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Playboy’s Suit Charges That Song ‘Best I Ever Had’ by Recording Artist Drake Infringes ’70s Classic ‘Fallin’ in Love’

June 25 2010

Playboy Enterprises Inc. on June 25 filed a suit in a California federal district court, alleging that the song “Best I Ever Had” by recording artist Drake infringes its copyrighted song “Fallin’ in Love” (Playboy Enterprises Inc. v. Drake, C.D. Cal., No. 2:10-cv-04750, 6/25/10).

Plaintiff Playboy Enterprises Inc. owns the copyright in the 1970s classic “Fallin’ in Love” performed by Hamilton, Joe Frank and Reynolds. Playboy filed this suit against recording artist Drake, whose given name is Aubrey Drake Graham, charging that his song “Best I Ever Had” is comprised of the “Fallin’ in Love” sound recording. Playboy’s suit also names defendants Cash Money Records Inc., Universal Music Group Inc., and Universal Music Group Distribution Corp.

According to the complaint, each defendant “willfully, wantonly, and in conscious disregard” to Playboy’s rights “made and distributed in the United States, caused to be made and distributed in the United States, and aided, abetted, contributed to, and participated in the unauthorized making and distribution of phonorecords containing the copyrighted sound recording” owned by Playboy. Among other things, the suit seeks injunctive relief, damages, and attorneys’ fees.

Playboy’s suit was filed by Neville L. Johnson of Johnson & Johnson, Beverly Hills, Cal.

Read the complaint filed in Playboy Enterprises Inc. v. Drake.

Briefs (January 2010 - June 2010)

USPTO Issues a Response to the Bilski v. Kappos Decision

June 20, 2010

The U.S. Patent and Trademark Office June 28 issued a brief press statement in response to the U.S. Supreme Court’s ruling the same day in Bilski v. Kappos, U.S., No. 08-964, 6/28/10).

After the Supreme Court’s Bilski decision was rendered, the USPTO issued the following statement:

The Supreme Court today affirmed the USPTO’s decision that Mr. Bilski’s invention was not patentable subject matter as his claims were drawn to an abstract idea.  Significantly, the Court ruled that the “machine or transformation” test is not the sole determinant of patent eligible subject matter for process claims, but is nevertheless an important “investigative tool” for evaluating their patent eligibility.  The Court also indicated that a business method is, at least in some circumstances, eligible for patenting under Section 101.

The USPTO will be issuing guidance further interpreting the decision as soon as possible.  The USPTO is distributing interim guidance for the examining corps today.

The USPTO’s press release is available here.

Survey Puts European Patent Office at Top of Patent Quality List

June 14, 2010

According to a survey conducted by Thomson Reuters and the Intellectual Asset Management magazine (IAM), the European Patent Office is best in patent quality among the IP5 offices. The survey was announced in a June 14 EPO statement.

The survey, taken among 600 corporate and private practice IP professionals and published in the latest issue of IAM, reported that 71% of corporate counsels found the quality of EPO granted patents “excellent or very good,” with 56% of private practice counsels sharing that opinion. The Japanese Patent Office placed second with a respective ratio of 55% and 40%. The United States Patent and Trademark Office placed third with a 52% to 38% rating. The Korean Intellectual Property Office (29%/21%) and the State Intellectual property Office of the People’s Republic of China (22%/20%) placed fourth and fifth in the survey.

Outgoing EPO President Alison Brimelow said that to have the EPO “seen by the users of the system as delivering the highest-quality patents is the best endorsement any office can hope to get.”
The news release on the Thomson/IAM survey was posted on the EPO’s website.

TTAB Refuses to Dismiss Petition to Cancel ‘WHITE GOLD’ on Fraud Grounds

May 13, 2010

The Trademark Trial and Appeal Board May 13 ruled that Meckatzer Lowenbrau Benedikt Weiß KG’s bid to cancel respondent’s “White Gold” registered marks should not be dismissed because its petition sufficiently alleged fraud (Meckatzer Lowenbrau Benedikt Weiß KG v. White Gold, LLC., Cancellation No. 92051014, TTAB 5/13/10).

Respondent White Gold LLC owns U.S. trademark registrations (3399843 and 3399844) for “WHITE GOLD” and “WHITE GOLD & Design” for use of the mark on various alcoholic beverages, such as “aperitifs; orak; brandy; wine; whisky; gin; vodka; prepared alcoholic cocktails; liqueurs…” Meckatzer Lowenbrau petitioned to cancel the registration, claiming fraud in that WHITE GOLD’s marks had never been used in connection with any product other than vodka. Meckatzer Lowenbrau had attempted to register the mark “WEISS GOLD” – the English translation of which is “White-gold” – to be used in connection with “beers, brewed malt-based alcoholic beverages; mineral waters; aerated waters; fruit juices containing crushed fruit, fruit drinks and lemonades or other carbonated soft drinks and alcoholic beverages, namely, potable spirits and liqueurs.” However, due to respondent’s registration, Meckatzer Lowenbrau’s   application was denied.

After that denial, Meckatzer Lowenbrau engaged a private investigator and then alleged fraud in respondent’s registration based on two factors: (1) at the time of registration, respondent’s marks were not in use with all of the goods referenced in the Statements of Use; and (2) “Respondent knowingly made false, material misrepresentations of fact in procuring the Registrations with the intent to defraud the U.S.P.T.O” because “Respondent knew that [its involved marks] were not in use in connection with all of the goods referenced.”

Originally, the TTAB in 2009 denied respondent’s motion to dismiss the original petition for cancellation. Though it sua sponte dismissed the original petition, the TTAB then gave Meckatzer Lowenbrau 30 days to file an amended cancellation petition.

Despite respondent’s motion to dismiss the amended petition for failure to state a claim under Fed. R. Civ. P. 12(b)(6),  the TTAB  here found that Meckatzer Lowenbrau “has sufficiently alleged fraud” for purposes of the pleading requirements of  Fed. R. Civ. P. 9(b). The allegations here are not based solely on “information and belief,” but are also based on the results of an investigation which, petitioner alleges, revealed that respondent was not using its mark on all of the goods listed in its Statements of Use at the time the Statements of Use were filed, the TTAB said. “More specifically, petitioner alleges that its investigation revealed that respondent’s mark was not used on any of the goods listed in its Statements of Use, other than vodka.”

Citing In re Bose Corp., 580 F.3d 1240 (Fed. Cir. 2009), the TTAB added:

First, the question is not whether petitioner has alleged that a nonparty “specific individual” had the requisite intent, but rather whether petitioner has alleged with particularity that respondent, the defendant and owner of the subject Registrations, had the requisite intent. … We do not read In re Bose as requiring that a party identify a “specific individual” who “knew of the withheld material information or of the falsity of the material misrepresentation, and withheld or misrepresented this information with a specific intent to deceive the PTO,” as respondent argues. Second, as petitioner points out, In re Bose did not change the consequences of fraud, when it is proved. A finding of fraud with respect to a particular class of goods or services renders any resulting registration void as to that class. …Therefore, if petitioner proves its allegations of fraud, it will also establish that respondent obtained registrations to which it was not otherwise entitled.

Read the decision in Meckatzer Lowenbrau Benedikt Weiß KG v. White Gold, LLC.

TTAB Upholds Refusal to Register Mark Since
Applicant’s Pamphlet Specimen Was Mere Advertisement

May 13, 2010

The Trademark Trial and Appeal Board ruled May 12 that the “Anpath” mark was correctly denied registration because the applicant’s submission of a “scanned pamphlet” did not show the mark functioning as a trademark for the goods identified in the notice of allowance, and thus failed to evidence trademark use (In re Anpath Group Inc., Serial No. 77004809, 5/13/10).

Applicant Anpath Group Inc. sought to register the mark “ANPATH” on the Principal Register for “all purpose disinfectant cleaning preparations for Household commercial and industrial use” in International Class 5.

After considering the “scanned pamphlet” that was submitted as a specimen with the statement of use, the trademark examining attorney refused registration on the basis that the pamphlet was a mere advertisement for the goods, rather than a functioning trademark for the goods identified in the notice of allowance.

The TTAB affirmed the rejection. Citing Lanham Act Section 45, 15 U.S.C. §1127, and 37 C.F.R. §2.56, the TTAB said that “[t]he statute and attendant regulations focus on actual affixation of the mark (e.g., a close physical association – either on the goods or on tags, labels and/or containers for the goods).” Beyond the requirement that a trademark for goods performs its function of identifying the source of the goods to the consuming public, “the rules also require that the specimen of use demonstrates a sufficient association between the trademark and the identified goods,” the TTAB continued. Here, the applicant’s “pamphlet” and its “product ordering information” are not directly affixing the trademark on “a label, tag, or container for the goods,” the TTAB said, quoting 37 C.F.R. § 2.56. Further, it noted that the applicant did not argue that that these proffered specimens function as labels affixed to industrial containers for the goods or that they are part of shipping documents accompanying the goods. In the TTAB’s view, the pamphlet was an ordinary advertisement, which does not qualify as a valid trademark use under the Lanham Act.

The TTAB observed that case law interpreting the Lanham Act has drawn a clear line between “mere advertising materials” and point-of-purchase materials that are so closely associated with the goods on display to the consumer that they evidence a trademark use. “It has long been held that specimens are invalid for registration purposes if they constitute mere advertising,” the TTAB said, citing Powermatics Inc. v. Globe Roofing Products Co. Inc., 341 F.2d 127 (CCPA 1965). Here, it could find no reason why the applicant’s pamphlet was not a mere advertisement incapable of evidencing a trademark use.

The TTAB acknowledged that the result here would be different if, like the catalogue in Land’s End Inc. v. Manbeck, 797 F. Supp. 511 (E.D. Va. 1992), the applicant’s materials had detailed descriptions and pictures having trademarks displayed prominently nearby, along with elements such as specifications and options, prices, and a detailed order form. “The specimens herein simply do not contain adequate information for making a decision to purchase the goods and placing an order, and hence, we conclude that applicant’s specimens are nothing more than mere advertisements that do not show use of ANPATH as a trademark for the goods.”

Read the decision in In re Anpath Group Inc.

CAFC Reverses TTAB Ruling Denying Motion to Amend Cancellation
Petition for Failure to Submit Fee for Additional Classes

May 12, 2010

The U.S. Court of Appeals for the Federal Circuit May 12 ruled that the Trademark Trial and Appeal Board was “arbitrary and capricious” in denying a motion to add four classes to a pending petition to cancel a trademark based on the petitioner’s failure to submit the $300 statutory fee for each additional class for which cancellation was sought (Fred Beverages Inc. v. Fred’s Capital Management Co., Fed. Cir., No. 2010-1007, 5/12/10).

The court said that the proper fee was paid for the initial cancellation petition, and that “the TTAB has no stated rule and no established practice of requiring that a supplemental cancellation fee be included with a motion for leave to amend a petition for cancellation.”

Fred’s Capital Management Company obtained registration for its trademarked name in 2006, and the registration covered a variety of goods in International Classes 1, 2, 3, 5, 6, 8, 16, 25, 28, 29, 31, and 32. Fred Beverages Inc. sought cancellation of  FCMC’s  registration in International Class 32 on the ground of abandonment. 37 C.F.R. § 2.6(a)(16) requires that all petitions for cancellation of registered trademarks must be accompanied by a fee of $300.00 per class for which cancellation is sought, and Fred Beverages submitted the requisite $300.00 payment.

Later in the proceedings, Fred Beverages filed a motion for leave to amend its petition to state new grounds of cancellation against FCMC’s mark in International Classes 2, 25, 28, and 29. Fred’s Beverages did not submit any fee in connection with this motion.

The Trademark Trial and Appeal Board entered judgment cancelling the registration in class 32, but it denied the motion for leave to amend on the grounds that the motion was not accompanied by the required fee.

Fred Beverages appealed.

The Federal Circuit reversed the TTAB’s denial of the motion for leave to amend and remanded the case.

“Petitions for cancellation are not accepted for filing unless accompanied by the statutory fee,” the court observed, citing 37 C.F.R. § 2.111(c)(1), (c)(3)(i), and 15 U.S.C. § 1064. However, it noted that “[t]here is no stated rule of the TTAB that a motion for leave to amend a petition for cancellation must be accompanied by the statutory fee corresponding to the classes for which cancellation is sought by amendment.” Further, it noted that the TTAB “did not cite any equitable reason to deny the Motion, but relied solely on Appellant’s failure to file the fee associated with the underlying Petition.” Moreover, the appellate court cited authority suggesting that a motion for leave to amend is considered separately from the underlying filing, and that a jurisdictional prerequisite for the underlying filing, such as the statutorily required filing fee, is not grounds for denying the motion. Ayush Herbs, Inc. Hindustan Lever Ltd., Opposition No. 91172885 (TTAB 2009); Tribal Sportswear, Inc. v. Torquay Enter., Opposition No. 91171576 (TTAB 2007); and Dollar Tree Stores, Inc. v. Everything for a Dollar Store, Inc., 2001 WL 315045 at *3, Cancellation No. 26,850 (March 30, 2001).

Criticizing the TTAB’s decision, Judge Sharon Prost stated:

At a minimum, these cases demonstrate that there is no established practice for deciding whether the statutory fee must accompany a motion for leave to amend a pending petition for cancellation.

It therefore appears that the TTAB has no stated rule and no established practice of requiring that a supplemental cancellation fee be included with a motion for leave to amend a petition for cancellation. The lack of authority for the TTAB’s decision is further confirmed by the fact that the TTAB opinion cited no rule or precedent on point in support of its decision to deny the Motion for Leave in this case.

There is no basis on which to distinguish the circumstances of the present case from those in which the TTAB granted or deferred ruling on motions for leave and set a subsequent deadline for the payment of the underlying fee. Where an agency departs from established precedent without a reasoned explanation, its decision will be vacated as arbitrary and capricious. … In determining whether an agency has provided a reasoned. Where an agency departs from established precedent without a reasoned explanation for departing from precedent or treating similar situations differently, the court looks only to the reasons given by the agency. ... Accordingly, we find that TTAB’s decision in the present case to deny the Motion for Leave was arbitrary and capricious. We hereby reverse the decision of the TTAB denying the Motion for Leave to Amend on the grounds that the filing fee did not accompany the Motion, and remand the case to the TTAB for further proceedings consistent with this opinion.

The opinion was joined by Chief Judge Paul Michel and Senior Judge Raymond Clevenger.

Fred Beverages was represented by H. Jay Spiegel of H. Jay Spiegel & Associates, Mount Vernon, Va. Fred’s Capital Management was represented by Simor L. Moskowitz of Jacobson Holman PLLC, Washington, D.C.

Read the Fred Beverages Inc. v. Fred’s Capital Management Co. opinion.

Industry Blames Piracy for Global Music Sales Decline in 2009

April 28, 2010

A report on the recording industry released Apr. 28 charges that piracy is the likely cause of a seven percent decrease in the industry’s global music revenue in 2009.

According to the Recording Industry in Numbers 2010 (RIN 2010) report released by the International Federation of the Phonographic Industry (IFPI), 80 percent of the revenue decline occurred in the United States and Japan, and the rest of the world showed a 3.2 percent decrease. Global physical sales revenue fell by 12.7 percent.

