IP Updates

Michelle K. Lee, the director of the USPTO, unexpectedly resigned on June 6.  Ms. Lee has been viewed favorably by the tech industry, which recently sent a letter to the new administration and asked for her continued stay as the leader of the agency.

The USPTO is a US federal agency that handles patent approval and trademark registration.  The agency’s headquarter is located in Alexandria, Virginia.   It has about 13,000 employees.   According to its annual report in 2011, the USPTO’s earned revenue totaled $2.2 billion.  Most (90%) of the revenue came from patent operations.  Majority (65%) of the patent revenue were generated from maintenance and filing fees.

Based on a recent decision by Supreme Court, plaintiff will no longer be able to bring a patent suit against defendant in a federal district court that plaintiff prefers, such as the Eastern District of Texas or the District of Delaware.  Instead a patent case can be only filed in a district court located in the state where the defendant corporation is incorporated or where acts of infringement are committed.  As reported by this article, this decision may make a dramatic change on venue where patent proceedings will take place.

Celebrities are perceived as a group of people with certain privileges that are not generally possessed by the public.   This may be true when it comes to their purchasing power and influence on media.  However, if they want to register their famous names as a trademark, things start to get tricky and don’t seem to be that obvious.  In some cases, the registration process may become even more difficult due to their famousness.  In this article Kylie Jenner’s experience in trademark application is uncovered and shared.

Regardless owners’ status, some applied-for marks have a great potential to be allowed and become registered.  Some don’t and may have weakness.  Therefore, making the most appropriate case for a mark before the filing is very important for it to be approved.   Further, examining attorneys at the USPTO are not there to give assistance to applicants, but sometimes they do provide suggestions.  It is an applicant’s responsibility to respond and make a right choice in order to proceed further.  When making these decisions, getting helps from trademark professionals will help the applicant go a long way in the trademark process.

A provider of cheerleading supplies sued another company for its copyright infringement on several cheerleading uniforms made by the provider.  The other company counterclaimed that the design of those uniforms was not copyrightable and there was no infringement.  The case went through three different levels of the federal judiciary system and was presented to eight justices in the high court.  The district court made a decision against the provider, which was later reversed by the circuit court and the Supreme Court.

In its 6-2 decision, the Supreme Court laid out the rule and the test for evaluating whether a feature is copyrightable.  In order to be copyrightable a feature cannot itself be a useful article.  However, for a feature which is incorporated into the design of a useful article, it is copyrightable when identified and imagined apart from the useful article, it would qualify as a pictorial, graphic, or sculptural work either on its own or when fixed in some other tangible medium.  By applying this test to the case, the Court held that the design on the cheerleading uniform, which included the lines, chevrons, and colorful shapes, was copyrightable.

It may be easier to use another example, a car, to illustrate the Court’s decision.  Because a car is a useful article, features related only to its functionality such as the shape and size may not be copyrighted.  However, design patterns like lines and shapes, which are painted on the car’s body, may be copyrightable because these features can be separated from the car and applied on another tangible medium.

As pointed out by some observers, this case does not reach to the end yet.  It has been sent back to the district court for a decision on the merits.  If eligibility of copyright protection is successfully challenged by the other company on other grounds such as “originality”, the provider may still lose in this legal battle.

A trademark may be registrable even though it contains an unregistrable component.  In order to register the mark, a disclaimer must be used.  A disclaimer is a statement used by a trademark applicant to indicate that no exclusive right is claimed to the unregistrable component of the applied-for mark.  A trademark’s component that is merely descriptive is considered not to be registrable.  The component is descriptive when it immediately conveys knowledge of a quality, feature, function, characteristic or purpose of the goods for which the mark is used.  For example, if a vendor sells ice cream and the trademark he uses includes the words “ice cream”, the words are used to describe the product and therefore must be disclaimed in order for the mark to become registrable.  Descriptive words or phrases are used by public to describe goods or services.  Therefore, they should not be taken away for an exclusive use through the trademark registration.

Besides terms used to describe goods or services, a word or phrase used to indicate the source of the goods or services may also be considered to be descriptive and therefore not registrable.  In re Deutscher Fußball-Bund (DFB) e.V. (01/18/2017).  In this case, the applicant is the governing body of football in Germany.  It tries to register a trademark for goods and services related to football.  The trademark includes words of “DEUTSCHER FUSSBALL-BUND” and drawing components.  The English translation of “DEUTSCHER FUSSBALL-BUND” is German Soccer Federation, which is the name of the applicant.  The examining attorney refuses to allow the mark to be registered after the applicant declines to disclaim the words for the goods.  The applicant relies on a similar application, in which another trademark owner was allowed not to disclaim the name of a football association on a registered mark.  The dispute goes to Trademark Trial and Appeal Board (TTAB).  Although the Board agrees that the case may provide some helps for the applicant’s argument, it points out that there is only one such case raised by the applicant and in other sixteen trademark applications the names of similar sport associations are not registrable and have to be disclaimed.  After all, “DEUTSCHER FUSSBALL-BUND” is the words used to describe the provider of goods and services and therefore must be disclaimed.

