Trade show materials may be a patent buster. Trade shows are a way to showcase products and innovations in an industry. Materials distributed at a trade show are usually promotional and are designed to get more sales and establish a beacon in the marketplace. But, trade materials that identify inventions could bust a patent. The US Patent Trial and Appeal Board (the “Board”), in an inter parties review (“IPR”) between Nobel Biocare Services AG v. Instradent USA, Inc., held that certain claims in Nobel’s patent for a dental implant screw were not patentable because they were anticipated. “Anticipated” is similar to “prior art” which means that the claimed invention isn’t new. Instradent, the IPR petitioner, argued that Nobel’s invention for a dental implant screw had already been disclosed in a product catalogue from Alpha-Bio Tech Ltd. (“ABT”). Instradent proved that ABT disclosed the product in a catalogue it distributed at a 2003 dental trade show in Cologne, Germany. ABT had a rather small booth at the show and not much of a presence. But people at the trade show had seen the catalogue. So it was considered publication of the prior art. On appeal, the Federal Circuit affirmed the Board’s determination that the ABT catalogue was prior art and so some of Nobel’s claims in the patent were not patentable.
WHY YOU SHOULD KNOW THIS. Patent protection is limited to inventions that are new, useful and non-obvious. Patents give the patent owner a monopoly on practicing the invention for 20 years. So, the U.S. Patent Office has to determine if claims are really new in order to issue a patent. The Instradent case shows that an invention is not new if there’s publication of prior art; even small publications with a limited distribution at a trade show outside the U.S. are published prior art so inventors should always conduct a prior art search before going through the time and expense of filing a patent application. And, for that matter, inventors should always be careful about disclosing their inventions at a trade show before they file the application.
Captain America, Thor and Iron Man can’t save your party guests without a license. Characters for Hire, LLC (“CFH”) advertises premium entertainment for parties and private events by booking actors dressed like popular characters. CFH offers hero characters and famous characters from popular scifi/fantasy movies. Understanding that Disney, Marvel and LucasFilm own the rights to characters that fall into those categories, CFH used generic names like "Big Green Guy" (Hulk) and “The Dark Lord” (Darth Vader). Similarly, CFH advertised themed parties that referenced Plaintiffs’ movies, such as “Frozen Themed” (Frozen), “Avenging Team” (The Avengers), and “Star Battles” (Star Wars). But CFH used the original images of the characters in its ads (see picture). After CFH ignored several cease and desist letters, Disney, Marvel and LucasFilm sued. The court entered summary judgment against the plaintiffs on trademark infringement. The court appeared to put a lot of weight on the fact that the plaintiffs couldn’t show actual confusion and there was enough notice that CFH was not affiliated with the plaintiffs. But the court will proceed on the other counts of unfair competition, dilution and copyright infringement. So CFH can’t breathe a sigh of relief yet.
WHY YOU SHOULD KNOW THIS. A themed party is a popular way to entertain at a child’s birthday party, a corporate event or even a brand awareness meeting. Character themed apparel is even more common. The problem arises when one wants to use protected characters and doesn’t have the permission to do so. CFH’s experience on the trademark infringement count is not typical. Whenever contemplating the use of protected characters for any reason, be sure to get the right permissions. And, always respond to a cease and desist letter.
Even Halloween can’t escape copyright.
Frankenstein: This year is the 200th anniversary of the first edition of Mary Shelley’s Frankenstein which means it’s in the public domain. Here are some other non-copyright fun facts. Mary Shelly’s mother, Mary Wollstonecraft, was a writer, philosopher and is credited as being the first feminist. Mary Shelley was just 17 years old when she wrote Frankenstein. The name “Frankenstein” refers to the creator of the monster and not the monster itself. In the original story, the monster is 8 ft. tall, had beautiful black hair, white teeth, yellow skin and, apparently, was really buff (see picture).
Movie Characters: Your favorite horror characters, Freddy, Jason, Pinhead, etc. have been copyrighted by their various studios.
Halloween Costumes: Most costumes are considered “clothes” and are not subject to copyright. However, a costume that has a creative element unrelated to its function as clothing is copyrightable. See IP News for Business Blawg post Spooky Halloween Banana, http://gct.law/blog/113.