Commenting on RIN 2010, IFPI Chairman and CEO John Kennedy expressed his displeasure with the results, but still saw a silver lining. "Global music sales in 2009 fell by 7%. This is disappointing, but amid the decline there are some very positive points. No fewer than thirteen countries saw music sales grow in 2009, including important markets such as Australia, Brazil, South Korea, Sweden and the UK.” According to Kennedy, the digital sales in some of those markets “rose at very encouraging rates, reflecting the new opportunities of online and mobile channels. South Korea and Sweden in particular saw striking returns to growth, showing how an improved legal environment can help impact on legitimate music sales."

IFPI’s Kennedy continued:

Reducing piracy is critical if these improvements are going to translate into long term recovery for our global business. Here too there are encouraging developments. France and the UK, in particular, are leading the way with new legislation. There is a huge battle ahead, but also signs that the tide of opinion among governments is shifting as piracy's impact on the economy and jobs becomes clear. There is no doubt in my mind that growth is within reach for the music business - it depends, to a large extent, on how quickly governments can act to deal with piracy and, in doing so, tackle a market distortion that overshadows not just music but all the creative industries.

Read the IFPI’s April 28 press release about the RIN 2010 report.

Mixed Rulings in Trade Secret, Inventorship Case Against Nike

April 20, 2010

The U.S. Court of Appeals for the Federal Circuit ruled Apr. 20 that trade secret misappropriation claims brought against Nike Inc. over golf club technology were barred by the statute of limitations, but that the doctrine of res judicata did not bar the plaintiffs’ claims for inventorship (Gillig v. Nike Inc., Fed. Cir., No. 2009-1415, 4/20/10).

Triple Tee Golf Inc. brought an initial suit in 2004 against Nike Inc., claiming that the company misappropriated his trade secrets relating to golf club technology after it hired a person (Stites) who had learned of the secrets under a confidential agreement with the technology’s creator, John Gillig. However, the district court ruled on summary judgment that Triple Tee lacked standing because it could not show that it acquired the trade secret rights from Gillig. Triple Tee Golf Inc. v. Nike Inc., No. 4:04-CV-302-A, 2007 WL 4260489, at *14 (N.D. Tex. Aug. 10, 2007) (Triple Tee I). The Fifth Circuit affirmed that ruling.

In October 2008, Triple Tee initiated the present action against Nike, this time with Gillig as co-plaintiff and adding inventorship claims that Nike golf club patents should be corrected under 35 U.S.C. § 256.

This time, the district court concluded that the trade secret claim was barred by the statute of limitations and res judicata, and that the inventorship claims were also barred by res judicata because they arose from the same nucleus of operative facts as the trade secret claims in Triple Tee I. The court barred both Triple Tee and Gillig from asserting the claims, reasoning that Gillig was in privity with Triple Tee.

Gillig and Triple Tee appealed.

The Federal Circuit affirmed the ruling that the trade secrets claims were barred under Texas law, which requires that a suit misappropriation of trade secrets be brought not later than three years after the misappropriation is discovered or by the exercise of reasonable diligence should have been discovered.

Though Gillig insisted that the statute of limitations should have been equitably tolled in this case, the Federal Circuit quoted authority recognizing that “a litigant seeking equitable tolling bears the burden of establishing . . . that he has been pursuing his rights diligently.” Pace v. DiGuglielmo, 544 U.S. 408 (2005). “One who fails to act diligently cannot invoke equitable principles to excuse that lack of diligence,” Judge Timothy B. Dyk noted, quoting Baldwin County Welcome Ctr. v. Brown, 466 U.S. 147 (1984). “In this case, Gillig was not diligent in the pursuit of his rights,” he said, pointing out that more than five years passed between the time that Gillig first discovered Nike’s alleged misappropriation and the filing of this suit.

However, the Federal Circuit went on to find that neither collateral estoppel nor res judicata bars Gillig from pursuing his inventorship claims here. The only issue that Triple Tee I decided was that there was no assignment from Gillig to Triple Tee of any trade secret rights in the year 2000, Dyk said. “That determination has no bearing on Gillig’s inventorship interests.”

Dyk added:

Even Triple Tee is not entirely barred from pursuing the inventorship claims. The parties appear to agree that the inventorship claims arose from the same nucleus of operative facts as the trade secret claims. Claims arising from the same nucleus of operative facts are barred by res judicata. … To the extent that Triple Tee is asserting an inventorship correction claim based on a purported 2000 assignment, that claim is, of course, barred, since the district court already found that there was no assignment of rights in 2000. However, to the extent that Triple Tee is asserting an inventorship correction claim based on a later 2005 assignment, there is no bar. The first lawsuit did not address Triple Tee’s claims based on the 2005 assignment.

The district court’s ruling was affirmed in part, reversed in part, and remanded.

The opinion was joined by Judge Richard Linn and Senior Judge S. Jay Plager.

Gillig and Triple Tee were represented by Melvin K. Silverman of M.K. Silverman & Associates, Newark, N.J. Nike was represented by Christopher J. Renk of Banner & Witcoff, Chicago.

Read the Gillig v. Nike Inc. opinion.

CAFC Affirms TTAB Decision That Mattel Did Not Abandon ‘Crash Dummies’

April 16, 2010

The U.S. Court of Appeals for the Federal Circuit Apr. 16 affirmed the Trademark Trial and Appeal Board’s ruling that Mattel Inc. rebutted the statutory presumption of abandonment of its “Crash Dummies” marks by showing evidence that it intended to resume use of the marks during the contested time period (Crash Dummy Movie LLC v. Mattel Inc., Fed. Cir., 4/16/10).

In February of 1997, received an assignment of the “Crash Dummies” trademark portfolio from Tyco Industries Inc., which had first produced a line of toys under the “Crash Dummies” marks in 1991 and obtained federal registrations for the “Crash Dummies” and “The Incredible Crash Dummies” marks in 1993. Mattel officially purchased Tyco in December of 1997. While Mattel was developing new toys, the U.S. Patent and Trademark Office cancelled the registrations for the “Crash Dummies” marks on December 29, 2000, because Mattel did not file a section 8 declaration of use and/or excusable nonuse for the marks.

In March of 2003, Crash Dummy Movie LLC filed an intent-to-use application for the mark “Crash Dummies” for games and playthings. Mattel opposed the application, claiming priority to Tyco’s prior registration and use of the Crash Dummies marks.

The only disputed issue before the Trademark Trial and Appeal Board was whether Mattel was entitled to claim common law trademark rights to the “Crash Dummies” marks predating CDM’s March 2003 filing date.

The Board found a prima facie abandonment of the “Crash Dummies” marks based on three years of nonuse, beginning at the earliest on December 31, 1995, and ending at Mattel’s actual shipment of Crash Dummies toys in December 2003. However, the Board concluded that Mattel rebutted the presumption of abandonment of its common law trademark rights by showing “reasonable grounds for the suspension and plans to resume use in the reasonably foreseeable future when the conditions requiring suspension abate.”

CDM appealed.

The Federal Circuit affirmed the TTAB’s ruling.

A registered trademark is considered abandoned if its “use has been discontinued with intent not to resume such use,” Judge Randall R. Rader observed, quoting Section 45 of the Trademark Act, 15 U.S.C. § 1127. Nonuse for 3 consecutive years constitutes prima facie evidence of abandonment under the statute, and such a prima facie case creates a rebuttable presumption that the trademark owner has abandoned the mark without intent to resume use, Rader continued, citing On-Line Careline Inc. v. America Online Inc., 229 F.3d 1080 (Fed. Cir. 2000). “The burden then shifts to the trademark owner to produce evidence that he either used the mark during the statutory period or intended to resume use,” he said, quoting that authority. “The burden of persuasion, however, always remains with the [challenger] to prove abandonment by a preponderance of the evidence,” he stressed, again quoting On-Line Careline.

Here, the appellate court found that Mattel overcame the statutory presumption of abandonment of its “Crash Dummies” marks. “Substantial evidence supports the Board’s finding that Mattel intended to resume use of the CRASH DUMMIES marks during the contested time period,” the court said. Rader first noted that, in 1998, Mattel entered into discussions with KB Toys about becoming the exclusive retailer of Crash Dummies toys. “Although Mattel did not ultimately enter into the KB Toys agreement, no evidence suggests that Mattel rejected the business opportunity because it decided to abandon the marks,” he stated.

Rader continued:

Second, common sense supports the conclusion that Mattel would not have recorded Tyco’s trademark assignment with the USPTO in 1998 unless it intended to use the CRASH DUMMIES mark within the foreseeable future. Although Mattel later allowed its trademark registrations to lapse, cancellation of a trademark registration does not necessarily translate into abandonment of common law trademark rights. Nor does it establish its owner’s lack of intent to use the mark. … Therefore, Mattel’s failure to file a timely Section 8 declaration of use and/or excusable nonuse for the marks does not negate Mattel’s intent to resume use of the mark.

Third, substantial evidence supports the Board’s finding that Mattel’s research and development efforts from 2000 to 2003 indicate its intent to resume use of the marks. Mattel relied on its internal documents and testimony by Peter Frank, Mattel’s marketing manager, to describe its product development activities. Based on the documents, Frank testified that Mattel began brainstorming ideas for the CRASH DUMMIES toys in 2000, researched and tested them in 2001, and obtained concept approval in 2002. He also explained that Mattel began manufacturing the CRASH DUMMIES toys in October 2003, culminating in actual shipment in December 2003.

In addition, Mattel’s shipment of CRASH DUMMIES toys in December 2003 supports Frank’s testimony about Mattel’s research and development efforts in the early 2000’s. This court does not disregard this record evidence because it falls outside of the three-year statutory period of nonuse. The Board may consider evidence and testimony regarding Mattel’s practices that occurred before or after the three-year statutory period to infer Mattel’s intent to resume use during the three-year period. … Therefore, substantial evidence shows that Mattel continuously worked on developing CRASH DUMMIES toys from 2000 to 2003.

The TTAB decision sustaining the Mattel opposition to CDM’s application was affirmed.

The opinion was joined by Judges Pauline Newman and William C. Bryson.

Crash Dummy Movie LLC was represented by Theodore H. Davis Jr. of Kilpatrick Stockton, Atlanta. Mattel was represented by William C. Rooklidge of Howrey LLP, Irvine, Calif.

Read the Crash Dummy Movie LLC v. Mattel Inc. opinion.

Likely Confusion Exists Between ‘ML’
and ‘ML Mark Lees’ Skin Care Marks

April 13, 2010

The U.S. Court of Appeals for the Federal Circuit Apr. 13 agreed with the Trademark Trial and Appeal Board’s decision to refuse registration to the “ML” mark for skin care products because it would likely cause confusion with the federally registered “ML Mark Lees” mark for nearly identical products  (In re Mighty Leaf Tea, Fed. Cir., No. 09-1497, 4/13/10).

Mighty Leaf Tea sought to register the “ML” mark on the Principal Register in Class 003, for “personal care products and skin care preparations, namely, skin soap, body wash, foam bath, body lotion, body scrub, bath salts and massage oil; potpourri; incense.”

The examining attorney rejected the application under Section 2(d) of the Lanham Act, 15 U.S.C. §1052(d), finding likelihood of confusion with the mark ML MARK LEES, registered in Class 003 on January 27, 1998, for “skin care products, namely, skin cleanser, skin toner, skin cream, skin lotion, skin mask gel, make-up foundation, powder and blush.”

The Trademark Trial and Appeal Board affirmed the refusal to register, and Mighty Leaf Tea appealed.

Among other things, Mighty Leaf Tea argued that the additional words MARK LEES distinguish the registrant’s mark from ML standing alone.However, the TTAB found that the presence of the name MARK LEES in the registered mark does not diminish the likelihood of confusion, because consumers familiar with the registered mark are likely to assume that Mighty Leaf Tea’s ML is merely a variation or shortened version of the registered mark.

The Federal Circuit agreed with the TTAB’s reasoning. Citing a host of cases, Judge Pauline Newman said that “the presence of an additional term in the mark does not necessarily eliminate the likelihood of confusion if some terms are identical.” Quoting In re United States Shoe Corp., 229 USPQ 707 (TTAB 1985), she noted that “Applicant’s mark would appear to prospective purchasers to be a shortened form of registrant’s mark.”

Newman continued:

In this case the Board found, similarly, that ML is likely to be perceived as a shortened version of ML MARK LEES when used on the same or closely related skin care products. The Board thus recognized that these initials comprise a dominant feature of the registered mark, and that a newcomer’s use of the same initials, in connection with the same goods, would likely lead consumers to view the goods as coming from the same source. Avoidance of this kind of confusion about the provenance of goods is the very problem to which the Lanham Act was directed.

The TTAB’s refusal to register was affirmed.

The opinion was joined by Senior Judge Raymond Clevenger and Judge Richard Linn.

Mighty Leaf Tea was represented by Charles C. Valauskas of Valauskas & Pine, Chicago. Solicitor Raymond T. Chen represented the Patent and Trademark Office, Arlington, Va.

Read the In re Mighty Leaf Tea opinion.

Straight-Nozzled Ear Aid Infringes Screw Thread or Ball-Socket Designs

April 1, 2010

The U.S. Court of Appeals for the Federal Circuit ruled Apr. 1 that accused earphones with straight-nozzled and barbed-nozzled attachments infringe patented designs with screw thread and ball-and-socket designs under the doctrine of equivalents (Hearing Components Inc. v. Shure Inc., Fed. Cir., No. 2009-1364, 4/1/10).

In this appeal, Hearing Components Inc. challenged the district court’s decision that Claims 1 and 2 of its patent (5,401,920) covering a hearing aid device  are invalid for indefiniteness. Further, it appealed the court’s judgment as a matter of law that one patent (4,880,076 describing a hearing aid with a screw thread attachment (shown in Figure 1) and another patent (5,002,151) depicting a ball-and-socket attachment (shown in Figure 4) were not infringed by Shure Inc.’s earphones employing a straight nozzle (Shure’s straight and barbed devices appear below).

The appellate court first reversed the finding that Claims 1 and 2 of the ’920 patent are indefinite under 35 U.S.C. § 112, ¶2.

Though the district court found that the “readily installed” phrase is indefinite, Judge Alan Lourie said that this term was not “insolubly ambiguous” under the language of Young v. Lumenis Inc., 492 F.3d 1336 (Fed. Cir. 2007). Lourie explained that while this term is one of degree, the patent specification’s written description provides a clear example of a wax guard that is “readily installed and replaced by a user”: one that “is inexpensive and requires no tools for installation or removal.” He said that the specification also discusses the phrase “readily installed and replaced by a user” in the context of prior art by criticizing devices that were hard to use or required tools for installation or removal.

Continuing, the Federal Circuit agreed with Hearing Components that substantial evidence supported the jury’s verdict that both Shure’s straight- and barbed-nozzled products infringed the asserted claims.

The straight nozzle “performs the claimed function in substantially the same way to achieve substantially the same result as” a screw thread or a ball-and-socket attachment, the court said, quoting Odetics Inc. v. Storage Tech. Corp., 185 F.3d 1259 (Fed. Cir. 1999). Though Shure argued that its straight nozzle does not perform the function “in substantially the same way” because it lacks a male structure on its outer surface, the Federal Circuit said that “no positive male structure is required by the attaching or fastening means; indeed, adhesive is one of the disclosed structures, and it has no positive male structure.” In finding substantial evidence supporting the jury verdict as to the barbed-nozzled earphones, Lourie said that “[i]ndeed, the barbed nozzles have an additional structure of a barb for performing the attaching or fastening function.”

