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Tiffany Wang is an IPilogue Writer, IP Innovation Clinic Fellow, Intellectual Property Journal Editor, and a 2L JD Candidate at Osgoode Hall Law School.

In the midsummer of 2020, the Supreme Court of the United States rendered an unusual decision in its first . The case, , signals broader protections for trademarks vis-à-vis .

In . The USPTO’s both denied the registration, underscoring that consumers will perceive

Writing for the 8-1 Supreme Court, Justice Ruth Bader Ginsburg affirmed the . Justice Ginsburg underscored that Booking.com is a distinctive business and that the public will not misunderstand the brand. Having acquired sufficient distinctiveness in the marketplace, “Booking.com” moves away from the generic category as a descriptive mark. The distinctiveness of a trademark is measured on the . In the case at hand,

This case finds a fine equilibrium between two factors: enhancing trademark protection and valuing consumer perception. Stronger trademark protection enhances Booking.com’s brand image and goodwill. Granting trademark registration to Booking.com simultaneously enhances the significance of consumer voices. Consumers are able to distinguish the services provided by Booking.com from those of other lodging competitors.��

Practitioners may worry that this case opens the floodgates to trademark litigation. The Supreme Court blurred the . Additionally, Permitting the registration of “generic.com” domain names may lead to .

In an increasingly digital arena, defying clear trademark doctrine may inevitably deplete the USPTO’s authority to prevent an influx of generic marks from entering the marketplace and diluting the value of more distinctive trademarks. The majority underscores that consumers perceive that . Even if the majority reasonably valued consumer data, did the majority err in granting too much weight to public input?

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The United States Patent and Trademarks Office (USPTO) has released an updated set of Eligibility Examination Guidelines to provide guidance to examiners on when to reject claimed inventions as ineligible abstract ideas. These guidelines give a sense of what computer-implemented subject matter the USPTO considers to be ineligible for patent protection.

Developing guidelines was difficult for the USPTO as the courts have provided little explanation of when patent claims are invalid for defining ineligible abstract ideas, or even what abstract idea means, and the USPTO lacks the authority to craft its own definitions. The USPTO is largely limited to telling examiners that patent claims cover abstract ideas if they cover subject matter that is similar to what the courts have determined to be abstract ideas. Given the absence of general concepts or principles for identifying the kinds of abstract ideas that are not eligible for patent protection, practitioners and applicants need to be aware of all of the Federal Circuit and Supreme Court case law on patent subject matter eligibility, and to craft patent claims with arguments in mind as to why the subject matter covered by the claims is materially different from subject matter determined to be ineligible in any of this case law.

The original 2014 Interim Guidance on Patent Subject Matter Eligibility¹ document (“the Guidance”) defines steps to be taken by an Examiner to assess subject matter eligibility.�� Steps 2A and 2B apply the two-part analysis from Alice² and Mayo³.��In step 2A the Examiner determines whether the claim is directed to a statutory exception to patent protection: a law of nature, natural phenomenon or an abstract idea.��If not, then the claim is eligible for protection (although the Examiner must still determine whether the claim meets the other requirements for patentability, such as novelty and non-obviousness).��If the claim is directed to a law of nature, natural phenomenon or an abstract idea, then step 2B applies and the Examiner determines whether the claim as a whole represents “significantly more”.�� Claims that do not cover significantly more than a law of nature, natural phenomenon or abstract idea are ineligible for patent protection and are to be rejected under 35 U.S.C. § 101.

The posting of the Guidance in 2014 provoked much comment and criticism, some critics alleging that under the Guidance virtually nothing was eligible for patent protection. The July 2015 Update on Subject Matter Eligibility⁴, (“the Update”) responds to these comments and criticism.

The Update provides an updated set of subject matter examples, and also divides the case law into different categories of abstract ideas, which are useful both as a credible attempt to organize the case law, and to provide insight into the USPTO’s perspective on this case law and arguments they may find persuasive.�� It also provides reassurance that the USPTO is addressing criticism that under the current rules post-Alice⁵ there is not a clear path forward for software patent applications because of the difficulties encountered with subject matter objections. The Update makes it clear that examiners should not determine a claimed concept to be an abstract idea unless the claimed concept is similar to at least one concept that either the Federal Circuit or the Supreme Court have identified as an abstract idea. In other words, applicants should be able to avoid having their claims rejected, at least in the USPTO, on subject matter eligibility grounds by defining concepts in the claims that differ sufficiently from claim concepts invalidated on these grounds by the Federal Circuit or the Supreme Court.

