Tag: Intellectual property

Intellectual Property Cases to Watch in 2017

The New Year brings excitement and anticipation of changes for the best.  Some of the pending patent cases provide us with ample opportunity to expect something new and, if not always very desirable to everybody, at least different.  In this post, we highlight several cases that present interesting issues and that we anticipate may provide for new and important developments in the patent law this year.

Samsung Electronics Co. v. Apple Inc.

2017 IP cases intellectual propertyThis highly-publicized case, now on remand from the Supreme Court, concerns damages for design patent infringement.

Apple sued Samsung in 2011 for infringement of U.S. Patent Nos. D618,677 (claiming an electronic device having black rectangular front face with rounded corners), D593,087 (claiming an electronic device having a rectangular front face with rounded corners and a raised rim) and D604,305 (claiming a grid of 16 colorful icons on a black screen of an electronic device).  As we reported earlier, a jury found that several Samsung smartphones resembling the iPhone infringe those patents and awarded $399 million in damages to Apple, the entirety of Samsung’s profit from sale of the infringing smartphones.

The Federal Circuit upheld the award. The decision centered on 35 U.S.C. § 289, which provides that an accused infringer manufacturing or using a patented “article of manufacture” is liable to the patent owner “to the extent of his total profit.”  The Federal Circuit rejected Samsung’s argument that damages should not be determined based on the entire smartphone but rather should be limited to individual components covered by the patents, such as a front face or a screen.  The smartphone as a whole was deemed to be an “article of manufacture” in the context of Section 289.  The Supreme Court, in an unanimous (but short) decision, however agreed with Samsung and remanded, stating that an “article of manufacture” is “simply a thing made by hand or machine,” and is broad enough to include both a multicomponent product sold to a consumer and individual components of that product, “whether sold separately or not.”  No test however was provided on how to identify an “article of manufacture” relevant to damages.

On remand, the Federal Circuit will determine whether “the relevant article of manufacture for each design patent … is the smartphone or a particular smartphone component.”  A test for determining what exactly constitutes an “article of manufacture” for the purpose of determining damages in design patent cases is highly anticipated.

TC Heartland LLC v. Kraft Foods Group Brands LLC

This case concerns a choice of venue in patent cases, and a decision by the Supreme Court is expected around June, 2017.

Kraft Foods sued TC Heartland in the District of Delaware, alleging that Heartland’s liquid water enhancer products infringed three of Kraft Foods’ patents.  Heartland moved to either dismiss the action or transfer venue to the Southern District of Indiana, where it is headquartered and incorporated.  In support, Heartland stated that it is not registered to do business and has no presence in Delaware.  After the district court denied its motion, Heartland appealed.  The Federal Circuit affirmed and stated that patent suits may be filed in any judicial district in which the defendant sells an allegedly infringing product (Heartland ships accused products to Delaware, which amounts though to only about 2% of its total sales).  The Federal Circuit has consistently applied this interpretation of the patent venue statute since its 1990 decision in VE Holding, which has since allowed patent holders to file suits in favorable courts that are perceived to be more plaintiff-friendly, such as the Eastern District of Texas. Opponents of this doctrine refer to it as a “forum shopping.”

As we reported before, on December 14, 2016, the Supreme Court agreed to review the Federal Circuit’s decision.  A decision in favor of Heartland would fundamentally change where patent cases can be litigated.  In particular, many patent holders may effectively be barred from bringing suits in the Eastern District of Texas.

Lexmark International v. Impression Products

On December 2, 2016, the Supreme Court granted Impression Products’ petition to hear a case concerning whether patent exhaustion arises from foreign sales.

Lexmark, a manufacturer of printers and cartridges for those printers, sold the cartridges covered by Lexmark’s U.S. patents in the U.S. and abroad.  Some of the cartridges were sold at a reduced price and, according to a “Return program,” were subject to a single-use/no-resale restriction set forth in the user agreement.  With the goal of protecting quality and reputation of its products, and for other reasons, Lexmark required that customers who bought Return program cartridges return the empty cartridges only to Lexmark for remanufacturing or recycling.  Impression, among others, acquired and re-purposed (which included modifying the original chip) both the foreign- and domestically-sold cartridges, and sold the modified cartridges in the U.S.  When Lexmark took legal actions and other defendants agreed to settlements, Impression however argued that the first sale of the cartridges, either in the U.S. or abroad, exhausted Lexmark’s U.S. rights to exclude.

