The Supreme Court, Reversing the Federal Circuit, Holds that “Residence” in the Patent Venue Statute Refers to Only a Domestic Corporation’s State of Incorporation

Patent147631712In a brief, well-reasoned opinion, a unanimous eight-member Supreme Court held that 28 U.S.C. § 1400(b) is a stand-alone provision governing venue in patent infringement suits, unaffected by the broad definition of “residence” in the general venue statute, 28 U.S.C. § 1391.Rather, a domestic corporation “resides” in only its state of incorporation. TC Heartland LLC v. Kraft Foods Group Brands LLC, No. 16-341 (U.S. May 22, 2017).

The Court based its decision on the history of the general venue statute and the patent venue statute and its own consistent interpretation of the patent venue statute. Reviewing that history, the Court observed that Congress created the patent venue statute as the exclusive provision for patent infringement suits, at least against domestic corporations, with little change from its initial creation as an exception to the more frequently amended general venue statute.

Thus, in 1789, Congress in all cases permitted suit in a district if the defendant was “an inhabitant” of the district or could be “found” there. Slip op. at 3 (citing Act of Sept. 24, 1789, § 11, 1 Stat. 79). Congress amended that statute in 1887 to restrict venue to a district where the defendant was an inhabitant or, in diversity cases, where either party was an inhabitant. Slip op. at 3-4 (citing Act of Mar. 3, 1887, § 1, 24 Stat. 552). But a Supreme Court decision in 1893 created confusion about whether the 1887 Act, rather than the 1789 Act, applied to patent cases. Congress enacted the first patent venue statute in 1897 to eliminate the confusion. Slip op. at 4 (citing Act of Mar. 3, 1897, ch. 395, 29 Stat. 695).  Continue Reading

Living it up at the HOTEL CALIFORNIA

Legendary rock band Eagles, Ltd. (The Eagles), filed suit on May 1 against the owners of the Hotel California Baja LLC in the U.S. District Court for the Central District of California. The suit alleges trademark infringement and common law unfair competition by the owners, Debbie and John Stewart (owners).

The hotel originally opened in the 1950s under the name Hotel California, decades before the rock band released its hit song by the same name. However, since opening, the hotel has gone through multiple name and ownership changes, most recently as the Todos Santos Hotel. On Nov. 16, 2015, the defendants filed a trademark application at the U.S. Patent and Trademark Office to register use of the name HOTEL CALIFORNIA on goods, such as T-shirts and other clothing.  Continue Reading

In Case of First Impression, Federal Circuit Rules that a Patent Owner’s Statements in an IPR Proceeding Can Create Prosecution Disclaimer

 

In Aylus Networks, Inc. v. Apple Inc., Appeal No. 2016-1599 (Fed. Cir. May 11, 2017), the Federal Circuit ruled that a patent owner’s statements during an inter partes review (IPR), even if before an institution decision, can create prosecution disclaimer.

After the patent owner filed suit, the defendant filed two petitions for IPR. In the patent owner’s preliminary responses to the petitions, it argued, for the purpose of distinguishing the asserted claims over the prior art, that the claim limitation—“wherein the CPP logic is invoked to negotiate media content delivery between the MS and the MR”—requires that only the CPP logic be invoked, even though the asserted claims were open (“comprising”) claims. The district court, applying prosecution disclaimer, therefore granted the defendant’s motion for summary judgment of noninfringement, since the patent owner conceded that the defendant did not infringe the asserted claims under that construction. The patent owner appealed the noninfringement determination to the Federal Circuit. Continue Reading

Court Finds Infringement of THE KRUSTY KRAB Mark

early winter, snow, lobster traps, dock, fishing village, harborIn Viacom International Inc. v. IJR Capital Investments, LLC, 2017 WL 1037294 (S.D. Tex. Mar. 17, 2017), Viacom successfully asserted common-law rights in the trademark THE KRUSTY KRAB for a fictional restaurant, which appears in the cartoon SpongeBob SquarePants. The defendant, IJR, had filed an intent-to-use trademark application for the mark THE KRUSTY KRAB for restaurant services. After a Notice of Allowance had been issued, Viacom sent a cease-and-desist letter asserting that registration of the mark would cause a likelihood of confusion with the “iconic” fictional restaurant that had been featured in 166 out of 203 SpongeBob episodes over its seventeen-year run. IJR declined to withdraw its plan to use the mark for a restaurant. Viacom filed suit, alleging trademark infringement, unfair competition and dilution, and ultimately moved for summary judgment.