Although a disclaimer is used to limit the scope of trademark protection, it can become a useful tool for an applicant who wants to add a descriptive component to a trademark.  Meanwhile, a disclaimer can only be applied to a portion but not the entirety of a mark.  Take the “ice cream” product above as an example again.  If the vendor really wants “ice cream” in the mark registered for his ice cream products, he can’t apply for the registration of “ice cream” even though he disclaims it.  However, he may blend these two words with other components to form a registrable mark and simply disclaim the exclusive right to use “ice cream”.

The European Patent Office (EPO), the Japan Patent Office (JPO), the Korean Intellectual Property Office (KIPO), the State Intellectual Property Office (SIPO) and the United States Patent and Trademark Office (USPTO), so-called IP5, launched a PPH (Patent Prosecution Highway) pilot program on January 6, 2014.  Its duration was three years, and was scheduled to expire on January 5, 2017.  Now these five Offices decide to extend the program for another three years to January 5, 2020.

Under the PPH program, when an applicant receives a final ruling from a first patent office, which could be any one of IP5, that at least one claim is allowed, the applicant is entitled to request fast track examination of the corresponding claim in the corresponding patent application that is pending in other offices.  When a request is raised for participation of the program in US, the applicant must fill out a request form and make available to the USPTO the relevant work of the first patent office as well as any necessary translation.  However, there is no additional fee for raising this request under this program.

During the progression of a business there will come a time when the owner wants to protect intellectual property rights of the business.  A trademark is usually used for the protection of important and unique words or symbols that closely relate to the goods or the services delivered by the business.  A trademark helps customers to distinguish the goods from others and indicate its source, i.e., the business or the provider.  In order for a trademark to be registered and protected in the US, it must have the feature of signifying to purchasers the source of the goods or services.  Otherwise, the registration is not allowed.  In some cases, the historical background and use of a phrase, symbol, or slogan by the public can become a decisive factor on whether it can be registered as a trademark.  A recent decision by the TTAB (Trademark Trial and Appeal Board) of the USPTO reflects how the registration of a popular slogan is affected by its public use prior to the application.

In this case the Respondent wanted to use “I ♥ DC” as a trademark for their souvenirs sold in the District of Columbia.  This mark would be displayed on the hangtags of their merchandise. The Petitioner was also a vendor who sold similar souvenirs such as T-shirts, key chains, and caps bearing designs that resembled the marks registered by the Respondent.  If the trademark registration of “I ♥ DC” by the Respondent stands, the Petitioner would not be able to sell these souvenirs any more.  The Petitioner brought up this case and asked TTAB to cancel the registration.  It argued that such slogan was too commonly used by the public to be considered a trademark that would indicate the Respondent’s company.  The TTAB sided with the Petitioner and cancelled the registration of “I ♥ DC”.

In fact “I ♥ xx” has been used throughout souvenirs in different areas. “xx” can be a name of a city like DC or just a goods like KETCHUP.  Long before the respondent registered it as a trademark, “I ♥ DC” was commonly used on merchandise such as shirts, hoodies, hats, etc. in many tourist shops around DC.  Many witnesses testified that people bought souvenirs with “I ♥ DC” to express their fondness of the District of Columbia.  These customers didn’t purchase them because the slogan indicated the stores selling the goods or the manufacturers making them.  This showed that the mark of “I ♥ DC” has not been used for indicating the source of the goods. The respondent admitted that it did not create “I ♥ DC” and did not look for credit to the slogan. Instead it instead wanted to prevent other companies from selling similar products bearing “I ♥ DC”.  However, without being able to prove that “I ♥ DC” indicates the source of goods, exclusivity of the mark cannot be granted to the Respondent.

When a popular mark or slogan becomes widely used by the public, it may be a little bit late and risky to register it as a trademark.

In order to become a patent, an invention must be eligible subject matter other than abstract ideas, laws of nature, or natural phenomenon.   Whether an invention is eligible subject matter is the very first question that is raised and examined during patent prosecution.   While a software patent usually relates to method or process claims, sometimes it may fall into the rejection basket of abstract ideas.  How to draw a clear line to distinguish software claims from abstract ideas has always been a hot topic in patent law practice.  As the computer and internet technology keep updating itself at a nonstop pace, the law has also been evolving. In early November the USPTO issued a memo regarding recent Federal Circuit decisions on subject matter eligibility (SME) of software claims.  While the USPTO focused the discussion on these cases in this memo, it promised to update the guidance in the near future to keep up with the ever-increasing new decisions made by the Court of Appeal for Federal Circuit, the highest judicial authority below the Supreme Court on patent law.

According to the memo, the two decisions are McRO and BASCOM.  The Federal Circuit decided that the inventions related to patent-eligible subject matter in both cases.  In the memo the USPTO highlighted the court’s important analysis on each case and pointed out their significance on Alice’s two-step test on SEM.

In McRO the claimed methods were about how to use computer-implement rules to prepare automatic lip synchronization and facial expression animation.  The court researched the specification of the patent and was convinced that those claimed rules were not directed to an abstract idea because they enabled the automation of specific animation tasks that previously could not be automated.  The USPTO treated McRO as an illustration for making decision on whether a software claim is an abstract idea or not (the first step of Alice test).  To accomplish this test, one needs to look for whether there is a set of rules that improve computer-related technology by allowing computer performance of a function not done by a computer before.  The USPTO suggested that a particular solution to a problem that is taught in the specification could be an indication that a claim is directed to an improvement rather than just an abstract idea.

