Let’s say the world believes in Unicorns. TikTok is filled with glowing Unicorn affirmation testimonials and whole YouTube channels are dedicated to fuzzy, pixelated videos of Unicorns in the distance.  Learned scientists publish studies speculating about the natural history of Unicorns.

You, on the other hand, are part of the small but sturdy band of Unicorn deniers.  You know that Unicorns don’t exist, that the YouTube videos are of two people in a Unicorn suit, and that the scientists are victims of confirmation bias.  The problem is, no one believes you.  Your anti-Unicorn signs are stolen from your yard  Your tightly-reasoned letters to Unicorn thought leaders go unanswered.  Your protestations become ever more shrill.  Sputum sprays from the corners of your mouth when you address local government meetings. 

In desperation, you buy a billboard in the center of town and express your feelings about Unicorns.  Most would (and do) find your message offensive.  The local government passes an ordinance outlawing offensive billboards.

Can they do that?  

Not likely, based on, among others, Reed v Town of Gilbert. The First Amendment (“Congress shall make no law… abridging freedom of speech”), applied to the states by the Fourteenth Amendment, protects communications from Federal, state and local government interference, with narrow exceptions.  You call the ACLU, which threatens litigation.  Your billboard stays up.

Now for the patent part:

In addition to your interest in cryptozoology, you own patents for a product that you make and sell.  Your competitor copied your patented product and sells the infringing copies to retailers.  You sue your competitor for patent infringement in Federal court.  You notify the retailers that they are selling products that infringe your patent.  You point out that retailers who sell infringing goods are themselves patent infringers and are subject to lawsuit and money damages.  

Your competitor files a counterclaim (effectively a lawsuit against you) for state law unfair competition in your Federal infringement action.  Your competitor alleges that you harmed the competitor’s business by notifying the retailers of the infringement and of the retailers’ potential infringement liability.  The competitor petitions the Federal trial judge for a court order (a ‘temporary injunction’) preventing you from notifying retailers of their infringement or of your competitor’s infringement. The trial judge recognizes that Federal patent rights preempt state claims (like unfair competition) unless the patent owner makes infringement claims ‘in bad faith.’  The trial judge rules that your infringement claims are so meritless that they amount to bad faith.  The trial judge grants the injunction.  Your ability to communicate about your Federal patent rights – your free speech – is completely blocked by the court order. 

Outrageous!

You appeal to the Federal Circuit Court.  The Federal Circuit concludes that everything about the trial judge’s injunction is just… wrong.  

The case is Lite-Netics v Nu Tsi Capital and the technology relates to strings of holiday lights.  The Federal Circuit said that an injunction against speech is “strong medicine that must be used with care and only in exceptional circumstances.”   The court noted that speech asserting patent rights is protected speech based partly on the First Amendment.  To withstand challenge, a court order interfering with protected patent speech must show that a claim of infringement is objectively baseless, meaning that “no reasonable litigant could realistically expect success on the merits,” and subjectively baseless, meaning that the patent infringement claim is a weapon to achieve an aim other than compliance with the patent.  In addition:

“Under the First Amendment, restrictions on protected speech, including injunctions (where allowed at all), must meet tailoring requirements aimed at ensuring that they do not burden speech more than necessary.”

The Federal Circuit amply demonstrated that the trial judge did not understand how to interpret a patent claim and the trial judge’s determination that the infringement claim was “objectively baseless” was wrong.  Since the trial court’s objectively baseless conclusion was wrong, the Federal Circuit did not reach the issue of ‘subjectively baseless.’   The trial judge also failed to tailor the injunction to the minimum interference with speech required.  

Injunction terminated.

The bottom line?  Court orders restricting patent free speech will be rarely granted and even more rarely upheld on appeal.  Similarly, state law counterclaims based on harms from assertion of patent free speech rights will be rarely successful. Incidentally, your humble narrator has no information as to whether Lite-Netics is interested in cryptozoology.

— Robert Yarbrough, Esq.

Leave a Reply