Of course, much will depend on how aggressive and creative examiners are in determining that claimed concepts they are considering are similar to a concept determined to be an abstract idea by the courts. Further, the Update makes it clear that this determination of similarity does not require evidence: examiners can ground such a rejection by merely explaining, clearly and specifically, why the claimed concepts are similar to concepts determined to be abstract ideas by the courts, and are thus ineligible for patent protection.

New Examples

In the Update, several new examples are provided in addition to those found in the original Guidance document and include:

21. ��Transmission of Stock Quote Data – modeled after the claims at issue in Google Inc. v. Simpleair, Inc.⁶, (Claim 1 ineligible, Claim 2 eligible).
22. ��Graphical User Interface for Meal Planning – based on Dietgoal Innovations LLC v. Bravo Media LLC⁷ (Claim 2 ineligible).
23. ��Graphical User Interface for Relocating Obscured Textual Information (Claims 1,4 eligible, Claims 2-3 ineligible).
24. ��Alerting System for a Catalytic Chemical Process --�� based on Parker v. Flook⁸ (Claim 1 ineligible).
25. ��Temperature Control of Rubber Molding --�� based on Diamond v. Diehr⁹ (Claims 1-2 eligible).�� Claim 1 is the actual claim 1 from Diamond v. Diehr, Claim 2 is a hypothetical claim in the form of computerized instructions.
26. ��Exhaust Gas Recirculation in an Internal Combustion Engine – based on technology from U.S. Pat. 5,533,489 (Claim 1 eligible).
27. ��A method of loading System Software (BIOS) into a computer – based on technology from U.S. Pat. 5,230,052 (Claim 15 eligible).

In each example, the Update evaluates the hypothetical claims based on steps 2A and 2B, and discusses how an Examiner might determine patent eligibility for patent claims covering an analogous technology.

Example #25 – Diamond v Diehr

An interesting example in the Update is #25, since it introduces hypothetical claims modeled after the technology in the 1981 case Diamond v. Diehr, 450 U.S. 175 (1981).�� This case dealt with a patent involving a computerized process controlling a rubber molding press.��The invention offered significant advantages over the prior art at the time, as it enabled in situ temperature monitoring and automatic recalculation of the optimal cure time.��This calculation involved using the temperature inputs and the Arrhenius equation, long used to calculate the cure time of rubber molding processes.

The reasoning in the Update for Diamond v Diehr differs from the reasoning provided by the Supreme Court. In the 1981 decision, the Supreme Court obliquely refers to the machine or transformation test in determining subject matter eligibility:

“A mathematical formula, as such, is not accorded the protection of our patent laws, Gottschalk v. Benson, 409 U. S. 63 (1972), and this principle cannot be circumvented by attempting to limit the use of the formula to a particular technological environment. Parker v. Flook, 437 U. S. 584 (1978). Similarly, insignificant post-solution activity will not transform an unpatentable principle into a patentable process. ��To hold otherwise would allow a competent draftsman to evade the recognized limitations on the type of subject matter eligible for patent protection. On the other hand, when a claim containing a mathematical formula implements or applies that formula in a structure or process which, when considered as a whole, is performing a function which the patent laws were designed to protect (e.g., transforming or reducing an article to a different state or thing), then the claim satisfies the requirements of § 101. Because we do not view respondents' claims as an attempt to patent a mathematical formula, but rather to be drawn to an industrial process for the molding of rubber products, we affirm the judgment of the Court of Customs and Patent Appeals.”¹⁰

In example #25, according to the Update, Claim 1 from Diamond v. Diehr involves a repeated calculation of the Arrhenius equation, a mathematical relationship held to be representative of a law of nature, and therefore Step 2A is met. Next, analyzing the claim as a whole using the Guidelines, the combination of steps taken together amount to significantly more than just the abstract idea of the Arrhenius equation (Step 2B). ��Thus, claim 1 in Diamond v Diehr is patent eligible, satisfying the “significantly more” step of the test.

