Sunstein

Federal Copyright Registration

2012-01-24T10:16:00.000-08:00

Overview of Copyright Registration ProcessA party can apply for federal copyright registration for certain original works either before or after the work has been made publicly available. An application form, together with "deposit" copies of the work, must be filed with the Copyright Office. The Copyright Office reviews the application and may require corrections, clarification, or additional information, or may refuse to register the copyright claim for various reasons. The Copyright Office does not determine whether the work infringes another copyright.

In the event of a refusal to register, an applicant may respond to the Copyright Office's objections by filing a request for reconsideration by the Examining Division, and, if registration is again refused, by filing a request for reconsideration by a Review Board. If the Copyright Office agrees to register the copyright claim, it issues a copyright registration certificate.

The term of copyright protection depends upon the year in which the work was first created and published. For works created on or after January 1, 1978, the copyright expires 70 years after the author's death. For works made for hire created on or after January 1, 1978, the copyright duration is 95 years from publication or 120 years from creation, whichever is shorter. For works created prior to January 1, 1978, the copyright term generally lasted 28 years but could be renewed for an additional period during the 28th year. Calculating the duration of copyright terms of works created prior to January 1, 1978 requires careful analysis and must be based on the individual facts of each case.

Benefits of Federal Copyright Registration
Required for Infringement Suit. Generally speaking, unless the copyrighted work has been registered (or the Copyright Office has refused registration although the required deposit, application and fee were properly filed), a court action for infringement of the copyright will be dismissed.[Read the full article]

Patent Litigation 101

2012-01-09T08:23:00.000-08:00

A patent owner who finds that another party is making, using or selling its patented invention may bring suit for patent infringement. Federal courts have exclusive jurisdiction over patent infringement claims. Hence the litigation must be brought in a federal district court having jurisdiction over the parties. A party accused of infringement by letter or otherwise may bring a suit against a patent owner for declaratory judgment of patent invalidity or noninfringement. Either party in a patent infringement action may demand a jury, or the case can be tried to the judge if both parties waive their jury rights.

As a general rule, patent litigation presents unusually complex issues and a case will typically take at least 18 months or more to get to trial. During the initial discovery phase, each side will make demands on the other for responses to written questions and for the production of documents relevant to the issues in the case, followed by depositions of key witnesses, including the inventor, design and engineering personnel, and financial and accounting personnel. Next, in the expert witness phase, expert witness reports are exchanged, followed by depositions of the experts. Thereafter, either side may file a motion for summary judgment with supporting briefs and documentation, seeking a ruling from the court without the need for a full-scale trial. Following resolution of such motions, the case is ready for trial.

At some point in this process, it is necessary for the court to conduct a Markman hearing to determine proper construction of the claims. Even in a jury case, it is the job of the judge to determine the meaning of the claims as a matter of law. The terms in a claim are given their ordinary and accustomed meaning unless it appears the terms were used differently by the inventor. Claim language is construed by reference to the claims, the specification of the patent, the prosecution history of the patent and the prior art. Expert witness testimony is also often considered. The timing of the Markman hearing is currently a subject of considerable controversy. Some judges have even permitted the case to be tried to the jury before resolving disputes about claim construction. In other cases the Markman hearing has been held at a preliminary stage well before trial. In many cases, the judge's decision on the meaning of the claims may be determinative of the question of infringement.

The trial of liability issues generally divides into two areas: infringement and validity. The plaintiff-patentee has to prove infringement by a preponderance of the evidence. Plaintiff can do this by showing literal infringement - i.e., that the accused device embodies every element of the patent claim. Alternatively, plaintiff may also prove infringement under the doctrine of equivalents. This doctrine also requires that the accused device embody every element of the patent claims, but permits the patentee to show, with respect to an element that is not literally present, that that element is available by equivalents. To prove equivalents, the plaintiff typically attempts to show that the element performs substantially the same function in substantially the same way to achieve substantially the same result as the corresponding element in the claimed invention.

On the issue of validity, the patentee enjoys an advantage, since the patent is presumed valid and the defendant can only overcome that presumption of validity by clear and convincing evidence. The patent statute permits a variety of attacks to be made on patent validity. The most frequently seen attacks on patent validity are based upon obviousness, anticipation, prior disclosure or "on sale" status and best mode.

In addition to challenging validity, the defendant may also have available one or more equitable affirmative defenses, which, if proven, would constitute a bar to enforcement of the patent. In general these equitable defenses fall into three categories: fraud or inequitable conduct, laches or delay and estoppel, and patent misuse. [Read the Full Article]

Comparison of Types of Intellectual Property

2011-12-28T06:55:00.000-08:00

What are the types of intellectual property, and what are the differences among them? We try to answer these questions succinctly, based on current U.S. law. The classic IP types are copyrights, patents, trademarks, and trade secrets.

Copyrights

Copyright law protects original works of authorship, such as books, films, music, but many other things as well. Copyright law protects only the original expression set forth in those works, however, and not the underlying ideas, procedures, processes, systems, methods of operation, concepts, principles, and discoveries themselves. In other words, copyright protects how something is expressed, not what is expressed.

In the United States, federal copyright law protects a wide range of works, including literary works; musical works and lyrics; dramatic works; pantomimes and choreographic works; pictorial, graphic, and sculptural works; motion pictures and other audiovisual works; sound recordings; and architectural works, and computer programs. Federal copyright law is set forth in Title 17 of the U.S. Code.

Under current U.S. law, a copyright begins on the date that a work is created and lasts until 70 years after its author’s death. If the author is anonymous or pseudonymous, or if the work is made for hire, the copyright term is 95 years from the date of publication or 120 years from the date of creation, whichever expires first.

The copyright in a work is separate from the work itself and, in the absence of an agreement to the contrary, the copyright is not transferred when the work itself is sold or given away. Thus, an artist who creates a painting and sells it to a collector has not given up the copyright in the work and may prevent the collector from making and selling posters or postcards of the painting. Although the collector does not own the copyright in the work, he or she does have the right to display and sell the work itself.

Copyright law protects these works by granting the owner of the copyright certain exclusive rights. Specifically, as the word “copyright” connotes, the owner has the exclusive right:

to reproduce or make copies of the work;
to prepare derivative works based on the work;
to distribute copies of the work to the public by sale or other transfer of ownership, lease, or rental;
to perform the work publicly (in the case of literary, musical, dramatic, and other such types of works);
to display the work publicly (in the case of literary, pictorial, graphic, sculptural, and other such types of works);
and to perform the work publicly by means of digital audio transmission (in the case of sound recordings).

Of course, the copyright owner can grant permission to others (e.g., by a license) to exercise some or all of these rights.

Copyright exists as of the date the work is fixed in a tangible medium, regardless of whether or not the work is registered with the Copyright Office. However, there are a number of important benefits that are gained by registration of copyright with the Copyright Office.

Patents

A patent is a right, granted by the government, to exclude others from making, using or selling the invention that is claimed in the patent. Patents protect certain kinds of innovations -- namely, original, novel, and useful inventions.

A patent is basically an exchange between an inventor and the government: the inventor provides information about his or her invention to the U.S. Patent and Trademark Office in exchange for a grant by the government of the exclusive right to practice the invention for a term of years. Under current U.S. law, in general, the patent owner has the exclusive right to practice the invention claimed in the patent for twenty years from the date the patent application was filed. 35 U.S.C. § 154.

Patent rights exist solely pursuant to statute. An inventor’s patent rights are entirely contingent upon successfully obtaining a patent from the USPTO. The USPTO rigorously reviews a patent application before it will grant a patent. Patents are governed by Title 35 of the U.S. Code. [Read more about Patents, Trademarks and Trade Secrets]

Sure as Shootin’, If It’s Claimed in Your Patent, You Can’t Assert It as a Trade Secret

2011-12-12T07:00:00.000-08:00

By Joel Leeman, a member of our Litigation Practice Group

Companies face a potential loss of intellectual property rights when a key employee walks out the door. Those rights may be grounded in both patents and trade secrets, which may pose tricky problems when those rights are intertwined, as a recent case illustrates.

In Atlantic Research Marketing Systems Inc. v. Troy, the Federal Circuit sets its sights on a rifle handguard that attaches to the gun barrel in only one place. Atlantic Research had employed Stephen Troy to assist it in making and marketing this product. When Mr. Troy left to make a competing product, Atlantic Research sued him for infringing its patent and for stealing and using its trade secrets.

The free-floating handguards sold by both parties solve the problem of how to attach ancillary devices, like integrated laser systems, to the barrel of a military rifle without damaging both the rifle and the added device. Ordinarily, the device could cause the barrel to bend; at the same time, the extreme heat from the barrel could damage the device. Both parties overcome these difficulties with a handguard that surrounds the barrel of the firearm without touching it.

The specification of Atlantic Research’s patent discloses a sleeve accessory, which includes a receiver-sleeve component that attaches to the firearm. Although the receiver sleeve is self-supported, the patent specification explained that “additional support may be provided” by a yoke around the barrel nut of the weapon.

Troy, for his part, offered for sale a handguard that could be attached to a rifle in just one location, the barrel nut.

