Our weekly SoCal IP Institute meeting on Monday, December 15, 2014 will be a discussion of one Second Circuit decision and a Federal Circuit decision.  Synopses of the cases appear below:

Swatch Group Management Services Ltd. .v. Bloomberg L.P., Case Nos. 12-cv-2412; 12-cv-2645 (2d. Cir.  January 27, 2014 ) (available here). Swatch periodically provides calls in which its executives speak regarding the future and the financial outlook for the company.  One such call took place here on February 8, 2011.  Within minutes of the call completing, and despite requests to all attendees (which did not include Bloomberg representatives) not to record the call, a full length audio recording of the call was available n Bloomberg’s service.  Swatch protested, claiming copyright protections, and sued.

At the district court, despite some early wrangling and after Swatch was able to obtain a registration, the court found that whether or not the copyright was infringed, Bloomberg’s use was a “fair use” and, on that basis granted summary judgment in favor of Bloomberg.  The parties agreed to dismiss all other claims in order that an appeal might be taken.

In a fair use analysis, the court must consider the (1) purpose and character of the use, (2) the nature of the copyrighted work, (3) the amount and substantiality of the portion taken compared to the whole, and (4) the effect of the use upon the market for the copyrighted work.  Here, the Second Circuit found that the purpose and character were those of a reporter on relevant news, not an infringer seeking to profit.  The nature of the work was “thin” and, although unpublished, was already expressed in the marketplace. The amount and substantiality were the whole of the work, but this was necessary to convey the substance of the work.  Finally, the effect upon the potential market was minimal because, though there were potential suitors to buy the information, it was already released through other means. Three factors favored Bloomberg, one was neutral and, as a result, the Second Circuit affirmed the district court’s decision that the use was fair use.  A related cross appeal was dismissed.

DDR Holdings, LLC v. Hotels.com, L.P. et al., Case No. 2013-1505  (Fed. Cir. December 5, 2014 ) (available here).  Some of the defendants appeal from a final judgment in the Eastern District of Texas entered in favor of DDR Holdings. Following trial, a jury found that the defendants infringe the asserted claims of two U.S. Patents. The jury also found the asserted claims of the two patents are not invalid. The district court denied the defendant’s motion for judgment as a matter of law on, inter alia, noninfringement and invalidity of the asserted patents. The district court subsequently entered a final judgment consistent with the jury’s findings on infringement, validity, and damages, and awarded DDR pre- and post-judgment interest and costs.

Most interestingly for our purposes, the defendants requested that the Federal Circuit reverse the finding of validity of both patents.  In finding that the remaining patent was not invalid the court said:

As an initial matter, it is true that the claims here are similar to the claims in the [Bilski, Alice, Ultramercial etc.] in the sense that the claims involve both a computer and the Internet. But these claims stand apart because they do not merely recite the performance of some business practice known from the pre-Internet world along with the requirement to perform it on the Internet. Instead, the claimed solution is necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks.


It is also clear that the claims at issue do not attempt to preempt every application of the idea of increasing sales by making two web pages look the same, or of any other variant suggested by NLG. Rather, they recite a specific way to automate the creation of a composite web page by an “outsource provider” that incorporates elements from multiple sources in order to solve a problem faced by websites on the Internet. As a result, the ’399 patent’s claims include “additional features” that ensure the claims are “more than a drafting effort designed to monopolize the [abstract idea].” Alice, 134 S. Ct. at 2357. In short, the claimed solution amounts to an inventive concept for resolving this particular Internet-centric problem, rendering the claims patent-eligible.

The Federal Circuit affirmed the district court’s denial of NLG’s motions for JMOL of noninfringement and invalidity of one of the asserted patents. Because the Federal Circuit concluded that the second patent is anticipated as a matter of law, and reversed the district court’s denial of JMOL on validity, and remanded to the district court for further proceedings consistent with our decision.

Judge Mayer’s dissent is interesting, opening with:

The claims asserted by DDR Holdings, LLC (“DDR”) fall outside 35 U.S.C. § 101 because they simply describe an abstract concept—that an online merchant’s sales can be increased if two web pages have the same “look and feel”—and apply that concept using a generic computer.

 All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, December 15, 2014 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Noelle Smith by 9 am Monday morning.