MVS Filewrapper® Blog: New and Useful - February 21, 2013

·         In U.S. Polo Assoc., Inc. v. PRL USA Holdings, Inc., the Second Circuit Court of Appeals found that the natural zone of expansion doctrine did not permit the United States Polo Association (“USPA”) to expand its offerings into a line of fragrances and affirmed the district court’s entry of a permanent injunction prohibiting such use.  The USPA filed a declaratory judgment to approve use of its Double Horseman mark, accompanied by the words “U.S. POLO ASSN.,” “USPA,” and/or “1890,” in the sale of men’s fragrances.  PRL counterclaimed, seeking entry of a permanent injunction precluding such use—which the district court granted.  USPA’s argument was centered on the, so called, natural zone of expansion doctrine.  USPA argued that its history of selling branded apparel provided it with the right to expand into related markets, i.e., apparel sales give rise to the right to expand into fragrances.  The district court gave little weight to USPA’s survey and found that PRL’s survey gave strong evidence of a likelihood of confusion.  The Second Circuit found that the district court’s holdings regarding the survey evidence did not abuse its discretion and that the previous litigation and USPA’s history did not support USPA’s argued natural right to expand.

·         In Function Media, L.L.C. v. Google, Inc., the Federal Circuit Court of Appeals held that the denial of a pre-trial motion for summary judgment of non-infringement is not sufficient to show that the district court delegated claim construction to the jury.  Function Media (“FM”) sued Google for infringement of three patents directed at “facilitate[ing] advertising on multiple advertising outlets such as newspapers and websites.”  Slip op. at p. 2.  The district court held that one patent was invalid for being indefinite “because the specification did not disclose sufficient structure for its sole independent claim’s means plus function term ‘means for transmitting.’”  Id. at pp. 5–6 (citations omitted).  A jury found the asserted claims in other two patents invalid and not infringed.  FM moved for judgment as a matter of law (“JMOL”) that the claims were not invalid, which the district court granted with respect to four claims.  This did not alter the jury verdict of non-infringement. 

FM appealed on a number of grounds, including an assertion that the district court gave the claim interpretation to the jury.  The argument was based on the fact that the district court denied Google’s motion for summary judgment of non-infringement. FM argued that the denial of summary judgment demonstrated that there were unresolved issues regarding claim scope, which were subsequently left to the jury rather than construed by the court.  The Federal Circuit did not agree that the district court improperly gave the claim interpretation to the jury, the Federal Circuit stated, “We hold that the denial of a pre-trial motion for summary judgment of non-infringement does not, by itself, show that the district court delegated claim construction to the jury.  This is especially true where, as here, the jury was instructed to apply the district court's claim constructions.”  Id. at pp. 21–22. 

·         In Cephalon, Inc. v. Watson Pharma., Inc. , the Federal Circuit Court of Appeals reversed a district court’s holding of invalidity for lack of enablement stating, “Watson failed as a matter of law to show with clear and convincing evidence that Cephalon’s patents require undue experimentation to practice the invention.”  Slip op. at p. 2.  Throughout the discussion of enablement, the Federal Circuit highlighted that the burden is on Watson to show lack of enablement—undue experimentation—and to do so by clear and convincing evidence.  The district court’s analysis was that, “the disclosures lacked teachings directed to formulating and co-administering two separate dosage forms . . . to achieve an effervescent reaction.  The lack of disclosure of such methods of co-administration would, according to the court, necessitate undue experimentation to practice the invention.”  Id. at p. 11 (citations omitted).  Watson merely provided “[u] nsubstantiated statements indicating that experimentation would be ‘difficult’ and ‘complicated.’”  Id. at pp. 15–16.  The Federal Circuit found that these statements did not meet the standard of clear and convincing evidence to establish undue burden as opposed to reasonable experimentation.  As such, the Federal Circuit reversed the district court’s holding of invalidity and remanded.

·         The United States Patent and Trademark Office published the final rules and guidelines governing First-Inventor-to-File.  (  There were two separate Federal Register publications and each is briefly discussed below.  A more thorough discussion of each is forthcoming.

o   Changes to Implement First Inventor to File Provisions of Leahy-Smith America Invents Act

This publication sets forth the changes that will be necessary to implement the First-Inventor-to-File standards.  It addresses changes regarding each of the following:

§  The addition of definitions in the AIA to the rules of practice;

§  The submission of affidavits or declarations regarding:  disclosures in priority disputes under the first-to-file standards and prior public disclosures;

§  Standards regarding a U.S. Patent or Published Applications having a prior art effect as of the filing date of a foreign priority application;

§  Elimination of the provisions regarding statutory invention registrations; and

§  Adoption of requirements for nonprovisional applications filed on or after March 16, 2013, that claim priority to or the benefit of the filing date of an application filed prior to March 16, 2013.

o   Examination Guidelines for Implementing First Inventor to File Provisions of Leahy-Smith America Invents Act

This publication sets forth the changes the changes to the examination guidelines under the First-Inventor-to-File standard.  The publication is also meant to clarify and respond to questions provided during the public comment period regarding whether there is a requirement that the mode of disclosure by an inventor or joint inventor be the same as the mode of disclosure of an intervening disclosure.

