Jones Day Talks Intellectual Property: Women in IP – The Supreme Court’s "Copyright Day"

In Fourth Estate Public Benefit Corporation v. Wall-Street.com, the U.S. Supreme Court tackled questions relating to copyright applications vs. copyright registrations, while in Rimini Street v. Oracle, the justices ruled on how costs are measured in copyright litigation. Jones Day's Jessica Bradley, Anna Raimer, and Meredith Wilkes explain the implications for copyright holders, applicants, and litigants. They also talk about what’s ahead for the Firm’s "Women in IP" initiative.

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Dave Dalton:

The US Supreme Court recently issued two copyright-related decisions on the same day. That's rare. One of our lawyers even called it Copyright Day. We have a panel representing Jones Day's women in IP initiative here to talk about what these decisions mean for copyright holders and applicants and litigants. Maybe changes in strategy or an order. I'm Dave Dalton, you're listening to Jones Day Talks women in IP. US Supreme court tackled questions relating to copyright applications versus copyright registrations in Fourth Estate Public Benefit Corporation V Wall-Street.com. In a separate case Rimini Street V Oracle, the court ruled on how costs are measured in copyright litigation. We'll talk about both these decisions with our panel. Jessica Bradley has more than 10 years of experience litigating trademark, trade dress, false advertising, unfair competition, dilution, and copyright cases. She also counsels clients on trademark clearance, prosecution and enforcement, including representing clients before the trademark trial and appeal board. Anna Raimer works with clients to design and implement worldwide trademark protection programs, strengthen their IP portfolios and resolve domestic and international trademark disputes.

Dave Dalton:

Meredith Wilkes co-leads the firms global trademarks, unfair competition and copyrights group. She is the lead trial lawyer that has focused on high stakes trademark, trade dress, trade secret, false advertising and design patent litigation for global brands and federal and state courts throughout the US for more than 20 years. Meredith, Anna, Jessica, thanks for being here today.

Meredith Wilkes:

Thanks for having us Dave.

Dave Dalton:

Meredith, let's go to you first. I don't know who might keep track of these things, and I know that these cases don't always fall into neat categories or boxes, but it seems like the Supreme Court recently has heard more intellectual property related cases than it historically has. Is that correct? Or am I imagining it because I've been accused of imagining things. So, but if you know this, is the docket a little more crowded with IP matters than it has been historically?

Meredith Wilkes:

No, I don't think you're imagining things that all Dave, I think that's exactly right. If we look back even just over the last five years or so, I think we're seeing an uptick in IP cases in front of the Supreme Court. I'm thinking about maybe a trend starting around 2014, 2015 with the Lexmark and the POM Wonderful decisions. BNB Hargus recently, Hannah Financial Mattel versus Tom. And even in the last couple of years, we had patent day in the United States Supreme Court with Oil States and the SAS Institute argued right, same day.

Dave Dalton:

That's right.

Meredith Wilkes:

And this week we had copyright day in the Supreme Court with two copyright decisions being handed down in the same day, which I don't think has happened in about 100 years. So I don't think you're imagining anything at all. I think we're seeing some more and more IP cases in front of the Supreme Court.

Dave Dalton:

Now, why is that? Is it just, I don't like the word coincidence, but is there just a backlog of these types of cases that the courts finally thinking we got to start hearing these things or is because of the changing nature of commerce in the 21st century? A lot of business and therefore legal matters are IP related, and we're just seeing the manifestation of that at the high court. What do you think?

Meredith Wilkes:

Well, I have two answers to that question. The IP law nerd in me says these IP cases are so cool that they're getting the court's attention and that's why the court wants to weigh in on it. But I don't know that that's a hundred percent accurate. What I think we're seeing and the decisions this week, sure that up for me is that the IP cases that the court is taking have very little to do with just the underlying IP subject matter and are touching upon bigger issues. So you talked in a couple of your podcasts with our PTAB folks about Chevron deference leading to the SAS Institute decision. Here, I think we're seeing trends on statutory construction. So I think it's bigger picture issues that are hitting IP cases.

