What makes a patent ineligible?

On Behalf of | Mar 31, 2022 | Copyrights And Infringement, Patents |

The U.S. Supreme Court handed down a ruling on February 24, 2022, on a case argued on November 8, 2021. Unicolors, Inc. v. Hennes & Mauritz, LP involved a group of 31 design patents, nine of which were confined designs reserved for exclusive use by specific customers. Unicolors registered them all as a group in 2011.

The initial dispute

In 2015, Unicolors accused H&M of selling apparel that intentionally infringed on Unicolors copyrighted designs, and a jury agreed. The case then went to the 9th Circuit, where H&M countered, claiming the Unicolors patent registration had false information. The Circuit Court concurred with H&M, reversing the district court’s ruling, and then remanded the case, instructing the district court to refer the matter to the Register of Copyrights according to the Copyright Act.

The Supreme Court hears the case

Unicolors asked whether the referral to the Register was appropriate without fraud or material error. In its brief, the Unicolors legal team then argued that the applications were good-faith misunderstandings of copyright law principles. H&M argued that this was a material violation of the Supreme Court’s rules.

The Supreme Court did not agree with H&M. Instead, it voted 6-3 to vacate the Appeals Court decision and remanded the case for further proceedings. The basis of the high court’s decision was the “safe-harbor” provision of the Copyright Act of 1976, which protects applications with inaccurate legal or factual information. It then turned the case back to the Copyright Office to determine if the application was erroneous.

Is the patent void?

There is no ruling yet from the Copyright Office. Still, the Supreme Court’s stance maintained that the copyright is valid unless Unicolors knew that the application contained fraudulent information or factual errors, which is unlikely.

Registering a copyright is largely a formality because a work of authorship is protected under copyright law when it is fixed in any “tangible medium of expression,” without regard to any later registration or other activity by the author. The copyright registration’s real value is that it allows the applicant (Unicolors) to bring civil actions for infringement – there are no statutory damages for infringement before registration.

In this case, the error comes down to the 2011 registration of the 31 fabric designs split into two groups rather than the same publication unit. One was for the general public, and the other was for specific favored customers. The six Justices believe that there were two groups in their application rather than one is of little consequence. Justice Breyer went on to add in his majority opinion that the Copyright Act uses standards that are weaker than actual knowledge, such as their reasonable grounds to know or be aware of apparent facts.

Knowingly making a fraudulent claim invalidates it

As is normal when a case goes to the Supreme Court, there were a lot of twists and turns. Notably, the high court ruled on whether the copyright was valid if there were errors, while the lower court ruled on whether there was an infringement of clothing designs. Based on the Supreme Court’s ruling, the way for a patent or copyright to be ineligible is for the applicant to knowingly include false information.

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