Accordingly, the appellate court reversed the grant of JMOL that Shure’s straight-nozzled products do not infringe, and it affirmed the lower court’s denial of JMOL that Shure’s barbed-nozzled products infringe.

The Federal Circuit also went on to affirm the lower court’s judgment that upholding the jury verdict that the ’076 and ’151 patents were not invalid for obviousness under Section 103 of the Patent Act.
The district court’s ruling was affirmed in part, reversed in part, and remanded.

The opinion was joined by Judges Randall Rader and Alvin Schall.

Hearing Components was represented by Kevin M. Flannery, Dechert LLP, Philadelphia. Shure was represented by Marc S. Cooperman of Banner & Witcoff, Chicago.

Read the Hearing Components Inc. v. Shure Inc. opinion.

Informal Talks With Ex-Colleagues About Infringement
Not Enough for Declaratory Jurisdiction

April 1, 2010

Informal talks that representatives of a declaratory plaintiff had with ex-colleagues about how the patentee might want to litigate over a competitive product are an insufficient basis for jurisdiction under the Declaratory Judgment Act, the U.S. Court of Appeals for the Federal Circuit ruled April 1 (Innovative Therapies Inc. v. Kinetic Concepts Ltd., Fed. Cir., No. 09-1085, 4/1/10).

Kinetic Concepts Inc. owns or exclusively licenses from Wake Forest University five patents (4,969,880; 5,645,081; 5,636,643; 7,198,046; and 7,216,651) relating to medical devices for negative pressure wound therapy, used in treatment of chronic wounds. Innovative Therapies Inc. was established by several former KCI employees, in conjunction with Dr. Paul Svedman, a surgeon who had worked in the field of negative pressure wound therapy.

ITI filed this declaratory judgment action against KCI, arguing that there was a justiciable controversy between the companies based on several factors, including informal phone statements by current KCI representatives indicating that the company “will act aggressively” and “no doubt” sue in response to the Svedman device.

However, the U.S. District Court for the District of Delaware dismissed the suit for lack of declaratory jurisdiction. Among other things, the court found that these phone calls, made to former colleagues who had not seen and had not evaluated ITI’s device, produced impromptu responses, not an assertion of patent rights.

The Federal Circuit agreed, holding that there was no controversy of “sufficient immediacy and reality” between the parties within the language of the U.S. Supreme Court’s ruling in MedImmune Inc. v. Genentech Inc., 549 U.S. 118 (2007).

ITI first pointed to its statement to the Food and Drug Administration that the Svedman device has the “same technological characteristics” as KCI’s previously approved wound therapy device and other FDA-approved devices that KCI has charged with infringement. However, Judge Pauline Newman quoted authority recognizing that representations to a third person about “technological characteristics” do not establish a justiciable controversy with the patentee. Cat Tech LLC v. Tubemaster Inc., 528 F.3d 871 (Fed. Cir. 2008). “Although the parties disputed the extent of knowledge that KCI had about ITI’s filings with the FDA, we agree with the district court that even if KCI knew of ITI’s representations to the FDA, this knowledge of itself did not create a controversy within the contemplation of the Declaratory Judgment Act,” Newman said.

While ITI put great weight on the two phone conversations between its employees and current KCI employees, the district court described these phone calls as a “sub rosa” effort to create jurisdiction “by initiating telephone conversations to employees of the patentee who were not in decision-making positions and who were not informed of the real purpose behind the conversations.” To the district court, these informal conversations did not constitute a threat of suit for patent infringement against a device that had not been seen and evaluated for infringement of any patent.

The Federal Circuit agreed with that reasoning. “The indirection reflected in these conversations did not produce a controversy of such ‘immediacy and reality’ as to require the district court to accept declaratory jurisdiction, Newman said, citing SanDisk Corp. v. STMicroelectronics Inc., 480 F.3d 1372 (Fed. Cir. 2007).

While ITI then cited KCI’s prior enforcement actions against other companies, the Federal Circuit found that more is needed even under the liberalized declaratory judgment jurisdiction standard of MedImmune. Newman said that “MedImmune did not hold that a patent can always be challenged whenever it appears to pose a risk of infringement.”

Newman continued:

Thus while prior litigation is a circumstance to be considered in assessing the totality of circumstances, the fact that KCI had filed infringement suits against other parties for other products does not, in the absence of any act directed toward ITI, meet the minimum standard discussed in MedImmune. … The holding of Micron Tech. Inc. v. MOSAID Techs. Inc., 518 F.3d 897, 901 (Fed. Cir. 2008), is not otherwise, for in Micron the patentee had not only litigated the patents against others, but also had sent several threatening letters to the declaratory plaintiff. The specific facts of each case must be considered, in deciding whether a declaratory action is warranted.

Finally, the appellate court found that the convenience factors of this case do not weigh against dismissal. “ITI has not stated that any party has any significant business operations in Delaware, nor that any witness resides in Delaware, nor that any conduct relevant to any aspect of the parties’ dispute occurred there,” Newman said. Further, she noted that the Middle District of North Carolina is the federal judicial district where Wake Forest and the inventors of four of the five patents in suit are based, and it is the forum in which the sole act of infringement is alleged to have occurred. Moreover, she noted that ITI’s unfair competition claim is also based on conduct that is asserted to have occurred in that forum.

The district court’s dismissal was affirmed.

The opinion was joined by Chief Judge Paul Michel and Judge Sharon Prost.

Innovative Therapies was represented by Jonathan G. Graves of Cooley Godward Kronish, Reston, Va. Kinetic Concepts was represented by Erik R. Puknys of Finnegan, Henderson, Farabow, Garrett & Dunner, Palo Alto, Calif.

Read the Innovative Therapies Inc. v. Kinetic Concepts Ltd. opinion.

CAFC Affirms Ruling That Power Supply System Patent Is Not Invalid

March 30, 2010

The U.S. Court of Appeals for the Federal Circuit Mar. 30 affirmed a district court’s ruling that a patent relating to power supply systems is not invalid for indefiniteness or obviousness (Power-One Inc. v. Artesyn Technologies Inc., Fed. Cir., No. 08-1501, 3/3/10).

In this case, Artesyn Technologies Inc. was accused of infringing three Power-One Inc. patents (7,000,125, 6,936,999, and 6,949,916) relating to power supply systems for controlling, programming and monitoring point-of-load (POL) regulators. Artesyn here appealed only as to the’125 patent, challenging the district court’s reading of the term “POL regulator” as imprecise and asserting that the ’125 patent is obvious as a matter of law.

The Federal Circuit affirmed the ruling of no invalidity.

While Artesyn first argued that the district court’s construction of “POL regulator” failed to articulate the scope of the asserted claims of the ’125 patent in any meaningfully precise manner, the appellate disagreed.

The district court construed “POL regulator” to mean:

[A] dc/dc switching voltage regulator designed to receive power from a voltage bus on a printed circuit board and adapted to power a portion of the devices on the board and to be placed near the one or more devices being powered as part of a distributed board-level power system.

The intrinsic record supports this construction, and despite Artesyn’s contention, the terms “adapted to” and “near” are not facially vague or subjective, the court wrote. Claims using relative terms such as “near” or “adapted to” are insolubly ambiguous only if they provide no guidance to those skilled in the art as to the scope of that requirement, said Judge Virginia M. Kendall of the U.S. District Court for the Northern District of Illinois, sitting by designation. Here, a person of ordinary skill in the field would understand the meaning of “near” and “adapted to” because the environment dictates the necessary preciseness of the terms, she explained.

The phrase “[t]o be placed near …” implies that the dc/dc switching voltage regulator is to be placed on the printed circuit board—somewhere close to or at the load—the device being powered as part of the distributed board-level power system, Kendall continued. Further, citing the ’125 patent specification, she emphasized that “near” means close to or at the load. Similarly, the court relied on the specification to note that the phrase “adapted to power a portion of the devices on the board” means that a POL regulator is one that is capable of delivering power, at the appropriate intensity, to one or more loads on the circuit board.

Accordingly, Kendall found that the district court’s claim construction of the term POL regulator was adequate to fully describe the scope of the claims. She then went on to reject Artesyn’s alternative argument that “POL regulator” is an indefinite term for purposes of Patent Act Section 112, ¶ 2, 35 U.S.C. § 112, ¶ 2.

Finally, the court agreed that Artesyn was not entitled to a judgment as a matter of law that the ‘125 patent is obvious under Section 103 of the Patent Act. Here, Kendall found that the scope of the prior art is limited, that there are significant differences between the invention disclosed in ‘125 patent and the prior art, and that secondary considerations supporting nonobviousness were shown by industry praise of the patented invention and evidence that Artesyn copied the patented invention.

The district court’s ruling was affirmed.

Read the Power-One Inc. v. Artesyn Technologies Inc. ruling.

Patent for Producing Larger Roses Is Invalid Under On-Sale Bar of § 102(b)

March 11, 2010

The U.S. Court of Appeals for the Federal Circuit ruled Mar. 11 that a district court properly granted summary judgment that a patent for producing larger rose heads is invalid under the on-sale bar of Patent Act Section 102(b)  (Delaware Valley Floral Group Inc. v. Shaw Rose Nets LLC, Fed. Cir., No. 2009-1357, 3/11/10).

Shaw Rose Nets LLC and inventor Kenneth Shaw have a patent (5,765,305) covering a process that produces larger rose heads by placing elastic, porous nets over the rose heads during the growing process and removing them before the roses are cut and sold. Delaware Valley Floral Group Inc., Superior Florals Inc., Choice Farms Corp., and Continental Farms LLC brought a declaratory judgment action, charging that the patent was invalid for being on sale more than a year before the patent application filing date in violation of 35 U.S.C. §102(b). Shaw counterclaimed for infringement.

The U.S. District Court for the Southern District of Florida granted summary judgment of invalidity, and Shaw appealed.

The Federal Circuit affirmed the ruling, agreeing that Shaw failed to raise a genuine issue of fact to preclude summary judgment.

Under the on-sale bar at 35 U.S.C. § 102(b), an inventor is barred from obtaining a patent where the patent application is filed more than one year after (1) the product was sold or offered for sale and (2) the invention is ready for patenting, the Federal Circuit observed, citing Pfaff v. Wells Elecs., Inc., 525 U.S. 55 (1998). The appellate court noted that Shaw failed to contest whether the invention was ready for patenting below and considered any argument to the contrary waived.

While Shaw argued that the district court improperly excluded evidence as to when the product was offered for sale, the Federal Circuit found no abuse of discretion in the exclusion of Shaw’s evidence. Judge Sharon Prost noted the district court’s finding that Shaw submitted an errata sheet well after the deadline to make changes to deposition testimony, and that this sheet was directly contrary to Shaw’s earlier, unequivocal deposition statements that 1994 was the date of conception and commercial sales. “Mr. Shaw testified eighteen times that he invented the process described and claimed in the ’305 patent in 1994,” and “we cannot conclude that Shaw does anything more than offer a contradictory declaration to create a genuine issue of material fact,” Prost said.

Having found that Shaw failed to demonstrate that the district court abused its discretion by excluding his errata sheet, the Federal Circuit also detected no abuse of discretion in the decision to exclude testimony of Govindarajan Muthiah, who was hired by Shaw as a graduate student. “The district court found that the critical aspects of Muthiah’s testimony, including the dates of the invention and commercial sale, occurred before Muthiah was hired,” and that he “therefore lacked personal knowledge of those events, Prost explained.

The invalidity ruling was affirmed.

Judges Richard Linn and William Bryson joined the opinion.

The declaratory plaintiffs were represented by Ury Fischer of Lott & Friedland, Coral Gables, Fla., James A. Gale of Feldman Gale, Miami, Ted H. Bartelstone of Ted H. Bartelstone P.A., Miami, and Steven R. Reininger of Rasco Klock Reininger Perez Esquenazi Vigil & Nieto, Coral Gables, Fla.

Shaw was represented by Rhett Traband of Broad and Cassel, Miami.

Read the Delaware Valley Floral Group Inc. v. Shaw Rose Nets LLC opinion.

Agreeing That Farm Boy Marks Are Not Confusingly Similar, CAFC Affirms Dismissal of Trademark Opposition by Odom’s Tennessee Pride

March 11, 2010

The U.S. Court of Appeals for the Federal Circuit affirmed the dismissal of a trademark opposition filed by Odom’s Tennessee Pride Sausage Inc. because the farm boy character used by a grocery store chain is not confusingly similar to the registered Tennessee Pride Farmboy mascot (Odom’s Tennessee Pride Sausage Inc. v. FF Acquisition L.L.C., Fed. Cir., No. 2009-1473, 3/19/10).

Over the past 40 years, Odom’s Tennessee Pride Sausage Inc. has obtained a number of trademark registrations (see top figure) depicting farm boys to designate its products. Odom’s filed a trademark opposition against registration of a mark (see bottom figure) submitted by grocery store operator FF Acquisition L.L.C., arguing that registration would likely cause prospective consumers to be confused, mistaken, or deceived within the meaning of Section 2(d) of the Lanham Act. 15 U.S.C. § 1052(d).

The Trademark Trial and Appeal Board granted summary judgment to FF Acquisition and dismissed Odom’s opposition.

Odom’s appealed.

The Federal Circuit affirmed the TTAB’s ruling. “As the board correctly concluded, the visual distinctions between the marks at issue here create unquestionably different commercial impressions, thereby precluding a finding of likelihood of confusion,” Judge Haldane Robert Mayer wrote. While Odom’s argued that the TTAB looked only at dissimilarity and ignored the other likelihood of confusion factors to consider under In re E. I. DuPont DeNemours & Co., 476 F.2d 1357 (CCPA 1973), Mayer quoted authority stating that a single DuPont factor “may be dispositive in a likelihood of confusion analysis, especially when that single factor is the dissimilarity of the marks.” Champagne Louis Roederer, S.A. v. Delicato Vineyards, 148 F.3d 1373 (Fed. Cir. 1998).

The opinion was joined by Judges Richard Linn and Arthur Gajarsa.

Odom’s Tennessee Pride was represented by Marsha G. Gentner of Jacobson Holman, Washington, D.C.  FF Acquisition was represented by Scott W. Johnston of Merchant & Gould, Minneapolis.

Read the Odom’s Tennessee Pride Sausage Inc. v. FF Acquisition L.L.C. opinion.

CAFC Transfers Metabolite’s Appeal for Lack of Jurisdiction

March 11, 2010

The U.S. Court of Appeals for the Federal Circuit ruled Mar. 11 that it lacks jurisdiction over an appeal by Metabolite Labs. Inc. involving patent license royalties because there is no central patent law issue in dispute and the only remaining issues in the case are those pertaining to state law contract claims (Laboratory Corp. of America Holdings v. Metabolite Labs. Inc., Fed. Cir., No. 2008-1597, 3/11/10).

Accordingly, the court transferred the appeal to the Tenth Circuit.