In BASCOM, the claim at issue related to a system for filtering content retrieved from an internet computer network.  The Federal Circuit agreed that the additional elements in the claim such as the computer, network and internet components didn’t amount to significantly more when considered individually.  However, when these elements were combined, an inventive concept might be found, i.e., the installation of a filtering tool at a specific location, remote from the end-users, with customizable filtering features specific to each end user.  The USPTO took BASCOM as the precedential case for the second step of Alice test.  It stressed that one should consider the additional elements in combination rather than just individually when determining whether these elements helps transform the abstract idea into an inventive concept.

In the memo, the USPTO also referred to an updated chart of court decisions which are either precedential or non-precedential.  The USPTO stated that examiners should avoid citing non-precedential decisions during patent prosecution unless the examined application matches the facts in any of these decisions very well.

For patent practitioners and those software inventors, this memo and the updated chart of court decisions are helpful for them to understand the current trend of the USPTO policy on prosecution of software patents.  A software invention may still be patentable when it satisfies the tests suggested by the USPTO in its SEM memos.

Before the America Invents Act takes effective, a patent is invalidated if the ready-to-filed invention is sold or offered for sale more than one year before its filing date.  On and after the effective date, March 16, 2013, a patent is invalidated as long as the invention is sold or offered for sale before the filing date of the application.  The one year grace period is applied only when the sale is made by the inventor.  Although the law is applied differently before and after the effective date of the AIA, validity of a patent is called into question once the on-sale bar is triggered.  It is common that inventors try to contact potential buyers or promote the invention for varieties of reasons such as their need for financial support before or after the application is filed.  Therefore, knowing the meaning of the on-sale bar helps inventors to navigate through the pitfalls that may cost them validity of the hard-earned patent.

A recent decision of the Federal Circuit provides an opportunity for inventors to look into the concept of on-sale bar.  In The Medicines Company v. Hospira, Inc., the Federal Circuit’s en banc (entire membership of the court) ruling reversed the court’s panel decision on what triggered the on-sale bar and sided with the lower district court’s conclusion.

In this case, Hospira tried to use the on-sale bar to invalidate a patent owned by The Medicines Company, which hired and paid a contract manufacturer before the critical date to prepare the drug product claimed in that patent.  The hiring was confidential and not disclosed to the public.  Both parties admitted that for triggering the on-sale bar the claimed invention must be the subject of a commercial offer of sale and ready to be patented.  However, while The Medicines Company argued that there was no commercial offer of sale and the on-sale bar was not applied because there was no title transfer of the patented drug product between the company and the contract manufacture, Hospira contended that the commercial benefit to the inventor by stockpiling the drug product for future sale was sufficient to trigger the on-sale bar.  In the decision the Federal Circuit stressed that various factors need to be addressed to determine whether a transaction is a commercial sale.  The court considered arguments presented by both parties were too narrow although it agreed that the point of no title transfer raised by The Medicines Company was convincing given the fact that arrangement between the company and the contract manufacture merely focused on the service of making the drug product rather than the drug product itself.  The court stated that an invention may be considered to be on sale if the inventor charges others fee for using the invention even though no title is transferred.  Meanwhile, the court rejected Hospira’s argument and concluded that a transaction having some commercial benefit for the inventor is not necessarily considered to be a commercial sale and storing the patented product is not an actual sale but a preparation for sale in the future.

As one of efforts to avoid the on-sale bar, keeping confidential is a good practice for an inventor before the application is submitted.  However, it may not be sufficient if the nature of transaction amounts to a commercial sale even though it is confidential and there is no title transfer.  At the same time, just getting the invented product ready for sale does not trigger the on-sale bar.  After all, inventors should not delay the application process when an invention is ready to be patented.  This will help reduce the risk of validity challenge.

The Federal Circuit recently handed down ruling in two cases.  Both decisions touched upon the way of conducting obviousness analysis.  These cases are unrelated.  The first invention is regarding a method preserving biological cells.  The second one pertains to a computer program for information search.

In Rapid Litigation Management Ltd., et al. v. CellzDirect, Inc., et al., defendant challenged validity of a patent that claimed a method of separating viable hepatocytes using multiple freeze-thaw cycles.  The single freeze-thaw cycle has been well known, but not the multiple cycles.  A District Court concluded that the method lacked of patent eligibility because it directed to a law of nature.  The method was also obvious given that fact that similar procedure was widely known and applied in the industry.  The Federal Circuit overruled the District Court’s rejection on patent eligibility and considered the lower court’s decision was too broad because the patent only narrowly claimed a method for making a specific material rather than tried to appropriate the law itself from the public.  On the issue of obviousness, the Federal Circuit stressed unpredictability for the outcome of such method and therefore “repeating a step that the art taught should be performed only once can hardly be considered routine or conventional”.  In another case called Arendi S.A.R.L. v. Apple, the Federal Circuit reversed a decision of obviousness by the PTO’s appeal board on a patent of computer program.  As pointed out by the Federal Circuit, although the application of common sense would be allowed to supply a motivation to combine or a missing limitation in the analysis of obviousness, it must be backed by reasoned analysis and evidentiary support instead of conclusory statements.