The USPTO may have seen fit to rewrite the justification for this case to bring it into accord with the Alice framework.��The Court in Diamond v Diehr determined that the structure claimed, considered as a whole, was the kind of structure and performed the kind of function the patent laws were designed to protect. In making this determination, the Court refers to the machine or transformation test to establish the patentability of the claimed invention. However, after the decision of the Supreme Court in Bilski, the machine or transformation test is no longer the definitive test, although it remains a helpful indicator of subject matter eligibility.

Categories of abstract ideas outside the scope of patentable subject matter

The US courts have provided little explanation of when and why patent claims are invalid for covering abstract ideas.��Since the USPTO lacks the authority to create its own definitions, and it is difficult, perhaps impossible, to discern principles from the case law, the USPTO has instead focused its efforts on helping examiners to determine if the concepts defined in claims are similar to what the courts have determined to be abstract ideas, and are thus invalid.��The Guidelines and Update construct several different categories of ineligible abstract ideas based on the case law.�� Each category covers many different examples, taken from the case law, of concepts defined in patent claims that have been invalidated by either the Federal Circuit or the Supreme Court as abstract ideas. Clearly, patent applicants should do whatever they can to define their inventions using claim language and concepts that fall outside these categories.

These categories are the closest the USPTO gets to general concepts or principles for subject matter eligibility. These categories include the set of “judicial descriptors” associated with software based subject matter that has been identified by precedent in the Federal Circuit and the Supreme Court as patent ineligible, including

1. “Fundamental economic practices” including concepts dealing with the economy and commerce including contracts, legal obligations and business relations.
   1. Mitigating settlement risk -- Alice¹¹.
   2. Mitigating hedging risk -- Bilski¹².
2. “Certain methods of organizing human activity” including concepts dealing with personal and intrapersonal activities including relationships, transactions involving people, social activities and behaviour.
   1. Managing human behaviour, specifically meal planning -- Dietgoal¹³.
   2. Advertising, marketing and sales – Ultramercial¹⁴.
3. “An idea ‘of itself’” i.e. an idea standing on its own including a bare concept, plan or scheme, and
   1. Methods of comparing data that could be done mentally -- Cybersource¹⁵.
   2. Concepts relating to organizing, storing, and transmitting information – Cyberfone¹⁶.
4. “Mathematical relationships/formulas” including algorithms, mathematical relationships, formulae and calculations.
   1. Converting binary coded decimal values to pure binary values -- Benson¹⁷.
   2. A mathematical formula for hedging – Bilski¹⁸.

It is difficult to find recent cases where software related patents have survived subject matter eligibility analysis by the Federal Circuit or the Supreme Court. Given the numerous examples of ineligible subject matter in the Update and Guidelines combined with the rejection statistics¹⁹ from the USPTO and invalidation statistics²⁰ at the Federal Circuit, it is reasonable to ask whether any claims have recently survived challenge on subject matter eligibility grounds. ��One example outside of the scope of software subject matter is Myriad²¹, where the Supreme Court allowed claims for complementary DNA.

While the Supreme Court invalidated all of the claims in both Bilski and Alice; there is one case related to software subject matter that has survived scrutiny, at least at the level of the Federal Circuit:�� DDR Holdings v Hotels.com²².

DDR Holdings v Hotels.com²³

The Guidelines discuss this case. This is the first Court of Appeal for the Federal Circuit case to uphold the validity of a software subject matter patent since Alice.�� In this patent, the claims were directed to managing the look and feel of an e-commerce website to provide “store within a store” functionality.

The claims in DDR covered a software solution to a problem, which, according to the judgment but not the dissent, was unique to the internet.��The claims dealt with the problem of retaining website visitors at an ecommerce site and offered a solution anchored in software that addressed a challenge unique to the web.�� Specifically, in the prior art a user clicking on an advertisement would be taken away from the host website to the advertising merchant. The claimed invention involves presenting a hybrid page generated by the host website to include a composite of the host website and advertising merchant’s product information. The decision was based, at least in part, on the grounds that the claimed concept lacked a non-technological analog.

