Can the USPTO Recover the Salaries of its Legal Personnel in Challenges to Adverse Decisions?

By John Hilten on December 13, 2019 Posted in Patent

Can the U.S. Patent and Trademark Office (USPTO) recover the salaries of its legal personnel in challenges to adverse decisions? Not surprisingly, the answer was a quick and unanimous no. More specifically, on Wednesday, Dec. 11, the U.S. Supreme Court concluded that the USPTO cannot recover the pro rata salaries of its legal personnel.

The case relates to a NantKwest Inc. patent application directed to a method for treating cancer, which was denied by the USPTO. Thereafter, NantKwest filed a complaint against the USPTO Director in the Eastern District of Virginia under Section 145. Subsequently, the Eastern District of Virginia granted summary judgment to the USPTO; thereafter, the Federal Circuit affirmed.

The USPTO then moved for reimbursement of expenses, including the pro rata salaries of USPTO attorneys and paralegals who worked on the case.

The question presented in this case was whether such “expenses” included the salaries of attorney and paralegal employees of the USPTO. The District Court denied the USPTO motion, and an en banc Federal Circuit affirmed.

The U.S. Supreme Court – relying on the “American Rule,” the plain text of Section 145 (including the term “expenses”) and the Patent Act’s history – concluded that the USPTO cannot recover pro rata salaries of its legal personnel under Section 145 actions.

It is noted that the Lanham Act contains similar provisions, and accordingly, the USPTO will no longer be able to seek reimbursement of USPTO attorneys’ and paralegals’ salaries in trademark cases. The decision is seen as beneficial for all intellectual property owners, and especially intellectual property owners that are less affluent. The brief and unanimous opinion was released less than 10 weeks after argument. Moreover, only one of the numerous amicus briefs urged the court to strike down the rule.

IPO’s “Gender Diversity in Innovation Toolkit” Aims to Address Disparities in Inventorship

By Lesley Grossberg on November 14, 2019 Posted in Patent

While women are awarded 53% of PhDs, they accounted for only 12% of named inventors on U.S. patents granted in 2016. Fewer than 30% of Patent Cooperation Treaty applications name a woman inventor. After the U.S. Patent and Trademark Office issued a report, “Progress and Potential: A Profile of Women Inventors on U.S. Patents” in February 2019, the Intellectual Property Owners Association’s Women in IP committee formed a working group to address the issue of gender disparity in innovation. The result of the group’s effort is the “Gender Diversity in Innovation Toolkit” (“Toolkit”), a publicly available document offering proposed solutions to address the gender gap in inventorship.

The Toolkit is aimed at any organization, including corporations, universities and law firms, engaged in innovating new technologies and protecting the resulting intellectual property. It proposes an iterative four-step process: (1) increasing awareness of the disparity and supporting employees in a position to change it; (2) discovering root causes, such as implicit bias; (3) developing short- and long-term programs to address the root causes of the disparity; and (4) launching and monitoring programs to increase gender diversity. It is contemplated that successful results will be shared among organizations. The Toolkit offers detailed suggestions for each of the four steps to be implemented within an organization, as well as a complementary section directed to outside counsel to help clients adopt and use the Toolkit.

As detailed in the “Progress and Potential” report, the proportion of women inventors is lower than women’s participation in STEM education and employment, indicating that there is not merely a “pipeline” problem, but rather one of institutional issues requiring action. At the current rate of increasing women inventorship, it will take until the end of the 21st century to achieve gender parity in named inventorship on U.S. patents. The Toolkit will help organizations recognize women’s contributions to patentable technology, so that parity might instead be reached in our lifetime.

The theory of “trademark neutralization.” What is it and will it likely be adopted in the US?

By Robert Horowitz on November 11, 2019 Posted in Trademark

Have you heard of the theory of “trademark neutralization?” It was developed by the European Union (EU) General Court and the European Union Court of Justice (“CJEU”) in 2006 (Case No. C-361/04 (ECJ Jan. 12, 2005)) holding PICASSO/PICARO not confusingly similar and was followed in Case C-206/04 (ECJ Mar. 23 2006) holding SIR/ZIRH not confusingly similar. Essentially, the theory is that aural similarity of trademarks may be neutralized by obvious visual or conceptual differences. When the theory is applied, a finding of non-confusing similarity of marks arises. Might the theory be adopted in the U.S.?

Background of the theory and the lack of uniform application in the European Union.