Even though the invention fields are quite different in these two cases, the Federal Circuit’s decisions help clarify how the law of non-obviousness should be applied.  For applicants and inventors, any element in an invention that is either against conventional wisdom or deviating from the teaching in prior art will be very helpful for overcoming the obviousness rejection in patent prosecution.

Effective June 29, 2016, a USPTO pilot program starts running in support of the White House’s initiative called National Cancer Moonshot, a global fight against cancer in the next five years.  The program, which is name as Cancer Immunotherapy Pilot Program, provides a faster review than the current scheme to patent applications pertaining to cancer immunotherapy.  Under this program, the examination for such application is expected to be completed within twelve months of special status being granted.

To be eligible for the program, applications must contain at least one claim related to a method of ameliorating, treating, or preventing a malignancy in a human subject wherein the steps of the method assist or boost the immune system in eradicating cancerous cells.  The application must not contain more than three independent claims and more than twenty total claims.   For those applications with excessive claims, applicants must amend claims as required in order to participate in the program.  Although applicants need to file petitions to the USPTO before applications are accepted into the program, no fee is required to make special.  Special status under this program may not be granted to an eligible application if another special status was previously granted to the application.  The petition must be filed electronically through the USPTO’s EFS-Web.

In order to maintain the special status granted under the program, applicants must respond to the restriction requirement or office action in a timely manner and without any extension of time.  The USPTO’s twelve-month goal doesn’t mean there is no prosecution activity after the set time.  Rather it means that a final disposition occurs, which is including but not limited to a notice of allowance or a final office action.

The program will run for twelve months.  The petition to make special under the program must be filed before June 29, 2017.  After that date, the USPTO may extend or terminate the program based on the need and the agency’s assessment on the program.

On May 11, 2016, the Defend Trade Secrets Act of 2016 (DTSA) was signed into law by President Obama.  The new law amends the Economic Espionage Act of 1996 by striking subsection (b) of 18 USC § 1836, which provides that federal district courts have exclusive jurisdiction over civil actions brought by the Attorney General for trade secret misappropriation.   A new provision is in place for allowing an owner of a trade secret to bring civil actions in federal courts.

Prior to this law, trade secret disputes among private parties are primarily governed by state law and resolved by state courts.  However, trade secret law is applied differently in different states even though most states adopt the Uniform Trade Secrets Act.  The differences make it difficult to effectively protect trade secrets in interstate or international commerce by private parties and gives rise to the need of passing a law for trade secret protection at the federal level.   Under this law, a federal court is authorized to seize property necessary to preserve evidence or prevent the propagation or dissemination of the trade secret.  The law also provides remedies for the misappropriation of a trade secret, which include injunctive relief, monetary damages, exemplary damages (for willful and malicious misappropriation), and attorney fees (for either party acting in bad faith).  The maximum penalty for a trade secret violation is increased to be the greater of $5 million or three times the value of the stolen trade secret.

Section 7 of the Act provides for criminal and civil immunity for anyone who discloses a trade secret under two circumstances, i.e., disclosures in confidence to government officials or attorneys for the purpose of reporting or investigating a suspected violation of the law and disclosures in confidence in a judicial proceeding.

Sometimes inventors rush to submit provisional applications in order to have a filing date as early as possible.  It makes some sense in the first-to-file system.  However, there is a catch in such practice.

In Dynamic Drinkware LLC v. National Graphics, Inc., Dynamic wanted to prove to the Federal Circuit that a patent owned by National Graphics was anticipated by a reference patent and therefore was invalid.  To achieve that, Dynamic needed to convince the Court that the reference patent had an effective filing date before the priority date of National Graphics’ patent.   The reference patent had claimed benefit in a provisional application, which had the earliest priority date.  However, as the Court pointed out, in order for the priority link between the provisional application and the reference patent to be formed, the disclosure of the provisional application must provide support for the claims in the reference patent.  Dynamic was unable to make that showing.  Therefore, the reference patent was not entitled to the filing date of its provisional application and National Graphics’ patent remained valid.

A non-provisional application is allowed to claim benefit of an earlier-filed provisional patent.  However, if an invention is not fully described in the provisional application to support claims established in a later-filed non-provisional application, inventors may risk losing the priority date of the provisional application in patent proceedings.

Design patents are solely applied to an art with an ornamental appearance.  However, an element having a functional feature may also serve an ornamental purpose.  For such element, being functional should not become the basis of excluding it from the protection of a design patent.

In Sport Dimension, Inc. v. The Coleman Company, Inc., Sport Dimension sold a personal flotation device that looked almost the same as the one illustrated in a design patent owned by Coleman.  Sport Dimension requested a District Court in California to declare that the patent is invalid and there is no infringement for its product.  Because the District Court decided that two armbands and a side torso tapering in the design were functional elements, it completely excluded them from the claim construction.  In appeal, the Federal Circuit rejected the District Court’s claim construction.  The Circuit Court pointed out that “their functionality did not preclude those elements from having protectable ornamentation” and “design patents protect the overall ornamentation of a design, not an aggregation of separable elements”.  Therefore, by eliminating those structural elements, the District Court erred by converting “the claim scope of the design patent from one that covers the overall ornamentation to one that covers individual elements”.

People tend to focus on usefulness of a novel product.   However, as an inventor, one needs to look beyond functionality and give protection to an invention as much as possible.  If the invention has ornamental appearance, a design patent should be filed to protect that feature.