Dave Dalton:

Okay. You mentioned statutory construction, and I think I know where you're going with this because the two cases we're going to talk about today, but define for us briefly, if you could, what is statutory construction?

Meredith Wilkes:

Sure. It's the court's interpretation of what the words mean in the statute and both of the cases that we're going to talk about today, touch upon different philosophies or different ways to interpret the words as they appear on the page.

Dave Dalton:

Gotcha. Okay. All right. Let's talk about the first of those two cases. We'll go to Anna first. Fourth Estate Public Benefit Corporation V Wall-Street.com. This is about the copyright applications and registrations process, correct. Just give us some background, tell us how this case evolved.

Anna Raimer:

That's right, Dave, in Fourth Estate, you had a news organization that had licensed its articles to websites. And when one of those licensees continue to use the articles after the license was canceled, Fourth Estate sued for copyright infringement. But at the time when it filed that suit, Fourth Estate had only filed copyright applications to register the articles, it didn't have any registrations yet. So when the district court looked at that, it dismissed the case under section 411A of the copyright act, finding that you've really had to have a copyright registration in order to sue for infringement. So after the 11th circuit agreed, the case was taken by the Supreme Court, and we now have a decision delivered by justice Ginsburg, and it was unanimous. The Supreme Court holding that a copyright claimant does have to wait until the copyright office registers the copyright before it institutes and infringement suit.

Anna Raimer:

And here what the court found was that given the way the word registration is used in the rest of the section, as well as in other parts of the copyright act, that the real meaning had to be that the registration had issued, not that you had just applied for a copyright registration. And that the Congress didn't mean to give multiple meanings to the word registration throughout the acts, so that it was really the only reading that made sense in the context of the statute.

Dave Dalton:

Okay. Okay. In the context of the statute. Well, let's turn this to Jessica for a second. What did somebody do wrong here? I guess, what is the court trying to prevent or discourage moving forward with this decision?

Jessica Bradley:

It wasn't any particularly that anyone did anything wrong. It was more so that courts across the country essentially had split over what this provision in section 411A meant that registration has been made. What that actually meant in terms of filing an application, or did you need a registration? Some court said that it was fine if you filed an application with the required deposited fee and you can move forward. And other courts said, no, you had to have the actual registration or your registration had to have been refused. So copyright owners across the country essentially were left with an open question as to when and how can I actually start my action for copyright infringement? And the answer depended on where in the country you were. So the Supreme Court was essentially just resolving that split among the court. So the interpretation was consistent across the board.

Dave Dalton:

Okay. Now let's deal with Jessica. These things can take time sometimes. You apply for copyright in terms of the period from when the application is made to when you might be approved for registration, if I'm using the right terminology. How does an applicant protect himself or herself in the meantime? If just applying doesn't protect you in this case.

Jessica Bradley:

So that was really what a lot of the Amicus briefs that were submitted centered on. And that's really was a central question. It was almost like a practical issue versus what does the statute actually mean? What was Congress's intention, because copyright owners and people that actually work in this space, it could take, I think as of the time of the Supreme Court decision, the average processing time for just a normal electronic application was seven months. If you go on the, yeah, if you go on the copyright office website now, they're saying an average of six months, but it could be two to 10 months. And that if there actually has to be a correspondence with a copyright owner. There's questions about the application, it could take up to 15 months. And interestingly enough, Fourth Estate's copyright application, as of the time it filed its petition for cert with the Supreme Court had been pending for 19 months.

Dave Dalton:

19 months.

Jessica Bradley:

Yeah. It seemed like looking back on it, they made some procedural mistakes and that delayed it, but the amount of time, it could be significant. But I think the Supreme Court's view was is that those time processing lags were more as a result of budgetary constraints. It wasn't something that the court should cure. It was something that it was going to be within Congress's role to cure. As far as other remedies available to a copyright owner, both the court's opinion and Wall-Street's brief brought up the availability of special handling, which essentially is a way to get expedited processing of your application. It does come with a bit of a hefty price tag. It's an additional $800 fee per copyright claim. And also the copyright office makes no guarantee that it will actually within process that application with any certain timeframe. It says it will make its best efforts to do it within five days.