Despite the EU’s harmonization of European trademark law, national courts do not necessarily apply the theory of trademark neutralization. For example, in a decision dated April 21, 2009 (Case 24 W (pat) 37/08), the marks XXERO and ZERO were found confusingly similar by the German Federal Patent Court because of their aural similarity. In that case, the court followed the caselaw of the German Federal Supreme Court, which permits a finding of a likelihood of confusion on either aural, visual or conceptual similarity alone. In a November 8, 2011 decision, the German Patent Court also found EAGLE and EAGLET (in stylized form) confusingly similar (Case 27 W (pat) 602/10), holding the marks were very similar aurally and somewhat conceptually similar. The court also warned that excessive extension of neutralization of similarities would restrict the protection of trademarks. Continue Reading

Five Counterfeit Hotspots in New York that Brand Owners Must Be Aware Of

By Heather McDonald and Robb Beckerlegge on November 8, 2019 Posted in Trademark

The issue of fake goods in New York City has been widely covered for a number of years. For example, earlier this year, the South China Morning Post looked at the “rising counterfeit market” in New York, especially around luxury goods. It pointed out a recent investigation from the US government that led to the seizure of $450 million worth of counterfeit luxury goods in the Big Apple, with 33 suspects arrested.

Kanye West Denied Trademark Registration for ‘SUNDAY SERVICE’ Mark

By C. Dennis Loomis on October 23, 2019 Posted in Trademark

Global rap icon Kanye West is one of the most visible and controversial personalities on the contemporary scene. He has long been recognized as one of the best rap creators and performers of his generation. More recently, his prominence has transcended the world of music with his highly publicized embrace of President Donald Trump, making him a lightning rod for both acclaim and opprobrium from the supporters and opponents of our controversial president.

Now, the spotlight shines even brighter on Kanye West as a result of his proclamation that he has become a convert to Christianity. He has announced that henceforth, his musical career shall be dedicated entirely to his mission of spreading the Word of his faith, which brings us to the subject at hand: Kanye performed on Easter Sunday this year, with his gospel singers and other celebrities, at the Coachella music festival in California. At that event, he debuted his line of “church clothing” – dresses, jackets, scarves, footwear, headwear, etc. – under the brand SUNDAY SERVICE. In July, his company applied for U.S. trademark registration of the SUNDAY SERVICE mark in International Class 25 for these and related articles of apparel.[i] No other types or categories of goods or services are covered by the application. Continue Reading

Are Questions of Novelty and Nonobviousness Relevant to the Test for Whether a Patent Qualifies as a Covered Business Method Patent Under the AIA?

By Michael Gannon on October 22, 2019 Posted in Patent

A covered business method (CBM) patent “does not include patents for technological inventions.” AIA § 18(d)(1). The United States Patent and Trademark Office (USPTO) promulgated a regulation that defines “a technological invention” as one in which (1) “the claimed subject matter as a whole recites a technological feature that is novel and unobvious over the prior art” and (2) “solves a technical problem using a technical solution.” 37 C.F.R. § 42.301(b). Both prongs have to be satisfied in order for an invention to be deemed a technological invention.

The first Federal Circuit case to address this regulation was Versata Dev. Grp., Inc. v. SAP Am., Inc., 793 F.3d 1306, 1326-27 (Fed. Cir. 2015), which clarified that ultimate questions of novelty and nonobviousness should not be a part of the threshold question of CBM jurisdiction. Continue Reading

A Punctuation Mark: Off-White Files Trademark Application for “PRODUCT BAG”

By Savannah Merceus on October 21, 2019 Posted in Trademark

Last summer, streetwear brand Off-White filed an application with the United States Patent and Trademark Office (USPTO) to register the mark “PRODUCT BAG.” With other Off-White goods bearing logos such as “MAKE UP,” “GOODS,” and “SCULPTURE,” those familiar with the brand know that founder Virgil Abloh is no stranger to the use of quotation marks. Despite their prevalence in the brand, this seems to be the first time the fashion house has filed an application for a quotation-specific mark. It begs the question: Can someone register a mark containing quotation marks? What about other punctuation?

Generally, a trademark may consist of any “word, name, symbol, or device, or any combination thereof.” 15 U.S.C. §1127. While punctuation can be included as an element of a mark, it generally creates no additional indicating function. Section 807.14(c) of The Trademark Manual of Examining Procedure states, “Punctuation, such as quotation marks, hyphens, periods, commas, and exclamation marks, generally does not significantly alter the commercial impression of the mark.” In other words, the addition or subtraction of punctuation does not seriously change how the mark resonates with consumers. Continue Reading

Standing Necessary To Appeal an Inter Partes Review Decision

By Kevin Flynn on October 14, 2019 Posted in Patent

Article III of the Constitution grants the federal judiciary the power to decide “cases and controversies.”^[1] “Standing,” the legal concept ensuring that federal courts review only cases and controversies, focuses on the party bringing suit to analyze the appropriateness and constitutionality of judicial review. The court-limiting effects of standing help ensure that the separation of powers is maintained and that the courts refrain from issuing advisory opinions. In turn, this ensures that well-defined law develops from well-defined and thoroughly argued issues.

