Tag: IP

Five Key Takeaways From ICANN 50 in London

Katten Muchin Law Firm

The 50th Meeting of the Internet Corporation for Assigned Names and Numbers (ICANN) took place in London from June 22–26. This marked the first time that an ICANN meeting has been held in London, and also resulted in the largest attendance record for an ICANN meeting, with more than 3,300 individuals registered in attendance. Despite what could be characterized as organized chaos on the ground during the meeting, the following five topics and takeaways began to emerge for brand owners and new generic top-level domain (gTLD) applicants—topics which have only continued to blossom and garner further attention in month following the formal conclusion of the meeting.

1. Geographic Terms Trump Trademarks, According to the Argentina Proposal

In essence, the Argentina proposal seeks to block at all levels of the domain name system, “terms with national, cultural, geographic and religious significance,”; including “regions of countries, regions of continents, sub-regions of countries, rivers [and] mountains, among others …”; subject to registration through relevant national approval. The proposal adopts a highly aggressive posture toward inevitable conflicts between natural, cultural, geographic and religious terms on the one hand and trademarks on the other hand, no doubt in response to ongoing disputes within ICANN over the .AMAZON and .PATAGONIA new gTLD applications.

Contrary to the principle of freedom of use of geographic names, allowing private companies to register geographic names as part of gTLDs [sic] strings creates a high risk for these names to be captured by companies that want to use them to reinforce their brand strategy or profit from the meaning of these names, limiting the possibility of utilizing them in the public interest of the affected communities.

See GAC Meeting: Briefing to ICANN Community – Protection of Geographic Names in gTLDs (June 25, 2014).

Although the national, cultural, geographic and religious terms contemplated are clearly distinct from geographical indications, such as BORDEAUX, FETA or DARJEELING, the two have been conflated and the Argentina proposal has raised similar ire from nations vehemently opposing the .WINE and .VIN new gTLD applications within the Governmental Advisory Committee (GAC). Accordingly, based on serious concerns within the GAC that the Argentina proposal is not rooted in international legal norms, that it hinges upon impractical and ad hoc terminology lists, and that it fails to grasp the purpose or intent of exclusivity pursuant to national trademark legislation, the GAC agreed to take this discussion out from behind closed doors and into a more public forum, via a GAC project team.

Accordingly, it is incumbent upon all stakeholders to question and ultimately oppose the Argentina proposal by weighing in on project team deliberations leading up to ICANN 51 in Los Angeles in October. Indeed, ever-expanding blocks will certainly hamper registry growth and harm contracted parties. Most importantly, myriad companies, and even third-party legitimate users, may ultimately find their famous brands and desired strings wholly excluded from the domain name system.

2. Conflicts Addressed Between Trademark Sunrise Protection and the Domain Name Collision Mitigation Framework

To date, ICANN’s domain name collision mitigation framework has failed to explicitly account for mandatory rights protection mechanisms, such as trademark sunrise and claims periods. Thus, many famous brands experienced frustration leading up to the London meeting, particularly because certain registry operators felt disinclined to allocate names corresponding with famous trademarks during sunrise periods, and instead held them as reserved names on collision block lists—a practice technically permitted within the name collision mitigation framework and Registry Agreement.

In the closing moments of the London meeting, ICANN shocked both the trademark and registry communities when it announced that ICANN would not require collision block list names to be allocated during sunrise periods, and if collision block list names were ever released for registration down the road, then only a 90-day claims period would apply, rather than any sunrise period. Both brand owners and registry operators disagreed with this announcement. Specifically, sunrise allocation stands as the clear preference for brand owners, given the choice between sunrise protection and mere claims notifications. In addition, registry and registrar systems would require substantial and costly retooling in order to ensure adequate claims notices are delivered to registrants beyond original claims periods.

Accordingly, in the wake of ICANN 50, the Registry Stakeholder Group (RySG), Intellectual Property Constituency (IPC) and Business Constituency (BC) all coalesced around a compromise counter proposal, based on the novel set of circumstances created by name collisions and mitigation measures. The compromise proposal prescribed a 30-day period for collision block list names to serve as the functional equivalent to the trademark sunrise period. In addition, the compromise proposal removed the additional 90-day claims period for collision block list names. See Application of Rights Protection Mechanism to Name Collision Block Lists(July 17, 2014). The New gTLD Program Committee (NGPC) within the ICANN Board of Directors stands poised to approve the domain name collision mitigation framework accounting for the compromise counter proposal.

3. The Circumvention of Rights Protection Mechanisms Has Reached a Boiling Point

ICANN leadership has increasingly emphasized its need for specific details in response to complaints from commercial stakeholders regarding the circumvention of intellectual property rights protection mechanisms in new gTLDs. In response, the Business Constituency and the International Trademark Association (INTA) continue to gather specific evidence, screen grabs and industry news coverage expanding upon the ways in which certain registry operators and registrars have skirted the letter and spirit of new gTLD rights protection mechanisms. Some overarching categories of abuse examined to date include inter alia:

  • preregistration offers or allocation of domain names prior to trademark sunrise and devoid claims notifications;
  • extortionate premium names programs or sunrise registration pricing covering famous trademarks;
  • incorrect claims notices integrated with advertisements; and
  • bulk premium name warehousing with registry affiliates.