Metabolite is a non-exclusive licensee of a patent (4,940,658) claiming a method for detecting deficiencies of vitamin B12 and folate by assaying total homocysteine levels and correlating an elevated level of total homocysteine with a deficiency in either cobalamin or folate, and it has the right to sublicense. Metabolite granted LabCorp a license to the know-how and a sublicense to the ’658 patent. LabCorp later began using  using an immunoassay kit developed by Abbott Laboratories and stopped paying both patent and know-how royalties on just the serum-based homocysteine-only assays.
Metabolite and ’658 patent owner Competitive Technologies Inc. sued LabCorp for breach of contract and patent infringement. Metabolite Labs. Inc. v. Laboratory Corp. of America Holdings, 2001 WL 34778749 (D. Colo., Dec. 3, 2001) (“Metabolite I”). The Federal Circuit affirmed the jury’s finding that LabCorp breached the License Agreement, holding that LabCorp’s refusal to pay royalties was a material breach that constitutes termination even if the contract requires written notice. 370 F.3d 1354 (Fed. Cir. 2004) (“Metabolite II”), cert. granted, 546 U.S. 999 (2005), cert. dismissed as improvidently granted, 548 U.S. 124 (2006). LabCorp stopped performing the homocysteine-only assays itself but outsourced the assay by entering into an agreement with a third party. Metabolite filed a post-judgment motion asserting that LabCorp’s referral of the assays to a third party violated the injunction.

In the instant case, LabCorp brought a declaratory judgment action, seeking a judgment on “whether Metabolite can recover damages for activity occurring after the time period covered by the Amended Judgment with respect to a part of an Agreement that has been terminated,” and “whether LabCorp’s outsourcing activity violates any existing contract between LabCorp and Metabolite.” In response, Metabolite counterclaimed for breach of contract, among other state-law claims.

Metabolite appealed the district court’s ruling that no further royalties were due under the license agreement, but LabCorp filed a motion to dismiss or, in the alternative, transfer the appeal to the Tenth Circuit, for lack of jurisdiction.

The Federal Circuit agreed that jurisdiction was lacking and transferred to the case to the Tenth Circuit. Citing the Supreme Court’s rulings in Grable & Sons Metal Products Inc. v Darue Engineering & Manufacturing, 545 U.S. 308 (2005), Empire Healthchoice Assurance Inc. v. McVeigh, 547 U.S. 677 (2006), Judge Arthur Gajarsa said that, for jurisdiction to first exist at the Federal Circuit, a substantial question of patent law must be disputed and require resolution on the merits.

Finding that Metabolite did not satisfy this test, Gajarsa noted that “[b]ecause infringement of the ’658 patent was determined in Metabolite I, here Metabolite’s hypothetical action does not require resolution of a disputed question of patent law central to the disposition of the breach of contract claim.”   “[T]he mere presence of a patent as relevant evidence to a claim does not by itself present a substantial issue of patent law,” Gajarsa insisted, citing Excelstor Tech., Inc. v. Papst Licensing GMBH & Co. KG, 541 F.3d 1373  (Fed. Cir. 2008). Like the declaratory defendant in Speedco Inc. v. Estes, 853 F.2d 909 (Fed. Cir. 1988), Metabolite’s claim would concern only state law contract claims, he reasoned.

Gajarsa summed up:

Because the present cause of action does not arise under federal patent law nor does Metabolite’s right to relief necessarily depend on resolution of a substantial question of federal patent law, this court does not have jurisdiction over this appeal. The action is a state law contract dispute over know-how royalties brought pursuant to the district court’s diversity jurisdiction. Therefore, we transfer the appeal to the United States Court of Appeals for the Tenth Circuit.

The opinion was joined by Judge Kimberly A. Moore.

However, in a dissenting opinion, Judge Timothy B. Dyk argued that “[t]he fundamental error of the majority is that … it fails to look at the controversy prevailing at the time that the complaint was filed.” He explained that LabCorp, in its initial complaint, sought a declaratory judgment that it was not liable for any royalties with respect to the newly outsourced homocysteine-only assays. “In order for Metabolite to prevail on its hypothetical claim for royalties, it would have had to establish that the outsourced homocysteine assays were in fact covered by the ’658 patent,” a substantial question of patent law, he argued.

LabCorp was represented by Gregory A. Castanias of Jones Day, Washington, D.C. Metabolite was represented by Mark A. Perry of Gibson, Dunn & Crutcher LLP, of Washington, D.C.

Read the Laboratory Corp. of Am. Holdings v. Metabolite Labs. Inc. opinion.

Federal Circuit Affirms Injunction, Damages Award Against Microsoft, and Allows Microsoft to File for En Banc Rehearing

March 10, 2010

The U.S. Court of Appeals for the Federal Circuit Mar. 10 reissued its Dec. 22 opinion affirming an injunction and damages award against Microsoft Corp. for infringing a document technology patent with versions of Microsoft Word (i4i Limited Partnership v. Microsoft Corp., Fed. Cir., No. 2009-1504, 3/10/10).

This opinion adds a section discussing Microsoft’s willful infringement.  A nonprecedential ruling issued the same day withdrew the December opinion, replaced it with this March opinion, and allowed Microsoft leave to file a combined petition for panel rehearing and rehearing en banc.

In this suit, a jury found Microsoft Corp. liable for infringing a patent (5,787,449) of i4i Limited Partnership and Infrastructures for Information Inc. (i4i) covering a system and method for the “separate manipulation of the architecture and content of a document”  with Microsoft Word 2003 and Microsoft Word 2007.  The district court followed the verdict with an August 11, 2009 final judgment and permanent injunction.

The final judgment found the ’449 patent valid and enforceable, and that Microsoft willfully infringed the patent. It also found that inventor Michel Vulpe did not engage in inequitable conduct in prosecuting the patent and that i4i’s damages award was not barred by laches. The court awarded $200 million in damages, $40 million in enhanced damages for willful infringement, $37 million in prejudgment interest, and post-verdict damages of $144,060 per day counting back to May 21, 2009.

Among other things, the permanent injunction barred Microsoft from selling, offering to sell, and/or importing in or into the United States any infringing and future Word Products that have the capability of opening an “extensible mark‐up language,” or XML file. The injunction was to go into effect 60 days after the August 11 order.

Microsoft appealed, and the Federal Circuit affirmed that ruling on December 22, 2009. i4i Ltd. v. Microsoft Corp., 589 F.3d 1246 (Fed. Cir. 2009). That opinion rejected Microsoft’s invalidity and noninfringement arguments and upheld the damages awards and permanent injunction in favor of i4i. The March 10 opinion closely tracks that opinion as reported in an earlier story, but adds a discussion on willfulness in response to Microsoft’s argument that it was entitled to a judgment as a matter of law on this issue.

This argument did not change the result here because a reasonable jury could have concluded that Microsoft willfully infringed the ’449 patent based on the evidence presented at trial, the panel concluded. Infringement is willful when the infringer was aware of the asserted patent, but nonetheless “acted despite an objectively high likelihood that its actions constituted infringement of a valid patent,” Judge Sharon Prost said, quoting the en banc ruling in In re Seagate Technology LLC., 497 F.3d 1360 (Fed. Cir. 2007). She noted that after satisfying this objective prong, the patentee must also show that the infringer knew or should have known of this objectively high risk. Here, Prost cited i4i’s evidence that employees attended demonstrations of i4i’s software, which practiced the ’449 patent, that Microsoft employees received i4i’s sales kit identifying the i4i’s software as “patented” technology, and that e-mail exchanges between Microsoft employees explained that the “heart” of i4i’s software was patented. Further, Prost said there was no evidence Microsoft ever made a good faith effort to avoid infringement, and instead company e-mails show Microsoft intended to render i4i’s product “obsolete” and assure “there won’t be a need for [i4i’s] product.”

Prost continued:

Based on this and other evidence presented at trial, it would have been reasonable for the jury to infer that Microsoft went ahead with producing, marketing, and promoting its custom XML editor despite an objectively high likelihood the editor infringed the ’449 patent. This same evidence supports the jury’s finding as to the subjective prong of Seagate. Given the information Microsoft had about i4i’s software and the ’449 patent, Microsoft knew or should have known that there was an objectively high risk of infringement.

As with the December ruling, the appellate court also affirmed the permanent injunction against Microsoft and concluded that the injunction’s effective date should have been five months, rather than sixty days, from the date of its August 11, 2009 order.

The district court’s ruling was affirmed in all other respects.

The opinion was joined by Judges Alvin A. Schall and Kimberly A. Moore.

i4i was represented by Donald R. Dunner of Finnegan, Henderson, Farabow, Garrett & Dunner, Washington, D.C. Microsoft was represented by Matthew D. Powers of Weil, Gotshal & Manges, Redwood Shores, Calif. John W. Thornburgh of Fish & Richardson, San Diego, represented amici curiae Dell Inc. and Hewlett-Packard Co. Richard A. Samp represented amicus curiae Washington Legal Foundation, Washington, D.C.

Read the March 10 i4i Limited Partnership v. Microsoft Corp. opinion.

Design of Patented ‘Stepclaw’ Tool Is Not Infringed by Stanley’s ‘Fubar’

March 9, 2010

The U.S. Court of Appeals for the Federal Circuit March 9 ruled that a patented tool design that combines a hammer with a stud climbing tool and a crowbar was not infringed by the design of a Stanley Works Inc. tool whose over overall visual effect was not substantially similar (Richardson v. Stanley Works Inc., Fed. Cir., No. 2009-1354, 3/9/10).

In this appeal, David A. Richardson challenged a district court’s ruling that the design patent (D507,167) covering his “Stepclaw” carpentry tool that combines a conventional hammer with a stud climbing tool and a crowbar (shown on top) was not infringed by the Stanley Works Inc. “Fubar” (shown on bottom).

The Federal Circuit affirmed the district court’s ruling. A design patent, unlike a utility patent, limits protection to the ornamental design of the article, Judge Alan D. Lourie observed. However, he found that “Richardson’s multi-function tool comprises several elements that are driven purely by utility,” noting that its handle, hammer-head, jaw, and crowbar are dictated by their functional purpose.

Applying the ordinary observer test, the court found significant differences between the ornamental features of the two designs. Lourie explained:

Each of the Fubar tools has a streamlined visual theme that runs throughout the design including elements such as a tapered hammer-head, a streamlined crow-bar, a triangular neck with rounded surfaces, and a smoothly contoured handled. In a side-by-side comparison with the ’167 patent design, the overall effect of this streamlined theme makes the Fubar tools significantly different from Richardson’s design. Overall, the accused products clearly have a more rounded appearance and fewer blunt edges than the patented design. The court therefore was not clearly erroneous in concluding that the accused products embody an overall effect that cannot be found in the ’167 patent design and hence cannot cause market confusion.…

The noninfringement ruling was affirmed.

The opinion was joined by Judge Timothy B. Dyk and Judge Virginia M. Kendall of the U.S. District Court for the Northern District of Illinois, sitting by designation.
Richardson was represented by Geoffrey S. Kercsmar of Kercsmar & Feltus, Scottsdale, Ariz. Stanley Works was represented by Bryan P. Collins of Pillsbury Winthrop Shaw Pittman, McLean, Va.

Read the Richardson v. Stanley Works Inc. opinion.

CAFC Affirms $90 Million Contempt Judgment Against EchoStar

March 4, 2010

The U.S. Court of Appeals for the Federal Circuit Mar. 4 affirmed a $90 million judgment against EchoStar Corp. for being in contempt of a district court’s permanent injunction order barring further infringement of a TiVo Inc. “Multimedia Time Warping System” patent (TiVo Inc. v. EchoStar Corp., Fed. Cir., No. 09-1374, 3/4/10).

In this case, the U.S. District Court for the Eastern District of Texas patent found EchoStar Corp. liable for infringing TiVo Inc.’s patent (6,233,389) on a multimedia “time warping” system that allows users to store selected television broadcast programs while simultaneously watching or reviewing another program. Among other things, the district court found EchoStar in contempt of its permanent injunction order and imposed sanctions against EchoStar in the amount of nearly $90 million. TiVo Inc. v. Dish Network Corp., 655 F. Supp. 2d 661 (E.D. Tex. 2009).

EchoStar appealed.

Affirming the award of sanctions, the Federal Circuit said that the district court did not abuse its discretion in finding that EchoStar’s modified software raised no substantial open questions of infringement. Judge Alan D. Lourie also was persuaded that there was clear and convincing evidence before the district court to find that both accused EchoStar receivers continue to infringe and that there was no abuse of discretion for the court to find EchoStar in contempt of the infringement provision.

The appellate court further found no error in the district court’s conclusion that its injunction required a permanent disablement of all DVR functionality in the specified EchoStar units. “Given EchoStar’s refusal to disable the DVR functionality in its existing devices and the fact that its original attempts to design around TiVo’s patent were wholly unsuccessful, the district court had ample justification for its determination that court pre-approval of any new design-around effort was necessary to prevent future infringing activity,” Lourie wrote.

The opinion was joined by Judge Haldane Robert Mayer.

However, in a dissenting opinion, Judge Randall R. Rader argued that the contempt finding is improper because it is based on an overbroad reading of the district court’s permanent injunction order. Rader stated:

“Even if Echostar had achieved a non-infringing design around, this Court would still find that Echostar is in contempt of this Court’s permanent injunction.” Those words come directly from the district court’s contempt order. In other words, even assuming the modified technology falls outside the asserted claims, Echostar would still be in contempt. How can that be correct?

Under its strained interpretation of its earlier injunction, the district court effectively required Echostar to go into each of its customers’ homes and physically remove each cable box containing any DVR functionality — infringing or not! The trial court required this course of action even in the face of both parties’ recognition that a satellite link could more easily remove or replace the “infringing” technology. In other words, if Echostar would enter each home and replace each of its cable boxes with identical cable boxes uploaded with the same software, it would escape contempt. These absurdities spring from the “disablement provision:”

Defendants are hereby FURTHER ORDERED to, within thirty (30) days of the issuance of this order, disable the DVR functionality (i.e., disable all storage to and playback from a hard disk drive of television data) in all but 192,708 units of the Infringing Products that have been placed with an end user or subscriber. The DVR functionality, i.e., disable all storage to and playback from a hard disk drive of television data) [sic] shall not be enabled in any new placements of the Infringing Products.

While this court manages to find a way to refashion the intent and purpose of the disablement provision, no reasonable patent attorney would read it as this court does. The district court’s injunction applied only to infringing products. The court did not refer to any modified product or any other “DVR functionality” for that matter. Yet, the injunction today applies to any DVR functionality regardless of infringement.

TiVo was represented by Seth P. Waxman of Wilmer Cutler Pickering Hale and Door, Washington, D.C. EchoStar was represented by E. Joshua Rosenkranz of Orrick, Herrington & Sutcliffe, New York.

Read the TiVo Inc. v. EchoStar Corp. opinion.

Infringement Decision Is Vacated Due to Inconsistent Obviousness Verdicts

March 1, 2010

The U.S. Court of Appeals for the Federal Circuit March 1 ruled that a new trial is warranted in a patent infringement suit involving computer cooling devices because the jury reached inconsistent verdicts on the issue of obviousness (Comaper Corp. v. Antec Inc., Fed. Cir., No. 2009-1248, 3/1/10).

Comaper Corp. sued Antec Inc. for infringing its patent (5,955,955) on a cooling device designed to mount within a computer drive bay. Antec appealed a final judgment holding that it willfully infringed Claims 1, 2, 7, 12, and 13, and that independent claims 1 and 12 were not invalid for obviousness under Section 103 of the Patent Act, 35 U.S.C. §103 .
The Federal Circuit affirmed the district court’s claim constructions, but agreed that a new trial should be granted on obviousness. The jury found Claims 1 and 12 not obvious, but found that Claims 2 and 7, which depend from claim 1, and claim 13, which depends from claim 12, were invalid as obvious. Judge Timothy B. Dyk found these verdicts “irreconcilably inconsistent” and ordered a new trial on invalidity.

The opinion was joined by Judges Arthur J. Gajarsa and Randall R. Rader.

