CAFC Holds That Foreign Company Only Needs "Use" in U.S. for 2(d) Opposition

The Court of Appeals for the Federal Circuit (CAFC) has reversed the Trademark Trial and Appeal Board (TTAB) ruling in First Niagara Ins. Brokers, Inc. v. First Niagara Financial Group, Inc. First Niagara Insurance Brokers, Inc. (FN-Canada) had sought to oppose registration of First Niagara Financial Group, Inc.'s (FN-US) intent-to-use trademark applications on the claim of priority under Section 2(d) of the Trademark Act, which requires only prior "use" in the U.S. FN-US had argued that FN-Canada, which has no physical presence or registered trademarks in the United States, did not establish the priority necessary to prevail on a likelihood-of-confusion claim because it had not used its marks "in commerce" in the U.S. In overturning the TTAB's agreement with FN-US, the CAFC ruled that the proper standard of Section 2(d) is that the mark or trade name must have been previously "used in the United States by another." The Court noted that the language of prior use "in commerce" was absent from the statute. It found that the privilege of an opposer claiming priority under Section 2(d) attaches to all opposers, regardless of whether they are foreign or domestic. The TTAB's decision was reversed and remanded for further proceedings, based on FN-Canada's ample use of its marks in the United States to satisfy the use requirements of Section 2(d). The implications of this case may be broad and far-reaching, if it is held that a foreign company has standing to bring a 2(d) opposition based on its "use" in the U.S. merely through its activities on the Internet.
continue reading »

Medimmune v. Genentech

Until recently, patent licensees have been faced with Hobson's choice when they believed that the licensed patent was invalid or unenforceable or was not infringed by their product. On the one hand, the licensee could terminate or breach the license (creating a "case or controversy" required for federal jurisdiction and satisfying the "actual controversy" requirement of the federal Declaratory Judgment Act) and seek a court declaration regarding the status of the patent. This approach, however, poses the risk of significant monetary exposure-treble damages and licensor's attorney fees-and a potential injunction if the licensor prevails. On the other hand, the licensee could continue to abide by the terms of the license agreement; without a justifiable case or controversy, the courthouse door was closed to the licensee.

In Medimmune, Inc. v. Genentech, Inc., the Supreme Court addressed this dilemma, concluding that a licensee need not "bet the farm" by breaching the agreement in order to challenge the underlying patent. In a footnote, the Court explained how the constitutional case or controversy requirement is met by stating that a licensee who pays royalties either in fear of an injunction or for fear of treble damages is being coerced in a way that creates case or controversy-a clear departure from the existing law. The decision is worded broadly enough to cover all forms of intellectual property, not just patents. Case makes mention of but does not address contractual provisions that could be used to block claims by licensees in good standing.

continue reading »

"Gmail" confusingly similar to "G-mail...und die Post geht richtig ab"

Last week's ruling from the Office for Harmonization in the Internal Market (OHIM) has set Google back in its fight for the right to use the Gmail name in Europe. Google's opponent is German-born 32-year-old venture capitalist Daniel Giersch who founded a same-day mail delivery service called G-mail (short for Giersch-mail) some six years ago. The service provides e-mail accounts ending in "gmail.de" and offers a "hybrid mail" option where electronically-sent documents are printed out by the company and physically delivered to local addresses. Empowered by earlier rulings in German district court ordering Google to remove all "Gmail" references from its German service and cease issuing gmail.com accounts to German residents, Giersch went on to oppose Google's CTM applications, citing his German registration for "G-mail...und die Post geht richtig ab" [translation: "G-mail...and the mail goes right off"] issued in 2000. Google has downplayed OHIM refusal to register its Gmail mark on a pan-European basis, saying it will not affect Google's current use of the mark in Europe.
continue reading »

USPTO Battling Perception of Patent System in Crisis

The US patent system has been cited from various quarters as being "broken" or "in crisis". The general opinion regarding patents is that they are not being granted based on the patentee's innovative ideas, but that patents are obtained on the ability of the inventor's attorneys to convince the US Patent and Trademark Office (USPTO) that distinguishing (and sometimes minute) features between the claimed invention and what was known before, the prior art, rise to the level of a patent grant. The public has become jaded also to news media accounts of high profile cases, such as the US Supreme Court ruling in a patent case involving everyone's favorite electronic gadget, the Blackberry, which threatened to shut down the system by a patent holder who did not manufacture or sell any products, but merely held patents that could have conceivably blocked use of the Blackberry in the US.