Halloween Masks: Masks are copyrightable because they aren’t considered useful articles.
Shameless Plug: I highly recommend Remy Bumppo Theater’s production of Frankenstein. It’s Jeff Recommended and has gotten rave reviews. Now playing until November 17, 2018. Visit https://www.remybumppo.org/ for more info.
WHY YOU SHOULD KNOW THIS. Happy Halloween.
A weak trademark is hard to enforce. IAC Search U Media Inc. owns the “Ask” trademark for a search engine. IAC brought a petition to cancel the trademark “ASKBOT” for question and answer software. IAC argued that it had priority of the use of the word “ask” with respect to search engines and that ASKBOT is likely to cause confusion with its “Ask” trademark. In the proceeding before the Trademark Trial and Appeal Board, ASKBOT produced ninety-seven news articles from the Lexis/Nexis database for the term “askcom”, third-party registrations of marks using the word “ask”, and excerpts from an unrelated opposition in which IAC opposed registration of the mark ASKVILLE. The Board held that, yes, the two marks were similar, involved the same or similar services and they each were reaching for a similar customer base. But here’s where it went sideways for IAC. The Board held that one must 'ask' a question in order to get an answer. So, the Ask mark is merely suggestive of the services provided and is a weak mark entitled to the barest minimum of protection. Since customers have to pay for IAC’s service and ASKBOT is free, customers will be able to tell the difference between the two and there is little likelihood of confusion. The Board denied the petition to cancel.
WHY YOU SHOULD KNOW THIS. Choosing a trademark can be really tough. You want to choose something that is easily relatable to your product or service. And yet, in order for it to be protectable, your trademark has to be distinctive. In this case, IAC chose a trademark that really just described an attribute of its services. As ASKBOT demonstrated, a lot of other companies are using “ask” for similar services. So the Board didn’t want to give IAC a total ‘lock’ on the word.
Those pesky on-line terms and conditions strike again. James May listed his vacation rental property on HomeAway, an online marketplace for vacation rentals. Originally HomeAway only charged the owner and not the traveler. In 2016, HomeAway, which was acquired by Expedia, changed its policy to charge both the owner and the traveler. In 2016, James renewed the HomeAway subscription. Actually he renewed it in his wife’s name and not his own name. Then James brought a class action suit against HomeAway/Expedia for breach of contract, fraud, fraudulent concealment, and Oregon and Texas state law claims based on HomeAway’s imposition of a “traveler fee” and its negative effect on owners who used HomeAway to rent properties. The terms and conditions of the on-line agreement required arbitration for all disputes. So HomeAway/Expedia brought a motion to compel arbitration. James opposed the motion arguing that because he renewed in his wife’s name, he wasn’t bound by the arbitration clause in the terms and conditions. The magistrate judge hearing the case quickly disposed of this argument. First, the terms and conditions didn’t allow assignment of the agreement without HomeAway/Expedia’s permission. Second, the magistrate held that James had notice of the terms and conditions and so he was bound by them. The magistrate judge made a recommendation to the district court judge to enter an order granting the motion to compel arbitration.
WHY YOU SHOULD KNOW THIS. Online terms and conditions are enforceable as long as the party enforcing them can show consent by the other party. In this case, HomeAway/Expedia showed consent with two things. First, James renewed. Second, James booked a property through HomeAway/Expedia. James initiated the class action lawsuit with both hands tied behind his back. One hand was tied by his failed attempt to get around the terms and conditions. The other hand was tied by the enforceability of online terms and conditions.
Inventor identification gets lost in the haze of a patent application for a cannabis delivery system. Michael Pappalardo met Samantha Stevins at a pharmaceutical products trade show. Michael told Samantha about his concept for a new product related to liquid and solid cannabis delivery systems. They agreed to work on it together. Samantha, who is an attorney, suggested that they apply for a patent. When Michael found out that Samantha had named herself as the sole inventor on the patent, he brought suit to add his name as an inventor. The Federal Circuit affirmed the district court’s dismissal of Michael’s case. The court held that there is no cause of action to challenge inventorship until a patent issues. So Michael will have to wait until then to file suit.