The district court partially sided with Impression, ruling that Lexmark’s sale in the U.S. exhausted its patent rights, despite the express single-use/no-resale restrictions under the Return Program, but concluded that foreign sales did not exhaust Lexmark’s patent rights.  As we said earlier, on February 12, 2016, the en banc Federal Circuit agreed with Lexmark and confirmed two important aspects of the patent exhaustion doctrine, namely that (1) a patentee can “sell[] a patented article subject to a single-use/no-resale restriction that is lawful and clearly communicated to the purchaser” without exhausting the patentee’s rights to that item; and (2) because foreign sales do not permit “the buyer to import the article and sell and use it in the United States,” an authorized foreign sale of a product does not exhaust a patentee’s U.S. patent rights to exclude associated with that product.

In re Aqua Products

This is a pending en banc case before the Federal Circuit regarding whether it is the patent owner who bears the burden of proving patentability of its amended claims in inter partes reviews before the Patent Trial and Appeal Board.

Aqua Products, Inc., as a patent owner, faced a claim amendment issue.  In particular, after an inter partes review (IPR) of Aqua’s patent on a robotic swimming pool cleaners was initiated, Aqua moved to substitute several of the challenged claims with limitations from the claims that were not challenged, effectively amending the claims.  The America Invents Act (AIA) permits patent owners to move to amend claims of a patent, and 35 U.S.C. § 316(d) states that “the patent owner may file one motion to amend the patent,” with additional motions to amend allowed in limited circumstances.

Applying its rule making authority, the PTO ruled that Aqua failed to demonstrate that its amendments would make the claims-at-issue patentable over the known prior art.  On August 12, 2016, the Federal Circuit granted Aqua’s motion for an en banc hearing and asked Aqua and the USPTO to brief whether the USPTO may require that a patent owner bear the burden of persuasion regarding patentability of the amended claims, even though the AIA assigns the burden of proving unpatentability of the proposed claim amendments to an IPR petitioner.  See 35 U.S.C. § 316(e)).

Argument was heard on December 9, 2016, and a blog post on the upcoming decision will appear in due course.

ARTICLE BY Inna Dahlin, PhD & Brad M. Scheller of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
©1994-2017 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.

Hillary Clinton’s Intellectual Property Litigation Experience

Hillary Clinton Intellectual PropertyMany people are surprised to learn that Hillary Clinton was an intellectual property attorney when she practiced law from 1977-1992 for the Rose Law Firm.  While the New York Times has reported that former colleagues cannot remember any cases she tried and that court reporters in Little Rock say she appeared in court infrequently, there are at least three reported court decisions on which she is named as counsel.  A review of those decisions provides an interesting glimpse into Clinton’s background with intellectual property.

In a case involving allegations of false advertising, Clinton represented Maybelline Co. in a suit against Noxell Corp. regarding Noxell’s “Cover Girl Clean Lash” mascara product.[1]  According to the complaint, Maybelline’s principal place of business and only factory in the United States was located in North Little Rock, Arkansas.  Maybelline asked the court to restrain Noxell from advertising the Clean Lash mascara as being waterproof.  Maybelline submitted to the court a videotape of a Clean Lash commercial in which a voice-over claimed that “water won’t budge” Clean Lash and that it “laughs at tears,” and then submitted independent laboratory tests contradicting those claims.  Maybelline argued that the commercials were deceptive.  Unfortunately for Clinton, it was found that Maybelline brought suit in the wrong venue because Noxell was not doing business in the Eastern District of Arkansas.[2]  The case was transferred to a court in New York and settled.[3]

In a trademark infringement case, Clinton represented First Nationwide Bank against Nationwide Savings and Loan Association regarding the use of the mark “Nationwide Savings.”[4]  In particular, First Nationwide Bank sought an injunction against the Savings and Loan Association’s use of the phrase “Nationwide Savings” for financial services.  First Nationwide Bank argued that the use of the disputed phrase was likely to cause confusion among customers as to the provider of the financial services and was an attempt by the Savings and Loan Association to benefit from the valuable goodwill and reputation established by First Nationwide Bank.  Clinton helped to secure injunctive relief for the Bank to prevent the Savings and Loan Association from using the mark.