As to trademark infringement, IJR argued that Viacom never registered the mark THE KRUSTY KRAB and that it could not have a trademark right in a fictional restaurant. The court squarely rejected these arguments. Because trademark rights flow from use, not registration, and Viacom had demonstrated that it used the mark in commerce by featuring it in SpongeBob episodes and two commercially successful movies and by licensing the mark for use on merchandise, Viacom established that it had ownership of the mark. The court also rejected the notion that the fictional nature of the mark undermined its protectability, observing that “specific ingredients of a successful T.V. series, including symbols, design elements, and characters which the public directly associates with the plaintiff or its product,” are entitled to trademark protection, listing “kryptonite” and “The Daily Planet” from Superman as examples. Continue Reading

Federal Circuit Remands Novel Issue on Patent Marking Requirement

On April 17, 2017, the United States Court of Appeals for the Federal Circuit vacated an award of more than $15 million in damages because a plaintiff’s licensee failed to mark patented articles. Rembrandt Wireless Technologies, LP v. Samsung Electronics Co., No. 2016-1729 (Fed. Cir. Apr. 17, 2017). The decision underscores the importance of not only marking patented articles, but also requiring licensees to mark licensed articles. However, this decision left unanswered whether patent-marking applies on a claim-by-claim rather than a patent-by-patent basis.

In March 2013, Rembrandt sued Samsung for patent infringement in the United States District Court for the Eastern District of Texas. A jury found that Samsung had infringed Rembrandt’s asserted patents and awarded Rembrandt $15.7 million in damages. Samsung appealed, inter alia, the denial of its motion for judgment as a matter of law to limit Rembrandt’s damages for failure to mark patented articles. The Federal Circuit affirmed the liability rulings but vacated and remanded the district court’s denial of Samsung’s motion to limit damages for failure to mark. Continue Reading

Protecting a Scent Makes Sense

Although seldom seen in applications or registrations, a scent that identifies the source of a good or service may be eligible for protection as a trademark. Registration of a scent mark carries many of the same requirements that apply to a word mark or a design mark. The scent must be used in commerce.[i] Also, the scent cannot be functional.[ii] For at least this reason, the scent of a perfume, a candle or a food is likely ineligible for registration. One may also imagine an application for the scent of a restaurant being rejected if it is found to serve to entice potential customers. The scent of cleaning fluid may represent a grey area, as the fresh scent is not central to the function of the product, but serves an ancillary purpose in eliminating odors.
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No Bull: Acquired Distinctiveness Is Not a Given

The Trademark Trial & Appeal Board recently issued a nonprecedential decision that serves as a good reminder that distinctiveness is not automatically acquired simply by long-standing use. Klickitat Valley Chianina, LLC, Serial No. 76715490 (March 16, 2017). Nor are declarations attesting to exclusive use for five-plus years automatically sufficient to pass a trademark application through to registration under §2(f) of the Lanham Act. Where a mark is particularly descriptive, it is advisable to rustle up greater evidence when making a §2(f) claim rather than relying on a simple declaration by the applicant. Otherwise, the application may be on a path straight to the slaughterhouse.

