Beverly A. Berneman
Abstracts are nice in visual arts but not in patents. Before Alice Corp. v. CLS Bank International, about 30% of software patent applications were invalidated. After Alice, the statistic is up to about 80%. Another one just went down. In Clarilogic, Inc. FormFree Holdings Corp., the Federal Circuit Court of Appeals affirmed summary judgment for the plaintiff to invalidate the defendant’s patent for credit reporting software. The Court ruled that the software "is directed to the abstract idea of gathering financial information of potential borrowers." The patent used computers to automate a fundamental financial information process without identifying any particular algorithm engine.
WHY YOU SHOULD KNOW THIS. A software developer should ask two questions before pursuing a patent. First, am I developing something that automates a task a human can do manually? Second, can any computer do what I’m automating without my software? If the answer is yes to both questions, then a patent will probably not be issued. Of course, to be safe, always get an opinion from a patent attorney whose area of emphasis is in the software patent space.
Beverly A. Berneman
A new law prohibits blocking negative reviews. On March 14, 2017, the Consumer Review Fairness Act of 2016 went into effect. The Act prohibits a company from using a ‘form contract’ to prohibit or restrict a person from posting a review, performance assessment, or other similar analysis of a company’s goods, services, or conduct. The Act also prohibits a company from requiring an individual to transfer intellectual property rights in the review or feedback to the company. Any form contract containing the prohibited language is void and can subject the company to a penalty or fee imposed by the Federal Trade Commission. The Act also creates a private right of action that can be brought by a State’s attorney general on behalf of the residents of the State.
Beverly A. Berneman
The common law trademark rights of an Antarctic marathon organizer got a chilly reception from the TTAB. Beginning in 1995, Marathon Tours, Inc. (“MTI”) organized sporadic cold weather marathons using the name “Antarctic Marathon”. Richard Donovan started his Antarctic marathon tours in 2006. Unlike MTI, Donovan’s tours were an annual event and have been well publicized and attended. When Donovan sought to register “Antarctic Ice Marathon and 100 k” and it’s graphic design, MTI opposed registration before the Trademark Trial and Appeal Board (“TTAB”) claiming prior common law rights. Everyone agreed that “Antarctic” and “Marathon” were descriptive words. So, for MTI to prevail, it would have to show that its use of “Antarctic Marathon” had acquired distinctiveness through continued use. All MTI could show was its sales and advertising, without context for the numbers, and four unsolicited articles from the media right before some events. The TTAB concluded that MTI failed to meet the burden of showing acquired distinctiveness and dismissed the opposition.
WHY YOU SHOULD KNOW THIS. A trademark owner can establish common law rights in a trademark by continued use in the market place. But when it comes to enforcing those common law rights against a registered trademark, the common law owner can experience an uphill battle. For any business that is not local in nature, federal trademark registration helps establish priority of use and protect the trademark owner from latecomers.
Andrew S. Williams
If your organization sponsors a 401(k) or other retirement plan, you or someone in your organization is a fiduciary to that plan. You may have hired a service provider to administer the plan (a third party administrator, or “TPA”), but the buck stops with your organization. This is because the fine print in your TPA’s service agreement says the official “Plan Administrator” is the employer, not the TPA. This means the employer has the ultimate responsibility for the plan’s ERISA compliance.
On the investment side, the plan’s trustee or investment committee will be a responsible plan fiduciary. The investment fiduciary must act with the care, skill, prudence and diligence of a prudent person “familiar with such matters.”
This is a prudent expert standard. So ask yourself, do the people making investment decisions for your plan have a financial or investment background? If not, you need to consider engaging a professional investment advisor to assist with investment decisions.
What does all this mean to you?
Plan fiduciaries do not have to make perfect decisions but they do need to exercise diligence in their deliberation on both administrative and investment matters. It is always advisable to document fiduciary deliberations as the best defense to a claim of fiduciary misconduct. Remember, good intentions never justify fiduciary misconduct including any inattention to fiduciary duties. As one federal judge put it: “A pure heart and an empty head are not an acceptable substitute for proper analysis.”
There are other steps that plan sponsors take to help their plan fiduciaries:
- Hire an investment advisor, adopt an investment policy statement – and follow it!
- Meet with your investment advisor at least annually to review plan investments – and document these discussions.
- Perform self-help compliance checkups for your plans using IRS and Department of Labor websites.
- Consider fiduciary insurance (that’s not the plan’s ERISA fidelity bond).
- Get professional help when you need it, and consider using independent legal counsel to assure the confidentiality of sensitive plan-related information.
The Takeaway: Take another look at the bullet points immediately above. Is there any good reason not to follow each of those protective steps?