Takeaways

When drafting new applications for software-based inventions, it is important to keep in mind the judicial descriptors of ineligible subject matter, and to draft the claims to avoid categorization under any of these judicial descriptors if at all possible.��However, it is also important to keep in mind that this area of law is in flux, and will almost certainly see significant change over the next few years.��In particular, the categories of ineligible subject matter constructed by the USPTO may evolve or grow in number over the next few years as more cases are decided. Eventually, as the courts grapple with more and more cases, clear principles may start to emerge from the present chaos. One day, it may again be possible to rely on general principles to distinguish patent eligible subject matter from ineligible subject matter. At present, that day seems far distant, and for the foreseeable future it will be even more important to keep up-to-date on the latest Federal Circuit and Supreme Court precedent, mostly to know what kinds of subject matter to avoid claiming, but also to keep an eye out for the occasional beacons of hope, such as a DDR.

��is a partner,��lawyer and patent agent in��Bereskin & Parr's Patent Group in the Mississauga��Region. He��is active with the Intellectual Property Institute of Canada (IPIC) and has contributed extensively to patent education in Canada. is a JD candidate at Osgoode Hall School and was a summer student in��Bereskin & Parr's��in��Toronto.��Twitter: .

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In 1990, Kimble patented a device that would allow the user to sling webs of aerosol string from their wrists and tried to sell the idea to Marvel. They demurred, but soon came out with their own, suspiciously similar products:��. In 1997, Kimble sued Marvel and eventually the two sides settled on a licensing agreement that would give Kimble a lump sum plus ongoing royalties based on sales. Later disputes about what precisely constituted sales of the Web Blaster brought the two sides back to court and in that litigation, Marvel brought Brulotte��to the table.

Marvel argued that according to Brulotte, while there was no end date for the royalty payments in the original settlement, no royalties could possibly be owed past the expiry of the original patent. The District Court agreed with Marvel’s application of Brulotte. The Ninth Circuit Court of Appeals . Stare decisis and the need for national uniformity in patent law forced them to apply the Brulotte decision, even though they found it “counterintuitive” and “unconvincing”. Kimble appealed, and the question before SCOTUS was whether to away��the Brulotte interpretation of ?

In applying stare decisis to Brulotte, the majority gave added deference to the existing decision because it was an exercise in statutory interpretation, and more particularly because those statutes have been revisited repeatedly since the Brulotte decision. Despite changes to the surrounding statutes, Congress has not chosen to disturb the details interpreted in Brulotte.

The court did not draw any firm conclusions on whether there are existing royalty agreements that rely on Brulotte, but also gave deference to the decision on the grounds that there might be and disturbing the decision could cause dead agreements to return to life. They also rejected Kimble's proposed alternative — considering each example of post-expiration royalty clauses separately to determine their impact on competitiveness — as more complicated and expensive than the bright line rule established in Brulotte.

Kimble also offered arguments regarding the economic underpinnings of Brulotte, claiming��that��decision was wrong about the effect of post-expiration royalties on competition and on technological innovation. The majority��accepted ������������’s economic analysis, but did not conclude��that it must inevitably lead to overturning Brulotte. First, they note that the bar for overturning a decision is more than simple wrongness, but instead requires “a special justification over and above the belief that the case was wrongly decided." Further, they point out that the original decision in Brulotte was not predicated on the economic principles that Kimble took issue with. The court in Brulotte was not as concerned with protecting competition as with interpreting what they felt was clear Congressional intent.

While they chose not to overturn Brulotte, the majority could not muster an enthusiastic defense, repeatedly acknowledging that it��may have been wrongly decided. Embedded within the decision are no fewer than two dozen references to Congress, including at least four places where they specifically mention that ������������’s arguments would best be addressed to the legislative branch. Much like the Ninth Circuit, SCOTUS does not seem like �����ܱ��dzٳٱ�’s biggest fan. Also much like the Ninth Circuit, they seem to be stuck with it.

Jacquilynne Schlesier is an IPilogue Editor and JD Candidate at Osgoode Hall.

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Background

Teva Pharmaceuticals developed a medication for the treatment of multiple sclerosis called Copaxone. Sandoz Pharmaceuticals submitted to the Food and Drug Administration to develop generic versions of Copaxone. Teva launched a suit in 2012 claiming patent infringement under . “Average molecular weight” was a disputed term which Sandoz claimed to be ambiguous.

After hearing expert evidence, the district court found the term to not be ambiguous, and that Sandoz infringed Teva’s patent. Sandoz appealed to the Federal Circuit Court of Appeal, arguing that “average molecular weight” was “insolubly ambiguous”. The Federal Circuit heard the case de novo without giving deference to the district court’s factual determinations, and unanimously reversed the lower court’s decision. Teva for writ of certiorari to SCOTUS. The petition was granted and were heard on October 15, 2014, and the decision was published on January 20, 2015.