Earlier this year, a number of "town hall meetings" were held by John Doll, Commissioner for Patents and James Toupin, the agency's General Counsel, to alert the patent community of proposed PTO rule changes that were intended to address these and other problems faced by the USPTO, including the large and increasing backlog of patent applications in the USPTO. The presentations were directed to those people most affected by the proposed rule changes, including patent attorneys, patent agents, independent inventors and members of the small business community. In the meeting held in Chicago in February, the local patent community voiced its strong dissatisfaction and dissent with most of the proposed rule changes, which sentiments were mirrored by patent practitioners all over the US. Several organizations have strongly opposed the implementation of the controversial rule changes in public comments to the USPTO regulatory body as to the proposed rules.

One goal of the US Patent Office has always been the issuance of timely and valid patents. The USPTO has experienced a patent pendency backlog, especially in certain technologies, that has continued to increase over the years to the extent that in some cases, the technology has become obsolete before the patent issues. However, every year on average for the last ten, 10% more patent applications have been filed than the year before. In some areas, the average period of a patent application from the time it is filed to its being taken up substantively for the first time now exceeds six years. Patent application pendency for some applications exceeds 10 years from the filing date to grant date.

The USPTO has been actively seeking to address the patent pendency problem by hiring additional patent examiners. Intending to hire 1000 new patent examiners per year for five years the USPTO exceeded that goal by over 200 for fiscal year. The USPTO acknowledges that hiring new examiners will not, by itself, solve the backlog problems. The PTO figures are somewhat misleading because the rate of examiner attrition does not allow the USPTO to expand its corps of seasoned examiners to address the noted problems. In fiscal 2005, the USPTO hired 959 new examiners, but in the same period, 425 examiners retired, resigned or were let go (attrited in USPTO parlance).

Other elements of the USPTO strategy to address the perceived problems include changes to internal operations of the USPTO and others set forth in a 2006 fiscal year end reportiv. Training of new examiners is a crucial matter, but the traditional way of providing such training, one-on-one hands on training by seasoned examiners, was found to hinder examination of new applications and thus added to the backlog. To free the examining corps to examine, examiner training has been replaced by a university model. This has led the USPTO to claim that patent quality has increased, using an internal USPTO metric, the patent error rate as determined by USPTO quality control. The error rate of examined applications has been reduced from an average of about 5% in previous years to 3.6%.

Additional USPTO rule changes proposed in January of this year will most likely not be implemented as they were panned by the patent community as drastically changing the way that the USPTO would interact with inventors and their attorneys. Additional legislative input was contemplated in Congressv toward reform of US patent law, but the political landscape has been changed by the November election with as of yet unknown ramifications. The proposed overhaul of patent laws was also intended to address general dissatisfaction within the technology community, and especially the cutting edge Information Technology community, of the patent system and IP enforcement by the US court system. The US patent system has been seen, even among the general public, as being counterproductive to the goals set forth in the US Constitution "to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries." Additional input is expected from the US Supreme Court from a decision expected before June 2007 in a patent case that may change the standard of obviousness, making it more difficult to find a claimed invention patentable, or a patent valid.