Google has been making digital copies of millions of books through its Library Project without the consent of copyright holders. It has used these digital copies to establish a search function on its website so that the public is able to get access to these books on a limited basis. To be more specific, a user can search a term in a digital book. The user is also able to see snippets of text containing the search term. However, the user cant see the entire book through the digital copy. Participating libraries can obtain digital copies of books from Google, but under their agreements with Google they can’t use these digital copies in violation of the copyright laws.

Several copyright holders were unhappy about what Google did and brought a class action suit (Authors Gild v. Google, Inc.) in federal courts accusing Google for copyright infringement. Several main arguments were raised by plaintiffs against Google in the proceedings. Some key points among them are listed below. First, even though no fee was charged and no commercial was popped up during a search, Google’s act of making digital copies of copyrighted books was not a fair use because it helped Google to dominate the internet search market and ultimately would generate profit for the internet giant. Second, there was a possibility that Googles storage of digital copies might be hacked and subsequently exposed to the public. Third, copyright holders had a risk of loss of copyright revenue due to Googles distribution of digital copies to participant libraries, which might use these copies in an infringing manner.

The Courts disagreed with plaintiffs and ruled for Google. After making a detailed analysis and concluding that Google’s book scanning was not a substitute of the original publication but an allowable transformative use, the court rejected the argument of commercial motivation by stating that nearly all of the illustrative uses listed in the Copyright Act are generally conducted for profit. The Courts admitted that plaintiffs had a reasonable ground to challenge Google for the exposure of digital copies to the public due to hacking or unauthorized release. However, no evidence was presented by plaintiffs to show that this type of exposure actually happened.

While the traditional media is greatly challenged by the Internet and digitalization, the doctrine of fair use is still applied to digital works. As shown by Google in this case, a massive unauthorized duplication of copyrighted works does not necessarily lead to infringement. The purpose of copying and the way how the duplicate is used and presented remain to carry a big weight for court’s judgment on fair use. However, data compromise caused by hacking has recently become a major concern in eCommerce. As pointed out by the judge, divulging of digital copies due to poor measures on data security, even unintentional, may turn a lawful use into an infringement.

When a patent has been infringed, the patent owner can inform the infringer and bring it to courts and demand for legal damage (money) and equitable remedy (injunction) caused by the infringement.  A utility patent is usually expired after twenty years from the filing date.  However, it does not mean that a patent owner can wait a long before taking an enforcement action for recouping monetary damage.  A quick, if not immediate, action is highly recommended.  Otherwise, the damage may not be regained.  The Federal Circuit stressed the importance of swift action in a case decided in September.

In SCA Personal Care Inc. v. First Quality Baby Products LLC, plaintiff  SCA sued defendant First Quality for infringement on its patent related to an adult incontinence product.  In 2003 SCA believed First Quality infringed its patent and sent a letter to First Quality. First Quality quickly responded and rebuffed SCA’s assertion.  After SCA received the response, it disagreed with First Quality’s argument but did not inform First Quality about its objection, not to mention taking any enforcement action against the alleged infringer.  First Quality took SCA’s silence as an agreement on its position and expanded its manufacturing and sale of the product.  In 2010, seven years after the letter, SCA filed a complaint alleging the infringement in a federal district court.  First Quality raised a defense of laches, a legal term meaning an unreasonable delay on making a claim.

The Federal Circuit ruled for First Quality on this issue and affirmed that laches, which is codified in statute, can be used as a defense for past  in litigation of patent infringement.  The Court distinguished laches defense in patent litigation from the same in copyright cases, which was illustrated in Petralla by the Supreme Court in 2014.  The Court stated that laches can’t be invoked as a defense in Petralla because a statute of limitations has already been legislated in the Copyright Act by Congress to regulate the timeliness of copyright infringement claims.  On the contrary, such timeliness does not exist in the Patent Act.  Therefore, laches must be used to fill the gap.  However, the Court pointed out that laches can’t bar injunction and any on-going royalty negotiation because the owner is still entitled to have the right on the valid patent.

The reason for why it took so long for SCA to make the claim is not clear.  Not every infringing product can make a good sale in the market.  If it does, the legal damage demanded by the infringed party can be high.  However, without keeping the infringing party informed and taking necessary enforcement action within a reasonable timeline, as shown in this case, the patent owner may not be able to obtain sympathy from courts and recover that damage.

Written description is one of legal requirements for a patent to be valid.  At the time when an application is filed, the inventor must show that he completely grasps the invention that he is claiming for.  In order to show his know-how, the inventor needs to fully disclose his invention in a thorough and descriptive way.  Without written description of the invented matter, the inventor is not considered to possess his invention at the time of filing the application.  Deficiency on written description may render a patent invalid.  In fact, this requirement is in line with the principle of give-and-take under patent right: an inventor must explicitly demonstrate to the public that he indeed knows and owns the invention at the time of filing in exchange for the exclusive right and protection on patented matters. It helps stop an applicant from claiming a matter for patent protection, which he realizes only after the application is filed. However, how much possession is sufficient so that the requirement of written description is met?  A case called ALLERGAN, INC. v. SANDOZ INC., which was recently decided by the Federal Circuit, provides an example for illustration of this important requirement in patent application.