Arguments by Sandoz

In the oral arguments, counsel for Sandoz relied heavily on , a significant case where SCOTUS determined that the interpretation of patent claims are questions of law rather than questions of fact. Sandoz claimed that even fact-finding becomes a legal inquiry, since the district court has to make a legal inference of a fact to put it into context of the patents-in-suit. Being questions of law, Sandoz argued that the Federal Circuit need not give deference to district courts and was��correct in reviewing such claims de novo. Moreover, enforcing deference to the district court will create a “cottage industry of trial lawyers fighting with the judge about which bucket some particular evidence fits into”.

Arguments by Teva

Counsel for Teva pointed to the convention of the judicial system where district court judges find the facts and the Courts of Appeal review those fact-findings deferentially under Rule 52(a). They argued that patent construction claims are hybrids, containing a mix of questions of law and fact. Some cases, like this case, is one where factual findings by��themselves point to the correct outcome since the ultimate legal conclusion rests on fact-finding.

Decision

The majority of SCOTUS held that when reviewing a district court’s resolution of subsidiary factual matters made in the course of its construction of a patent claim, appellate courts must apply a “clear error”, not a de novo, standard of review. They distinguished between evidence intrinsic and extrinsic to the patent. In reviewing intrinsic evidence, a district court judge’s determination is solely a determination of law, which appellate courts can review de novo. When a district court requires��extrinsic evidence and consults experts to settle factual disputes, the judge’s determination is a factual finding that must be given deference unless a clear error has been made.

With regards to Sandoz’s argument that it may be difficult to separate “factual” or “legal” questions, SCOTUS stated that courts of appeals have long been able to separate factual from legal matters. As a result, SCOTUS determined that the Federal Circuit in this case erred in law in failing to review factual findings only for clear error.

Analysis

SCOTUS has settled the controversy in the applicability of Rule 52(a) in relation to patent construction claims that extends beyond the pharmaceutical industry. The decision promotes consistency in the law and judicial integrity of factual determinations at large. Moreover, with on appeal, reviewing patent construction claims de novo provides an incentive for��unnecessary litigation, increases trial costs, and arbitrariness of decisions.

Long-term implications from this ruling are less clear. It is to be expected that district court judgments on patent construction claims will not be appealed as often as before, and litigators will shift the focus of their claims on factual determinations to gain higher certainty on appeal. Since fact-finding often requires expert testimony, litigants will spend a greater amount of resources hiring experts, adding to the complexity for district court judges to explain their judgments in areas where they themselves may not have expertise.

Beyond the pharmaceutical industry, the emphasis of fact-finding in the district court and what constitutes a “clear error” on appeal may have shifted patent litigation in favour of those with deeper pockets to hire experts. It is unclear how this ruling will affect smaller players who claim to have their patent rights infringed by large companies.

Nonetheless, Teva v Sandoz provides greater clarity in litigation for patent construction claims and resolves the controversy of the applicability of Rule 52(a) towards appellate courts.

Jason Ho is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.

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��police should obtain a warrant before searching the cellphones of arrestees. This decision provides better protection of privacy rights of individuals against police power and misconduct.��: Riley v. California and United States v. Wurie, referring to the common question of whether or not police can search an arrestee’s cellphone.

The protection of privacy and contemporaneous challenges

to the United States Constitution prohibits unreasonable and illegal searches and seizures and states that warrants shall be issued only upon probable cause.��However, search incident to arrest is an exception to this rule, which allows search of an arrestee by police officers to protect their safety and prevent any destruction of evidence. In a leading decision,��, the US Supreme court held that a full search of an arrestee upon a legal custodial search, without a warrant, is constitutional and in conformity with the Fourth Amendment. This search also extends to the immediate area under control of the arrestee. However, the scope of this search has long been subject to controversy and privacy advocates have called for new protective measures, as the advent of technology has given rise to an increase in violation of privacy rights. In this digital age, highly sensitive data are carried and stored in cellphones, tablets and laptops making such data prone to theft and illegal access.

