James Jebbia founded Supreme in 1994 with the opening of the first store on Lafayette Street in New York City.  Supreme now has stores in Los Angeles, London, and six in Japan.  Supreme has, in part, built up its reputation by incorporating altered versions of famous logos and has mostly gotten away with it by producing very limited runs of clothing that sell out quickly.  Most companies are not going to bother with the cost of legal action over several hundred items.

The Supreme logo itself—the color and font at least—is borrowed from a work created by conceptual artist Barbara Kruger.  Kruger, who now teaches at UCLA, weighed in on the lawsuit in an email to the website Complex: “I make my work about this kind of sadly foolish farce.  I’m waiting for all of them to sue me for copyright infringement.”

Interestingly enough, Jebbia only trademarked the logo itself on March 6, 2013.  The name “Supreme” was also only recently trademarked in 2011, to which protection was granted in 2012.  Jebbia responded to questions regarding the delay in filing by stating that the name Supreme is “a difficult one to trademark” and that, at the beginning, “there were no grand plans—with the name, with the store, with anything.”  In filing for the trademark for the logo, Supreme included “women’s, children’s and infant’s wear.”  However, for a November article written in the New York Times, Jebbia denied any interest in expanding into women’s wear stating, “It’s not what we know.  It’s not in keeping with what we do.”

The “Supreme Bitch” t-shirt has become a MOB staple since its inception 10 years ago.  Jebbia even gave the design his blessing, selling the shirt at Union, another store he owns.  On the brand’s website, McSweeney commented on the lawsuit noting the parodic nature of the design and describing the suit as “just another example of the hostility that MOB—the first women’s street wear brand—has faced since Day 1.”  She even included court documents in the interest of transparency.

Jebbia admits to originally approving the “Supreme Bitch” design, but added, “I thought it was just going to be a one-off.  Now it’s on hats, T-shirts, towels, mugs, mouse pads.”  McSweeney responded, “There’s this one Barbara Kruger piece that says, ‘Your comfort is my silence,’ and I can’t help but think that I’m being silenced by Supreme with this lawsuit.  I don’t have $250,000 to litigate this case, and they know that.”

More detailed information about the suit itself can be found here.

Morris brought this appropriation suit in a federal district court in Los Angeles, where District Judge John Kronstadt held that Guetta’s work could not be seen as fair use.  Guetta argued that he aimed to use the work to make a comment on musician’s persona and celebrities. However, the judge did not side with his argument, stating that the body of work based on the photograph, which included a collage made out of shattered vinyl records and a mural, was not transformative enough to merit a fair use defense.

Judge Kronstadt also based his decision on a previous case, Cariou v. Prince, where a New York District Court held that Prince violated Cariou’s copyright by using one of the photographer’s pictures in his own work without making significant changes, parody, or commenting on the original piece.  Although the District Court of Appeals for the Second Circuit later reversed the Cariou decision, this recent decision regarding Guetta’s work joins an increasing and heatedly debated number of holdings regarding appropriation artists, who may use an original piece in their work without transforming it.

The legal fight over the “Eat More Kale” trademark between Muller-Moore and Atlanta-based Chick-fil-A Inc. has been going on for several years. Muller-Moore has been selling T-shirts and other items with the phrase for more than a decade. A local vegetable farmer asked him to create three shirts with the phrase, and Muller-Moore continued with the sales as a tribute to local farming.

From my own personal experience, it takes a strong person to stomach kale. So anyone willing to promote it with “Eat More Kale” logo apparel should be allowed to do so. But that’s not happening in this case. Chick-fil-A thinks Muller-Moore is infringing on their “Eat Mor Chikin” slogan. From an article on Treehugger, Chick-fil-A’s attorneys think Muller-Moore’s “Eat More Kale” message will dilute their “chikin thing” because it “is likely to cause confusion of the public and dilutes the distinctiveness of Chick-fil-A’s intellectual property and diminishes its value.”

On Monday, the U.S. Patent and Trademark Office gave a “preliminary no” regarding Muller-Moore’s efforts to protect his “Eat More Kale” T-shirt business.

The ruling does lean toward a favorable outcome for Chick-fil-A. The trademark examiner said the “applicant’s mark is similar in overall commercial impression to the registered marks” and that “the similarities between the marks are more important than the differences.” The examiner said further that “the marks urge action in the same way, only as to different substances, and both of them are commonly consumed types of food.”  This means consumers are likely to be confused into thinking the products under the “Eat More Kale” banner are coming from the same source as Chick-fil-A’s trademark.

Muller-More had argued in his submissions to the patent office that his mark was intended to “invoke the message of buying and eating locally grown produce and living close to the earth and the farmer” while the Atlanta-based chicken chain’s mark simply seeks to persuade the consumer to eat chicken instead of beef.

In 2011, Vermont’s governor, Peter Shumlin, also gave support to Muller-Moore, stating that he saw this matter as “corporate bullying” by Chick-fil-A. Shumlin even formed “Team Kale” as a fund-raiser to help with the legal expenses. Once the preliminary ruling came, Gov. Shumlin also offered the State House for a press conference to be held this week. Muller-Moore declined because the patent office has yet to reach a final ruling.

The FDA cited that the original version, now off the shelves, was pulled for public health concerns. Purdue stopped selling the product once it received approval from the FDA for a more abuse-resistant formula. The public health concerns originate from the highly potent nature of the drug and its susceptibility for abuse or misuse. The original formula could be crushed easily and snorted or injected, debilitating its slow-release mechanism. The FDA hesitated in making the determination due to a lack of evidence regarding the effectiveness of the new abuse deterrent formula. However, the agency determined that the new formula would at least make it more difficult to abuse by injection or snorting.

The decision came as a surprise to many in the industry due to the patent implications on generic drug manufacturers and the financial burden it will place on consumers. The decision expands the authority of the FDA, most likely to other areas, not solely to drugs abused in the mainstream.  Many also argue that it will only be more difficult since the agency did not provide guidance for generic abuse deterrent formulations. By prolonging the process, many generic companies lose money and time for research and development, while costs to the consumers are fixed by Purdue. If the agency requires abuse deterrent formulas, prices are bound to rise for generic manufacturers as well and the cost will be passed onto the consumer. Further, others argue that various other manufacturers and innovators may cite safety issues as a reason to pull their products in order to delay generic versions.

The most disconcerting issue remains the precedent of the decision and its impact on the controversy surrounding “pay-for-delay” settlements. These settlements are agreements between name-brand pharmaceutical companies and generic manufacturers aimed to delay or postpone the introduction of a generic version into the market in exchange for monetary compensation. Last week’s decision could further polarize the issue by giving pharmaceutical companies another channel to control the market, leaving consumers with the burden of higher costs.

Apple initially applied for the mark on November 15, 2012, requesting protection for the words IPAD MINI in connection with a “handheld mobile digital electronic device comprising a tablet computer, electronic book and periodical reader, digital audio and video player, camera, electronic personal organizer, personal digital assistant, electronic calendar, and mapping and global positioning system (GPS) device, and capable of providing access to the Internet and sending, receiving, and storing messages and other data.” The USPTO accepted the application April 2, 2013 on the condition that Apple disclaim exclusive rights over the term MINI. The road to that decision, however, took a curious turn.

On January 24, 2013, the USPTO issued its initial opinion in an Office Action, rejecting Apple’s application on the grounds that the term IPAD MINI was “merely descriptive.” Under section 2(e)(1) of the Lanham act (15 U.S.C. § 1052(e)(1)), marks that are merely descriptive when used in conjunction with the goods cannot be registered. From a policy perspective, this provision ensures that marks serve as unique identifies for the goods and services to which they are attached.

In rejecting the application, the examining attorney focused on three elements of the mark, finding they were all merely descriptive of the good. First, the use of the letter “I” in front of “IPAD” as a prefix was merely descriptive because when used as a prefix, “i” or “I” denotes the “internet,” and would thus be understood by the general purchasing public as referring to an Internet-related or capable product. Since, Apple identified its good in the application as “capable of providing access to the internet,” this element of the mark was merely descriptive. Second, the use of the word “PAD” was also merely descriptive, since “pad” can refer to a “pad computer”—synonymous with tablet computers—and the product is a tablet computer. Last, the examiner found the word “MINI” to also be merely descriptive, since “mini” means “something that is distinctively smaller than other members of type or class,” and Apple applied to use IPAD MINI in conjunction with a product that is a miniature version of its iPad tablet computer.

Finding each element of the mark merely descriptive, and finding that even in combination, the term IPAD MINI was also descriptive, the examining attorney rejected the application. The USPTO then gave Apple six months to respond to the Office Action with an argument that the mark was not merely descriptive. Analysts found this rejection puzzling, since the USPTO already granted Apple trademark protection for the original IPAD name.

Then, on April 3^rd, the USPTO did an about face: without any (official) response from Apple to the January 24^th letter, the USPTO issued a Supplemental Office Action withdrawing their refusal to issue a trademark on the grounds that IPAD MINI was merely descriptive. The letter gave no particular reason for the withdrawal of refusal—except for the wonderfully ambiguous “upon further review”—and apologized “for any inconvenience caused.”

None are quite sure why the USPTO changed its tune so quickly. Speculations run the gambit from a review of the initial office action by a supervising attorney at the USPTO to off-the record backroom lobbying with Apple lawyers. Whatever the case, Apple looks like it is back on track to gain trademark protection over the IPAD MINI name.

The parties’ arguments and the comments offered at last week’s post-argument discussion revealed a heated debate between polarized interpretations of Myriad’s patents on their BRCA 1 and BRCA 2 gene sequences that are associated with breast and ovarian cancers.  The petitioner flatly argued that Myriad’s patent on genes is not only prohibited by the product of nature limitation in the Patent Act, but also inherently wrong from a moral perspective.  Myriad, however, steadily maintained that its patents covered isolated DNA molecules that do not exist in nature.  But just how helpful will the term “isolated” be in conveying the amount of human manipulation needed to overcome the §101 threshold?

For a layperson unfamiliar with DNA sequencing, “isolated” might merely mean extracting from another substance to possibly obtain a purer state.  Under this perspective, is this enough manipulation to make the originally found-in-nature BRCA genes patent eligible?

Similarly, the Justices seemed less familiar with the complexities of the isolation of DNA sequences and relied heavily on analogies to understand “the extent of human manipulation required to make a product found in nature patent eligible.”  Justice Alito was among the many who teased at the petitioner’s argument, comparing Myriad’s isolated DNA sequence to a leaf in the Amazon:

“JUSTICE ALITO: . . . Let’s say if you do that, you’d have to eat the whole forest to get the [] value of this.  But it’s extracted and — and reduced to a concentrated form.  That’s not patent . . . eligible?

MR. HANSEN: No, that may well be eligible, because you have now taken what was in nature and you’ve transformed it in two ways. First of all, you’ve made it substantially more concentrated than it was in nature; and second, you’ve given it a function.  If it doesn’t work in the diluted form but does work in a concentrated form, you’ve given it a new function.  And the — by both changing its nature and by giving it a new function, you may well have patent -­

JUSTICE ALITO: Well, when you concede that, then I’m not sure how you distinguish the isolated DNA here, because it has a different function.”

Although the result of this exchange seems straightforward (“Myriad’s isolated gene molecules might have sufficient human manipulation to become patent eligible”), the answer is not that simple.  I have trouble finding that the Court will be comfortable with endorsing the notion that a composition of matter is not a product of nature merely because it has been isolated.  The PTO has granted a number of patents on these grounds and now, in light of this decision, are at risk of being invalidated.  Aside from the faulty analogies that undermined the manipulative aspect of “isolation,” the patent-happy PTO and the subsequent risk of retarding innovation might persuade the Court to limit the breadth of these types of patents and reject their eligibility.  Notwithstanding, the Justices have expressed concern about the economic impact of a negative decision on companies like Myriad, which depend on patents to cover the hefty price tag on its investment process.  Such considerations are likely to affect the decision that will ultimately affect hundreds of biotechnology investors.

The decision is expected some time in June.  What do you believe the Court will or should hold in the Myriad case?

In November 2012, a federal court awarded Vringo $30 million in damages and granted it a 3.5% running royalty rate off part of Google’s revenue from the patents’ use until they expire in 2016. At trial, Vringo presented evidence that “the appropriate way to determine the incremental royalty base attributable to Google’s infringement was to calculate 20.9% of Google’s U.S. AdWords revenue, then apply a 3.5% running royalty rate to that base.” The court explained that the discrepancy between what Vringo sought and what it was awarded was based on Vringo’s delay in filing its claims; damages requested for the time prior to the filing of the complaint were denied.

After the first suit against Google, Vringo brought a new suit against Microsoft alleging infringement of the same patents in question as the Google suit. The complaint alleges that Microsoft’s infringement is willful, enabling Vringo to seek punitive damages. Court documents reveal that both parties are currently discussing a possible settlement.

Vringo is now appealing the I/P Engine v. AOL, Inc. et al. ruling, as well as a recent denial to its motion for a new trial on the amount of past damages. Vringo seeks to increase the royalty rate from 3.5% to 7%, alleging that Google’s continued infringement is willful. Google has not commented since it’s last remark on the initial matter that, “We remain confident that the patents here are invalid, that we did not infringe them, and that we will ultimately win this case.”

While Google, the primary defendant on appeal, seems to be standing strong on its ground, it will be interesting to see if AOL settles the rest of the claims against them or if any of the other defendants decide to cave in. Perhaps the new allegation that the defendants’ conduct is willful is a legal tactic. Microsoft seemed to quickly cooperate and discuss settlements in light of it facing triple punitive damages because of the willful allegation. Conceivably Vringo’s counsel anticipates that Google will get shaken up in the same manner. Until then, online investors can watch the number of shares for all companies involved dance around the charts like they did during the last suit. 

Timelines.com, a website which describes itself as “the first web site that enables people like you to collaboratively record, discover and share history,” filed suit against Facebook for direct and reverse confusion infringement of its trademark in the word “timelines.” Facebook countersued, seeking a declaration of non-infringement and cancellation of the “timelines” trademark.

Facebook’s claims for cancellation of the mark failed at the summary judgment stage, but will be heard again at trial. Because Timelines has been granted trademark registration, it is entitled to a rebuttable presumption of validity that challengers must overcome, per § 33(a) of the Lanham Act. Facebook is aided by the fact that the mark has not yet reached incontestability under § 15 of the Lanham Act, which would immunize it from most challenges, save for those listed in § 33(b).

Facebook’s first argument for mark cancellation is that the mark is generic, meaning that it is the term commonly used to name the type of good, and that competitors cannot effectively compete without using the term to describe their product. Hickory Farms, Inc. v. Snackmasters, Inc.. Under the Lanham Act, no generic term can be granted registration, and any mark that becomes generic after registration is to be cancelled. The court found that the evidence Facebook presented, including examples of generic use, survey evidence, and testimony from competitors, was insufficient to sustain the claim at summary judgment.

Facebook also failed to make an affirmative showing as a matter of law that the mark is “merely descriptive,” or one which merely describes the qualities or characteristics of a good, and is not entitled to trademark protection without a showing that it has developed the sufficiently unique association with the seller known as secondary meaning.

Facebook also set forth the affirmative defense of fair use, requiring a showing that: it did not use the mark as a trademark; its use is descriptive of its product; and it used the mark fairly and in good faith. This failed because there is still a question as to whether Facebook’s use was as a mark or not, in addition to questions of whether they acted in good faith.

Timelines’ argument for infringement relies first on proving that Facebook used the mark in commerce as a source-identifying feature; without use in commerce there is no infringement. While Facebook claimed they were not using the timeline function as a source-identifier, the judge held that there existed an issue of material fact and would not grant summary judgment on this issue. At trial, Timelines will have to prove that Facebook’s use created a likelihood of confusion.

Timelines also claims that Facebook engaged in “reverse confusion” infringement. This occurs when a more famous junior user adopts the mark of the lesser-known senior user. Because Timelines was granted trademark registration in 2009, and Facebook did not begin development of their timeline product until 2010, it is clear that Timelines is the senior user. Factors considered in this context include the arbitrariness of the mark, the similarity of the marks, and the relatedness of the goods.

The jury trial is scheduled to start April 22, 2013. All claims that Facebook set forth and failed on will likely be reasserted at this stage, though the burden will shift since Timelines is the moving party. Timelines will also present its case against Facebook for direct and reverse confusion infringement.

Whatever the jury decides in this case, the decision is likely to be appealed. While the rebuttable presumption of a registered mark’s validity is strong, it is much weaker at trial than it is at the summary judgment stage. Thus, actions for mark cancellation are more likely to succeed at this level. There is strong evidence to suggest that Timelines is either generic or descriptive. On the other hand, there is strong evidence—including alleged instances of actual confusion—that Facebook infringed upon Timelines’ mark, which would render any fair use defense inapplicable.

Privateering is the practice of companies intentionally arming third party patent trolls with patents so that they can be used to litigate against competitors. Many companies see patent trolling as a weapon that they can embrace and direct towards their opponents. The operating companies transfer ownership of the patent to the patent troll while retaining a license to use the patent. The patent troll’s payment from the operating company is usually linked to how persistent and successful their litigation against competitors is.

Privateering differs from independent patent trolling in two key ways. First, in privateering, operating companies give patent trolls relevant patents. They are “newer” patents that the operating companies are still licensed to use. This means that the patent troll is armed with patents that are more likely to be similar enough to other inventions to justify litigation. Second, the patent troll now has an added monetary incentive to litigate. In regular trolling, the incentive is based solely on the patent troll’s possibility of winning in court. But with privateering, the operating company will also reward the patent troll. Clearly, privateering has become an amped up version of what already is a burdensome practice.

Many operating companies have taken the high road and publicly spoken out against patent trolls. Google recently wrote a letter cosigned by Blackberry (RIM), Earthlink, and Red Hat to the FTC and the DOJ, condemning patent trolls and patent privateering. Google noted that patent trolling costs operating companies $30 billion annually: “These costs are exacerbated by the evolving practice of operating companies employing PAE privateers as competitive weapons.”

Yet while privateering is seen as an unsavory business practice, many companies see it as a strategic opportunity to oust their competitors. In 2011, MOSAID Technologies acquired more than 2,000 patents that had been jointly controlled by Microsoft and Nokia. Likewise, Ericsson recently agreed to transfer 2,185 patents to troll Unwired Planet. These operating companies seek to benefit from the patent trolling through the burden it will place on their competitors. In response to the Microsoft-MOSAID deal, Google filled a complaint with the European Union, alleging collusion aimed at raising consumer smartphone prices.

For better or worse, privateering has created an interesting dynamic in how patents are treated. Patents are not simply a right to the spoils of one’s work, but are assets that collectively can become a dangerous weapon. As with any weapon, there will always be those who say it does more harm than good pitted against those who wish to use the weapon to their advantage.

This marks yet another lawsuit Apple has faced in China over the last few years.  Last year, Apple paid $60 million to Chinese computer maker Shenzhen Proview Technology to settle its trademark dispute over the iPad.  However, the present case introduces new complexities as it involves a patent rather than a trademark.  Apple will likely face two different issues should it lose the current case.  First, Apple will either have to stop selling iPhones in China or remove Siri from the iPhones that it sells in China.  Second, Apple’s loss could encourage others to challenge Apple’s Siri patent in other countries.  At the March 27^th court hearing, Apple denied the allegations and asked the court to reject the case, which the court refused.  The case is scheduled to be heard this July.

The AIA defines a “covered business method” as one that “claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration or management of a financial product or service,” specifically excluding patents that classify as technological inventions.  Two well-known examples of covered business method patents are Amazon’s “1-Click Shopping,” which simplifies online shopping for its customers, and Priceline’s “Reverse Auction,” which enables customers to bid on airline tickets before they become available.

In singling out covered business method patents, Congress believed that, following the Federal Circuit “greatly broadening the patenting of business methods” in State Street Bank v. Signature Financial Group, the “PTO was forced to issue a large number of business-method patents, many or possibly all of which are no longer valid.”  The CBM Program was thus designed to offer “a relatively cheap alternative to civil litigation for challenging these patents,” and to hopefully “reduce the burden on the courts of dealing with the backwash of invalid business-method patents.”  In addition, CBM proceedings provide a much faster alternative to complex litigation.  These proceedings, once instituted, are expected to last no more than one year, and can only be extended up to six months for “good cause.”  This “transitional” program will expire on September 16, 2020.

On April 12, the Intellectual Property Brief held its 2nd Annual Symposium with one segment focused on these proceedings and how they have fared so far.  Scott McKeown, a partner at Oblon Spivak and author of the blog “Patents Post-Grant,” highlighted that “these proceedings have only been around for roughly six months or so, and, frankly, they’re working.”  Since becoming available September 16, 2012, only 15 proceedings have been brought before the USPTO via the CBM Program.  Suzanne Michel, Senior Patent Counsel at Google, Inc., commented she believed there is “still a hesitancy and something of a desire among cautious companies to see how things turn out.”

The very first petition filed under the CBM Program was heard just this week.  The petition was brought by SAP challenging U.S. Patent 6,553,350 of Versata Development Group.  In May 2011, Versata was awarded a $391 million verdict in the Eastern District of Texas against SAP.  The verdict is currently on appeal to the Court of Appeals for the Federal Circuit.  As more hearings are brought before the PTAB and cases are decided, we will gain a better understanding of what these proceedings mean to patent holders and attorneys and of the overall effectiveness of this legislation.

Recently, a lucky man from Philadelphia was hand picked by Google to be a Google Glass Explorer and test drive the new Google Glass technology.  He was chosen based on what he posted under the hashtag #ifihadglassand.  Although the man was happy to be chosen, he decided to forgo the chance to be a first adopter, and instead, decided to make a profit by selling the Google Glass on eBay.  That is, until he was notified by the Glass Explorers Google+ group, that the Google Glass End User Agreement forbade the “resell, loan, transfer, or giv[ing the]  Device to any other person.”  If anyone resold, loaned, transferred, or gave the “device to any other person without Google’s authorization, Google reserve[ed] the right to deactivate the Device.”  After learning of these restrictions, the man quickly stopped the eBay auction, which had risen to $90,000.

Thanks to legal precedent, Google is well within their rights to restrict the first adopters from reselling, loaning, transferring, or giving their Google Glass to another person.  In Adobe Systems Inc. v. One Stop Micro, the Northern District of California held that the first sale doctrine did not apply when the contract language only gave the user a license to use the software.  The first sale doctrine maintains that under copyright law, the copyright holder cannot interfere with the subsequent sales or distribution of a lawfully made copy of software.  Because the End User Agreement only gave a license and not a lawfully made copy of software, there was no actual sale and the first sale doctrine was not triggered.

In this instance, Google is selling the End Users a $1,500 right to use Google Glass, and nothing more (by Google Glass, I’m referring to the physical product and software as a package).  The End User Agreement restricts the ownership of the Google Glass by forbidding normal activities that a buyer would be able to perform if they owned their pair of Google Glass.  An owner of Google Glass would actually be able to resell, loan, transfer or give away their Google Glass.  Because the buyer is forbidden to do these activities, there is no actual sale of the Google Glass, just a sale of a license to use the Google Glass.

Some have speculated that the restrictions placed on the Google Glass could possibly be an anti-trust issue because Google is hindering further transactions of a physical product.  Adobe typically applies to contractually restricting software and digital media licensing.  Once the copyright owner combines hardware with the software as a product, it begins to look more like an actual sale of a product, than merely licensing software.  However, considering the fact that the main selling point of Google Glass is the software inside the glasses and not the physical apparatus, the restrictions are more akin to those of other software licenses.