Indeed, industry news coverage has already flagged a number of these practices in the public arena. See e.g., Domain Incite, GoDaddy Risking Oscars Wrath With .BUZZ Premium Domains (March 7, 2014); Domain Incite, ICANN Smacks New gTLDs For Pre-Sunrise Auctions (June 18, 2014). The goal for commercial stakeholders and INTA will be to educate ICANN on the abusive practices brand owners are encountering in the marketplace, and also demand remedial action, despite the laisse faire approach to pricing taken by ICANN in the past, and also in dealings with mere applicants who have not yet executed a Registry Agreement.

4. Improvements  for a Second Application Round Are Already Under Formation and Consideration

While in London, the Generic Names Supporting Organization (GNSO) Council unanimously passed a motion that: created a discussion group to exchange experiences gained in the 2012 new gTLD application round and identify topics for further study and policy development; solicited subject matter input from the ICANN Board of Directors; and requested a timetable from ICANN staff for the next application round, as well as a status report on pending studies evaluating the 2012 new gTLD application round. Concurrently, the New TLD Applicant Group (NTAG) held a public session in London dedicated to new gTLD program lessons and potential improvements. Commentators generally agreed on the necessity for “a defined and predictable process across the board that works for all applicant categories.”; More pointedly, intellectual property representatives advocated:

  • regulations governing premium names programs and trademark sunrise periods;
  • completely redrafted objection procedures, with the exception of the legal rights objections;
  • affirmations requiring that all domain names be subject to trademark sunrise periods; and
  • protected marks lists, similar to Donuts’ DPML model but less expensive, across all new gTLDs.

Brand owners, prospective applicants in the second round, as well as prospective objectors, are all well-advised to participate in this ongoing discussion, which will no doubt contribute to share guidelines for future new gTLD delegations.

5. ICANN Accountability Has Taken Center Stage in the Internet Assigned Numbers Authority (IANA) Transition

Community discussions to date concerning the IANA transition have concerned the process to transition IANA stewardship, and now increasingly, enhancing accountability to the community. The accountability concerned addresses the absence of the historical contractual relationship between ICANN and the US Department of Commerce (DOC)—more specifically, the theoretical possibility that the DOC could terminate its IANA contract with ICANN to renegotiate terms or engage some other qualified entity. As it stands, accountability generally already exists within ICANN in a multifaceted way, including inter alia:

  • overarching accountability and transparency commitments in the bylaws;
  • well-documented relationships with contracted parties;
  • periodic structural and effectiveness reviews mandated by the Affirmation of Commitments;
  • bylaws-mandated accountability mechanisms, namely the Ombudsman, Reconsideration Requests, and Independent Review Panels;
  • operational information on finances, metrics and performance;
  • rigorous selection processes for ICANN Board members;
  • publication of board resolutions, minutes, and statements of interest; and
  • United States rule of law as a Californian not-for-profit corporation.

In addition to exchanging ideas about improving upon this existing accountability framework, the community in London debated philosophical considerations behind accountability itself. From the debate, one message has been made loud and clear, as recently reaffirmed by U.S. National Telecommunications and Information Administration (NTIA) Assistant Secretary Lawrence E. Strickling, the “important accountability issue will and should be addressed before any transition takes place.”; See U.S. NTIA, Keynote Address By Assistant Secretary Strickling At the American Enterprise Institute (July 22, 2014). In other words, to place the matter in perspective, the IANA transition presents a unique opportunity with unprecedented pressure on ICANN to ensure its accountability framework and mechanisms work for the community—that they are cost effective, expeditious and efficient, while according due process to parties negatively affected by the actions or inactions made by ICANN.

ARTICLE BY

Brian J. Winterfeldt
Of:
Katten Muchin Rosenman LLP

First Written Decision Pertaining to Pharmaceuticals

ArmstrongTeasdale logo

Practitioners monitoring the use of inter partes review (IPR) proceedings to challenge pharmaceutical patents may want to note what appears to be a pair of first-time events.  The Patent Trial and Appeal Board (PTAB) recently issued the first Final Written Decision in an IPR proceeding involving a pharmaceutical-related patent. In addition, the first petition for covered business method review challenging an Orange Book-listed patent for a marketed drug was recently filed.

On June 20, 2014, the PTAB issued Final Written Decisions in four related IPR proceedings (IPR2013-00116; IPR2013-00117; IPR2013-118; and IPR2013-00119)  involving U.S. Patent Nos.  5,997,915; 6,011,040; 6,673,381; and 7,172,778, respectively. The patents generally disclose compositions for supplementing dietary folate and the challenged claims were directed to compositions comprising natural isomers of reduced folates and corresponding methods of using such compositions.  Petitioner Gnosis SpA initiated the IPR proceedings after it was sued for infringement of the patents by a group of plaintiffs including Merck KGaA (licensee of three of the patents) and Merck & Cie (owner of the remaining patent).  The decision to challenge the patents in an IPR proceeding was a successful one for Gnosis as the PTAB found all of the challenged claims to be unpatentable, holding that certain claims were anticipated and the remaining claims were obvious.

Several days later, on June 24, 2014, Amneal Pharmaceuticals, LLC, Par Pharmaceutical, Inc., and Roxane Laboratories, Inc. (Petitioners) filed a petition for covered business method of a patent listed in the Food and Drug Administration’s Orange Book for the prescription drug product Xyrem®, which is marketed by Jazz Pharmaceuticals, Inc. The patent, U.S. Patent No. 7,895,059, generally discloses methods for controlling the distribution of, and access to, hazardous or abuse-prone drugs and the challenged claims are directed to “[a] computerized method of distributing a prescription drug under the exclusive control of an exclusive central pharmacy.”