Laying the groundwork for its infringement case, Atlantic Research asked the district court judge for a construction of the key claim of its patent that permitted the barrel nut to provide complete support for the handguard accessory. The receiver sleeve, Atlantic urged, provided additional but not necessary support. In short, Atlantic Research sought to have the claim construed in a manner that would be infringed by Troy’s barrel nut-only support design.

The district court (Judge Saris of the federal court in Boston) obligingly adopted the claim construction that Atlantic Research proposed, but found that the specification of Atlantic’s patent did not disclose a handguard attached only to the barrel nut. To the contrary, every embodiment in the patent had the handguard supported at no fewer than two points on the rifle.

The district court found the asserted patent claim invalid for lack of written description. The patent is supposed to permit a person who is skilled in the art to understand, upon reading the original specification, that the inventor was in possession of the claimed invention.

By the same token, as the Federal Circuit reminds us, “the purpose of the written description requirement is to ensure that the scope of the right to exclude, as set forth in the claims, does not overreach the scope of the inventor's contribution to the field of art as described in the patent specification.”

For Atlantic Research, getting the claim construction it wanted ultimately led to the invalidation of its claims because they were not supported by the specification. [Read the full article]

When Trade Secrets Are Stolen Overseas, Can the Thief Compete in the U.S.?

2011-11-30T11:57:00.000-08:00

By Thomas Carey, Chair of the Business Practice Group

The International Trade Commission (ITC) may ban the import of items made abroad using improperly obtained trade secrets even if the trade secrets are no longer in use in the United States. So says the Federal Circuit, which applied U.S. trade secret law to foreign activity, despite the Supreme Court’s refusal to apply U.S. law to protect U.S. patents from potentially infringing activity abroad.

The facts of TianRui Group v. ITC illustrate why U.S. manufacturers balk at disclosing their trade secrets to a Chinese subcontractor. In this case, Amsted Industries engaged Datong ABC Castings, a Chinese company, to make cast-steel railway car wheels using Amsted’s secret process. To facilitate the process, Amsted trained several Datong employees at its U.S. facility.

Amsted was later approached by TianRui Group, another Chinese manufacturer, which sought to license the Amsted process. Amsted negotiated with TianRui, but the license talks bogged down.

TianRui then hired nine employees of Datong, including some whom Amsted had trained in the U.S. All nine had been informed by Datong of their obligation not to disclose Amsted’s trade secrets, and eight of the nine had signed confidentiality agreements to protect those secrets.

Notwithstanding these safeguards, TianRui soon started making train wheels using Amsted’s secret process and exporting them to the U.S. in direct competition with Amsted. In fact, Amsted and TianRui were the only suppliers of cast-steel train wheels in the U.S.

Amsted asked the ITC to turn these wheels away at the border. The federal law that empowers the ITC to take such action to protect patented and trademarked items is not clearly applicable to trade secrets. The law does, however, in general terms, permit sanctions against foreign manufactures who engage in “unfair methods of competition … the effect of which is … to destroy or substantially injure an industry in the United States…”

The language protecting patents and trademarks does not include this “destroy or substantially injure” phrase; instead, it requires only that the aggrieved party demonstrate that the industry related to the articles in question “exists or is in the process of being established” in the United States. 19 USC 1337(a)(2). This difference in language proved to be critical in surprising ways.

Before analyzing the statute, the Federal Circuit took issue with the ITC’s application of Illinois trade secret law to this case. Breaking new ground, the court held that the ITC should apply federal common law in trade secret cases. This ruling had little effect on the outcome, but it signals a feisty Federal Circuit bucking the Supreme Court’s trend of deferring to the states in areas that are traditionally the domain of state law.

Next, the court considered whether it is appropriate to apply U.S. trade secret law to activity taking place in China. The majority of the three-judge panel focused on the fact that the activity in question involved more than the theft of trade secrets in China; it also involved the importation of train wheels into the United States.

Likening the ITC’s power to that of the Immigration and Naturalization Service, which can consider illegal conduct abroad in determining whether to grant a visa to a foreigner, the Federal Circuit said that the ITC could consider whether an item was made in violation of U.S. trade secret law in determining whether the item involves an “unfair method of competition.”

The remaining question raised by the statute – whether the importation would “destroy or substantially injure an industry in the United States” – was not easily established because, in fact, Amsted’s domestic manufacture of cast-steel train wheels uses an entirely different process from the one that had been disclosed to the Chinese. [Read the full article]

New Encouragement for Patent Owners Seeking Injunctions After Winning an Infringement Suit

2011-11-21T06:39:00.000-08:00

By Meredith L. Ainbinder, a member of our Litigation Practice Group

Uncertainty continues to linger around a patent owner’s ability to obtain a permanent injunction after succeeding in proving infringement at trial. While a monetary award compensates the patent owner for the defendant’s past infringement, only an injunction stops future infringement.

In Robert Bosch LLC v. Pylon Manufacturing Corp.,the Federal Circuit ruled that permanent injunctions are not awarded as a matter of course, but at the same time took a district court to task for not granting such relief to Bosch, a large supplier of automotive equipment. Whether the ruling portends an era of more easily obtained injunctions depends on how district court judges read between the lines of Bosch.

In any type of dispute, a party seeking a permanent injunction must show that: 1) it will suffer irreparable harm if the defendant is permitted to continue the offending conduct; 2) other remedies, such as monetary damages, do not suffice to compensate for the harm; 3) the balance of hardships between the parties tilts in favor of the claimant; and 4) a permanent injunction will serve the public interest. Factor #1, proof of irreparable harm, is always the dominating factor in this widely followed approach; without it, an injunction won’t issue.

For many years, in the early stages of a patent case, if a patent owner proved a likelihood of success on his claim for infringement, irreparable harm was presumed and a preliminary injunction would issue to stop the accused infringer from its offending activities for the duration of the litigation.

The analysis for a preliminary injunction involves the same factors, but includes the requirement that the party seeking relief must show a likelihood of success on the merits of its claim. Likewise, once a party prevailed in proving infringement at trial, irreparable harm was again presumed and a permanent injunction was granted in short order.

This mighty sword was lost to patent owners with the Supreme Court’s 2006 decision in eBay Inc. v. MercExchange, L.L.C. That case eliminated the presumption of irreparable harm and required district courts to engage in a more robust analysis of the facts. The result has been that, unless the patent owner itself sells a patented product, preliminary injunctions are all but impossible to obtain. Even those patent owners who do compete with the accused infringers have faced an uphill battle.[Read the entire article]

Copyright Flow Chart

2011-11-02T07:44:00.000-07:00

Copyright in a work can expire under U.S. law, but remain valid under the law of another country. Thus, if you make use of a work in another country or on the Internet you may be subject to liability under the laws of a foreign country, even though the work has entered the public domain in the U.S. This copyright flow chart is very handy at helping people understand their options in this process.

Under current law, foreign authors from most countries are accorded the same exclusive rights under U.S. copyright law as they would have if they were U.S. citizens.
Under the 1909 Act, works of foreign authors entered the public domain by virtue of being first published in the U.S. before January 1, 1978, unless they qualified for protection under some other basis, which many did.

Works by foreign authors that were first published abroad before January 1, 1978 similarly entered the public domain unless they qualified for protection under some other basis, but copyright in such works, if lost due to lack of national eligibility, was later restored if the work was not in the public domain in the country of first publication and if certain other requirements were met. (The same law restored the copyright in foreign works that entered the public domain due to other reasons, including publication without notice of copyright before March 1, 1989, or failure to renew U.S. registration when such renewals were necessary.)

For more pointers on effective use of copyright, click here.

Trademark Terminations: A Lesson From the Music Industry?

2011-10-17T07:07:00.000-07:00

By Peter Karol, a member of our Trademark Practice Group

The nervous energy accumulating in anticipation of January 1, 2013—the start date for terminations under Section 203 of the 1976 Copyright Act—has been centered around the music industry.

Justifiably so. As others have explored at length, the music industry is particularly vulnerable to arguments that its valuable copyright assets, especially sound recordings from the late 1970s and early 1980s, are not works made for hire and therefore not exempt from the termination provision in Section 203. See, e.g., Mark H. Jaffe, Defusing the Time Bomb Once Again—Determining Authorship in a Sound Recording, 53 J. Copr. Soc'y 139 (2006).

Add to this already volatile mix that many sound recordings are subject to multiple claims of authorship, that many of these authors feel undercompensated for their contributions, and that many of the copyrights at issue have increased in value over time, and one is left with a real powder keg.

While the music industry might be receiving the most attention, it is not the only one facing the risk of post-1978 terminations. The structure which put the music industry in jeopardy—its use of large numbers of non-employee contractors to create copyrighted works that increased in value over time—is not unique.

Converted into a query, we might ask for any given industry: (1) Did it outsource its creative tasks to freelancers in the late 1970s and thereafter; and (2) Did those freelancers create works of ever-increasing value to the deep-pocketed companies which now own them? With a few exceptions mentioned below—such as the movie and television industries—a strong yes to both should put one on guard.

Viewed through the lens of the above query, certain industries come into focus that might not have been immediately visible—particularly to a trademark attorney.

