Technology & Information Law Blog by Charles Gideon Korrell

Category: Copyright Law

  • All Quiet on the IP Front: SCOTUS Declines Review in All But One IP Case in the 2024–2025 Term

    All Quiet on the IP Front: SCOTUS Declines Review in All But One IP Case in the 2024–2025 Term

    In a typical show of judicial restraint, the U.S. Supreme Court has closed the books on the 2024–2025 term without granting review in any patent, copyright, or trade secret case—and issuing only one decision in a trademark dispute. Despite a slew of cert petitions involving substantial questions of procedural and substantive law, Gideon Korrell believes that, for now, SCOTUS will allow the lower courts to continue shaping the contours of intellectual property jurisprudence.

    Gideon Korrell’s Observations: A Wave of Cert Denials Across Patent Law

    Patent litigants were especially active this term, but none were able to persuade the justices to weigh in. The Court denied certiorari in every patent-related petition it received, including several that raised persistent questions about procedural fairness and the scope of patent eligibility:

    CaseIssue on AppealStatus
    ParkerVision v. TCL (No. 24-518)Challenge to Rule 36 summary affirmance as violating 35 U.S.C. § 144Cert denied (Mar 25, 2025)
    Island IP v. TD Ameritrade (No. 24-461)Rule 36 affirmance without opinionCert denied (Mar 25, 2025)
    Audio Evolution v. USPTO (No. 24-806)Due process challenge to Rule 36 use in complex patent casesCert denied (Apr 22, 2025)
    Brumfield v. IBG (No. 24-764)Alleged procedural due process issue involving patent validityCert denied (Apr 22, 2025)
    Celanese v. ITC (No. 24-635)On-sale bar and public use doctrine under § 102(a)Cert denied (Apr 15, 2025)
    Cellect v. Vidal (No. 23-1231)Whether AIA eliminates obviousness-type double patentingCert denied (Apr 15, 2025)

    Trade Secrets: No Help for Cross-Border or Web Scraping Claims

    Gideon Korrell notes that two trade secret petitions were also rejected:

    • Hytera Communications Corp. v. Motorola Solutions, Inc.
      Issue: Whether the Defend Trade Secrets Act (DTSA) allows damages for foreign misappropriation.
      Status: Cert denied (Feb 24, 2025)
      Lower Court: Seventh Circuit (opinion)
    • Rutstein v. Compulife Software, Inc.
      Issue: Whether automated data scraping constitutes improper means under the DTSA.
      Status: Cert denied (Feb 24, 2025)
      Lower Court: Eleventh Circuit (opinion)

    Both cases raised important extraterritorial and digital enforcement issues under the DTSA, but the Court left the Federal Circuit and Eleventh Circuit rulings intact.

    Copyright Law: No Activity at the High Court

    As of May 2025, Gideon Korrell did not observe any copyright cases argued or granted review by the Supreme Court during the current term. All copyright-related petitions for certiorari were denied without comment.

    Trademark: One Decision, But No Blockbusters

    Charles Gideon Korrell did find where the Court weighed in on one trademark case—offering a limited but important clarification of Lanham Act remedies:

    • Dewberry Group, Inc. v. Dewberry Engineers Inc.
      Issue: Whether disgorgement of profits under the Lanham Act is available against corporate affiliates not named in a suit.
      Holding: No. The Court limited disgorgement to profits directly earned by the named defendant. (opinion)
      Decision Date: Feb 26, 2025
      Lower Court: Fourth Circuit (order)

    While the case resolved a narrow question of remedies, it fell far short of tackling larger trademark law issues such as First Amendment boundaries, reverse confusion, or platform liability.

    Charles Gideon Korrell’s Final Thoughts: A Quiet Term with Lingering Questions

    The 2024–2025 Supreme Court term will be remembered not for reshaping intellectual property law, but for allowing existing trends to stand. Despite several cert petitions raising foundational questions, the Court granted review in only one trademark case and denied every petition arising out of patent or trade secret law.