Dave Dalton:

This leaves an applicant in a precarious position sounds like, but at least there is an option or the opportunity to fast-track this sort of, but even then there's no guarantee is what you're saying.

Jessica Bradley:

Yeah. And I think they don't even now offer a guarantee. And I think the issue is going to be that given this courts, given the Supreme Court's decision, you're going to see an uptick in special handling. And right now we're going to make every best effort to process it within five days, if it doubles or triples, the amount of people that are now applying for special handling, you're going to be left with a definite issue there.

Dave Dalton:

You might have the same problem. Interestingly, if suddenly everybody's rushing to do the expedited handling or specialty handling, there's going to be a log jam there too, or at least potentially. Let's go back to Anna for a second. Okay. It sounds like this is a game changing situation suddenly. How do you advise or counsel clients moving forward after this position?

Anna Raimer:

The conservative approach, and depending on what jurisdiction you've been in has been to obtain a registration if possible, before filing suit, because this was a split between the circuits. So in that way, we continue to advise clients to seek to register early, consider the special handling that Jessica was just talking about, at times that can be a way to go. We'll see whether there is going to be this delay that Jessica mentions and also can be an issue if the client has lots of registrations that need to be approved before filing litigation, depending on what the action is about. Another thing the court mentioned too, was this idea of pre-registration that's available. It's only in specific limited circumstances, but that is also something to consider if that criteria is met by the copyright claimant.

Dave Dalton:

It's called preregistration?

Anna Raimer:

That's right, and it only involves really specific circumstances. And that's when you have a situation like a movie that's about to be released, it's unpublished at the moment, but it's being prepared for commercial distribution or musical work or video game, a specific class of types of copyrights. And the concern there is it's types of works that there has been a history of pre-release infringements and that was specifically provided for in a statue.

Dave Dalton:

Gotcha. Gotcha. All right. Let's go over to the other case. Rimini Street V Oracle. Meredith, this was about how costs are measured in copyright litigation. Tell us what happened here.

Meredith Wilkes:

Well, that's right, Dave. There's no question here about copyright ownership or the validity of the registrations. Here, the question before the court is what happens when you win? What to the Victor must go the spoils, right? What are the spoils? Section 505 of the copyright statute allows recovery for quote, full costs and attorney's fees. And that's within the court's discretion. And in this case, Oracle had recovered in excess of $35 million in damages for copyright infringement in excess of $14 million in damages for other state claims that it had prevailed upon. And then it also recovered $28 million, $20.5 million in attorney's fees, as well as $4.9, $5 million in costs that on appeal and got reduced down to $3.4 million. But in addition, they also recovered [crosstalk 00:13:24] no, no, but wait, there's more.

Dave Dalton:

It's agonizing.

Meredith Wilkes:

The $12.8 million for litigation expenses. And that was found to include expert witness fees and e-discovery fees and jury consulting fees. And so the question before the court was whether the $12.8 million in these other litigation expenses were recoverable costs under the copyright statute.

Dave Dalton:

And in terms of recovering fees of litigation is copyright law, is it different than other areas of the law Meredith? Is this special somehow in terms of what you can ask for reimbursement of?

Meredith Wilkes:

I think the court points out in the opinion that there are probably hundreds of statutory provisions that permit the recovery of costs or fees under different, very specific circumstances. But one thing that litigants are used to is this idea called the American rule, that ordinarily you don't get fees or costs unless there's a statutory provision that allows for it, and that allows very specifically for it. And costs in this case have been specifically defined by other areas of the United States code. And there are typically a handful of well-recognized costs that are available to a prevailing party, but the idea of this $12.8 million for other litigation expenses was a newly advanced theory in this case, and not one that was typically recoverable under the other parts of the code that speak to what costs are, what recoverable costs are in a litigation.

Dave Dalton:

Okay. Now it sounds like this has been reasonably well-defined. Let's go to Anna. On what basis might have lower courts awarded costs that didn't fall under the established, I guess there are six categories in the general federal cost statute. What would make a lower court say, well, maybe it doesn't fit in one of those categories, but we're going to award that anyway. Why would they think that?