Reclaiming Rights to Logos?

For decades, the advertising industry has been hiring talented freelance graphic designers to create the branded logos we see around us. These artful logos, design marks in trademark parlance, have been steadily increasing in value over time.

They started as mere pictures but, in the language of the law, grew into symbols impregnated with the psychological power to draw in repeat purchasers. Mishawaka Rubber & Woolen Manufacturing Co. v. S.S. Kresge Co., 62 S. Ct. 1022, 1024 (1942). In other words, they became invested with goodwill. For any successful product or service, the value of this goodwill, and therefore the logo, could have ballooned to an enormous size.

Imagine a young company that paid a freelance graphic designer some lump sum in, say, January 1980, to design a logo for its designer clothing line, super premium liquor, coffee, or budding sports franchise. Trying to do the right thing from an intellectual property perspective, the young company asked the graphic designer to irrevocably assign to it all the copyrights in the work, and also for good measure to agree that the work was created as a work made for hire.

Thirty-five years go by. The brand, anchored by that nifty and original logo, is fabulously successful. In addition to large sales of the flagship clothing, liquor, or coffee, or television rights for the sports franchise, the logo itself gains popularity. Merchandising has taken off—millions of dollars are coming in from shirts, mugs, hats, shower curtains, infant onesies, license plate holders, etc.

The company, perhaps, has kept its look sleek and contemporary by modernizing its logo over time, but the core concept remains in place. In its success, it has undertaken an aggressive policing campaign, involving every manner of demand letter even in borderline cases of trademark and copyright infringement.

Then, in January 2013, the company receives a notice of termination effective January 2015. That graphic designer from the 1980s—now retired and painting seascapes in Wellfleet— has two children well aware of the value of that logo he came up with. [Read the full article]

Reproduced with permission from BNA’s Patent, Trademark & Copyright Journal, 82 PTCJ 666 (09/16/2011). Copyright (c) 2011 by The Bureau of National Affairs, Inc. (800-372-1033) www.bna.com

The Importance of Distinguishing a Product From an Invention

2011-10-11T09:08:00.000-07:00

By Samuel J. Petuchowski, a member of our Patent Practice Group

Under U.S. law, a patent may be obtained to protect a “process, machine, manufacture, or composition of matter” (35 U.S.C. § 101) that meets standards of utility, novelty and non-obviousness.

Whether a patented invention covers a particular product – of the patentee, or of an infringer – is a legal conclusion that hinges on whether all the requirements of one or more patent claims are met by that product. (Patent counsel may be called upon to review that question.)

Telling apart a product and an invention impacts both the validity and enforcement of patent rights. One consequence of correctly making this distinction is that a competitor may find a way to compete lawfully if he can design his own product so as not to incorporate the claimed invention.

Another implication of the product/invention distinction was recently addressed by the Federal Circuit Court of Appeals in August Tech Corp. v. Camtek Ltd. The Court considered the case of an inventor who offers a product for sale but, at the time the offer is made, the product, as conceptualized, does not contain the invention because the invention has not yet been conceived.

In order to limit the period of exclusive rights afforded by a patent, the statute provides that when a product contains an invention, the inventor must file for patent protection within one year of making the offer. Otherwise, the opportunity to protect the invention will be lost and the invention will be available for others to use. (New considerations enacted in the America Invents Act will go into force in 18 months, and, while highly significant, are outside the scope of this note.)

One of the questions addressed in August Tech. is: What happens if what is offered for sale is merely the idea for a product, and, at the time of the offer, the product hasn’t assumed its final form? What if, in particular, the offer assumes that some technical challenge can be met, and, indeed, further research leads to an invention?

The Court dedicated almost six pages to the question of whether the offer for sale of a product necessarily starts a clock running, such that a patent application must be filed within one year, highlighting the complexity of this area of the law and the product/invention distinction. [Read the full article]

Substance Over Form – An Eligibility Test For Evaluating the “Abstractness” Of Process Claims

2011-10-03T07:11:00.000-07:00

By Jeffrey T. Klayman, a member of our Patent Practice Group

The U.S. Court of Appeals for the Federal Circuit has taken aim at the “claim-drafting ingenuity” through which, the court suggests, patent lawyers sometimes obtain patents for otherwise unpatentable abstract ideas. This is particularly true for process claims in the business method, software, and medical diagnostic/treatment arts.

In reaction, the Federal Circuit, which hears appeals of all patent cases, posits a framework for evaluating patent subject matter eligibility that seeks to elevate the substance of the invention over the form of the patent claims.

Influential court opinions have established that patents may not be obtained for laws of nature, physical phenomena, and abstract ideas. In two recent decisions, the Federal Circuit explored the “abstract ideas” exception to patent eligibility. And in a related opinion 1, the court’s chief judge notably railed against the “gamesmanship” that can reward clever claim drafters and “cheat naïve inventors out of their inventions due to poor claim drafting.”

CyberSource Corp. v. Retail Decisions, Inc. relates to online credit card fraud detection. Two claims, a method claim and a “Beauregard” claim (a claim directed to a computer-readable medium on which a computer program is stored), are at issue. The method claim reads as follows:

3. A method for verifying the validity of a credit card transaction over the Internet comprising the steps of:

-obtaining information about other transactions that have utilized an Internet address that is identified with the credit card transaction;

-constructing a map of credit card numbers based upon the other trans-actions and;

-utilizing the map of credit card numbers to determine if the credit card transaction is valid.

Although the claim makes reference to “the Internet” and is written in the context of a computer-implemented invention, the court looked to the underlying invention as opposed to the form of the claim. It found that the claim is directed to purely mental steps (a sub-category of abstract ideas) and hence does not meet patent eligibility requirements.

The court noted that all three steps can be achieved by the human mind or by a human with pencil and paper; that none of the steps is specifically tied to the Internet or other machine such as a computer; and that the Internet does not implement any of the steps. [Read the full article]

Congress Brings First-to-File Patent System to the U.S.

2011-09-26T06:44:00.000-07:00

By Bruce Sunstein and David Blau, members of our Patent Practice Group

The Senate’s passage of the “America Invents Act” ushers in a major overhaul of United States patent law. Signing the bill into law on September 16, President Obama predicted it would promote innovation and speed the issuance of patents, resulting in new businesses and new jobs.

Yet, for many inventors and their lawyers, expedited patent prosecution is not the most striking change. The new law will bring the United States into line with patent systems of other countries by awarding a patent for an invention to the first to file an application instead of to the first to invent. The law introduces new procedures for challenging the validity of patents, both before and after issuance, including a special provision for post-grant review of any “covered business method patent.”

The law makes it easier for smaller inventors to file applications for patents, and defines a new “micro entity” for this purpose. And other provisions will change, in big ways and small, how patent owners, inventors, and patent practitioners interact with the Patent and Trademark Office.

First Inventor To File

Effective 18 months after signing of the legislation, our present first-to-invent system will be replaced by a first-to-file system. Subject to one narrow exception, the new system eliminates the one-year grace period, enjoyed by inventors under the present system, within which to get on file after a publication of the invention or an offer for sale of a product or process embodying the invention.

Thus, for example, an inventor who puts his invention into public use or on sale, anywhere in the world, without having filed a patent application, immediately loses his rights to obtain a patent in the United States (as well as in almost all foreign countries). A one-year grace period remains only for a publication of the invention by or through the inventor. The inventor has no grace period if a third party publishes the invention ahead of his filing date, unless the content of the publication is traceable to the inventor.

As between two inventors who develop the same technology and file applications to patent it, the one who files first will get the patent. It will no longer do any good for the second-to-file inventor to produce a notebook proving an earlier date of invention. The application filing date determines the rights.

Under the new regime, when a given patent application is filed, a previously filed application constitutes prior art for all purposes, even though the previously filed application was not published when the given application was filed. This rule is harsher than that of the European patent system, under which an application previously filed but unpublished as of the filing date of the given application can be cited as prior art for purposes of a rejection based on lack of novelty but not for a rejection based on lack of an inventive step (called “obviousness” in the United States).

On the other hand, another provision has the effect of shielding a company from a rejection of its patent application based on any previously filed applications of the company that were unpublished as of the date of filing of the given application. This provision suggests that companies might well consider filing successive applications with a view to the publication date of previously filed applications. [Read the full article]

Extra, Extra! Court Reverses “Hot News” Trend

2011-09-12T10:24:00.000-07:00

By David Blau, a member of the Patent Practice Group

A federal appeals court has ruled that U.S. copyright law, not a state’s “hot news” law, applies to news aggregators that redistribute buy-sell-hold securities recommendations from big brokers. This ruling reverses a modest comeback of the hot news doctrine that we highlighted in March 2009, and significantly undermines the doctrine’s viability.

Under U.S. law, a state law claim for misappropriation of someone else’s hot news will be preempted if the work in question is protectable by federal copyright, and the alleged wrongdoing violates a right provided in the federal copyright law.

The Second Circuit’s recent ruling in Barclays Capital v. Theflyonthewall.com deals with an electronic news service that manages to obtain investment recommendations that are the product of proprietary research performed by major brokerage houses for their clients.