Further, Google is hand-picking purchasers to essentially test the Google Glass in their Explorer Edition program that will eventually help competition by making Google Glass better for the consumers at large.  Google has a very good reason to maintain control over who uses the Google Glass because they want to ensure the quality of the product.  Google chose the buyers based on their social media entries that detailed the different ways they would use Google Glass.  Google wants people to test the glasses to ensure that they work for various people in various situations.  Although selling the Google Glass to another would still provide a varied experience, Google would not receive the experience that they contracted for when they selected the purchaser.

Once the product has proven itself to be stable in the beta program, Google will likely release the reigns on selling, loaning, transferring, or giving away the device.  At that point, the second hand market for Google Glass will emerge.

ReDigi’s business is the sale of “used” digital music files, much like your local used bookstore or record store: except instead of dealing with tangible copies of a copyrighted work (like a book or a CD), ReDigi exclusively sells digital copies of the work purchased through iTunes or another ReDigit user. To ensure the resold music was legitimately acquired, ReDigi requires users to download a program to their computer —their Media manager—that scans the computer for eligible music files. Once scanned, the program organizes the eligible files and continues running to ensure that once uploaded to ReDigi’s server for resale, no copy of the file remains on the user’s computer (though the user may stream it from their ReDigi account until it is sold).  When purchased, the file is downloaded to the purchaser’s computer by erasing the information from ReDigi’s servers and placing it onto the purchaser’s computer one digital packet at a time. At the start and end of the process, only one copy of the music ever exists on the seller’s, ReDigi’s, and purchaser’s devices: the particular music never exists in more than one place at one time.

Capitol claimed that by selling “used” digital music files, ReDigi directly and secondarily infringed its rights of reproduction, distribution, performance, and display. ReDigi claimed  (1) there was no reproduction within the meaning of the act, and (2) that the re-sale was covered by the fair use defense under section 107 of the Copyright Act, and also by the “first sale” doctrine, under section 109.  The judge denied both defenses, granted summary judgment for Capitol Records on the reproduction and distribution claims, but reserved judgment on the display and performance claims finding not enough evidence on the record to support a summary judgment on that issue.

Because the United States Supreme Court recently interpreted part of the first sale doctrine under section 109 in Kirtsaeng v. John Wiley & Sons, Inc. (Slip Opinion, March 2013) [allowing an individual to import and resell cheaper authorized foreign publications of American textbooks under the first sale doctrine], this blog post will focus on how the judge in Capital Records understood the application of the doctrine to the digital universe.

Before delving into the first sale doctrine, however, just a brief word about the Judge’s opinion on how digital sales implicate the reproduction right, since the first sale doctrine only applies to copies “lawfully made under” the Copyright Act. Thus, if the “sold” copy is not “lawfully made,” the first sale doctrine cannot apply.

Reproduction Right: Section 106 of the Copyright Act gives owners the exclusive right to “reproduce” their work in any material form. Works are “reproduced” when they are “fixed” in any medium from which the work may be communicated, perceived, or further reproduced for a period of more than transitory duration. Looking at the language and legislative history of section 106, Judge Sullivan concluded that users implicate the reproduction right anytime a work becomes embodied in a new material object. Specifically, he states “Simply put, it is the creation of a new material object, and not an additional material object that defines the reproduction right.” A user can thus be said to “reproduce” the work by merely fixing it a new form: they do not need to create an additional copy of the work to infringe. Interestingly, the Supreme Court of Canada specifically rejected this interpretation of the reproduction right more than 10 years ago in Théberge v. Galeria d’Art du Petit Champlain, Inc., 2002 SCC 34—but that is a discussion for another time. The Northern District of Texas also recognized this principle 1973, when they held no reproduction occurred when images where chemically lifted from postcards, refixed on ceramic tiles, and then sold (see CM Paula Co. v. Logan, 355 F. Supp. 189 (N.D. Tex. 1973)).  

In this case, however, Judge Sullivan’s interpretation renders any new fixation a “reproduction.” According to this interpretation, digital transfers unauthorized by the copyright owner must always infringe, since the technology necessarily requires new fixations every time the file is transferred, even if the original fixation is simultaneously or thereafter destroyed.

First Sale Doctrine: Originally a common law principle, the first sale doctrine allows users who lawfully acquire a work to dispose of it as they wish (i.e. through sale) without requiring the copyright owner’s permission. Section 109 formalizes the doctrine. It provides “the owner of a particular copy or phonorecord lawfully made under this title, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.”  In other words, “first sale” exhausts a copyright owner’s right to control the sale of a particular copy of their work once that copy is placed into the stream of commerce.

The doctrine has historically applied to physical, tangible copies of copyrighted works, such as books and CDs. It facilitates a “secondary market” of used (generally) cheaper goods over which the copyright owner has no control.

ReDigi claimed that the doctrine should also extend to the digital world, to allow users who no longer wish to possess and listen to a digital file of music to sell the digital file to someone else who does. ReDigi claimed that because the sellers lawfully acquired “copies” of the musical works from iTunes or other ReDigi users, their service effectively acted as an online used record store. The judge disagreed for two reasons.

First, using his analysis of the reproduction right, Judge Sullivan concluded that because the files in question were in fact unauthorized reproductions of the work, the first sale doctrine could not apply ab initio, since the final “copies” were not “lawfully made” according to the Copyright Act.

Second, under the judge’s strict reading of section 109, resold digital files could never fall under the first sale doctrine, since the technology necessarily precludes any particular copy to be transferred. In his words, “the first sale defense is limited to material items, like records, that the copyright owner put into the stream of commerce.” As such, first sale can never apply in the digital realm.

The judge bolstered his conclusion by pointing to remarks from the United States Copyright Office (USCO) in its report on the Digital Millennium Copyright Act (DMCA). In this report the USCO explicitly states that the first sale doctrine could not be imported into the digital domain, specifically because the justification for the first sale doctrine is only applicable in a tangible realm. According to the USCO, the justification for the first sale doctrine is premised on the idea that “physical copies of works degrade with time and use, making used copies less desirable than new ones.” In other words, the first sale doctrine is designed to allow users who do not care about that “new car smell” to purchase work at a (theoretically) lower price. Digital copies, however, never lose their “new car smell”: digital information does not degrade and can be infinitely and perfectly reproduced, making one used “copy” as desirable as the other.

This interpretation, however, seems to miss the mark. The first sale doctrine is not concerned with the quality of the copy sold or even the value (since certainly there are used books out there that demand a much higher price than their original sale value, for example, a mint condition first printing of Dickens’s “A Tale of Two Cities”). Rather, what the first sale doctrine seems to be aimed at is the number of copies available in the market place, since the doctrine effectively limits a secondary market in creative works to at most the number of works released to the primary market. Of course, this interpretation turns on an interpretation of the reproduction right that ignores the number of “fixations” made, and instead turns on the number of “copies” left at the end of any process. Since Judge Sullivan rejected this interpretation of the reproduction right, it is only logical that he should find the first sale doctrine not apply from the get go in the digital realm. Instead, he advised that if ReDigi wants the first sale doctrine to include digital sales, they should take it up with Congress.

Future Predictions

But is Judge Sullivan’s ruling on the first sale doctrine and the digital world sustainable? Given current trends in the Second Circuit (where the Southern District Court of New York is located), the answer is: not likely.

Over the last five years, the Second Circuit has favored more liberal, consumer-centric interpretations of the Copyright Act. First, in The Cartoon Network LP v. CSC Holdings, Inc., 536 F.3d 121 (2d Dir. 2008) (aka Cablevision), the circuit struck down the district court’s opinion that Cablevision copied broadcast transmissions and engaged in a “public transmission” without authorization from the copyright holder when it created a service that allowed its subscribers to initiate copying of a broadcast program to personal space on Cablevision’s remote service DVR and then stream that content to their televisions at a later time. The Second Circuit held that because the user initiated the copying—which was covered as a “fair use” under the Supreme Court’s interpretation of section 107 in Sony [that case allowed copying of television programs through a VCR as a “fair use”]—Cablevision did not violate the reproduction right. Furthermore, they did not create a “public transmission” since each user initiated copy could only be viewed by the user who initiated it, not the general public. The court thus allowed Cablevision to continue offering its services.

Second, earlier this month in WNET, Thirteen v. Aereo, Inc., the court affirmed the district court opinion that it was not a “public transmission” when Aereo re-broadcast over the air signals to individual subscribers, since each subscriber was assigned their own unique antenna through which they could receive the programming.

These two consumer-centric decisions from the appellate court suggests that despite Judge Sullivan’s opinion that the first sale doctrine can never apply in the digital realm, unless Congress were to legislate otherwise, the Second Circuit might have other ideas. Specifically, considering the increased speed with which the world is digitizing, following Judge Sullivan’s strict interpretation of section 109 would eliminate the secondary market for digitally released creative works. This not only includes musical works, but other creative works like ebooks, and movies.

Furthermore, according to the Supreme Court in Kirstaeng, the first sale doctrine is designed to protect against monopolistic practices. By denying its application to the digital realm, copyright owners gain a monopoly over all the sales of all its digital copies, for the duration of copyright.

Judge Sullivan’s ruling also places too much form over substance. By focusing on the minutia of how many “copies” are created over the process, rather than how many are left at the end of the process, courts lose perspective over the primary purpose of the reproduction right: to control the number of actual usable copies available in the marketplace.

While a huge boon for copyright owners—since it guarantees any sale will be to a primary market— maintaining Judge Sullivan’s ruling would be a blow to consumers. First, many individuals rely on cheaper, secondary markets to access recorded cultural works: eliminating a secondary market could create a class of culturally illiterate individuals. While one could argue that the current price of a song on iTunes ($0.99) is not particularly burdensome, prohibiting resale of digital items is particularly worrisome in the digital book market, where many files cost the same (or more) as the tangible copy. Second, prohibiting resale also creates a danger that certain works would be lost should the author only make the work available for purchase and download for a limited time (for promotional or other reasons).

The digital realm is forcing us to rethink copyright and whether models that worked in a tangible world may also be applied to a digital one. Given that other domestic and foreign courts recognize that “reproduction” requires some sort of “duplication,” that at the end of a sale through ReDigi’s service, no such duplication occurs, and that the Second Circuit seems to favor a liberal, user-centric interpretation of the Copyright Act, should ReDigi seek appeal (and they likely will), the Second Circuit will likely overturn Judge Sullivan’s decision—at least as it pertains to the first sale doctrine—and affirm the Supreme Court’s statement in Kirstaeng that “the first-sale doctrine has played an integral part in American copyright law for over a century.” Let’s just hope that it continues to play that role for another 100 years.

After the success of “A Study in Sherlock,” a collection of Holmes-inspired stories organized by Klinger and Laurie King, a novelist who has also borrowed from Conan Doyle’s stories in her work, the two editors intend to publish a sequel called “In the Company of Sherlock Holmes.” Although Klinger paid the license to use characters and parts of the story line for the first book, which was published by Random House, he claims that the material used in the current book are all from works that are in the public domain and, therefore, require no license. The Conan Doyle Estate disagrees, and the publisher, Pegasus, will not publish Klinger and King’s new collection without a favorable ruling by the District Court for the Northern District of Illinois, where Klinger has filed his suit.

After passing the Copyright Act of 1976, the US adopted the “life plus” model prevalent in other countries and allowed authors whose works had reached the public domain to restore those rights with certain limitations. This meant that works published between 1923 and 1977 would retain a term-limit of 95 years, and anything published previously would remain in the public domain. In 1981 Conan Doyle’s daughter registered with the US Copyright Office “The Case-Book of Sherlock Holmes,” a compilation of Holmes stories which had been previously published individually in the country. Klinger, however, claims that his collection uses elements that did not first appear in the registered book. He argues that the main characters in the Sherlock series were introduced in Conan Doyle’s first story, “A Study in Scarlet,” published in 1887, and that the stories in his collection do not borrow from the ten works in “The Case-Book” published after 1923, which still retain their copyright.

Even though literary works like “A Study in Sherlock” might be the most affected by a favorable decision for Klinger in this case, it will also affect a number of other mediums that have used Sherlock Holmes as inspiration. In recent years, several TV shows, like the BBC’s “Sherlock” and CBS’s “Elementary,” as well as high-profile movies, like the Sherlock Holmes adaptation featuring Robert Downey Jr., have helped the notorious detective gain momentum in pop culture. However, these channels and studios have paid the Conan Doyle Estate license fees to avoid litigation. If the District Court declares that most of the author’s work is in the public domain, we may see an increase in the proliferation of Holmes-inspired adaptations very soon.

April 17 marks the one-year anniversary of Twitter’s IPA, and after one year, not many companies have adopted or even praised the merits of the twitter’s agreement.  Nevertheless, today the IPA turns a year old, so maybe it would be beneficial for us all to reevaluate the merits of the agreement.

The IPA’s purpose is to eliminate major patent suits by giving the inventors control over how their patents are used.  The agreement grants the power to the inventors by only allowing patents to be used defensively during litigations.  How can an agreement stop companies from suing other companies when the inventor assigns the patent to the company though?

The agreement sets up a simple, but effective way to minimize the number of patent suits by allowing inventors to license their patents to opposing parties when their patents are used in offensive litigations.  So if Apple decided to sue Samsung, and Apple did not receive permission from the actual inventor, he/she would be able to license the patent to Samsung and cancel the patent suit.

The oversimplified example above shows exactly why the IPA has not become popular within the industry.  Patent suits are essential for business.  Companies’ patent portfolios are assets that are easily liquidated, and weaponry used for increasing market share.  Executives and shareholders responsibilities are to protect the companies’ financial interests, not the interests of the inventors.

So although Twitter’s solution would be ideal in a perfect world, unfortunately that is not the world we live in.  Big tech companies exist to bring profits for their shareholders, and shareholders typically invest in companies that can recoup their investment plus more.  At the end of the day, money rules all.

As time progresses, Twitter might not even enforce its own agreement.  Twitter, a private company, just received its first patents and many companies possibly infringe those patents.  Will Twitter offensively enforce those patents?  Who knows?  But what we do know is that if Twitter does enforce those patents, it will wish the IPA was a tweet it could simply delete and forget about.

Register of Copyrights Maria Pallante

In that vein, Pallante called for balance in passing a new law, asking Congress to take care to satisfy the needs of the public interest, which she described as the ultimate goal of incentivizing creators with copyright protection.  Specifically, Pallante called for a retreat from the increasing copyright protections of the past forty years, specifically suggesting that Congress return the term of copyright to the life of the author plus fifty years, the minimum required by the United States’ obligations under the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property (TRIPs).  This emphasis on the public interest appears to be in response to criticisms that particularly since the advent of online file sharing, the copyright system has directed its focus on protecting organized creative industry associations such as the RIAA and MPAA.

Yet this emphasis on the public interest has not satisfied all of Pallante’s critics.  Mike Masnick, editor of the popular copyright skeptic blog Techdirt, found Pallante’s testimony to lack specific details.  While he agreed with her that many aspects of the copyright system are broken, he criticized what he saw as her failure to articulate why the system is broken.

Masnick seemed to be particularly frustrated with Pallante’s testimony later in the hearing that Digital Rights Management technology is an essential part of a functioning copyright system, as well as her repeated call for greater penalties for infringements such as illegal internet streaming, a key element of the now-defunct SOPA legislation.  Yet despite his dissent, Masnick supported Pallante’s statement that the new copyright law should focus on for-profit piracy enterprises, not teenagers downloading songs at home.  Ultimately, one hopes that parties on both sides of the debate – stakeholders and observers alike – can take their points of agreement and work toward a new copyright law that works for Americans in the 21st Century.

IP NAV describes itself as a Patent Monetization Company specializing in turning “IP assets into revenue streams” by analyzing patent claims and identifying claims by other “products which may infringe those thaims.” IPNav’s then “leverages [its] global database of licensing transactions” to get a deal signed and the “money flowing.”  They claim they simply specialize in protecting small patent holders that are victims of infringement. Rackspace on the other hand, describes them as “the most notorious patent troll in America” with a business model that relies entirely on frivolous lawsuits and intimidation.

In this particular case Rackspace claims:

IP Navigation Group (IP Nav), as agent for a supposedly secret patent owner, now known as Parallel Iron, accused Rackspace of patent infringement. IP Nav told us that they could not divulge the details of their infringement claims – not even the patent numbers or the patent owner – unless we entered into a “forbearance agreement” – basically, an agreement that we would not sue them. IP Nav was worried that as soon as we found out what their patents and claims actually were, Rackspace would sue to invalidate their patents or for a declaration that Rackspace does not infringe.

IPNav’s responds that:

Maybe Rackspace’s lack of respect for intellectual property is because it doesn’t have any. With a market cap of $6.5 billion and annual revenues of over a billion dollars a year, Rackspace only has two patents.

Rackspace is simply using this lawsuit as an excuse to further its objective of using other people’s intellectual property for free. The company’s real attitude toward intellectual property was laid out by its general counsel, Alan Schoenbaum, in an October, 2012 interview with ars technica: “We’d love to get rid of software patents altogether.”

Rackspace wants to use other people’s property without paying for it. That’s the definition of a thief.

Rackspace’s approach of going on the offensive is new and a largely unexplored tactic. Traditionally accused patent infringers have simply made decisions between paying or fighting when responding to claims against them. Rackspace has taken a new approach that can be seen as a preemptive effort to bring the heat to IPNav rather than take a strictly defensive position in response to infringement claims. The current filing  accuses IPNav of requiring that Rackspace enter a “Forbearance Agreement” precluding suit without notice while the claims Rackspace were being substantiated; but then turning and suing Rackspace through Parallel Iron without notice and in violation of the agreement. Rackspace claims this is a material breach and “relieves Rackspace of any further duty to comply with the Forbearance Agreement.”

Basically it’s a mess. The business incentive exists for a company like IPNav to exist. There’s money to be had in researching similar technologies, getting a jump in litigation, and pressing for settlement. There are also legitimate reasons for smaller companies to seek out patent protection assistance. And it’s no secret that patent fights over license control are a major strategy for technology companies both large and small. While not a fan of jumping to legislative solutions, this is an area where the rules of the game need to be laid out more clearly and fairly for all parties. This constant back and forth at all levels of business just isn’t good business and some better ground rules need to be established.

In both proceedings, consumer groups argue that promoting freedom of choice in modes of access to information can enable American Consumers’ full participation in their culture.  This freedom enables consumers to exercise their First Amendment right to access and disseminate information and promote further innovation and expression.  New technologies that are the product of this innovation are developed to meet changing consumer needs; today consumers need choice.

Additionally, consumer groups argue that the congressional intent of the Copyright Act is to promote consumer choice by favoring legitimate uses of technologies in ways that improve access to content. The intent of the Copyright Act is also to protect consumer autonomy by distinguishing between public and private performance rights.

The proceedings differ in one crucial way: the Cablevision case. In Cartoon Network LP, LLLP v. CSC Holdings, Inc., known as Cablevision, the Second Circuit held that a remote storage DVR service did not infringe the copyright of content owners.  The court reasoned that because the service made a unique copy of a program available only to the user who requested that copy be created, the performance of that copy was a non-infringing private one.  The Second Circuit relied on this precedent to find that Aereo facilitates private performances of broadcast content in a similar way.  However, the Ninth Circuit does not believe that Cablevision was a sound decision, and the Aereokiller District Court roundly rejected its reasoning in granting a preliminary injunction against the technology.

Recently, News Corp reacted to the Second Circuit’s support of Aereo’s service by threatening to turn Fox into a cable channel in order to put it out of reach of Aereo’s technology.  News Corp claims that Aereo “is pirating our broadcast signal” by making Fox’s broadcast content available on devices other than a television screen.  So ask yourself, if Fox programming is free on broadcast television, why should a viewer be limited to live television, or DVR service connected to the television, to watch desired content?  What is the problem with viewing a show on a phone, tablet, or laptop when you could lawfully view on broadcast television in your home?

Although the Ninth Circuit may reject Cablevision, consumer groups argue that the performances of broadcast content that Aereokiller enables are private due to the limited audience capable of receiving the work.  In addition, the Aereokiller technology can be justified as a fair use because it provides sufficient public and consumer benefit.

The pending proceeding in the Ninth Circuit provides a unique opportunity for the Court to determine whether disruptive technologies like Aereokiller, which meet consumer demand for choice in when and where to view broadcast content, will be supported or snuffed out.  The issues which the Aereo and Aereokiller cases highlight are fundamentally important to any television viewer because these services will help consumers save money, and will give consumers the necessary flexibility watch desired content when and where they want to.

It is crucial that courts allow consumers to continue to use technologies like the mp3 player, smartphone, tablet, and other hugely popular, user-friendly technologies which empower consumers by enabling time and space-shifting of content.  A decision that halts the Aereo or Aereokiller services in either of these cases could harm consumers by stifling innovation and decreasing access to information, and by forcing consumers to pay too much for TV.  Because the Ninth Circuit decision is still pending, it is very important to raise awareness about the importance of the current proceedings so that the public can demonstrate their support for new technologies like Aereo and Aereokiller that meet consumer needs.

This symposium will reexamine the landmark article, A Marketplace Approach to Broadcast Regulation, by former Chairman of the Federal Communications Commission (FCC) Mark S. Fowler and Judge Daniel L. Brenner, thirty years after its initial publication.  Our discussion will feature an author retrospective, as well as consideration of “lessons learned” from broadcast regulation that may inform future FCC regulation of broadcast, cable, the Internet and beyond.

In addition to Judge Brenner and Chairman Fowler, the distinguished speakers include: Christopher Yoo of the University of Pennsylvania Law School, Thomas Hazlett of the George Mason University School of Law, Lili Levi of the University of Miami School of Law, Ellen Goodman of the Rutgers’ School of Law, Frank Pasquale of the Seton Hall University School of Law, Antoinette Bush of Skadden, Arps, Slate, Meagher & Flom LLP, Andrew Jay Schwartzman of the Media Access Project, John Bergmayer of Public Knowledge, Charles Firestone of the Aspen Institute, Chérie Kiser of Cahill, Gordon & Reindel LLP, and former FCC Chairman Richard Wiley.

 

However, Louboutin subsequently took issue with the USPTO’s proposed revision of the trademark. The Second Circuit issued a mandate to the USPTO on September 27, 2012, and the USPTO updated the mark with the mandate’s exact language, limiting the trademark “to a red lacquered outsole on footwear that contrasts with the color of the adjoining (‘upper’) portion of the shoe.” The trademark leaves out a definition for “upper,” and counsel for Louboutin found this lack of specificity problematic. In a letter to the clerk of court for the Second Circuit, Louboutin requested that the trademark include the Second Circuit’s definition of “upper” as referring to “the visible portions of the shoe other than the outsole.” Christian Louboutin S.A. v. Yves Saint Laurent Am. Holdings, Inc., 696 F.3d 206, 227 (2d Cir. 2012). Counsel argued that the ambiguity of the revised mark, without clarifying what constitutes an “upper,” could allow Louboutin’s competitors to get more out of the adjudication that was intended; namely, competing shoemakers could use the red sole as long as some of the visible portions of the shoe were also red.

In what will hopefully be the last decision in this belabored litigation, the Second Circuit denied Louboutin’s request on March 8, reasoning that the company had not shown that this inconsistency rose to the level necessary to grant such a modification request. See Louboutin S.A. v. Yves Saint Laurent Am. Holding, Inc., 709 F.3d 140, 142 (2d Cir. 2013). If Louboutin’s predictions were true, however, the proliferation of red-soled shoes may cause a flood of future litigation over the company’s signature.

Over one million downloaders have already “paid the iron price” for illegally accessing HBO’s exclusive subscriber content.  According to a report by TorrentFreak, a blog that covers file sharing trends, the United States has the highest piracy levels, followed closely by the UK and Australia. But why is Game of Thrones such a popular target for illegal downloading? The answer is due to the international delay in the airing of episodes. HBO original series are only available to subscribers through HBO’s cable channel or through its digital platform, HBO GO. Viewers outside the US often have to wait a week or more for new episodes to reach their markets.