Each of the Petitioners had previously filed an Abbreviated New Drug Application with the Food and Drug Administration seeking approval of a generic version of Xylem and been sued by Jazz for infringement of several Orange Book-listed patents including U.S. Patent No. 7,895,059. In their petition for covered business method review, the Petitioners asserted that the challenged method claims involve the verification of an insurance payment for the drug and therefore are related to a “financial product or service” (a requirement for covered business method review). Should the PTAB accept this argument and grant the petition, that determination could potentially encourage others to file petitions for covered business method review of additional Orange Book-listed patents containing similar “Risk Evaluation and Mitigation Strategies (REMS)”-type claims.

Article By:

B. Scott Eidson
Of:
Armstrong Teasdale

The Redskins Decision: Much Ado About (Probably) Not Much

Dickinson Wright Logo

I’ve been having fun listening to commentators – most of whom appear to know little or nothing about trademark law – expound on last week’s decision by the Trademark Trial and Appeal Board to cancel six trademark registrations for variations of the wordREDSKINS as the name of Washington, D.C.’s pro football team. One observer described it as a “landmark” decision, and several have prophesied that it marks “the beginning of the end” of the team’s controversial nickname.

The decision may turn out to have significant impact on the team politically and in terms of public relations. But legally…not so much.

Into the Time Machine

Many of the “beginning of the end” analyses treat the TTAB decision as a referendum on current public opinion about the Redskins name issue. A spokesman for the National Congress of American Indians, which supported the plaintiffs, said, “I don’t know how the team doesn’t recognize at this point that it’s not just a small group of Indians anymore. It’s more than that. People and fans and the country itself are saying, ‘Let’s just change the name.’”

Maybe they are – but the TTAB decision has nothing to do with that. As the dissenting judge (it was a 2-1 decision) wrote, “To be clear, this case is not about the controversy, currently playing out in the media, over whether the term “redskins,” as the name of Washington’s professional football team, is disparaging to Native Americans today.” The task before the TTAB was not to render a judgment on the propriety of naming a football team the Redskins. Rather, the task before the TTAB was to conduct a kind of time-machine research project: to determine, as a matter of empirical historical fact, whether the term Redskins was considered offensive by a “substantial composite” (not necessarily a majority) of the Native American population at the time when the first of the REDSKINS registrations was granted – in 1967.

In performing this task, the Board was limited to the evidence placed in the record by the parties. It didn’t do any independent research or fact-finding of its own, and it was not allowed to take “judicial notice” of any information that may have come its way by other means. This procedural limitation is crucial to understanding why the decision may be vulnerable to being overturned on appeal.

“Déjà Vu All Over Again”

It is important to bear in mind that we have passed this way before. In 1999, in a case called Harjo v. Pro Football Inc., the TTAB canceled the very same six trademark registrations for the very same reason: that the word “redskin” was considered disparaging by Native Americans at the time the registrations were granted. Pro Football appealed to the U.S. District Court for the District of Columbia, and won: the court overruled the Board’s decision, holding – bear with me, this is the important part – that the evidence concerning the disparaging nature of the term “redskin” in 1967 was insufficient. The petitioners then appealed to D.C. Circuit Court of Appeals, which affirmed the district court – without disturbing the ruling on insufficient evidence. The six registrations – which had remained intact throughout the appeal process – were thus definitively preserved.

Flash forward. The case decided last week, Blackhorse v. Pro Football, Inc., was essentially a re-run of Harjo, with different plaintiffs but with essentially the same evidence. The parties stipulated that all the testimony, expert reports, affidavits, and other documents from Harjo would be received into evidence in Blackhorse as well, and the new petitioners made a strategic decision not to add any substantial new evidence.

Same Evidence, Same Result?

This appears to have worked well in the TTAB: the same tribunal, asked to decide the same issue by examining the same evidence, came to the same conclusion.

But the same strategic decision may backfire in the appellate courts. Note what happened in Blackhorse: the petitioners went into court armed solely with a body of evidence that a higher court had already ruled was insufficient. As the dissent inBlackhorse wrote, “The consequence of petitioners’ decision to rely on the same evidence [that was] previously found insufficient to support cancellation[,] without substantial augmentation[,] is that the evidence before the Board in this case remains insufficient as well.”

Will the appellate courts agree, and overturn the Board’s decision a second time? The picture is clouded by the fact that, owing to an intervening restructuring of the federal court system, the initial appeal might be heard this time by the U.S. District Court for the District of Eastern Virginia, rather than the District of Columbia. Will the new court agree with the old? Only time will tell. But the petitioners may have a hard time persuading anycourt that a body of evidence already deemed insufficient had somehow grown in stature merely as the result of growing 15 years older.

The initial aftermath of Blackhorse, however, will be much the same as that of Harjo. The TTAB has already stayed execution of the Blackhorse decision on the assumption that Pro Football will appeal. So the six REDSKINS registrations will remain in full force and effect throughout the appeal process, which could take several years (as it did last time).

What Impact?

Let’s suppose that Pro Football’s appeal ultimately fails, and that the six registrations are, finally and definitively, canceled. What then? The fact is that the impact of such an outcome on the Washington Redskins team would likely be far less than many observers have suggested.