Flyonthewall publicizes this data before the financial institutions release it to the general public. This speedy distribution of data supposedly plays havoc with the firms’ business model and impairs the trading advantage of their clients.

The court clarifies that a hot news claim under state law, while still viable, may cover only works that are not copyrightable or acts that do not infringe the broad rights reserved under federal copyright law.

The ruling represents a severe curtailment of the hot news doctrine. After all, there are few works that are not at least potentially copyrightable under federal law; indeed, copyright broadly covers “original works of authorship fixed in any tangible medium of expression.”

One major exception is that facts by themselves are not copyrightable. Thus, as was pointed out in the House of Representatives debate over the preemption law, a consistent pattern of unauthorized appropriation by a competitor of the facts reported by a news source (but not their literary expression) may be actionable under state law. [Read the full article]

Narrowing a Patent Claim Can Prove Costly During Litigation — and a Broadly Worded Preamble Doesn’t Help

2011-09-06T06:45:00.000-07:00

By Nancy C. Wilker, a member of our Life Sciences Practice Group

In case patent prosecutors needed reminding that the art of claim drafting is much akin to fortune telling, a recent case by the Federal Circuit throws the spotlight on the preamble - the formal introductory clause of a claim - and its role in the doctrine of equivalents.

The patent claims at issue in Duramed Pharmaceuticals v. Paddock Laboratories pertain to a moisture barrier coating for use with an estrogen formulation therapy. Estrogen formulations, which are used clinically to relieve menopausal symptoms, are extremely water-sensitive, and thus are amenable to a moisture barrier coating to prolong shelf-life and stability.

During prosecution, to overcome an obviousness rejection, Duramed amended its claim to require that the moisture barrier coating comprise ethylcellulose. Duramed was issued U.S. Patent No. 5,908,638. The preamble to the claim at issue read: “A pharmaceutical composition . . . comprising:” and the claim ended with, “wherein said solid unit dosage form is coated with a moisture barrier coating comprising ethylcellulose.”

When Paddock Laboratories filed an Abbreviated New Drug Application for a generic estrogen formulation which used a moisture barrier coating comprising polyvinyl alcohol, Duramed sued for infringement of the ‘638 patent under the doctrine of equivalents. This doctrine comes to the rescue of a patent owner when an accused product does not literally infringe, but an equivalence is found between its elements and the claimed elements of the patented invention.

But the countervailing doctrine of prosecution history estoppel, which the Supreme Court explicated in its high-impact 2002 decision in Festo Corp. v. Shoketsu, also comes into play: If a narrowing claim amendment is made during patent prosecution, the surrendered claim scope is presumed to be stripped of equivalents if those equivalents were foreseeable in the field of the invention.

Predictably, then, Paddock defended by asserting that Duramed had surrendered the claim scope for the moisture barrier coating with its amendment requiring that the coating comprise ethylcellulose. Just as predictably, Duramed responded that the use of polyvinyl alcohol as a moisture barrier coating was unforeseeable at the time of the amendment and therefore not surrendered. [Read the full article]

Are “Patent Trolls” Facing A New Era of Litigation Penalties?

2011-08-29T08:08:00.000-07:00

By Jack Schecter, a member of our Litigation Practice Group

Feared and loathed by most major companies and the general public, non-practicing entities (“NPEs”) that file patent infringement lawsuits are commonly referred to as “patent trolls” and are held up as illustrations of a broken patent system.

Whatever the merits of this characterization, NPEs have generally found refuge in the courts, where their "trollish" nature has largely been ignored and the law has held them to the same standards—and accorded them the same privileges—as any other patent litigant.

A recent Federal Circuit case, however, Eon-Net LP v. Flagstar Bancorp, may presage a new standard for assessing sanctions and awarding attorneys’ fees against unsuccessful NPEs and their lawyers.

Eon-Net is a Cayman Islands limited partnership formed by three inventors for the sole purpose of enforcing their patents. Eon-Net alleged that Flagstar’s website, which allowed its customers to submit loan applications and related information online using HTML forms, infringed Eon-Net’s patents. Those patents claim an “information processing system for inputting information from a document or file on a computer into at least one application program . . .”

Flagstar promptly sought summary judgment, arguing that its accused products were duly licensed. Flagstar also contended that Eon-Net’s lawyers should be sanctioned under Rule 11—a requirement that lawyers ask questions first, then shoot—for failing to vet their client’s baseless infringement claims.

Although Eon-Net successfully argued that Flagstar’s license covered only a subset of the accused products, the district court entered summary judgment of non-infringement. Without a hearing or any claim construction, the court concluded that the claims of the asserted patents were limited to the processing of hard copy documents, and that Flagstar’s HTML forms clearly fell outside the scope of the claims.

The court then assessed Rule 11 sanctions of $141,984 against Eon-Net’s counsel and his law firm, an amount equal to Flagstar’s attorneys’ fees.[Read the full article]

Court Brings Cheer to Biotech World With Strong Backing For Gene Patents

2011-08-23T11:12:00.000-07:00

By Nancy C. Wilker, a member of our Life Sciences Practice Group

The biotechnology and pharmaceutical industries felt equal measures of relief and vindication from the Federal Circuit’s recent decision that isolated DNA molecules continue to be patentable subject matter. The case examined seven patents held by Myriad Genetics, Inc., which dominates the U.S. market for screening women for breast cancer.

In Assoc. for Molecular Pathology v. U.S. Patent and Trademark Office, widely known as the Myriad Genetics case, the Federal Circuit held that isolated DNA molecules are patentable subject matter because they are not products of nature. On the other hand, certain diagnostic screening methods using the DNA sequences are not patentable subject matter, since they failed the “machine or transformation” test.

The court reversed the most controversial portions of a federal judge’s 2010 ruling that, as we discussed at the time, deeply unsettled the biotech industry. That judge had held that isolated DNA corresponding to genomic DNA sequences are unpatentable products of nature, and that Myriad’s method claims were unpatentable because they disclosed no meaningful transformation.

Myriad’s patents at issue cover two genes, BRCA1 and BRCA2, that are frequently mutated in women with a propensity to develop breast cancer. A coalition of patients, physician groups, and the American Civil Liberties Union sued Myriad, asserting that the patents were invalid under Section 101 of the patent act as being drawn to unpatentable subject matter. Under that statute, a patent may be obtained for “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.”

Oddly enough, even though the U.S. Patent Office has granted patents covering isolated DNA claims for the past 30 years, the Department of Justice’s amicus brief supported the district court judge’s holding that genes were not patentable subject matter. [Read the full article]

Licensing and Strategic Partnering

2011-08-08T07:42:00.000-07:00

Companies have different strengths. The company with creative, technically trained executives may turn out marvelous products that they have little idea how to market, while other companies may be marketing whizzes with little product flow. Out of this may be born licensing or strategic partnering transactions.

Licensing
Licensing may involve patents, trademarks, copyrights (including copyrights in software), or trade secrets and know-how. Different legal doctrines and issues will arise in each of these types of transactions. The primary business issues that need to be resolved may include:

-Is the license exclusive or non-exclusive?
-What is the royalty rate? Are there any lump-sum license fees? Are they to be credited against future royalties?
-What is the duration of the license?
-For what field of use is the license being granted?
-What territory is covered?
-Who is responsible for warranty coverage and customer support?
-Who is responsible for enforcing any intellectual property rights that may be involved?
-Are there any performance targets, such as sales volumes, that the licensee must achieve to keep its license rights alive?

Legal issues will also need to be covered in the text of the license agreement. For example, what representations and warranties will the licensor provide? What audit rights will the licensor have? What level of efforts must the licensee exert to promote the licensed property? How should the parties allocate any legal expenses associated with enforcing intellectual property rights (or defending against claims of infringement)? How does the licensor assure itself that the licensee's quality control is adequate? [Read the full article]

Trademark Selection Guidelines

2011-08-01T10:44:00.000-07:00

Choosing a Trademark. The choice of a trademark can be critical to the ability to protect one's rights in a mark. A weak mark may not serve as a good identifier of source. A strong mark, which becomes identified in the mind of the consumer with a particular product or service—e.g., LEXUS® for luxury cars or AT&T® for long distance telephone services—makes possible more effective protection of rights. Thus, it is easier for the owner of a strong mark to preclude third parties from adopting similar marks than it is for those with weak marks. By helping our clients identify and select strong marks, we assist them in developing trademark portfolios that become valuable business assets.

It is natural for the owner of a trademark to want to choose a mark that tells consumers something about its products. Unfortunately, this understandable tendency can sometimes come into conflict with certain principles of trademark law. In the United States, as well as in most other jurisdictions, only "distinctive" terms may be protected as trademarks. Terms that are considered "merely descriptive" or generic are generally not able to function as trademarks and will not be protected.

The line between an imaginative mark that cleverly suggests the nature of the products for which it is used and a mark that is "merely descriptive" of those products can be quite fine. Case law in the United States describes a spectrum of types of marks: fanciful, arbitrary, suggestive, descriptive and generic.