Comaper was represented by Stephen J. Driscoll of Saul Ewing, Philadelphia. Antec was represented by Robert P. Andris II of Ropers Majeski, Kohn & Bentley, Redwood City, Calif.

Read the Comaper Corp. v. Antec Inc. opinion.

Dissenting From Memorabilia Obviousness Ruling, Judge Rader Charges That CAFC Has ‘Bias Against Non-Technical Arts’

March 1, 2010

The U.S. Court of Appeals for the Federal Circuit March 1 affirmed a summary judgment ruling that found two patents on cards featuring cut-up pieces of sports memorabilia invalid for obviousness, but Judge Randall R. Rader argued in a dissenting opinion that this innovation was not disclosed in more than a 100 years of trading card history and that the result here shows “this court’s blindness to the underlying facts supporting non-obviousness is a bias against non-technical arts” (Media Technologies Licensing LLC v. Upper Deck Co., Fed. Cir., No. 2009-1022, 3/1/10).

Media Technologies Licensing LLC appealed a district court’s ruling on summary judgment that its patents (5,803,501 and 6,142,532) for trading cards featuring tiny pieces of sports clothing, entertainment clothing, or other memorabilia are invalid for obviousness under Section 103 of the Patent Act, 35 U.S. § 103.

Judge Haldane Robert Mayer, writing for the Federal Circuit, agreed that the patents are obvious combinations of: (a) a trading card with a picture of Marilyn Monroe and a diamond attached to the card; (b) a piece of a sheet purportedly slept on by one of the Beatles attached to a copy of a letter on Whittier Hotel stationery declaring authenticity; (c) a piece of fabric purportedly belonging to a Capuchin Friar named Stephen Eckert attached to paper stock including the friar’s picture; and (d) a greeting card fashioned to look like a novelty item that supposedly includes a piece of jean material belonging to actor James Dean.

The opinion was joined by Judge Alan D. Lourie.

However, in a dissenting opinion, Judge Randall R. Rader complained that the majority relied on “wholly irrelevant prior art” and ignored the huge success of inventor Adrian Gluck’s creations which rebutted a finding of obviousness. He noted that more than 100 years of trading card industry history taught against cutting memorabilia items into pieces. In fact, defendant Upper Deck Co. and others expressed much skepticism and turned Gluck away when he approached them with his idea. “According to the standard wisdom in this field, the dismembered jersey could not enhance the value of either the jersey or the card,” Rader said.

“Without even so much as a cursory review of these unexpected results, the skepticism of experts, the commercial success, the flattery of copying, or any other objective facts, this court concludes in a rather passing fashion that the claimed invention would have been obvious at the time of invention based on the prior art references,” Rader argued. He wrote that the result reached here may have been completely different if Gluck’s innovation involved a more sophisticated technology. Rader stated:

Lurking just beneath the surface of this court’s blindness to the underlying facts supporting non-obviousness is a bias against non-technical arts. No doubt, the invention of the transistor or of the polio vaccine came from more scientific fields and contributed more to the welfare of humanity. This court, however, cannot overlook that many individuals invest vast energies, efforts, and earnings to advance these non-technical fields of human endeavor. Those investments deserve the same protection as any other advances. The incentives for improvement and the protection of invention apply as well to the creator of a new hair-extension design as to a researcher pursuing a cure for cancer. In either case, the PTO and this court are charged with assessing the invention disclosure to determine its worthiness to receive a valuable, but temporally limited, exclusive right.

The district court’s ruling was affirmed.

Media Technologies was represented by Gregory S. Dovel of Dovel & Luner, Santa Monica, Calif. Upper Deck was represented by Matthew Borden of Liner Grode Stein Yankelevitz Sunshine Regenstreif & Taylor, Los Angeles. Defendant Playoff Corp. was represented by Eric D. Kirsch of Cooper & Dunham, New York.

Read the Media Technologies Licensing LLC v. Upper Deck Co. opinion.

Obviousness Ruling Is Vacated as B.P.A.I. Misunderstood Prior Art

February 24, 2010

The U.S. Court of Appeals for the Federal Circuit on Feb. 24 vacated an obviousness determination as to a patent application claiming divalent antibody fragments because it was based on the Board of Patent Appeals and Interferences’s misreading of a prior art reference (In re Chapman, Fed. Cir., No. 2009-1270, 2/24/10).

Andrew Chapman and David King filed a patent application (Serial No. 09/719,045) directed to divalent antibody fragments comprising two antibody heavy chains and at least one polymer molecule attached to the heavy chains in a site-specific manner on each chain.

The Board of Patent Appeals and Interferences found certain claims in application invalid for obviousness based on the Gonzalez patent (6,025,158) describing linking antibody fragments to a polymer to increase an antibody’s circulating half-life for therapeutic purposes.

However, the Federal Circuit vacated the ruling because it found that the Board made errors in reading the Gonzalez reference. Rejecting the Patent and Trademark Office’s argument that these mistakes were merely harmless, the court found them “harmful because they increase the likelihood that Chapman was erroneously denied a patent on grounds of obviousness.”
Judge Timothy B. Dyk explained:

If the Board based its decision on a misunderstanding of Gonzalez, its conclusions regarding obviousness are called into question. … Because we cannot say with confidence that the Board would have reached the same conclusion in the absence of these errors, we are persuaded they are indeed harmful.

On remand, the Board need only revisit its conclusion of obviousness in light of a corrected understanding of Gonzalez. The Board is in no way precluded from, and indeed may be correct in, finding the claims to be obvious, particularly in the light of Gonzalez’s disclosure of joining two antibody fragments together with a polymer to make a dumbbell-shaped structure.

The Board’s ruling was vacated and remanded.

The opinion was joined by Senior Judge Raymond C. Clevenger and Judge Arthur Gajarsa.

Chapman and King were represented by Doreen Yatko Trujillo of Cozen O’Connor, Philadelphia. Frances M. Lynch, associate solicitor, represented the PTO, Alexandria, Va.

Read the In re Chapman opinion.

The En Banc Federal Circuit Will Decide if New Arguments and New Evidence Can Be Presented by Applicants Challenging BPAI Rulings Under § 145

February 17, 2010

The U.S. Court of Appeals for the Federal Circuit on Feb. 17 agreed to decide en banc whether applicants can present new arguments and new evidence in challenging rulings by the Board of Patent Appeals and Interferences in federal district court pursuant to 35 U.S.C. § 145 (Hyatt v. Kappos, Fed. Cir., No. 2007-1066, 2/17/10).

In deciding to take this case en banc, the Federal Circuit vacated its Aug. 11 panel ruling, which found that a district court reviewing the BPAI’s rejection of an applicant’s claims for lack of written description in a § 145 suit properly excluded the applicant’s new evidence. It also denied inventor Gilbert Hyatt’s petition for panel rehearing. As reported in Intellirights’s earlier story, the panel decision found that that this evidence should have been submitted to the Patent and Trademark Office during prosecution. Chief Judge Paul Michel, writing for the majority, said that allowing an applicant to make unfettered submissions of new evidence in Section 145 suits would create de novo trials in district courts and undermine the deference afforded the PTO under case law and the Administrative Procedure Act.

However, Judge Kimberly A. Moore voiced a strong dissent, arguing that “[t]he majority takes away this patent applicant’s fundamental right to a `civil action to obtain [a] patent’ as granted by Congress in 35 U.S.C. § 145.”

The Federal Circuit’s order asks the parties to address the following issues:

(a) Are there any limitations on the admissibility of evidence in section 145 proceedings? In particular—

  • (i) Does the Administrative Procedure Act require review on the agency record in proceedings pursuant to section 145?
  • (ii) Does section 145 provide for a de novo proceeding in the district court?
  • (iii) If section 145 does not provide for a de novo proceeding in the district court, what limitations exist on the presentation of new evidence before the district court?

(b) Did the district court properly exclude the Hyatt declaration?

Read the Feb. 17 order in Hyatt v. Kappos.

‘Don’t Mess With Texas’ Application and Registration Are Successfully Opposed and Cancelled in Consolidated TTAB Proceedings

February 5 , 2010

The Trademark Trial and Appeal Board in consolidated proceedings Feb. 5 sustained the Texas Department of Transportation’s opposition to a pending application for additional clothing items to be covered under the “Don’t Mess With Texas” mark and cancelled the applicant’s existing registration for the mark (Texas Department of Transportation v. Tucker, Cancellation No. 92030882/Opposition No. 91165417, TTAB 2/5/10).

Richard Tucker owns a U.S. trademark registration (1915026) for “DON’T MESS WITH TEXAS” for various items of clothing and filed an application (Serial No. 76121980) for use of the mark on additional clothing items. The Texas Department of Transportation filed a petition to cancel the registration, and then filed a notice of opposition against Tucker’s pending application, claiming priority of use and that Tucker’s marks are likely to cause confusion with TxDOT’s own identical mark used on t-shirts, hats, and other items. These proceedings were consolidated.

The Board on Feb. 5 granted TxDOT’s motion for summary judgment, agreeing to sustain the opposition against Tucker’s application and to cancel his registration. “Having carefully considered the evidence and arguments submitted by the parties in connection with this motion for summary judgment, we find that Tucker has failed to demonstrate that there are any genuine issues of material fact as to priority and the likelihood of confusion between the marks, and that TxDOT therefore is entitled to judgment,” the Board wrote. Not only did the Board find strong evidence of likely confusion, but it also pointed out that “Tucker had prior knowledge of TxDOT’s mark when he adopted it as his mark.”

Read the decision in Texas Department of Transportation v. Tucker.

Another Abbott Test Strip Patent Is Found Invalid on Appeal

January 25 , 2010

On the same day that it found three Abbott glucose test strip patents invalid and unenforceable, the U.S. Court of Appeals for the Federal Circuit ruled Jan. 25 in a separate case that one other patent is invalid for obviousness (Therasense Inc. v. Becton Dickinson and Co., Fed. Cir., No. 2009-1008, 1/25/10).

In this appeal, Abbott Laboratories and Abbott Diabetes Care Inc. challenged a district court’s ruling that their patent 5,628,890 was infringed but invalid. The appellate court the same day decided in another appeal that related glucose test strip patents are invalid and unenforceable.

Here, the Federal Circuit first found error in the district court’s jury instruction regarding invalidity based on anticipation under Section 102 of the Patent Act. The district court instructed the jury that “for anticipation, it is sufficient if the single reference would have informed those skilled in the art that all of the claimed elements could have been arranged as in the claimed invention.”

The way in which the elements are arranged or combined in the claim must itself be disclosed, either expressly or inherently, in an anticipatory reference, Judge Richard Linn said. “[U]nless a reference discloses within the four corners of the document not only all of the limitations claimed but also all of the limitations arranged or combined in the same way as recited in the claim, it cannot be said to prove prior invention of the thing claimed and, thus, cannot anticipate under 35 U.S.C. § 102,” he stressed, quoting Net MoneyIN Inc. v. VeriSign Inc., 545 F.3d 1359 (Fed. Cir. 2008).

Nor does the concept of anticipation through inherency does not change the result since it requires that that all elements must be disclosed in an anticipatory reference in the same way as they are arranged or combined in the claim, Linn continued. “Inherency, however, may not be established by probabilities or possibilities. The mere fact that a certain thing may result from a given set of circumstances is not sufficient,” he stressed, quoting Continental Can Co. USA Inc. v. Monsanto Co., 948 F.2d 1264 (Fed. Cir. 1991).

Despite this legal error in the jury instruction, the court found the error harmless since the ’890 patent was still obvious under Section 103 of the Patent Act. Noting that the jury rendered a verdict of “anticipation or obviousness,” it said that the jury still would have reached the same result since Claims 11 and 12 were obvious over the Nankai reference as a matter of law. These claims require only that a single counter electrode be spaced downstream of a single working electrode, and Nankai’s counter electrode is “downstream” of at least one working electrode, Linn stated.

Accordingly, the invalidity ruling was affirmed.

The opinion was joined by Senior Judge Daniel M. Friedman and Judge Timothy B. Dyk.

Abbott was represented by Rohit K. Singla  of Munger, Tolles & Olson, San Francisco. Bradford J. Badke of Ropes & Gray, New York, represented Becton, Dickinson and Co. and Nova Biomedical Corp.

Read the Therasense Inc. v. Becton Dickinson and Co. opinion.

District Court Misread Claim Language in Elevator Device Patent

January 15 , 2010

The U.S. Court of Appeals for the Federal Circuit ruled Jan. 15 that a lower court misread the claims terms in an elevator system patent to exclude any “personal action” by an elevator user (Schindler Elevator Corp. v. Otis Elevator Co., Fed. Cir., No. 2009-1146, 1/15/10).

In this appeal, Schindler Elevator Corp. and Inventio AG (Schindler) challenged a summary judgment ruling that Otis Elevator Co. did not infringe a   patent (5,689,094) directed to an elevator system that recognizes a user when he or she enters an entry location of a building, then dispatches an elevator to bring the user to a destination floor based on user-specific data. In that ruling, Otis’s accused system installed at 7 World Trade Center in New York City was found noninfringing because, according to the district court, the ’094 patent disclaimed  “any and all types of personal action” by the elevator user.

Specifically, the district court ruled that Otis’s accused system—which involves a passenger using his hands to bring an electronic card within the 3.5-inch effective range of a card reader—could not meet the “information transmitter” and “recognition device” limitations of the ’094 patent because they exclude any “personal action” by an elevator user other than “walking into the monitored area.”
Finding that the inventors never disavowed all personal action during prosecution, the Federal Circuit agreed with Schindler’s argument that this claim construction “is too narrow.” Judge Richard Linn stressed that the statements in the specification and prosecution history on which the district court relied “were directed to elevator operations that occur only after the information transmitter is already within range of the recognition device, not to the initial act of bringing the information transmitter within range of the recognition device.” As the claim language explicitly provides that the transmitter is “carried by an elevator user,” Linn said, carrying a transmitter is thus a type of “personal action” that is expressly required in the claims. Further, he noted that the claims and the specification indicate that a user would need to use his hands to bring the transmitter key within range of the recognition device to unlock the door, or to clock in or out of work—all permitted types of personal action.
Accordingly, the Federal Circuit modified the district court’s construction of “information transmitter” and “recognition device” by striking the phrase “without requiring any sort of personal action by the passenger.” Given this new claim construction, the court vacated the summary judgment of noninfringement and remanded the case.

Judge Timothy B. Dyk agreed that the district court’s construction was too narrow. However, dissenting in part, he argued that the construction reached by the majority was so broad that it includes a swipe card device that is not tied to building access and ignores the disclaimer appearing in both the specification and prosecution history—disclaiming devices that are not “hands-free” and “automatic.” To Dyk, “the action of swiping a card to call the elevator separate from the action required to gain entry to the building is clearly within the disclaimer of both the specification and prosecution history.”
Schindler Elevator was represented by Joseph R. Re of Knobbe, Martens, Olson & Bear, Irvine, Calif. Otis Elevator was represented by Mark L. Levine of Bartlit Beck Herman Palenchar & Scott, Chicago.

Read the Schindler Elevator Corp. v. Otis Elevator Co. opinion.


Briefs | 2009

CAFC Faults Texas Court for Failing to Transfer Nintendo Case

December 17, 2009

The U.S. Court of Appeals for the Federal Circuit on Dec. 17 ruled that the U.S. District Court for the Eastern District of Texas abused its discretion by refusing to transfer a patent infringement suit against Nintendo Co. Ltd. to the Western District of Washington (In re Nintendo Co. Ltd., Fed. Cir., Misc. No. 914, 12/17/09).