Past public opinion of the patent system as providing the economic framework for bringing innovative ideas to market and thereby catapulting the US into the technological supremacy, has been supplanted by the general feeling that the patent system is being gamed by unscrupulous actors to keep innovative technology from reaching the market. This tend has been seen as holding up general technological progress. Abraham Lincoln, the only US President to be awarded a patent, considered that "[t]he patent system . . . secured to the inventor, for a limited time, the exclusive use of his invention; and thereby added the fuel of interest to the fire of genius, in the discovery and production of new and useful things." The limited monopoly of a patent granted to a patentee the right to exclusively exploit an invention during the life of the patent, and so provides incentive to inventors to invent and discover "a new and useful process, machine, manufacture, or composition of matter or any new and useful improvement thereof. . ." The next year is expected to provide additional insight in whether the US Congress and USPTO efforts to revamp the patent system will serve these admirable goals.

continue reading »

New Exemptions to Prohibition Against Circumvention of Technology

The Digital Millennium Copyright Act (DMCA) contains numerous provisions that guard against individuals attempting to circumvent copyright controls or protection in various technologies. However, pursuant to terms of the DMCA, the Librarian of Congress has issued a rule setting out six classes of works that will be subject to three-year exemptions from the statute's prohibition against circumvention of technology. The proponents of these exemptions were able to demonstrate that the prohibition on circumventing access control had a substantial adverse effect on the ability of people to make non-infringing uses of the six particular classes of copyrighted works. The six classes of copyrighted works, subject to additional restrictions, are: 1) audiovisual works included in the educational library of a college or university's film or media studies department; 2) computer programs and video games distributed in formats that have become obsolete and that require the original media or hardware as a condition of access; 3) computer programs protected by dongles that prevent access due to malfunction or damage and which are obsolete; 4) literary works distributed in ebook format when all existing ebook editions of the work contain various access controls; 5) computer programs in the form of firmware that enable wireless telephone handsets to connect to a wireless telephone communication network; 6) sound recordings, and audiovisual works associated with those sound recordings, distributed in compact disc format and protected by technological protection measures that control access to lawfully purchased works. Those who may benefit from three of the newer classes of exempted works include owners of wireless telephone handsets who want to continue to use the handsets when they switch to new wireless carriers, film professors making compilations of film clips for classroom instruction, and those who test, investigate and correct security vulnerabilities on compact discs that are distributed with access control technology that compromises the security of personal computers. The exemptions went into effect on November 27, 2006, and will remain in effect until October 27, 2009.
continue reading »

Perfumer's Tagline Causes a Stink

Perfumer Sephora most recent promotion using the tagline "The Greatest Gift Show on Earth," landed it in court with the greatest of ease. The marketing campaign features a swinging trapeze artist animation and a festive organ grinder's monkey. Once the Ringling Bros. and Barnum & Bailey circus, which has been using its famous "The Greatest Show on Earth" mark since the 1890's, learned of the promotion, it filed a suit against Sephora and its parent company, the Paris-based LVMH Moet Hennessy Louis Vuitton SA, in the U.S. District Court in Manhattan.
continue reading »

Priority Document Electronic Exchange Program Between USPTO and EPO

The United States Patent and Trademark Office (USPTO) and the European Patent Office (EPO) are set to launch a new free service that will simplify filing procedures in each others offices by allowing patent application priority documents to be exchanged between the two offices electronically. Filing of priority documents is required when applicants are claiming an earlier application filing date in one patent office based on a prior application filing in another. Claiming priority is a valuable tool for businesses investigating whether to pursue patent rights globally because it provides additional time for making a decision as to whether and how extensively to pursue worldwide protection. Under the Paris Convention for the Protection of Industrial Property, a patent applicant may file an application in one Paris Convention member country (the priority document), and within 12 months, file corresponding applications in other member countries, while obtaining the benefit of the first application's filing date. Paris Convention filings are a critical component in many applicants' global business and patenting strategies and represent a substantial portion of worldwide patent activity. It is expected that as a result of this agreement, substantial benefits of reduced expenses and paperwork will ensue when filing a Paris Convention application in the EPO. Other treaties also provide for foreign application rights. For example, the Patent Cooperation Treaty (PCT) can effectively defer the decision of whether and in which countries to file a patent application up to 2 ½ years from the original priority document filing date.
continue reading »

New Federal Rules on Electronic Discovery

Amendments to the Federal Rules of Civil Procedure addressing the discovery of electronically-stored information are scheduled to take effect on December 1, 2006. With the Information Age in full swing, the roles of corporate IT departments and IT professionals have changed from merely keeping the company's computer systems up and running to acting as librarians and record keepers for all activities occurring on the company's computer system, including managing electronic data on networks spanning multiple servers, back-up tapes, hard drives, laptops and PDAs. Savvy litigants are increasingly pursuing electronic records of all types as part of the discovery process.