Standing is the determination of “whether a litigant is entitled to have the court decide the merits of a dispute or of particular issues,”^[2] and the inquiry analyzes the sufficiency of a party’s concern regarding the issues to be litigated, rather than whether the legal issues are fit for litigation.^[3] The standing doctrine helps conserve judicial resources, ensure zealous litigation, guard against unconstitutional advisory opinions, and promote fairness by ensuring that parties raise only their own rights in court.^[4] To have constitutional standing, a plaintiff must have suffered a concrete injury-in-fact that is traceable to or caused by the defendant and is of such a nature that the courts are able to properly redress the issue.^[5] Other so-called prudential considerations, which need not be satisfied but which courts often follow to help ensure the constitutionality of a court decision, are that (1) the plaintiff should generally assert his own legal rights rather than the rights of third parties, (2) the political branches – not federal courts – should adjudicate abstract questions that amount to generalized grievances, and (3) the plaintiff’s complaint should fall within the zone of interests to be protected or regulated by the statute or constitutional provision at issue.^[6] The requirements of standing “must be met by persons seeking appellate review, just as [they] must be met by persons appearing in courts of first instance.”^[7] Continue Reading

Oh! Mega Liability for Landlords Under Second Circuit’s Recent Trademark Infringement Ruling in Omega SA v. 375 Canal LLC

By Heather McDonald on October 8, 2019 Posted in Trademark

In March 2019, after a seven-year-long legal battle, a Manhattan jury found defendant landlord 375 Canal LLC contributorily liable for trademark counterfeiting and infringement and awarded Omega SA statutory damages of $1.1 million ($275,000 for each mark infringed).[1] In the suit, plaintiff Omega claimed that the Canal Street landlords knew about, had reason to know about or acted with “willful blindness” toward the illegal activities of its tenants. Further, Omega contended that 375 Canal possessed the power and authority to exercise control over the use of its premises for the infringing sales and, upon notice of infringing activity, failed to properly exercise such control. Omega sought statutory damages against 375 Canal as a “willful infringer” under 15 U.S.C. §1117(c)(2). Omega’s claims survived both a motion to dismiss and a motion for summary judgment.

The outcome in Omega SA v. 375 Canal LLC[2] is notable for two reasons. First, it evidences a rare instance in which a trademark infringement claim progressed to trial and received adjudication by a jury; most infringement cases settle. Second and more importantly, it provides a road map for plaintiffs in counterfeiting cases to successfully recover damages under the theory of contributory liability. Rather than simply pursue traditional recovery from the sellers of counterfeit goods – many of whom are often judgment-proof[3] – Omega suggests how a plaintiff can pursue monetary damages (not just injunctive relief) from additional deep-pocketed sources, such as a landlord who rents to someone selling counterfeits. Continue Reading

Federal Circuit Holds Lack of Efficacy Data Defeats ‘Substantial Evidence’ Showing of a Reasonable Expectation of Success Needed To Support PTAB’S Finding of Obviousness

By Scott Feldmann on October 7, 2019 Posted in Patent

In a precedential opinion, the Federal Circuit reversed a Patent Trial and Appeal Board (PTAB) finding of obviousness invalidating a patent’s method claims for administering a drug for treating non-small cell lung (NSCLC) cancer.[1] The PTAB found that it would have been obvious to combine pharmaceutical references. The Federal Circuit, however, noted that the “asserted references do not disclose any data or other information about the drug’s efficacy in treating NSCLC [the cancer].” (Emphasis in original.)[2] Without any preclinical animal data, human clinical data or even in vitro [test tube] results, success could not reasonably have been expected. To the contrary, the Federal Circuit noted that 99.5% of Stage II clinical trials for treating that particular type of cancer failed. Only “failure, not success,” could be expected.

The first prior art reference cited never discussed treating NSCLC, the particular type of cancer in issue.[3] The second prior art reference did not disclose any “data regarding the use of [the compound] to treat NSCLC.”[4] Neither did any of the references cited by the second reference. Similarly, the alternative combination reference, the patent holder’s Form 10-K, did not disclose any data regarding the compound’s effect upon NSCLC.[5] Without a factual substrate, the PTAB’s holding could not be supported. Continue Reading