The high demand for the season 3 premiere is no surprise, as Game of Thrones was the most pirated show of 2012. TorrentFreak estimates that 4.3 million people downloaded the season 2 finale last year, costing HBO about $170 million in revenues.

Users who illegally downloaded the premiere used BitTorrent, a free software system that lets users swap large media files and illegally trade copyrighted content, such as movies, TV shows, and music. While Hollywood is worried about the pervasiveness of illegal downloads, HBO executives are less concerned. HBO programming president Michael Lombardo sees the piracy of Game of Thrones as a sign of success rather than a problem: “I probably shouldn’t be saying this, but it is a compliment of sorts…[Piracy is] something that comes along with having a wildly successful show on a subscription network…[It] certainly didn’t negatively impact DVD sales.” David Petrarca, a director of Game of Thrones, agrees. According to him, unauthorized downloads do not matter because the show thrives on “cultural buzz,” and benefits from the social commentary that it generates. This in turn leads people to eventually purchase HBO subscriptions.

The impact of piracy has an interesting effect on the way subscriber content is offered to the public. Richard Plepler, the CEO of HBO, foresees a future where HBO GO is bundled with internet service, the same way HBO is bundled with cable. Reuters reported that customers could pay an extra $10-15 a month on top of their Internet rates for access. However, it is difficult to imagine converting downloaders who have already experienced easy and free (albeit illegal) access through BitTorrent, into paying subscribers. For now, it seems, HBO will be sticking to its subscriber revenue strategy.

The children of David Pryor, the Thunder and Lightning frontman who penned the song, are seeking $150,000 plus attorney fees.  Pryor’s family claim that during the track under question, when Kanye says “Get down girl, go ‘head, get down” he samples the line “Get Down” which is similarly repeated three times on both songs. They additionally state that West lifted that sample to use it in his “Gold Digger” song as an echo to his own voice. TMZ has run a comparison of both tracks.

The lyrics “get down girl, go ‘head, get down” is one of the hit song’s instantly recognizable hooks. In fact, “Gold Digger” has become one of Kanye’s most successful songs, selling over three million copies in the United States alone since its 2005 release.

There has been a circuit split in deciding exactly how much sampling needs to constitute infringement. The Ninth Circuit affirmed a non-infringement verdict when holding that “three notes, C-D flat-C, sung over a background C note played on the flute …for approximately six seconds” was not enough to constitute infringement, since the use was not likely to be recognized by a listener as the plaintiff’s original work and were therefore was not substantially similar. The opinion also noted that the song-in-question sampled so little of the plaintiff’s composition that the claims lacked merit.

In other circuits, there are no de minimis defenses for sampling: use is use and requires a licensing fee. In these circuits, sample length is not a heavily weighed factor in determining infringement.  The Sixth Circuit ruled in Bridgeport Music v. UMG Recordings, Inc. that N.W.A.’s sampling of a Funkadelic song constituted infringement.  This sampling was half the number of notes as the sample in the Ninth Circuit case.

Also named in the current lawsuit are record labels that Mr. West has distributions deals with, Roc-a-Fella Records, Bomb Hip-Hop Records, Caroline Distribution, Autumn Games, Activision, Bad Boy Records, Stones Throw Records, and The Island Def Jam Music Group.

West is clearly at an advantage. The phrase “get down” is 70’s slang and commonly used in other songs.  Marvin Gaye, KC & The Sunshine Band, and Kool & The Gang are just some of the artists who use the phrase “get down” in their lyrics. West’s attorneys could argue that the phrase is part of the public domain, and thus, Pryor does not have a valid copyright claim.  However this case will finish, 2 Live Crew had one of the best infringement cases of all-time.

On April 15, 2013, the Supreme Court will hear oral arguments for the case of Association for Molecular Pathology v. Myriad Genetics. The Supreme Court will address the issues of 1) whether genes are patentable and 2) whether petitioners deterred by Myriad Genetics (Myriad)’s active enforcement of its patent rights lack standing to
challenge those patents without evidence of being threatened by an infringement action.

Myriad owns a patent involving isolated nucleic acids that correspond to a gene locus related to breast cancer. Myriad’s nucleic acids have helped detect mutations in the locus linked to breast cancer. The America Civil Liberties Union (ACLU) has challenged Myriad on the validity of Myriad’s nucleic acid patent. The ACLU claims that natural
occurring nucleotides are not patentable simply by isolation because their functionality is defined by their natural occurring sequences.

The U.S. District Court for the Southern District of New York agreed with the ACLU, holding that patents are not valid for naturally occurring products. However, the Court of Appeals for the Federal Circuit reversed that decision.

This creates a tension with the United States Patent and Trademark Office (USPTO). The USPTO has granted patents on isolated nucleic acids, including those that correspond to human genes. According to the USPTO, nucleic acids do not naturally exist in an isolated state –which makes isolated nucleic acids patentable because they are human made as long as they have a “substantial” practical utility.

The circuits have been split on the decision. If the Supreme Court determines that nucleic sequences of human genes are not patentable, the biopharmaceutical and medical companies may be upset because may of their gene patents could be undermined or reconsidered. In favor of maintaining the long-standing decisions of the patent community, judges have tended to agree that nucleic acids are patent eligible. Judges consider characteristics of nucleic acids such as broken peptide bind, fragments created, and a new substantial utility distinct from the product’s nature. In contrast, full-length gene sequences are not patent eligible. This is a middle ground that the Supreme Court will probably reach –allowing district court judges to continue determining patentability of nucleic acids on a case-by-case basis.

So how was the Digital Millenium Copyright Act used by GoPro to remove the user’s review? GoPro insists its intention was never to censor or shut down reviews. The infringement notice states: “I have a good faith belief that use of the trademark(s) described above in connection with the domain and URLs described above is not authorized by the trademark owner, and such use is not otherwise permissible under applicable law.” According to GoPro’s brand manager, the review consisted of a trademark violation; however, trademark violations are not covered by the DMCA. In addition, the use of trademarked material in a review is completely legal.

Unfortunately, the abusive use of DMCA takedowns is all too common. Service providers are notorious for immediately taking down flagged material, without first assessing whether infringing content exists. One of the most litigated cases, the Dancing Baby case, fought by the Electronic Frontier Foundation, is still waiting to reach a resolution. After years in the courtroom, there are still no damages.

A GoPro representative posted a response on reddit, stating that the DMCA notice was an “unfortunate mistake.” The response states:

“The letter that was posted next to the review on DigitalRev was not sent in response to the review. Obviously, we welcome editorial reviews of our products. This letter was sent because DigitalRev is not an authorized reseller of GoPro products and they were using images and had incorrect branding and representation of our product in their online commerce store. As part of our program – we ask merchants who are selling our product to use authorized images. That is why DigitalRev was contacted. But – our letter did not clearly communicate this and that is something we will correct.”

The GoPro representative’s response does not seem to answer any of the questions about why the review was targeted with a DMCA takedown request in the first place, if the real issue was about the use of trademarked unauthorized images. While these questions remain unanswered, the fact that the review was pulled without first assessing the content amounts to censorship. The perceived consequences of DMCA abuse suggests that any product reviewer would have to get permission to use the name of a product as well as to review it. While it remains to be seen how GoPro will extract itself from this sticky situation, one thing is clear: DMCA reform is necessary to prevent further unfair censorship of online content.

Apple filed its patent application with the U.S. Patent and Trademark Office back in September 2011, and it was finally published on April 4. Since most of us have accessed street level imaging through Google’s “Street View”, Apple’s use of similar technology is certain to spark some sort of reaction from Google. Even loyal consumers may be hesitant towards using another map application from Apple given the company’s past shortcomings.

Yet in true Apple style, this street view mapping system has the potential to be a trendsetter. With Apple’s recent $20 million purchase of WifiSLAM, a Wi-Fi based indoor navigation company, they appear to be set on incorporating online shopping to their app.

Upon entering a store, customers will be given a detailed view of the store’s interior. Satellite location detection systems will then alert shoppers when they are near items that may be of interest to them. Gone are the days where shopping meant searching through a store for what you want to buy. Shoppers will rejoice, for now you can just let your iPhone do all the work for you. At this point the only question remains, is there anything the iPhone can’t do?

April 12, 2013
09:00 AM – 05:00 PM
American University Washington College of Law
4801 Massachusetts Avenue, NW
Washington, DC 20016
Room 603

**CLE Available**

Program Flyer & Agenda

Click to Register

Summary:

Patentable subject matter has plagued the appellate courts for years. Now, the issue appears to be coming to a head—or rather, three. This symposium analyzes the current conflicted state of 35 U.S.C. § 101 and the patentable subject matter exception in the context of electronics and software patents, diagnostic and biotechnology patents, and computer-implemented business method patents. These three distinct areas of patent eligibility developed under three very different regimes. The upcoming decisions in CLS Bank Int’l v. Alice Corp., AMP v. USPTO (the Myriad case), and the ongoing implementation of Covered Business Method Post-Grant Review are driving the change.

Panelists will discuss the significance, advantages, and drawbacks of each in three panels in an attempt to contribute certainty and perspective to an ever-changing area of the law. Esteemed speakers include in-house intellectual property counsel at Google, Rosetta Stone, and Smith Detections; noted intellectual property lawyers; IP bloggers; International Trade Commission-Nominated F. Scott Kieff; and Administrative Patent Judges at the new Patent Trial and Appeals Board.

via google images

Rackspace Hosting, Inc., an open cloud computing company, and Red Hat, Inc.,an open source technology provider that developed the Linux OS software Rackspace uses, were victorious in a patent suit brought by Uniloc USA, Inc., a known patent troll that filed at least a dozen lawsuits just last month.

Touted by Red Hat’s general counsel as a “major victory for open source software,” the case is being hailed as remarkable for how uniquely decisive Uniloc’s loss is. The suit was quelled before making it to trial, and the decision came from a court that, according to arstechnica.com, is notoriously friendly to patent holders.  Rackspace maintains that this is the “first reported instance in which the Eastern District of Texas has granted an early motion to dismiss finding a patent invalid because it claimed unpatentable subject matter.” The decision will hopefully send a strong message to non-practicing entities who aggressively assert patents without actually creating anything themselves.

Chief Judge Leonard Davis granted Rackspace’s motion to dismiss, holding that the plaintiff failed to allege infringement of a patentable claim. The claim in question is not patentable because it is, essentially, a basic math formula.

Uniloc, which has numerous pending patent cases against technology companies, first filed a complaint against Rackspace in June 2012 in the US District Court for Eastern Texas, alleging that Rackspace infringed its patent entitled “Method and Apparatus for Handling Overflow and Underflow in Processing Floating-Point Numbers.” A floating point number is a number with a decimal point and a certain number of significant figures. Uniloc claimed that Rackspace infringed in “making, using, offering for sale, selling and/or importing servers running Linux Kernal (version 2.6 or higher), which is used to process floating point operations carried out on Rackspace’s servers including those servers used in conjunction with Rackspace’s hosting solutions/products that practice at least the method described in Claim 1 of the patent.”

The claim reads as follows:

“Claim 1: A method for processing floating-point numbers, each floating-point number having at least a sign portion, an exponent portion and a mantissa portion, comprising the steps of: converting a floating-point number memory register representation to a floating-point register representation; rounding the converted floating-point number; performing an arithmetic computation upon said rounded number resulting in a new floating-point value; and converting the resulting new floating-point register value to a floating-point memory register representation.”

According to the opinion, the claim fails the non-dispositive machine-or-transformation test in that it does not recite a machine, only steps to produce another representation of a number. The transformation prong is not met because the claim is merely a manipulation of data that “converts the floating-point number into a different format, performs an arithmetic operation, and converts the result back to the original floating-number format,” and no transformation occurs. Moreover, because it merely describes an improvement on a mathematical formula, the claim embodies one of the three §101 exceptions to patent eligibility; laws of nature. Additionally, the conversion of floating-point numbers can apply across a plethora of fields such as science, math, communications, security, graphics, and games. If upheld, the patent at issue would create a significant road block to scientific innovation.

Overall, the case reiterates the idea that simple math simply cannot be patented. While Uniloc is currently quiet as to whether it will seek an appeal, Rackspace and Red Hat are celebrating the significant win. In its victory announcement, Rackspace General Counsel Alan Schoenbaum asserted that “the early dismissal of this case delivers a clear message that patent assertion entities can’t expect quick settlements on weak claims, a tactic many patent assertion entities use to monetize questionable patents.”

Appeal or not, it is refreshing and potentially game changing, that an open source software company prevailed against a patent holder in a court like this.

The law that supposedly protects our Internet privacy rights – the Electronic Communications Privacy Act (ECPA) – was written in 1986. A lot has happened in 25 years that makes ECPA virtually useless. When ECPA was passed, email, instant messaging, cloud computing, cellphones, GPS, and location-tracking did not exist. The law was written without any regard to these current popular forms of communication. The rise of cloud computing and location-tracking have changed the way we store information. For example, companies may give your information to third parties when the law does not provide any protection on this kind of information storage. In addition, the rise of social networking sites has increased the instances where people, in blind trust, submit their personal information and photos, giving the public free and easy access to them. Many people do not realize that when they upload something onto the Internet, the Internet providers can keep it forever. Once your personal information enters the World Wide Web, anything can happen to it and you no longer have control over it.

The scandal of former CIA Director David Petraeus is an alarming example of how little protection we have online. Chris Soghoian, in his article on the ACLU’s website, states: “When the CIA Director cannot hide his activities online, what hope is there for the rest of us? In the unfolding sex scandal that has led to the resignation of David Petraeus, the FBI’s electronic surveillance and tracking of Petraeus and his mistress Paula Broadwell is more than a side show—it’s a key component of the story.” The fact that the government can access one’s personal email with a simple subpoena is disturbing. The government traced the anonymous email account that Paula Broadwell used to exchange emails with the former CIA Director within a matter of days and without any court order. If you think you know how to be safe on the Internet, think again. Paula Broadwell thought she was being safe when she used a couple of anonymous email accounts and never used her home computer. But the government still traced these emails back to her personal laptop. It turns out that they were able to trace them to the hotels’ Wi-Fi that Paula Broadwell used to send these emails. The former CIA Director was being “safe” too. He had an anonymous email account that he used to write draft emails which he never sent but allowed Ms. Broadwell access to read. Despite these measures, the FBI was still able to trace the account back to Petraeus.

ECPA has become outdated, and some courts are starting to resist the law. The Sixth Circuit Court of Appeals ruled in 2011 that the government’s ability to obtain a person’s email from a service provider without a warrant was unconstitutional. Congress had previously considered amending the law, but in the wake of 9/11 and the USA Patriot Act, not much has been done to ECPA. In November 2012, Senate Judiciary Committee Chairman Patrick Leahy introduced a bill designed to modernize the ECPA but these reforms have not been passed. Private entities like Google and Digital Due Process support this new movement. Google refuses to turn over clients’ information, arguing that the Ninth Circuit Court, where Google’s headquarters are located, has rejected this kind of search-without-warrants practice. However, in other jurisdictions, this kind of search and seizure is still very much lawful. The push towards Internet privacy is gathering momentum. If these ECPA reforms succeed, we must next consider how to protect ourselves from commercial data mining by private entities. The Internet has secretly stripped us from our privacy rights and we need to now start taking control of the situation.

The U.S. Patent and Trademark Office has rejected Apple’s application to trademark the term “iPad mini.” The agency sent a letter to Apple refusing the registration under Section 2(e)(1) of the Lanham Act because “the applied-for mark merely describes a feature or characteristic of applicant’s goods.”

Apple launched the original iPad in 2010 and received trademark registration on the term in March of 2010 after Apple was assigned rights to the iPad trademark from Fujitsu. This time, however, Apple was not as successful with the term iPad mini. The USPTO denied the registration on the basis that the term does not create a unique or non-descriptive meaning in relation to the product.

“A mark is merely descriptive if it describes an ingredient, quality, characteristic, function, feature, purpose, or use of an applicant’s goods and/or services.” The examining attorney considered separate components of the term, specifically, “i”, “Pad”, and “mini” arguing that each component in the applied for mark was a description of a feature of the product. The letter explained that “if individual components of a mark retain their descriptive meaning…the combination results in a composite mark that is itself descriptive and not registrable.”

The decision cited to instances where the word “mini” had been held merely descriptive explaining that it has been used to describe goods sold and produced in miniature form. The examining attorney, having attached internet searches as evidence, noted that other companies use the term “mini” to describe smaller versions of handheld devices. Among those attached as evidence include Samsung Galaxy mini, Motorola Defy mini, and Nokia N97 mini.

Apple has until July 24 to respond to the letter in which Apple simply needs to demonstrate that the term has acquired distinctiveness. The examiner does note, however, that Apple must include a disclaimer in its amended application noting that Apple only wishes to trademark the word “mini” when used with the entire term “iPad mini,” a process that should not prove difficult for Apple to overcome.

Photo courtesy of Huffington Post

On Friday March 22, 2013, Brooklyn designer Haleh Nematzadeh filed a suit against Yoko Ono in Brooklyn federal court for infringement of Nematzadeh’s designs. Nematzadeh claimed that Ono’s team saw her clothing designs, changed them slightly, and sold the styles online, passing off the designs as Ono’s own work. Outraged, Nematzadeh has stated, “They took everything with no shame. They stole from me blatantly.”

The 14-page complaint alleges, “The offending collection copied exact designs as well as imitated the designs and concepts from plaintiff’s collection. In order to conceal their thievery…defendants renamed the collection and called it a collection for men. Despite defendants’ feeble attempt at disguising the unlawful use of plaintiff’s collection, it is clear that defendants copied plaintiff’s design.” The complaint explains further, “One piece of the collection is a bra-like design. Defendants copied the design and used a male model to model it. The ridiculousness of this farce stands on its face.”

Nematzadeh claims that she met with Opening Ceremony, the retailer who sells Ono’s line, in July 2012 seeking to get her “Gonna Walk the Night” collection into its catalogue. Nematzadeh further alleges that Opening Ceremony photographers were supposed to meet with Nematzadeh, but instead decided to work with Ono and change the designs into a menswear line.

Nematzadeh’s “Gonna Walk the Night” line is fetish-inspired, involving nipple holes, sheer material, and handprints all over the crotch and breast. Ono’s collaboration with Opening Ceremony also features nipple holes and handprints on crotches. Ono’s statement on the Opening Website reads “I was inspired to create fashion for men, amazed at how my man was looking so great. I felt it was a pity if we could not make clothes emphasizing his very sexy body. So, I made this whole series with love for his hot bod and gave it to him as a wedding present. You can imagine how he went wild and fell in love with me even more.”

Nematzadeh fires back in her suit arguing that Ono’s statement is transparent and this has been the first time Ono has designed clothes. “She’s trying to put fetish in context, but since when does fetish and John Lennon go together? When you think of the Beatles, you think of dove and trees, not that,” Namatzadeh stated.

Nematzadeh’s lawyer Aymen Aboushi said that “They [big companies] rip off pieces here and there all the time, but you don’t see up-and-coming artists really trying to fight for their rights.” Nematzadeh is seeking $10 million for copyright infringement, disgorgement of unjust profits, and delivery or destruction of the offending products.

Before the tournament, many people did not know FGCU was even a school, nor could they tell you where in Florida the school was located (Ft. Myers, Fl. by the way).  But during a time where predictive brackets become more popular than schoolwork, meeting schedules, and politics, FGCU took the 2013 NCAA men’s basketball tournament, and America by storm.  They were the Cinderella team of the tourney, becoming the first 15-seed to advance to the Sweet Sixteen.  Not only was FGCU competing and winning on the actual hardwood, but the University was also involved with a legal battle stemming from their instant success and jaw dropping dunking ability.

Apparently trying to capitalize on the notoriety of the term, a local Ft. Myers, Florida man filed for the trademark “Dunk City” with the United States Patent and Trademark Office (USPTO).  The problem with the filing was that FGCU also refers to their basketball team as “Dunk City” due to their theatrical dunks during games.

In order for a mark to be officially recognized by the PTO, the mark must be distinctive or acquired secondary meaning, and used in commerce.  The man who filed for the mark had not used the mark in commerce, but had filed an intent-to-use application attempting the lockdown future use of the mark.

Although the mark was filed by another individual, the University contends that “Dunk City” belongs to the University.  During the tournament, FGCU made t-shirts for students referring to the team as “Dunk City,” and it was the basketball team’s play on the court that supposedly created the term.  So why hasn’t the University formally filed an application for the mark?

One reason might be because of the distinctiveness of the trademark.  In order for the PTO to grant trademarks under the Lanham Act, the mark must be distinctive, meaning the mark must be arbitrary or fanciful.  “Dunk City” is hardly a fanciful term, and definitely not arbitrary when used to describe basketball.  Some may even say “Dunk City” is a generic term used to describe any team that likes to throw alley-oop dunks.  Although not exactly the same, the NBA’s Los Angeles Clippers are called “Lob City” for their similar dunks.  This means the University has work to do in order to create a secondary meaning synonymously associating FGCU with the term “Dunk City.”

For a school founded in 1991, FGCU impressed the world making it far into the NCAA tournament.  Not only did they impress the world with their wins, but also with their amazing Lebron James-like dunks.  During the month of March, American basketball fans knew FGCU as “Dunk City.”  The next step for the University is getting all of America to know them as “Dunk City” throughout the entire year.  Then, and only then, will the term “Dunk City” belong solely to Florida Gulf Coast University.

Representative Eni Faleomavaega, an American Samoa Democrat, wrote H.R. 1278, Non-Disparagement of American Indians in Trademark Registrations Act of 2013. This act, if passed, would amend the Trademark Act of 1946 regarding “the disparagement of Native American persons or peoples through marks that use the term ‘redskin,’ and for other purposes.” Del. Eleanor Holmes Norton (D-D.C.) — a critic of the team’s name — is an original co-sponsor, along with Reps. Raúl Grijalva (D-Ariz.) and Karen Bass (D-Calif.).

There is no guarantee that the measure will even receive a committee hearing in the House, much less a vote. But it comes at a sensitive time; earlier this month in Alexandria, a three-judge panel on the federal Trademark Trial and Appeal Board heard arguments over whether the term ‘Redskins’ should be considered a slur, and therefore not worthy of trademark protection.

Even if the Redskins lost their trademark, they wouldn’t necessarily have to change their name. But it would be easier for other businesses and people to cut into the franchise’s profits by selling paraphernalia with the name on it.

According to The U.S. Patent and Trademark Office database, a number of the team’s trademarks were at issue during this hearing, including “Redskinettes,” “the Redskins,” and “Washington Redskins.” The team has argued that the name was intended to honor American Indians, an honor that some representatives of various native groups find dubious.

In February, a symposium entitled “Racist Stereotypes and Cultural Appropriation in American Sports” was held at the National Museum of the American Indian. Critics of the team’s name spoke up during the forum saying that the term “Redskin” is demeaning, dismissing the franchise’s argument that the word is meant to honor Native Americans rather than disparage them. The Washington Post reported that Robert Holden, deputy director of the National Congress of American Indians, stated : “Honors like that we don’t need.”

District Mayor Vincent Gray has also weighed in on the subject, albeit carefully. “I would love to be able to sit down with the team … and see if a change should be made,” Gray said in January, though he later clarified that he simply meant the subject would likely be discussed if the Redskins were to move back to the RFK Stadium site, which is on federal land.

As the Hill.com notes, the team has not publicly commented on challenges to the Redskins trademark, but last month began posting articles to the team website highlighting high schools that also use the moniker. This bizarre move seems to be backfiring, though, as students are leading the move away from using the racist nickname, including at Cooperstown High School in New York.

