Supreme Court Corner: Q1 2017

Intellectual Property and Technology News

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RECENT DECISIONS

Star Athletica v. Varsity Brands
COPYRIGHT – DECIDED: MARCH 22, 2017

HELD: An artistic feature of the design of a useful article is eligible for copyright protection if the feature (1) can be perceived as a two- or three-dimensional work of art separate from the useful article; and (2) would qualify as a protectable pictorial, graphic or sculptural work either on its own or in some other medium if imagined separately from the useful article.

Respondent Varsity Brands is a manufacturer and distributor of cheerleading and dance-team uniforms. Varsity designs its uniforms by creating two-dimensional design concept sketches on paper, including chevrons, lines, curves and other designs, and has registered copyrights. After Star Athletica entered the cheerleading uniform market in 2010, Varsity sued Star Athletica for infringing its registered copyrights in its two-dimensional drawings and photographs.

The Copyright Act protects "the design of a useful article…if, and only to the extent that, such design incorporates pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article." 17 U.S.C. § 101. The district court found Varsity did not have copyright protection for its two-dimensional design drawings because the designs could not be severed, physically or conceptually, from the utilitarian function of the uniforms. The Sixth Circuit reversed, finding the design was separate and distinct from the garments' utilitarian functions of "cover[ing] the body, wick[ing] away moisture, and withstand[ing] the rigors of athletic movements."

The Supreme Court (6-2) held copyright protection exists in a feature of the design of a useful article when, "identified and imagined apart from the useful article, it would qualify as a pictorial, graphic or sculptural work either on its own or when fixed in some other tangible medium." Applying this test, the Court held that the "two-dimensional work of art" embodied in the arrangement of colors, shapes, stripes and chevrons on the uniforms' surface is entitled to copyright protection because it is (1) capable of being separated from the cheerleading uniforms and (2) protectable when separated. The Court emphasized that, by contrast, the shape, cut and dimensions of the uniform itself are not eligible for copyright protection.

SCA Hygiene Prods. AB v. First Quality Prods. LLC

PATENT – DECIDED: MARCH 21, 2017

HELD:  The equitable defense of laches cannot bar monetary damages that accrue within the Patent Act's six-year limitations period (35 U.S.C. § 286).

Laches is an equitable defense that can bar equitable remedies when (1) a plaintiff has unreasonably delayed filing suit and (2) the delay caused prejudice to the defendant. Courts have applied the defense to limit the availability of monetary remedies in patent infringement cases.

In 2014, the Supreme Court faced a similar issue in the copyright context. Petrella v. Metro-Goldwyn-Mayer, Inc., 572 U.S. ___ (2014). In that case, the Court held that laches cannot bar legal relief because the Copyright Act includes a three-year limitation period on damages, but laches may be available to bar an equitable remedy such as an injunction.

The Court (7-1) applied the same reasoning to the Patent Act and held laches inapplicable to bar monetary damages. Section 282 of the Patent Act lists specific defenses to a patent infringement action, and section 286 sets forth a statutory limitations period of six years for monetary remedies. The Court interpreted section 286 of the Patent Act to allow a six-year damages period subject to the defenses listed in section 282, which do not include laches. Without express statutory authority, the Court followed its general rule that laches cannot be invoked to bar damages within a statutory limitations period.

Learn more about the implications of these Supreme Court rulings by contacting any of the authors.