In another case involving allegations of trademark infringement, Clinton represented Holsum Baking Co. against W.E. Long Co.[5] regarding the use of the “Holsum” trademark in the marketing of bakery products.  Long registered the “Holsum” mark on bakery products in Arkansas and later entered into an agreement granting Holsum Baking the right to use the “Holsum” name for advertising purposes in certain areas for three years.  After that time, Holsum Baking began using the composite mark “Holsum Sunbeam” until more than 40 years later when it introduced a wheat bread product and marketed it as “Holsum Grains” with no mention of Sunbeam. Long then contacted the packaging suppliers of Holsum Baking and advised them not to sell packaging bearing the “Holsum” mark to Holsum Baking. Holsum Baking sought injunctive relief to reinstate its packaging source with the “Holsum” mark, arguing that the earlier agreement had been breached or abandoned by the parties and that Holsum Baking had acquired the rights to the “Holsum” mark due to use for more than 44 years.  Clinton helped to secure a preliminary injunction for Holsum Baking.

While the number of reported cases involving Clinton is too small to draw any definitive conclusions, the above three cases demonstrate Clinton’s advocacy for companies that had their IP rights threatened.  Some commentators have criticized Hillary Clinton’s current intellectual property platform as being vague, consisting of passing references to patent litigation reform and copyright policy. However, given her past experience, she may have more detailed thoughts on IP policy–an area that rarely is a focus in presidential campaigns.

ARTICLE BY Justin M. Sobaje of Foley & Lardner LLP
© 2016 Foley & Lardner LLP

[1]  Maybelline Co. v. Noxell Corp., 643 F. Supp. 294 (E.D. Ark. 1986).

[2]  Maybelline Co. v. Noxell Corp., 813 F.2d 901 (8th Cir. 1987).

[3]  Morrison, T.C., “The Regulation of Cosmetic Advertising under the Lanham Act,” 44 Food Drug Cosm. L.J. 49, 57 1989.

[4]  First Nationwide Bank v. Nationwide Sav. & Loan Ass’n, 682 F. Supp. 965 (E.D. Ark. 1988).

[5]  W.E. Long Co. v. Holsum Baking Co., 307 Ark. 345 (Ark. 1991).

Warning: Don’t Use Trademarked Olympic Hashtags, Images

Olympic hashtagsWith all of the hype and public attention paid to the Olympics, you and your employees should be aware of the rules that govern the use of hashtags and images related to the Olympic games. The U.S. Olympic Committee (USOC) and the International Olympic Committee (IOC) have historically been very aggressive in policing any use of the Olympic trademarks, images, and hashtags. This year’s games are no exception.

In the last few weeks, the USOC has sent a number of letters to companies that sponsor athletes (who now happen to be Olympians) but have no sponsorship relationship with the USOC or the IOC warning them not to discuss the games on their corporate social media accounts. Companies have specifically been told that they cannot use the trademarked hashtags “#Rio2016” or “#TeamUSA” in any of their postings. The letters also warn companies not to reference Olympic results or to repost or share anything from the official Olympic social media accounts, this includes use of any Olympic photos, logos, or even congratulatory posts to Olympic athletes. While media companies are largely exempt, all other commercial entities should carefully monitor their social media accounts for any Olympic commentary.

Olympic trademarks are the subject of intense legal protections around the world and the IOC and USOC will pursue alleged offenders regardless of their size. In fact, previous enforcement actions have ranged from trademark suits against small restaurants with the word “Olympic” in their names to issuing cease and desist letters to companies that used trademark hashtags such as #Sochi2014 during past games. Guidelines about Olympic brand usage can be found by clicking here.

ARTICLE BY Jennifer E. Hoekel & Donna Frazier Schmitt of Armstrong Teasdale

© Copyright 2016 Armstrong Teasdale LLP. All rights reserved

Intellectual Property and You: University Edition

Intellectual Property at UniversityIt may be July, but school is still in session. Today, I’ll discuss another common but mysterious topic: intellectual property ownership, specifically in the university setting. Universities sponsor research, encourage experimentation, and foster collaboration. The hallowed halls of universities are treasure troves of intellectual property. However, the process can hit a snag when it comes time to start a company and (hopefully) make money. Intellectual property is the cornerstone of many companies and at the center of many disputes. Here, I will address a few items: 1) joint inventorship; 2) university policies and grant terms; and 3) employment agreements.