Students at Cooperstown High School voted to change their Redskins mascot. The district’s board of education called an open meeting to discuss the change and potential replacement names. Although many members of the school’s alumni board are against the name change, the mascot will change. The school board will decide on a new mascot for the high school in a few weeks.

Cooperstown High School took the bold approach, and will change their mascot. The Washington Redskins are unlikely to follow suit, but the team name will continue to be up for debate as its fate now lies in the hands of the United States Congress.

This is but another example of the United States imposing our standards and criteria of right and wrong on the international community. Not that there is anything wrong with that: America’s unique position as a superpower allows us to take positions on everything from world hunger to nuclear weapons without question. But at times, some of our stances seem a bit hypocritical. Public opinion favors policies that cater to Americans leading the pack in innovation and technological advancements, yet developments in the tech industry are flipping societal norms of cyberspace behavior and privacy upside down.

I fear the repercussion of throwing Google under the bus – they are among the companies that govern my digital life, and the amount of my personal information they’ve collected is unknown. Yet while their services and products undoubtedly have changed our lives for the better, some of their recent breakthroughs raise serious concerns about how “acceptable norms” of privacy will manifest themselves in the times ahead.

The latest lawsuit against Google was brought by 37 states and the District of Columbia, which complained the Internet behemoth violated people’s privacy when it collected various personal information during its street view mapping project. Google has admitted to these allegations, and paid a settlement of $7 million – pocket change for a company that makes over $100 million per day in advertising. But for Google, which has revolutionized the way we communicate in the digital sphere, the unauthorized use of unsuspecting users’ data opens a debate about their capabilities and motives.

Larry Page, Google’s founder and CEO, wishes for his company to act like a startup instead of a multinational corporation. This means taking risks and implementing strategies rather quickly; a consequences of this is the street view violation. In response to this blunder, Niki Fenwick, a Google spokeswoman said, “We work hard to get privacy right at Google, but in this case we didn’t, [so] we quickly tightened up our systems to address the issue.” Critics have been less forgiving. According to Scott Cleland, a consultant who maintains a privacy watch blog, “Google puts innovation ahead of everything and resists asking permission.”

This privacy battle is particular timely, as Google plans to unleash its newest invention that many believe will redefine privacy as we know it – Google Glass. The wearable technology that integrates the capabilities of a smartphone (camera, web browsing, voice recognition) into a pair of glasses is lauded as the arrival of the future. But the future has a dark side. As Mark Hurst, founder of Creative Good, writes:

“First, take the video feeds from every Google Glass headset, worn by users worldwide… Now add in facial recognition and the identity database that Google is building within Google Plus…

Finally, consider the speech-to-text software that Google already employs… Any audio in a video could, technically speaking, be converted to text…

Anything you say within earshot could be recorded, associated with the text, and tagged to your online identity. And stored in Google’s search index. Permanently.”

And yet while American innovators are happy to have us walking around as cyborgs with unlimited eavesdropping capabilities, red flags are only raised when foreign nations beat us at our own game. Certainly this does not undermine the gravity of China’s cyber espionage. The president’s National Security advisor, Tom Donilon noted the new concerns with the Chinese extend beyond “ordinary cybercrime or hacking.” Indeed, recent attacks on the military’s intellectual property have threatened our foreign policy and national infrastructure, so the White House’s swift response and uncompromising stance should be applauded. Still, it boils down to the classic American attitude that was also the rule growing up in my father’s house: “Do as I say, not as I do.”

It is no secret that expectations of privacy have slowly been eroding in the post-9/11 era of surveillance. Yet while the White House and Congress believe they wield the power to set the benchmark for cyber behavior, through their policies promoting innovation, they have created a proverbial Frankenstein. Internet, telecom, and data companies now determine how much privacy citizens are entitled to. Washington’s voice may still be worth something on the global stage, but when it comes to influencing sociological perceptions of an increasingly cyber world, Google is the only superpower.

Attorneys for Ms. Burch filed suit last week in the U.S. District Court for the Southern District of New York against Bluebell Accessories, a costume jewelry seller, alleging that Bluebell sold jewelry with a strikingly similar T-shaped monogram. The monogram logo is an integral part of the Tory Burch brand, appearing on everything from the company’s popular ballet flats to its handbags and sunglasses.

The lawsuit alleges that back in November, the company hired an investigator to order various pieces of jewelry with a similar-looking logo off the website. Burch’s legal team then sent a cease-and-desist letter to the owners of Bluebell Accessories, Jessica Min and Sung Ki Min. The owners stopped selling the goods on their website but failed to provide information about the manufacturer who made the goods.

Burch is suing Bluebell for trademark and copyright infringement, false designation of origin and false descriptions, trademark dilution, unfair competition, and injury to business reputation. Burch is seeking both a permanent injunction against Bluebell and the names of the jewelry manufacturers who supplied Bluebell with the allegedly infringing goods.

The company has been actively involved in policing trademark copycats through its legal department and consumer education techniques. Two years ago, the company was awarded $164 million in an Anti-Counterfeiting suit, which was said to be the largest damages award granted to a fashion company in a counterfeit suit. The Tory Burch official website claims it has disabled over 1,200 websites selling counterfeit goods and seized nearly half a million counterfeit Tory Burch items. There is also a “Counterfeit FAQ’s” section on the Tory Burch e-commerce website that alerts consumers about fake products and how to spot them. This is a great way for luxury brands to empower their consumers instead of ignoring a common problem that many of these higher-end brands face. When a luxury brand becomes popular, look-a-likes of lesser value are created to give consumers the next best thing. There is a saying that imitation is the sincerest form of flattery. I’m guessing Tory Burch would disagree with that one.

Back in 2010, Luvdarts sued the wireless carriers for allowing their users to forward its MMS greeting cards without permission. Allegedly, the carriers were profiting billions of dollars from the infringing messages being sent because they were charging customers for sending and receiving the content.  Luvdarts also contended that the carriers were at fault for not preventing the sharing of these messages among their users. The messages themselves contained warnings against sharing the messages with others, however nothing prevented users from doing so.

Luvdarts had allegedly given the carriers notice of the infringement in accord with the Digital Millennium Copyright Act. However, the District Court held those notices to be “indistinguishable from a generalized notification that infringement is occurring” and too vague to meet the DMCA’s standards since they did not specify which titles were infringed by the carriers or users or when that infringement occurred. The court dismissed the case in March of 2011, after which, Luvdarts shut down production since it could not protect its material.

On appeal, Luvdarts argued that the carriers should have prevented users from forwarding the greeting cards by using some sort of technological system. However, the federal court held that Luvdarts “failed to allege adequately that the carriers had the necessary right and ability to supervise the infringing conduct.” Nothing suggested that the wireless carriers could have even implemented such a system.  Furthermore, the court ruled that, “the carriers didn’t induce users to infringe copyright and weren’t aware of specific acts of infringement by users.” Luvdarts did not present any information suggesting that the carriers should reasonably have known that the sharing activity was likely occurring on their networks. As for Luvdarts’ contention that the carriers profited billions of dollars from the sharing, the Ninth Circuit held that the carriers could not have profited from the messages because they were not capable of supervising or monitoring the messages.

AT&T Corporate Communications announced that it is “pleased with the decision.” Perhaps Luvdarts’ argument that wireless carriers should be responsible for messages shared by network users was too broad of a claim to make. Since the carriers cannot be expected to monitor every single transmission, this may be an end for businesses like Luvdarts if they are unable to develop a method to charge for subsequent use of their MMS messages. However, given this technological age we are in and the hundreds of multimedia sharing devices, I am sure that this will not be the last time we hear of a case like this.

Abbott Laboratories v. Cordis Corp

In a case that closes the door on the availability of witness depositions in Patent Reexaminations at the U.S. Patent and Trademark Office, the Federal Circuit ruled March 20, 2013 that reexaminations are not “contested cases” and thus local district courts do not have to issue deposition subpoenas to parties in those cases.  However, the far more interesting holding is the shadow-issue the ruling leaves unsaid—that the new Inter Partes Review (IPR) and Post-Grant Review (PGR) procedures are contested procedures under the law of the case.  Subpoenas duces tecum are available.

To explain the significance, Congress statutorily allows the clerks of court for U.S. District courts to issue subpoenas duces tecum to compel local residents to appear in any “contested case.”  35 U.S.C.§ 24.  So, if parties in litigation in Texas are attempting to call a reticent witness in Kansas, they would request a subpoena duces tecum from the local Kansas District Court’s clerk of court, as the Texas district court has no legal authority to issue subpoenas in other districts.  The same is true with the International Trade Commission.

The court held that “contested cases” are those that provide for the taking of depositions, and thus the inter partes reexamination proceedings, which have occasionally allowed testimony and depositions but do not statutorily provide for them, are thus not “contested cases.”  Again, the 600-pound elephant in the room is that the replacement for inter partes reexaminations (which are now-moribund under the Leahy-Smith America Invents Act of 2011) inter partes review, does allow for depositions.  Thus, the litigation tool of 35 U.S.C. § 24 subpoenas duces tecum is available for all IPR and PGR proceedings.

Here, the court stated “[w]e construe the term ‘contested case,’ as used in section 24, as referring to a proceeding in which the PTO has provided for the taking of depositions for use in that proceeding.”

Notably, this means discovery for IPR and PGR reviews will be even more trial-like, and reticent witnesses will have to pay heed to these challenges moving forward.  Notably, these reviews extend additional discovery, is allowed when “otherwise necessary in the interest of justice.”  The PTAB recently outlined a five-factor test useful in determining whether to allow additional discovery.

[Panel: Rader (author), Dyk, Reyna]

[Full Citation: Abbott Labs v. Cordis Corp. __ F.3d __, No. 2012-1244 (Fed. Cir. Mar. 20, 2013).]

[Find the full opinion here]

Checkpoint Systems, Inc. v. All-Tag Security S.A. and All-Tag Security Americas, Inc.

Parties must meet a high standard to shift attorney fees to the losing party under the “loser-pays” regime of 35 U.S.C. § 285.  Here, the Federal Circuit reversed a grant of $6.6 million in attorney’s fees to the defendant, finding the trial court judge had made a clear error of law in granting the award.

The technology, anti-shoplifting “resonance tags” affixed to merchandise in retail stores, was covered by both plaintiff and defendant’s respective patents, with one key difference—the All-Tag patent allegedly lacked sufficient mention of a “throughhole” in one key layer of the device.  All-Tag admitted during trial that its products are made in accordance with its own patents, and thus the plaintiff brought the infringement action for its earlier-in-time patent.

During, trial it came out that defendant All-Tag had moved its manufacture from Switzerland to Belgium, and the plaintiff had only had its expert witnesses examine the products that existed prior to the move.  Thus, his final testimony was based only on an analysis of outdated products not accused and the patents themselves.

All-Tag moved for judgment as a matter of law and summary judgment at every appropriate interval, and moved to exclude the expert.  The judge denied all motions and the case continued to the jury, who found All-Tag’s devices embodied in its patents did not infringe, and that the other patent was invalid and unenforceable.  At the close of trial, the judge granted All-Tag’s motion for attorney fees under § 285.

The Federal Circuit found that the infringement was never shown to have been brought in bad faith or to be objectively baseless.

[Panel: Newman, Lourie, and Schall]

[Full Citation: Checkpoint Sys., Inc. v. All-Tag Security S.A. and All-Tag Security Ams., Inc.

, __ F.3d __, No. 2012-1085 (Fed. Cir. March 25, 2013).]

[Find the full opinion here]

Chandler Dawson v. Chandler Dawson & Lye Bowman

In a quirky appeal from an interference proceeding, plaintiff was defendant—effectively suing himself to cancel his own patent.

The issues arose out of a research dispute between the University of California San Francisco (UCSF), the inventor Dr. Chandler Dawson, and Dr. Lyle Bowman of InSite Vision Inc.  Through a tortured set of facts, Drs. Dawson and Bowman met and began developing a topical preparation of azithromycin, used to treat trachoma.  The two received two patents on the invention, a “Topical Treatment or Prevention of Ocular Invections.”  Then UCSF, in order to provoke an interference, filed a patent application naming Dr. Dawson, an employee, as the sole inventor, copying the claims and specification (as is common practice in interference provocations) of the two.

Two interferences were thus provoked.  The Board found that UCSF failed to prove the sole conception of Dr. Dawson, and so could not maintain the university’s first-in-time rights.  UCSF appealed, and InSite (proceeding on appeal for Drs. Bowman and Dawson) cross-appealed the Board’s failure to rule that the UCSF application was unpatentable.  The Federal Circuit majority panel affirmed on the issue of conception and failed to reach the other grounds, but provoked a scathing dissent themselves.

Judge Reyna, in a spirited if soon-to-be-moot dissent, found that Dr. Dawson indeed possessed a “definite and permanent idea” as to the invention before he met Mr. Bowman at InSite.  In colorful language, he stated: “Inventorship is perhaps the most fundamental question in patent law. The instant an inventor conceives her invention is the moment in which vests her right to a  patent, thus perfecting her constitutional right to exclude.”  He discussed Dr. Dawson’s possession of each feature in “the count,” and found that the majority “discounts Dr. Dawson’s work . . . as failing to achieve a fully developed idea of the invention” reflecting a “misapplication of the law of conception.”  He found that invention is the work of the mind, and that no reduction to practice or physical embodiment need be developed for the mere idea of the invention.

[Panel: Bryson, Wallach, Reyna (dissenting)]

[Full Citation: Chandler Dawson v. Chandler Dawson & Lye Bowman, __ F.3d __, No. 2012-1214, -1215, -1216, -1217 (Fed. Cir. March 25, 2013).]

[Find the full opinion here]

Move, Inc. v. Real Estate Alliance Ltd.

In a case involving competing website processes that allow users to target available real estate properties in a selected geographic area, a unanimous Federal Circuit panel vacated the Central District of California’s grant of summary judgment for Move.  The panel, in an opinion by Judge Lourie, found that although the district court’s ruling was not in error as it applied to the Real Estate Alliance’s (REAL’s) claim of direct infringement, the court entirely failed to analyze whether there may nonetheless be liability for indirect infringement through inducement.

In stressing the importance of this indirect infringement analysis, Judge Lourie referred to his court’s recent en banc opinion in Akamai Technologies Co. v. Limelight Networks, Inc., 692 F.3d 1301 (Fed. Cir. 2012), in which the court overruled its prior opinion in BMC Resources, Inc. v. Paymentech, L.P., 498 F.3d 1373 (Fed. Cir. 2007) and held that another entity need not necessarily be liable for direct infringement in order to find the party in question liable for indirect infringement.  Instead, indirect infringement could still be found even if all of the necessary steps were not completed by a single third party.  Thus, because here the district court found that Move could not be liable for inducement under 35 U.S.C. § 271(b) because it was not liable for direct infringement, the finding was contrary to Federal Circuit precedent and it was in error that the necessary analysis was never conducted.  The Federal Circuit remanded the case back to the Central District of California to determine whether Move’s actions gave rise to liability for inducement.

Move, Inc. v. Real Estate Alliance Ltd., __ F.3d __, No. 2012-1342 (Fed. Cir. Mar. 4, 2013).

Find the full opinion here: http://www.cafc.uscourts.gov/images/stories/opinions-orders/12-1342.Opinion.2-28-2013.1.PDF

Radio Systems Corp. v. Lalor

A divided panel affirmed in part and reversed in part the decision of the Western District of Washington in a case involving patents on electronic pet collars.  The panel was unanimous in affirming the district court’s construction of the terms “inside surface” and “electrode base” and, as a result, also affirming the lower court’s judgment that three of the four challenged pet collars did not infringe on the patented collar.

The three-judge panel was divided, however, on the issue of whether a fourth Radio Systems collar – the UltraSmart collar – could still potentially give rise to infringement liability or whether the plaintiff’s claims relating to this collar were barred by the doctrine of equitable estoppel.  The plaintiff had previously sent Innotek (a company that has since been acquired by Radio Systems) a demand letter, claiming that the UltraSmart collar infringed on its patent (the ’014 patent), but after Innotek challenged the claim in a response letter, the plaintiff took no further action for more than four years before eventually bringing the suit here.

During that time, however, the plaintiff also obtained the ’082 patent, which served as a continuation-in-part of the ’014 patent.  In reversing the district court’s ruling that equitable estoppel did bar the plaintiff’s claim, the majority found that although the plaintiff’s claim was barred as it related to the original ’014 patent, because the plaintiff had never previously taken action against Radio Systems (or, for that matter, Innotek) under the ’082 patent, this claim was not barred by estoppel.

It was here that Judge Newman began dissenting from the majority’s opinion.  Judge Newman argued that the plaintiff should not be permitted to bring its claim under the ’082 patent when “[t]he subject matter of the ’082 claims in suit is disclosed and described in the ’014 patent, and the[] claims do not draw on any new matter.”  As such, she believed that the district court did not abuse its discretion when it barred the plaintiff’s claim after applying the equitable estoppel doctrine.

Judge Newman also dissented from the majority’s decision to not address Radio Systems’ claims that the plaintiff’s two patents here were actually invalid.  While the majority found that it could not review the validity of the patents because Radio Systems did not file the appropriate cross-appeal, Judge Newman argued that because Radio Systems actually prevailed on this question in the court below, it in fact had no right of appeal to this court and thus could not possibly have filed the cross-appeal the majority found was required.

Radio Systems Corp. v. Lalor, __ F.3d __, No. 2012-1233 (Fed. Cir. Mar. 6, 2013).

Find the full opinion here: http://www.cafc.uscourts.gov/images/stories/opinions-orders/2012-1233%20opinion%203-4-2013%2011.pdf

In re Hubbell

In an appeal from a decision of the Board of Patent Appeals and Interferences, the Federal Circuit panel here was also divided on the issue of whether the invention for which Hubbell applied for a patent was properly rejected under the doctrine of obviousness-type double patenting.  The majority, quoting its 2005 decision in Perricone v. Medicis Pharmaceutical Corp., 432 F.3d 1368, defined this doctrine as “judicially-created” and “designed to ‘prevent claims in separate applications or patents that do not recite the “same” invention, but nonetheless claim inventions so alike that granting both exclusive rights would effectively extend the life of patent protection.’”

Hubbell, a named inventor on the earlier-issued patents filed during his employment with the California Institute of Technology, claimed that the patent applications at issue here should not be barred by this doctrine because although some of the inventors are common to both the issued patents and the current applications, the two “do not have identical inventive entities, were never commonly owned, and are not subject to a joint research agreement.”  Conversely, the Director of the USPTO argued that only an overlap in inventors, and not identity between the two, is necessary for the obviousness-type double patenting to potentially apply.

The majority agreed with the Director, finding that “the MPEP specifically contemplates application of obviousness-type double patenting” in cases where there is a partial overlap in inventors between the established patent and the applied-for patent, and that prior Federal Circuit “case law supports application of obviousness-type double patenting in instances where there is no common ownership” between the established and applied-for patents.  As such, the majority affirmed the BPAI’s decision on this matter.

Hubbell further argued, in the alternative, that if the obviousness-type double patenting doctrine did bar his applications, he should nonetheless be permitted to file a terminal disclaimer to rectify any concerns that may arise about possible extension of the rights of the original patent.  The majority likewise agreed with the BPAI on this matter, finding that because there is no common ownership or joint research agreement among the owners of the established and applied-for patents, Hubbell has no right to file such a disclaimer for the applied-for patent.

Judge Newman, again breaking away from the majority, filed a dissent on both of these points.  First, Judge Newman argued that the majority’s application of the obviousness-type double patenting doctrine to a case, like this one, where there was mere overlap in inventors but neither an identity in inventors nor any common ownership, misconstrued prior Federal Circuit precedent, which had consistently required the presence of at least one or the other.

Judge Newman also disagreed with the majority’s decision to prevent Hubbell from filing a terminal disclaimer to remedy the issues raised through the application of the doctrine to the applied-for patent.  Arguing that the main concern behind the obviousness-type double patenting doctrine is the unfair extension of exclusive rights over two similar inventions, Judge Newman found that this concern could always be remedied by the latter inventor’s agreement to terminate his rights at the same time as the rights held by the original patent’s owners were set to terminate – a finding, she argued, that was also supported by Federal Circuit (and CCPA) precedent.

In re Hubbell, __ F.3d __, No. 2011-1547, (Fed. Cir. Mar. 7, 2013).

Find the full opinion here: http://www.cafc.uscourts.gov/images/stories/opinions-orders/2011-1547.opinion.3-5-2013.2.pdf

This decision, which is subject to review by the full commission (6 members), only addresses one patent (there were originally five) for the method of establishing communication between the video-game system and its accessories (controllers, etc.).  Judge Shaw stated that there was no violation of the patent under § 337 of the Tariff Act, 19 U.S.C. § 1337 (2011).

The Xbox is the best-selling game console in the United States and accounted for over 10% of Microsoft’s sales last year (around $9.6 billion).  Therefore, it is a major relief that Judge Shaw was ordered by the full commission to reconsider, and ultimately reverse, his April 2012 decision, which found that Microsoft had in fact infringed on 4 of the 5 patents, including 2 video-decoding patents.  If the ITC hand found infringement, they have the authority to bar the importation of the infringing device into the United States.  However, there has been a push, by the FTC and the Department of Justice, to prevent the import/sales bans on standard essential patents, such as those involved in this litigation.

Although this decision is still subject to full ITC review, it signals the winding down of a two year old legal battle between Motorola, and now Google, and Microsoft.  This legal dispute began in October 2010 when Microsoft demanded royalties on phones using Google’s Android operating system, and Motorola retaliated with an ITC complaint against Microsoft.  Then, in early 2012, Microsoft accused Motorola Mobility of misusing patents to hinder competition in a formal complaint with the European Commission.  In November 2012, Microsoft and Google had the opportunity to face each other in court during a week-long trial over royalty payments (the outcome of that case has not yet been released).  However, in January of this year, Google requested the ITC remove 2 patents (allegedly standard essential patents) from the complaint (the other 2 had expired).

It will be interesting to see how the U.S. District Court in Seattle decides, in addition to the foreign litigation that is still on going.  In the words of David Long, a Washington D.C. attorney, “wining this battle doesn’t settle the whole war.”  The question remains as to who will win the war: Microsoft or Google.

The ITC case is In the Matter of Gaming and Entertainment Consoles, 337-752 U.S. International Trade Commission.

This first-to-invent system has been viewed as beneficial to smaller entities when dealing with the might and money behind large corporations. Many smaller inventors complain that under the new system large corporations have a window to steal ideas and file the patent first. However there is hope under the new system in the form of an exception. In section 102 of title 35,there is a fundamental change in the role of disclosures and under the new system public disclosures can serve as a place hold until the actual patent application. Disclosures can include official postings on company websites, presentations or demonstrations at trade shows, even postings by company employees on social networking sites.

Pre-filing disclosures do have a downside. Many international patent regimes do not have a “grace period” in which to file for patents. While a pre-filing disclosure may preserve the inventor’s rights within the United States, it may cost forfeiting rights elsewhere. This is a large change for United States companies and it will take time to adjust. The USPTO saw a swell of applications on March 15, 2013. A good patent attorney will be able to digest the changes under the AIA and enable companies to navigate through these new waters.

The song, titled “Harlem Shake,” by Baauer is number one on the Billboard Hot 100 list for the fourth straight week.  While this success may have come as a surprise for Baauer, it apparently came as an even greater surprise to the artists who heard their own voices on the recording.  The voices of Reggaeton artist Hector “El Father” Delgado and Philadelphia MC Jayson Musson are both clearly audible in the song.  Neither of these artists gave Baauer permission to use snippets of their work in “Harlem Shake.”  They are now in negotiations with Baauer’s label, Mad Decent, for compensation from the use of their works in the song that has sold over 800,000 digital downloads.  Courts have typically held that artists are entitled to compensation when their work is sampled, no matter how short the sampled work may be.