The amendments to the Federal Rules of Civil Procedure attempt to reduce costly discovery disputes pertaining to electronic discovery by offering structure, uniformity and guidance as to how electronic discovery should proceed. However, the rules also dictate a significant amount of work that must be done by litigants in the first 120 days after commencement of the lawsuit. From the beginning of the litigation, litigants must work closely with their IT departments and litigation counsel to ensure compliance with electronic discovery rules. Penalties for non-compliance with the electronic discovery rules can be devastating, ranging from significant monetary penalties to dismissal of lawsuits.

continue reading »

U.S. Supreme Court to Rule on Issue of Patent Claim Obviousness

More than twenty interested parties have filed amicus curiae briefs in a recent patent case, KSR v. Teleflex (S.Ct. 2006, Docket No. 04-1350). Leave to appeal to the U.S. Supreme Court was granted to clarify the standard of obviousness for a patent claim as propounded by the Court of Appeals for the Federal Circuit. The question presented to the Supreme Court is whether the Federal Circuit has erred in holding that a claimed invention cannot be held "obvious," and thus unpatentable under 35 U.S.C. 103(a) in the absence of some proven "teaching, suggestion, or motivation" that would have led a person of ordinary skill in the art to combine the relevant prior art teachings in the manner claimed. Oral arguments in KSR v. Teleflex are set for November 28, 2006.

A Supreme Court holding that overrules the present Federal Circuit standard by eliminating the "motivation test" will profoundly and retroactively change how the U.S. Patent and Trademark Office and the courts view the standard of obviousness as applied to already granted patents. A reversal will call into question the validity of literally hundreds of thousands of patents, issued after the CAFC added the "motivation test" in 1993. Any arguments presented during patent application prosecution will undergo close scrutiny and any reliance on the Federal Circuit standard will provide a basis to attack patent validity, should the Supreme Court change the standard. The Supreme Court is expected to decide the KSR case during its present term, ending in June 2007.

continue reading »

MPAA and the Boy Scouts Unveil New "Respect Copyrights" Activity Patch

The Los Angeles area Boy Scouts of America have added a new merit badge, developed in part with the Motion Picture Association of America. This activity patch is another effort to help combat illegal downloading and pirating of movies and music. Partnering with the area Boy Scouts, many of whom come from families that are involved in some aspect of the entertainment industry, is a strategic step for MPAA that aims to change attitudes about intellectual property theft. To earn the badge scouts will have to learn some copyright basics and will also be given the opportunity to visit a studio or to create public service announcements appealing to their peers to not participate in illegal downloading. These scouts may be facing a tall order though, as most of those who partake in pirated movies and music appear to be well aware of the illegal nature of their actions, and consider pirating an acceptable alternative to purchasing movies and music that they may not otherwise be able to afford.
continue reading »

Artist Takes No Bull

Arturo Di Modica, creator of New York City's famous Charging Bull sculpture, is suing at least 10 companies in Manhattan US District Court, including Wal-Mart Stores, North Fork Bancorp, Art.com, and S.G. Martin Securities, for copyright infringement, alleging that the defendants are selling unauthorized photographs and lithographs of the sculpture or using images of it in advertising without his permission. The copyright was registered in 1998.

The snorting, pavement-pawing, 11-foot-tall, 7,000-pound bronze bull took two years and over $350,000 of the artist's own funds to complete. The sculpture was introduced in 1989, and has since become one of the world's best-known symbols of American capitalism and one of the biggest tourist draws in the financial district. Di Modica has received a fee in the past from film and television companies when he has authorized them to use the bull in motion pictures and television shows.