WHY YOU SHOULD KNOW THIS. If everything Michael says is true and he is the inventor or at least one of the inventors, then Samantha may have problems beyond cutting Michael out of the deal. Inventors have a duty of candor when filing a patent application. The duty of candor includes disclosing all inventors and anyone else who was substantively involved in developing the invention. The failure to make a full disclosure can compromise the ability to enforce the patent. So Samantha may be putting the viability of the future patent at risk.
Don’t wait too long to protect your trademark. Since the 1990s, Cosmetic Warriors Ltd. sells “Lush” brand personal products like soap, lotions and makeup. For a brief period, Cosmetic Warriors sold a small number of t-shirts. But for the most part, Cosmetic Warriors does not sell clothing. Pinkette Clothing, Inc. started selling clothing using the brand name “Lush” in 2003. In 2009, Pinkette applied to register the trademark and it was registered in 2010. Cosmetic Warriors didn’t contest the registration. Almost 5 years after the registration of Pinkette’s trademark, Cosmetic Warriors sued Pinkette for trademark infringement. Cosmetic Warriors said that it didn’t know about the registration to explain why it waited so long to bring suit. Cosmetic Warriors won the battle but not the war. A jury sided with Cosmetic Warriors on the infringement issue. But then the jury sided with Pinkette on Pinkette’s argument that Cosmetic Warriors was barred by laches because it waited too long to bring suit. The jury’s verdict was upheld on appeal.
WHY YOU SHOULD KNOW THIS. There are 3 important points to unpack here. First, Trademark Law allows the registrant of a trademark to have the mark deemed uncontestable 5 years after registration. Once it’s declared uncontestable, the registration can only be challenged on the limited grounds of a fraud in the application or abandonment. That brings us to the second important point. The court in this case held that this five year benchmark is not a statute of limitations. So a registrant who is defending a challenge can claim the laches defense; even if the challenge comes before the 5 year benchmark. That’s important because the U.S. Supreme Court has held in patent and copyright cases, that the laches defense is not available before the statute of limitations runs. Third, registration of a trademark is notice of the use of the trademark. So, Cosmetic Warrior couldn’t rely on its argument that it didn’t know about Pinkette’s trademark until it brought suit almost 5 years after Pinkette’s registration.
Trade dress protects non-functional attributes of a product like color. Moldex-Metric uses a bright green color for its foam earplugs. McKeon Products also uses bright green for foam earplugs. Moldex-Metric sued McKeon for infringement of unregistered trade dress, namely, the color of the earplugs. The trial court granted summary judgment for McKeon holding that the bright green color couldn’t be protected as trade dress because it served the function of making them easier to see during an inspection. The Ninth Circuit Court of Appeals reversed. The court held that the trial court failed to consider whether other colors would be just as visible. So the case is remanded back to the trial court to allow a jury to decide if the green color was not functional because of available alternatives.
WHY YOU SHOULD KNOW THIS. A distinctive color can be registered as protectable trade dress. Some famous trade dress colors are the Tiffany Blue and the UPS Brown. In each of these cases, the color has nothing to do with the function of the product or service. It just creates a distinctive look. Separating functionality from the look of a product or service isn’t always easy. In the Moldex-Metric case, the Ninth Circuit Court of Appeals gives a helpful test to determine color functionality. The availability of alternative colors to serve the same function could mean that color choice is non-functional and therefore protectable.
Trademark fair use can win the race. SportFuel, Inc. sued PepsiCo, Inc. for trademark infringement. SportFuel alleged that PepsiCo’s slogan “Gatorade The Sports Fuel Company” infringed on its trademark. The attached image shows SportFuel’s use of its trademark on the left and PepsiCo’s use of its slogan on the right. The court granted summary judgment to PepsiCo on the basis of trademark fair use. The court cited factors that weighed in favor of fair use. First, the Gatorade house mark appeared more prominently than the tag line which lessens the possibility that the tag line would be seen as an indicator of source. Second, the judge found that the words “sports fuel” were merely descriptive.
WHY YOU SHOULD KNOW THIS. Descriptive marks have a hard time getting trademark protection. An unprotectable descriptive mark uses identifiers that others in the same industry will need to describe their products or services. Some descriptive marks can achieve trademark status when they are more suggestive than descriptive or they’ve been used long enough for the public to connect the descriptive mark with the goods or services. This case was a close call. The words “sports” and “fuel” do not appear together in any dictionary. Fuel is often used with vitamins and supplements but more often it’s used with either food consumption or energy sources for machinery. So the combination of the words may be more suggestive of vitamin supplements than merely descriptive. There’s no word on whether SportFuel intends to appeal the summary judgment.