This incident shows how powerful the Internet can be in taking a song from obscurity to number one on the charts.  Furthermore, it demonstrates how quickly an artist can profit by using the work of another artist without permission.  Given the ubiquitous nature of Internet memes and viral videos, it is also likely that artists whose work is being sampled without permission will be able to discover the fact fairly quickly and seek the compensation they deserve.

Patent dispute settlements between innovative and generic pharmaceutical companies sometimes involve what are called “Pay-for-Delay” agreements. These agreements generally entail commitments by a generic drug company to delay the entrance of its generic version of a drug into the market, typically in exchange for payment, and sometimes for the additional promise that the innovative drug company will not produce an authorized generic drug to the market. An authorized generic (AG) is a lower-cost, generic-label version of a brand-name drug already sold by the original manufacturer.

The Hatch-Waxman Act, enacted in 1984, was designed to make it easier for generic drugs to enter the market and compete with patented pharmaceuticals. Once an innovative company creates a new drug application (NDA) there is an automatic five-year exclusivity period. Meanwhile, generic companies engineer around the branded patent and file an abbreviated new drug application (ANDA), asserting bioequivalence and claiming an invalidity or non-infringement of the branded patent. This results in a 30-month stay while litigation is underway; if successful, the first to file an ANDA (also known as the “first filer”) is granted a 180-day marketing exclusivity period.

During this exclusivity period, no other generic company can receive FDA approval to sell its own generic version; however, this marketing exclusivity period does not prevent innovative companies from introducing its own AG version.  While the marketing exclusivity period only extends 180 days, this exclusivity period does not come into effect until after the first marketing of the first filers’ generic drug. The exclusivity period allows for the innovative company to block multiple generic competitors, while only having to negotiate with one.  By delaying the entry of the first filer, innovative companies effectively delay the introduction of any generic company’s drug onto the market. Thus, Pay-for-Delay agreements extend the innovative pharmaceutical company’s profit monopoly and are viewed as a win-win for both generic and innovative companies, because the innovative company retains a temporary monopoly, while the generic company gets a share of the monopoly profits.

Innovative drug companies are willing to enter into such agreements even though their products are still under patent protection because they have lost a majority of suits brought against them by generic companies.  These losses result from either a finding of patent invalidity or from a finding that the generic company has not infringed the innovative company’s patent. Innovative drug companies favor pay-for-Delay agreements because they are an easier and a potentially less costly means of retaining a monopoly over its drugs market. This is true even when generic companies begin suits well before the patent is due to expire.  In fact, with some of these Pay-for-Delay agreements, the innovative drug company will sacrifice a few years of its original exclusivity period granted by the patent, in order to avoid litigation.

The Supreme Court has recently agreed to hear the FTC’s appeal in its case against Watson Pharmaceuticals. The case concerns a settlement agreement between generic competitors Watson Pharmaceuticals, Par Pharmaceuticals, and Paddock Laboratories and innovative company Solvay Pharmaceuticals, over Solvay’s testosterone supplement, AndroGel.

In May 2003, Watson and Paddock, Par Pharmaceutical’s partner, both filed applications for FDA approval to market a generic version of AndroGel; even though Solvay’s patent for AndroGel had only been issued four months earlier and was not due to expire until 2020. In their filings, both Watson and Par certified that their products did not infringe on Solvay’s patents, and that Solvay’s AndroGel patent was invalid. According to the complaint, Solvay realized the harm these two generic entries would have on their market and decided to share its AndroGel profits in exchange for delaying the generic entries until 2015.

Back in the 11^th Circuit, the FTC argued that, in this case, innovative companies are “not likely to prevail” in litigation. Extrapolating upon that notion, the FTC argued that “not likely to prevail” is equivalent to an antitrust claim since “a patent has no exclusionary potential if its holder was not likely to win the underlying infringement suit.” The FTC also argued that if the patent had no exclusionary potential, a reverse payment, which excludes competition from the market, exceeds the scope of the patent and must be seen as an illegal “buy-off.”

The court rejected the FTC’s arguments, stating that “[t]he FTC’s position equates a likely result (failure of an infringement claim) with an actual result, but it is simply not true that an infringement claim that is ‘likely’ to fail actually will fail.” The court held that the decision focused on the potential exclusionary effect of the patent and not its likely exclusionary effect. Absent sham litigation or fraud in obtaining a patent, a reverse settlement (Pay-for-Delay) does not violate antitrust law so long as the anticompetitive effects are no different than the exclusionary potential of patents. This holding contradicts a 2012 ruling by the 3^rd Circuit, which held that courts should presume such reverse payments are anticompetitive to begin with.

The Supreme Court, which is hearing oral arguments on March 25, will have to choose whether Pay-for-Delay protects legitimate patent monopolies or whether Pay-for-Delay is anti-competitive in nature.

As the IP Brief has previously reported, the suit began in 2009, when Abbott claimed the Johnson & Johnson subsidiary’s psoriasis treatment, Stelara, infringed on two of Abbott’s antibody patents. The antibodies treat a condition, which results in the overproduction of the protein interleukin-12. Janssen, formerly Centocur Biotech argued against the infringement charges, citing that the antibody failed to meet the human antibody requirement to satisfy the patent claim.

During the same month, Centocur brought an action against the U.S. Patent and Trademark Office seeking to invalidate both of Abbott’s patents. The cases were consolidated and resulted in Janssen’s victory.

Abbott filed various post-trial motions, including a request for judgment as a matter of law or a new trial; Judge Saylor, however, found no legal basis to grant either motion. Judge Saylor indicated that the jurors’ factual and legal findings had merit and that, “the jury was entitled to believe the testimony of defendant’s experts over that of plaintiff’s experts.”

The jury found that the patents were both obvious and invalid for failure of a proper written description. The jury agreed with Janssen’s argument that Abbott’s technology was obvious because of previous work, and that the patents lacked written descriptions that would enable others to utilize the technology.

In an interesting twist, a recent report reveals that the two companies will put their differences aside and jointly develop a diagnostic genetic test to aid in the treatment of adult leukemia by identifying at-risk patients.

On January 24, a petition was started through the White House’s “We The People” program, urging the Obama Administration to reconsider the controversial October 2012 “unlocking” decision of the Library of Congress. As IP Brief Blogger, Priya Mahajan, previously wrote, this decision interpreted the Digital Millennium Copyright Act (“DMCA”) to prohibit “unlocking” (the modification of a device to allow it to work on any cellular network, not just the original provider’s) of cell phones purchased after January 2013 without the carrier’s permission. The Library’s decision understands this unlocking to be a prohibited “circumvention” of a digital lock “controlling access” to a copyrighted work (in this case, the software which limits access to the provider’s network).

On March 4, the White House responded to the petition, which bears over 114,000 signatures. The response, penned by R. David Edelman, voices the administration’s agreement that both mobile phones and tablets, which aren’t bound by a service agreement or other obligation, should be freely useable on any network. Edelman writes that this is “common sense, crucial for protecting consumer choice, and important for ensuring we continue to have the vibrant, competitive wireless market.”

This response has elicited a large push to modify the current rule. The Library of Congress released a statement that same day, stating that their rule was the result of a rigid technical, legal proceeding, and is not the proper forum for broad public policy deliberations. The statement suggests that while it served the purpose of raising the policy concerns, this issue would be better addressed by Congress. Julius Genachowski, the Chairman of the Federal Communication Commission (“FCC”), also released a statement in support of the White House’s position. Genachowski urges that both the FCC and Congress should look to preserve competition and innovation by acting to change this rule. Organizations such as Free Press have started petitions urging Congress to act.

A legislative remedy may not be far off. On March 5, only a day after the White House’s response, Senator Ron Wyden (D-OR) introduced the “Wireless Device Independence Act.” Many others, on both sides of the aisle, have expressed support for the issue, and others plan to introduce their own similar bills.

The underlying legal battle has been ongoing between activists and the wireless industry. The wireless industry claims the protections of the DMCA, which was initially passed to prevent piracy and intellectual property theft, apply here because traffickers could buy up large numbers of phones, unlock them, and sell them abroad, hurting foreign sales. However, activists, such as Mitch Stoltz of the Electronic Frontier Foundation, call this a “legal grey area” and note that the provisions are being misused to serve the purposes of the wireless industry. He reminds us that the purpose of the DMCA is to protect copyrightable (meaning creative) works, and that this isn’t a battle about piracy or misappropriation of creative works, but rather about fear of subsidized phones being sold for a profit.

Whatever happens in the coming months, it’s clear that the DMCA is now under the microscope and change is coming.

On March 1^st 2013, however, Judge Lucy Koh of the Northern District Court of California, who presided over the original case, issued a new order regarding the damages award: it must be reduced from $1.05 billion to about $600 million. (read the order here).

While judges normally give great deference to jury awards—looking at whether the overall number could be supported by the evidence, rather than how the jury arrived at the final number—the Ninth Circuit allows judges to meddle with the amount of the award if it is “readily apparent” from the numbers that the jurors relied on and applied an impermissible legal theory in making their determination. See In Re First Alliance Mortgage Co., 471 F.3d 977 (9th Cir. 2006). Such reliance is “readily apparent” when jurors use the exact same numbers, “to the dollar,” as the experts who testified at trial, but where the jury has been specifically instructed to not rely on that expert’s testimony. Courts view the taint from this reliance on the damages award as so great that they will change the amount of the award even if there is other evidence that could have supported the same, or even higher, numbers.

In Apple, the jury did just this. They relied on one expert’s testimony on the reasonable royalty award that should be owed to Apple, cutting them exactly in half to arrive at the damages amount.

Because of these errors, Judge Koh reduced the damages award to the maximum amount that would have been supported by the evidence: $598, 908,892. By reducing the award to the maximum amount supported by the evidence—a process known an “remittitur”—, judges ensure the law is properly applied, while also respecting the intentions of the jury—to award the highest amount possible—, and maintaining the parties’ Seventh Amendment right to a jury trial. Importantly, this process also gives the prevailing party, in this case Apple, the option to demand a new trial on the issue of damages instead of accepting the new award.

The judge’s biggest problem with the jury award in the Apple case was their use of the infringer’s (Samsung) profits to arrive at a damages award for the utility patent infringement claims. As a general matter, an infringer’s profits are not a legally permissible measuring stick to grant remedies for utility patent infringement. Using an amount of Samsung’s profits to determine the damages award for the Galaxy Prevail phone so tainted the final award, that Judge Koh ordered a new trial on the issue of damages in connection with this product.

Judge Koh also found the jury calculated the amount of damages owed using an improper measure of time. Normally, damages may only be awarded for the amount of time starting on the date when the infringer received actual or constructive notice of the alleged infringement. See 35 U.S.C. § 287(a).  In the IP law field, notice of infringement for utility patents cannot create notice for the purposes of establishing a notice date for trademark or design patent claims.  Moreover, notice only occurs when the plaintiff—in this case Apple—notifies the infringer of which specific patents it believes are being infringed, either by placing the patent number on the product itself (“constructive notice”) or by directly identifying it to the infringer by letter or otherwise (“actual notice”). Id.  In this case, the jury calculated damages for all the patent claims starting on August 4, 2010; however, the evidence showed that Samsung received notice for several of the patents significantly after this date.  As such, the jury granted Apple excess compensation in their awards based on Samsung’s profits during the period in which Samsung only had notice of the utility patent claims and in their awards based on a “too long” notice period.

These errors led Judge Koh to order a new trial on damages for the 14 products affected by the incorrect jury calculations. The decision effectively removes all damages related to these products from the final jury award, reducing Apple’s once billion-dollar victory to a paltry $600 million.

The parties are expected to seek appellate review of the order before proceeding to a new trial.

Jesus Jeans was originally developed in the 1970’s by Italian entrepreneur, Maurizio Vitale. BasicNet’s counsel told the Wall Street Journal that Vitale “decided Jesus could be used in a nonreligious context by representing the will to rebel and refusal to conform.”  This rebranding did not stop the company from playing on the name’s obvious religious connotations to sell products. A controversial advertisement for Jesus Jeans in Italy featured a scantily clad model with the slogan, “he who loves me follows me.” The ad stayed on the air despite being denounced by the Catholic Church.

BasicNet filed a trademark in the United States in 1999 that was eventually granted eight years later.  Other countries have been less accepting of Jesus Jeans. The company’s trademark applications have been rejected in China, Switzerland, Australia, Norway, Cuba, Turkey, Uzbekistan, Tajikistan, and Kyrgyzstan. The United Kingdom’s patent and trademark office rejected the application on grounds that it was morally offensive to the public. The Jesus Jeans trademark applies to clothing articles including jackets, vests, shirts, pants, and belts.

Perhaps BasicNet is taking action against other clothing lines because it plans to relaunch the brand in Italy and increase U.S. distribution in the near future. Jesus Jeans is allegedly in the works of launching an ad campaign linking Jesus Jeans to concepts of solidarity and a peaceful society. Attorneys for BasicNet claim their use of the trademark is merely secular, and compare their efforts to protect Jesus Jeans’ brand value to Nike’s ownership over the Greek Goddess of victory.  They further claim that the company has no intentions of holding a monopoly over religion. In the same interview, general counsel explains that ”[if] somebody—small church or even a big church—wants to use ‘Jesus’ for printing a few T-shirts, we don’t care.” Still, this creates a problem for religious themed clothing companies, like “Jesus Surfed,” where 20% of the proceeds go to Christian organizations.

It is unlikely that BasicNet has a lawful monopoly over “Jesus.”  The name “Jesus” itself is quite popular among Hispanic Christians in the United States, and could only be trademarked if it established secondary meaning, that is, came to be “associated in the minds of the public with the products or services offered by the proprietor of the mark.” Even though the public probably won’t be associating the name “Jesus” with blue jeans anytime soon, small businesses still face a challenge when threatened with infringement litigation by a large corporation like BasicNet.

Tiffany representatives claim that Costco’s sales of “Tiffany” jewelry “unlawfully trade off Tiffany’s goodwill and brand awareness.” Trademark law protects a trademark owner’s exclusive right to use their mark. The Lanham Act protects the owner of a mark against the use of similar marks if such use is likely to result in consumer confusion or dilution of the mark. To show trademark infringement under the Lanham Act, the plaintiff must prove that (1) it has a valid and legally protectable mark (whether registered or unregistered); (2) that it owns the mark; and (3) that the defendant’s use of the mark to identify goods or services causes a likelihood of confusion.

If Tiffany & Co. can show that Costco was selling diamond engagement rings under the “Tiffany” name, the “little blue box” jeweler will likely prevail under the Lanham Act. (1) “Tiffany & Co.” is registered and is a valid and legally protectable mark. (2) Since the mark is registered, Tiffany can easily show that it owns the mark. (3) Tiffany will have to argue that Costco’s use of Tiffany’s name on the diamond engagement rings, a product Tiffany is known for selling, caused confusion among customers. Tiffany can also show dilution of the mark – many of the people who bought what they thought was a timeless Tiffany ring ended up buying a Costco ring, which holds significantly less prestige and mystique.

Tiffany & Co. is claiming that Costco led its customers to believe they were buying authentic Tiffany product at deep discounts. Jeffrey Mitchell, Tiffany’s counsel, stated, “We now know that there are at least hundreds if not thousands of Costco members who think they bought a Tiffany engagement ring at Costco, which they didn’t. Costco knew what it was doing when it used the Tiffany trademark to sell rings that had nothing to do with Tiffany. This is not the kind of behavior people expect from a company like Costco, and this case will shed a much needed light on this outrageous behavior.”

In addition, Tiffany & Co. is claiming that when the company confronted Costco, the wholesaler immediately removed the references to Tiffany rings within their store. Tiffany further claims that Costco’s description of the rings as “Tiffany rings” was not included online, possibly to avoid detection. If Tiffany & Co. come out on top, the suit will likely cost Costco damages associated with prior sales of “Tiffany” rings and will definitely lead Costco to stop sales of any current rings marketed under the Tiffany name. Tiffany & Co. is currently seeking damages in the amount of $2 million “per infringement” along with triple the amount of Costco’s profits from selling the rings.

On February 14^th, 2013, Justice Phelan issued his ruling in San Miguel Brewing Int’l Ltd. v. Molson Canada, 2013 FC 156 (full text of decision available here). The case involved two brewing companies battling over whether a newcomer to the market could gain national trademark protection for their brand of beer.

RED HORSE was the newcomer (the “junior” mark) in this race between horses. It sought to overturn an opposition proceeding that blocked the registration of its mark at the Canadian Intellectual Property Office’s (CIPO) Trade-marks Opposition Board level (note – the role of the CIPO Trademark Opposition Board in granting or refusing trademark registration is nearly identical to that of the United States Patent and Trademark Office).  The RED HORSE brand is owned by a Philippines Corporation—San Miguel Brewing International, Ltd.—who filed an application with CIPO in 2005to protect the name RED HORSE MALT LIQUOR & Horse Head Design in association with beer, ale, pilsner, stout, bock, and malt beverages. Alternatively, the BLACK HORSE trademark is owned by beer conglomerate MolsonCoors’s Canadian Branch (Molson Canada) who has held that mark since it was granted by Newfoundland trade-mark officers in 1922. The primary market for BLACK HORSE ale is the Canadian Province of Newfoundland & Labrador, on the Atlantic Cost. RED HORSE brand ale has thus far only been sold in British Colombia and Alberta, on the Pacific coast and western side of Canada.

At the opposition level, the Trade-marks Opposition Board examined the word marks for a likelihood of confusion under sections 6 and 12 of the Trademarks Act, RSC 1985, c. T-13 (it was requested to ignore the design marks). Section 12(1)(d) provides that any mark that is “confusing with a registered trade-mark” is not registerable. A mark is “confusing” when its use in the same area as another mark would be “likely to lead [a consumer] to the inference that the wares or services associated with [both marks] are manufactured [or] sold … by the same person.” Section 6(5) sets out the elements of confusion: (a) inherent distinctiveness and the extent to which the marks have become known; (b) length of time of use; (c) nature of the wares, services, or business of each mark; (d) nature of the trade; and (e) degree of resemblance between the marks in appearance, sound, or in the ideas suggested by them.

The Board examined all five elements, emphasizing the “degree of resemblance” between the marks. It focused in on both brands’ use of the word HORSE and concluded that RED HORSE was confusing because both marks are dominated by the word HORSE, since other companies use the word RED in association with beer, and since the design features of each mark do not outweigh the significance of the words. Furthermore, because BLACK HORSE has been in use since 1922—as opposed to RED HORSE’s 2005 date—, because distinctiveness between the marks is only created by the design, because the channels of trade—liquor stores—is identical, because selling the wares at opposite sides of the country was immaterial to the inquiry, and because BLACK HORSE is well known in Newfoundland, the senior (older) mark—BLACK HORSE—could block registration of the junior (younger) mark.

Justice Phelan overturned the Board’s judgment on appeal to the Federal Court of Canada. The Justice berated the Board for only examining a segment of the mark (the words), since Supreme Court of Canada jurisprudence requires courts to look at “the mark as a whole” rather than discreet portions of the mark. Moreover, he found that the Board failed to consider the proper consumer—the starting point for any trademark confusion analysis. Specifically, courts are supposed to consider whether confusion would occur in the mind of an “ordinary harried purchaser,” whom the court owes a “certain amount of credit for their intelligence and knowledge.”

In this case, the Justice determined the relevant consumer was an “ordinary beer consumer.” In understanding the mind-frame of such a consumer, the judge observed that “the ordinary beer drinker is sensitive to the names of beers and to what they know and like,” and would thus be more sensitive to differences in names, brands, products, labels, etc. Importantly, the relevant group of consumers did not include a “non-beer drinking life partner who is asked to pick up the beer,” even though such a person could conceivably be asked to distinguish between beer brands and labels before making a purchase.

In determining whether the ordinary beer consumer would likely be confused when encountering RED HORSE and BLACK HORSE, Justice Phelan immediately observed that the different labels on the two beverages “is sufficient to dispel any notion of confusion,” since RED HORSE brand features a red horseshoe and profile of a horse’s head, while BLACK HORSE features the silhouette of an entire equine. Nevertheless, since both parties disclaimed the arguments involved the design marks, the judge went on to consider whether the word mark, on its own, was confusing.

The Justice held it was not. He focused on the fact that BLACK HORSE beer is sold alongside brands called DARK HORSE and CHEVAL BLANC (“Cheval” is French for “Horse”), owned by other companies, without evidence of confusion. He further found that Molson—who instigated the proceedings—failed to bring any evidence showing actual confusion in the marketplace between their brand and San Miguel’s. Last, he placed especially strong emphasis on policy: by focusing on the word HORSE, the Board’s decision effectively gave Molson a monopoly over the use of that word joined with any color when used in association with beer. Should he let the Board’s decision stand, Justice Phelan would have endorsed such an unreasonable monopoly.

And it would have been. Canadians—like many other peoples—can be quite particular about their beer. Like other brands, they are acutely aware of which tastes they like and which tastes they want to avoid, like a three-week old poutine. Justice Phelan’s decision rightly focused on the relevant consumer and properly considered the wider implication of allowing one company to claim an effective monopoly over a word in a particular national market.

As Justice Phelan rightly observed: “this is a case about beer and a case of beer is a serious matter.”

J.C. Penney lost a lot of money at the beginning of 2012 when it announced a drastic “no sales” policy and attempted to rebrand itself as “jcp.” The rebranding attempt was an effort to revive the store, and make it more relevant amongst its competitors. Although backed by good intentions, the rebranding resulted in decreased revenue.

In an effort to “un-do” the failed re-branding, J.C. Penney, backed by hedge-fund manager William Ackerman, is set to raise billions of dollars through its revised credit line. Under changes to the company’s primary credit line, its banks affirmed that J.C. Penney can sell convertible preferred stock without triggering repayment provisions under the lending agreement, according to a February 12 regulatory filing. The revisions also permit the department store chain to obtain as much as $1.75 billion in new loans by pledging real estate and other fixed assets as collateral.

J.C. Penney has lost almost half its stock-market value in the past year, making it the fourth-worst performance among companies in the U.S. benchmark Standard and Poor’s 500 Index . The decline has weighed down the returns of Pershing Square’s funds, which had about 9 percent of their capital invested in J.C. Penney.

J.C. Penney’s cash and equivalents fell to $525 million at the end of the third quarter from $888 million three months earlier. J.C. Penney ended the 2012 fiscal year with less than $700 million in cash.

A copy of the amended borrowing agreement filed with the U.S. Securities and Exchange Commission on February 12 shows new terms that, among other things, give J.C. Penney leeway to raise money through a stock sale underwritten by a financial institution. The amended filing affirms that this type of equity offering will not trigger change of control provisions in the credit line that authorizes lenders to force repayment of any outstanding borrowings if J.C. Penney is acquired.

Despite receiving a default notice from the company’s bondholders, a J.C. Penney spokesperson stated that the February 12 announcement of the credit agreement revisions is independent and unrelated to the default notice received. While there is no correlation between the default notice and credit agreement revisions, the credit agreement revisions are strongly related to re-vamping the company after its collapse from the rebranding fail.

Semiconductor Energy Laboratory Co. v. Yujiro Nagata

Plaintiff and assignee of U.S. Patent No. 6,900,463 (“’463”), Semiconductor Energy Laboratory Co., Ltd. (“SEL”) brought an action against Yujiro Nagata who is listed on the ‘463 patent as a co-inventor under a theory of “Violation of Federal Patent Law.”  The complaint attempted to enlarge the doctrine of assignor estoppel alleging that it was a violation of federal patent law for the assignor, Nagata, to testify in a proceeding between SEL and Samsung on behalf of Samsung alleging that the documents were forged and that the ‘463 patent was therefore unenforceable. The district court held and the Federal Circuit affirmed that the doctrine of assignor estoppel is a defensive doctrine that can only be invoked when an assignor attacks a patent on grounds of unenforceability or inequitable conduct and therefore dismissal was proper for lack of subject matter jurisdiction.