Joint Inventorship

As it is synonymous with intellectual property, let’s first tackle patents and the concept of “joint inventorship.” 35 USC §116(a) provides that when an invention is made by two or more persons jointly, they shall apply for a patent “jointly.” Further, inventors may apply for a patent jointly even though (1) they did not physically work together or at the same time, 2) each did not make the same type or amount of contribution, or 3) each did not make a contribution to the subject matter of every claim of the patent.

Case law maintains no minimum threshold for contribution. In Burroughs Wellcome Co. v. Barr Labs, Inc. (1994), the court posited that “conception is the touchstone of inventorship.” There, the patent application was prepared before the defendant’s scientists (Barr Labs) contributed to the research on the use of a pharmaceutical to treat HIV. The court held that inventors are those who thought of the idea, not those who only realized the idea. As such, discovery that an idea actually works and reduction of that idea to practice are irrelevant for inventorship. The idea must be “definite” and “permanent” in a sense that it involves a “specific approach to the particular problem at hand.” The typical contributions of a supervisor do not necessarily qualify.

Burroughs Wellcome teaches an important lesson for startup teams: everyone should have a clear understanding of their roles and duties. Over an idea’s lifecycle, many hands may touch the idea. Confusion among these matters can create disputes and unnecessary hurdles. Teams must secure the intellectual property rights of all inventors, otherwise, the intellectual property will have multiple owners. For example, three students are working on a project for a new light tracking technology. Each student contributed, but only two students were listed on the patent, which was assigned to the company IP, Inc. The third student has inventorship rights, and as such, she can have herself added to the application and more importantly, she has rights to the patent which she may assign and license at her pleasure. Put simply, your company may have a joint owner.

University Policies and Grant Terms

Second, always–and I do mean always–look at your university’s intellectual property and technology transfer policies and any funding terms that you receive. These terms will ultimately govern your relationship with the university and dictate your responsibilities and rights. Many of your questions may be answered right in the policy.

For my fellow Wolverines, let’s focus on the University of Michigan’s Tech Transfer Policy.

1. Ownership. Generally, the University claims ownership over intellectual property made by “any person, regardless of employment status, with the direct or indirect support of funds administered by the University (regardless of the source of such funds).” These funds include University resources, and funds for employee compensation, materials, or facilities.

2. Student Intellectual Property. The University generally does not claim ownership of intellectual property created by students. The policy defines “student” as a person enrolled in University courses for credit, except when that person is an employee. However, UM will claim ownership of intellectual property created by students in their capacity as employees (i.e., persons who receive a salary or other consideration from the University for performance of services, part-time, or full time). Interestingly, a student will be considered an employee, for the purposes of this policy, if they are compensated. UM gives the following examples as compensation: stipends and tuition.

The University of Michigan is relatively generous towards its students. However, employees (professors, graduate student instructors, research assistants, post-docs) are another matter.

Employment Relationships

Lastly, as hinted above, founders should pay close attention to the terms of their engagement with the university, which will include employment agreements or other related agreements. Typically, professors, graduate student instructors, research assistants, and the like will have these agreements in place and they are bound by their provisions. Each of these agreements is likely to have an intellectual property assignment clause, which will give ownership of created intellectual property to their respective university employer.

Conclusion

Although the university setting is a boon to intellectual property creation, it does come with strings attached. IP ownership can also become very messy due to concepts like joint inventorship and a lack of proper assignment documents. An unwary student group can end up with the university, or another party, as a co-owner in his/her intellectual property.

Here are a few suggestions:

  • Communicate. As stated above, it is important that everyone understand their role in your project/venture. Informed persons are less likely to assert unwarranted ownership claims.

  • Read your university, classroom, and grant policy. While some places can be student friendly (GO BLUE!), others may not.

  • Maintain clear documentation. Properly document your inventive processes. Also ensure that when you have a startup involved, have proper intellectual property assignments between participants and the startup.

  • Always read your employment agreements. These agreements can contain various obligations in regards to intellectual property. They may also contain intellectual property assignment clauses.

Keep in mind, there is a value to working with university intellectual property. The university may already have ownership, or in some cases, a venture (or students) may assign their intellectual property to tech transfer offices for help in commercialization efforts. The university is a valuable environment.