Anna Raimer:

They would think that if the statutes actually specifically provided for those other costs. So even within the copyright act, they do provide for the additional costs of attorney's fees. So the court really focused on that and reason that Congress could have specifically identified litigation expenses outside of those six categories, if it meant to expand the scope of the cost statute. And that's what it didn't specify in that attorney's fees are recoverable under the copyright act. But absent that express authority courts can't award litigation expenses outside of the specific categories. And like Meredith mentioned, you were talking about these types of additional costs that are so significant here over $12 million and things like expert witnesses and e-discovery, it's really significant costs and important to understand whether those are included in what's recoverable.

Dave Dalton:

We hear about they're entitled to full cost. So over to Jessica, does this come down to how the word full is interpreted then?

Jessica Bradley:

I'd say it really more so came down to how costs are interpreted, because the court with regards to the word full, the court held that full was just a term of quantity. It was an adjective that modified and didn't change the meaning of the word costs. So picking up on what Meredith was talking about, there's precedent that it's not in the statute. If there is an express authority in the statute that courts can award litigation expenses, other than what is already specified in the six categories and the general cost statute. The court pointed out that Oracle's meaning of full costs, including all litigation expenditures, it would make the second sentence of section 505 that Anna mentioned that provides for attorney costs, that it would make that redundant. So full just meant you got to award the full amount. It wasn't anything more than that.

Dave Dalton:

I see, I see. Let's look to the future. In getting ready to record this program, I ran across a client alert that your group's working on. Meredith, you wrote that the Rimini decision does not bode well for the USPTO. That's the United States Patent and Trademark Office in Iancu V NantKwest. Talk about that for a moment. What are you getting at?

Meredith Wilkes:

So if I sit here with my crystal ball.

Dave Dalton:

You haven't been wrong yet. We've been doing this for a year and a half. You're always right.

Meredith Wilkes:

The check is in the mail Dave. Thank you. If I look into my crystal ball and I'm sitting here with this Fourth Estate opinion and this Rimini Street opinion authored by two Supreme Court justices who are on opposite ends of the ideological spectrum, coming to the same conclusion that we engage in strict statutory interpretation here, words mean what they say. And we are not going to start awarding costs or fees, unless there's a statute that specifically says that that particular type of monetary recovery is allowed. I think about that and I look at this [inaudible 00:18:22] case and what's involved there is essentially a question of whether the phrase, all expenses means attorney's fees. There's a circuit split right now and the United States supreme court has granted cert here in this NantKwest case to resolve a circuit split between the fourth circuit and the federal circuit on this issue involving essentially analogous provisions under the patent act and the trademark act that say that an unhappy applicant has two options to appeal a decision of an examiner.

Meredith Wilkes:

They can either go into the district court where they'll be able to introduce new evidence, or they can go straight up to the federal circuit. But if they go into the district court, there's a statutory provision that says that regardless of the outcome, they have to pay all expenses as a result of the proceeding. And for 100 years, that just meant this typical costs and expenses that we think about it didn't mean attorney's fees. But over the last several years, the USPTO has been trying to recover attorney's fees under that provision. And so now that is the issue that the court is going to be deciding. Does all expenses mean attorney's fees? And in our view, we read these two opinions and the federal circuit's decision and factor in the American rule, the answer to that should be no.

Dave Dalton:

No. Okay. Did you say the USPTO is trying to recover fees?

Meredith Wilkes:

Yes.

Dave Dalton:

Okay. Yeah. Okay. Okay. Is that typical? I mean, part of the federal government tries to recover its attorney's fees from someone bringing a case. Does that happen?

Meredith Wilkes:

It's a recent development and something that during oral argument, in the NantKwest decision from the federal circuit, a couple of the judges took issue with the USPTO doing so saying, "Listen, for a hundred years, you weren't trying to seek any type of recovery for attorney's fees". So clearly no one was thinking that all expenses meant attorney's fees. And we recently published an alert on this issue on the trademark side, out of the fourth circuit, where you had an unhappy applicant challenge and examiners decision. And win! The examiner got it wrong, and the court of appeals found that the examiner got it wrong, that their mark was actually protectable. It wasn't generic. And in exchange for that great victory, they got to pay $50,000 in what the PTO approximated it's attorney's fees.

