IP Intelligence

IP Intelligence

Insight on Intellectual Property

Attorney Fees for Post-Grant Patent Challenge Proceedings Before the USPTO May Be Recoverable in Exceptional Cases Under 35 U.S.C. § 285

Patent147631712Parties accused of patent infringement are turning more and more to post-grant challenge proceedings at the United States Patent and Trademark Office (“USPTO”) as a faster and cheaper means for invalidating the asserted claims. A recent federal district court order indicates that the fees and costs associated with such proceedings may be recoverable if the underlying infringement suit is declared “exceptional” under 35 U.S.C. § 285.

On August 19, 2015, the United States District Court of the Southern District of California awarded defendant Southwest Airlines Co. nearly $400,000 in attorney fees and costs related to an inter partes reexamination of U.S. Patent No. 6,738,770 (the “’770 patent”). Order Granting Def’ts Application for Fees and Costs, Deep Sky Software, Inc. v. Southwest Airlines Co., Case No. 10-cv-1234-CAB, Dkt. No. 49 (S.D. Cal. Aug. 19, 2015). Southwest was sued for infringement of the ’770 patent in June 2010 by patent owner Deep Sky. Southwest filed a request for inter partes reexamination in April 2011, and the parties jointly moved for a stay pending the outcome of the reexamination, to which the court agreed. The reexamination concluded in December 2014, with all of the asserted claims of the ’770 patent found invalid by the Patent Trial and Appeal Board. Continue Reading

Favoring a Holistic Approach, the Federal Circuit Overturns TTAB Decision to Refuse Paw Print Logo

Last week, the United States Court of Appeals for the Federal Circuit reviewed a TTAB decision that had refused outdoor apparel company Jack Wolfskin’s application to register its paw print logo. Jack Wolfskin Ausrustung fur Draussen GmBH & Co. KGaA v. New Millennium Sports SLU, 14-1789 (Fed. Cir. August 19, 2015). New Millennium Sports SLU (“New Millennium”), the company that owns sportswear label Kelme, had opposed the mark stating there was a likelihood of confusion with its registered mark that also employed a paw print. The two marks are compared side by side, below. Continue Reading

USPTO Updates Guidance on Subject Matter Eligibility

Patent147631712[For background, see our prior posts on July 2, 2014, August 5, 2014, December 18, 2014, and March 23, 2015.]

On July 30, 2015, the United States Patent & Trademark Office (USPTO) published an update to its 2014 Interim Guidance on Subject Matter Eligibility (2014 IEG) published on December 16, 2014.[1] Comments to the 2014 IEG were solicited from the public, and the update purports to respond to six major themes from the public comments, including

  • requests for additional examples, particularly for claims directed to abstract ideas and laws of nature;
  • further explanation of the markedly different characteristics (MDC) analysis;
  • further information regarding how examiners identify abstract ideas;
  • discussion of the prima facie case and the role of evidence with respect to eligibility rejections;
  • information regarding application of the 2014 IEG in the examiner corps; and
  • explanation of the role of preemption in the eligibility analysis, including a discussion of the streamlined analysis.

The Quick Reference Sheet summarizes the Office’s views on the prima facie case requirement, and the requirements for identifying abstract ideas in Step 2A of the Alice analysis. Continue Reading

The Supreme Court Again Rejects Post-Expiration Patent Royalties

Patent147631712Authored by: Samuel McMahon, 2015 Summer Associate

In Kimble v. Marvel Entertainment, LLC, No. 13-720 (U.S. June 22, 2015), the Supreme Court, in a 6-3 decision with Justice Kagan writing for the majority, upheld its 1964 decision in Brulotte v. Thys, 379 U.S. 29, reaffirming that a patent owner cannot charge royalties for use of the patent after the patent term expires.

