MVS Filewrapper® Blog: 2014 Supreme Court Cases Relating to Intellectual Property

On January 10, 2014 the Supreme Court agreed to review a variety of intellectual property cases in the upcoming session, including two patent cases, a copyright case, and a trademark case (including Lanham Act claim).  A brief overview of these cases is provided and more detail will be available once decisions are entered by the Court.

Limelight Networks, Inc. v. Akamai Technologies, Inc. (U.S., No. 12-786.)

Question Presented to the Supreme Court: Whether the Federal Circuit erred in holding that a defendant may be held liable for inducing patent infringement under 35 U.S.C. § 271(b) even though no one has committed direct infringement under § 271(a).

The Federal Circuit dismissed the “single-entity” rule for finding induced infringement of a method/process claim, finding that steps taken by multiple parties can result in induced infringement. The Federal Circuit stated, “To be clear, we hold that all the steps of a claimed method must be performed in order to find induced infringement, but that it is not necessary to prove that all the steps were committed by a single entity.” If the Supreme Court upholds the Federal Circuit’s ruling, a patentee has increased opportunity to assert induced infringement for method/process claims in the marketplace.

Nautilus, Inc., v. Biosig Instruments, Inc. (U.S., No. 13-369)

Question Presented to the Supreme Court: Does the Federal Circuit’s acceptance of ambiguous patent claims with multiple reasonable interpretations—so long as the ambiguity is not “insoluble” by a court—defeat the statutory requirement of particular and distinct patent claiming? Does the presumption of validity dilute the requirement of particular and distinct patent claiming?

The Federal Circuit reversed a district court decision that a patent claim to a heart rate monitor was invalid for indefiniteness as a matter of law because of its use of the claim term “spaced relationship” in describing the positioning of two electrodes with respect to each other. The Court held that this claim term was not one that is “insolubly ambiguous” when the intrinsic evidence is considered from the perspective of a person of skill in the art. It considered the functionality of the claimed monitor, as described in the specification, as did the USPTO when the claim was under reexamination. “[T]he claims provide inherent parameters sufficient for a skilled artisan to understand the bounds of ‘spaced relationship.’” Judge Schall concurred in the result but would have used a more narrow analysis, explaining that he would not have used the functional limitation to address the definiteness issue.

 

POM Wonderful LLC v. The Coca-Cola Company, U.S. (No. 12-761)

Question Presented to the Supreme Court: Whether the court of appeals erred in holding that a private party cannot bring a Lanham Act claim challenging a product label regulated under the Food, Drug, and Cosmetic Act.

The case arising out of the 9th Circuit resulted in affirming judgment in favor of Coca-Cola, finding that POM's Lanham Act challenge to Coca-Cola’s “Pomegranate Blueberry” name was barred under the Food Drug and Cosmetic Act (FDCA).  Applicability of Section 43(a) of the Lanham Act, 15 U.S.C. 1125(a) (authorizing actions of false/misleading description of goods), The FDCA and/or state law claims will be addressed.

American Broadcasting Companies, Inc. v. Aereo, Inc. (U.S., No. 13-461)

Question Presented to the Supreme Court: Does a company “publicly perform” a copyrighted television program when it retransmits a broadcast of that program to thousands of paid subscribers over the Internet?

The Second Circuit denied reviewal of a panel decision that online streaming of TV programs to individual subscribers is not an infringing public performance. The panel found that the creation of a copy of a broadcast that is transmitted to individual subscribes failed to establish infringement as streaming “to the public.”

MVS Filewrapper® Blog: Flawed Evidence Undercuts "Charbucks" Trademark Suit

In Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., the U.S. Court of Appeals for the Second Circuit affirmed a district court’s decision denying injunctive relief in Starbucks’ trademark case against Black Bear Micro Roastery over Black Bear’s use of “Charbucks” for coffee. 

 

Starbucks sued Black Bear in 2001, alleging, among other things, trademark dilution in violation of 15 U.S.C. §§ 1125(c), 1127.  In December 2005 the district court ruled in favor of Black Bear and dismissed Starbucks’ complaint.  Starbucks appealed this original decision, but while the appeal was pending, Congress passed the Trademark Dilution Revision Act of 2006 (“TDRA”), which amended portions of the federal trademark law relevant to the case, resulting in the case being remanded.   The district court again ruled in favor of Black Bear, and Starbucks again appealed.  On appeal, the Second Circuit remanded again, instructing the district court to reconsider Starbucks dilution claim based on its interpretation of the TDRA provisions.  Once again, the district court found in favor of Black Bear, and once again Starbucks appealed.

