How Justice Scalia helped to shape US IP law

When Justice Antonin Scalia, who died last weekend, sat down with broadcaster Piers Morgan in 2012 for an interview on CNN, few would have predicted his answer about his most difficult case.

The CNN-published transcript reads as follows.

Scalia: My hardest?

Morgan: Yes.

Scalia: You don’t want to know.

Morgan: I do want to know.

Scalia: No, it’s the dullest case imaginable. They—there is—there is no necessary correlation between the difficulty of a decision and its importance. Some of the most insignificant cases have been the hardest.

Morgan: What has been the one that you …

Scalia: It would probably be a patent case. You want me to describe it, really?

Morgan: No, I don’t.

(Laughter)

The laughter and Scalia’s assumption that Morgan, and indeed the many viewers at home, would not want to know about the “dullest imaginable” patent case is symptomatic of the way intellectual property is viewed in some circles.

Nevertheless, Scalia’s contributions over the years have had a wide-reaching impact, addressing several concerns in the IP industry.

Although the case Scalia was referring to will remain a mystery, in the last few years several Supreme Court decisions he was involved in have helped to shape IP law in the US.

Mayo v Prometheus

Followed by our sister publication Life Sciences IP Review,  the 2012 ruling centred on two patents owned by healthcare company Prometheus Laboratories, US numbers 6,355,623 and 6,680,302.

The patents included claims covering a method for determining the proper dose of a drug used to treat autoimmune disorders.

Scalia joined a unanimous opinion that said claims to methods of administering drugs to treat gastrointestinal autoimmune diseases were not patent-eligible.

Robert Greene Sterne, director at law firm Sterne, Kessler, Goldstein & Fox, says the impact of the Mayo case “continues to ripple through the medical technology industry” and affects what research and development is funded based on the availability of possible patent protection.

Association for Molecular Pathology v Myriad Genetics

In another major case which set a precedent for patentability in the US, the validity of so-called gene patents was brought to the court’s (and the nation’s) attention.

Specifically, the case focused on certain claims in patents owned or controlled by Myriad Genetics that cover isolated DNA sequences.

In the 2013 ruling, the court said that isolated human DNA is not patent-eligible and invalidated Myriad’s related patents, but added that complementary DNA, which is synthesised from messenger RNA, can be patented.

Scalia dissented in part, saying he was “unable to affirm” some of the “fine details” of molecular biology, but agreed that isolated DNA is the same as that found in the human body and should not be patentable.

“It suffices for me to affirm, having studied the opinions below and the expert briefs presented here, that the portion of DNA isolated from its natural state sought to be patented is identical to that portion of the DNA in its natural state,” Scalia wrote.

For Sterne, the case was an example of how Scalia wanted a “more nuanced analysis” of what constitutes patentable subject matter in this area.

Alice v CLS Bank

In one of the most important patent-related decisions of the last few years, Scalia joined the other eight justices by ruling in 2014 on patent claims covering a computer system for electronic financial transactions. The court said the claims, owned by Alice Corporation, were ineligible because they were drawn to the “abstract idea of intermediated settlement” and only required a generic computer implementation that failed to transform the abstract idea into a patent-eligible invention.

“The question presented is whether these claims are patent-eligible ... or are instead drawn to a patent-ineligible abstract idea,” said the majority opinion, which Scalia did not write.

“We hold that the claims at issue are drawn to the abstract idea of intermediated settlement, and that merely requiring generic computer implementation fails to transform that abstract idea into a patent-eligible invention,” it added.

The decision was definitive on the basic conflict, but did not provide precise legal guidance that clearly defines the line between patent-ineligible abstract ideas and patent-eligible implementations of computer and software-related inventions.

American Broadcasting Companies v Aereo

In June 2014 , Scalia broke away from a majority verdict to file a dissenting opinion in the dispute between TV streaming service Aereo and some of the US’s major broadcasters.

