the Federal Circuit, No. 15-1177.