The sculptor is seeking an unspecified award of damages and part of the profits that resulted from the sales, as well as a court order to block continued use of the sculpture and its image.

continue reading »

Trademark Dilution Revision Act of 2006 ready for Bush to sign

What has previously been a muddled area of trademark law may get some clarity when, as expected, President Bush signs H.R. 683, known as the Trademark Dilution Revision Act of 2006. This act sets the standard of proof in dilution claims as "likelihood of dilution," and not actual dilution. The Act provides for injunctive relief for famous marks when a likelihood of dilution by blurring or by tarnishment exists, regardless of the actual or likely confusion, competition, or economic injury. 'Dilution by blurring' is association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark. 'Dilution by tarnishment' is association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark. Additional remedies, along with fair use and other exclusions may also be available.
continue reading »

DARJEELING No Ordinary Cup of Tea

In Tea Board of India v The Republic of Tea, Inc., (opposition No. 91118587), a citable TTAB precedent, the Board set out certain standards concerning the degree of control that the owner of a certification mark (and mark owners in general) must exercise in order to maintain their rights.

Applicant sought to register DARJEELING NOUVEAU for tea ("DARJEELING" disclaimed) and was opposed by owner of the certifications marks DARJEELING and DARJEELING & Device. Applicant had argued that registrant had lost control of its mark so that it had become generic, and pointed to numerous instances of third party misuse.The board noted that "the statute does not define control or indicate the degree of control required, but it is clear that absolute control would be impractical, if not impossible...The owner of a mark is not required to constantly monitor every nook and cranny of the entire nation and to fire both barrels of his shotgun instantly upon spotting a possible infringer. The question is whether the control is adequate...the owner must take reasonable steps...to prevent the public from being misled. Even if control is not maintained and misuse occurs, it must be shown that the misuse was of such significance to permit an inference that the mark is generic." Finding that the registrant had indeed taken action upon learning of misuse and had upgraded its monitoring program to prevent misuse, the Board found that applicant's evidence did not support a finding that registrant had lost control of its mark.

continue reading »

Patent Reform Legislation Likely Delayed

Patent Law Reform and proposed changes to the USPTO rules and regulations have been a hot topic in the IP field for at least the last year. Both the House (H.R. 2795) and Senate have taken up different bills to enact legislation for patent reform. On September 19, 2006, the Senate's Hatch-Leahy patent reform bill (S. 3818) was placed on the Senate Judiciary Committee's agenda. Legislative news services report that the Senate bill might be taken up by the committee in the week of October 2, but most observers believe the committee likely will not reach the subject of patent reform before the Congress recesses on October 6 for the November election. Even if Congress takes up patent reform legislation during the "lame duck" session following the election, the general expectation is that no patent reform legislation will be signed this year. The implementation of changes to USPTO rules and regulations is also not assured, as the proposed rules have come under fire from the patent bar and industry.
continue reading »

Transcribing Music by Ear and Derivative Infringement

The Music Publishers' Association and the National Music Publishers' Association have launched a campaign to eradicate websites that offer free guitar tablature. Operators of popular tablature sites, including olga.net, guitarzone.com and guitartabs.com have been approached. So far, the tactic has worked, since most sites are privately owned and lack the financial backing needed to effectively carry a fight of this nature, but the alleged infringers are regrouping. As there appears to be no legal precedent, it remains to be seen how the courts will interpret the issue. While the parties may agree that outright copying is illegal, most tablature is the result of "reverse-engineering" efforts by guitarists, whereby one tries to match the sound by ear. Trade groups allege copyright infringement, arguing that even when not copied outright, tablature is a derivative work at best; meaning it still cannot be legally produced without the copyright holder's permission. Tablature promoters, on the other hand, may challenge the derivative-work argument by demonstrating that each allegedly-infringing piece is meaningless (stripped of lyrics, each given tab can correspond to a number of different songs), as well as advancing first amendment and fair use defenses.
continue reading »