On appeal, the Second Circuit made its own conclusions regarding the elements of Starbucks’ dilution case, under the TDRA.  The appellate court refused to revisit its previous conclusion that the “Charbucks” mark is only minimally similar to Starbucks famous mark.  The court also rejected Starbuck’s arguments that Black Bear’s admitted intent to create an association raises a strong presumption of actual association, and that Starbuck’s proffered survey evidence proved a high degree of association.  The court then conducted its own weighing of the factors, and concluded that—although four of the six factors favored Starbucks—the overall determination based on the weight afforded each factor favored a finding that there was not a likelihood of dilution. The court concluded that what ultimately tipped the balance was that Starbucks meet its burden due to the combination of fundamentally flawed survey evidence and minimal similarity of the marks.

The full court opinion is available here.  

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.  (http://www.uspto.gov/news/pr/2013/13-10.jsp)  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.

Supreme Court: NFL collective licensing of trademarks not immune from Section 1 antitrust scrutiny

Monday the Supreme Court unanimously held the NFL's practice of collectively licensing the trademarks of all 32 individual teams is not immune from antitrust scrutiny under Section 1 of the Sherman Act.  The NFL argued that because the marks are all licensed through a single entity, NFL Properties, there was no "contract, combination, . . . or conspiracy" under § 1, and therefore there could be no antitrust problem.

The Court disagreed.  The Court first observed the question of whether there is a "single enterprise" is not dependent on the specific legal structure of the entities.  As stated by the Court (internal citations omitted):

The relevant inquiry, therefore, is whether there is a "contract, combination . . . or conspiracy" amongst "separate economic actors pursuing separate economic interests," such that the agreement "deprives the marketplace of independent centers of decisionmaking," and therefore of "diversity of entrepreneurial interests," and thus of actual or potential competition.

Applying this framework, the Court held the existence of NFL Properties was not sufficient to prevent a "contract, combination . . . or conspiracy" and therefore avoid § 1 scrutiny.  The teams are "sparately controlled, potential competitors with economic interests that are distinct from NFLP's financial well-being." 

Despite holding the NFL's actions were subject to review under § 1, the Court did not pass on the merits, and noted some aspects of the NFL may provide a sufficient justification of its licensing practices under the Rule of Reason.  Ultimately, it will be up to the district court to address the merits of the case and determine whether there is a § 1 violation.

Click below for more detail of American Needle, Inc. v. National Football League and links to media coverage of the case.

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Today's eCommerce lesson: There's no upside to using others' trademarks in your website meta tags

Those who have a passing familiarity with website design are probably familiar with the concept of meta tags.  Meta tags are pieces of data included in the HTML code of a webpage that provide information regarding the content of the page.  You can view the code of a webpage you are visiting by clicking the "view" menu and, in IE, selecting "source," or in Firefox, selecting "page source."

Keyword meta tags have been used frequently in the practice of SEO, or search engine optimization.  This essentially is an industry designed to get a webpage to show up higher in search results for various key terms and phrases in order to make it easier for the website to be found by customers.  SEO practices frequently included loading the meta tags of a site with numerous keywords and phrases in an effort to improve a site's search performance for those terms.

Click below for a discussion of what happens when trademarks are used in connection with this practice, and why website owners would be best served avoiding such use.

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Second Circuit limits 1-800 Contacts; keyword advertising can be use in commerce

In a recent decision, the Second Circuit reversed a district court's grant of a motion to dismiss in a trademark infringement case.  The district court, relying on the Second Circuit's 2005 decision in 1-800 Contacts, Inc. v. WhenU.com, Inc., held Google's use of its Adwords and Keyword Suggestion Tool to cause advertising to appear when certain trademarked words and phrases are searched did not constitute a "use in commerce" as defined in § 1127 and required for a claim of trademark infringement under § 1114.

On appeal, the Second Circuit reversed, holding this practice did constitute a use in commerce.  The court distinguished the 1-800 Contacts case, observing in that case, the advertisements were in response to visiting a website, not the entry of a trademark.  Further, in that case, advertisers could not "purchase" a competitors keyword, so even if an advertiser wanted its ads to appear when a user visited a competitor's site, the defendant did not offer such a service.

In contrast, here Google not only keys the advertisements to the trademark itself (rather than as a result of visiting a website), but also permits anyone to pay to have its advertisements shown when a trademark is searched.  The Keyword Suggestion Tool will also suggest that advertisers key their advertisments to trademarked terms.  Based on these allegations (taken as true in the context of Google's motion to dismiss), the Second Circuit held there was a use in commerce, and reversed the district court's dismissal of the case.

More detail of Rescuecom Corp. v. Google Inc. after the jump.

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Ninth Circuit: Trademark claim against tribal corporation does not confer tribal court jurisdiction

In a recent decision, the Ninth Circuit reversed a district court's grant of a motion to stay federal trademark claims against Indian tribal defendants pending a determination of jurisdiction by a tribal court.  The trademark claims were for alleged passing off of cigarettes on the Internet, on the reservation of another tribe, and elsewhere.  The district court ruled that there was at least a colorable claim to tribal jurisdiction under Supreme Court precedent and granted a stay of federal proceedings pending a determination of jurisdiction by the tribal court.