For starters, the team would not need to change its name. The TTAB decision does not cancel the REDSKINS trademarks, only the federal registrations for those marks. To be sure, federal registration provides important benefits. But as my trademark law students could tell you, under U.S. trademark law rights ultimately come from use of a mark in commerce, and even unregistered marks can become quite strong by virtue of long-standing and widespread use, substantial investment in advertising and promotion, and strong “name recognition” among the public. By any of those measures, REDSKINS is a very strong mark indeed, and Pro Football would not find it difficult to enforce its common-law trademark rights against infringers.

Purely as a matter of legal and economic reality, the post-cancellation world of the Washington Redskins might not look much different than the current one.

IP Rights and Censorship

All this, of course, addresses only what may happen as a result of what is done in courts of law. The court of public opinion is a different matter. Blackhorse appears to have triggered significantly stronger public reaction than Harjo, which may help bring other forces to bear on the situation.

One thing that has not changed is my conviction that deciding issues of this nature is not a job for the Trademark Office. The judges who decide cases in the TTAB are experts on trademark law. They shouldn’t be expected to be experts on the kinds of social and political issues that drive cases like this one, or even on the kind of historical research questions such cases present. Nor do they have the opportunity to submit fact issues to a jury, which might be better positioned to render a verdict about what is or is not “immoral” or “scandalous.”

The Lanham Act is the only intellectual property statute that includes a censorship provision. Why do we feel it is improper to place a government “stamp of approval” (the ® symbol) on a trademark that is “immoral” or “scandalous,” when we have no qualms about placing another such symbol (the © symbol) on copyrighted pornography or hate speech, which we do all the time?

The Redskins case raises many interesting, and important, issues. But none of them are really trademark issues. That’s why their ultimate resolution will likely have little to do with what happened in the Trademark Office last week.

Article By:

John C. Blattner
Dickinson Wright PLLC

Alice v. CLS Bank: Supreme Court Continues to Grope in Dark for Contours of Abstract Idea Exception

Schwegman Lundberg Woessner

In Alice Corp. v. CLS Bank Int’l (2014), the Supreme Court unanimously affirmed the one-paragraph per curium opinion of the en banc Federal Circuit, which found all claims of U.S. Patent Nos. 5,970,479, 6,912,510, 7,149,720, and 7,725,375 invalid under 35 U.S.C. § 101 for being directed to an abstract idea.

The Court based its affirmance on an application of a two-step process outlined in Mayo Collaborative Services v. Prometheus Labs, 566 U.S. ___ (2012). The first step is the determination of whether the claims are directed to a patent-ineligible concept such as a law of nature, natural phenomenon, or abstract idea. This step implicitly includes the identification of the concept at issue. The second step is to determine if the claims recite “an element or combination of elements that is sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the ineligible concept itself.”

The Court avoided providing “the precise contours of the ‘abstract ideas’ category” by relying on the similarity between Alice’s claims for intermediated settlement and Bilski’s claims for hedging. The Court characterized the Bilski claims as “a method of organizing human activity.” Accordingly, while only three justices signed Justice Sotomayor’s concurrence, stating that “any claim that merely describes a method of doing business does not qualify as a ‘process’ under §101,” the unanimous decision does implicate business methods as likely directed to abstract ideas.

At the Federal Circuit, the splintered opinion included a four-judge dissent that argued that the system claims should be patent-eligible even though the method claims were not. The Supreme Court disagreed with this view, finding that if the system claims were treated differently under §101, “an applicant could claim any principle of the physical or social sciences by reciting a computer system configured to implement the relevant concept” which would “make the determination of patent eligibility depend simply on the draftsman’s art.” To convey patent-eligibility, the claims at issue must be “significantly more than an instruction to apply the abstract idea … using some unspecified, generic computer.”

In my previous post regarding the oral argument before the Supreme Court, I noted that the Court seemed to be looking for reasonable and clear rules regarding the limits of the abstract idea exception to patentable subject matter, but did not get such a rule from any party. Perhaps as a result, this case was decided purely on its similarity to Bilski, and without providing much guidance as to the scope of the exception.

My thanks to Domenico Ippolito for this posting.

© 2014 Schwegman, Lundberg & Woessner, P.A. All Rights Reserved.

Article By:

Steven Lundberg
Of:
Schwegman, Lundberg & Woessner, P.A.

“REDSKINS” US Trademark Registrations are Canceled for Disparaging Native Americans

MintzLogo2010_Black

A three-judge panel of the US Trademark Trial and Appeal Board (TTAB), for the second time and in a 2-1 decision, has held that the REDSKINS trademark used in connection with professional football and related services by the Washington Redskins National Football League team was disparaging to a substantial composite of Native Americans between 1967-1990, the time during which the registrations issued. It also held that the defense of laches did not apply to a disparagement claim where the disparagement pertains to a group of which the individual plaintiff or plaintiffs comprise one or more members. Accordingly, it ordered the registrations at issue canceled as violations of Section 2(a) of the Trademark Act. The cancellation of the registrations has no effect on the team’s ability to continue to use the REDSKINS marks.

Efforts to cancel the REDSKINS registrations have been ongoing for many years. The first petition to cancel the registrations was filed in 1992 and, after seven years of litigation, the TTAB canceled the registrations on grounds that the marks were disparaging to Native Americans. After several rounds of appeals and remands through the DC federal courts, the case was dismissed on grounds of laches.

While the above proceedings were still pending, six new individual petitioners, all Native Americans, initiated the current case seeking to cancel the same REDSKINS registrations. The matter was suspended pending a final decision in the above proceedings, and resumed in March 2010. After four more years of litigation, the TTAB again cancelled the registrations for disparaging Native Americans.