    This restraint leaves in place:

    • The Federal Circuit’s continued use of Rule 36 summary affirmances—even in complex patent cases
    • Ongoing uncertainty around the extraterritorial reach and digital enforcement of the Defend Trade Secrets Act
    • An incremental approach to trademark remedies under the Lanham Act

    The absence of any § 101 eligibility cases this term is notable, especially given ongoing disagreement among lower courts. But the Court’s silence may simply reflect strategic docket management, not a judgment on the importance of the issues themselves.

    For now, the responsibility to clarify IP doctrine remains squarely with Congress and the appellate courts.

    By Charles Gideon Korrell

  • Court Upholds Limited Damages in Bitmanagement Software GmbH v. United States: Key Takeaways on Copyright Infringement and Licensing

    On January 7, 2025, the United States Court of Appeals for the Federal Circuit issued its decision in Bitmanagement Software GmbH v. United States, affirming a damages award of $154,400 for copyright infringement by the U.S. Navy. The case centered around the Navy’s unauthorized copying and use of Bitmanagement’s 3D rendering software, BS Contact Geo, raising significant issues in copyright law, licensing agreements, and damages calculations.

    Background of the Case

    Bitmanagement, a German software company, initially licensed BS Contact Geo to the Navy in 2008 through seat licenses, which restricted installation to specific computers. In 2012, the parties transitioned to a floating license model, which allowed broader access but required monitoring software (Flexera) to enforce concurrent usage limits. However, the Navy later installed the software on over 429,000 computers without ensuring compliance with the agreed usage restrictions.

    After discovering this breach, Bitmanagement sued the U.S. government for copyright infringement in 2016, leading to a complex litigation over the scope of the Navy’s license and the appropriate damages for the unauthorized copying.

    Major Legal Issues Addressed

    1. Implied License and Copyright Infringement

    One of the core disputes was whether the Navy’s actions constituted copyright infringement or were covered by an implied license. The Court of Federal Claims initially ruled in favor of the Navy, holding that an implied license existed. However, on appeal, the Federal Circuit clarified that while an implied license was granted, it was conditioned on the use of Flexera to track and limit concurrent use. Since the Navy failed to implement this safeguard, its conduct amounted to copyright infringement.

    2. Method of Calculating Damages

    A crucial issue in the case was the method for calculating damages under 28 U.S.C. § 1498(b), which governs copyright infringement claims against the U.S. government. Bitmanagement argued that it should be compensated based on a per-copy basis, amounting to approximately $85.9 million, as the Navy had installed the software on 429,567 computers.

    The Court, however, applied the Gaylord v. United States precedent, which mandates that damages in such cases should reflect a hypothetical negotiation at the time of the infringement. The Court reasoned that because Bitmanagement had previously agreed to floating licenses—where charges were based on concurrent users rather than installations—the hypothetical negotiation would have led to a license fee based on usage rather than per-copy sales.

    3. Burden of Proof on Usage

    The ruling also addressed the burden of proof regarding the Navy’s actual use of the software. The Federal Circuit held that, as the party that breached the licensing agreement, the Navy bore the burden of proving its actual software usage. However, the Court found that Bitmanagement had not sufficiently challenged the government’s usage estimates and did not provide alternative damages calculations.

    4. Admissibility of Expert Testimony

    Bitmanagement challenged the admission of testimony from the government’s expert, David Kennedy, who estimated damages based on Navy usage data. The Court upheld his testimony, finding it credible and aligned with standard methodologies for determining copyright damages in government infringement cases.

    Implications for Intellectual Property and Government Licensing

    1. Importance of Clear Licensing Terms

    This case underscores the importance of well-defined licensing agreements, particularly for software providers dealing with government entities. The failure to enforce explicit monitoring and usage restrictions allowed the Navy to argue for a more limited interpretation of damages.