ARTICLE BY Fermin M. Mendez of Varnum LLP

© 2016 Varnum LLP

Supreme Court Defers Certiorari Decision In Amgen Sandoz

Amgen Sandoz Supreme Court Biosimilar PatentOn June 20, 2016, instead of deciding whether to grant certiorari in the biosimilar patent dance dispute between Amgen and Sandoz, the Supreme Court invited the Solicitor General “to file a brief in this case expressing the views of the United States.” While this will delay any Supreme Court review of the Federal Circuit’s first decision interpreting the patent dance provisions of the Biologics Price Competition and Innovation Act (BPCIA), it could give the Court an opportunity to consolidate its consideration of the biosimilar statute with other biosimilar cases making their way through the courts.

These articles discuss some of the issues raised to date in biosimilar patent disputes surrounding Neupogen®, Nuelasta® and Remicade®:

ARTICLE BY Courtenay C. Brinckerhoff of Foley & Lardner LLP

© 2016 Foley & Lardner LLP

Google Tries “Pretty Woman” Tactic in Oracle Copyright Suit

I’m not sure Julia Roberts’ use of that blonde wig and eighties cut-out dress when she Google versus Oracleleaned against Richard Gere’s car in Pretty Woman should be considered “fair use,” but perhaps a court might say otherwise. How does Julia’s transformation from wayward to womanly in that iconic 1990 film come into play in a fight between tech giants Google and Oracle over the use of copyrighted java? Because they both hinge on “transformative use.”

Google’s going to trial again? Say it isn’t so. I have to wonder how many lawyers Google, alone, employs. But, if you’re going to stand as one of the front-runners in today’s fast-paced, internet-driven services market, you have to be prepared for lawsuits. Google has been fending off some serious claims by Oracle in a copyright suit filed in San Francisco since 2010, but when the focus of the debate turned to expert witness testimony, we wanted to highlight the matter for discussion and debate. Oracle initially sued Google claiming improper use of copyrighted Java, particularly Google’s use of its application programming interfaces (“APIs”) on its Android platform, to allow developers who are familiar with Java to quickly convert their web apps to Android.  Oracle is now reportedly seeking royalty damages in excess of $8 billion.

Initially Google argued, and the trial court agreed, that APIs were not subject to copyright. That ruling, however, was overturned by the Federal Circuit on appeal, which means Google’s remaining defense is whether its use of the APIs was “transformative,” which would make it acceptable under the Fair Use Doctrine. What standard of “transformative use” are the parties looking to?  2 Live Crew and their ripping parody of “Pretty Woman” in their 1989 album, “As Clean As They Wanna Be.” Please tell me you’re envisioning that iconic cover right now. Apparently the Supreme Court in a 1994 ruling, Campbell v. Acuff-Rose Music, Inc., found 2 Live Crew’s version of “Pretty Woman” so creative and original that it qualified as “fair use,” not copyright infringement. Oracle is arguing the opposite by claiming Google’s use of the Java APIs did nothing to transform the code. Google simply plugged it into to a larger body of work, but in no way altered it, which does not qualify, according to Oracle, as transformative.

Oracle has sought to exclude the testimony of Google’s computer science expert from opining that Google’s use of the Java code altered it sufficiently to qualify as a transformative use, claiming his opinion “flies in the face” of the Federal Circuit’s finding that Google was wrong in claiming its use was transformative simply because it incorporated other elements in the Android system. Google has fought back, stating the Federal Circuit never decided whether the work was transformative and specifically remanded the case so that issue could be decided by a jury. Are you finding both of those arguments a bit rambling and repetitive? Apparently so did the trial court judge when he lamented his role as the gatekeeper who has to “excise every detail of expert testimony on a granular level.” With reams of lawyers on either side fighting over every detail and every dollar, however, that is probably precisely what he will have to do.

If you feel it may be hard, not being a computer science guru, to make a determination as to whether Google’s use of the Java at issue was “transformative,” imagine how the jury is going to feel. In May, 2012, a jury found Google had infringed Oracle’s copyrights but they could not decide whether use of the code in question was “fair.” This will be the second trial and second jury that attempts to answer this question. It will require an expert with exceptional communication skills, who is as persuasive as Julia, to effectively break this Java jumble down and win over the potentially tech-savvy, but stubborn “Richards” in the jury box. That’s the expert we would find for them, anyway, if Google gave us a call.

ARTICLE BY Annie Dike of IMS ExpertServices

© Copyright 2002-2016 IMS ExpertServices, All Rights Reserved.