In this case, the disputed patent related to an ophthalmic formulation for reducing hyperemia in patients with glaucoma or ocular hypertension.  The plaintiff disclosed how to prepare the claimed formulation.  It also stated that this formulation helped reduce hyperemia in patients.  A permeation study of the invented formulation was also conducted on an animal model and described in the application, although it was not the same as the study for hyperemia reduction.  However, efficacy data regarding the hyperemia reduction in clinical study were neither mentioned nor described in detail in the patent application. A defendant tried to argue that some of the plaintiff’s patent claims related to hyperemia reduction were invalid because the specification in that patent lacked of efficacy data to support the clinical property of the formulation, meaning that the plaintiff did not know for sure of that property at the time of submission and therefore the requirement of written description was not met.  However, as the alleged infringer who made the same formulation as the plaintiff’s invention, the defendant agreed with the plaintiff that the claimed clinical effects, i.e. hyperemia reduction, necessarily resulted from using the invented formulation.

The Court sided with the plaintiff and stressed the importance of the word “necessarily” in its analysis on the issue of written description.  Stating that the property necessarily came from the formulation was to admit that such property was an inherent characteristic of the formulation.  As long as the formulation was thoroughly disclosed in the application, its effect on hyperemia reduction would come with the formulation even though this effect was not explicitly shown or proved in the clinical study demanded by the defendant.  The Court also gave credits to the permeation study and a constructive example wherein the effect was mentioned.  This case shows that in order to claim an inherent property of an invention, a brief mentioning or even a predictable statement regarding the property is helpful for showing that the inventor possesses it and the application meets the requirement of written description.  A full blown study for proving that property is nice but may not be needed when the application is filed.

A utility patent is usually expired in 20 years after the filing date.  After the patent is expired, it will go into the public domain and every one can use it without the owner’s approval.  Does that mean a licensee need not to pay royalty for using the patent after the expiration date?  In 1964 the Supreme Court ruled in Brulotte v. Thys Co. that royalty payment was not allowed after a patent was expired.  Last month the Court affirms that decision again in Kimble v. Marvel Entertainment LLC.

In Kimble, the patent owner sold his invention, a toy called Web Blaster, to Marvel in exchange for a lump sum payment and a 3% royalty of future sales.  However, no end date was set for royalties in the agreement.  This means Marvel must continue to pay royalties to Kimble as long as revenue was generated from selling of the patented toy.  Both parties weren’t aware of Brulotte when the agreement was reached in 1997.  Marvel later noticed the ruling in Brulotte and refused to pay royalties to Kimble after the patent was expired.  The dispute went through lower courts and finally reached to the Supreme Court.  Kimble asked the Court to overrule Brulotte and validate the royalty arrangement in the agreement.

Kimble relied on two grounds to justify his position for post patent royalties.  First, Kimble argued that post patent royalties drove up the cost for the licensee and therefore made it easier for other competitors to enter the market after the patent was expired.  He also contended that post patent royalties allowed for a longer payment period and a more precise allocation of risk.  Without such arrangements he might not be able to sign the agreement with Marvel.  In sum, Kimble believed that post patent royalties helped promote competition and innovation and therefore should be allowed.  The Court disagreed with Kimble because the unrestricted right to use the patent passes to the public once its term is expired.  The statute remains unchanged on patent term and does not set any rule opposite to the decision in Brulotte.  The Court stated that Kimble’s policy argument migh have a point, but was not sufficient to persuade it to overrule Brulotte.  Kimble should go to Congress instead of the Court to change the law and seek relief.

In fact, there are other ways for licensors to receive remuneration after the expiration date as long as they are not royalties for using the patent.  As stated by the Court in the opinion, the patent owner, for instance, may allow the delay of royalty payment so that the licensee is able to amortize it in a period beyond the expiration date.  In addition, when drafting the agreement, the licensor can bundle up the patent with other intellectual property such as trade secrect, which does not have a time limit on royalties.  Afer all, realizing the time limit on patent royalties and planning ahead pursuant to the law are the key to avoid future dispute.

Unlike direct infringement, which can be proved by showing only the infringing action, infringer’s knowledge of the patent and infringement is required for induced infringement to arise.   A party who commits induced infringement does not directly make, sell, or use the infringed product.  Instead it knowingly encourages others to conduct these acts.  If the infringer is able to convince the court that it indeed doesn’t know that there is an infringement to the patent, the charge of induced infringement can’t be established.  However, what happens if the infringer realizes the infringement but truly believes that the patent is invalid?  Does the good-faith belief negate the infringer’s intention of infringement so that no induced infringement can be found?  It sounds tempting, but doesn’t comply with the Supreme Court’s latest decision.

In Commil USA, LLC v. Cisco Systems, Inc., Commil sued Cisco in a district court for its infringement of a method patent for Wi-Fi networks.  Commil alleged both direct and induced infringement against Cisco.  The jury found Cisco liable only for direct infringement and awarded Commil $3.7 million in damages in the first trial.  Commil filed a motion for a new trial on induced infringement.  In the second trial the jury returned a verdict for Commil on induced infringement and awarded $63.7 million in damages, which is almost 20 times higher than damages for direct infringement.  Cisco challenged validity of Commil’s patent in trials, but both attempts failed.  In the appeal Cisco didn’t contest the district court’s decision on direct infringement and patent validity.  Instead Cisco argued that its good-faith belief that Commil’s patent was invalid at the time of infringement was a defense (negating its intent to infringe) to the claim of induced infringement.