The “Strength” of a Mark. The strongest marks are those that are considered fanciful. A fanciful mark is one that has been made up or invented by its owner. Fanciful marks are either previously unknown words, or archaic or obsolete terms that are no longer commonly known. Non-word marks (letters, numbers, designs and pictures) may also be considered fanciful. Examples of fanciful marks are EXXON®, KODAK®, and XEROX®.

Arbitrary marks are the next on the spectrum of trademark strength. An arbitrary mark is one that may have a commonly known meaning, but the meaning is unrelated to the products for which the mark is used. Examples of arbitrary marks are APPLE® (for computers), DELPHI™ (for computer software), and RADIUS™ (for a restaurant).

Suggestive marks are not as strong as fanciful and arbitrary marks, but are nevertheless good marks as they, like fanciful and arbitrary marks, are considered "inherently distinctive." A suggestive mark is one that hints at the products in a clever way, but does not actually describe the products. Examples of suggestive marks are FROOT LOOPS® (for breakfast cereal), JOIE DE VIVRE™ (for a toy store), and SATURDAY'S CHILD™ (for a children's clothing store). [Read the full article]

What are the different types of patents?

2011-07-25T13:50:00.000-07:00

There are three types of patents that an inventor can obtain in the United States: a utility patent, a design patent and a plant patent. The type of patent with which most people are familiar is a utility patent, which is a patent for a new and useful invention. The subject matter for each of the three types of patents is discussed further below.

Utility Patents
In order to obtain a utility patent, the invention must be for a "new and useful process, machine, manufacture, or composition of matter . . . ." This requirement is fairly straightforward and is usually not a problem, except in certain areas.

A series of very vague, indefinite and often misleading maxims have arisen over time to address what may and may not be patented. For example, "mathematical algorithms," "mental steps," "laws of nature," "products of nature," "methods of doing business," and "printed matter" have, in the past, been held to be not patentable. Patents are regularly issued that defy these maxims. For instance, purified products of nature are generally patentable, assuming that the other requirements of patentability are satisfied. In addition, computers and the Internet have now transformed methods of doing business and mathematical algorithms into protectable machines and processes.

Decisions by the Federal Circuit Court of Appeals favorable to patent applicants have caused the U.S. Patent and Trademark Office to rewrite and loosen its guidelines for examining patent applications for software inventions.

Medical procedures are patentable in the United States; however, the patentee's ability to sue all infringers of a patent directed to a medical procedure has been curtailed by recent legislation. This legislation makes it even more important to consider likely defendants when drafting a patent claim. For instance, it is usually easier to sue the manufacturer of an infringing product than the consumers, so the patent should be drafted to cover the product as it leaves the factory—as opposed to how it may be used by the consumer—so as to avoid having to show the additional elements of contributory infringement. Many foreign countries limit the patentability of medical procedures.

Design Patents
Design patents have different subject matter requirements from utility patents, as set forth in 35 U.S.C. sec. 171, which reads as follows: "Whoever invents any new, original and ornamental design for an article of manufacture may obtain a patent therefor, subject to the conditions and requirements of this title. The provisions of this title relating to patents for inventions shall apply to patents for designs, except as otherwise provided." [Read the full article]

Trademark Usage Guidelines

2011-07-18T12:56:00.000-07:00

How can trademarks be used most effectively? In order to allow consumers to quickly and easily recognize a trademark, the rendition of the trademark should be consistent every time it is displayed. Further, a trademark should be used in a manner that distinguishes it from surrounding text. The mark should be clearly and visibly seen by consumers and should not simply be an indistinguishable part of a larger context. Whether this has been done successfully depends upon the "overall commercial impression" of the trademark in its particular setting. A trademark can be distinguished in a variety of ways, such as by physically placing the trademark apart from surrounding text or by distinguishing the trademark's appearance by using a different size, typeface, capitalization, or color from the surrounding text.

When used properly, a trademark is a "brand name" for the type of goods or services that it identifies. If a trademark comes to be known as a common name for those goods or services, it is at risk of becoming generic. For example, the words ASPIRIN, THERMOS and ESCALATOR started out as trademarks but became so commonly used that they became generic words and lost their trademark protection. Therefore, it is important for trademark owners to refrain from referring (or allowing others to refer) to their trademarks as generic terms used to describe the products generally. A company should use a trademark as an adjective to modify the generic name of the product (e.g., "Xerox® brand copy machine"), either with or without the word "brand," and should avoid using or allowing others to use the trademark as a noun (e.g., "make a xerox") or a verb (e.g., "please xerox this for me"), and should also follow the general trademark usage guidelines set forth herein.

A trademark should be followed by a notice that it is being used as a trademark whenever possible. Although not required by law, such a notice serves a useful function by placing the world on notice of the trademark owner's claim of exclusive right to use the mark. Such a notice is also necessary before the trademark owner can collect any monetary damages for infringement of the mark (although even without such notice the trademark owner can still seek injunctive relief, that is, a court order prohibiting another party from using the mark).

At a minimum, a notice should be used the first time the mark is used as a trademark on advertising, product packaging or other documents. Before registration in the United States Patent and Trademark Office, the notice should be TM for a trademark or (SM) for a service mark (e.g., JeepTM), or the mark can be followed by an asterisk that refers to a footnote that indicates the owner's claim of rights in the mark, e.g., "JeepTM is a trademark of Chrysler LLC." Once the trademark is registered, but not before then, the products, labels or advertising materials bearing the mark may carry the legend "Registered in the U.S. Patent and Trademark Office," "Reg. U.S. Pat. & Tm Off." (both of which commonly appear as footnotes), or the registration symbol ®.[Read the full article] [Contact our trademark attorneys]

“Clear and Convincing Evidence” is Still Required To Invalidate a Patent

2011-07-11T10:20:00.000-07:00

By Thomas C. Carey, Chair of the Business Practice Group

We reported earlier on Microsoft v. i4i Limited Partnership, in which a small Canadian software company accused Microsoft of infringing its patent rights. The i4i victory was recently affirmed in a Supreme Court opinion that drew not a single dissent. Explicitly, the Court stood by its long-standing rule that patent invalidity must be proven by clear and convincing evidence. Implicitly, it acknowledged the patentability of software and the enforceability of software patents.

The i4i patent claimed an improved method for editing computer documents. The method involves storing a document’s content separately from its metacodes. Although aware of the i4i patent, Microsoft included in Word 2003 a “Custom XML” feature that allowed users to create documents that infringed the i4i patent claims.

i4i successfully sued Microsoft for patent infringement. The trial court judge upheld the damages award of $290 million and issued a permanent injunction against the sale of Word with the Custom XML feature.

Microsoft appealed the case to the Federal Circuit, which upheld both the damages award and the injunction. Not satisfied, Microsoft appealed to the Supreme Court.

I4i had sold a software product called S4 more than one year before the patent application was filed. The S4 product was not mentioned in the prosecution of the i4i patent. Thus, no patent examiner had reviewed the question of whether it constituted invalidating prior art.

In its Supreme Court appeal, Microsoft focused on this question of prior art. The source code of S4 had been destroyed years before the commencement of the litigation, so it was impossible to prove whether S4 practiced the art claimed in the i4i patent. The creators of S4, who were also the inventors named in the i4i patent, testified that it did not.

Following a long line of Supreme Court cases, the trial court judge instructed the jury that, to invalidate the i4i patent, Microsoft would have to prove its case by “clear and convincing evidence.” The jury found that Microsoft had not met this burden. [Read the full article]

Federal Circuit Strikes Hard Against the "Plague" of the Inequitable Conduct Defense

2011-06-29T08:16:00.000-07:00

By Kerry Timbers, Co-Chair of the Litigation Practice Group

At the end of May, the Federal Circuit -- the court that hears all patent appeals -- drastically toughened the standards for proving the inequitable conduct defense in patent infringement litigation. In the process, the court expressed its scorn for the overuse of this defense by accused infringers.

Signaling the importance it attached to this shift, the entire court -- rather than the typical three-judge panel -- participated in the decision. In Therasense, Inc. v. Becton, Dickinson & Co., the court considered the widespread, practically reflexive, assertion of the inequitable conduct defense.

With this defense, an accused infringer alleges that, when the inventor applied for his patent, he failed to tell the patent examiner about a prior art reference, or otherwise engaged in conduct that deceived the Patent and Trademark Office (PTO) into granting a patent. If such conduct rises to the level of “inequitable conduct,” the entire patent is unenforceable.

In a stinging indictment of the current state of the law and practice of the inequitable conduct defense, the majority opinion deplored the “numerous unforeseen and unintended consequences” of the defense.

The court linked the inequitable conduct defense with a string of transgressions, saying that it:
-“expands discovery” in litigation,
-“disqualifies the prosecuting attorney from the patentee’s litigation team,”
-“cast[s] a dark cloud over the patent’s validity,”
-“focuses on the moral turpitude of the patentee with ruinous consequences for the reputation of his patent attorney,”
-“discourages settlement,”
-“deflects attention from the merits of validity and infringement issues,”
-“increase[s] the complexity, duration and cost of patent infringement litigation,”
-“is the ‘atomic’ bomb of patent law,”
-“can ... render unenforceable other related patents and ... endanger a substantial portion of a company’s patent portfolio,” and
has become “an absolute plague ... [and] has plagued not only courts but also the entire patent system.”