Artist Formerly Known as a Trademark: Prince

Prince logoI’m sure his name came immediately to mind when you read that title: Prince. That was, at least, before he changed it to the unpronounceable, androgynous “Love Symbol.” While many thought this was a marketing stunt, Prince’s “formerly known as” campaign was actually an attempt to skirt a heated legal battle with his record label, Warner Bros., by creating and producing music under a new trademark. Now that the regal record-breaking artist has passed, however, it will be interesting to see where the royalty chips will fall.

Sleepless in Seattle was in, Cheers was out and Haddaway asked the all-important question, “What is Love?” We were all a little Dazed and Confused. It was 1993 when the very public trademark battle began. “Why You Wanna Treat Me So Bad?” Prince asked Warner Bros. when they refused to release his extensive back-log of music. It seemed Warner was more focused on going “Round and Round” the promotion circuit than producing more Prince records, leaving a pile of his hand-crafted gems to sit and collect dust. Finding Warner “Delirious” in this regard and seeing their refusal as a “Sign o’ the Times,” Prince decided to “Kiss” his label goodbye and produce music under a new trademark, the unpronounceable Love Symbol, subsequently copyrighted as “Love Symbol #2.”

“The first step I have taken toward the ultimate goal of emancipation from the chains that bind me to Warner Bros. was to change my name from Prince to the Love Symbol. Prince is the name that my mother gave me at birth. Warner Bros. took the name, trademarked it, and used it as the main marketing tool to promote all of the music that I wrote. The company owns the name Prince and all related music marketed under Prince. I became merely a pawn used to produce more money for Warner Bros.”

Prince claimed in a public statement about the trademark dispute, boldly sporting the word “SLAVE” on his cheek.

While the Love Symbol album didn’t really earn him “Diamonds and Pearls,” it did garner some attention, selling millions of copies worldwide, and laid down some heavy “Purple Rain” on Warner’s Prince promo-party. Prince was waiting for the sun to set on “1999” when his contract with Warner Bros. would expire so he could begin producing music once again under his rightful, trademarked name—Prince—in 2000. Post-“Emancipation,” Prince embarked on a long and lustrous music-making career, earning world-wide critical acclaim and induction into the Rock Star Hall of Fame when he was first eligible in 2004.

With the royal Prince’s passing and his songs playing on every satellite station right now, we couldn’t help but mull over this old trademark tango and wonder what you thought? Was Prince’s bold Love Symbol move successful? Do you predict any royalty fall-out, now that he has passed, over royalties that were earned under the “Love Symbol” trademark as opposed to “Prince?”

Article By Annie Dike of IMS ExpertServices
© Copyright 2002-2016 IMS ExpertServices, All Rights Reserved.

Artist Formerly Known as a Trademark: Prince

TrademarkI’m sure his name came immediately to mind when you read that title: Prince. That was, at least, before he changed it to the unpronounceable, androgynous “Love Symbol.” While many thought this was a marketing stunt, Prince’s “formerly known as” campaign was actually an attempt to skirt a heated legal battle with his record label, Warner Bros., by creating and producing music under a new trademark. Now that the regal record-breaking artist has passed, however, it will be interesting to see where the royalty chips will fall.

Sleepless in Seattle was in, Cheers was out and Haddaway asked the all-important question, “What is Love?” We were all a little Dazed and Confused. It was 1993 when the very public trademark battle began. “Why You Wanna Treat Me So Bad?” Prince asked Warner Bros. when they refused to release his extensive back-log of music. It seemed Warner was more focused on going “Round and Round” the promotion circuit than producing more Prince records, leaving a pile of his hand-crafted gems to sit and collect dust. Finding Warner “Delirious” in this regard and seeing their refusal as a “Sign o’ the Times,” Prince decided to “Kiss” his label goodbye and produce music under a new trademark, the unpronounceable Love Symbol, subsequently copyrighted as “Love Symbol #2.”

“The first step I have taken toward the ultimate goal of emancipation from the chains that bind me to Warner Bros. was to change my name from Prince to the Love Symbol. Prince is the name that my mother gave me at birth. Warner Bros. took the name, trademarked it, and used it as the main marketing tool to promote all of the music that I wrote. The company owns the name Prince and all related music marketed under Prince. I became merely a pawn used to produce more money for Warner Bros.”

Prince claimed in a public statement about the trademark dispute, boldly sporting the word “SLAVE” on his cheek.