The Trademark Act prohibits registration of a trademark which may disparage persons or bring them into contempt or disrepute. A two-pronged test was used by the TTAB to decide the issue of disparagement as follows:

  1. What is the meaning of the matter in question, as it appears in the marks and as those marks are used in connection with the goods and services identified in the registrations?
  2. Is the meaning of the marks one that may disparage Native Americans?

Both questions are required to be answered as of the various dates of registration of the marks involved, which was between 1967 and 1990, considering the views during that time of a substantial composite of Native Americans, not the American public as a whole. The questions are not to be determined based on current views on the subject.

The TTAB found that first prong was satisfied by evidence that the term REDSKINS when used by the Washington Redskins football team retained its Native American meaning and imagery inherent in the original definition of the word. It stated that the football team “has made continuous efforts to associate its football services with Native American imagery.”

The second prong of the test required a determination of whether the use of the word was disparaging within the context of its use. “Context of use” can consist of several types:

  1. One which turns an innocuous term into a disparaging one;
  2. One which strips the disparaging meaning from the disparaging term; and
  3. One which has no effect on the disparaging meaning.

The TTAB held that as used by the football team, the word “Redskins” retained its original meaning and the context of the use had no effect on the disparaging nature of the word. It noted that the team’s “alleged honorable intent and manner of use of the term” did not change this finding.

In reaching its decision to cancel the registrations, the TTAB considered expert reports and testimony, dictionary definitions, and reference books. In considering the specific views of Native Americans, it considered the National Congress of American Indians’ (NCAI) 1993 Resolution 93-11, deposition testimony of several Native Americans, and various newspaper articles, reports, official records, and letters of protest filed at the Trademark Office. It concluded that the NCAI Resolution represented the views of a substantial composite of Native Americans who believed the term was disparaging, that the trend in dictionary usage labels corroborated the time frame of objections from Native Americans starting in the late 60s and continuing through the 90s as lexicographers began and finally uniformly labeled the term as “offensive” or  “disparaging,” and that, at a minimum, approximately 30% of Native Americans found the term used in connection with football services to be disparaging at all the times at issue.

In rejecting the laches defense, the TTAB stated that it was difficult “to justify a balancing of equities where a registrant’s financial interest is weighed against human dignity.”  Moreover, both it and the courts have routinely held that when a broader public policy concern is at issue, the laches defense does not apply.

The dissenting judge disagreed with the majority’s decision on the claim of disparagement arguing that the dictionary evidence relied upon was inconclusive and there was no reliable evidence to corroborate the membership of the National Counsel of American Indians. However, he stated that he wanted to make clear that the case was “not about the controversy, currently playing out in the media, over whether the term “redskins,” as the name of Washington’s professional football team, is disparaging to Native Americans today.” He disagreed with the majority that the evidence of record proved that the term was disparaging “at the time each of the challenge registrations issued.”

According to the Washington Post, the Redskins plan to appeal the decision and the team has no plans to discontinue use of the REDSKINS mark. Unlike the last proceeding, any appeal of this decision will not go to the DC federal courts but must now go to the United States District Court for the Eastern District of Virginia. This change was implemented in the America Invents Act which was enacted in September 2011 and it is not clear how a different court will decide these issues. The cancellation of the registrations will be stayed pending any appeal.

©1994-2014 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.

Article By:

Susan Neuberger Weller
Of:
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

Apple Inc. v. Rensselaer Polytechnic Institute and Dynamic Advances, LLC, Decision Denying Institution

DrinkerBiddle

Takeaway: A voluntary dismissal of a litigation without prejudice will not nullify service of a complaint for purposes of 35 U.S.C. § 315(b) if that litigation is immediately continued in a consolidated case.

In its Decision, the Board denied institution of the Inter Partes Review as time-barred under 35 U.S.C. § 315(b) because it was not filed within the statutory period of 35 U.S.C. § 315(b).  The date of service of two different complaints was an issue of primary focus by the Board.

In a first patent litigation, Patent Owner (Dynamic Advances) filed a complaint on October 19, 2012. Dynamic Advances, LLC v. Apple Inc., No. 1:12-cv-01579-DNH-CFH (N.D.N.Y.)(Dynamic I).  The complaint for the first litigation was served on Petitioner (Apple) on October 23, 2012.  In a second patent litigation, Rensselaer Polytechnic Institute and Dynamic Advances jointly filed a complaint on June 3, 2013. Rensselaer Polytechnic Inst. & Dynamic Advances, LLC v. Apple Inc., No. 1:13-cv-00633-DNH-DEP (N.D.N.Y.)(Dynamic II).  The complaint for the second litigation was served on Petitioner (Apple) on June 6, 2013.

The Petition in the instant proceeding was filed on January 3, 2014.  Thus, the service date of October 23, 2012 for the first litigation (Dynamic I) was more than 12 months prior to the filing of the Petition, whereas the service date of June 6, 2013 for the second litigation (Dynamic II) was less than 12 months prior to the filing date of the Petition.  The Board found that service of the first complaint on October 23, 2012, rather than service of the second complaint on June 6, 2013, controlled for purposes of determining whether the requested inter partes review was time-barred under 35 U.S.C. § 315(b).  Because the service date of October 23, 2012 for the first litigation (Dynamic I) was more than 12 months prior to the filing of the Petition, the Board found that the Petition was not filed within the statutory period of 35 U.S.C. § 315(b).