Nor, in the court’s view, are such offenses confined to the arena of patent litigation. In the PTO itself, the inequitable conduct defense, or more particularly, the anxiety it causes in patent applicants:
-“cast[s] the shadow of the hangman’s noose,”
-“[causes] patent prosecutors [to] regularly bury the PTO examiners with a deluge of prior art references, most of which have marginal value ... a tidal wave of disclosure [that] makes identifying the most relevant prior art more difficult ... [and] strains the [PTO’s] examining resources and directly contributes to the backlog”
-has “impaired patent quality,” and
-“has been overused to the detriment of the public.”

This is tough talk from the very court that is most responsible for the current incarnation of this “judge-made” defense -- it is like a father who lets his son play with knives, then rebukes him for injuring his little brother. And like a disappointed parent, the court has decided to impose discipline, laying down rules that make it much harder to get into the silverware drawer, in an effort to right what has gone so very wrong.[Read the full article]

Supreme Court Affirms Precedence of Inventor’s Personal Patent Rights Over Those of a University Employer

2011-06-21T13:22:00.000-07:00

By Samuel J. Petuchowski, a member of our Patent Practice Group

Last November, the U.S. Supreme Court took up competing questions of patent ownership arising from the Small Business Patent Procedures Act of 1980 (known as the Bayh-Dole Act):

Does the Act assure that rights derived from government-sponsored research always flow to the university or small business that receives a government research grant? Or is the contrary true, that an inventor may, by agreement, vest those rights in another party?

The Supreme Court has now ruled, in Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems Inc., that the Bayh-Dole Act governs only the rights of a university (or small business grantee or contractor) vis-à vis the government. That law does not, however, operate to allocate to the university, or small business, any rights in the invention belonging, under U.S. law, to the inventor.

As we earlier recounted, Stanford University researcher Mark Holodniy had, in 1988, “agree[d] to assign” to Stanford all rights in any invention that he may “conceive or first actually reduce to practice” while working for Stanford.

Just months later, Cetus Corporation, which was collaborating with Dr. Holodniy’s research team, also asked him for a signature, asking him to turn over anything he would invent in the course of his research. This agreement recited: “I will assign and do hereby assign to CETUS, my right, title, and interest in each of [my] ideas, inventions and improvements.” (Emphasis added.)

Stanford obtained three patents on the technology in question, covering the use of polymerase chain reaction (PCR) in monitoring HIV in the blood plasma of AIDS patients taking drugs such as AZT. The case that wended its way to the Supreme Court started with Stanford suing Roche, successor to Cetus’s rights, for infringement of these patents.

Roche argued in its defense that Stanford had no standing to bring the lawsuit. The law requires, said Roche, that all patent rights be represented in bringing an infringement action, and while other co-inventors had duly assigned their rights to Stanford, the university lacked Dr. Holodniy’s rights.

Indeed, the Federal Circuit Court of Appeals concluded that Dr. Holodniy’s initial agreement with Stanford (“I agree to assign”) was a mere promise to assign rights in the future, whereas his agreement with Cetus (“I hereby assign”) actually acted to assign rights to Cetus. Thus, the Federal Circuit instructed the trial court judge to dismiss Stanford’s claim because the university could not bring suit without Dr. Holodniy’s share of the patent rights.

Before the Supreme Court, Stanford leaned hard on the language of the Bayh-Dole Act in arguing that it did not matter that the university lacked an express assignment of Dr. Holodniy’s interest. So did the U.S. Government, arguing as an amicus curiae.[Read the full article]

What is the process of obtaining a patent?

2011-06-13T06:54:00.000-07:00

The process of obtaining a patent is typically referred to as patent prosecution.

In the United States Patent and Trademark Office, examiners with technical backgrounds do the substantive review of the applications, including searching for relevant prior art. Unlike trademark practice, only registered patent attorneys or agents, or the inventors themselves, can normally file and prosecute patent applications in the Patent and Trademark Office. Members of Sunstein's patent practice group include registered patent attorneys and agents. Our patent practice group has experience prosecuting applications in a wide variety of technical areas, including electronics, computer networking, software, biotechnology, medical devices, semiconductors, x-ray technology, motors and other mechanical devices.

After an application has been filed, it usually takes the U.S. Patent and Trademark Office between approximately one and two years to consider the application. In some instances, however, accelerated examination may be requested.

Sometimes, if more than one "invention" is being claimed in a single application, the U.S. Patent and Trademark Office will require that one invention be elected and the others pursued, if at all, in divisional applications. After this restriction requirement, the application is examined substantively.

Although the examiner's review sometimes results in an immediate notice of allowance, in the vast majority of cases the examiner's review results in an initial rejection. The rejection is typically based on the lack of novelty in the invention (35 U.S.C. sec. 102), the obviousness of the invention (sec. 103), the failure to provide clear enough claims (sec. 112, 2nd para.), the failure to provide an enabling disclosure (sec. 112, 1st para.), or the subject matter not being subject to patent protection, e.g., the claimed invention is merely a mathematical algorithm (sec. 101).

These rejections can be overcome in most applications. Therefore, an inventor should not despair too much when the application is initially rejected. One responds to a rejection by amending the application (including usually the claims) and/or by arguing that the examiner's rejection is ill-founded. This response may result in a notice of allowance or another rejection. There may be several iterations of this process, and one may appeal from a final rejection by the examiner. It is important that a patent attorney handle the prosecution of a patent application, as well as its drafting, since it is all too easy to lose valuable patent coverage by amending the claims, or even by arguing that the rejection is ill-founded.[Read the full article]

How To Keep Your Brand Name Out of the Adult Industry’s Neighborhood

2011-06-06T10:58:00.000-07:00

By Steven A. Abreu, a member of our Trademark Practice Group

The new .xxx top-level domain, scheduled to launch this summer, is causing brand managers and trademark owners anxiety. Thankfully, a “defensive registration” process is in place that allows trademark owners to block their marks from being abusively registered as a .xxx domain by a third party. Defensive registration can prevent unwanted affiliation between a wholesome brand and the adult entertainment industry.

Recently, the Internet Corporation for Assigned Names and Numbers (ICANN), has approved the formation of a new .xxx top level domain for the adult entertainment industry and has asked ICM Registry to operate the domain. ICM set up a process by which registered trademark owners can submit a request to block registration of domain names that contain registered trademarks during a time period called “Sunrise B”.

Although it has not been disclosed when the Sunrise period will begin, some in the industry believe it could begin as early as June 2011. Most importantly to brand owners, a free pre-registration process is now available through the ICM Registry website.

Pre-Registration

Currently open to trademark owners is a pre-registration process that allows trademark owners to signal their interest in defensive registration of a trademark by filling out a pre-registration form at located at http://domains.icmregistry.com.

Once a mark has been pre-registered, ICM Registry will notify the owner when the Sunrise period begins and send the owner the necessary forms and fee information. Pre-registration can be completed now, and there is no charge to pre-register a mark.

Sunrise B

In the Sunrise B period, ICM will allow a registered mark owner to complete the defensive registration process and block registration of .xxx domain names which contain protected trademarks. [Read the entire article]

Isn't Asserting a Trade Secret Inconsistent with Seeking a Patent? Not If the Secret is a Unique Combination of Known Elements

2011-05-31T07:38:00.000-07:00

By Joel Leeman, a member of our Litigation Practice Group

One might think the twain would never meet. A trade secret, as the name indicates, exists only in information or a process that is unknown outside of the business that asserts it. That is, it must in fact be secret.

On the flip side, anyone who seeks a patent must make a broad disclosure of the invention for which he seeks protection. Indeed, the essence of the “patent bargain” is that, in exchange for twenty years of exclusivity, an inventor must reveal the workings of his discovery.

In Tewari De-Ox Systems, Inc. v. Mountain States/Rosen, LLC, the Fifth Circuit Court of Appeals recently concluded that a company might possess a trade secret in a process even though it was partly described in its patent application.

Gustav Tewari devised a means for packing meat with zero oxygen. In 2005, he demonstrated his method to Mountain States, a seller of fresh cuts of lamb, but not before that company signed a non-disclosure agreement. Tewari eventually accused Mountain States of misappropriating the alleged trade secrets that he disclosed to them.

The trial court judge threw out the lawsuit. A trade secret is defined as appropriately safeguarded information whose economic value arises from not being generally known to competitors. The judge concluded that everything Tewari claimed as a trade secret was either disclosed in Tewari’s 2004 patent application or included elements that were known in the meat-packing industry.

The appeals court affirmed, up to a point, but still allowed Tewari to revive its trade secret lawsuit. The court agreed that when Tewari’s patent application was published - in keeping with a patent law that has been in effect since 2000 - any claim to the secrecy of its contents was destroyed.

However, regarding the meatpacking elements that were known in the industry, the court said that Tewari was entitled to show that he possessed a trade secret in a unique combination of those elements.