One major concern for privacy advocates is if private information stored in a cellphone should��be included in protection against unreasonable search and seizure��under privacy rights offered by the Fourth Amendment, and a warrant be required to access such information upon arrest of an individual? Cellphones and the data they contain, have long been subject to exception and have not been covered by the privacy protection of the Fourth Amendment. The rationale behind this exception is that a cellphone being in an immediate area under control of the arrestee allows police officers its search and seizure, just like a suitcase or a briefcase would be subject to such search and seizure. From this perspective the contents in a cellphone could be compared to the contents found in a briefcase under immediate control of the arrestee, making a cellphone no exception to the search incident to arrest principle. Police officers have continued to search and seize cellphones of arrestees based on this analogy and�� “ cellphones should have no greater protection from a search than anything else police find”.

However, it is worthy of note that there is a significant difference between a suitcase and a cellphone and the type and sensitivity of contents that can be stored in each of these items. Cell phones or computers are sensitive mediums in which extremely private and highly sensitive information could be stored in very large amounts. Cell phones have a strikingly higher storage capacity as compared to other mediums such as briefcases, and the nature of the information that can be stored in them can vary. Privacy advocates have long battled to demonstrate such differences and have urged legislators to take measures in protecting private data found in cellphones and computers.����in the ruling: “Cellphones are powerful devices unlike anything else police may find on someone they arrest said for the court. Because the phones contain so much information, police must get a warrant before looking through them”.����“Modern cellphones are not just another technological convenience. With all they contain and all they may reveal, they hold for many Americans the privacies of life”.�� “Many cell phones now in use are capable of storing and accessing a quantity of information, some highly personal, that no person would ever have had on his person in hard-copy form. This calls for a new balancing of law enforcement and privacy interests. “

in addressing concerns about search and seizure of cellphones and the digital data contained in them, upon arrest of individuals by police.��Privacy advocates in Canada, have also emphasized the differences��in the��sensitivity of private data stored in cellphones compared to information stored as hard-copy or other formats, and have urged legislators to take adequate measures in protecting such data.����“Smartphones are potentially repositories of vast amounts of personal information”. He adds “The privacy interests that are engaged with these kinds of devices are markedly different from the privacy interests in other receptacles.”

Wilson, along with other privacy advocates, believes that due to the significant privacy interests at stake, police officers have to go further and obtain a warrant if they want to do the full forensic analysis of devices such as cellphones and computers.��There are definitely less intrusive, alternative measures that can be taken to prevent destruction of evidence rather than searching private data in a cellphone, unreasonably and needlessly, without a warrant.�� “Authorities concerned about the destruction of evidence the remote erasure of a phone’s contents or the activation of encryption”.

Extensive privacy protection and more stringent police power

The US Supreme Court’s decision prohibiting police from searching an arrestee’s cellphone without a warrant also protects the rights of an accused against illegally obtained evidence and police misconduct. Moreover, this decision reinforces an individual’s privacy against police intrusion and it defines police power in accordance with the privacy requirements of the new technological era. Before this decision, suspects could risk conviction . This phenomenon used to take place in violation of privacy and defense rights of an accused. However, now arrestees can benefit from more extensive rights once again as this decision limits illegally obtained evidence by requiring a search warrant before searching cellphones upon arrest.

in situations where officers reasonably believe there is a risk to their safety or the lives of other individuals. This exception allows protection of the police and public when required.��, “Digital data stored on a cell phone cannot itself be used as a weapon to harm an arresting officer or to effectuate the arrestee’s escape. Officers may examine the phone’s physical aspects to ensure that it will not be used as a weapon, but the data on the phone can endanger no one”.

The US Supreme Court’s revolutionary decision enhances and protects privacy rights all across the county. It can be served as a role model for legislators in other jurisdictions, to take measures in providing better protection to individuals in regards to their private information, in conformity with the requirements of the digital age. This ruling balances the interests of public safety with the protection of private digital information, according to the norms of the 21st century.

Sophia Qureshi��is an IPilogue Editor and an LLM Candidate at Osgoode Hall Law School.

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The Evolution of the Kirby vs. Marvel Saga

In 2010, Marvel filed suit against Kirby’s heirs, who contended that they had the right to issue copyright termination notices to Marvel (and other entertainment powerhouses like Fox, Sony, Universal and Paramount Pictures) on characters created by Kirby under section ��of the . Marvel argued that Kirby’s works were made for hire and thus his estate had no termination rights. In August of 2011 the district court found in favour of Marvel, applying the “instance and expense test” to find that the works were indeed made for hire. The Kirbys thus appealed and subsequently lost both the and a for the Second Circuit appeal court to rehear the case. Their latest brings the issue to where it stands today.