The Ninth Circuit reversed, holding there was not a colorable claim of jurisdiction in tribal court insofar as it implicated the plaintiff's federal trademark claim against the tribal defendants and its principals, members of the Yakama Tribe.  Accordingly, allowing exhaustion of tribal remedies would serve no purpose other than delay.  As a result, the court reversed the district court's decision and remanded for the case to proceed.

More on Philip Morris USA, Inc. v. King Mountain Tobacco Co. after the jump.

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Ninth Circuit: Copyright owner's ambiguous reservation of rights clarified with extrinsic evidence

In a recent decision, the Ninth Circuit reversed a district court's grant of summary judgment that a copyright holder did not have standing to sue for copyright, trademark, unfair competition, and related declaratory judgment claims.  The case involved the film Gone in 60 Seconds, produced and directed in 1974 by H.B. "Toby" Halicki, and remade in 2000.  The key issue was the construction of a 1995 Agreement that provided an option to remake the movie, and assigned certain of Halicki's rights to Hollywood Pictures (a division of the Walt Disney Company and producer of the 2000 film), and more specifically what rights were reserved to Halicki's wife (who obtained Halicki's rights after his death).  Based on the district court's construction of the agreement, the Plaintiffs did not have standing because they assigned all relevant rights in the Agreement, and specifically the rights to the remake of the famed Ford Mustang "Eleanor." 

The Ninth Circuit reversed, holding the agreement between the parties lacked explicit details about what rights the plaintiff might have in a derivative work – namely a remake of Eleanor.  However, the court found that the agreement was "reasonably susceptible to the interpretation" that the plaintiff had retained rights to the remake of Eleanor.  When combined with other extrinsic evidence not considered by the district court, it was clear to the court that plaintiff owned the rights to remake Eleanor, and therefore reversed the district court's holding of no standing to bring the copyright claim.

The court also highlighted several errors by the district court regarding trademark standing.  First, the district court held the plaintiff did not have standing to claim infringement of the "Eleanor" mark because she did not own a registration in the mark.  This was the wrong legal standard, because a plaintiff may also have standing to claim infringement if they are the owner of an unregistered mark.  The district court also held that the plaintiff did not have standing to sue on the "Gone in 60 Seconds" mark because her registrations were for toy cars and baseball caps, while the alleged infringement was for use of the mark on actual cars.  The Ninth Circuit noted the district court confused the test for infringement with the test for standing:  to establish standing under the Lanham Act, a plaintiff must only demonstrate that they are the owner of a mark for any class of products.  Because the plaintiff owned a registration for the Gone in 60 Seconds mark (even for different goods), she had standing under the Lanham Act to bring an infringement claim against the defendant.

More on Halicki Films, LLC v. Sanderson Sales & Mktg. after the jump.

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Ninth Circuit: Trademark claim over use in video game stripped away by First Amendment

In a decision Wednesday, the Ninth Circuit affirmed a district court's grant of summary judgment that the producer of Grand Theft Auto: San Andreas had a First Amendment defense against a claim of trademark infringement.  The plaintiff owns a strip club known as the "Play Pen" on the eastern edge of downtown Los Angeles.  Grand Theft Auto: San Andreas includes, in its fictional city "Los Santos," a virtual strip club "Pig Pen" in the neighborhood "East Los Santos."  The Ninth Circuit, agreeing with the district court, held the First Amendment defeated the infringement claim.  Specifically, the court held the game's producers' "modification of [the] trademark is not explicitly misleading and is thus protected by the First Amendment."

More detail of E.S.S. Entm't 2000, Inc. v. Rock Star Videos, Inc. after the jump.

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Eleventh Circuit: Website in Tennessee using Floridian's trademark sufficient for jurisdiction

In a decision last week, the Eleventh Circuit reversed a district court's dismissal of a trademark infringement case for lack of personal jurisdiction.  The district court held that the allegedly infringing conduct, operating a website, was insufficient to warrant jurisdiction in the plaintiff's home state of Florida.

Here, the plaintiff was an individual, and the trademark allegedly infringed was the plaintiff's name.  The court applied the Calder effects test, and held it was reasonable for the defendant, in using the plaintiff's name, to expect to be haled into court in the plaintiff's home state.  The court characterized the alleged trademark infringement in this case as intentional, in that the plaintiff was "individually targeted" to "misappropriate his name and reputation for commercial gain."  As a result, the Calder test was met, and personal jurisdiction was proper in Florida.

More detail of Licciardello v. Lovelady following the jump.

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