While the Love Symbol album didn’t really earn him “Diamonds and Pearls,” it did garner some attention, selling millions of copies worldwide, and laid down some heavy “Purple Rain” on Warner’s Prince promo-party. Prince was waiting for the sun to set on “1999” when his contract with Warner Bros. would expire so he could begin producing music once again under his rightful, trademarked name—Prince—in 2000. Post-“Emancipation,” Prince embarked on a long and lustrous music-making career, earning world-wide critical acclaim and induction into the Rock Star Hall of Fame when he was first eligible in 2004.

With the royal Prince’s passing and his songs playing on every satellite station right now, we couldn’t help but mull over this old trademark tango and wonder what you thought? Was Prince’s bold Love Symbol move successful? Do you predict any royalty fall-out, now that he has passed, over royalties that were earned under the “Love Symbol” trademark as opposed to “Prince?”

Article By Annie Dike of IMS ExpertServices

© Copyright 2002-2016 IMS ExpertServices, All Rights Reserved.

Limelight Networks v. Akamai Tech. – Supreme Court Cert. Denied

Yesterday, the Supreme Court declined to hear Limelight’s petition for cert. on the question of whether an accused infringer may be held liable for direct infringement of a claim to a method where multiple parties perform the steps of the method.

On August 13, 2016, the S. Ct. remanded the en banc decision of the Fed. Cir. that set forth the law of divided infringement under s. 271(a), and found that Limelight directly infringed U.S. Pat. No. 6,108,703. The court held that an entity will be found responsible for others’ performance of method steps “(1) where that entity directs or controls others’ performance, [or] (2) where the actors form a joint enterprise.”

As well as in the case of agency or contractual direct infringement, the court concluded that liability under s.271(a) can also be found what an infringer “conditions participation in an activity or receipt of a benefit upon performance of a step or steps of a patented method and establishes the manner and timing of that performance.” The infringer must have the right and ability to stop the infringement.

In those instances, “the third party’s actions are attributed to the alleged infringer such that the alleged infringer becomes the single actor chargeable with infringement.” The element of direction or control is a question of fact, as is the presence of a joint enterprise.

If the facts support the presence of a joint venture, all parties involved can be found liable for direct infringement, “as if each were a separate actor.”

The court found that Limelight directed or controlled its customer’s performance of each remaining method step: “tagging and serving content”). Don’t ask me what this means. See slip. op. at 8-9. Of course, this decision is relevant to a drug company instructing a physician and, ultimately, the patient, via labelling and/or training, about how to use a drug or biological.

Article By Warren Woessner of Schwegman, Lundberg & Woessner, P.A.

© 2016 Schwegman, Lundberg & Woessner, P.A. All Rights Reserved.

Trade Secrets Bill with Controversial Civil Seizure Provision Passes Senate

Recently, Congress and the courts in the United States have been active in reining in what many have seen as patent system that has run amuck. In the process, they have placed a number of limits on patent holders’ ability to effectively and successfully enforce patents. But as opportunities to enforce intellectual property through patent suits have been narrowed, another IP door appears to be opening.

For several years, Congress has been working on legislation that would, in effect, federalize what until now has been a state-by-state system of trade secret law. The current version, the Defend Trade Secrets Act of 2016 (S. 1890) (“DTSA”), was approved by the Senate on April 4, 2016 with bipartisan support.

The DTSA would operate to expand the existing Economic Espionage Act by, among other things, adopting much of the framework of the Uniform Trade Secrets Act (“UTSA”) and permitting private parties to bring civil trade secret misappropriation actions. UTSA-derived provisions are already in effect in 48 of the 50 states. Thus, while there are some differences between the DTSA and the UTSA, it is unclear whether the DTSA would represent a meaningful departure from existing trade secrets law, at least substantively. There are differing views.

The DTSA’s Civil Seizure Provision

What would almost certainly represent a significant new development is the DTSA’s civil seizure procedure, which is not contemplated under the UTSA. Under the proposed law, upon application by a party asserting theft of trade secrets, a federal court would have the authority to order law enforcement officials to enter land and seize property “necessary to prevent the propagation or dissemination of the trade secret that is the subject of the action.” Most strikingly, the bill envisions an ex parteprocess under which seizures would be authorized and executed without any notice to the relevant property owner(s), including third parties—a process that naturally raises due process and Fourth Amendment concerns.

