IP News

In deciding Cuozzo, the Court noted that, notwithstanding 35 U.S.C. §314(d) (which states that "[t]he determination by the [PTO] Director whether to institute an inter partes review under [the patent statue] shall be final and nonappealable"), Article III courts were only precluded from reviewing a PTAB decision to institute IPR "where the grounds for attacking the decision to institute [IPR] consist of questions that are closely tied to the application and interpretation of statutes related to the Patent Office's decision to initiate [IPR]." 136 S. Ct. at 2141. In Thryv, the Court found that §315(b)'s time bar was closely tied to the PTAB's application of § 315(b) and was "integral to, indeed a condition on institution." Thryv, Slip Op. at 7. The Court further supported its opinion by finding the America Invents Act's "purpose and design properly reinforce [the Court's] conclusion" that the §315(b) determination was not reviewable. Id. at 8. The court stated that "[a]llowing §315(b) appeals …." Id. at 9. Additionally, "because a patent owner would need to appeal on §315(b) untimeliness grounds only if she could not prevail on patentability, §315(b) appeals would operate to save patent claims." Id. In other words, the only time a time bar would be appealed by a patent owner would be when the time bar should have prevented review, but the patent was found invalid on the merits of the petition by the PTAB.

In a fiery dissent, Justice Gorsuch, joined by Justice Sotomayor in Parts I-IV, admonished the court for allowing the PTAB to "exercise in property-taking-by-bureaucracy" which the government conceded in briefing "was forbidden by law" by §315(b). Thryv, Slip. Op. at 1 (Gorsuch, J., dissenting). In his dissent, Justice Gorsuch notes that under the Court's ruling, the PTAB may openly disregard the law with no repercussions or Article III review. In total, the dissent points to a recent shift in patent law over the past decade in which the Court has steadily embraced a position precluding judicial review. See, id. at 15-17 (Gorsuch, J., dissenting).

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SDNY: Video Game Makers Not Violating Copyright with NBA Player Tattoos

In a copyright infringement lawsuit involving NBA players' tattoos in video games, the U.S. District Court for the Southern District of New York concluded that the game makers and publishers do not infringe the copyrights in the tattoos that were created by the tattoo artists. Solid Oak Sketches, LLC v. 2K Games, Inc., 2020 U.S.P.Q.2d 10256 (S.D.N.Y. 2020)

Solid Oak Sketches, LLC, brought a copyright infringement lawsuit against 2K Games, Inc. and Take-Two Interactive Software, Inc., the publishers and marketers of the video game NBA 2K, based on their depictions of tattoos displayed in the game. At issue were five tattoos (collectively, the Tattoos) inked on LeBron James, Eric Bledsoe, and Kenyon Martin (collectively, the Players), which had been exclusively licensed to Solid Oak. Solid Oaks contended the inclusion of the Tattoos on the simulated video game characters of the Players who bore the actual Tattoos, infringed its copyrights. The district court, after denying defendants' judgment on the pleadings, granted summary judgment to the defendants of no infringement on multiple grounds: de minimus use, an implied license, and fair use.

To analyze if the game's use of the Tattoos was de minimus, the court applied a three-factor balancing test, which measured "(i) the amount of the copyrighted work that is copied, (ii) the observability of the copied work — the length of time the copied work is observable in the allegedly infringing work, and (iii) factors such as focus, lighting, camera angles, and prominence." Solid Oak Sketches, LLC v. 2K Games, 2020 U.S.P.Q.2d 10256, 6-7 (S.D.N.Y. 2020) (internal quotations omitted). The court noted that, inter alia, the Tattoos were only on three of over 400 players available in the game, they measure only "a mere 4.4% to 10.96% of the size that they appear in real life," they are not displayed [in NBA 2K] with sufficient detail for the average lay observer to identify even the subject matter of the [Tatoos]," and that they are out of focus for much of gameplay. Id. at 8 (alterations in original). Ultimately, the court ruled that "[t]he undisputed evidence of record shows that Defendants' use of the Tattoos in NBA 2K falls below the quantitative threshold of substantial similarity" and that "[n]o reasonable fact finder could conclude that Plaintiff has carried its burden of proving that Defendants' use of the copyrighted material was substantially similar to Plaintiff's copyrighted work." Id.

The defendants also argued they "had an implied license to feature the Tattoos as part of the Players' likeness." Id. at 9. The court found that the record "clearly supports the reasonable inference that the tattooists necessarily granted the Players nonexclusive licenses to use the Tattoos as part of their likenesses, and did so prior to any grants of rights in the Tattoos to [Solid Oak]." Id. In making the determination, the court found the facts indicated that the Players each requested the creation of the Tattoos, the artists created the Tattoos by inking the designs, and the artists intended the Players copy and distribute elements of their likeness knowing that the Players were likely to appear in public and the media. Id. As a result, the court reasoned, the Players were never requested to or agreed to limit the exposure of the Tattoos as elements of the Players' likenesses. In that way, the defendants had a right to use the Tattoos as part of an implied licensed to the Players' likenesses.

Lastly, the court analyzed the four factors for fair use as articulated in Bill Graham: 1) the purpose and character of the use; 2) the nature of the copyrighted work; 3) the amount and substantiality of the use; and 4) the effect on the market. See, Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d 605, 608-615 (2d Cir. 2006). For the purpose and character of the use, the court found that the Tattoos as used in the video game were transformative as the purpose was entirely different than that of the Tattoos in which Solid Oak had the respective copyrights. The court also found that the Tattoos were significantly reduced in size, had minimal expressive value in the game, and constituted an inconsequential portion of the game (comprising less than one-thousandth of 1% of the total game data). Solid Oak, 2020 U.S.P.Q.2d at 10-11.

In evaluating the nature of the work, the court found that the Tattoos have previously been published and that the tattoos were more "factual" than "expressive" because the works contained reproductions of other works with commonly used tattoo motifs. See, id. at 11-12. Notably the court stated that "[n]one of the tattooists stated in his declaration that the Tattoos were based on unique or expressive features" and that "[t]o the contrary, the tattooists each stated that the Tattoos copied common tattoo motifs or were copied from designs and pictures they themselves did not create." Id.

For the amount and substantiality of the use, the court found that the evidence showed the Tattoos were used by the defendants in their entirety, but the purpose was to have a transformative effect, which would have been rendered pointless if only a small portion was copied for the game, given the limited impact of the Tattoos in the game.

Lastly, the court evaluated the effect the copying had on the market. The court found that the video-game alone did not adequately represent a realistic alternative to acquiring a copy of the Tattoo designs in a way that would deprive the copyright owner of significant revenues. Id. at 13. While the court found that fact to be dispositive of the fourth factor weighing in favor of fair use, it also added that no "reasonable fact finder could conclude that a market for licensing tattoos for use in video games or other media is likely to develop." Taken together, all four factors favored the video game's depictions of the Tattoos to be fair use.

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Howard J. Shire is Editor-in-Chief of this newsletter and a Partner in the New York office of Pepper Hamilton LLP. He can be reached at [email protected]. Shaleen J. Patel is an associate in the Intellectual Property Department of Pepper Hamilton LLP, resident in the Boston office. He can be reached at [email protected].