For the second time in two weeks, the appellate court has chided the Texas district court for refusing to transfer a case in which witnesses and evidence had more relevant ties to other venues.

Here, Motiva LLC brought suit against Nintendo Co. Ltd and Nintendo of America Inc. in the U.S. District Court for the Eastern District of Texas, alleging that the Nintendo Wii infringed its patent (7,292,151) relating to a human movement measurement system.

Nintendo moved under 28 U.S.C. § 1404(a) to transfer venue, arguing that the Western District of Washington was a far more convenient venue since four witnesses lived in Washington, three lived in Japan, and the two inventors lived in Ohio and New York. Nintendo further noted that none of the parties was incorporated in Texas or had offices in Texas, no witnesses resided in Texas, and no evidence was located in Texas.

When the Texas district court refused to transfer, Nintendo appealed to the Federal Circuit for a writ of mandamus.

Granting the motion, Judge Randall R. Rader relied on In re TS Tech USA Corp., 551 F.3d 1315 (Fed. Cir. 2008) and In re Volkswagen of America Inc., 545 F.3d 304 (5th Cir. 2008). “As in TS Tech and Volkswagen, the district court clearly abused its discretion in denying transfer from a venue with no meaningful ties to the case,” he wrote. Noting that Nintendo of America is based in Washington and “[n]o parties, witnesses, or evidence have any material connection to the venue chosen by the plaintiff,” Rader found that “the record leaves only the conclusion that the local interest in Washington clearly favors transfer.”

Rader also pointed to a case decided on December 2, which similarly found that the Eastern District of Texas abused its discretion by refusing to transfer a suit to the Eastern District of North Carolina. In re Hoffman-La Roche Inc., Fed. Cir, Misc. No. 911, 12/2/09). “This court has held and holds again in this instance that in a case featuring most witnesses and evidence closer to the transferee venue with few or no convenience factors favoring the venue chosen by the plaintiff, the trial court should grant a motion to transfer,” Rader warned.

The opinion was joined by Senior Judge Raymond Clevenger and Judge Timothy B. Dyk.

Alex V. Chachkes of Orrick, Herrington & Sutcliffe, New York, represented Nintendo. Christopher D. Banys of the Lanier Law Firm, Palo Alto, Cal., represented Motiva.

Read the In re Nintendo Co. Ltd. opinion.

CAFC Affirms Ruling That Infringement Was Not Proven Against Sony

December 15, 2009

The U.S. Court of Appeals for the Federal Circuit on Dec. 15 affirmed a summary judgment ruling of noninfringement in favor of Sony Electronics Inc. because the plaintiff could not show that Sony’s accused devices have the “data transmitting means” claimed in a patent covering an apparatus for reading optical disks (Intellectual Science and Technology Inc. v. Sony Electronics Inc., Fed. Cir., No. 2009-1142, 12/15/09).

In this case, a district court granted summary judgment that US JVC Corp., JVC Americas Corp., Panasonic Corp. of North America, and Sony Electronics Inc. did not infringe a patent (5,748,575) owned by Intellectual Science and Technology Inc. claiming an “Information processing apparatus having a multitasking function with one or more optical discs.” While its appeal to the Federal Circuit was pending, Intellectual Science and Technology settled with JVC and Panasonic.

The Federal Circuit affirmed the ruling for Sony, agreeing that Intellectual Science and Technology failed to show any genuine issue of material fact preventing summary judgment.

Judge Randall R. Rader found that Intellectual Science and Technology, through its expert (Michaelson), did not sufficiently identify the structural elements of the claimed “data transmitting means” in the accused devices. “To satisfy the summary judgment standard, a patentee’s expert must set forth the factual foundation for his infringement opinion in sufficient detail for the court to be certain that features of the accused product would support a finding of infringement under the claim construction adopted by the court, with all reasonable inferences drawn in favor of the non-movant,” Rader said, citing Collins v. Northern Telecom Ltd., 216 F.3d 1042 (Fed. Cir. 2000). He found that Michaelson offered “no more than an unsupported conclusion of infringement.”

Continuing, Rader distinguished this case from Applied Medical Resources Corp. v. United States Surgical Corp., 448 F.3d 1324 (Fed. Cir. 2006), which vacated a summary judgment because the patentee’s expert provided a sufficient basis on which a jury could conclude that the identified structure in the accused device, a surgical instrument, was equivalent to the structure claimed in the asserted patent. “[U]nlike this case, the patentee’s expert in Applied Medical had pinpointed the relevant structure in the accused device,” he wrote.

The opinion was joined by Senior Judge Glenn Archer and Judge Arthur Gajarsa.

Intellectual Science and Technology was represented by Andrew Kochanowski of  Sommers Schwartz, Southfield, Mich. Sony was represented by John R. Hutchins of Kenyon & Kenyon, Washington, D.C.

Read the Intellectual Science and Technology Inc. v. Sony Electronics Inc. opinion.                                                

CAFC Affirms Dismissal of Tyco Healthcare’s Infringement Suit

December 7, 2009

The U.S. Court of Appeals for the Federal Circuit on Dec. 7 affirmed a lower court’s decision to dismiss Tyco Healthcare’s patent infringement suit without prejudice because the company could not prove that it owned the asserted patents relating to surgical instruments that employ ultrasonic energy to cut and coagulate blood vessels (Tyco Healthcare Group LP v. Ethicon Endo-Surgery Inc., Fed Cir., No. 2008-1269, 12/7/09).

Tyco Healthcare Group LP, previously called Kendall LLP, was transferred rights to some assets under a 1999 agreement with U.S. Surgical Corp., but it could not prove to a federal district court that these rights included three surgical patents 6,063,050; 6,468,286; and 6,682,544 asserted against Ethicon Endo-Surgery Inc. in an infringement suit. The district court dismissed the suit for lack of standing without prejudice.

While Federal Circuit Chief Judge Paul Michel agreed that Tyco failed to prove ownership of these patents, Judge Paul Newman disputed that conclusion in a dissenting opinion.

Drew M. Wintringham III of DLA Piper US, New York, represented Tyco Healthcare. Barbara L. Mullin of Woodcock Washburn, Philadelphia, represented Ethicon Endo-Surgery.

Read the Tyco Healthcare Group LP v. Ethicon Endo-Surgery Inc. opinion.

CAFC Reverses Ruling on Scope of Licensing Agreement

November 3, 2009

The U.S. Court of Appeals for the Federal Circuit Nov. 3 reversed a district court’s ruling that an agreement covering “Subsidiaries” qualifying “now or hereafter” limited the number of Philips Electronics technology licensees to entities that were in existence before the agreement expired (Imation Corp. v. Koninklijke Philips Electronics N.V., Fed. Cir., No. 2009-1208, 11/3/09).

In this case, Imation Corp. brought a declaratory judgment action against Koninklijke Philips Electronics N.V., U.S. Philips Corp., and Philips Electronics North America Corp. (Philips), seeking a declaration that two companies that it owns a least a 50 percent interest in—Global Data Media FZ-LLC (GDM) and Memorex International Inc. —are licensed “Subsidiaries” under a patent cross-license agreement (CLA) that Philips signed with Minnesota Mining and Manufacturing Company in 1995. The CLA agreement stated that Philips “agrees to grant and does hereby grant to [Imation] and its SUBSIDIARIES a personal, non-exclusive, indivisible, nontransferable, irrevocable, worldwide, royalty-free license under PHILIPS LICENSED PATENTS.”

The district court found that GDM and Memorex did not qualify as “Subsidiaries” under the agreement because they were not formed until after the CLA expired.        
Imation appealed, joined by Moser Baer India Ltd., which owns a 49 percent stake in GDM.

The Federal Circuit reversed the district court’s ruling. Examining the “agrees to grant and does hereby grant” language, the appellate court relied on authority holding that this wording effected a present assignment of rights in future inventions—and thus a valid assignment of legal title to an invention. Filmtec Corp. v. Allied-Signal Inc., 939 F.2d 1568 (Fed. Cir. 1991). Thus, under Filmtec, “no further act would be required once an invention came into being; the transfer of title would occur by operation of law.”

Judge Amy J. St. Eve of the U.S. District Court for the Northern District of Illinois, sitting by designation, then observed that Filmtec’s holding was recently reaffirmed in DDB Tech. L.L.C. v. MLB Advanced Media L.P., 517 F.3d 1284 (Fed. Cir. 2008). St. Eve rejected Philips’s argument that any assignment of an invention made prior to the existence of the invention grants only an expectant interest—an equitable title—and instead found that, under Filmtec and DDB , the “agrees to…” language “constitutes a present grant of rights—albeit to future inventions, but nonetheless a present grant—that vests immediately.”

Continuing, St. Eve ruled that GDM and Memorex qualified as Imation “Subsidiaries” under Section 13 of the CLA, which defines “Subsidiary” as “any . . . form of business organization as to which the party now or hereafter has more than a fifty percent (50%) ownership interest.” She said that the parties could have simply omitted the “or hereafter” language if they had intended to limit a “Subsidiary” to only entities in existence at the time, or they could have specifically listed the subsidiaries. This “unambiguous language … allows class membership to grow (or shrink) over time, and so the non-existence of GDM and Memorex at the time of the license grant did not prevent either entity from receiving the benefits of the fully vested licenses,” the court wrote.

St. Eve concluded as follows:

A plain reading of the Agreement as a harmonious, integrated whole, as New York law requires, …,  establishes that these sophisticated parties created broad cross-licenses that enabled the parties to operate in a given area of technology, free of the risk that the other party would threaten infringement. To make this possible, the parties constructed licenses with a fluid scope that grew with the acquisition of additional patent rights and a fluid membership that changed as the parties—sophisticated corporations operating throughout the world—changed their corporate structures. The court thus holds that the licenses granted by the Agreement extend to any subsidiary of either Imation or Philips that otherwise meets the “Subsidiary” definition of Article 1, Section 13, regardless of when Imation or Philips acquired or formed that subsidiary.

The district court’s ruling was reversed and remanded.

Judges William C. Bryson and Arthur J. Gajarsa joined the opinion.

Imation was represented by Ronald J. Schutz of Robins, Kaplan, Miller & Ciresi, Minneapolis. Marc De Leeuw of Sullivan & Cromwell, New York, represented the Philips entities. Moser Baer was represented by Jeff G. Randall of Skadden, Arps, Slate, Meagher & Flom, Palo Alto, Calif.

Read the Imation Corp. v. Koninklijke Philips Electronics N.V. opinion.

Virginia Man Gets 41 Months for Selling Counterfeit Software

October 22, 2009

The U.S. Department of Justice on Oct. 22 announced that Gregory William Fair was that day sentenced to prison for 41 months for selling counterfeit computer software via the Internet. Assistant Attorney General Lanny A. Breuer of the Criminal Division and Acting U.S. Attorney for the District of Columbia Channing D. Phillips said in a press release that Fair, of Falls Church, Va., was also sentenced to three years of supervised release, ordered to pay $743,098 in restitution, and forfeited $144,000 in currency and numerous vehicles seized as illegal proceeds from the scheme.

On April 16, 2009, Fair pleaded guilty to one count of criminal copyright infringement and one count of mail fraud for using the eBay auction Web site to sell pirated business software, which, according to court documents, had a combined retail value of more than $1 million. The press release added:

The case is part of the Department of Justice’s ongoing initiative to combat the sale of pirated software and counterfeit goods through commercial Web sites and online auction sites. To date, the Department has obtained 39 convictions involving online auction and commercial distribution of counterfeit software. The Department’s initiative to combat online auction piracy is just one of several steps being undertaken to address the losses caused by intellectual property theft and hold responsible those engaged in criminal copyright infringement.

AAA Wins Fight Over Domain Name

October 19, 2009

A federal district court in Pennsylvania ruled in favor of the American Automobile Association Inc. (AAA) on Oct. 19, transferring the domain name to AAA and overturning an earlier decision made by the National Arbitration Forum that had denied the transfer request. According to AAA’s press release, the court’s ruling permanently enjoins “a known cybersquatter from registering, trafficking, or using domain names confusingly similar to AAA’s registered trademarks.”

The ruling ends a long dispute between AAA and defendants James M. Van Johns and QTK Internet Inc. over the domain name, which AAA claimed was used to profit from its trademarks. AAA’s federal complaint also alleged that defendants were engaged in a willful and elaborate cybersquatting and pay-per-click advertising scheme involving over 1,300 domain names, many of which include other famous trademarks owned by others. Under the Oct. 19 consent judgment, the district court barred the defendants from engaging in any activities related to any domain names “identical to or confusingly similar to a registered mark of AAA and/or any AAA subsidiary.”

According to Jim Brehm, corporate counsel for AAA and head of its trademark enforcement efforts, the judgment was “an important victory for AAA” which “reinforces the strength of AAA’s valuable and famous trademarks, and … shows would-be infringers the lengths to which the AAA will go to protect its trademark rights.”

AAA was represented by W. Patrick Delaney of MacDonald, Illig, Jones & Britton, Erie, Pa., and Neil Roman of Covington & Burling, Washington, D.C.   

Read the AAA’s full press release.

Sughrue Mion Partner Is Named AIPLA President

October 19, 2009

The law firm of Sughrue Mion announced Oct. 19 that senior partner Alan Kasper was named president of the American Intellectual Property Law Association (AIPLA) at the annual AIPLA conference in Washington, D.C., on Oct. 17.

Kasper’s “vast experience and strong international ties make him an ideal choice to further the mission of AIPLA and to help guide the formation of American intellectual property law and practice,” stated Cindy Weber, Sughrue’s Mion’s managing partner. A graduate of Georgetown University Law Center, Kasper has led the firm’s international department in Washington, where he has worked for 20 years. Kasper has also served as chief patent counsel for Communications Satellite Corporation, and as a patent examiner at the U.S. Patent and Trademark Office.

“International patent law is undergoing intense scrutiny and many changes are under consideration for the patent laws of the United States,” said Kasper in a press release. “It will be an exciting time to be leading AIPLA in its mission of advocating the adoption of appropriate laws in the United States that will provide holders of United States patents strong protection and laws that facilitate the realities of the international market place.”

Locke Appoints Foley & Lardner Partner as PTO Deputy Director

October 2, 2009

U.S. Commerce Secretary Gary Locke on Oct. 2 appointed Foley & Lardner partner Sharon Barner to the position of deputy director of the Patent and Trademark Office. Barner has 23 years of experienced as a patent attorney, and Locke has hired her to assist PTO Director David Kappos in handling key issues facing the agency.

Locke said in a press release:

I have directed the USPTO to significantly reduce the time it takes to process patent applications,” Locke said. “David Kappos has moved quickly to establish an aggressive agenda to pursue that goal. Sharon is a deeply qualified IP attorney and her experience is an important addition to the USPTO senior leadership as they reshape the office and work with Congress to pass comprehensive patent reform.

Barner is a 1982 graduate of the University of Michigan Law School and chair of Foley & Lardner’s Intellectual Property Department.

Read the PTO’s Oct 2 press release.