Third Circuit: False endorsement claims use modified likelihood of confusion analysis

In a recent decision, the Third Circuit vacated a district court's grant of summary judgment to the plaintiff in a § 43(a) false endorsement case, but affirmed the plaintiff's summary judgment win as to the state law right of publicity claims.  The dispute revolved around the National Football League's use of John Facenda's voice in a production regarding the making of the video game Madden NFL 06.  Many football fans remember Mr. Facenda's voice from NFL Films productions from the 1960s up to his death in 1984; he is sometimes referred to as "The Voice of God."   The district court granted summary judgment to Mr. Facenda's estate on both claims.

The Third Circuit affirmed the summary judgment on the right of publicity claim, but vacated it on the false endorsement claim.  On the right of publicity claim, the Third Circuit agreed with the district court that copyright law did not preempt state right of publicity law in this case.  This was because Mr. Facenda's voice was used in a commercial context, rather than an "expressive" context.  Interestingly, the court cited with approval discussion of the district court's opinion on this subject from a leading copyright treatise, Nimmer on Copyright.

On the issue of false endorsement, the Third Circuit agreed with the bulk of the district court's analysis, but vacated the summary judgment on the basis of issues of disputed fact.  In so doing, the court adopted a modified version of the Ninth Circuit's test in false endorsement cases, as the appropriate factors were a matter of first impression for the Third Circuit.  Interestingly, the court observed that "parties may not stipulate to forgoing a trial when genuine issues of material fact remain that prevent either side from succeeding on a motion for summary judgment."  This is in contrast to a recent Federal Circuit decision, where the court decided an appeal where the parties did make such a stipulation before the district court.

More detail of Facenda v. N.F.L. Films, Inc. after the jump.


Seventh Circuit: Several likelihood of confusion factors favored plaintiff, no summary judgment

The Seventh Circuit recently reversed a district court's summary judgment for the defendant in a trademark infringement case.  The district court held no reasonable fact finder could find the marks likely to be confused.

On appeal, the Seventh Circuit reminded us that the test for likelihood of confusion is not simply whether consumers will confuse two marks, but whether upon viewing the junior mark a consumer will be likely to associate the product or service with the source of the products or services of the senior mark.  In other words, the relevant query is whether consumers will believe that goods/services offered under the junior mark are sponsored, endorsed, or otherwise affiliated with the senior trademark owner.  Applying this standard, the court held there was at least a genuine issue of fact regarding likelihood of confusion, and reversed the grant of summary judgment.

More detail of AutoZone, Inc. v. Strick after the jump.


Tenth Circuit: District court's internally inconsistent findings lead to remand

In a decision last week, the Tenth Circuit reversed a district court's ruling of no trademark infringement.  The district court, applying the Tenth Circuit's six likelihood of confusion factors, initially stated that three factors favored the plaintiffs, two were neutral, and one favored the defendants, but in its conclusion, stated that only one factor favored the plaintiff, with the remainder of the factors neutral or favoring the defendants.  The district court also noted it was "reluctant" to find infringement where the allegedly infringing mark incorporated one defendant's middle name.

The Tenth Circuit reversed, noting the inconsistency in the district court's findings and that such inconsistencies constitute clear error.  The court further noted that while courts are "generally reluctant to enjoin an individual from using their own name," this reluctance does not extend to situations where there was "an attempt to deceive the public."  Here, the district court specifically found the defendants chose their mark to advantage of the plaintiff's goodwill, and thus any reluctance to find infringement was inappropriate.  

More on The John Allan Co. v. The Craig Allen Co. after the jump.


First Circuit: Don't expect to win on appeal if you admit 7 of 8 likelihood of confusion factors

In a decision Friday, the First Circuit affirmed a district court's summary judgment of trademark infringement and an associated award of the defendant's profits and attorney fees to the plaintiff.  The defendant used the plaintiff's registered marks in both the metatags of its website as well as in white text on a white background in the body of the site in an effort to cause consumers searching for the plaintiff's marks on an internet search engine to be more likely to go to the defendant's website instead.  Over the course of discovery, the defendant essentially admitted that seven of the eight Pignons factors weighed in favor of the plaintiff, and accordingly the district court granted summary judgment, awarding the plaintiff an equitable share of the defendant's profits and attorney fees.

The First Circuit affirmed, holding that even if the final factor, evidence of actual confusion, was neutral or favored the defendant, it was not error for the district court to grant summary judgment for the plaintiff given the admissions on the other seven factors.  Further, the court held the award of profits was proper, as the plaintiff only had to prove the defendant's gross sales under 15 U.S.C. § 1117(a).  Because the defendant did not offer evidence of its costs, the district court's award of profits was proper.  Further, the award of attorney fees was not an abuse of discretion, given the defendant's admission that it intentionally used the plaintiff's marks in order to divert traffic to its website.

