Welcome to Skilled in the Art. I'm Law.com IP reporter Scott Graham. Well, we had our last IP opinion from the Supreme Court's Term 2018. The outcome of Iancu v. Brunetti was predictable, but there a few nuggets worth commenting on. Also, the Federal Circuit's Berkheimer decision bit hard into a Northern District of California patent eligibility (and fee award) case today, and I've got details on that. Please pull up a virtual chair and share a few minutes. As always you can email me your thoughts and follow me on Twitter.

➤➤ Would you like to receive Skilled in the Art by email. Sign up here. 

Justice Elena Kagan. (Photo: Diego Radzinschi/ALM)

Have You No Decency?

I haven't read all of the Supreme Court opinions this term, but it's hard to imagine a less surprising outcome than Iancu v. Brunetti. Monday's decision striking down the Lanham Act's prohibition on registering “immoral” or “scandalous” trademarks seemed a foregone conclusion given the court's 2017 decision in Matal v. Tam striking down a related provision on “disparaging” marks. If you're gonna require the PTO to register racially charged epithets like The Slants, it's hard to see how you keep out pseudo-swearwords like FUCT.

My ALM colleague Tony Mauro had a breakdown of the decision and its back story on Monday. These are a few of my takeaways:

➤ Justice Elena Kagan's majority opinion was direct and to the point. “So the key question becomes: Is the 'immoral or scandalous' criterion in the Lanham Act viewpoint-neutral or viewpoint-based? It is viewpoint-based,” she wrote.

➤ Kagan explained why the court took a seemingly simple case. “As usual when a lower court has inval­idated a federal statute, we granted certiorari,” Kagan wrote. Perhaps my readers can educate me: I'd always understood this to be an unwritten rule of the court. Is this the first time it's been formally enshrined?

➤ Naturally, the justices wanted us to know they frown on coarse language. The curse word suggested by the FUCT mark “as commonly used today, generally signifies nothing except emotion and a severely limited vocabulary,” Justice Samuel Alito sniffed in a separate concurrence. Alito also made clear that he frowns even harder on political correctness. “At a time when free speech is under attack, it is especially important for this Court to remain firm on the principle that the First Amendment does not tolerate viewpoint discrimination.”

➤ Some of the justices already seem to be having buyer's remorse about Tam. Justices Stephen Breyer and Sonia Sotomayor suggested in separate opinions that the “scandalous” provision could be saved by limiting it to extremely vulgar or obscene expression. Such words “have a physiological and emotional impact” on the listener, Breyer wrote. Over time those words have shifted from religious slurs to sexually explicit terms, and “may be evolving yet again, perhaps in the direction of including race-based epithets.” Justice Sotomayor similarly targeted “the small group of lewd words or 'swear' words that cause a visceral reaction, that are not commonly used around children, and that are prohibited in comparable settings.” She adds that there is “at least one particularly egregious racial epithet that would fit this description well.”

So I guess “egregious” racial epithets like the N-word should not be registered, but warm and fuzzy racial epithets like “The Slants” can be?

➤ The justices focused on words while glossing over the government's arguments about trademarking offensive imagery. “Word,” “words” or “swearwords” is used 79 times in the court's opinions by my count. “Image” or “imagery” appears only five times. I would think that racially charged epithets combined with racially offensive imagery would produce an order of magnitude greater psychological and emotional impact than words alone. But there's little evidence the court engaged with this part of the argument, aside from Justice Sotomayor's vague allusions to “the most viscerally offensive words and images that one can imagine.”

➤ Design patents up next? The PTO has now fought all the way to the high court and lost in Tam and in Brunetti. University of Oklahoma law professor Sarah Burstein pointed out a year ago that the PTO's Manual of Patent Examining Procedure still states that the Patent Office won't register design patents that “could be deemed offensive to any race, religion, sex, ethnic group, or nationality.” I assume the PTO will now have to eliminate that provision, but who knows? Maybe it will litigate this issue too.

Other Views on Brunetti

➤ Christopher Larus, Robins Kaplan partner: “It will be interesting to see whether Congress will now move to enact a narrower prohibition against registration of marks that are lewd, obscene, or profane. The Court strongly signaled that it would uphold such a narrower restriction.”

➤David Bernstein, Debevoise & Plimpton partner, and co-author of an amicus brief for the International Trademark Association: “I remain concerned that even such a [congressional] restriction would unfairly restrict brand owners from using trademarks (like FUCT) that may have goodwill simply because some trademark examiner finds it scandalous—which is an inherently subjective judgment. We do not, for example, have any such restrictions on what kinds of books, movies and other forms of expression can be registered by the Copyright Office.”