CAFC Affirms Noninfringement Ruling on Stent Patents

September 22, 2009

The U.S. Court of Appeals for the Federal Circuit on Sept. 22 affirmed a summary judgment of noninfringement favoring makers of accused blood vessel stents because their devices lack malleable wires required by the asserted patents (Edwards Lifesciences LLC v. Cook Inc., Fed. Cir., No. 2009-1006, 9/22/09). 
Edwards Lifesciences LLC and Endogad Research PTY Ltd. appealed a district court’s ruling on summary judgment that their patents (6,582,458; 6,613,073; 6,685,736; and 6,689,158) covering blood vessel stents were not infringed by Cook Inc. and W.L. Gore & Associates Inc. In particular, the court reasoned that the accused devices do not contain malleable wires, as required by the claim constructions, but instead contain self-expanding wires.

The Federal Circuit affirmed the district court’s ruling. Judge Alan D. Lourie found that the common patent specification uses the words “graft” and “intraluminal graft” interchangeably, that each of the claimed “graft” devices must include wires, and that “the wires required by the claims must be malleable, as the inventors disclaimed the use of resilient, or self-expanding, wires.” He went on to further conclude that the claims requiring devices with “malleable” wires could not be literally infringed by the accused devices featuring substantially resilient wires. Finally, Lourie agreed that the district court properly granted summary judgment of no equivalents infringement, noting that “the inventors disclaimed resilient wires and cannot use the doctrine of equivalents to recapture the disclaimed scope.”

The opinion was joined by Judges Kimberly A. Moore and Randall R. Rader.

Hugh A. Abrams of Sidley Austin, Chicago, represented Edwards Lifesciences and Endogad Research. Richard A. Kaplan of Brinks Hofer Gilson & Lione, Chicago, represented Cook Inc. Harry C. Marcus of Locke Lord Bissell & Liddell, New York, represented W.L. Gore.  

Read the Lifesciences LLC v. Cook Inc. opinion.

ITC Investigates Infringement of LG Flat Panel TV Patents

September 11, 2009

The International Trade Commission on Sept. 11 voted to institute an investigation (No. 337-TA-687) into whether the importation of certain video displays, components thereof, and products containing the same infringe patents asserted by LG Electronics Inc. of Korea (In re Certain Video Displays, 74 Fed. Reg. 47616 (Int’l Trade Comm’n Sept. 11, 2009).

The complaint filed by LG on Aug. 12, 2009 charges that the importation into the United States and sale of the accused products violate Section 337 of the Tariff Act of 1930, 19 U.S.C. §1337, by infringing LG’s patents (5,790,096; 5,537,612; 5,459,522; and 7,154,546).

The respondents in this case are Funai Electric Co. Ltd. of Japan, Funai Corporation Inc. of Rutherford, N.J., P&F USA Inc. of Alpharetta, Ga., and Vizio Inc. of Irvine, Cal. The amended complaint requests that the ITC issue an exclusion order and cease and desist orders.

Read the ITC notice in In re Certain Video Displays.

Federal Circuit Stays Injunction Pending i4i v. Microsoft Appeal

September 3, 2009

The U.S. Court of Appeals for the Federal Circuit on Sept. 3 granted Microsoft’s motion to stay a permanent injunction pending its appeal of a $290 million patent infringement and damages judgment from the U.S. District Court for the Eastern District of Texas (i4i Limited Partnership v. Microsoft Corp., Fed. Cir., No. 2009-1504, 9/3/09).

The nonprecedential, 2-page per curiam order said: “Without prejudicing the ultimate determination of this case by the merits panel, the court determines based upon the motion papers submitted that Microsoft has met its burden to obtain a stay of the injunction.”

In August, the district court entered a final judgment against Microsoft for infringing i4i’s patent (5,787,449) covering a system and method for the “separate manipulation of the architecture and content of a document.” The permanent injunction barring infringing Microsoft Word products was to take effect October 10, 2009.

Read the August ruling by the district court in this case.

ITC Investigates Bulk Welding Wire Containers

September 2 , 2009

The International Trade Commission on Sept. 2 decided to open an investigation (No. 337-TA-686) into whether the importation of certain bulk welding wire containers, components thereof, and welding wire infringe asserted wire packaging patents (In re Certain Bulk Welding Wire Containers, 74 Fed. Reg. 46223 (Int’l Trade Comm’n Sept. 2, 2009).

The complaint filed Aug. 7 by Lincoln Electric Co. of Cleveland, Ohio, and Lincoln Global Inc. of City of Industry, Cal., charges that the importation into the United States and sale of the accused products violate Section 337 of the Tariff Act of 1930, 19 U.S.C. §1337, by infringing six wire packaging patents (6,260,781; 6,648,141; 6,708,864; 6,913,145; 7,309,038; 7,398,881; and 7,410,111.
The respondents in this case are Atlantic China Welding Consumables Inc. of China, ESAB AB of Sweden, Hyundai Welding Co. Ltd. and Kiswel Co. Ltd., both of Korea, and Sidergas SpA of Italy. The complaint requests an exclusion order and cease and desist orders.

Read the ITC notice in In re Certain Bulk Welding Wire Containers.            

ITC Investigates Alleged Infringement of Samsung Patents

August 27, 2009

The International Trade Commission on Aug. 27 decided to open an investigation (No. 337-TA-685) into whether the importation of certain flash memory and products containing the same infringe asserted semiconductor patents in In re Certain Flash Memory, 74 Fed. Reg. 45468 (Int’l Trade Comm’n Aug. 27, 2009).

The investigation comes in response to a complaint filed with the ITC July 31 by Samsung Electronics Co. Ltd. of Korea. Samsung’s complaint charges that the importation into the United States and sale of the accused products violate Section 337 of the Tariff Act of 1930, 19 U.S.C. §1337, by infringing two semiconductor device patents (6,930,050 and 5,740,065).

The respondents in this case include Spansion Inc. and Spansion LLC, both of Sunnyvale, Cal., Spansion Japan Limited and Alpine Electronics Inc., both of Japan, and eight other companies. Samsung requests that the ITC issue an exclusion order and a cease and desist order following the investigation.

Read the ITC notice in In re Certain Flash Memory.            

TiVo Sues Verizon and AT&T Over ‘Time Warp’ Technology

August 26, 2009

TiVo Inc. filed two suits Aug. 26 against Verizon and AT&T Inc. in the U.S. District Court for the Eastern District of Texas, charging that the companies have infringed three patents relating to its digital video recording technologies (TiVo Inc. v. Verizon Communications Inc., E.D. Tex., No. 09-cv-257, 8/26/09 and TiVo Inc. v. AT&T Inc., E.D. Tex., No. 09-cv-259, 8/26/09).

The suits allege that Verizon’s FIOS TV service and AT&T’s U-verse service infringe TiVo’s patent (6,233,389) on a multimedia “time warping” system that allows users to store selected television broadcast programs while simultaneously watching or reviewing another program. TiVo also alleges infringement of its patent (7,493,015) on an “automatic playback overshoot correction system,” and its patent (7,529,465) “system for time shifting multimedia content streams.”

In June, Judge David Folsom, also of the Eastern District of Texas, ordered Dish Network Corp. and EchoStar Corp. to pay TiVo $192.7 million in damages and interest for infringing the ‘389 “time warping” patent. That case is now on appeal at the U.S. Court of Appeals for the Federal Circuit.

Lead counsel for TiVo in the Aug. 26 filings is Sam Baxter of McKool Smith, Marshall, Tex.

ITC Investigates Accused Articulated Measuring Arms

August 25, 2009

The International Trade Commission on Aug. 25 opened an investigation (No. 337-TA-684) into whether the importation and sale of certain articulated coordinate measuring arms and components thereof infringe an asserted patent. In re Certain Articulated Coordinate Measuring Arms, 74 Fed. Reg. 44384 (Int’l Trade Comm’n Aug. 25, 2009).

The investigation comes in response to a complaint filed July 28 with the ITC by Hexagon Metrology AB of Sweden and Hexagon Metrology Inc. of North Kingstown, Rhode Island. According to the complainants, the patent (5,829,148) is infringed by the importation into the United States and sale of the accused products in violation of Section 337 of the Tariff Act of 1930, 19 U.S.C. §1337.

The respondents in this case are Metris N.V. of Leuven, Belgium, Metris U.S.A. Inc. of Brighton, Mich., Mitutoyo Corp. of Kanagawa, Japan, and Mitutoyo America Corp. of Aurora, Ill. The complaint requests an exclusion order and a cease and desist order following the investigation.

Read the ITC notice in In re Certain Articulated Coordinate Measuring Arms.

ITC Investigates Dell, Apple Flash Memory Devices

August 24, 2009

The International Trade Commission on Aug. 24 opened an investigation (No. 337-TA-683) into whether the importation and sale of certain multilevel cell (MLC) flash memory devices by Dell Inc., Apple Inc., and other companies infringe five patents. In re Certain MLC Flash Memory Devices, 74 Fed. Reg. 43723 (Int’l Trade Comm’n Aug. 24, 2009).

The investigation comes in response to a complaint filed July 27 with ITC by BTG Int’l Inc. of West Conshohocken, Pa. The complaint alleges violations of Section 337 of the Tariff Act of 1930, 19 U.S.C. §1337, in the importation, sale for importation, and sale within the United States after importation of certain MLC flash memory devices and products containing the same that infringe the asserted patents (5,394,362; 5,764,571; 5,872,735; 6,104,640; and 6,118,692).

The respondents in this case are 16 companies that include Samsung Electronics Co. Ltd. of Seoul, South Korea, Apple Inc. of Cupertino, Cal., Dell Inc. of Round Rock, Tex., Research in Motion Ltd. of Ontario, Canada, and Sony Corp. of Tokyo, Japan. The complaint requests issuance of an exclusion order and a cease and desist order after the investigation.

Read the ITC notice in In re Certain MLC Flash Memory Devices.

Federal Circuit Grants Stay of En Banc Proceedings in Tafas v. Kappos

August 21, 2009

The U.S. Court of Appeals for the Federal Circuit Aug. 21 granted a stay of the en banc proceedings in the litigation testing the legality of the Patent and Trademark Office’s proposed rules to limit the number of continuation applications and claims that can be filed by patent applicants (Tafas v. Kappos, Fed. Cir., No. 2008-1352, 8/21/09). The order, in response to the parties’ joint motion for a stay, states that the “ the appellants' additional en banc brief [of the PTO and Director David Kappos] is due within 60 days of the date of filing of this order.”

Read the Federal Circuit’s August 21 order.

See earlier story “Federal Circuit Agrees to Rehear Legality of PTO Claim Rules En Banc”.

Expedited Review Is Granted in i4i v. Microsoft Appeal

August 19, 2009

The U.S. Court of Appeals for the Federal Circuit on Aug. 19 granted expedited review of Microsoft’s appeal of a $290 million infringement and damages judgment from the U.S. District Court for the Eastern District of Texas (i4i Limited Partnership v. Microsoft Corp., Fed. Cir., No. 2009-1504, 8/19/09). In a motion before Judge Sharon Prost, the court denied Microsoft’s request for a stay of the permanent injunction, which becomes effective October 10, 2009, but it granted Microsoft’s motion for expedited briefing. According to a second Aug. 19 order, Microsoft’s opening brief is due Aug. 25, 2009, and the case will be heard September 23, 2009.

Read the Aug. 19 order 1, part 1 , order 1, part 2.

Read the earlier story on this infringement case.

McAfee-Owned Entity Permanently Enjoined Over Web Security Patents

August 18, 2009

Finjan Inc., a maker of Internet security solutions, obtained a permanent injunction from the U.S. District Court for the District of Delaware Aug. 18. in a patent infringement suit against Secure Computing Corp., a company owned by McAfee Inc. (Finjan Inc. v. Secure Computing Corp., D. Del., No. 06-369 (GMS), 8/18/09).

Finjan sued Secure Computing for selling products that infringe its three U.S. patents (6,092,194, 6,804,780, and 7,058,822). Affirming the jury verdict and damages award, Chief Judge Gregory M. Sleet also agreed that enhanced damages were warranted since “Finjan’s patents were copied deliberately,” “It is an important day for Finjan and a great win for Finjan’s web security technology,” Gadi Maier, Finjan’s chief executive officer, said in a press release on the company’s website.

Read the court’s Aug. 18 injunctive order in Finjan v. Secure Computing.

Schering-Plough Announces Settlements Over Generics of Clarinex

August 11, 2009

Drug innovator Schering-Plough Corp. announced Aug. 11 that it has reached  settlement agreements with Orchid Chemicals & Pharmaceuticals Ltd. and Orgenus Pharma Inc. (Orchid) related to the generic manufacturing of certain formulations of CLARINEX (desloratadine). The agreement concludes all pending suits filed and consolidated since 2006 in the U.S. District Court for the District of New Jersey against generic drug companies that had sought Food and Drug Administration approval to market generic solid oral dosage forms of desloratadine products in the United States prior to the expiration of certain Schering patents. “This agreement resolves all pending patent infringement litigation filed by Schering Corp. against Orchid and will allow Orchid to introduce a generic version of the CLARINEX brand REDITABS (orally-disintegrating tablets) to be introduced into the U.S. market on January 1, 2012, and CLARINEX brand 5 milligram tablets to be introduced on July 1, 2012,” Schering stated on its website.

Smith & Nephew Wins Patent Ruling in German Court

August 11, 2009

Smith & Nephew Inc., a maker of products for orthopedic reconstruction, orthopedic trauma, endoscopy, wound management, and clinical therapies, on Aug. 11 announced that a district court in Dusseldorf, Germany, ruled in its favor by rejecting a preliminary injunction request by Kinetic Concepts Inc. in a patent infringement case. Smith & Nephew’s Advanced Wound Management division said that the injunctive relief was sought in a suit by Kinetic Concepts Inc. charging infringement of European Patent 0777504. Smith & Nephew said that the decision clears the way for the continued marketing of its RENASYS* EZ Negative Pressure Wound Therapy (NPWT) product portfolio in Germany in Germany.

Robin Carlstein, Senior Vice President of Advanced Wound Devices at Smith & Nephew, said on the company’s website that “we are pleased with the German District Court's findings in this matter,” and that “[t]his win … allows us to continue providing wound care professionals in Germany with options for the latest innovations for NPWT."

Sony BMG Music Wins $675,000 Verdict for Illegal Downloads

July 31, 2009

A federal jury in Boston July 31 awarded Sony BMG Music Entertainment and other record labels $675,000 in damages for a defendant’s illegal downloading of 30 copyrighted songs (Sony BMG Music Entertainment v. Tenenbaum, D. Mass., No. 07-cv-11446-NG, 7/31/09).

The copyrighted songs at issue included Outkast’s “Wheels of Steel,” Nirvana’s “Come as You Are,” and Nine Inch Nails’s “The Perfect Drug.” In a key ruling, Judge Nancy Gertner dismissed the fair use defense asserted by defendant Joel Tenenbaum.

This decision comes more than a month after a Minnesota federal jury verdict of $1.92 million favoring several record companies in Capitol Records Inc. v. Thomas, D. Minn, No. 06-cv-1497 (MJD/RLE), 6/18/09).

Following the verdict against Tenenbaum, the Recording Industry Association of America stated on its website: "We are grateful for the jury's service and their recognition of the impact of illegal downloading on the music community. We appreciate that Mr. Tenenbaum finally acknowledged that artists and music companies deserve to be paid for their work. From the beginning, that's what this case has been about. We only wish he had done so sooner rather than lie about his illegal behavior."