Tewari claimed trade secrets in such things as:
-A gas mixture in combination with the zero-oxygen process published in the patent application
-An oxygen scavenger, disclosed in yet another patent application, that adapts to particular environmental conditions
-The combination of these two secrets
-Knowing how to adapt the disclosed process to an open-nozzle system

The appeals court ruled that Tewari was due an opportunity to prove that these combinations of known elements represent trade secrets, that is, that they give his company a competitive advantage. [Read the full article]

Court Widens Use of Reissue Applications for Strengthening Patents Against Infringement

2011-05-23T06:42:00.000-07:00

By Timothy Murphy, a co-chair of our Patent Practice Group

A reissue application enables the owner of an already issued patent to correct defects in the patent. With its recent decision in In re Yasuhito Tanaka, the Federal Circuit Court of Appeals has expanded the reasons for pursuing a reissue. One result is that a patentee can now better fortify his patent in anticipation of suing for infringement.

The statute relating to reissues, 35 U.S.C. § 251, allows a patentee to make a correction if the claimed invention is either broader or narrower than what the patentee can rightfully claim.

More specifically, a patentee would want to narrow the scope of his patent if he finds a piece of prior art that would render at least the broadest claims invalid. In such a case, the patentee may fear that, in an infringement lawsuit, his broadest claims would be invalidated by this newly discovered prior art, so he preemptively seeks to narrow and thereby strengthen its patent.

By the same token, a patentee might seek to broaden the scope of his patent if he realizes, after the patent has issued, that he claimed his invention too narrowly. (Such a broadening reissue must be filed within two years of issuance and cannot “recapture” subject matter given up during the original prosecution of the patent.)

Yasuhito Tanaka filed a reissue application with broadened claims. After these broadened claims were rejected, Tanaka sought only to add dependent claims to his patent. The Patent and Trademark Office—through both an examiner and the Board of Patent Appeals and Interferences—rejected the new claims because Tanaka did not allege that his original patent claims were too broad.

As the PTO saw it, by keeping his broad patent claims unamended, Tanaka implicitly conceded that the claims were “not inoperative to cover the disclosed invention.” Because Tanaka did not specify an error that either broadens or narrows the scope of the claims of his issued patent, he did not meet the requirements of the reissue statute.

In reversing this judgment, the Federal Circuit ruled that a patentee may in fact seek a reissue application when he does not seek to give up his broadest claims but merely to add the narrower dependent claims. In its 2-1 decision, the Federal Circuit asserted that the case law supported Tanaka’s view that a reissue application may be filed merely to add a dependent claim.[Read the full article]

Accelerating Your Patent Application

2011-05-16T06:54:00.000-07:00

By Tom Tuytschaevers, a member of our Patent Practice Group

Patent applicants often react with impatience and exasperation as they count the months, then the years, before their application runs the gantlet established by the U.S. Patent and Trademark Office (the “PTO”). The attached chart illustrates that several ways to accelerate the process are available.

The delay
The PTO typically issues at least one “office action” that rejects the patent claims, or otherwise objects to aspects of the application. The applicant’s response to the office action may resolve the issues raised by the PTO, or may beget another office action. The duration of this “prosecution” process depends, in part, on the number of rounds of this correspondence.

Another significant time factor, however, is the wait between the application filing and the time the PTO issues its first office action. Patent applications are examined on a first-come first-served basis, and the wait for this first action on the merits is frequently more than two years. The PTO’s 2010 Annual Report revealed that the “Patent Average First Action Pendency” was 25.7 months.

In addition, the 2010 PTO data on “Total Average Pendency” (i.e., the time between filing the application and the time a patent is allowed or when the application is otherwise finally disposed) was 35.3 months, with applications in some technology areas taking much longer: Three of the PTO’s technology centers each had total average pendency of over 42 months! Such time horizons may conflict with the needs of the applicant.

The acceleration
Fortunately, as shown in our chart, there are a number of ways by which the examination of a patent application can be accelerated, or “advanced out of turn,” in PTO parlance. In addition, the PTO goal for some such accelerated applications is to reach a final disposition within 12 months. [Read the full article]

Copyright Durations

2011-05-09T07:54:00.000-07:00

The summary below is provided for informational purposes only, and does not constitute legal advice. Any specific question about copyright law should be directed to an attorney in our Copyright Practice Group.

General Framework
The general framework for understanding statutory copyright duration involves the change of law effective January 1, 1978 (the 1976 Copyright Act). Under the prior law (the 1909 Act) the copyright term began on the date of publication or registration, and originally lasted 28 years; a series of laws, culminating in the Sonny Bono Term Extension Act of 1998, extended the term to a maximum, for some works, of 95 years from publication. The U.S. Supreme Court has upheld the constitutionality of the Sonny Bono Act. Eldred v. Ashcroft, 537 U.S. 186 (2003).

Under the 1976 Act, as amended by the 1998 Act, the copyright term for works created on or after January 1, 1978 begins on the date of creation and ends 70 years after the author's death, 95 years from publication, or 120 years from creation (depending on the nature of the work, its authorship, and its date of publication).

This term also applies to works created but not published or registered before January 1, 1978. In addition, the 1976 Act, as amended, provides these works with a minimum term until the end of 2002; the term is extended, if the work was published by the end of 2002, through 2047.

We have prepared a flow chart setting forth some general guidelines regarding the duration of United States federal statutory copyright. There are a number of exceptions to these guidelines. In most cases, these exceptions may involve expiration prior to the theoretical date indicated. However, in some cases, copyright protection may continue past the indicated date. In addition, some remnants of state common law copyright protection continue to exist, and may provide protection even when federal copyright does not. See, e.g., Capitol Records, Inc. v. Naxos of Am., Inc., 4 N.Y.3d 540 (2005) (holding that New York state common law copyright protects sound recordings made before 1972 until February 15, 2067).

We recommend consulting with an attorney in our Copyright Practice Group before relying on any conclusions concerning the copyright status of a work reached using this flowchart. [Read the Full Article]

Focusing on Inter Partes Reexamination

2011-05-02T06:26:00.000-07:00

Inter partes reexamination is a relatively new form of patent reexamination in the United States Patent and Trademark Office (PTO). A reexamination is a proceeding in the PTO in which a requester can challenge the patentability of issued patent claims with respect to relevant prior art patents or publications.

There are two types of reexamination: ex parte reexamination, where only the patent owner participates in the proceeding once it is under way, and inter partes reexamination, where both the patent owner and the requester participate. A reexamination may be commenced at any time while a patent remains in force.

In view of the magnificent results we have documented, it is not surprising that the use of inter partes reexamination has been exploding. At Sunstein, we believe inter partes reexamination strategy should be coordinated with a company's overall approach to patents and to the specific patent in question.

In our study of the first 250 inter partes reexaminations filed, as of February 2011, 67 of the 143 inter partes reexaminations that have gone through to issuance of a reexamination certificate (or are pending issuance) have resulted in cancellation of all the claims challenged in the request and 35 have survived with only new or amended claims. Of those 143 reexamination certificates, only 15 have resulted in a confirmation of all the claims challenged in the request and 26 of the 143 have resulted in some other mixed outcome. Upon review of the 55 inter partes reexamination proceedings in the group currently on appeal, we note that the patent owner filed 41 of the appeals and the requesters filed 13, and in one, both parties filed the initial notice of appeal. The results in inter partes reexamination proceedings have thus overwhelmingly favored the requester.

In part, the success rate for challenging patents is due to the fact that the requesters are the ones choosing the patent claims they consider to be unpatentable. But it is also the inter partes reexamination procedures that present stringent challenges for patent owners. The procedures prevent discussions with the patent examiner and preclude the filing of continuations which are readily filed during normal patent prosecution. Enthusiasm for inter partes reexaminations have nevertheless been dampened by the delays imposed by the understaffed USPTO and the multiple levels of appeal and prospects of being returned to prosecution before the examiner. Such delays have fueled the proclivity of many district court judges to deny stays and refuse to await the results of an inter partes reexamination.

Any questions regarding reexaminations or requests for a complete chart of inter partes reexaminations listing the patents and parties involved can be sent to Attorney Robert M. Asher.

Inter Partes Reexamination Table [View the full table]

Peace Eludes Google Books as Court Sides With Vocal Opponents of Class Action Settlement

2011-04-25T06:34:00.000-07:00

By Peter Karol, a member of our Litigation Practice Group

In the latest twist to Google’s high-stakes battle to create a universal digitized library, a federal district court in New York has reversed its earlier position and rejected Google’s proffered settlement of a massive copyright class-action lawsuit.

Twice the same court had preliminarily approved a version of the agreement, as we have discussed. Each time, however, the preliminary approval was met with hundreds of objections by vocal dissenters with long lists of grievances.

Thousands of one-time class members, moreover, sent the same message by opting out of the class. Academic authors, cyber-privacy advocates, Google’s competitors, even the United States and foreign governments also got in on the action, filing friend-of-the-court briefs in opposition to the deal.

This time, what the court called the “vociferous” (and politically powerful) objectors finally proved persuasive. After reviewing the countless filings and holding “fairness” hearings, the court rejected the deal. As a whole, the court ruled, it was “not fair, adequate, and reasonable” as required by class action law.

The court provided a range of reasons for rejecting the settlement. Three stand out.