    2. Challenges in Proving Damages

    The decision highlights the difficulties in proving damages for software infringement, especially when a floating license model is involved. Companies should maintain detailed records of negotiations and enforce monitoring mechanisms to strengthen potential claims in litigation.

    3. Limits on Government Copyright Liability

    Under Gaylord, the Court reaffirmed that copyright damages against the government are limited to “reasonable and entire compensation,” which does not necessarily equate to commercial licensing rates in the private sector. This means companies contracting with the government should anticipate that damages may be awarded based on actual use rather than theoretical maximum exposure.

    Conclusion

    The Federal Circuit’s decision in Bitmanagement Software GmbH v. United States sets a precedent for how copyright damages are calculated in government infringement cases. By affirming a relatively modest damages award, the Court reinforced the principle that compensation should reflect a reasonable licensing negotiation rather than punitive measures. For intellectual property owners, the ruling serves as a reminder to establish clear contractual safeguards and proactively enforce licensing terms to avoid disputes over implied use and damages calculations.

    By Charles Gideon Korrell

  • Motorola v. Hytera: Seventh Circuit Upholds Extraterritorial Reach and $271M Punitive Damages Under the DTSA

    Motorola v. Hytera: Seventh Circuit Upholds Extraterritorial Reach and $271M Punitive Damages Under the DTSA

    In Motorola Solutions, Inc. v. Hytera Communications Corp. Ltd., 108 F.4th 458 (7th Cir. July 2, 2024), the Seventh Circuit issued a sweeping and consequential decision affirming a major trade secret misappropriation verdict against Chinese telecommunications company Hytera. The appellate court’s ruling is especially notable for two reasons: (1) its endorsement of the Defend Trade Secrets Act’s (DTSA) extraterritorial reach, and (2) its affirmance of a $271.6 million punitive damages award, one of the largest ever upheld under the statute. Charles Gideon Korrell believes the decision cements key protections for U.S. companies facing foreign-based misappropriation of proprietary technologies, especially in cases where enforcement through monetary awards alone has proven illusory.

    A Global Theft and a Jury’s Historic Verdict

    The case arises from a brazen and well-orchestrated theft of Motorola’s trade secrets, committed by three former Motorola engineers recruited by Hytera in Malaysia. Acting under Hytera’s direction before and after their resignation from Motorola, the engineers downloaded more than 10,000 documents, including Motorola’s proprietary source code, from its secure systems. That code later appeared—verbatim, including Motorola’s own typos—in Hytera’s competing line of high-end DMR (digital mobile radio) products.

    The jury found in Motorola’s favor on both trade secret and copyright claims, awarding $764.6 million in total damages. The district court later reduced the award to $543.7 million, composed of $135.8 million in compensatory damages under the DTSA, $271.6 million in DTSA punitive damages (the statutory maximum of 2x), and a revised copyright award. Hytera appealed the damages awards, and Motorola cross-appealed the denial of a permanent injunction.

    The DTSA Applies to Foreign Sales: The Extraterritoriality Holding

    One of the core issues on appeal was whether the DTSA permits recovery for trade secret misappropriation occurring outside the United States. The Seventh Circuit became the first federal appellate court to directly confront and resolve this issue—and did so unequivocally in favor of extraterritorial application.

    Hytera argued that because much of its conduct occurred overseas—including the hiring of Motorola engineers and product development—the DTSA should not reach its foreign sales. But the court rejected this argument, relying heavily on 18 U.S.C. § 1837(2), which provides that “this chapter also applies to conduct occurring outside the United States if … an act in furtherance of the offense was committed in the United States.”

    Although § 1837 was originally enacted in 1996 as part of the Economic Espionage Act (EEA), the court reasoned that Congress intended for the 2016 DTSA—which amended the EEA to create a private right of action—to inherit § 1837’s extraterritorial provisions. According to the court, the DTSA must be read as part of a unified statutory scheme:

    “Congress was not acting to change an existing interpretation of the EEA, but rather was creating a private right of action in the statutory chapter. … [T]he chapter amended through the DTSA should be read as a cohesive whole.”