Scandal Causes Suspension of 74,000 .eu Domain Names

EURid, the organization that administers the .eu domain names, filed a lawsuit against 400 American registrars, and suspended 74,000 .eu domain names, after accusations of "warehousing." Registrars are only permitted to purchase domain names on behalf of their customers, but they allegedly were speculatively buying .eu domain names for resale at a higher price. EURid claims that three companies, Ovidio Ltd., Fausto Ltd. and Gabino Ltd., held all of the domain names that were suspended, and were also acting as a front for a number of registrars. While these domain names are "on hold," legitimate purchasers of .eu domains have not been affected. Proceedings on the lawsuit are scheduled to begin in October.
continue reading »

Malaysia Joins the Patent Cooperation Treaty

The Patent Cooperation Treaty (PCT) has become effective in Malaysia as of August 16, 2006. A patent application filed under the PCT now covers 131 countries, including all of the major industrial countries, in a single filing. Filing a PCT patent application provides valuable time (up to two and a half years) before nationalization is required in each of the contracting states. The decision of entry into a member state, as well as consequent translation and filing fees, can be delayed until business interests arise and/or until the patented technology is validated.
continue reading »

TTAB Has No Taste For Flavor Marks

In re N.V. Organon (Serial Number 76467774), the TTAB affirmed the refusal to register an orange flavor for pharmaceuticals and set the bar very high for any future attempts to register a flavor, providing that "any registration of a flavor requires a substantial showing of acquired distinctiveness."

This Board first concluded that orange flavor was functional since flavors are a standard addition to pharmaceutical products to increase palatability and patient compliance. The board next noted that this particular flavor is unable to function as a trademark because it is likely to be considered merely "another feature of the medication, making it palatable" and not an indicator of source. Moreover, practical difficulties would arise in examination and from the fact that consumers generally have no access to a flavor before purchasing a product.

continue reading »

Cat's Domain Name Gets Nipped for Bad Faith

In a recent Domain Name UDRP decision, Complainant, Morgan Stanley, was successful in obtaining a transfer of the domain name "mymorganstanleyplatinum.com" from feline Respondent, Meow, Baroness Penelope Cat of Nash DCB.

Morgan Stanley alleged that the disputed domain name is confusingly similar to its MORGAN STANLEY trademark. Meow registered the domain name through its owner, Michael Woods, a business consultant, as a means to teach a seminar to demonstrate how large companies fail to register obvious domain names. The Panel found that, in addition to the domain name being confusingly similar to Complainant's mark, the Respondent was not using the disputed domain name in connection with a bona fide offering of goods or services. Since a cat cannot speak, read, or write, a common cat could not have submitted a Response or register the disputed domain name. Therefore, the Panel found the third necessary element of bad faith, by Respondent's assertions that it is a cat, and providing incorrect WHOIS information. Having established the required elements of a domain name dispute, the domain name was ordered to be transferred to the Complainant.

continue reading »

Section 44(e) basis does not survive assignment to a US successor

In Karsten Manufacturing Corporation v. Editoy AG; Editoy B.V.; Pingu V.V.; and Joker, Inc., (91101408 and 91108831) the TTAB held that an assignee of an application originally filed by a foreign corporation under Section 44(d) could continue to claim the benefit of the priority filing date, even though the assignee's country of origin is the United States. The assigned application, however, could not proceed to registration under Section 44 (e).

The original foreign based Section 44 applicant assigned the mark to a subsequently incorporated United States subsidiary. Even though the new United States company was foreign owned and controlled, it did not have bona fide commercial facilities outside of the United States and so it was not a "foreign applicant" for the purposes of 44(e). On the other hand, the assignment did not invalidate the 44(d) priority claim since the claim was properly made by the original applicant. An applicant stands in the shoes of its assignor and since applicants can amend or add a substitute basis for registration before or after publication, the 44(d) priority claim survives the assignment provided that the applicant also amends the application to assert a proper Section 1 basis for registration.

continue reading »