➤ Simon Tam, Slants band member who won Tam case on disparaging marks: “I've always believed that the battles around language shouldn't be waged at the Trademark Office, decided by those who have no connections to the people actually affected. … I am thrilled to see that the Supreme Court agreed and further protected Americans from government overreach in one of the most fundamental rights we have as citizens.”

U.S. District Judge Yvonne Gonzalez Rogers

A Shot Across the ND-Cal Bow on Eligibility

It's been almost 18 months since the Federal Circuit decided Berkheimer and Aatrix, two decisions that made it harder to win Section 101 motions on the pleadings. That means district court decisions applying Berkheimer and Aatrix (or not applying them) are starting to hit the Federal Circuit now.

It's going to be interesting to see how this plays out for the Northern District of California. Exhibit A is today's Federal Circuit opinion in CellSpin Soft v. FitBit.

CellSpin is a non-practicing entity that sued Fitbit, Moov, Nike, Fossil Group, Canon, GoPro and others, alleging infringement of patented technology that automatically transfers data from a capture device such as a wearable to bluetooth-enabled mobile devices. CellSpin Soft says this eliminates the need for cables and human intervention.

U.S. District Judge Yvonne Gonzalez Rogers ruled that CellSpin had patented the abstract idea of capturing and transmitting data from one device to another. In fact, she found the patents so weak, she awarded about $500,000 in attorneys fees to the six accused infringers. She found that CellSpin “litigated its exceptionally meritless claims aggressively” by refusing to stay discovery until the 101 motion was heard and amending its complaint just three days before the hearing.

It turns out Collins, Edmonds & Schlather partner John Edmonds had good reason for amending the complaint. The Federal Circuit had just a few weeks earlier ruled in Berkheimer and Aatrix. So CellSpin had amended its complaint to allege that it was unconventional at the time of patenting to separate the steps of capturing and publishing data, so that each step would be performed by a different device linked via a wireless, paired connection.

Rogers had dismissed the amended allegations, saying they found no support in the patent specifications. They don't have to, Judge Kathleen O'Malley wrote Tuesday for a Federal Circuit panel. “While we do not read Aatrix to say that any allegation about inventiveness, wholly divorced from the claims or the specification, defeats a motion to dismiss, plausible and specific factual allegations that aspects of the claims are inventive are sufficient,” O'Malley wrote. “As long as what makes the claims inventive is recited by the claims, the specification need not expressly list all the reasons why this claimed structure is unconventional.”

Out goes the judgment of dismissal. Out goes the fee award. And just to make it sting a little harder, Judge O'Malley pointed out a few errors in the exceptional case determination—even though fees now seem off the table.

CellSpin and its attorneys had argued that they reasonably relied on the presumption of validity, but Rogers had corrected them. “Although issued patents are presumed valid, they are not presumed eligible under Section 101,” she wrote, citing Federal Circuit Judge Bob Mayer's concurrence in Ultramercial v. Hulu (“Second, no presumption of eligibility attends the section 101 inquiry.”)

Not so, Judge O'Malley wrote. “To the extent the district court departed from [the presumption of validity] by concluding that issued patents are presumed valid but not presumed patent eligible, it was wrong to do so,” O'Malley wrote Tuesday.

The lesson here: Never rely on a Federal Circuit concurrence.

More Battlez Over Trademarkz

While the trademark world was focused on the Supreme Court on Monday, my ALM colleague Alaina Lancaster had an interesting item about a suit between rival video game makers. Palm Springs-based Illektron accuses Redwood City-based Electronic Arts of using Illektron's “BATTLEZ” mark in EA's “Plants vs. Zombies” game.

“Electronics Arts Inc. is the Godzilla of what they are,” Illektron attorney Fritz Clapp told Lancaster. “We sent them a notice of infringement, and got a nice response that said, 'Your mark is weak.' So, we're going to take it to the next step.”

I'm with Godzilla on this one. Adding “z” to an ordinary word does seem pretty weak. But Clapp argues BATTLEZ is famous within the video game market, and that his client can prove it with metrics like game installs and real-time user data. “If we need to demonstrate that it's a popular game, we have the numbers to pony up,” Clapp said.

That's all from Skilled in the Art for today. I'll see you all again on Friday.