Full Citation: Semiconductor Energy Laboratory Co. v. Nagata, __ F.3d __, No. 2012-1245 (Fed. Cir. Feb. 11, 2013).

Find the full opinion here.

Cephalon, Inc. v. Watson Pharmaceuticals, Inc.

Patentee Cephalon alleged infringement of U.S. Patent Nos. 6,200,604 (“’604”) and 6,974,590 (“’590”) in response to Watson Pharmaceuticals (“Watson”) filing for an Abbreviated New Drug Application.  The district court found, after a bench trial, that the patents were not infringed and that the patents were invalid for lack of enablement.  The Federal Circuit affirmed in part and reversed in part finding that, although the district court did not clearly err in finding no infringement, Watson failed to prove lack of enablement by clear and convincing evidence as a matter of law.  First, the Federal Circuit noted that the district court misconstrued the standard for proving lack of enablement by ignoring the presumption of enablement and applying a novel burden-shifting framework.  Second, the Court observed that Watson had provided no evidence as to why the embodiments and formulations recited by the patents failed to enable the invention, ultimately concluding that the “[u]nsubstantiated statements indicating that experimentation would be ‘difficult’ and ‘complicated’ [were] not sufficient.”

Full Citation: Cephalon, Inc. v. Watson Pharmaceuticals, Inc., __ F.3d __, No. 2011-1325 (Fed. Cir. Feb. 14, 2013).

Find the full opinion here.

Brilliant Instruments, Inc. v. GuideTech, LLC

Declaratory defendant, GuideTech appealed the trial court’s grant of summary judgment that Brilliant Instruments, Inc. did not infringe three related GuideTech patents: U.S. Patent Nos. 6,226,231 (“’231), 6,091,671 (“’671”), and 6,181,649 (“’649”).  The Federal Circuit reversed the lower courts ruling, holding that, with respect to the ‘231 patent, the testimony of GuideTech’s expert, Dr. West, as well as the schematic submitted to the court raised a genuine issue of material fact.  Specifically, the issue was whether, when operating in One-Channel-Two-Edge mode, the circuits in question “contained within” them two-timing circuits or whether “borrowing” the timing circuits while in this mode did not infringe the patent in question.  With respect to the ‘671 and ‘649 patents, the court held that GuideTech had raised a genuine material issue that, though the capacitor in question was part of the first current circuit, the circuit might still infringe under the doctrine of equivalents.  Judge Dyk dissented on this second holding, which found that the accused invention axiomatically could not achieve the same result as the result in question.  In otherwords, Judge Dyk noted that the claim that “’the shunt can direct current the shunt can direct current to flow from the first current circuit to the second current circuit or from the first current circuit to the capacitor,” is an implausible fear because the capacitor is contained within the aforementioned “first current circuit.”

Full Citation: Brilliant Instruments, Inc. v. GuideTech, LLC, __ F.3d __, No. 2012-1018 (Fed. Cir. Feb. 20, 2013).

Find the full opinion here.

Function Media, L.L.C., v. Google Inc.

Plaintiff-appellant Function Media (“FM”) appealed the district court’s invalidation of U.S. Patent No. 6,446,045 for indefiniteness and abdication of claim construction to the jury, as well as irreconcileable verdicts regarding U.S. Patent Nos. 7,240,025 and 7,249,059.  The Federal Circuit affirmed the invalidation noting that, though there were descriptions of what function the software performed, some recitation of how it performed that function was necessary.

The appellant further took exception to the district courts claim construction of the terms “ad creation/processing,” “selection,” and “processing.”  The Court upheld the construction noting that, given the steps recited, the terms, though related, were applied to distinct stages and achieved different outcomes and thus their distinct meanings were appropriate.  With regard to “selection,” the court held that “FM may not object to the court’s decision to instruct the jury to apply the claim construction that FM itself proposed.”  Finally, the Court affirmed the construction of the term “published” as properly requiring that the ads be sent to media venues rather than being so broad as to be simply displayed to consumers.

The Federal Circuit further rejected FM’s argument that claim construction questions were improperly submitted to the jury, instead characterizing the disputed incident during trial as a question of improper argument, objections FM failed to preserve.  And, because there was no plain error, and FM made no argument that substantial interests of justice turned upon these issues, FM’s arguments failed.

The Court also rejected FM’s appeal that the jury verdict was irreconcilable. The Court found that because the questions asked on the verdict form required legal instruction and not merely fact finding, FM was required to object before the jury was dismissed in order to preserve the objection under the law of the Fifth Circuit,

Finally, the Federal Circuit denied FM’s motion for a new trial on several grounds.  The court held that there was evidence in the record to support the non-infringement verdict and that FM had waived its opportunity to object to any misapprehension of law by the jury as with regard to claim construction as discussed above.

Full Citation: Function Media, L.L.C., v. Google Inc., __ F.3d __, No. 2012-1020 (Fed. Cir. Feb 13, 2013).

Find the full opinion here.

DC Comics, owner of the trademarks to popular heroes such as Superman, Batman, and Wonder Woman, initially filed its complaint on September 25, 2012, claiming that “Defendants have ignored DC’s lawful demands and continue to utilize the infringing promotions in conjunction with the infringing barbershops.” The complaint raised claims of trademark infringement in violation of the Lanham Act, claims under the Anti-cybersquatting Consumer Protection Act, and unfair competition claims under Florida law. Reginal Jones, owner of Supermen Fades To Fros and Superman Pro Barbershop, both of which are located in Florida, incorporated the famous Superman logo into the signs outside of his shops, the clothing and capes that the barbers wear, and vehicle wrap advertising. DC Comics’ alleged main concern was that Jones’ use of their trademarks would cause confusion and deception, leading people to think that he was somehow affiliated with them. DC Comics originally sought the destruction of all infringing materials, the surrender of Jones’ domain name, and the cancelation of all business names containing the Superman trade or service marks.

In his response to the lawsuit, Jones stated, “DC Comics has decided to pick on me because they know I am a small local barber and cannot afford the big lawyers they can. I am asking that you look very carefully at what they are trying to do and not let them take advantage of me.” Jones represented himself throughout the matter.

While it seems that before the settlement Jones was shaping up for a David and Goliath kind of argument, would that have worked in this case? On the one hand, the main issue is two signs, which are located in two small town barbershops and might not affect DC Comics. On the other hand, Jones deliberately used this Superman sign, and as DC Comics noted in their complaint they “never at any time authorized defendants to utilize the infringing promotions in conjunction with any barbershop business and/or the sale or offer for sale of hair groom services.” Therefore, it seems as though they were legitimately just trying to protect their assets.

Microsoft executives, along with executives from IBM and Oracle, took their concerns to the Hill last Thursday.  Microsoft, joined by Oracle, made sure to express its desire to curtail litigation, but not to limit the ability to patent software, since patents protect competitive edge and innovation. Brad Smith, general counsel for Microsoft, stated, in regards to the patent system, “We need to fix what’s broken but be careful so we don’t break what’s working.  It’s all about striking the right balance.”

Microsoft’s’ concern over the increase in patent litigation is not unfounded.  Of the 5,600 patent infringement lawsuits filed in the United States in 2012, 60% were filed by patent-assertion entities, commonly known as “patent trolls.”  Patent trolls are individuals and companies that earn most of their money from patent licensing and litigation, rather than actual innovation.  They do this by buying patent portfolios with the only purpose to extort fees from the companies that actually make the patented products.  If there is one thing that all the technology giants can agree on, it is their dislike of patent trolls and their lawsuits.

In addition to their dislike of patent trolls, Microsoft has joined with Google and Oracle in support of changing policy to address the rampant litigation that is occurring today.  Microsoft supports reforming the U.S. patent system in numerous ways, including, having the losing party pay the winner’s legal fees (forcing companies to internalize the strength of their case prior to litigation, thus deterring frivolous litigation), greater transparency at the patent office, more clearly identifying the true owner of a patent, and requiring more specific information to be provided by patent applicants regarding their inventions.  Microsoft has even announced that it will post “information that enables anyone to determine which patents [Microsoft] own[s],” by April 1 of this year to foster transparency and reduce litigation.  Furthermore, Microsoft, Oracle, and IBM have stated that courts and the patent office are making some progress since implementing the Leahy-Smith America Invents Act in 2011, but more needs to be done, especially in curtailing ligation.

It will be interesting to see if Microsoft and the other technology/software giants live up to their promises of transparency regarding their own patents in their efforts to reduce litigation by patent trolls and increase innovation.

It has become increasingly common for advertising agencies to use indie band sound-a-likes in an attempt to appeal to younger audiences. Bands like LCD Soundsystem, Grizzly Bear, and Sigur Ros have accused advertisers of ripping off their music. Unlike big-name acts, advertising agencies can prey on indie bands because most of them do not have the financial means necessary to take action. John Best, Sigur Ros’s manager, says that “if we were a richer band, we might take matters into our own hands, but you need very deep pockets to fight these cases.”  The only way an artist can prevail on an infringement claim is by arguing that the sound-a-like is substantially similar to the original, taking a substantial part of the melody, lyrics, or other musical elements.

American rock band, The Black Keys, has decided to take this approach and fight back against sound-a-likes. Last year, the band settled two legal claims out of court with Home Depot and Pizza Hut for copyright infringement. The details of these settlements were unknown to the public, but the band alleged that Pizza Hut used significant portions of their hit single, “Gold On The Ceiling” and Home Depot used their song “Lonely Boy” in a power tools advertisement.

Last month, the band filed a third suit in New York Federal Court against casino operation company, Pinnacle Entertainment, and music production house, Manhattan Production Music. The defendants have allegedly used music substantially similar to The Black Keys’ song “Howlin’ for You,” in advertisements.

According to the complaint, a rep for Pinnacle Entertainment tweeted “We bought a licensed musical interpretation of the song” after a fan pointed out the similarities between the advertisement’s song and The Black Key’s song. It is also alleged that a Pinnacle Entertainment rep asserted on YouTube that the song in the commercial is “a licensed track inspired by ‘Howlin’ for You’ by The Black Keys.”

Unlike some of the indie bands mentioned above, The Black Keys have achieved a great deal of fame over the years and have the means to pursue litigation. Last year’s sound-a-likes were based on songs that appeared on the rock group’s seventh album, “El Camino,” which has sold nearly 840,000 copies. The band won big at the 2013 Grammys, taking home awards for Best Rock Song, Best Rock Album, and Best Rock Performance.  If The Black Keys prevail, this would be a win for artist’s rights, and hopefully for those bands without the means to pursue infringement suits.

You already know Vernon Hugh Bowman. He’s just a 75-year-old soybean farmer from Indiana. Monsanto, on the other hand, may be less familiar. They are the multinational biotechnology corporation that revolutionized the agrochemical industry when they introduced genetically modified (GM) seeds in 1987. They have since registered countless patents on GM seeds, unique for their resistance to Roundup, the most widely used chemical pesticide. Not coincidently, Monsanto also owns the patent to Roundup.  These “Roundup Ready” seeds are highly beneficial to farmers, as they are immune to the chemicals used to kill weeds and insects. In fact, 90% of the soybean crop in the US comes from Monsanto patented seeds. But to authorize the use of these seeds, farmers must pay Monsanto hefty yearly licensing fee, and promise that they wont replant any of the crop they harvest.

Bowman believed he identified a loophole in Monsanto’s scheme when he purchased seeds from a grain elevator. Farmers commonly sell their crop to grain elevators, who then may sell the GM seeds back to farmers, or to manufacturing companies for processing into food, animal feed, or industrial products. In Monsanto’s view, buying patented seeds from a third party without paying the licensing fee is an infringement, so Monstanto took Mr. Bowman to court.

Oral arguments took place last Tuesday. Bowman’s lawyers relied on precedent established in Quanta Computer, Inc. v. LG Electronics, Inc., a 2008 case that held manufacturers’ patent rights are exhausted after an initial sale, and a buyer’s use of patented technology could not be controlled. Justice Sotomayor clarified this holding relating to GM seeds, stating “the exhaustion doctrine permits you to use the good that you buy…It never permits you to make another item from that item you bought.”

Monsanto’s approach sought an exception to the exhaustion doctrine to protect self-replicating technology past the first generation. Justice Breyer pointed out that when seeds self replicate, as they tend to do, a new, patented article is created. “You can feed it to animals, you can feed it to your family, make tofu turkeys,” joked Breyer. “But you can’t pick up those seeds that you’ve just bought and throw them in a child’s face – there’s a law that says you can’t do it. Now, there’s another law that says you cannot make copies of a patented invention.”

Chief Justice Roberts seemed to side with Monsanto’s position that allowing farmers to save and reuse seeds without paying licensing fees would completely undermine patent protections, whose central functions are to incentivize innovation. “Why in the world would anybody spend any money to try to improve the seed if as soon as they sold the first one anybody could grow more and have as many of those seeds as they want?”

Despite their apparent skepticism, the Justices acknowledged the potential consequences of this decision. Allowing patent protection to extend beyond the initial sale could lead to circumstances where a company owns patents to multiple steps in the chain of production – especially as GMOs become more widely used in food production. Independent farmers and small business see this as an attack on their livelihood. They argue their right to reuse seeds is their last leg of defense against skyrocketing costs of farming, and a last ditch effort to reset the economics of seeds. Social Darwinists and the American businessman would disagree.

The fate of self-replicating technologies is not limited to agriculture. Live vaccines, stem cells, bacteria strains, and even genetically modified human genes serve the sole purpose of regeneration – and are instrumental for medical research. Will similar patent protections apply to them as well?

Legal issues aside, what we have here is David versus Goliath. Monsanto is a $12 billion empire with a reputation for using ruthless strategies to protect its intellectual property. It has gone so far as to reward farmers who report their infringing neighbors. Rural farmers simply don’t have the means to engage in legal battles with multinational corporations. Before Bowman’s case was taken pro bono, he spent $31,000 on legal fees and did legal research at the library since he doesn’t own a computer. While most farmers are forced into settlements, the Center for Food Safety reports that Monsanto has filed 144 lawsuits involving 410 farmers and 56 small farm businesses in at least 27 different states. Monsanto has never lost a case that has gone to trial.

However way the court ultimately rules, one thing is certain. The issues presented in Bowman enter uncharted territory, as will similar cases henceforth. As Professor Jorge Contreras here at WCL remarked, “We’re dealing with laws and doctrines that were developed in the 19th century, where the idea of self-replicating technologies didn’t exist.”

On January 22, Apple’s latest trademark, its retail store layout, was registered by the United States Patent and Trademark Office (“PTO”) on the Principal Register. The layout, which has been described as iconic, did not have an easy path to registration. The application, which was initially filed in May 2010, was rejected twice before finally being accepted.

The first rejection, issued on September 6, 2010, claimed the mark was not “inherently distinctive.” However, this wasn’t a comment on the store’s layout itself, but rather the failure to submit a proper description of what the mark consists of.  The second rejection, issued on August 23, 2011, was also primarily a commentary not on the mark itself but on the procedural elements still missing for registration. Even the rejection on the grounds of failure to show acquired distinctiveness (or “secondary meaning,” pursuant to § 2(f) of the Lanham Act) was a rejection not on the merits of their claim, but on the sufficiency of evidence provided.

This registration has drawn some particularly harsh criticisms, including that it merely trademarks something fundamentally basic to retail, and not anything that is unique to Apple. However, the Apple retail store boasts a look that many, including Microsoft and Samsung, have been trying to emulate. The success of the Apple store has even led to the operation of fake Apple stores in China. The PTO’s second rejection letter even concedes that the Apple retail store has been immensely successful.

Beyond anecdotal support for protection of retail layouts, trade dress protection has been upheld by the United States Supreme Court. In Two Pesos v. Taco Cabana, the Court held that where trade dress is inherently distinctive (that is, capable of identifying the source of products or services), no secondary meaning is required to claim trademark protection. In its decision, the Court recalls the purpose of the Lanham Act, which is to make “actionable the deceptive and misleading use of marks” and “to protect persons engaged in such commerce against unfair competition.” Naturally, all other bars to registration, such as deception and functionality, under § 2 of the Lanham Act would still apply in the trade dress context.

While this registration certainly raises questions of the outer limits of trademark protection, critics should keep a few things in mind. Trademark law is unlike other sects of intellectual property because its purpose is centered on unfair competition. In an infringement action, there is no strict liability standard, but rather a highly fact-specific inquiry into the likelihood of consumer confusion, which includes a multifactor test. As a result, others who wish to use a similar layout may still be able to without infringing on Apple’s mark. Additionally, neither functional nor generic marks receive trademark protection, so an entity would not be able to claim rights over something fundamental.

While trusting the government may not be everybody’s first reaction, it seems to have worked in this case. The PTO rejected Apple’s application twice for failure to describe a distinctive, non-functional layout. After two and a half years, the description of the mark on the final registration is highly detailed, and does not include any functional features.

DHC serves the dance community by preserving, making accessible, and enhancing materials that document the artistic heritage of choreography and dance performance.  The comment discussed the various problems and possible remedies concerning orphan works in the context of the dance community, with specific examples illustrating how creativity and legacy of the dance community is unnecessarily impeded by orphan works.

For those interested, the filing can be found here.

The Ralph Lauren logo and the USPA’s logo are shockingly similar. Given that the USPA has been around since 1890 as the official organizing body of the polo sport, and that Polo Ralph Lauren sprung onto the scene and into window displays circa 1968, one might think that the late blooming Ralph Lauren copied the USPA’s logo as a way to associate itself with the allure of polo. While RL probably did choose a horseman logo to evoke whatever cultural associations polo had garnered in the late 60s, it did not copy the USPA’s logo. It appears that the USPA copied Ralph Lauren’s logo after the company developed its goodwill with consumers. Ralph Lauren trademarked its logo in 1971, three years after the company’s launch.  The USPA introduced a new logo, the double-horseman, around 1981 – a good deal of time after its inception in 1890.

The legal disputes between Ralph Lauren and the USPA started in 1984 when Ralph Lauren claimed the USPA’s marketing of clothing products bearing the double-horseman logo infringed on Ralph Lauren’s trademark. The USPA in turn opposed Ralph Lauren’s attempt at trademarking the horseman logo by itself, without any accompanying words. The 1984 opinion opted for compromise: it allowed the USPA to continue using its double-horseman logo on apparel but enjoined it from using its name or mark in a way likely to cause confusion with Ralph Lauren’s marks.

Not surprisingly, this decision has led to many more lawsuits. This most recent decision by the second circuit bars the USPA from marketing a fragrance line with its double-horseman logo with the words “polo” or “polo since 1890” underneath. The court rejected the USPA’s argument that the 1984 decision allowing the USPA to use its logo on apparel barred Ralph Lauren from claiming the USPA’s use of its logo on fragrance products infringed Ralph Lauren’s marks; apparel is one market sector and fragrance is another. The court found the similarity of the proposed fragrance line to Ralph Lauren’s fragrance products and the USPA’s history of bad faith infringement weighed in favor of upholding the permanent injunction.

It appears that the Second Circuit’s decision is saying that if the USPA uses its double-horseman mark without also using its word mark “United States Polo Association” or “USPA,” it will be infringing on Ralph Lauren’s mark. There it is. Ralph Lauren has won the branding war over the polo logo. The USPA’s proposed fragrance bottle does sound cool, especially with “polo since 1890” or just “1890” underneath the double-horseman logo, but that’s the problem – the USPA is trying to find appeal from somewhere other than its word mark, yet its efforts end up looking too much like Ralph Lauren when the USPA uses its double-horseman logo. It’s understandable that the USPA would like to sex up its brand with chic logo-emblazoned items, but it can’t do that by trying to ride on the coattails of Ralph Lauren’s horseman logo. It’s time for the USPA to reconsider its target market and redo its logo.

Interestingly, the report also found that virtually none of these brands place advertising on pornography websites.  While it appears that the brands have no concerns about facilitating illegal copyright infringement, they would be embarrassed to have their ads show up on sites that are considered taboo.

The Annenberg Innovation Lab believes that by reporting the top offending networks they could help to cut off funding to websites that support digital piracy.  The websites that facilitate piracy make most of their money by selling advertising space.  By cutting off the money from advertisements it is possible that the sites could lose their ability to operate.  It appears that Annenberg Innovation Lab’s hope is that by publicly shaming those who pay for ad space on the sites, these brands will choose not to continue in the endeavor.

In the first report that came out, Google ranked second among the offending brands.  One month later, after the rankings were updated, Google’s name has been cleared from the list.  Although this is only one example, it goes to show the serious impact public shame can play on discouraging these brands from purchasing ad space on websites that encourage piracy

The IIPA identified Argentina as a country that should remain on the Priority Watch List, which contains the countries with the lowest scores in terms of protecting U.S. IP owners.  One of the reasons for the IIPA’s assessment is that Argentina is home to the largest street market in Latin America, a place called La Salada.

Situated in the outskirts of Buenos Aires, La Salada has about 6,000 employees and 15,000 stands that sale clothing, shoes, CDs, DVDs and electronics.  The market sales amount to 9 million dollars per week in pirated and counterfeit goods.  According to Jorge Castillo, one of the market’s managers, the “mall for the poor” happens twice a week; individuals rent a stand to sell merchandise they produce, with some of them using a label of a well-known mark in the process.

The music and the movie industries are two sectors that are most affected by La Salada.  Javier Delupi, executive director of the Association for the Protection of IP in Phonograms (APDIF), stated that La Salada is the epicenter of the pirate market Argentina.  He further explained that there is a network of production labs around the fair that supply the illegal copies.  For Delupi it is the government’s role to regulate these illegal activities, not organizations such as the one he represents. According to statistics  from the Argentinean Chamber of Phonogram and Videogram Producers, sales of the illegal movie industry amount close to 230 million dollars per year; more than twice the amount of legal movie sales.

The IIPA is worried that the Argentinean government endorses La Salada’s economic model.  The government has supported the expansion of to other Argentinean provinces.  Last year, Castillo and other Salada merchants went to Angola as part of an official government delegation, headed by the Minister of the Economy, Guillermo Moreno.  The mission sought to introduce Argentinean products to be traded first in Angola, and the rest of Africa later on.  There is an agreement with the Angolan government to build a replica of La Salada market in Luanda where Argentinean products made by La Salada’s merchants will be sold.

Argentina’s government endorsement of La Salada and all that street market represents is one way to approach the IP debate.  From a policy standpoint, what kind of legislation can a country pursue when a section of its population makes a living by selling pirate and counterfeit goods?  What kind of legislation can a country pursue to protect an industry whose prices are often inconsistent with the country’s cost of living?

Full PDF

Individual Articles:

Ultramercial and Prometheus: How Transformation Analysis After Bilski Is Changing to Accommodate Modern Technologies by Sarah Beth Smith, with Foreword by Professor Jonas Anderson

ICANN’s New Generic Top-Level Domain Program and Application Results by Amer Raja

The United States Copyright Office: Nostalgia for the Past, Obstacle for the Future by Jacob Harper

Are Secondary Considerations Still “Secondary”?: An Examination of Objective Indicia of Nonobviousness Five Years After KSR by John Paul Putney

A Dutch Patent-holding company, Rembrandt Social Media, filed a complaint against Facebook last week in the U.S. District Court of Virginia, acting on behalf of the widow and family of Dutch programmer, Joannes Jozef Everardus Van Der Meer. According to Van Der Meer’s camp, the late programmer patented Facebook’s “like” and “timeline” functions in 1998, six years before Zuckerberg launched Facebook.

