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U.S. Intellectual Property and New Media Law Update THE CONSTITUTION AGAINST THE PATENT ACT Florida Prepaid Postsecondary Education Expense Board v. College Savings Bank et al. (U.S. Supreme Court - June 23, 1999) THE CONSTITUTION VERSUS THE LANHAM ACT College Savings Bank v. Florida Prepaid Postsecondary Education Expense Board et al. (U.S. Supreme Court - June 23, 1999) FEDERAL CIRCUIT IS CLEARLY ERRONEOUS Dickinson v. Zurko (U.S. Supreme Court - June 10, 1999) EXPRESSIVE-LY YOURS Express Services, Inc. v. Careers Express Staffing Services, et al. (Third Cir. - April 23, 1999) THE CONSTITUTION AGAINST THE PATENT ACT Florida Prepaid Postsecondary Education Expense Board v. College Savings Bank et al. (U.S. Supreme Court - June 23, 1999) It is not very often that patent law comes to stage center in an ongoing dispute as to the nature of the U.S. Constitution and the sovereignty of the individual states. The facts are simple enough. A branch of the Florida government allegedly infringed a patent. The owner of the patent sued. Defendant pled its sovereignty immunity. The issue was clearly crystallized by the Patent Act itself. In 1992, Congress had amended the patent law and expressly abrogated the states' sovereign immunity from claims of patent infringement. It did so to avowedly enforce the guarantees of the due process clause of the Fourteenth Amendment to patentees. The question before the Supreme Court was whether there was violation of the fourteenth amendment sufficient to abrogate a states immunity from suit. For immunity to be abrogated the transgression must be fully identified in the legislation and the legislation tailored to remedy or prevent such conduct. The Court noted that Congress had not identified a pattern of patent infringement by states, let alone a pattern of Constitutional violations. There were only eight such suits in the last 110 years. Testimony before the House Subcommittee acknowledged that the states are willing to respect patent rights. There was no evidence that patent infringement by states had become a problem of national import. There was no legal basis for the abrogation and the suit for patent infringement was dismissed. The majority of the 5-4 opinion was delivered by Chief Justice Rehnquist. A strong dissent was submitted by Justice Stevens with Justices Souter, Ginsburg and Bryer joining. The minority believed there was an absence of affective remedies against the states for patent infringement and, thus, the 1992 amendment to the Patent Act was clearly a proper exercise of Congress' powers under Section 5 of the Fourteenth Amendment. Thus, the following case and other recent cases, are an affirmation of the conservative majority's belief that the Constitution formed a union of sovereign states, rather than states being a mere political subdivision of a single sovereign state. The decision can be reviewed at: http://supct.law.cornell.edu/supct/html/98-531.ZS.html THE CONSTITUTION VERSUS THE LANHAM ACT College Savings Bank v. Florida Prepaid Postsecondary Education Expense Board et al. (U.S. Supreme Court - June 23, 1999) This case is a companion case to the above, both because the same parties are involved and because the Court brought into question the right of the U.S. Government to subject states to suits under Section 43(a) of the Trademark Act of 1946 (The Lanham Act) for false and misleading advertising. While the Court indicated that abrogation of immunity may be appropriate for infringement of a trademark in order to protect a property right in the mark, the Court found that there was no property right in preventing false advertising under Section 43(a) of the Lanham Act. Thus, no failure of due process or taking by the state of trademark or other property right and, thus, no support for the abrogation under the Fourteenth Amendment. The 5-4 opinion was delivered by Justice Scalia with the same four joined in dissent. In this case, both Stevens and Bryer delivered dissenting opinions in which the other two joined. The decision can be reviewed at: http://supct.law.cornell.edu/supct/html/98-149.ZO.html FEDERAL CIRCUIT IS CLEARLY ERRONEOUS Dickinson v. Zurko (U.S. Supreme Court - June 10, 1999) There is only one court in this country that can tell the Federal Circuit it is wrong and the Supreme Court just did so. The Federal Circuit had adopted the clearly erroneous standard for review of Patent and Trademark Office (PTO) decisions (i.e., facts can be overturned on appeal where they are clearly erroneous), rather than the standard set forth in the Administrative Procedures Act (APA). The APA permits a court to set aside agency findings of fact only where the findings are arbitrary, capricious, an abuse of discretion, or unsupported by substantial evidence. The clearly erroneous standard gives the Federal Circuit far greater discretion as to what it can overturn in comparison with the APA test. The Supreme Court found that the APA standard was the one that should be used and that the current standard amounted to "additional requirement" that trumps Section 706 of the APA. The ruling was a victory for the Patent and Trademark Office which had asked the Justice Department to appeal the decision to the Supreme Court. Obviously, the PTO wishes to have its decisions upheld. This is more likely to occur under the APA standard. There was an interesting dissent by Chief Justice Rehnquist which was joined in by Justices Kennedy and Ginsburg. The dissent indicated the APA was, in actuality, a minimum, intended to raise the standards of the courts, not lower them. Among other things, the Court pointed to Section 12 of the APA which expressly stated that requirements which predated the APA and were otherwise recognized by law were not affected by the APA. The decision can be seen at: http://supct.law.cornell.edu/supct/html/98-377.ZO.html EXPRESSIVE-LY YOURS Express Services, Inc. v. Careers Express Staffing Services, et al. (Third Cir. - April 23, 1999) |
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