This is an instance where companies would do well to remember that while how search engines work is generally secret, it is widely believed that metatags have no effect on search engine ranking, although some search engines may use them for indexing purposes.  However, if the point of their use is to increase the site's position in the search results (as it usually is, and was in this case), they are basically useless and, as shown here, a potential basis for liability.

More detail of Venture Tape Corp. v. McGills Glass Warehouse after the jump.


First Circuit: District court's determination that "duck tour" is nongeneric doesn't hold water

In a lengthy decision last week, the First Circuit held a district court erred in finding the term "duck tour" nongeneric in the context of sightseeing tours on amphibious vehicles.  The district court, based largely on the nongenericness of this aspect of the parties' marks, found the plaintiff was likely to succeed in its infringement claims, and entered a preliminary injunction.  The defendant appealed.

The First Circuit vacated the injunction.  The district court's erroneous holding regarding the generic nature of "duck tour" caused the district court to give too much weight to those terms in the composite marks in its likelihood of confusion analysis.  As a result, the district court also erred in finding both a likelihood of confusion and a likelihood of success on the merits for both the word marks and design marks at issue.  Therefore, the court vacated the district court's preliminary injunction.

More concerning Boston Duck Tours, LP v. Super Duck Tours, LLC after the jump.


Tenth Circuit: No trademark infringement, unfair competition, or cybersquatting by parody sites

In a decision last week, the Tenth Circuit affirmed a district court's grant of summary judgment finding no trademark infringement, no unfair competition, and no cybersquatting. 

The district court held, and the Tenth Circuit affirmed, that none of the three elements of a trademark infringement action was proven, namely that the mark was not protectable, the defendant's use was not in connection with goods or serivces, and that the successful parody showed there was no likely confusion.  On the cybersquatting claim, the district court held, and the Tenth Circuit also affirmed, that the mark was not shown to be protectable (as with the trademark claim), and there was no bad faith.  As a result, the district court's summary judgment was affirmed in all respects.

More detail on Utah Lighthouse Ministry v. Found. for Apologetic Info. & Research after the jump.


Fifth Circuit passes on eBay's applicability in trademark cases

In a decision last week, the Fifth Circuit affirmed a district court's conclusion it had subject matter jurisdiction over a trademark case, as well as its grant of a preliminary injunction.  While the activities giving rise to the claim of trademark infringement took place in Mexico, they had a "substantial effect" on United States commerce, and thus were within the court's subject matter jurisdiction.  

After ruling on subject matter jurisdiction, the court moved on to the issue of preliminary injunction.  The Fifth Circuit affirmed the preliminary injunction, stating the district court did not abuse its discretion concluding the plaintiff would likely prevail on the issue of likelihood of confusion, and that the likelihood of confusion would lead to an irreparable injury.  Unfortunately for practitioners, however, the court did not address the potential applicability of the Supreme Court's eBay decision to the commonly-applied presumption of irreparable harm in trademark cases, making it the second circuit court to pass on the issue (the Eleventh Circuit did likewise last month).

More concerning Paulsson Geophysical Servs., Inc. v. Sigmar after the jump.


Eleventh Circuit: eBay may eliminate presumption of irreparable harm in trademark cases

In a recent decision, the Eleventh Circuit vacated a district court's injunction against the use of a competitor's trademarks in the meta tags of a defendant's website.  The court held that while the plaintiffs had shown likelihood of success on both their trademark infringement and false advertising claims, because the district court relied on a presumption of irreparable harm to support its injunction, the injunction must be vacated.

Specifically, the court noted that the Supreme Court's eBay decision did away with the notion of irreparable harm in patent cases, and that the statutory authorization for injunctions is similar in trademark cases.  While the court noted that eBay applied to the case, it declined to decide its effect, specifically "whether the nature of trademark infringement gives rise to a presumption of irreparable injury," meaning whether presuming irreparable harm in trademark cases would run afoul of eBay.

More detail of N. Am. Med. Corp. v. Axiom Worldwide, Inc. after the jump.


Second Circuit: Statements made in settlement discussions admissible to prove estoppel

In a decision yesterday, the Second Circuit affirmed a jury's findings in a trademark infringement case between Polo Ralph Lauren and the U.S. Polo Association.  The jury found that one of the USPA's four marks was likely to cause confusion.  The two parties had been involved in a previous lawsuit in the early 1980s, and the USPA's former logo was found to have infringed Polo's trademark rights.

The court held that it was not erroneous for the district court to permit evidence of statements made during settlement negotiations that one of the logos was not "offensive" to Polo, as it was necessary for the USPA's claim of estoppel.  Further, the court held that it was not erroneous for the district court to refuse to give a jury instruction that the USPA, because it was previously found to have infringed, was required to stay a "safe distance" away from Polo's mark.  Such an instruction would have confused the jury regarding the applicable legal standard.

More detail of PRL USA Holdings, Inc. v. U.S. Polo Ass'n, Inc. after the jump.


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