Copyright infringement needs more than ‘sort of’ similarity. Experian Information Solutions, Inc. registered the copyright for a database containing consumer names and addresses. Experian’s employees made some selections in adding data, reconciling discrepancies, and discarding useless information. Experian licenses access to its database to companies for use in marketing campaigns. Nationwide Marketing Services Incorporated is Experian’s competitor. Nationwide is relatively new to the market and much smaller than Experian. Experian got an offer to purchase a Nationwide’s database of names of addresses. Experian tested Nationwide’s database against its own and came up with a 97% match rate. Experian brought suit for copyright infringement and trade secret misappropriation against Nationwide. The Ninth Circuit Court of Appeals affirmed the district court’s order for summary judgment in Nationwide’s favor on the copyright claim. The court held that the selection and arrangement process was sufficient to create minimal protection in Experian’s database. But, Experian did not prove infringement. Neither side could produce the databases as they appeared at the time of the alleged infringement. Experian could only show an 80% match rate between the current versions of the two databases. That wasn’t enough for copyright infringement. Experian’s trade secret misappropriation claim was remanded back to the district court.
WHY YOU SHOULD KNOW THIS. Facts are not copyrightable. However, the arrangement of facts or a compilation is copyrightable. A compilation of facts has only minimal copyright protection. That’s because no matter how you look at it, you can’t own the underlying facts. Copyright infringement occurs when the infringing work is substantially similar to the original work. Now we know that 80% similarity was not enough similarity for infringement. This case also points out that if you’re going to claim copyright infringement, be sure to preserve the copyrighted works as they appeared at the time of the alleged infringement. And be sure to tell your alleged infringer to preserve its version of the works.
Investing in tech companies with issues can be hazardous to your retirement funds. VirnetX, a publicly traded company, supposedly sells Internet connectivity and security software. By all reports, sales of its products don’t actually generate much revenue. Instead, VirnetX makes a lot of money suing other companies who allegedly infringe on its patents. Although it was successful in suits against Microsoft and Apple, VirnetX saw its heyday dwindle after the Supreme Court’s Alice Corp. v. CLS Bank International that invalidated a lot of software patents. For Dr. Poppell, an eye doctor in Florida, VirnetX’s woes proved to be the downfall in Dr. Poppell’s investment strategy. Despite warnings from financial managers, Dr. Poppell, who had no financial training or background, personally administrated the 401(k) plan for his employees. Using Internet research, Dr. Poppell invested over half of his employees’ 401(k) money in VirnetX. VirnetX stock fell precipitously. As a result, the plan participants lost about 53% of their 401(k) investments. When the good doctor’s employees complained about the large losses, he terminated the 401(k) plan. When they complained about that, he fired them. The plan participants sued Dr. Poppell and he settled for less than a third of the losses. Then the Department of Labor got involved and required Dr. Poppell to make the plan participants whole.
WHY YOU SHOULD KNOW THIS. Dr. Poppell is surely an example of what not to do when as the administrator of a 401(k) plan. But it all started with a high risk and heavy investment in a company that, by all reports, is a patent troll. A patent troll usually has no real inventions (or real inventions that don’t result in much revenue, are driven by lawyers rather than scientists, don’t develop, sell or license any real products, and assert weak patents to get settlements in cash or through licensing. These types of companies usually fly under the publically held stock radar. But for any publicly traded stock in the tech industry, be sure to check the company out thoroughly before making any type of investment.
Every photo doesn’t automatically have the veneer of copyrightability. Dr. Mitchell A. Pohl is a cosmetic dentist who is very proud of his work. He posted before and after pictures of one of his patients on his website. The photos showed the patient’s unfortunate ‘before’ smile (teeth, lips and small area around the mouth) and her ‘after’ beautiful healthy smile. Dr. Pohl registered the photos with the US Copyright Office. Then Dr. Pohl found seven websites that used his photos. He sued the alleged infringer, MH SubI, LLC d/b/a Offcite, for copyright infringement. While Dr. Pohl obviously does fantastic work, his photos didn’t bridge the gap into copyrightable subject matter. The District Court for the Northern District of Florida performed the judicial version of a root canal and granted Offcite’s motion for summary judgment. The court held that Dr. Phol’s self-serving affidavit was as convincing as “plaque on a molar” and no reasonable jury could find that the photos were creative enough for copyright protection. The court later performed another extraction by denying Dr. Pohl’s motion to reconsider.