The Board’s rationale in reaching this conclusion related to the fact that on July 22, 2013, the court ordered consolidation of Dynamic I and Dynamic II under Fed. R. Civ. P. 42.  In doing so, the court ordered that pursuant to a joint stipulation of the parties, Dynamic I was “dismissed without prejudice and the parties would proceed to litigate their claims and defenses in [Dynamic II].”

Petitioner argued that under the decision in Macauto U.S.A. v. BOS GmbH & KG, IPR2012-0004 (“holding that a voluntary dismissal without prejudice nullified service of the complaint for purposes of 35 U.S.C. § 315(b)”), service of the first complaint on October 23, 2012 was not effective.  According to Petitioner, as in Macauto, the facts of the present case have the effect of leaving the parties as if the first action had never been brought.

The Board disagreed, finding that “Dynamic I cannot be treated as if that case had never been filed under the rationale of Macauto.”  Instead, the Board found that it was “persuaded that the circumstances in the instant case weigh in favor of close scrutiny of the effect of the dismissal of Dynamic I, because that cause of action, although dismissed, was continued immediately in Dynamic II.”

This proceeding was the third time that Petitioner had petitioned for inter partes review against the ‘798 patent.  In IPR2014-00077, institution was denied.  IPR2014-00320 was filed concurrently with the petition for this proceeding.

Apple Inc. v. Rensselaer Polytechnic Institute and Dynamic Advances, LLC,IPR2014-00319
Paper 12: Decision Denying Institution of Inter Partes Review
Dated: June 12, 2014
Patent 7,177,798 B2
Before: Josiah C. Cocks, Bryan F. Moore, and Miriam L. Quinn
Written by: Moore
Related proceedings: IPR2014-00077; IPR2014-00320; Dynamic Advances, LLC v. Apple Inc., No. 1:12-cv-01579-DNH-CFH (N.D.N.Y.); Rensselaer Polytechnic Inst. & Dynamic Advances, LLC v. Apple Inc., No. 1:13-cv-00633-DNH-DEP (N.D.N.Y.)

Article By:

Christopher Bruenjes
Of:
Drinker Biddle & Reath LLP

Federal Circuit Issues Decision Affirming Obviousness of a Molecule Patent Claim

Katten Muchin

On June 12, 2014, the US Court of Appeals for the Federal Circuit issued a precedential opinion affirming the obviousness of a patent claim directed to a drug molecule. Bristol-Myers Squibb Co. v. Teva Pharms. USA, Inc., ___ F.3d ___ (2014). This is an example of the Federal Circuit holding a molecule patent invalid for obviousness.

The Federal Circuit upheld US District Court for the District of Delaware Magistrate Judge Christopher Burke’s opinion that held claim 8 of U.S. Patent No. 5,206,244 invalid in light of a structurally similar molecule. Claim 8 covers the entecavir molecule, which is the active ingredient in BMS’ Baraclude® tablets, which are designed to treat hepatitis B virus (HBV) infection. Teva successfully argued that one of ordinary skill in the art seeking to make an anti-HBV drug in October 1990 would have selected a prior art compound called 2′-CDG as a “lead compound” and would have modified it by adding a methylene (i.e. carbon-carbon double bond) group as indicated in the diagram to the right, below.

Lead Compound

Relying on testimony from both parties’ experts and prior art publications, the Federal Circuit saw no error in the district court’s finding that 2′-CDG was a proper lead compound. There was sufficient evidence that one of ordinary skill would have studied carbocyclic nucleosides generally, and 2′-CDG specifically, as antiviral drugs, especially because BMS’ expert admitted that “medicinal chemists . . . were actually treating and using 2′-CDG as a lead compound” in the search for new antivirals. Slip. Op. at 9-10. BMS argued that 2′-CDG would not be a lead compound because it was discovered to be toxic after the filing date of the patent. Id. at 10. The Federal Circuit (and the district court) rejected BMS’ argument because in October 1990 (i.e. the date of the proper inquiry), “2′-CDG was not yet known to have high toxicity” and BMS’ expert agreed that researchers thought 2′-CDG was a promising compound at that time. Id. at 10.

Motivation to Modify

The Federal Circuit also found that the record amply supported the district court’s conclusion on motivation to modify 2′-CDG to make the patented compound, entecavir. Slip Op. at 11-14. For example, both parties’ experts agreed that chemists were making changes on the carbocyclic ring in the prior art, and Teva’s expert stated that such changes resulted in greater activity than changes elsewhere on the molecule. Id. at 12. Unrefuted expert testimony also explained that the modification would take place at the 2′ or 5′ position on the carbocyclic ring because small changes could easily be made only at these positions. Id. at 12. The experts also agreed that the skilled artisan would focus on the smallest elements for the substitution, and BMS’ expert stated that he would “rule out everything but the carbon.” Id.The Federal Circuit found no clear error in the district court’s finding that the modification required was a minor one based on the testimony of both parties’ experts and a prior art article teaching improved antiviral activity by addition of a methylene group to a carbocyclic nucleoside. Id. at 12-13.