Dave Dalton:

So they won and they still had to pay attorney fees?

Meredith Wilkes:

Success at a cost.

Dave Dalton:

Who writes these rules? Geez. Unbelievable.

Meredith Wilkes:

Yeah, that's right. You can imagine the chilling effect this would have on applicants trying to decide what way to challenge a patent examiner or a trademark examiner.

Dave Dalton:

You know, every time we do one of these with you guys, there's always one jaw-dropping moment for me. And I think we're almost done, but it happened. You did it again, Meredith you surprised me. USPTO is suing for... Okay, great. Let's change focus for last couple of minutes. Jones Days women in IP initiative is thriving based on everything I'm observing and hearing. This is really a question for all of you, but let's start with Meredith. What's coming up for Jones Days women in IP initiative over the next couple of months?

Meredith Wilkes:

Always so excited to hear such great feedback and always really excited to talk about what's happening for women in IP. Dave, if you will have us, we would be delighted to come back and do a few more podcasts with you. We kicked off the year with our section 101 discussion, and that's going to continue to unwind through the patent office and through the courts. So having a follow on discussion, now that a part two of Susan and Dr. Patricia's articles come out, I think would be a great, great add. You and I have talked about, we've got a scandalous trademark decision that will be coming out at some point in 2019. So our women in IP would be delighted to talk about the Supreme Court's ruling on that case.

Dave Dalton:

You had me at scandalous. Will you give me an exclusive?

Meredith Wilkes:

Absolutely.

Dave Dalton:

I'm sure you will, Law360 will have it before I even know about it. All right, fine. I also understand that the speaker series that you put on remains very popular.

Meredith Wilkes:

It is, and we're really, really excited about the program lineup that we have for 2019. I'll let Anna and Jess talk about that in a little bit more detail.

Anna Raimer:

Sure. So our first upcoming part of the speaker series is our brand update in the end of March in Atlanta.

Meredith Wilkes:

Okay.

Anna Raimer:

We then have our annual View From The Top, which is a leadership program. This year it's going to be in New York and that's in June. And then we also have in October in our Los Angeles office an update on trade secrets law.

Dave Dalton:

So what happens, you bring in outside speakers? Or they're Jones Day lawyers talking or a combination, or what do people here?

Anna Raimer:

That's right. We have a combination for our update on trademark law. We have a number of speakers slated that are in-house counsel, and that's going to be combined with our very own Meredith Wilkes and Carrie Kiedrowski. And then the same for the other programs. We have both Jones Day speakers, as well as folks from the outside legal community, judges and in house counsel.

Dave Dalton:

Terrific. Well, I get good feedback all the time. You're doing terrific work there. And I think this one of, Jones Day has a lot of initiatives similar to this throughout the firm, but I never have heard anything but glowing reviews for the programs you guys put on. So nice work and keep it up. We're looking forward to hearing how everything goes. Meredith, Anna, Jessica, thanks for being here today.

Jessica Bradley:

Thank you.

Anna Raimer:

Thank you.

Dave Dalton:

Take care. For more information on Jones Days intellectual property practice. Go to the practice page at jonesday.com. There you'll find lots of information about the practice, including bios on Jessica Bradley, Anna Raimer and self-proclaimed self-identified IP nerd Meredith Wilkes. Hey, she said I didn't. Subscribe to Jones Day Talks on apple podcasts, Android, Google play, and Stitcher. You've been listening to Jones Day Talks women in IP. I'm Dave Dalton. We'll talk to you next time.

Disclaimer:

Thank you for listening to Jones Day Talks. Comments heard on Jones Day Talks should not be construed as legal advice regarding any specific facts or circumstances. The opinions expressed on Jones Day Talks are those of lawyers appearing on the program and do not necessarily reflect those of the firm. For more information, please visit jonesday.com.