Van Der Meer tried to capitalize on his inventions after he was granted the patents in 2001 and 2002. He founded a company called Aduna, and bought the domain name “surfbook.com.” Surfbook was intended to be a social networking site in the form of an online diary that allows users to approve data by using a “like” button. The complaint states that Surfbook also lets users “collect personal information and third-party content, organize the information chronologically on a personalized Web page, and share the information with a selected group of people, such as the end user’s friends, through the use of user-settable privacy levels.” Van Der Meer passed away in 2004 before he was able market his website and fully utilize his inventions.

Although he is not a household name like Mark Zuckerberg, Van Der Meer’s legal team believes he was a highly influential social networking pioneer. “We believe Rembrandt’s patents represent an important foundation of social media as we know it, and we expect a judge and jury to reach the same conclusion based on the evidence,” said Rembrandt’s attorney, Tom Melsheimer.

What is potentially damaging is that Facebook is more than aware of Van der Meer’s patents. In June, Facebook was granted a  patent for a method of running cross-platform applications on wireless devices. In its application, one of Van der Meeer’s patents was even cited as a reference.  The outcome of this case could encourage more litigation if Rembrandt prevails. Facebook did not always have the “like” function; this was a relatively recent enhancement in Facebook’s evolution from a college social networking site to the world’s most popular social network. If Facebook comes up with more enhancements, more companies could be encouraged to pursue litigation over individual functions. Rembrandt Social Media has sued for unspecified royalties. No word from Facebook yet, but this is exactly why the site needs a “dislike” button.

M.C.A. Hogarth’s book, Spots the Space Marine: Defense of the Fiddler, is described as “Pollyanna meets Starship Troopers.”  M.C.A. Hogarth is self-published author who focuses mostly on science fiction, fantasy, and humor.  Last month, Hogarth was surprised when Amazon blocked the e-book version of Spots the Space Marine from being sold.  The reason?  The English game company Games Workshop, which makes tabletop war games, alleged that Hogarth’s book title infringed their trademark rights in the term “Space Marines.”  This sparked a controversy pitting the author against the game company.  The Electronic Frontier Foundation, among others, stepped in to help get Hogarth’s book back on the e-shelves.

As Hogarth and others were quick to point out, Space Marines are not exactly new in the science fiction genre.  According to Wikipedia, the first known use of the term was in 1932 in the title of Bob Olsen’s short story “Captain Brink of the Space Marines.”  Space Marines have since appeared in several iconic science fiction works, including Starship Troopers, Doctor Who, Battlestar Galactica and (somewhat) in Avatar.  Science fiction icons like Wil Wheaton and the author Neil Gaiman tweeted support for the author.

Now Games Workshop does have a clear history of using the term Space Marines in their board games.  Specifically, the term “Space Marine” showed up in the Games Workshop game “Warhammer 40,000,” which was created in 1987.  Games Workshop does hold a registered trademark for the term for board games and miniature figures as well as another registration for the term in video games.  Apparently Games Workshop also holds a European registration for printed material and has its own set of “Space Marines” books.  However, only the Kindle version of Hogarth’s book was taken down.  Also, the term appears to be pretty generic in the realm of science fiction novels and films.  Considering the lack of distinctiveness of the term, it seems unlikely that a reader would confuse the two.  The fact that Amazon chose to reinstate the book seems to recognize this.

Again, this seems to be another case of a company choosing to challenge a plaintiff they probably should not have.  Hogarth’s story evokes sympathy.  Hogarth appears as the David figure standing up to the much larger Goliath.  It doesn’t hurt that she also donates a portion  of her proceeds from the book to charity.  As EFF points out, strategies such as requesting an Amazon takedown can be a quick and easy effort for the claimant, but have a big impact on authors like Hogarth.  Without help from these organizations, it is difficult for someone like Hogarth to contest this sort of takedown.  So this is an area that exists in a difficult area where websites likely don’t have the time to fully analyze whether a book is actually violating someone else’s rights.

For now, Spots the Space Marine is now available for download, again, and the book appears to be benefitting from the increased publicity.  Games Workshop has appeared to have angered science fiction fans, who are highly likely to be Games Workshop customers.  While trademarks do need to be protected, it is still important to consider how litigious action appears to the potential audience.

 Accent Packaging, Inc. v. Leggett & Platt, Inc.

This claim construction case arose out of the United Stated District Court for the Southern District of Texas and considered a patent for Accent Package, Inc.’s (“Accent”) wire tier device that was used to bale recyclables for easier handling.  Accent appealed the district court’s grant of summary judgment to Leggett & Platt (“Leggett”) which held Leggett did not infringe Accent’s device on several claims.

Accent’s patent disclosed a wire tier device including, “[an] operator assembly including a pivotal shaft assembly and elongated operator bodies, with each of the operator bodies being operably couple with a respective one of said gripper, knotter, cutting element, and cover . . . .”  The main issue in the case was whether this limitation only protected tier devices with four operator bodies—each devoted to gripping, knotting, cutting, and covering respectively—or was broad enough to include tier devices with only two operator bodies, such as Leggett’s potentially infringing invention.  The CAFC reversed the lower court, and held that nothing in the claim’s language required four operator bodies.

Full Citation: Accent Packaging Inc. v. Leggett & Platt, Inc., __ F.3d __, No. 2012-1011 (Fed. Cir. Jan. 29, 2013).

Find the full opinion here

Arkema Inc. v. Honeywell Int’l Inc.

This suit arises out of a dispute between two manufacturers of automobile refrigerants.  The Defendant, Honeywell, owned two patents, which claimed methods of using 1234yf, a refrigerant with a low global warming potential, that has become “the de facto standard refrigerant in Europe and the United States.”  Arkema had plans for selling 1234yf to automotive manufactures, and, fearing liability, filed suit against Honewell seeking a declaratory judgment for invalidity and noninfringment.  The District Court for the Eastern District of Pennsylvania held that this claim was not justiciable because as a supplier, not a manufacturer, Arkema would not be using 1234yf and therefore could not directly infringe Honeywell’s patent.  The Federal Circuit Court of Appeals reversed, stating, “[o]n its face, this is a quintessential example of a situation in which declaratory relief is warranted.”

The fundamental error in the trial court’s reasoning was the notion that declaratory judgment is generally reserved for cases of potential direct infringement.  The CAFC dismissed this notion and explained that, in Honeywell’s view, there was “no question that both the automobile manufacturers and their ultimate consumers . . . infringe the method patents.”  In other words, if Arkema agreed to sell 1234yf to car manufactures, there would be no question that Honeywell could sue Arkema for indirect infringement.  As a result, Arkema had an immediate economic need to understand the bounds of Honeywell’s patent rights, and the claim for declaratory judgment was justiciable.

Full Citation: Arkema Inc. v. Honewell Int’l Inc, __ F.3d __, No 2012-1308 (Fed. Cir. Feb. 1, 2013).

Find the full opinion here

In order to be successful on a copyright infringement claim the plaintiff must demonstrate ownership of the work, proof the defendant had access to the song, and substantial similarity between the two works. The facts of this case are an interesting fit. Francescatti registered “Juda” in 1999 and recorded it in 2005. Both performers used recording engineer Brian Gaynor on their albums, however, Gaynor did not work with Gaga on “Judas.” Gaynor has also been named a defendant in the suit.

The definition of “substantial similarity” is slightly different between the circuits. In the 7^th Circuit, where this case is taking place, the definition recently changed. Previously, the court used the “ordinary observer” test where the judges would attempt to determine, after listening to both songs, if an ordinary person off the street would consider them similar. The standard changed in 2012 with the Kanye West case, Peters v. West, where the Court of Appeals rejected the notion that opportunity was enough. The current standard requires the plaintiff to show that the defendant not only had access to their song but also provide evidence of similarity.

How the 7^th Circuit will assess Gaga’s possible copyright infringement under the new standard articulated in Peters remains to be seen. For fun, be the ordinary observer and listen for yourself!

Lady Gaga- “Judas”

Rebecca Francescatti- “Juda”

Watson, along with Francis Crick and the help of Rosalind Franklin, discovered the structure of DNA in the 1950s. As a pioneer of human genetics, Watson initially filed the brief with the court of appeals, but was unsuccessful in convincing the court. Watson does not support either side, but rather argues that genes cannot be patented, since they are products of nature. As one of the most influential scientists of cell biology and modern genetics, Watson objects to privatization and monopolization of human genes by companies, individuals, and governments, as stated in the press release by Wiley Rein LLP, Watson’s counsel.

The dispute surrounds Myriad’s isolation of the BRCA1 and BRCA2 breast cancer genes, which help determine the hereditary character of a specific patient’s cancer. In patenting the gene, Myriad monopolizes the market, making the test for this gene expensive and inaccessible to many affected breast cancer patients.

The case has been the center of much controversy. The American Civil Liberties Union (ACLU), who which is representing doctors challenging the patentability, has been a vocal player in the case. The ACLU contests Myriad’s assertion that isolated genes become a human invention when removed from the body, and are no longer a product of nature. The group responded by stating, “under this rationale, a kidney ‘isolated’ from the body would be patentable, gold ‘isolated’ from a stream would be patentable and leaves ‘isolated’ from trees would be patentable.”

The Supreme Court agreed to hear oral arguments last November, though they have yet to be scheduled. Over twenty amicus briefs have been filed with Supreme Court since late January. Watson’s brief holds symbolic importance, given his role in the field of cell biology.  His compelling arguments include scientific advances since his discovery of DNA and emphasized these studies’ intent to benefit all, not certain corporations or individuals. He left the court with a gripping statement in the brief, which summarizes the views of many opposing Myriad, stating, “as a product of nature, a human gene’s primary purpose is to encode the information for creating proteins, enzymes, cells and all the other components that make us who we are…life’s instructions ought not be controlled by legal monopolies created at the whim of Congress or the courts.”

But what, if anything, do the pirates of the “Crimson Permanent Assurance” have to do with intellectual property law?

Like Python’s bandits, “Pirate Architects” in China are renowned for their prowess in the business of “building theft.”

Last month, British star-architect (or “starchitect”) Zaha Hadid looked set to file suit against a Chinese developer whom she claims stole one of her architecture designs. Hadid designed the Wangjing SOHO complex—a futuristic set of curved buildings, sculpted in stone and etched with wave-like aluminum bands—which is now under construction in Beijing. A nearly identical set of buildings is also currently under construction in Chongquing, a megacity of 32 million in southwest China. Chongquing Meiquan is the developer behind this project, known at the “Meiquan 22^nd Century” building.

Hadid sent Chongquing Meiquan a “cease and desist” letter in May 2012. The letter was ignored and the Chinese developer launched an advertising campaign claiming that his firm “never meant to copy, only … to surpass.”

The SOHO and Meiquan projects are now locked in a race for completion, and the Chongquing project looks like it is pulling ahead: Meiquan is set to complete construction this year, while Hadid’s project won’t be finished until 2014.

This is not the first time that Chinese firms have replicated internationally-renowned pieces of architecture. There is a 108 meter high Eiffel Tower replica in Tianducheng, near Shanghai, a slowly-emerging version of the Manhattan skyline in Tianjin, northern China, and an exact duplication of the entire Austrian village of Hallstadtt—a protected UNESCO World Heritage site—in Huizhou city, southern China.

China does have intellectual property laws that protect works of architecture, and most lawyers believe that Hadid could win if the suit went to trial. They caution however, that the remedies would likely be limited to compensation or other similar types of damages, since courts would be hesitant to order a defendant to knock-down a newly completed, multi-million dollar complex.

United State copyright law also protects architectural works, and provides them with the same protection as any other original work. 17 U.S.C. § 102(a)(8). The Act also places two express limits on these rights—in addition to general copyright exceptions, such as Fair Use. The first is that once constructed, architects cannot prevent the owners of the physical building from altering or destroying the building. 17 U.S.C. § 120(b). The second provides that architects cannot prevent others from making, distributing, or publicly displaying pictorial representations of the building, so long as the building is ordinarily visible from a public place. 17 U.S.C. 120(a). Thus, like in China, U.S. architects also have recourse against unauthorized construction projects replicating their buildings.

Hadid was initially excited by the prospect of her work popping up in other places, but has since stepped back: “It is fine to take from the same well,” she says, “but not from the same bucket.”

While imitation may be the sincerest form of flattery, trends indicate the culture of “duplitecture”—as it has come to be known—is on the rise and is showing no signs of stopping: it will be a long battle yet with the brigands known at “pirate architects.”

Yaaar.

Rick Fox of Indiana presciently anticipated this exact Super Bowl matchup last Febuary and put his money where his mouth was, laying down over $1,000 in an attempt to file for trademarks of “Harbowl” and “Harbaugh Bowl”, a play on words regarding the last names of the two head coaches. “Right before the conference championship games last year, I thought to myself, ‘Can you imagine if these guys played each other?’”, recounts Fox, the lone man in America with the foresight and business acumen to see that San Francisco and Baltimore would both make the Super Bowl.

Starting in August, Fox became the target of a long and pre-meditated campaign of harassment and intimidation at the hands of the NFL that included threatening letters and phone calls. Fox peacefully offered to resolve this dispute by dropping his legal claims in exchange for a mere autographed photo of Commissioner Roger Goodell and a couple of game tickets. The NFL refused his attempt at dispute resolution and warned Fox that the league would not only seek to oppose his claims but would attempt to have him pay all legal costs as well. Being a layperson faced with the overwhelming power of multi-billion dollar corporate interests, Fox relented and in October abandoned his trademarks.

Legal authorities are highly skeptical of the NFL’s claim that Fox’s “Harbowl” trademark application would be confusingly similar to the term “Super Bowl”. R. Polk Wagner, an intellectual property professor at the University of Pennsylvania Law School, asserts, “that the league was being overly aggressive in their interpretation that his marks were confusingly similar to Super Bowl.” Mark McKenna, an intellectual property professor at Notre Dame Law School, agrees with this analysis: “While there’s no question that in this case the trademarks are referring to, in some sense, the Super Bowl, saying that meets the legal standard would be a stretch.”

Instead of having his ingenuity and early action rewarded, Fox has become just the latest in a long line of victims swallowed up by the merciless, money-making death machine which is the modern, Goodell-run NFL.

The most shockingly overlooked and negligently underreported twist to this whole saga, though, might be the stunning fact that both head coaches facing each other in this Super Bowl are apparently brothers from the same family who grew up together.

Initially I didn’t realize that not all Sriracha sauces were created equal.  In my ignorance, I thought Sriracha was the brand name.  Recently I purchased some “spicy Sriracha Peas (sidenote – that is not me in the video),” and although they were delicious, it was not the same tasty full bodied, sweetly unique Huy Fong flavor that I had come to love.  So here’s the deal.

Sriracha sauce is relatively young, only recently available since the 80’s.  Huy Fong foods makes the most popular version in the United States.  David Tran, a Vietnamese immigrant residing in Los Angeles, developed the delicious flavor based on hot sauces from Sri Racha, Thailand.  Originally selling bottles out of his van, he now sold over 10 million bottles of Huy Fong Foods Sriracha Sauce, with an estimated 2007 profit of 3.2 million.  Additionally, the sauce is made on machinery designed by Tran himself.

So really how do I make an IP blog about my favorite food condiment?  To begin with, as stated above, Sriracha is not the brand name.  In fact, it is most likely unprotectable under federal trademark law because primarily geographically descriptive marks are bared from registration unless there is secondary meaning.  In In re Joint-Stock Company “Baik,” the test for determining if a mark is primarily geographically descriptive is whether (1) the term in the mark sought to be registered is the name of a place known generally to the public, and (2) if the relevant public would make a goods/place association.  If the goods do in fact originate in the place named in the mark, the goods/place association can be presumed and must be overcome by the applicant.  As a policy reason, the geographic area must not be known for the production of the particular good, as registration of a mark should not disadvantage others from making similar products.  Here, Sri Racha is known for creating a similar, but not identical, hot sauce.

This might pose a difficult hurdle for an applicant to overcome.  But remember, a rejection can be avoided by proving, via surveys or otherwise, that relevant consumers don’t know that the particular place is known for making Sriracha sauce.  And unlike a complete bar, an applicant can overcome a section 2(e)(2) with acquired distinctiveness, aka secondary meaning.  A TESS search of the USPTO shows two live marks: one for a design mark of a bottle of Sriracha sauce, but the words “Sriracha Hot Chili Sauce” are disclaimed.  The other is Huy Fong’s design mark, but like the first, “Tuong Ot Sriracha” is disclaimed.  Not only has Huy Fong’s sauce become a valuable asset, but its label also has brand value.  For example, they are now manufacturing popular water bottles that look like their hot sauce bottles.  Alas, in conclusion, for all you entrepreneurs and lovers of sriracha sauce, it appears that it is fair game to use the word “Sriracha” to describe sauce from that region.

P.S.  As a somewhat unrelated side note, I came across this interesting blog where the author relates coming across packets of Sriracha sauce, made by “Chili Boy” and not Huy Fong.  The author creatively discovers another possible trademark issue involved, in that the Chili Boy logo looks remarkably like the Starkist Tuna character.

Likely none. One major point in the argument against this law and its prosecution has been the steep sentences attached to its violation; if found guilty, a party could spend up to 35 years in prison. The topics of prosecutorial overreach and judicial discretion aside, it’s highly unlikely that Swartz would have spent an amount even close to this behind bars, even after falling under its purview by downloading approximately 4 million files from a protected database. Decriminalizing an activity that many people engage in unknowingly probably would not prevent prosecutors from seeking a sentence against actors like Swartz who violated other key portions of the law.

While no physical or economic harm was ever incurred (indeed, the stolen data was returned and neither JSTOR nor MIT, the location of the hacker’s computer, ever pressed charges), policing the illegal downloading of privately owned digital property is currently a very attractive endeavor.  The CFAA is but one tool available to plaintiffs and prosecutors to protect their rights to evanescent property. The tech and legal community’s distaste for this law is, and will remain, inextricably connected to our apparent difficulty or unwillingness to nail down a workable definition of property rights in data or construct a reasonable, sustainable system for protecting intellectual property. Defining scope and policy for such a slippery concept could, in fact, create more problems than it actually solves as the nature of data and intellectual property tends to be unlike physical property, for which laws are better suited. As attorney Michael Phillips points out, stealing in the “analog” world is a relatively simple concept. Stealing an item of value from one party deprives that party from its ability to realize its value. Even a returned good has lost some element of its value; delay in sale, change in new, unused status.

This model of property rights is echoed in many intellectual property infringement statutes. But electronic data does not depreciate in the same way, and no harm is immediately clear when the “stolen” “goods” are returned. As Chris Gayomali points out in his piece on The Week, the current values placed on data privacy and copyright control vastly outstrip the practical economic loss felt by victims of copyright infringement and reflect instead an attempt to deter wrongdoers with exorbitant judgments. Making room for civil disobedience, when internet and information use constitutes a large portion of our daily speech, is important, but is complicated when that disobedience tramples on the existent rights of our neighbors. Until our society becomes more comfortable with what the Internet hath wrought and how the legal system can be better tailored to reflect this reality, activists like Swartz will need remain activists willing to risk jail time (and whatever that mean under the given laws) for their causes. Given the pace of legislation and substantial interest in preserving property rights, I would bet on this risk for many years to come, regardless of any legislative success.

I imagine that most students, from elementary through graduate school, are instructed to cite their sources, by both individual teachers and school mandate.  Because these lessons begin at such an early age, there is less motivation to understand the reasoning behind them.  So, why are these instructions given?  Are elementary schools trying to protect nine-year-olds from falling into the trap of copyright infringement, or are they more concerned with extralegal issues?

Generally, plagiarism raises moral concerns.  It is, “an act or instance of using or closely imitating the language and thoughts of another author without authorization and the representation of that author’s work as one’s own, as by not crediting the original author.”  Judge Richard Posner adds that, “plagiarism requires that the copying, besides being deceitful in the sense of misleading the intended readers, induce reliance by them.”

This is where the issue of morality emerges.  For example, if someone appropriated information from this article without citing to either the IP Brief or myself, and readers subsequently believed that it was the copier’s work, then it would be plagiarism.  While I may be greatly incensed by someone holding out my work as his or hers, I would likely have no legal cause of action.  In fact, if I attempted to sue a plagiarist (under whatever cause of action), they could then countersue for defamation—a risk many authors would want to avoid.  In most plagiarism cases, the best-case scenario for the wronged party is to hope that the plagiarist’s institution takes disciplinary action—a failing grade, suspension, expulsion.

The question then becomes, at what point does the ethical of issue plagiarism enter the legal sphere of copyright infringement?  According to Mark Fowler, in his blog Rights of Writers, “Plagiarism does not amount to copyright infringement unless (a) the plagiarist has republished copyrightable expression of another, and (b) the amount of copied expression exceeds the boundaries of fair use.”  For example, let’s say someone cut and pastes my entire article (no fair use defense) and puts it into their blog, neither citing to the original nor attempting to garnish a license.  In this case, I have been plagiarized and my rights have been infringed.

While these plagiarism/infringement cases arise from time to time, infringement almost always carries greater consequences.  In the example above, suppose I had registered a copyright in this article prior to infringement.  As the wronged party, I would much rather be able to sue for attorney’s fees, actual damages, or statutory damages than see my infringer slapped on the wrist for plagiarism.

At the beginning of his blog, Fowler offers readers the following, courtesy of Black’s Law Dictionary, “True plagiarism is an ethical, not a legal, offense and is enforceable by academic authorities, not courts. Plagiarism occurs when someone – a hurried student, a neglectful professor, an unscrupulous writer – falsely claims someone else’s words, whether copyrighted or not, as his own. Of course, if the plagiarized work is protected by copyright, the unauthorized reproduction is also a copyright infringement.”

So, whether you are writing your first book report or authoring your twentieth book, take care to cite your sources and, when in doubt, get a license.

That is the premise behind a complaint filed January 25, 2013 in the Superior Court of California. In the complaint (available here), the Results Group LLC brings suit against SyFy Media Productions LLC (the SyFy Channel), which is owned by NBC Universal Media LLC, for what they allege was a classic “pitch poach.” [author’s note—“pitch” is industry slang for the—typically short—presentation given by someone with a script, concept, or other property to another person who, they want to buy into the project. “Poach” is an English word meaning “to steal” or “encroach”].

The Results Group entered into a written contract with Studio City—a television program production house—to create and develop a new reality-show series called “Face Off” that would be the “Iron Chef” of  Hollywood special effects make-up artists. The two companies put together a presentation package about the show containing a detailed show synopsis, specific challenges that could be used during episodes, various graphics, and a presentation video. With their agent from William Morris Agency, the Results Group pitched the idea to two SyFy Channel executives on May 27, 2009. That’s when all the trouble started.

The Result Group gave SyFy their oral pitch along with an original copy of all the pitch materials.  After the meeting, the SyFy executives told the Results Group that they would not pursue the proposed television program. Later that year, however, SyFy announced they would release a series called “Face Off,” a reality show competition between special effects make-up artists.

The Results Groups approached SyFy about the similarities. SyFy denied that they stole the Results Group’s concept, claiming that they were planning a similar show before the pitch meeting following a pitch from a third production company, Mission Control Media, Inc.

After the first few episodes aired, the Results Group became convinced that SyFy had stolen their idea, and that the story about Mission Control Media was false: the SyFy show contained the same basic concept (a female hosted reality show about make-up artists with three judges and an $100,000 prize), and similar contests during the three episodes. The Results Group filed suit.