“Scalia’s death leaves just eight sitting justices. If a vote at the court is tied at 4-4, the ruling of the lower court is affirmed, but no precedent is created.”

The majority of the court (six) said that Aereo infringed the broadcasters’ copyright as its performances were classed as “public”.

“We are here concerned with a single claim: that Aereo violates the networks’ exclusive right to ‘perform’ their programmes ‘publicly’,” Scalia wrote.

In typically frank fashion, he added: “That claim fails at the very outset because Aereo does not ‘perform’ at all. The court manages to reach the opposite conclusion only by disregarding widely accepted rules for service provider liability and adopting in their place an improvised standard (‘looks-like-cable-TV’) that will sow confusion for years to come.”

Kimble v Marvel

In 2015, Scalia joined a 6-3 majority opinion in confirming that a patent owner cannot demand royalties for a patent after it has expired.

In the dispute, the Supreme Court had to decide whether to uphold its decision issued in the 1964 Brulotte v Thys case. In that dispute, the court said a right owner cannot demand royalties for an expired patent and that a licensing agreement was “unenforceable” because the patent had expired.

The most recent case centred on inventor Stephen Kimble’s ‘web blaster’ toy, which enabled children to behave like Spider-Man by shooting web strings from a canister of foam inside a polyester glove.

After Kimble claimed in 1997 that Marvel Enterprises had infringed his patent, Marvel agreed to pay royalties worth 3% of sales of its own version of the toy, which used Kimble’s patented technology, as well as a $500,000 fee.

But in 2010, Marvel invoked the Brulotte ruling by asking a district court to rule that it no longer owed Kimble royalties because the patent had expired that year. The lower court agreed, as did the US Court of Appeals for the Ninth Circuit and eventually the Supreme Court.

“In this instance, Scalia’s perspective was keenly focused on the doctrinal considerations in the case,” says Sterne, adding that the case “served as an example of Scalia’s independence of analysis on important business doctrines that are affected by patent law.”

MedImmune v Genentech

In this case, the court ruled that a patent licensee is no longer required to terminate or materially breach its licensing agreement in order to bring a suit challenging the validity of a patent or claims it had been infringed.

The decision, handed down in 2007 and for which Scalia wrote the majority 8-1 opinion, shifted the power from patentees to licensees.

“We hold that petitioner was not required … to break or terminate its license agreement before seeking a declaratory judgment in federal court that the underlying patent is invalid, unenforceable, or not infringed,” Scalia wrote.

Commil USA v Cisco Systems

One of Scalia’s last contributions to the IP field came last year in a dissenting opinion in the Commil patent dispute.

The case concerned whether a party’s good-faith belief in the invalidity of a patent is a defence against a claim of induced infringement.

While the majority ruled it was not a valid defence, Scalia argued that for a party to be found liable for induced infringement it must be proven that the defending party has knowledge that the action is infringing.

“Because only valid patents can be infringed, anyone with a good-faith belief in a patent’s invalidity necessarily believes the patent cannot be infringed. To talk of infringing an invalid patent is to talk nonsense,” he wrote.

Future of the court

Scalia’s death leaves just eight sitting justices. If a vote at the court is tied at 4-4, the ruling of the lower court is affirmed, but no precedent is created.

His death, which comes nine months before the US presidential election, has caused a stir among Republicans, who have vowed to oppose any nomination for a replacement by US President Barack Obama.

One case that Scalia didn’t have a chance to rule on is In re Tam. The dispute, which centres on attempts by rock band The Slants to trademark its name, has been causing hot debate among trademark practitioners about whether offensive trademarks should be allowed.

In the latest ruling, an en banc US Court of Appeals for the Federal Circuit said that to deny the band a trademark would violate its First Amendment rights. The case is expected to reach the Supreme Court.

Though patents and IP might not be major concerns for the public, legal professionals in the US will be waiting with bated breath to see who is next to step through the court’s doors

Scalia’s will be big shoes to fill.