WHY YOU SHOULD KNOW THIS. A work has to meet a minimum standard of creativity to be copyrighted. As the court noted in this case, “Meeting the standard for creativity is not like pulling teeth”. Dr. Pohl’s photos didn’t meet that minimum standard. The court noted that Dr. Pohl couldn’t identify any creative elements in the photos such as the type of camera used, decisions regarding the pose of the patient, lighting decisions, etc. Perhaps if Dr. Pohl could have described some creative decisions in taking the photos, the outcome would have been different.
A shout out to my friend, Matthew Scott Nelles, one of the fine attorneys at Berger Singerman LLP in Ft. Lauderdale, Florida, who represented Offcite in this case.
With smoldering eyes, the beautiful and brave romance writers defended their realm. Faleena Hopkins is a self-published romance author of steamy romances with titles like, “Cocky Soldier: A Military Romance” and “Cocky Roomie”. Faleena’s company, Hop Hop Productions, Inc., registered two trademarks for the word “cocky” in relation to a series of romance novels. Faleena sent out cease and desist letters to other romance writers advising them that “cocky” has found its one true love and no one else can use the word in their book titles. In response to this attempt to keep the word “cocky” from its other true loves, a group of romance writers published a collection of short stories titled “Cocktales: The Cocky Collective”. Faleena filed suit to stop the publication. The Author’s Guild and the Romance Writers of America, rescued one of the defendants, author Tara Crescent, by paying the past due taxes on the plantation, I mean, paying her legal bills. The court denied Faleena’s motions for a preliminary and temporary restraining order against the protest work. The court held that the “cocky” marks were weak and customers would not be likely to be confused between Faleena’s books and other books using the word in their titles. On another note, a proceeding to cancel Faleena’s trademarks is now pending before the Trademark Trial and Appeal Board. So there may be a sequel to this romantic tale of the word “cocky”.
WHY YOU SHOULD KNOW THIS. A weak mark may be meaningful but is common in usage. It usually describes the product or service. Faleena’s experience shows how hard it is to enforce a weak trademark. When choosing a trademark, try to stay away from descriptive, weak marks. Choose fanciful, arbitrary or suggestive words instead.
Great Minds don’t always think alike when it comes to copyright infringement. Great Minds is a company that publishes school books, including a math book. Great Minds licenses use of the book to schools for free as long as it is for strictly non-commercial use. Great Minds uses the Creative Commons non-commercial license for these deals. A school district in New York had FedEx make copies of the book instead of using the school’s copiers and staff. Great Minds sued FedEx for copyright infringement arguing that it licensed the work to the school district and not FedEx. Great Minds tried to distinguish between the school staff making copies and the school ‘jobbing’ out the project to FedEx. In affirming a ruling against Great Minds, the Second Circuit held that there really was no difference between school employees making copies and having FedEx’s copy service making copies. The Court identified FedEx as an agent of the school district. Under pure agency principals, the school district’s license to copy would extend to FedEx.
WHY YOU SHOULD KNOW THIS. Creative Commons is a non-profit organization that acts as a clearing house for copyright licenses. The licenses are standard forms that parties can use. However, there is no requirement that the parties accept the standard language. Parties can always add or delete anything that would better define their licensor/licensee relationship. In this case, the Creative Commons license was silent on whether the license extended to agents of the licensee. To avoid a problem like this, on the licensor side, it’s best to define authorized uses under the license. On the licensee side, it’s best to make sure that the license extends to employees and agents.
The Patent Office can invalidate a patent even if a court did not. Oils States Energy LLC won a patent infringement judgment against Green Energy Group LLC. But then, the Patent Trial and Appeal Board (“PTAB”) invalidated the patent leaving Oil States emptyhanded. Oil States appealed arguing that the PTAB, an Article III (of the US Constitution) administrative tribunal, couldn’t come out differently from an Article I court. The US Supreme Court decided against Oil States. SCOTUS held that patents are a “public right”. They are a public franchise granted by the government to the owner of the patent for a period of 20 years. So, the administrative body can determine patent validity without paying homage to a different decision by a federal court.