Supporters of the bill point to analogous ex parte seizure provisions contained in the Lanham Act1 (authorizing ex parteseizures of counterfeit goods) and the Copyright Act2 (authorizing ex parte impoundments of documents and things related to copyright infringement)—provisions that have survived constitutional scrutiny.

Moreover, Rule 64 of the Federal Rules of Civil Procedure authorizes prejudgment seizures of property under applicable state law (e.g., writs of replevin or sequestration remedies), and ex parte seizures under such state law provisions have likewise been upheld under many circumstances. Courts have also justified ex parte seizures under the All Writs Act.3 Thus, there is precedent for these types of procedures.

It is also worth noting that ex parte seizure procedures are used in intellectual property cases in numerous jurisdictions outside of the United States. For example, in the United Kingdom, so-called “Anton Piller” orders have been utilized for many years to secure documents and things on an ex parte basis, in exceptional circumstances.

Significant Controversy

Nevertheless, the prospect of ex parte seizures in the trade secrets context has generated significant controversy in the United States. One major source of concern is the fact-intensive nature and overall complexity of trade secrets disputes. What exactly is the information at issue and does it qualify as a trade secret? How, if at all, has it been maintained in secrecy? Does the target of the seizure really have the information in his or her possession, and if so, how was the information obtained? Was reverse engineering involved? And so on.

Even on a preliminary basis, the complex factual issues involved in trade secret disputes may not lend themselves to fair resolution through expedited and non-adversarial ex parte procedures. Indeed, it does not take much imagination to conceive how, in the wrong hands, one-sided ex parte seizure proceedings might be used for improper purposes.

For example, in one Lanham Act counterfeit goods case, the plaintiff’s attorney “ran roughshod over the applicable statutes and rules,” submitting an inaccurate and misleading affidavit and convincing the lower court to authorize a private investigator to conduct the seizure and hand the seized property to the attorney.4 In another, the district court described a scheme in which the plaintiffs obtained seizure orders in a succession of counterfeiting cases, only to dismiss each case approximately one year after seizing the goods, without having ever established that the goods were, in fact, counterfeit.5

Rigorous Procedural Safeguards

In an effort to eliminate potential mischief, and to ensure that the new DTSA scheme passes constitutional muster, the bill’s sponsors have included a number of key procedural safeguards:

  • Ex parte seizures would be reserved for “extraordinary circumstances” only;

  • A seizure order would only issue upon the plaintiff’s filing of an affidavit or verified complaint that sets forth “specific facts” establishing, among other things: (1) immediate and irreparable injury if seizure is not ordered; (2) a likelihood of success on the merits of the trade secret claim; (3) the balance of harms favors the applicant; (4) the identity and location of the material to be seized, with reasonable particularity; and (5) more ordinary procedures (such as a TRO motion under Rule 65) would be ineffective because the seizure target would evade the order or destroy the evidence;

  • The applicant would be required to post a bond sufficient to cover damages should the seizure turn out to be wrongful or excessive;

  • Any seizure order would “provide for the narrowest seizure of property necessary” and would be executed by law enforcement officials;

  • The court would be required to provide specific guidance to the officials executing the seizure that “clearly delineates” the scope of their authority and details how the seizure must be conducted;

  • The court would also be required to schedule an adversarial hearing for the earliest possible time after the seizure was executed, at which hearing the applicant would bear the burden of proof of establishing that the seizure order was proper; and

  • The bill provides for a civil action for damages based on a wrongful or excessive seizure.

Taken together, these safeguards are significant and may reduce the likelihood of erroneous seizure orders and/or abuse of the system. In fact, it is possible that the obstacles to securing a seizure order would be so significant that, as a practical matter, they would eliminate the seizure remedy as an alternative in all but the most egregious scenarios. That appears to be an intended result.

In any event, having navigated the Senate, the DTSA will now pass to the House of Representatives for further consideration. A companion bill to S. 1890, H.R. 3326, was introduced in July 2015 and has enjoyed broad bipartisan support. In an era of partisan rancor, the DTSA may yet be one instance—the ex parte seizure provision notwithstanding—in which legislators find ways to work together across the aisle to achieve results.

1See 15 U.S.C. § 1116(d).
2See 17 U.S.C. § 503(a).
328 U.S.C. § 1651.
4Warner Brothers v. Dae Rim Trading, Inc., 877 F.2d 1120 (2d Cir. 1989).
5NASCAR v. Doe, 584 F. Supp. 2d 824 (W.D.N.C. 2008).