The Issue Hits the Stands

The March filed by the Kirbys to the Supreme Court focused its attack on the “instance and expense” test used by the Second Circuit court to determine if a creation is work for hire (both doctrines explained rather well by IP lawyer Terry Hart ). ��The Kirbys submitted that the test was used “under the 1909 Act to eviscerate the 1976 Act’s inalienable termination right, and it did so with respect to a major independent artist and numerous invaluable works.” It further suggested that the late Kirby was a “creative genius who redefined an industry from a small drafting board in his basement, without financial security or any participation in the success of his creations, [epitomizing] the very author/publisher imbalance Congress sought to remedy in enacting the termination provisions.” The petition acts as a sort of call-to-arms for creators and their families, who would find great power in holding termination rights over the wealthy and powerful studios relying on these individuals for their works and talents.

Marvel Brings the (Asgardian) Hammer Down

Marvel did not hold back in its to the Kirbys, clearly tired of this seemingly never-ending dance (wait, I thought Marvel liked sequels?). In addition to submitting that the case in question presented “a factbound application of a test uniformly adopted by the lower courts” Marvel sharply summarized its position stating: “It [the decision] implicates no circuit split, no judicial taking, no due process violation, and no grave matter of separation of powers. It does not remotely merit this Court’s review.” Amongst the various arguments used to dismiss the Kirbys’ claims, Marvel’s papers include a discussion of why the Second Circuit was correct in finding that Kirby’s creations were works for hire. Marvel noted that comic book legend Stan Lee “supervised the creation of Kirby’s work from conception to publication” and had the authority to approve Kirby’s art or seek revisions, while Kirby was paid at a fixed fee-per-page created. As such, Marvel argues that they, not Kirby, “bore the “risk” and potential expense if the publication of the works was unsuccessful” and that Kirby himself had repeatedly stated that Marvel owned all the rights in his works.

The Interesting Web That Has Been Woven

Even though it will be a while until we know which party the Supreme Court sides with, the Kirby’s reopening of the issue and Marvel’s response have ignited a conversation about copyright and the��idea of work for hire - a concept extremely significant to the entire entertainment industry. On the Kirbys’ team, Hollywood guilds , the , and the submitted an to the Supreme Court, stating that the appeal court’s decision and a broad interpretation of works made for hire regarding commissioned works creates a huge power shift within the entertainment industry in favour of studios. The decision allows for a “presumption that copyright ownership vests in a commissioning party as a work made for hire, rather than in the work’s creator.”

The guilds’ interest in the matter reflects the importance of the case for the entertainment industry, especially if the Supreme Court reviews the issue. As noted by , “film studios, record labels and publishing houses have built their businesses in no small part on the conveyed rights of artists like Kirby, who worked quasi-independently.” If the Supreme Court were to find in favour of the Kirbys’ camp, the leaders of the entertainment industry could see their copyrights in important (and financially lucrative) franchises, characters, and works be challenged and potentially taken away by individual creators and their families or estates. This could result in a huge shift in how these studios, record labels, and publishing houses do business, having to possibly create partnerships with these artists and seek permission to use the works their businesses rely on. The artist’s or creator’s role could thus be elevated within the industry, no longer just a “worker” or “gear” in the machine but a partner in the creation of entertainment products. If Marvel wins or the Supreme Court decides not to revisit the case I can only assume that the status quo would hold and artists and their families may be deterred from spending the time and money to challenge industry giants like Marvel again. Whether this is the correct way for the entertainment industry to function (cue debate on artist’s rights and artistic integrity vs. the commercialization of art and entertainment), that is a discussion for another day.

There is a strong chance the Supreme Court will not open the case. Only a handful of cases from those requested to be reviewed are examined��each year, and as noted by this is a year of hot-button topics and to the that may trump the Kirby estate’s petition in importance. Yet, there are signs that the case may actually be heard. For example, Marvel originally declined to respond to the petition and only did so after being asked to by the Court’s justices because they planned to take the case into conference - a step towards a hearing. Again, nothing has been decided yet, but I think I feel my Spidey senses tingling...

Jaimie Franks is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.��

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