WHY YOU SHOULD KNOW THIS. This decision addresses the fundamental nature of a patent. Patents are different from other types of Intellectual Property. You own a copyright the minute you fix your work in a tangible means of expression. You own your trade secret as long as it’s not generally known and you take reasonable measures to keep it secret. You own a trademark as long as you use it as a source or product identifier. But a patent isn’t a patent until the US Patent Office issues the patent. So, you can win a patent infringement judgment in court and still have your patent invalidated by the PTAB.
A press release doesn’t always amount to trademark use. In the 1980s, Toni Basil had a one hit wonder “Mickey” that included the lyrics, “You’re so fine you blow my mind, Hey Mickey”. She sold the copyright to the recording of the song. When Disney Co., Kohl’s and Forever 21 started using the song in their advertising, they issued press releases and mentioned Toni’s name in connection with the song. Toni sued for various types of Intellectual Property infringement including trademark infringement based on the press releases. Toni argued that the use of her name violated trademark law based on false designation of origin. The judge disagreed and dismissed the trademark claim holding that the use of her name in the press releases as nominative fair use.
WHY YOU SHOULD KNOW THIS. Not every use of someone else’s trademark is trademark infringement. This case is a good example. A press release is an official statement that is issued to give general information to the news media. A press release isn’t considered trademark use because its primary purpose is to provide information for news purposes. The press releases didn’t use Toni’s name in the trademark sense so she couldn’t maintain a cause of action for infringement.
A better way to build a data center can be protected as a trade secret. BladeRoom developed a technique that allowed it to build data centers. BladeRoom’s system used prefabricated subassemblies that continued systems for air management, fire detection, security and lighting. Under a non-disclosure agreement, BladeRoom disclosed the system to Emerson Electric Co. and Facebook who were about to build a huge data center in Sweden. Emerson and Facebook took a pass on retaining BladeRoom. According to BladeRoom, Emerson and Facebook went ahead and built the data facility using BladeRoom’s system. BladeRoom sued for trade secret misappropriation. Facebook settled but Emerson went to trial and lost. Determining the misappropriation was a substantial factor in causing financial harm to BladeRoom, the jury awarded BladeRoom $10 million in lost profits and $20 million due to Emerson’s “unjust enrichment.” Emerson vows to appeal the verdict.
WHY YOU SHOULD KNOW THIS. Massive data centers are becoming a huge industry (pun intended). Anyone who can find a way to build them faster has major market potential. BladeRoom did the right things in having Emerson and Facebook sign non-disclosure agreements. They must have also identified their trade secrets and taken reasonable measures to keep them secret. Although it took four years of expensive litigation, BladeRoom got a big payoff.
The last word sometimes isn’t really the last word. Here’s what happened after some previous posts:
3/21/17 – The Intrepid Heroes of Copyright, Photographers. VHT, Inc.’s obtained an $8.3 million judgment against Zillow Group, Inc. for using photos without a license. On appeal the judgment was cut almost in half. The court determined that there was insufficient evidence that anyone actually saw the vast majority of the photos. Still, $4.3 million is a lot of money.
6/27/17 – Horton Hears a Vulcan. The lower court’s decision that fair use permitted a comic mash up between Dr. Seuss like drawings and Star Trek in “Oh the Places You’ll Boldly Go” was reversed on appeal. The appellate court determined that at least three of the four factors of fair use weighed in favor of the Dr. Seuss estate and against the creators of the parody comic book. In other words, parody is not a golden ticket for fair use.
10/31/17 – Spooky Banana Halloween. After settling with Kmart for allegedly infringing on its banana costume, Rasta Imposta sued Kangaroo Mfg. Inc. for copyright infringement involving the same banana costume. The court granted a preliminary injunction holding that although the costume is a useful article, it does have some elements that give rise to minimal copyright protection. It appears that Rasta Imposta has peeled off another competitor.