Former UCLA Athlete Charges NCAA and Licensees With Antitrust Violations Over Use of Names and Likenesses

July 21, 2009

Former UCLA basketball star Ed O’Bannon leads a proposed class of  former athletes against the National Collegiate Athletic Association in a suit filed July 21, alleging that  the NCAA, its member schools and conferences, and its licensees have “committed per se violations of the federal antitrust laws by engaging in a price-fixing conspiracy and a group boycott/refusal to deal” that has unlawfully foreclosed the plaintiffs from receiving compensation in connection with the commercial exploitation of their images long after their careers student-athletes have ended ( O’Bannon v. National Collegiate Athletic Association, N.D. Cal., No. 09-3329, filed 07/21/09).

O’Bannon, the celebrated star who led the 1994-1995 UCLA Bruins to the NCAA championship, charges that his image is being offered in the sale of photos, DVD sets, video games, on-demand highlights packages, and other formats “without informed consent and without compensation paid to him” years after his collegiate career ended. His complaint further alleges that the NCAA forces student-athletes to sign a “Form 08-3a” release and then uses the student-athletes names and likenesses in perpetuity as part of lucrative arrangements with third-parties. It also asserts that the NCAA, its licensing arm, co-defendant Collegiate Licensing Co., and “their co-conspirators” are part of a cartel that has “collectively and illegally conspired to limit and depress the compensation of former student-athletes for continued use of their images to zero.”

According to O’Bannon’s complaint:

“The NCAA’s abridgement of former student-athletes’ economic rights in perpetuity is unconnected to any continuing pro-educational benefits for former student-athletes, who by definition are no longer student-athletes. Defendants’ patently anticompetitive and illegal scheme has unreasonably restrained trade, and is a per se violation of Section 1 of the Sherman Act.”

The suit, which seeks treble damages and injunctive relief in a jury trial, was filed by Jon T. King of Hausfeld LLP, San Francisco.

Read the O’Bannon v. National Collegiate Athletic Association complaint.

“HOP” Warranty Service Mark Is Approved Since Some of Applicant’s Goods Are Sold Bearing Third-Party Trademarks

July 17, 2009

The Trademark Trail and Appeal Board on July 17 reversed a refusal to register the “HOP” service mark because it found that this mark would be used to indicate warranty services for not only the applicant’s own power-operated outdoor products, but also for products sold to third-parties that bear third-party trademarks (In re Husqvarna Aktiebolag, Serial No. 78899587 (TTAB July 17, 2009).

Applicant Husqvarna Aktiebolag was denied registration of “HOP” as a service mark for “providing warranties to consumers and retailers on power-operated outdoor products” such as power-operated chain saws, edgers, and string trimmers. The examiner reasoned that offering a standard warranty for one’s own products is merely an activity that is incidental or ancillary to the sale of the goods, and that Husqvarna’s activities did not constitute a service within the meaning of the Lanham Act. Trademark Manual of Examining Procedure §1301.01(a) requires that (1) a service must be a real activity; (2) a service must be performed to the order of, or for the benefit of, someone other than the applicant; and (3) the activity performed must be qualitatively different from anything necessarily done in connection with the sale of the applicant’s goods or the performance of another service.

However, Husqvarna provided the TTAB with evidence that it manufactures numerous power-operated outdoor products, some bearing the “Husqvarna” trademark and some bearing the trademarks of third-parties under private-label agreements. For example, it noted that that many of its products are sold through Sears and bear Sears’ “CRAFTSMAN” trademark. Reversing the refusal of registration, the TTAB concluded that such use constitutes “a cognizable service under the Lanham Act.”

Read the In re Husqvarna Aktiebolag ruling.

RIM Agrees to Pay Visto $267.5 Million to Settle Patent Suits

July 16, 2009

Research in Motion Ltd., maker of the Blackberry smartphones, and Visto Corp. on July 16 agreed to settle several patent infringement suits relating to Visto’s wireless e-mail technologies.

On its website press release, RIM said that the companies “have entered into a definitive agreement to settle all outstanding worldwide patent litigation.” The key terms of this deal involve “RIM receiving perpetual and fully-paid license on all Visto patents, a transfer of certain Visto intellectual property, a one-time payment by RIM of US $267.5 million and the parties executing full and final releases in respect of all outstanding worldwide litigation.”

RIM said that it expects “the majority of the payment to be expensed as an unusual item in the second quarter of fiscal 2010, with the remainder being classified as an intangible asset.”

The underlying suits are Visto Corp. Research in Motion Ltd., No. 06-cv-181 and No. 07-cv-375, both filed in the U.S. District Court for the Eastern District of Texas, and Research in Motion Ltd. v. Visto Corp., No. 07-cv-3177, filed in the U.S. District Court for the Northern District of California.

“Local Label” Mark Properly Rejected as Descriptive of Clothing

July 8, 2009

The mark “Local Label” for “hats; polo shirts; shirts; short-sleeved or long-sleeved t-shirts” was properly denied registration under Section 2(e)(1) of the Trademark Act, 15 U.S.C. §1052(e)(1), because it is merely descriptive of its goods, the Trademark Trial and Appeal Board ruled July 8 in a nonprecedential decision (In re Curtis A. Brubaker Jr., Serial No. 78797601 (TTAB July 8, 2009).

The board found “highly persuasive” the examining attorney’s evidence of dictionary definitions, Internet web pages, and newspaper article downloads showing that  “LOCAL LABEL” is used in the clothing industry to describe locally produced clothing. While the applicant insisted that the average consumer would be hard-pressed to name what goods, or types of goods, are described by this mark, the board found that this “misplaced” argument failed to analyze the issue within the proper parameters. “The question is not whether someone presented with only the mark could guess what the goods or services are. Rather, the question is whether someone who knows what the goods or services are will understand the mark to convey information about them,” the board said, quoting In re Tower Tech Inc., 64 USPQ2d 1314 (TTAB 2002).

The refusal to register was affirmed.

Read the In re Curtis A. Brubaker Jr. ruling.

TTAB Excludes Testimony of Witness Not in Pre-Trial Disclosure

July 6, 2009

The Trademark Trail and Appeal Board on July 6 excluded the testimony of the president of a company in a cancellation proceeding because this party failed to submit the witness’s name in a pretrial disclosure as required under TTAB Rule 2.121(e) (Jules Jurgensen/Rhapsody Inc. v. Baumberger, Cancellation No. 92048667 (TTAB July 6, 2009).

TTAB Rule 2.121(e) requires a party, no later than 15 days prior to the opening of its testimony period, to identify “each witness from whom it intends to take testimony, or may take testimony if the need arises.” The petitioner here failed to disclose the name of its intended witness, company president Morton Clayman, until the opening day of the testimony period. Clayman’s deposition was taken over the respondent’s objections, but the board agreed to strike this testimony.

The board noted that the requirement for parties to make pretrial disclosures, which are provided for in Fed. R. Civ. P. 26(a)(3), was introduced into its inter partes proceedings by amendments to the TTAB Rules, and is applicable to all proceedings on or after November 1, 2007. “Such disclosures allow parties to know prior to trial the identity of trial witnesses, thus avoiding surprise witnesses,” and “Mr. Clayman is the type of surprise witness that pretrial disclosure practice is intended to discourage,” it wrote. Here, the “petitioner has not complied with Trademark Rule 2.121(e), and has not provided a satisfactory explanation for failing to comply.”

Read the Jules Jurgensen/Rhapsody. v. Baumberger ruling.

“Brain Games” Is Descriptive and Lacks Acquired Distinctiveness

July 6, 2009

The mark “Brain Games” for “printed publications, namely, books and magazines containing games, puzzles and other cognitive exercises” was properly denied registration because it is merely descriptive under Section 2(e)(1) of the Trademark Act and lacks acquired distinctiveness under Section 2(f), the Trademark Trial and Appeal Board ruled July 6 in a nonprecedential decision (In re Publications Int’l Ltd., Serial No. 77103024 (TTAB July 6, 2009).

The board was first persuaded by the examining attorney’s evidence that many Internet websites make descriptive use of the term “brain games” in connection with a variety of cognitive and mental exercise games, and by the argument that “brain games” is used to describe a genre of games designed to improve one’s cognitive abilities and exercise the mind. Thus, the board found the mark merely descriptive under Section 2(e)(1), 15 U.S.C. §

1052(e)(1). While the applicant then argued that the mark had acquired distinctiveness for purposes of Section 2(f), the board disagreed, noting that the applicant’s sales success fell “far short of establishing that purchasers of applicant's goods recognize BRAIN GAMES as a distinctive source indicator for such goods.” The board found this mark “highly descriptive” and pointed out that “[t]he greater the degree of descriptiveness, the greater the evidentiary burden on the user to establish acquired distinctiveness.”

Read the In re Publications Int’l Ltd. ruling.

Federal Circuit Agrees to Rehear Legality of PTO Claim Rules En Banc

July 6, 2009

The U.S. Court of Appeals for the Federal Circuit on July 6 agreed to rehear the case of plaintiffs challenging the legality of the U.S. Patent and Trademark Office’s proposed rules to limit the number of continuation applications and claims that can be filed by patent applicants (Tafas v. Doll, Fed. Cir., No. 2008-1352, 7/6/09).  In granting the petition for rehearing in a case with broad impact on the scope of future U.S. patent applications, the appellate court’s decision order said that the “March 20, 2009 opinion, Tafas v. Doll, 559 F.3d 1345, is vacated and the appeal is reinstated.”

In this case, inventor Triantafyllos Tafas and drug maker GlaxoSmithKline challenged the PTO’s rules package issued in August of 2007 that placed limitations on the number of continuation applications and claims that applicants could file. (72 Fed. Reg. 46,716). The agency took the action largely to reduce the backlog of applications currently on file.

The U.S. District Court for the Eastern District of Virginia granted Tafas and GlaxoSmithKline a summary judgment enjoining enforcement of the new rules, but the Federal Circuit on March 20, 2009 vacated that ruling in part and upheld three of the four new rules.

  • New Final Rule 78.

Final Rule 78 places a limit of two continuation applications. Under this rule, additional continuation applications would not be entitled to the filing date of the parent applications absent a “showing that the amendment, argument, or evidence sought to be entered could not have been submitted during the prosecution of the prior-filed application.” The Federal Circuit’s 2-1 panel ruling in March found that Final Rule 78’s added requirements were inconsistent with Section 120 of the Patent Act, 35 U.S.C. § 120. Under Section 120, continuation applications meeting four stated requirements “shall” be entitled to the benefit of the parent's filing date. The Federal Circuit found that the additional requirements that the PTO sought to impose were inconsistent with the statute, and, thus, invalid under Patent Act Section 2(b)(2), 35 U.S.C. § 2(b)(2).

  •  New Final Rule 114.

This new rule sets a limit of one request for continued examination (“RCE”) that patent applicants may submit. See 37 C.F.R. § 1.114. As RCEs are not affected by Section 120, the appellate court found that New Final Rule 114 did not conflict with the statute.

  • Final Rules 75 and 265.

New Final Rule 75 limits applicants to five independent claims and 25 total claims unless an examination support document (“ESD”) is filed; Final Rule 265 sets forth the requirements for an ESD. See id. §§ 1.75, 1.265. The Federal Circuit found that the PTO did not exceed its authority in promulgating these two rules.

The Federal Circuit further held that the district court did not have to defer to the agency’s interpretation of the limits of its rulemaking authority. The Federal Circuit said that the PTO does not have substantive rulemaking authority, only the authority to issue rules that, under 35 U.S.C. §2(b)(2)(A),  “govern the conduct of proceedings” before the office, i.e., procedural rules. However, it found that the disputed rules in this case are not substantive because they do not “effectively foreclose[] [applicants] from obtaining patent rights to which they are entitled” under the ruling in JEM Broadcasting Co. v. Federal Communications Commission, 22 F.3d 320 (D.C. Cir. 1994).

Judge Randall R. Rader dissented from the majority’s “rigid application of a sentence out of context in JEM” and insisted that the PTO’s new rules are indeed substantive. Given the wide ranging impact of this case and the negative response to the ruling among many in the patent bar, the appellate court, with the exception of Judge Alan D. Lourie, took a poll and decided to address this appeal en banc.

En Banc Questions

Tafas’s brief for en banc rehearing was filed by Steven J. Moore of Kelley Drye & Warren, Stamford, Connecticut, who argued that the majority:
(1) misapplied significant binding Supreme Court and Federal Circuit precedent concerning the correct standard for classifying administrative rules as “substantive” versus “non-substantive”; (2) failed to fully consider as evidence that the Final Rules significantly and adversely affect individual rights and obligations under the law; (3) failed to correctly address the threshold question of whether the PTO has jurisdictional authority under the Administrative Procedure Act in 35 U.S.C. §2(b)(2) to enact the Final Rules; and (4) misapplied Chevron deference to its improper determination that Rules 75, 265 and 114 were not “inconsistent with existing law.”

Similarly, GlaxoSmithKline’s attorney, Carter G. Phillips, of Sidley Austin, Washington, D.C., asked two questions:

  • Whether the panel majority erred in rejecting the test for determining whether a Patent and Trademark Office (PTO) rule is “substantive,” as set forth in the controlling precedent of Chrysler Corp. v. Brown, 441 U.S. 281 (1979); Animal Legal Defense Fund v. Quigg, 932 F.2d 920 (Fed. Cir. 1991); and Cooper Technologies Co. v. Dudas, 536 F.3d 1330 (Fed. Cir. 2008); and
  • Whether the panel majority erred in holding that the challenged final rules, 72 Fed. Reg. 46,716 (Aug. 21, 2007), fall within the PTO’s limited, non-substantive rulemaking authority. 

According to the Federal Circuit’s per curiam order, the PTO’s additional brief shall be filed within 30 days, by August 5, and the additional briefs of Tafas and GlaxoSmithKline are due within 20 days of the date of service of the PTO’s brief.

To read Tafas’s brief for en banc rehearing, click here.

No “U.S. Customs Service” Mark for “Attorney Services”

June 26, 2009

The Trademark Trial and Appeal Board June 26 ruled that an applicant was properly barred from registering the “U.S. Customs Service” mark and design for “attorney services” by Sections 2(a) and 2(b) of the Trademark Act (In re Peter S. Herrick, P.A., Serial No. 76653159 (TTAB June 26, 2009).

The law firm of Peter S. Herrick, P.A. sought registration for its “U.S. Customs Service” mark and design for “attorney services,” but the examiner refused.

In a ruling re-designated as precedential, the board agreed first with the examiner’s determination that the mark, in violation of Section 2(a), 15 U.S.C. §1052(a), falsely suggests a connection with United States Customs and Border Protection, formerly known as the United States Customs Service, an agency of the United States government. It noted that the applicant’s seal is “nearly identical” to the former seal of the United States Customs Service and very similar to that currently used by United States Customs and Border Protection.

“In view of the facts that applicant’s mark is a close approximation of the name of the former United States Custom Service and of the agency’s current identity, that applicant’s mark points uniquely and unmistakably to United States Customs and Border Protection, that applicant’s law practice has no connection with the agency, and that a connection with the agency would be presumed if applicant’s mark were used in connection with legal services, we find that applicant’s mark falsely suggests a connection with United States Customs and Border Protection thereby precluding registration under Section 2(a),” the TTAB wrote.

Further, the board agreed that applicant’s mark—not readily distinguishable from the Department of the Treasury seal—consists of or comprises a simulation of an insignia of the United States, and thus is prohibited from registration under Section 2(b) of the Trademark Act.

The examiner’s refusal to register was affirmed.

Read the TTAB’s In re Peter S. Herrick, P.A. ruling.
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