Stephen Kimble patented a device that allows the user to shoot pressurized foam string from the palm of the hand, like Spider-Man shooting web. He pitched his idea to Marvel, and the company’s representatives apparently liked it but nonetheless declined to engage Kimble in a licensing agreement. Kimble sued for patent infringement when Marvel began manufacturing and selling its own “Web Blaster” toy. Pursuant to a settlement agreement, Marvel purchased the patent for a lump sum and agreed to pay Kimble a 3 percent royalty on future sales. The parties did not negotiate an end date for the royalty payments, but before the patent term expired, Marvel asked for and received from federal district court in Arizona a declaratory judgment that it could avoid the royalty payments upon expiration of the patent. Relying on Brulotte, the district court held that the agreement to pay royalties was unenforceable after expiration of the patent term. The Ninth Circuit affirmed, and Kimble appealed. Continue Reading

BakerHostetler’s Oren Warshavsky, a Law360’s Voices of the Bar for Intellectual Property, comments on “With High Court Mum On Java Copyrights, Is Innovation Safe?”

WARSHAVSKY_Oren_CAM_1_2007On July 1, 2015, Law360 queried the Supreme Court decision not to review Google Inc. v. Oracle America Inc. in their Voices on the Bar column.  Oren Warshavsky, head of BakerHostetler’s national Copyright, Content, and Platforms team and one of Law360’s Voices on the Bar commented:

 “In a vacuum, the Federal Circuit’s holding could well disrupt interoperability. APIs are the specifications permitting programs to communicate and operate together across a single or multiple platforms, and thus are critical to, among other things, local networks, mobile computing, cloud computing and the Internet of Things. APIs are openly used throughout the computer industry; developers write programs for one platform and then use APIs to make the application operable across other platforms. The industry trend has been toward universal applications that are “platform agnostic” — the same application is written for a desktop computer, iPhone, Android phone, etc. If all APIs are protected copyrights, and enforced by the copyright owners, the Federal Circuit’s ruling would require developers to rewrite applications for each platform and interoperability certainly would be chilled.

But the Federal Circuit was interpreting Ninth Circuit law, and many predict the Ninth Circuit — and other circuits — will decline to follow this ruling. Moreover, the decision can be limited because it focuses on the creative choices when these APIs were created; other APIs are created differently and many result from an iterative, purely utilitarian (and therefore not creative) process. Finally, the ruling specifically notes that interoperability will be considered in the fair use analysis in this case — which convinced the solicitor general that the Supreme Court should refrain from taking the case. The Federal Circuit’s decision clearly deals a blow to certainty — for now there is no longer a bright line copyrightability test — but its impact on interoperability and innovation may not be felt as significantly as some fear.”

Read full article on Law360.com (subscription required).

Pre-1972 Recording Rulings – Not as Happy Together or as a Settlement

TurtleshappytogetherThis week, after a string of wins, two members of the classic rock group the Turtles suffered a setback in their lawsuit against satellite radio provider, SiriusXM (Flo & Eddie Inc. v. Sirius XM Radio Inc.).

Background: The dispute has been well explained by others, including here and here. But generally speaking, the dispute concerns the rights of artists and record labels to control how recordings made before 1972 get used. Federal copyright law was extended to protect sound recordings made after February 1972. That means that state laws decided what rights and compensation the recording’s owner is entitled to—if any—for pre-1972 recordings. Continue Reading

In re Tam – Federal Circuit Orders En Banc Review of Trademark Act’s Ban Against Registration of Disparaging Marks

Trademark_Puzzle_99898612The Slants is a Portland-based band composed of musicians of Asian-American descent who characterize their genre as “Chinatown Dance Rock.” The band’s bassist, Simon Tam, filed a trademark application for THE SLANTS for “Entertainment, namely, live performances by a musical band.” The examining attorney refused registration on the basis that the mark THE SLANTS is disparaging to Asian-Americans, pursuant to 15 U.S.C. §1052(a) (“Section 2(a)” of the Trademark Act). Looking both to dictionary definitions and to evidence of the band’s own use of the mark, including the applicant’s contention that the band’s adoption of the name The Slants was “a way to reclaim a racial slur and to assert Asian pride,” the examiner found that “the evidence is overwhelming that applicant chose the mark fully aware of the connection to the racial slur.” The Trademark Trial and Appeal Board affirmed the refusal in April 2013.