The Supreme Court disagreed.  The Court refused to bring patent invalidity argument into the non-infringement defense and stated that “the issues of infringement and validity appear in separate parts of the Patent Act” and “non-infringement and invalidity are listed as two separate defenses” for patent infringement.  The Court pointed out that “a patent is presumed valid” under the Patent Act and reasoned that “the force of that presumption would be lessened to a drastic degree” if an infringer could prevail by simply proving his reasonable belief of invalidity rather than successfully challenging the patent in the legal system by clear and convincing evidence.  The Court also made analogy in Torts and Contract law to this good-faith belief argument and reiterated that “the general rule that ignorance of the law or a mistake of law is no defense to criminal prosecution is deeply rooted in the American legal system”.

Based on the Court’s decision and Cisco’s failure in pursuit of both defenses, only a belief of patent invalidity doesn’t fit into either defense and make a cut for the accused infringer.  The dissenting opinion written by Justice Scalia and joined by Chief Justice Roberts strongly suggested that a good-faith belief of invalidity should play a role in the non-infringement defense.   Although their view seems to conflate the assumed and proved invalidity, it brings up a point of how valid a patent is during the legal proceedings, which may take months or even years to reach a final conclusion.  For example, a patent is decided to be invalid by PTAB or a district court but the decision is later reversed by the Federal Circuit.  In such case, before the final decision invalidity of the patent is proved with significant credibility and the belief is backed by the court.  Therefore, is the infringer allowed to use his good faith belief on the early decision to help reduce damages for infringement that exists during the appeal?

In an opinion released last week, the ninth circuit affirmed a lower court’s decision denying appellant’s Motion for a Preliminary Injunction, which requires Google Inc. to remove a movie from its platforms.

Appellant Cindy Garcia played a role in a film produced in 2011.  She only spoke two sentences for the role, which appeared to be innocent and without any controversy. However, the film’s director transferred her acting in the film to another movie and integrated it into an anti-Islam polemic by replacing her voice with a statement that questioned the prophet’s morality.  The director later uploaded a trailer of the movie to YouTube, a Google subsidiary.  Since then the movie quickly spread around the world through the internet and stirred up controversy and outrage in the Middle East.  Garcia received several death threats and suffered severe emotional distress.  She demanded Google to remove the movie from YouTube.  After Google refused to meet her request, Garcia initiated several suits against Google and the director in both state and federal courts.

The legal battle in the federal court focused on Garcia’s allegation that copyright of her acting performance was infringed when the movie was placed on YouTube and seen by the public without her consent.  After several years of proceedings, the ninth circuit made a final judgment against Garcia’s request for preliminary injunction.  The court’s decision is based on two grounds.  Pursuant to the Copyright Act, only works of authorship fixed in any tangible medium of expression are entitled to copyright protection.  Although Garcia had an acting role in the film, she was hired by the director to act and her performance was not works of authorship.  The ninth circuit reasoned that anyone who did something for the film would have copyright on the film if Garcia’s request was allowed.  This would lead to a mass that the legal system tries very best to avoid.  In addition, the ninth circuit pointed out that Garcia did not do anything to actually put her performance to any tangible medium.  This seems obvious because Garcia is an actress, who is responsible for playing a role rather than making a film.  Even though the ninth circuit expressed sympathy to Garcia’s involuntary involvement to this terrible controversy, it refused to agree with her that irreparable harm had been formed from the alleged copyright infringement.  The ninth circuit admitted that the anti-Islam movie did cause harms, mainly emotional distress, to Garcia.  However, Garcia is not entitled to the relief under the copyright law because the law promotes rather than blocks (as requested by Garcia) public access to the work and only economic damage instead of emotional damage (as suffered by Garcia) can be recovered.

It is understandable that Garcia may care more about taking down the movie from YouTube than receive monetary compensation.  Nevertheless, money helps if she is able to recover it.  In order to do so, one needs to foresee the risk and potential harm before participating to a film.  A written agreement, which states clearly about the restriction on what an producer can do about an actor’s performance, will come in handy in case that any unexpected event happens in the future.  In reality the producer may have more bargaining power than an actress so that he is unlikely to accept those restrictions in any written form.  However, it may not be worthy for one to take the risk and then go through all the pain as shown in this case.  For Garcia, she earned only $500 for her performance in the original film.

Imaging that you are a patent holder and really want to get something back from the precious innovation, does it mean that you need to spend time on promoting the invention, negotiating with potential buyers, or even taking steps to transfer the certified idea into a real product? Yep, you are most likely to end up working on some of these things that you may not really be good at doing as an inventor.  Is there any other way for one to go through this process?  Yes, here comes the Patent Purchase Promotion from Google.

Starting 8^th and continuing through 22^nd of this month, Google is opening an online portal for patent holders to offer to sell their patents to Google.  An electronic Patent Submission Form is posted on the website along with a draft Patent Purchase Agreement.  As announced by Google, this is an experimental program and only unexpired US patents (except design patent) are allowed to be submitted for consideration.  By June 26 of this year, all applicants will be notified whether Google intends to go further for making the purchase.  By July 22, which is about a month after the notification, a purchasing agreement will be signed and executed if all conditions are met.  In the draft Agreement, Google promises to license a non-exclusive right back to the patent holder after it purchases and owns the patent.  This will allow the holder to pursue business development on the patented subject matter even though the decision of granting the license to any third party is completely under Google’s discretion.