Reasonable Expectation of Success

Based on the prior art and the structural similarity of 2′-CDG and entecavir, the Federal Circuit found no error in the district court’s finding of “reasonable expectation of success.” Id. at 14. In doing so, the Federal Circuit rejected a bright-line rule regarding reasonable expectation of success in new chemical entities proposed by BMS. Specifically, BMS had argued that the existence of unexpected properties forecloses a finding of a reasonable expectation of success. Id. at 14. Citing its en banc In re Dillon decision, the Federal Circuit held that “unexpected results do not per se defeat, or prevent, the finding that a modification to a lead compound will yield expected, beneficial properties.” Id. at 15. Instead, the court found that unexpected results should be analyzed as secondary considerations of nonobviousness. Id.

Secondary Considerations

The Federal Circuit found no reversible errors in the district court’s analysis of secondary considerations of nonobviousness.[1] The Federal Circuit was deferential to the lower court’s factual findings regarding evidence of secondary considerations, including unexpected results. Id. at 18. The district court found that the results regarding entecavir’s high potency and large therapeutic window were not entirely unexpected because it was known in the prior art that 2′-CDG was effective against HBV and had a good therapeutic window. Id. They were differences of degree, not kind. Id. While the district court credited entecavir’s high barrier to resistance as an unexpected property, the three properties taken together were not sufficient to support nonobviousness. Id. at 17-18.

Article By:

Robert B. Breisblatt
Christopher B. Ferenc
Jeffrey A. Finn
Samson Helfgott
Martin S. Masar III, PhD
Hassan Abbas Shakir
Of:
Katten Muchin Rosenman LLP

[1] The Federal Circuit found that the district court made two legal errors (albeit harmless ones) in assessing unexpected results because it: (1) compared entecavir to another HBV drug on the market and not the closest prior art, 2′-CDG, and (2) looked at what the inventor knew, not a person of ordinary skill in the art. Id. at 18-19. The Federal Circuit also found no error in the lower court’s findings on commercial success and long-felt need. Id. at 19.

U.S. Supreme Court Makes It Easier To Avoid Method Patents Requiring Multiple Actors

Neal Gerber

On June 2, 2014, the United States Supreme Court unanimously held that a defendant was not liable for inducing infringement of a patented method where there is no direct infringement because the method steps are “divided” between the defendant and its customers. See Limelight Networks, Inc. v. Akamai Technologies, Inc., No. 12–786. The Court was reviewing a 6-5 en banc decision from the Court of Appeals for the Federal Circuit that held a party might be liable for inducing infringement under 35 USC 271(b) where a defendant carried out some steps and encouraged others (such as its customers) to carry out the remaining steps. In other words, the performance of the method steps was divided between a party and its customers, so the party could be liable for inducing the performance of the remaining steps it did not perform itself.  The Supreme Court reversed and remanded the judgment against Limelight, reasoning that there could be no liability for inducing infringement if no party directly infringed.

The Supreme Court relied on a prior decision by the Federal Circuit that there is no direct infringement of a method claim unless a single party performs every step of a claimed method or exercises “control or direction” over the entire process such that every step is attributable to that party. See Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318, 1329 (Fed. Cir. 2013). Muniauction held that there was no direct infringement of a patented method when its distinct steps were performed by “mere arms-length cooperation” between parties. In Limelight, the Supreme Court “assumed” that Muniauction’s holding was correct but observed that the Federal Circuit could revisit it when the Limelight decision was remanded.

Both Limelight and Muniauction involved client-server scenarios for web-based businesses and cloud-based application services, but this decision has broad implications across a variety of fields, such as personalized or precision medicine.  For example, a patented method directed to diagnosing and treating a disease would not be infringed where a laboratory provides the diagnosis and the treating physician does not exercise “control or direction” over the steps performed by the laboratory.

Until Muniauction is further defined, the Court has returned the law to its state prior to the Federal Circuit’s Akamai holding, where liability turned on whether a single infringer exhibited sufficient “control or direction” over steps performed by others; if not, no one is liable for patent infringement.  For would-be infringers, this potentially provides a useful defense.  For patent applicants, it is a reminder to draft method claims in a manner such that all actions can be taken by a single entity.

Article By:

Michael B. Harlin
James P. Muraff
Kevin A. O’Connor Ph.D.
Mike R. Turner
Of:
Neal, Gerber & Eisenberg LLP

Supreme Court Nixes "Amorphous" Federal Circuit Indefiniteness Standard

ArmstrongTeasdale logo

The U.S. Supreme Court yesterday reversed long-standing Federal Circuit precedent, replacing the test used to determine whether a patent is indefinite with a new reasonable certainty standard (NAUTILUS, INC. v. BIOSIG INSTRUMENTS, INC., No. 13–369 (S. Ct. June 2, 2014).

The new reasonable certainty test raises the bar on the “clarity and precision” with whichpatents must be written. As a consequence, the burden on accused infringers attempting to invalidate patents based on ambiguous language is lowered. This new standard will prove especially helpful in the ongoing battle against patent trolls, who often wield portfolios of ambiguous or overly broad patents in an attempt to extract licensing fees. Tech companies, including Google, Inc. and Amazon.com, Inc., which are frequent targets of patent trolls, urged the Supreme Court to adopt the “reasonable certainty” standard.

The new standard will also require more precision in drafting and prosecuting patent applications. Exactly how precise language will need to be remains to be seen, but the Court explained that the old standard incentivized patent applicants and practitioners to “inject ambiguity” into their claims. The new standard was established, in part, to eliminate this incentive. The Court commented that patent practitioners are in the best position to resolve ambiguity in patent claims. In light of the Supreme Court’s admonition, patent applicants and practitioners seeking broad coverage of their inventions should use language no broader than necessary to adequately cover their inventions.