    The court also found that the required “act in furtherance” of the offense had occurred domestically: Hytera had marketed and demonstrated infringing radios at U.S. trade shows, thereby “using” Motorola’s trade secrets in a way sufficient to establish misappropriation under § 1839(5). This act triggered the statute’s extraterritorial application, allowing Motorola to recover damages for Hytera’s worldwide sales of DMR products developed using the stolen trade secrets.

    Charles Gideon Korrell notes that this part of the ruling will likely prove to be the most impactful: it gives teeth to the DTSA’s protections for U.S. companies when the bad actors—and the profits—are overseas, so long as some “act in furtherance” can be shown in the United States.

    $271.6 Million in Punitive Damages Survives Constitutional Scrutiny

    The court also upheld the $271.6 million in exemplary damages awarded under the DTSA, rejecting Hytera’s arguments that the award violated due process.

    The DTSA authorizes punitive damages of up to twice the amount of compensatory damages if the misappropriation is “willful and malicious.” The district court adopted that full multiplier after finding Hytera’s conduct met the standard, and the Seventh Circuit found no constitutional problem with the size of the award.

    In doing so, the court distinguished its prior ruling in Epic Systems Corp. v. Tata Consultancy Services Ltd., 980 F.3d 1117 (7th Cir. 2020), which had vacated a similarly sized punitive damages award under Wisconsin state law. Whereas the Epic Systems award was evaluated against open-ended state law standards, the court explained, the DTSA embodies a congressional judgment about the appropriate cap for punitive damages. That legislative determination is entitled to significant deference under BMW of North America v. Gore, 517 U.S. 559 (1996), and its progeny.

    “There is no reason to search outside the text of the DTSA for legislative guidance … Congress has made a specific and reasonable legislative judgment about punitive damages in cases like this one.”

    The court also emphasized that Hytera’s conduct was exceptionally reprehensible, both in the original theft and in its post-verdict gamesmanship, including deleting evidence, inflating R&D costs, and resisting discovery. That, coupled with the quantifiable harm to Motorola—$86.2 million in lost profits and $73.6 million in avoided R&D costs—justified a 2:1 punitive award. Charles Gideon Korrell observes that the opinion sends a strong message: willful and malicious trade secret theft will not only be punished, but that punishment can—and should—reflect the full gravity of the misconduct.

    Reconsidering Injunctive Relief on Remand

    The Seventh Circuit also found error in the district court’s refusal to revisit its earlier denial of a permanent injunction. Although the court had initially concluded that a royalty-based remedy would suffice, Motorola’s post-trial evidence showed that Hytera was either unable or unwilling to pay the court-ordered royalties.

    The appellate court held that the district court erred in denying Motorola’s Rule 60(b) motion for reconsideration based on a mistaken belief it lacked jurisdiction once the case was on appeal. Under Fed. R. Civ. P. 62.1 and established Seventh Circuit precedent, a district court may (and sometimes must) issue an indicative ruling in such circumstances.

    The panel remanded with instructions for the district court to reassess whether Hytera’s continued misconduct and refusal to pay justify permanent injunctive relief going forward.

    Conclusion

    The Motorola v. Hytera decision will likely become one of the foundational cases for interpreting the Defend Trade Secrets Act. It affirms the statute’s extraterritorial reach, recognizes the broad remedial powers it confers—including large punitive awards—and warns that companies cannot insulate themselves from consequences by offshoring their misconduct. Charles Gideon Korrell believes that with this decision, the Seventh Circuit has made clear that willful misappropriation of U.S. trade secrets will meet with serious and global consequences, particularly where deterrence demands more than just monetary damages.

    By Charles Gideon Korrell