Although Google indicates that it is not interested in negotiating terms of the agreement and the price offer is binding until applicants get notice or decision from Google, it is still a convenient and quick way for holders to try it and recover monetary value from their patents if winning Google nod.  However, as pointed out by Google, one is highly recommended to consult a patent attorney for a better understanding of terms and rights before making a submission to Google.

Images of Left Shark, which were shown with Katy Perry in the Super Bowl performance on 02/01/2015 and have become popular since then, were submitted for trademark registration by a company called Killer Queen LLC on 02/09/2015.  These applications were refused recently for their registration in the class of live music and dance performances by an examining attorney in the USPTO.  Several informality objections were coupled with the refusal in the Office action.

As pointed out by the examining attorney, the application is refused because “the applied-for mark, as used on the specimen of record, identified only a particular character, (which) does not function as a service mark to identify and distinguish application’s services from those of others and to indicate the source of application’s services”.  The specimen submitted is a picture that shows Katy Perry was singing and dancing with performers wearing Left Sharks costumes.  No textual note or message can be seen in the picture.  Because live music and dance performance are generally considered as services rather than goods, this type of the applied-for trademark is also called service mark.

In order for a service mark to be registered, the specimen must show the mark used in a manner that creates in the minds of potential consumers a direct association between the mark and the services.  The way how to establish the direct association depends on the type of specimen, i.e., rendering or advertising, that is submitted.  Typically speaking, specimens accepted by the USPTO include printed or electronic advertising and marketing materials as well as a photograph that shows the service is rendered.  While an applicant’s services are usually required to be explicitly referenced on advertising specimens for showing the direct association between the mark and services, the association is allowed to be inferred from the context or environment on rendering specimens or consumer’s experience without an explicit textual reference of the mark to the services.

Because the Left Shark specimen shows the applied-for mark with the applicant’s entertaining performance, it is considered to be a rendering specimen.  To overcome the USPTO’s refusal, the applicant may argue that the association between the mark and the entertaining services can be inferred and established even without any textual reference because the singer was performing right next to the applied-for mark as shown in the specimen and viewers have known her well for her music and dancing services.   It may be helpful if the applicant is able to explain how service marks are applied in the entertaining industry and how the use of the Left Shark mark comports with such practice.   On the other hand, the applicant may instead submit a substituted specimen, if any, that better establishes the direct association between the mark and the services.  However, given the fact that the date on the first use of the Left Shark is so close to the application date, it is likely that the applied-for mark was only shown once with applicant in her public performance before the submission.  As a fallback, the applicant may amend the filing basis from 1(a) to 1(b), which is usually called an intent-to-use basis and does not require any specimen to be submitted for the time being.   However, in order for registration to be granted, the applicant must later submit an acceptable specimen and change the filling basis back to 1(a).

The applicant is given  6 months to respond to the Office action.  Therefore, the applicant will have ample amount of time to explore all possible options before filing a reply.

Last month a Federal judge at Delaware granted Motion to Dismiss for Amazon in an infringement suit of software patent (#6055513) that is owned by Tuxis Technologies LLC.  Like Alice Corp. v. CLS Bank International, this case again shows the limit for a software application to become a valid patent.

Tuxis sued Amazon and alleged infringement of its 513 patent, which is about an upselling method used on electronic communication device.  Amazon asserted that those claims in the 513 patent were invalid because the claimed subject matter is not patent-eligible.  An upselling is a business practice used by salespersons to provide different good or service to a customer based on information learned about that customer after the initial offer is rejected.  This method has been applied in commerce for long time before the internet was born.  Under 35 U.S.C. § 101, laws of nature, physical phenomena, and abstract ideas are not patentable subject matter.  Business method is usually considered to be abstract idea.

The judge applied the two step framework established in Alice in his analysis.  First, it must be determined whether the claims at issue were directed to a patent-ineligible concept.  By dismissing Tuxis’s novelty argument at this step and taking its own words, the judge quickly reached the conclusion that the upselling claims in the patent were directed to a longstanding abstract idea.  The judge then turned to the issue of whether the claims contained an inventive concept sufficient to transform the claimed abstract idea into a patent-eligible application.  After going through and rebutting plaintiff’s arguments, the judge concluded that the upselling method patented in those disputed claims was not distinct from the in-person upselling that has existed for a long time.  In other words, these claims were not inventive concepts and therefore not patentable.

As pointed out by the Federal Circuit in DDR Holdings, LLC v. Hotels.com and quoted by the judge in Tuxis Technologies, LLC,  merely reciting the performance of some business practice known from the pre-Internet world along with the requirement to perform it on the Internet does not transform an abstract idea into patent-eligible subject matter.  In order to make a software application patentable, it is not sufficient to just convert a business method into a computing language and use it in an electronic device.  While a software application is usually considered to be an abstract idea or a business method, any inventive feature that distinguishes itself from a routine practice will help overcome the legal hurdle established in Alice.