The Supreme Court’s decision stemmed from a dispute between Biosig Instruments and Nautilus, Inc. Biosig sued Nautilus for infringement of a patented heart monitor for exercise machines, which registered electrical waves to estimate a user’s heart rate. Nautilus convinced the trial court that Biosig’s patent was invalid as indefinite. Applying its “insolubly ambiguous” test, the Federal Circuit found the patent valid. Biosig sought review by the Supreme Court.

Justice Ginsberg delivered the opinion for a unanimous Court. As embodied in the Patent Act, a patent must include “one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant claims as his invention.”

This notice requirement is satisfied, the Court held, where the claims of the patent, read in light of the specification and prosecution history, informs with reasonable certainty those skilled in the art about the scope of the invention. Like any property right, the boundaries of the patent monopoly should be clear. The failure to afford the public clear notice of what is claimed, “thereby appris[ing] the public of what is still open to them,” chills innovation by creating a risk of infringement in “zones of uncertainty.”

The High Court remanded the case with instructions that the Federal Circuit should no longer employ the “insolubly ambiguous” or “amenable to construction” tests of patent claim indefiniteness under 35 USC § 112, ¶ 2. These words can “leave courts and the patent bar at sea without a reliable compass.” While noting that the Supreme Court does not “micromanage the Federal Circuit’s particular word choice” in applying patent-law doctrines, Justice Ginsberg wrote, “we must ensure that the Federal Circuit’s test is at least ‘probative of the essential inquiry.’”

The Federal Circuit test, according to the High Court, “invoked a standard more amorphous than the statutory definiteness requirement allows.” In addition to breeding lower court confusion, the discredited “insolubly ambiguous” standard tolerated “some ambiguous claims but not others….” The Court’s new reasonable certainty standard requires more definite claim language.

Article By:

David W. Harlan
Jessica M. Mendez
Patrick Coyle
Samir R. Mehta
Of:
Armstrong Teasdale

Misrepresentation of Source Claims Re: Foreign Trademark Registration

Katten Muchin

Owners of marks that are well- known outside the United States may find that an American company has attempted to take advantage of the renown of the foreign mark by obtaining a trade mark registration for such mark in the United States. While Article 6(bis) of the Paris Convention provides the owner of a famous foreign trade mark with a basis for asserting and sustaining a claim of priority in the US over a US registrant, this provision does not provide a basis for cancelling a US registration absent use of the mark in the US.

In April, however, the US Patent and Trademark Office’s Trademark Trial and Appeal Board (TTAB) issued a precedential decision which extends the ability of the owner of a mark that is famous internationally but not used in the US to enforce rights in their marks. In Bayer Consumer Care AG v Belmora LLC, the TTAB granted Bayer’s petition to cancel Belmora’s Registration for the Flanax mark based upon a misrepresen- tation of source in accordance with Section 14(3) of the Trademark Act even though Bayer was not using, nor had any intention to use, the Flanax mark in the US.

The evidence in Bayer showed that Bayer’s Mexican affiliate had been dis- tributing a naproxen sodium-based analgesic under the Flanax mark in Mexico since 1976 and that Flanax is the top selling pain reliever in Mexico. However, Bayer does not use the Flanax mark in the US and, instead, markets its naproxen sodium-based analgesic in the US under the Aleve mark.

The respondent, Belmora, adopted the Flanax mark in connection with a naproxen sodium-based analgesic that it sold and marketed towards the Hispanic community. The evidence fur- ther established that the initial packag- ing used by Belmora copied the logo and colour scheme used by Bayer for its Flanax product in Mexico and repeat- edly invoked the reputation of Bayer’s Flanax mark when marketing its prod- ucts in the US.

Belmora attacked Bayer’s standing to bring the cancellation proceedings, arguing that Bayer does not own a US registration for the Flanax mark, has not used the Flanax mark in the US and had no plans to use the mark in the US. The TTAB rejected these arguments, stating that “if respondent is using the FLANAX mark in the US to misrepre- sent to US consumers the source of respondent’s products as petitioner’s Mexican products, it is petitioner who loses the ability to control its reputation and thus suffers damage”. Integral to this analysis was the TTAB’s finding that given the size of the Mexican pop- ulation in the US, the “reputation of the Mexican FLANAX mark does not stop at the Mexican border”.

Having held that Bayer had standing to pursue the cancellation, the TTAB turned to its analysis of Section 14(3) which provides that a party may cancel a registration for a mark if the mark “is being used by, or with the permission of, the respondent so as to misrepresent the source of the goods or services on or in connection with which the mark is used”. In doing so, the TTAB held that the evidence established blatant misuse of the Flanax mark by Belmora in a manner calculated to trade on the goodwill and reputation of Bayer. Therefore, the TTAB ordered the can- cellation of Belmora’s Registration for the mark Flanax.

Although typically the ability to claim rights in a trade mark in the US requires that the mark actually be in use in the US, the TTAB’s decision in Bayer indicates that there may be an alternate basis that can be pursued when a foreign trade mark owner that does not use its mark in the US seeks to assert rights in its mark. On the other hand, the standard to satisfy a claim of misrepresentation of source is fairly dif- ficult, as it requires that the petitioner show that the respondent took steps to deliberately pass off its goods as those of petitioner. Therefore, a successful claim of misrepresentation of source will be very fact dependent.

Article By:

Karen Artz Ash
Bret J. Danow
Of:
Katten Muchin Rosenman LLP