In their complaint, the Results Group claimed they had an implied contract of confidentiality with SyFy about the pitch materials, as well as an implied contract that (1) SyFy would not use the pitch materials to develop their own series; and (2) if SyFy did want to use the materials, they would hire Studio City and the Results Group as producers, using the standard industry contract and at the standard industry rate. Because SyFy produced the show without their permission, and without hiring them as producers, the Results Group claimed a breach of these implied contracts. The Results Group also claims unfair competition.

Interestingly, the Results Group did not include a claim for copyright infringement in the complaint, even though the entire lawsuit is based on the theory that SyFy “copied” their show.

Why Not?

First, even though the actual pitch material is certainly a copyrightable work, and thus fits under the Copyright Act’s definition of an “original work of authorship fixed in a tangible medium of expression,” 17 U.S.C. § 102(a), the actual thing that the Results Group claimed was copied was not the pitch materials, but rather the ideas contained within. This poses a problem in copyright law, since copyright protection does not extend to any “idea … [or] concept” even if it is embodied in the copyrightable work. 17 U.S.C. § 102(b). Thus, the Results Group would not actually have an infringement claim under copyright law, since what they claimed was “copied” cannot be protected in the first place.

Second, even if they claimed infringement for physically copying the pitch materials themselves, the amount of damages available would be so small, this claim would not be worth pursuing: the value of the materials derives not from the actual copies, but from the show produced as a result of those materials.

Consequently, those who believe they have fallen victim to concept or idea theft tend to claim damages under the causes of action mentioned in the Results Group complaint: breach of contract (express or implied) and unfair competition. Such common law causes of action allow individuals to enforce their perceived rights in a property that statutory law, such as copyright law, fails to protect.

The designer’s name is Dwight Fenton and he served as a senior design director at J. Crew in its men’s design division. On January 15, 2013, he resigned from his position at J. Crew to join Bonobos, which is a “rival men’s apparel company with a ‘similar aesthetic to J. Crew.’” Approximately a week after his announcement, J. Crew performed an “inventory and review of Fenton’s last 30 days of emails from his work computer.”

Through this inventory and review, J. Crew discovered that Fenton sent many “highly confidential and proprietary J. Crew documents to his personal email address,” which is a violation of company policy.

In his position at J. Crew, Fenton had access to extremely valuable proprietary business information. Due to the confidential nature of the information, Fenton agreed to use the information for his job duties, and to “keep it confidential in the event he left the company.” J. Crew alleges that Fenton did not adhere to latter part of the agreement because he forwarded emails containing confidential information two days before he left the company.

In all, Fenton sent himself “product design specifications and measurements, J. Crew’s 2013 production development calendar; contact information for J. Crew’s key manufacturing resources; its men’s design year-end financials, men’s design budgets and men’s presentation samples budgets; lists of third-party collaborating brands; and design inspirations.” J. Crew is concerned that Fenton will use the information with Bonobos to compete unfairly with J. Crew.

The scorned specialty retailer seeks injunctive relief to safeguard it from Fenton’s commercial piracy and compensatory and punitive damages for about $650,000 with a temporary restraining order. J. Crew believes that it is only a matter of time, if it has not been done, until Fenton uses J. Crew’s trade secrets to benefit Bonobos. The company asserts that it met the standard for a preliminary injunctive and that it has established that Fenton violated both J. Crew’s confidentiality policies and his “common law obligations under New York Law by misappropriating the confidential and proprietary information.”

Additionally, J. Crew argues that if it is not granted a preliminary injunction, it will suffer irreparable harm because Bonobos will be allowed to mimic J. Crew’s products in less and time and for less money and “replicate its manufacturing efficiencies, costs, and processes.”

What are your thoughts?

Foreign hackers, particularly from China, have become increasingly adept in their ability to crack into American computer systems and access our most heavily guarded and classified intellectual property. FBI director Robert Mueller III admonished that cyber attacks would soon replace terrorism as the agency’s primary concern. Most troubling is that neither the federal government, the Pentagon, nor private enterprises are immune.

At a congressional hearing on cyber security this past April, Rep. Michael McCaul (R-Texas) lamented, “When I look at the theft of intellectual property to the tune of $1 trillion, that’s a serious economic issue for the United States.” McCaul, who is chairman of the House Homeland Security Subcommittee on Oversight, Investigation, and Management, made this statement in
reference to the theft of blueprints for the F-35 Joint Striker Fighters and the F-22 combat aircraft, which were stolen by Chinese hackers in 2009. These are two of the most advanced and expensive stealth aircrafts in the world, but somehow cyber militants were able to obtain their plans from the depths of our most secretive dwellings with just the click of a mouse. The Pentagon has reported more than three million cyber attacks a year on its 15,000 computer networks, and numerous private defense contractors, including Lockheed Martin, Booz Allen, and Gulf Aerospace, also acknowledged to being victims of sophisticated hacking programs.

John Kerry, fresh in his new role as Secretary of State recently remarked that “cyber diplomacy” will be instrumental for the U.S. to establish new standards in the international community to cope with the growing use of “cyber espionage.” Referring to the noted threat from China, Secretary Kerry stated:

“Every day while we sit here, right now, certain countries are attacking our systems, they are trying to hack in to classified information, to various agencies of our government, to banking structures — money has been stolen from accounts and moved in large sums. There’s a long list of grievances with respect to what this marvel of the Internet and the technology age has brought us.”

Legislatures have already undertaken measures to protect technologies and intellectual property from slipping through the cracks of the cybersphere. On December 28, 2012, the Theft of Trade Secrets Clarification Act of 2012 (S. 3642) became law, expanding the definition of trade secrets under the Economic Espionage Act (EEA). It’s always nice to see Congress act in the nation’s best interests, but the true solution relies on a preemptive approach. “I don’t think they saw the attack coming,” remarked a former senior U.S. intelligence. “These guys (the U.S. builders of the plane) lack imagination. They don’t act until something bad happens.”

And act they did. Last year U.S. companies took measures to upgrade their security systems at a cost of $400 billion. Sure, these economic repercussions are hefty, but the real consequences are seen through the lenses of global competition and military supremacy. China now has the foundation to build the same stealth planes used by the U.S. Air Force. Not only is U.S.’s military advantage dwindling, but at a minimal cost to its adversaries, who avoid burdensome costs of research and development. A greater emphasis on cyber security is need from Congress, the Obama Administration, and the private sector, to protect us from Chinese hacking threats. Our military superiority depends on it.

On December 28^th, President Obama signed into law the Theft of Trade Secrets Clarification Act, expanding the scope of the federal government’s jurisdiction to prosecute trade secret misappropriation under the Economic Espionage Act of 1996 (EEA).

Trade secrets, perhaps the most elusive intellectual property right, were initially protected at the state level as common law torts. Most states have now adopted, in some form or another, the Uniform Trade Secrets Act (UTSA), which defines a trade secret as information deriving independent economic value from not being known or readily accessible and is subject to reasonable efforts to maintain its secrecy.

The EEA previously imposed liability on those who knowingly misappropriated a product that is “produced for or placed in interstate or foreign commerce.” However, the Second Circuit’s decision in United States v. Aleynikov, 676 F.3d 71 (2d. Cir 2012), explicitly limited the scope of federal jurisdiction in holding that the EEA does not cover the misappropriation of internal proprietary software in the case against the former Goldman Sachs employee. The case turned on the fact that internal proprietary software was never itself in interstate commerce, but merely used tangentially to conduct business.

Because the holding in Aleynikov would limit the protection of internal business practices previously thought to be safe under trade secret jurisprudence, Congress passed the Theft of Trade Secrets Clarification Act. This amendment to the EEA changes the language at issue in Aleynikov to “a product or service used in or intended for use in” interstate or foreign commerce. According to the bill’s sponsor, Senator Patrick Leahy (D-VT), the bill is a “straightforward” fix intended to ensure that our laws adequately protect American companies and innovation.

In addition to the Theft of Trade Secrets Clarification Act, the President also signed the Foreign and Economic Espionage Penalty Enhancement Act this month, which allows for heightened fines against individuals and organizations convicted of EEA violations. Internationally, authorities in Taiwan have recognized the importance of protecting trade secrets, as it has enacted legislation increasing civil penalties and adding provisions for criminal liability.

From this chain of events, notably including Congress setting aside its partisan differences, it is clear that trade secrets are highly valued intellectual property rights, and deserve protection on the same level as their statutory counterparts.

Rexnord Industries, LLC v. Kappos and Habasit Belting, Inc.

In this § 103 case reviewing an appeal from the USPTO Board of Patent Appeals and Inferences (BPAI), the Federal Circuit reversed BPAI, finding the claims obvious as a matter of law.  Generally a routine appeal, Rexnord signifies the court’s rejection of BPAI’s holding they need not consider other grounds presented during reexam, only because they had not been raised on appeal.

Disagreeing, the Federal Circuit held that the patent could be invalid as a matter of law based on factors not presented to the Board or examiner during reexamination, thus enlarging the scope of challenges possible on appeal.  BPAI had denied a motion to rehear the appeal based on rationales other than those argued by the examiner, but the CAFC disagreed, thus allowing new arguments to be raised on rehearing and/or appeal, thus complicating the Board’s job for review and allowing practitioners the ability to “sit on” arguments until rehearing or introduce new ones at various times during the appeals process.

[Panel: Newman (author), Lourie, Prost]

[Full Citation: Rexnord Industries, LLC v. Kappos and Habasit Belting, Inc. , __ F.3d __, No. 2011-1434  (Fed. Cir. Jan. 18, 2013).]

[Find the full opinion here]

Hall v. Bed, Bath & Beyond, Inc. and Nachemin

In this design patent pleading case, the Federal Circuit found clear error and reversed Judge Alvin K. Hellerstein of the Southern District of New York, reopening a case the district court had dismissed at the pleadings stage.

In this case, the Appellant had invented and applied for a design patent for the “Towel Tote,” a towel with zippers to store wallets and phones while at the gym.  Appellant Hall contacted Bed, Bath & Beyond about carrying the device, and rather than deal with him, BB&B mailed Hall’s product to Pakistan and had it copied.  Once the design patent issued, Hall sued, but the district court dismissed the case based on sparse pleading in the complaint.

Every first-year law student in recent years likely recalls the Twombly and Iqbal standards.  Here, the CAFC held that even under those cases, a pleading does not require specifying the “new, original, and ornamental” features of a design patent—but rather, the bare-bones requirements of naming the patent, the patent number, a statement of infringement, and a citation to the relevant patent laws.

The ruling represents the broader tack the CAFC has taken to pleading in general, holding that bare-bones Form 11 pleadings in patent cases, as well as bare-bones pleadings in design patent cases, as here, are special instances that satisfy pleading requirements unique to this genre of litigation.

The case is significant because it keeps the door open for broad pleadings in design patent cases, increasing design patents’ value to potential litigants.  A narrower reading would hold that this case is less significant, if only because novelty is not a necessary element of proof at trial because of legal presumptions available.

[Panel: Newman (author), Linn, Lourie (dissenting)]

[Full Citation: Hall v. Bed, Bath & Beyond, Inc. and Nachemin, __ F.3d __, No. 2011-1165, -1235 (Fed. Cir. Jan. 25, 2013).]

 [Find the full opinion here]

Allflex USA, Inc. v. Avid Identification Systems, Inc.

After the decision in Allflex v. Avid, parties cannot use settlement tricks to keep post-settlement litigation alive through arbitrary clauses in the settlement agreement which put money into play if any of the claims are overturned at a later date.

Normally, parties cannot sue again after entering into a settlement agreement due to mootness concerns—there is no live controversy between the two parties post-settlement.  This serves a number of purposes, the primary of which is to finally settle the controversy in the sake of judicial and economic efficiency.  But with the shifting tides of business and competitive advantage, companies often would like a second- or third-chance lawsuit that may get them out from under an oppressive settlement agreement.

The facts of the case are somewhat irrelevant other than the nature of the settlement-agreement-clause; an out-of-the-air $50,000 penalty if Avid overturned any of the three material legal findings.  That money could not keep the second-run litigation alive on appeal, thus disallowing the losing party to skirt the normal rule—parties cannot appeal findings from a court occurring prior to settlement.

The ruling makes sense; it prevents post-settlement gamesmanship, should strengthen settlement agreements, and benefit the industry in the long run by putting controversies to rest.

[Panel: Lourie, Clevenger, Bryson (author)]

[Full Citation: Allflex USA, Inc. v. Avid Identification Systems, Inc., __ F.3d __, No. 2011-1621 (Fed. Cir. Jan. 17, 2013).] 

[Find the full opinion here]

InterDigital v. USITC and Nokia (on denial of reh’g en banc)

In a resounding denial of rehearing en banc, the Federal Circuit stressed that patent licensing activities alone satisfy the “domestic industry” requirement of section 337 of the Tarif Act of 1930.

The significance of the ruling cannot be overstated—it will be far easier to prove domestic industry in ITC investigations in the future, particularly for foreign-based corporations who only license technology within the United States.  In practical effect, the ruling expands the jurisdiction of the ITC in that many foreign-based corporations with licensing activities within the United States can now rest assured they are permitted to bring actions for infringement and other unfair trade violations at the USITC.

By writing in sole dissent, Judge Newman has proved that the case Federal Circuit almost unanimously agrees—licensing alone is enough to satify the domestic industry requirement in a 1337(a)(2) or 1337(a)(3) violation action.

[Rader (Chief Judge), Newman (dissenting), Mayer, Lourie, Bryson (author), Dyk, Prost, O’Malley, Reyna, Wallach]

[Full Citation: InterDigital v. USITC and Nokia,__ F.3d __, No. 2010-1093 (Fed. Cir. Jan. 10, 2013)(denial of reh’g en banc)]

[Find the full opinion here]

Tillet’s all-natural ‘Kroma Makeup’ launched in 2004, and was granted an official USPTO trademark for ‘Kroma’ in January 2012. In June 2012, Tillet sent Boldface a cease-and-desist letter, but Boldface ignored the letter, and countered with a lawsuit seeking a declaratory judgment so that it could continue to use the ‘Khroma’ name. Currently, Boldface has the mark ‘Kardashian Khroma’ on file with the USPTO, but it is still under a 1B filing basis, meaning that Boldface has yet to start using its trademark.

Seemingly, the Kardashian counsel counted on intimidating Tillet, but Tillet doesn’t want to simply hand over her rights in Kroma in exchange for a lucrative settlement; indeed, she has stated that she “built [her] business through [her] own hard work, and took the legal steps necessary to protect it.” Unsurprisingly, Boldface’s CEO Nicole Ostoya responded they do “not believe that there is any likelihood of confusion between Khroma Beauty… and any other entity.” Boldface’s counsel argues that the Khroma Beauty are inextricably linked with the Kardashian name, because the mark prominently features the Kardashian name. They argue that Tillet’s line is distinguishable from the Kardashian line because the packaging and marketing of the ‘Kroma’ mark  is closely accompanied by the phrase “by Lee Tillet,” thus eliminating confusion among consumers.

Adding a certain level of intrigue is Tillet’s assertion that on or about May 2010, Tillet’s representatives and TLK Fusion, one of Kim Kardashain’s agents, engaged in discussions regarding a possible product placement of the KROMA® cosmetics line in an upcoming television special produced by Kim Kardashian, but the parties never reached an agreement. If this allegation proves to be true, it seems highly plausible that the Kardashian camp might have intentionally chosen to use the Khroma name despite complete knowledge of the pre-existing Kroma brand.

Photo courtesy of Kirby Lee and USA TODAY Sports

Upon leading his team to the Super Bowl for the first time since the dark, pre-Internet year of 1994, San Francisco 49ers starting quarterback Colin Kaepernick applied to trademark the term “Kaepernicking,” used to refer to the touchdown celebration where he kisses his bicep.

Once upon a time, in a simpler, halcyon era of American culture, our sports heroes all had iconic nicknames. These nicknames were widely recognized as legitimate signifiers of whom the sports star was and served as a kind of shorthand conduit to the general public fan base to explain what the star stood for. Names such as “Joltin’” Joe DiMaggio, “Shoeless” Joe Jackson, Eric “Sleepy” Floyd, and Paul “Bear” Bryant are canonical points of reference to fans of various sports. However, recently the grass-roots process of being christened with a catchy yet identifying nickname that catches on through word of mouth and something called “newspapers” has undergone a more commercial shift.

Nicknames in sports today must be trademarked almost immediately upon invention, and often are identified with a complementing action. Beyond the merely uncreative word choices behind names such as “Linsanity,” “Johnny Football,” or “Honey Badger,” it appears that the modern athlete must now also evoke a physical action to literally personifies his nickname. In the process started by “Tebowing,” we were then graced with “Griffining” and now “Kaepernicking”.

The mere fact that kissing your bicep in celebration is being trademarked says a great deal about American trademark law’s tolerance towards nontraditional marks. Nontraditional marks generally refer to trademarks that include, “sensory marks such as sound, color, scent, taste, and tactile marks, and also holographic marks or even the motion of a product.” Legal authorities have argued for years, in relative obscurity, that recognition towards nontraditional marks after Qualitex Co. v. Jacobson Products Co., Inc., 514 U.S. 159 (1995) is ill advised, burdensome, and unbeneficial in the long run. In this atmosphere, where even the motion of a Lamborghini car’s door can be trademarked, it is thus not surprising that the proliferation of meme-ish nickname actions are being trademarked left and right.

“Gaymer” is a term used to identify gamers who are also part of the LGBT community. Urban Dictionary defines the term primarily as “a gay person who is also a gamer.”  Ars Techica notes that the term has been used since the mid-1990s. Petitioner’s subreddit is a gamer community with over 21,000 subscribers where members discuss various facets of gaming, as well as the LGBT experience.

The subreddit came under attack in August 2012 when Vizzini sent them a cease-and-desist calling for the community to stop using the term “gaymer.” In the letter Vizzini requests that reddit, “cease and desist any further use of gaymer in association with reddit’s services and requested that reddit respond to the letter by assuring Registrant of reddit’s compliance with the terms of the letter.”

Vizzini filed to register the trademark “gaymer” in 2007, four years after creating his site. The site markets itself as a gay gaming community created for gay gamers and out of Vizzini’s frustration with the excessive homophobia that littered the general gaming community. Vizzini writes that his trademark only applies to online social websites, and that he encourages the existence of other gay gaming communities. Additionally, Vizzini holds that he built the name “gaymer” into its current meaning and that it unequivocally identifies his brand. According to Vizzini, after he sent the cease-and-desist letter, he agreed that Petitioners could use the mark in exchange for including a link to his site.

Vizzini’s partial concession did not appease Petitioner’s community, which received pro bono legal services from Perkins and Coie and the Electronic Frontier Foundation to plead its case. Petitioners argue that the mark threatens free speech, and that the term “gaymer” is either generic or merely descriptive, used to identify more then 1 million “gaymers” in the United States alone. Corynne Shelley, Electronic Frontier Foundation’s Intellectual Property Director stated, “Its pretty obvious this is a common term. This registration should never have been granted. Gamer is a common term that refers to members of this vibrant gaming community, and we are happy to help them fight back and make sure the term goes back to the public domain where it belongs.” Business Insider writes that the Petitioners argue that Vizzini’s ownership of the mark discourages its intended use, which is to describe a worldwide community of gay gamers.

This battle is turning “gaymer” against “gaymer.” Hopefully its outcome will protect Vizzini’s brand while maintaining the essence of the term as r/gaymer member Ozuri explains:

“For me, it is the marrying of my hobby and a part of my identity that allowed me to grow into my own as an adult.  I am a gaymer.

Mr. Vizzini, you keep using the word ‘gaymer.’  I do not think it means what you think it means. To the rest of us, it means community.  It means pride in our differentness and our small community.  It means inclusiveness rather than exclusiveness.”

The DMCA makes it illegal to “circumvent a technological measure that effectively controls access” to copyrighted material, in this situation software embedded in phones that controls carrier access. Unlocking a cellphone is a common practice for those wanting to change cell carriers. Unlocking the phone involves removing certain security features that keep the phone set in a particular mobile carrier’s network. Unlocking a cellphone is different than jailbreaking the phone, which involves opening up the phone to run additional software. Jailbreaking is still legal for cellphones. Unlocking a cellphone also allows users to carry their phones across networks – a particularly handy feature when users are travelling internationally.

The Library of Congress sees no need for third party unlocking. The Library believes that there are enough unlocked phones, options for carriers to unlock phones, and other options for consumers, such that the unlocking of phones no longer needs to be a protected right. The 2010 decision holding that software is licensed rather than sold was a likely factor leading the Library to decide that phone unlocking should be illegal. In addition, the Library may have been influenced by claims that there are more unlocked phones on the market than there were three years ago. Also, the Library’s belief that cellphone companies are doing well when it comes to fostering competition in their market likely lead to their decision to end third party unlocking.

Some lucky users will not have to worry about the new rules affecting their phones. Verizon’s iPhone 5 comes unlocked out of the box and AT&T will unlock a user’s phone once the contract is over. However, Apple charges the non-discounted rate (what a user would pay for a cellphone without the two year contract) for the unlocked iPhone 5 at $649 and Google sells the unlocked Nexus 4 for $300.

Despite the options, some are fighting back. Technology advocacy group Electronic Frontier Foundation (EFF) is contesting the DMCA’s right to mandate who is allowed to unlock a cellphone. EFF attorney, Mitch Stolz, sent a letter to TechNewsDaily.com: “Arguably, locking phone users into one carrier is not at all what the DMCA was meant to do. It’s up to the courts to decide.”

A petition to “make unlocking cellphones legal” on the White House website has over 10,000 signatures at the time of writing this post and is aiming to reach the 100,000 figure by late February. Under the new White House rules, the petition will need the 100,000 signatures in order to receive a formal response from the White House. Only time will tell whether the Library reverses itself on what many people deem a costly and unnecessary regulation for consumers.

Last Tuesday, the USPTO gave notice that the trademark application faces no opposition. Beyoncé and Jay-Z are on their way to acquiring the rights. They must now start using the trademark in commerce to prove that they are using the name to market their products. The celebrity couple plans to use the trademark for skin care products, key chains, ring tones, curlers, eyeglasses, strollers, handbags, stickers, playpens, wallets, baby bedding, teething rings, scrunchies, soccer balls, and movies.

While some may call their rush to the USPTO a shrewd business move aimed at furthering the Carter brand, the decision could also be considered a pre-emptive strike against companies aiming to profit off the celebrity couple’s empire and their baby daughter.

Blue Ivy has been dubbed “the world’s most famous baby.” She was the subject of a Saturday Night Live skit, her baby clothes are documented by fashion bloggers worldwide, and she is the record holder of being the youngest person ever to appear on a billboard chart after Jay-Z released the song “Glory” within 48 hours of her birth, which incorporated her voice.

Right after Beyoncé and Jay-Z announced the newborn’s name to the press, trademark applications for “Blue Ivy” started popping up across the United States. On January 11th, four days after Blue Ivy’s birth, Joseph Mbeh, submitted an application to trademark “Blue Ivy Carter NYC” for a children’s clothing line. After the Trademark office denied the filing, Mbeth released a statement claiming it was all a misunderstanding and he never intended to piggyback off the celebrity couple’s fame. He insisted that he planned on pitching the clothing line to Beyoncé and Jay-Z, and after he found out Blue Ivy was not a registered trademark, he tried to secure it himself. Another business owner filed an application for “Blue Ivy Carter Glory IV” in hopes of using the trademark for a fragrance and body glitter collection. The trademark office denied the application, expressing concern that consumers would falsely believe that the celebrity couple approved the products when they did not.

The USPTO granted trademark rights to a Boston-based wedding planning company that has been operating under the name “Blue Ivy” since 2009, provided that the company only uses the name for event planning. Since Beyoncé and Jay-Z do not intend to use the trademark for event planning, the two trademarks don’t conflict.