The Klickitat decision involved an application for CERTIFIED CHIANINA BEEF, filed by Washington-state cattle ranch Klickitat Valley Chianina, LLC. Application s/n 76715490. Registration was refused on descriptiveness grounds, with the Examiner, and later the Board, observing that Chianina cattle are a breed of cow originating in Italy and known for high-quality beef. *4. Thus, “the term CERTIFIED CHIANINA BEEF merely describes beef certified as coming from Chianina cattle.” Id. Merely descriptive marks are, of course, refused registration under § 2(e) of the Lanham Act. Importantly, though, while a mark may not be distinctive when first adopted, marks in many cases may be registrable under §2(f) of the Lanham Act on the basis of their having acquired distinctiveness.  Continue Reading

UK High Court Issues Important Ruling on Licensing of Standard Essential Patents

On April 5, 2017, the High Court of Justice in the UK ruled that if a patent holder claims that a patent is essential under the ETSI IPR Policy, it must license that patent to third parties on fair, reasonable, and non-discriminatory (FRAND) terms, and the licensee must accept the FRAND terms or face the threat of an injunction barring product sales for items taking advantage of such technology. [2017] EWHC 711 (Pat).

In Unwired Planet v. Huawei Technologies, a dispute arose during a nontechnical trial regarding several standards essential patents (SEPs) owned by NPE Unwired, whose robust global patent portfolio includes numerous SEPs declared essential to various telecom standards (including 2G, GSM, 3G, UTMS and 4G LTE). In March 2014, Unwired sued Huawei, Samsung and Google for infringement of six of its UK patents. During the course of the litigation, Unwired offered to license its entire global portfolio (both SEPs and non-SEPs) to the defendants. The defendants refused this offer and argued that they did not infringe and that the SEPss were both invalid and nonessential. Unwired then made another offer to license its SEPss, but the defendants argued that this offer was not FRAND. Google and Samsung eventually settled, leaving Huawei to litigate the dispute to trial. Continue Reading

Court Dismisses Suit Against Coach and Its Counsel for Wrongful Seizure of Website Due to Lack of Personal Jurisdiction

 

A recent decision from the United States District Court for the Southern District of Ohio held that Coach and its Illinois-based counsel could not be sued for collateral harm caused in a trademark dispute that played out in a federal case in Illinois. See Order, Brenda Buschle v. Coach, Inc. et al., Civil Action No. 1:16-cv-00471-MRB (S.D. Ohio Mar. 28, 2017). In doing so, the court held that it lacked personal jurisdiction over both Coach and its counsel even though Coach mistakenly seized a website of an Ohio business it wrongly believed was selling counterfeit goods from China.

In April 2016, plaintiff Brenda Buschle sued Coach and its counsel, alleging that it wrongfully seized her online discount retail store and informed consumers (wrongly) that she sold counterfeit Coach bags. In April 2015, in the U.S. District Court for the Northern District of Illinois, Coach sued Buschle and more than 500 other defendants for trademark infringement resulting from their selling of counterfeit Coach bags. Shortly thereafter, Coach obtained a temporary restraining order to enjoin further sales from what it believed were unlawful websites operated from China. It shut down Buschle’s website for approximately 36 hours. Coach posted a message on Buschle’s website informing consumers that the website had been shut down pursuant to a federal court order. The message directed consumers to purchase authentic products from the Coach.com website and seek a refund of purchases through payment providers.  Continue Reading

Proof of Life: USPTO Ushers in New Audit Power for Proof-of-Use

Effective earlier this year, recently amended 37 C.F.R. §§ 2.161(h) and 7.37(h) empower the USPTO to require a registrant to submit additional documentation as “reasonably necessary” to prove use of the mark in connection with each and every good or service identified in the registration.  This is to ensure that the register “accurately reflects marks that are in use in commerce in the United States for all the goods/services identified in the registrations, unless excusable nonuse is claimed in whole or in part.”  (Emphasis added.)

Because the USPTO only requires submission of a specimen of use for a single good or service per class, a registrant filing a Section 8 or Section 71 declaration typically submits one specimen per class, but then declares under penalty of perjury that it has continued to use its mark on all of the covered goods or services. Continue Reading

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