An implied copyright license doesn’t need to be in writing. In Intellitech Corp., v. The Institute of Electric & Electronics Engineers, Inc. a/k/a IEEE, IEEE is a non-profit organization that was trying to set standards for electrical engineers. Intellitech contributed to the “Test Access Architecture for Three-Dimensional Stacked Integrated Circuits.” Intellitech sued IEEE for copyright infringement when IEEE tried to use Intellitech’s contributions. The court denied Intellitech’s motion for summary judgment. The court held that even if Intellitech owned the copyright in the work, IEEE had a non-exclusive implied license to use it because the parties always intended that result.
WHY YOU SHOULD KNOW THIS. It’s always best not to rely on an implied anything, no less an implied copyright license. A written license agreement or work for hire agreement is not only preferable, it’s a must. The documents should be drafted and signed every time someone creates a work for another. In this case, the IEEE had written policies about IEEE's ability to use contributions to the standards. So Intellitech knew from the beginning that its contributions were going to be used by IEEE in its documentation.
A specimen of use can make or break a trademark application. Pitney Bowes wanted to register its new logo design as a trademark for mailing services among other things. For its specimen of use, Pitney Bowes used a screen shot from its website showing a picture of its “Mail&Go” kiosk that featured the new logo. The examining attorney refused the specimen saying that it showed the sale of products but not mailing services. Pitney Bowes appealed to the Trademark Trial and Appeal Board who reversed the refusal. The Board held that the examining attorney should have given greater deference to Pitney Bowes’ common sense explanation that its mailing services were offered to consumers through the self-service kiosk. Ultimately, Pitney Bowes submitted a substitute specimen of use anyway and the trademark has been registered.
WHY YOU SHOULD KNOW THIS. A specimen is a real-world example of how you are using your trademark on goods or in the offer of services. The Examining Attorney is going to match the specimen to the description of goods and services. This case shows how technical Examining Attorneys can be in that analysis. If you file a use based application, it might be helpful to create the description of goods and services from the specimen you are going to submit. If you are filing an Intent to Use application, then the specimen should be created from the description in the application. But what happens if you file an Intent to Use application and when it comes time to file the specimen of use, the goods or services have changed from the original description? If the change is material, you might have to file a new application.
Selling a patent doesn’t extend its limited life. Allergan, Inc. owned the patents for Restasis which treats severe dry eyes by producing tears. The terms of the patents were about to expire. So, Allergan “sold“ the patents to the Saint Regis Mohawk Tribe and who then licensed all of the rights relating to the patents back for millions in upfront and annual royalties. In an IPR between Mylan Pharmaceuticals and Allergan, the Tribe unsuccessfully tried to dismiss the proceedings based on sovereign immunity. The PTAB’s decision had several important points which all seemed to spring from the PTAB’s view that any rights the Tribe had were “illusory”. First, it held that Allergan’s exclusive rights to the patent under the license from the Tribe were irrevocable and lasted only until the patents expired or are invalidated. Second, since Allergan retained the right to sue, the Tribe had no interest in the proceedings. Third, sovereign immunity is not a defense to IPR proceedings.
WHY YOU SHOULD KNOW THIS. Unlike other types of IP, patents depend upon governmental sanctions in order to exist. The patent gives the owner the right to exclude others from practicing the patent for 20 years. After that, the patent goes into the public domain. Once in the public domain, generic drug manufacturers can manufacture and sell the same pharmaceutical at lower prices. This, of course, poses a problem for the owners of patents like Allergan who would like nothing more than to extend their exclusive rights for longer than 20 years. Allergan and the Tribe tried a tricky maneuver to get around the limited life of a patent. It doesn’t appear to be working.
You own your domain name, right? Maybe not. While working for the law firm, Trowbridge Sidoti LLP, attorney, Kim Taylor, registered a large number of domain names for the firm, including SyndicationLawyers.com. She registered them in her own name instead of the firm’s, even though they were going to be used by the firm. After she left the firm, Kim refused to transfer the domain names claiming she owned them. Trowbridge Sidoti sued. After 10 hours of deliberation, the jury returned a verdict against Taylor with respect to all of the domain names. The jury found that Taylor’s actions only caused harm with respect to the SyndicationLawyers.com domain name and awarded $7,800.00 in damages.