On appeal to the U.S. Court of Appeals for the Federal Circuit, Tam contended that the Board erred in finding the mark THE SLANTS disparaging, and also challenged the constitutionality of Section 2(a). Continue Reading

Ninth Circuit Draws Fine Line Around Fine Art Resale Royalties

copyright ThinkstockPhotos-493835891In a partial victory for artists such as Chuck Close and the Sam Francis Foundation—and for other visual artists who sold early works for rent money before establishing their name and value—the Ninth Circuit Court of Appeals last week resurrected part of a California law that enables fine artists to share in the profits from resale of their works.  Whether the state law interferes with federal copyright laws remains to be seen.

The 1976 Resale Royalty Act required California art sellers or their agents to locate artists after selling their work and to pay them 5 percent of the purchase price.  The well-intentioned law ran afoul of the so-called dormant Commerce Clause by purporting to regulate not only sales in California, but also all sales on behalf of California domiciles, even if the sale itself occurred wholly outside of California.  The Commerce Clause, contained in Article I, Section 8, of the U.S. Constitution, permits Congress to regulate interstate commerce, and by implication the dormant Commerce Clause prohibits states from regulating commerce taking place outside of their own boundaries.  See, e.g., Healy v. Beer Instit., 491 U.S. 324 (1989).  The Resale Royalty Act was therefore struck down in its entirety by the Central District of California.  On appeal, however, the Ninth Circuit severed the offending “California domicile” portion, leaving intact the remainder of the law regulating resale taking place in California. Continue Reading

Take Care in Using Consumer Data to Drive Dynamic Pricing of E-Commerce

Data_483120645Co-authored by: Hannah Bloink

Dynamic pricing is the practice of offering different prices to consumers based on various factors designed to maximize sales and profits, which may include the retailer’s perception of the willingness of a particular consumer to pay at a given price point, often in connection with other factors such as a given point in time. Airlines use dynamic pricing based on complex data analyses involving a myriad of factors including time of day and week, fare class and availability. The ride share service Uber’s surge pricing dynamically bases fares on supply and demand at a given moment. Making projections of whether consumers will pay more or less under different circumstances is an evolving art that can be aided by data analytics, including, now that the data is increasingly available, consumer profiling based on historical consumer behavior and even A/B testing – the practice of testing for different reactions by the same subject based on variables. This can be the basis for personalized pricing, also known as first-degree or primary price differentiation, the “holy grail” of which is to develop a methodology for “perfect price discrimination” that maximizes the amount each individual consumer is willing to pay. Perfect price discrimination is only theoretically possible since the seller must know each buyer’s reservation price (the maximum they will pay) and individualize an offer to them at that price, thus not leaving any potential revenues uncaptured. Beyond the difficulty in ascertain that information, the market prevents perfect price discrimination through competition and data enables real time competitive offering. However, since less price conscious consumers may be less inclined to shop the competition and more cost conscious consumers are more inclined to look for lower equivalent offers, retailers have an incentive to try to identify which consumers are which when they are in front of them and offer them personalized pricing based on their price sensitivity. Read More >>

Jury Sees a Clear Line – Pharrell, Thicke Crossed It

Pharrell Williams, famous for singing about how “Happy” he is, might be changing his tune these days. On March 10, a federal jury found him and fellow pop star Robin Thicke liable for copying Marvin Gaye’s popular song “Got to Give it Up,” resulting in one of the biggest music-infringement verdicts ever – $7.3 million.

Pharrell, known for composing an impressive list of pop hits, scored his biggest hit when he and Robin Thicke teamed up to compose and record “Blurred Lines,” which topped the music charts for months in 2013. Thicke repeatedly said that Gaye’s “Got to Give It Up” was an “inspiration” when they were composing the 2013 hit. While “Blurred Lines” enjoyed immense success, Marvin Gaye’s family members, who own the copyright to “Got to Give It Up,” complained that the two songs were a bit too similar. As a result, Pharrell, Thicke, and other “Blurred Lines” rights holders filed a declaratory action in the Central District of California asking the court to rule that their hit did not infringe, as we previously discussed here and here. The Gaye family counterclaimed for infringement.music crowd Continue Reading