WHY YOU SHOULD KNOW THIS. This scenario is not that unusual. An employee or independent contractor is given the task of registering domain names for a company. Wittingly or unwittingly, the employee or independent contractor registers the domain name in their own name. When the relationship is severed, the company finds out that it doesn’t own its own domain name. Getting the domain name transferred to the company becomes an issue if the parties didn’t part on good terms. As this case proves, it even happens to lawyers.
Agreeing to assign a patent in the future isn’t an assignment at all. Three co-inventors of a patent were employed by Company A. The co-inventors signed an employment agreement stating they “will assign” their rights to any patentable invention they created during their employment. Company A transferred its assets to Company B. Only two of the inventors assigned their patent rights to Company B. Based upon the employment agreement between the original company and the third inventor, the USPTO allowed Company B to prosecute the patent without the third inventor actually assigning the patent. Company B dissolved and its assets were transferred to Advanced Video Techs, LLC. Advanced Video then brought a patent infringement suit against HTC Corp. The district court dismissed the case holding that Advanced Video didn’t have standing to bring a patent infringement suit without joining the non-assigning inventor in the suit. On appeal, the Federal Circuit Court of Appeals affirmed the decision that Advanced Video didn’t have standing. The Federal Circuit reasoned that the agreement to assign something in the future, is not an assignment. The third co-inventor only promised to assign a future patent so she still had part ownership of the patent and had to be a party to the infringement suit.
WHY YOU SHOULD KNOW THIS. Inventors hold the rights to a patentable invention until those rights are assigned. Over the years, employment agreements contemplated that employee-inventors would always be innovating and there’s no way to anticipate which inventions will be patented. So a lot of employment agreements have the employee agree to assign inventions to the employer in the future. According to this decision, just having an agreement to assign something in the future, isn’t a present assignment. So what’s an employer to do? A two prong approach may be required. First, instead of a future assignment, have the employee make a present assignment of all Intellectual Property rights. Second, decide at what point in the research and development process, the employee will assign his or her patent in a particular invention and then follow through with it. One thing that the decision didn’t seem to address is whether the employer would have a cause of action against the employee who breached the employment agreement by failing to assign the patent as agreed.
Embedding a Twitter photo can be copyright infringement. It all started when Justin Goldman took photos of Tom Brady and posted them on Snapchat. Content on Snapchat is supposed to disappear after a while. These photos didn’t. Instead, the photos ended up being reposted on various social media sites, including Twitter. Some media outlets then embedded the third party tweets with the photos in articles on their respective websites. Goldman filed suit against the media outlets for copyright infringement. The defendants brought a motion to dismiss arguing that they aren’t liable because they were protected under the “Server Test”. The Server Test says that images generated by a search engine, like Google, aren’t copyright infringement because search engines don’t store images. The court denied the motion. This wasn’t a case of linking to the origin of the photos. The defendants actively embedded the images which were immediately available upon opening the offending webpage.
WHY YOU SHOULD KNOW THIS. For now, this case is considered an outlier. But since it’s out there, the best practice is to use extreme caution. The web is full of great content, especially photographs. But there’s a line between linking (which is ok) and embedding without permission (which isn’t ok).
Advertising a discount that disappears at point of purchase is a problem. A customer of Hobby Lobby, wanted to buy a picture frame. She believed she was getting a 50 percent discount on a photo frame due to an in-store sign stating "Photo Frames 50% OFF the Marked price.” Hobby Lobby didn’t honor the discount but instead pointed to disclaimer language that said, "DISCOUNTS PROVIDED EVERY DAY; MARKED PRICES REFLECT GENERAL U.S. MARKET VALUE FOR SIMILAR PRODUCTS." The customer brought a class action suit based on false advertising as well as other causes of action. Hobby Lobby’s motion to dismiss was denied. The court held that a reasonable consumer could have been misled despite the disclaimer language. So the suit will proceed.
WHY YOU SHOULD KNOW THIS. This is just one example of recent cases and settlements involving phantom discounts. Federal Trade Commission regulations and state laws govern advertising. The basics of proper advertising are pretty standard. Don’t use unfair, deceptive, untrue or misleading advertising. Advertising a price or a discount and then not honoring it falls squarely within prohibited conduct. Hobby Lobby’s disclaimer language didn’t excuse it from complying with the advertising rules.