First, the court was impressed by the arguments that a monumental and baroque arrangement such as this is best left to Congress, rather than the court system. After all, the would-be settlement codifies a comprehensive framework for the future of the electronic publishing industry. That is the sort of legislative task generally associated with rule-makers, not judges. Indeed, the opinion - which is filled with extended quotations from letters and briefs submitted by third parties - at times reads more like live testimony from a legislative hearing than a judicial decision.

The court’s desire to avoid intruding on Congress’s turf was particularly palpable in the arena of “orphan works” - works whose rights-holders cannot be readily located. Approval of the settlement would have effectively bypassed Congress’s longstanding, albeit failed, attempts to legislate a balanced solution to the problem.

A number of foreign governments, moreover, forcefully opined that approval of the settlement would put the United States in violation of its treaty obligations. A federal district court would want little to do with such a diplomatic quagmire.[Read the full article]

False-Marking Cases Might Soon be Extinct

2011-04-19T06:27:00.000-07:00

By Thomas Carey, a member of our Business Practice Group

It is a federal offense to mark goods as "patented" when they are not in fact protected by a patent. Such “false marking” often occurs when a patent owner neglects to discontinue marking goods after his patent has expired.

False marking was an obscure topic until a judge held, in a 2009 case involving coffee-cup lids, that a separate penalty is potentially due for each such article sold. Our analysis of that case previewed the unusual results that could arise from private lawsuits to enforce the patent-marking statute. Solo Cup, the maker of those lids, faced a potential penalty of $500 per lid for marking the product with patents that had expired, if it had demonstrably intended to deceive the public with the false markings.

While statutes that threaten potentially unreasonable penalties are seldom enforced to the limit, the marking statute has an unusual feature that increases the risk of irrational results: It authorizes anyone to sue to recover the penalty, splitting the recovery 50-50 with the United States government.

When the plaintiff seeking $500 per lid enjoyed some initial litigation success, he inspired a horde of others to seek a quick score under the guise of enforcing the patent laws. The flood of false-marking lawsuits was reduced to a trickle when Solo Cup persuaded the Federal Circuit that it did not intend to deceive the public with its markings, making the penalty inapplicable. As we reported, the Federal Circuit declared that plaintiffs bear a heavy burden of proof in such cases.

Recent developments have given this nascent cottage industry a dubious future. First, on March 15 the Federal Circuit held, in In re BP Lubricants USA Inc., that a false-marking suit must be quite specific about the evidence supporting the claim of intent to deceive. Absent these particulars a lawsuit will be dismissed, and that was the fate of the lawsuit in that case.

Then, in Unique Product Solutions Ltd. v. Hy-Grade Valve Inc., a federal judge held that the patent-marking statute is unconstitutional because it improperly delegates to private citizens the enforcement of a statute. After all, Article II, Section 3 of the Constitution provides that the President “shall take Care that the Laws be faithfully executed.”

The district court judge ruled that this administrative function cannot be delegated to the public at large without reserving to the executive branch of government some control over the enforcement. With his ruling, the judge rejected the argument of the United States--which had intervened in the case—that the marking statute was in fact constitutional. [Read the full article]

Federal Circuit Delivers Billion-Dollar Lesson on Written Description

2011-04-11T05:39:00.000-07:00

By Robert M. Asher, Co-Chair of the Patent Practice Group

For patent owners, patiently biding time in the PTO with repeated continuation filings, waiting for a hook on which to catch infringers, is a common practice. Here is a story in which patience pays off, but the BIG one gets away. The Federal Circuit demonstrates its greater willingness to use the written description requirement to place limits on the freewheeling practice of filing continuations.

Centocor Ortho Biotech, Inc. and New York University (collectively, “Centocor”) file a patent application in March 1991. Centocor then proceeds to file continuation-in-part after continuation-in-part (“CIP”). Finally, a couple of divisional applications are filed. A total of twelve patent applications are filed, at least six of which become patents.

The patent applications track Centocor’s development of a mouse antibody for tumor necrosis factor α ("TNF-α"). Overproduction of TNF-α can cause autoimmune conditions such as arthritis.

Centocor proceeds to develop and patent a chimeric (part mouse and part human) antibody. The chimeric antibody has a mouse variable region and a human constant region. It solves the problem of achieving an antibody that binds with and neutralizes human TNF-α with an acceptable reduced level of immunogenic reaction.

Centocor jumps on a new opportunity to expand its chimeric antibody patent family in 2001. Competitor Abbott Laboratories receives regulatory approval and begins marketing a different technology to likewise neutralize human TNF-α. Whereas Centocor made use of mouse regions in its antibody, Abbott developed a fully human antibody, which it sold under the name Humira.

Soon after Abbott comes out with its product, Centocor files a continuation application, its thirteenth patent application in the family. Centocor’s patent applications had mentioned the possibility of using a human variable region in the antibody but it did not disclose one that would work. Indeed, Centocor only made the single chimeric antibody.

Nevertheless, in the new continuation application, Centocor for the first time drafts claims to cover a fully human antibody so as to cover Abbott’s Humira. To Abbott’s chagrin, the PTO allows the claims and a patent issues in 2006. [Read the Full Article]

Change Is in the Air: Be Ready for a First-To-File Patent System

2011-04-04T06:51:00.000-07:00

By Bruce D. Sunstein, a member of our Patent Practice Group

Patent law change has become likely this year with the passage by the Senate on March 8 of legislation (S. 23) and, following hearings this year by the House Judiciary Committee, circulation in the House of similar legislation.

The pending legislation would grant patent rights to the inventor who is first to file a patent application for an invention, whereas the present system grants a patent to the inventor who is first to invent. In switching to a first-to-file system, U.S. patent law would resemble that of Europe, Japan, and, indeed, most other countries of the world.

Although revision of the patent laws has been on the legislative agenda for many years, the tone has changed. In prior years, organizations such as the Software Business Alliance (whose members include some of the nation’s biggest software companies) and major electronics manufacturers sought to file the teeth of the patent system. Their rhetoric emphasized the evils of “patent trolls” * and the need for “patent reform.”

Organizations sprang up with rhetorically pleasing names like Coalition for Patent Fairness, whose members include Cisco, Apple, Micron, Google, Dell, Intel, Oracle, etc. They wanted limits on patent damages. They also wanted limits on recoveries by entities that, unlike them, do not engage in manufacturing.

A succession of events has changed the rhetoric. The U.S. Supreme Court engaged in its own patent reform efforts by raising the standard required to show that an invention would not have been obvious (KSR v. Teleflex), making it harder to get an injunction (eBay v. MercExchange), making it easier for a licensee and others to launch declaratory judgment proceedings to challenge a patent (MedImmune v. Genentech), and protecting a software company from U.S. patent liability for overseas sales of U.S.-developed software (Microsoft v. AT&T).

Meanwhile, many organizations, including organized labor, came out against patent reform as harmful to U.S. competitiveness. (The pharmaceutical industry, which depends on the patent system, was always against the reforms proposed by the software and electronics industries.) Then came the meltdown of the U.S. economy, and indeed the world economy. Technological innovation is now viewed as important to spurring the economy.

With these developments, some of the most controversial provisions (such as limits on damages) in prior versions of the legislation have been excised. The legislation passed by the Senate is no longer “patent reform” but rather the “America Invents Act.” Aside from changing the patent system to one based on first inventor to file, perhaps the most important change that the Senate bill would make is allowing the Patent and Trademark Office to retain and use all fees that it collects. [Read the entire article]

What are some of the differences between patents and other types of intellectual property?

2011-03-28T07:35:00.000-07:00

The different types of intellectual property—patents, copyrights, trade secrets and trademarks—have different purposes, different strengths and different weaknesses. In many cases, a proper strategy for protecting a new product line will involve several different types of intellectual property. Sunstein is well suited to consider and implement such a strategy, since our attorneys are familiar with all these areas.

A patent is generally considered to be the strongest way to protect an invention—assuming that a patent with broad coverage can be obtained for the invention. A patent is frequently the only way to protect an invention adequately. In many cases, trade secret protection is impossible or impractical, because of the nature of the invention (e.g., the invention is mass marketed and can be reverse engineered), or because of other circumstances (e.g., the engineers move freely among competitors in the industry). A copyright is not supposed to protect an idea, only the expression of the idea. Trademark and trade dress protection is meant to prevent consumers from being misled about the origin of a product and is not intended to prevent competition in the underlying product.

Patents have other advantages over other types of intellectual property protection. In particular, in order to prove infringement of a patent, one does not have to show that the accused party copied the invention from the patent owner, nor does one have to show that the accused party breached an agreement with the patent owner. Indeed, the infringer may be liable even if the infringer was unaware of the patent or of the patent owner. In other words, someone can innocently infringe a patent and still be liable. Unlike in patent litigation, to prove copyright infringement in copyright litigation, one has to show—by one means or another—copying of the copyrighted work. To prove misappropriation of a trade secret, one must show that the trade secret was improperly appropriated.

Issued patents are entitled to a statutory presumption of validity pursuant to 35 U.S.C. sec. 282. In addition, since the institution in the early 1980's of the Federal Circuit Court of Appeals, which hears the appeals of all patent infringement cases, patents have become much more valuable. Whereas about two-thirds of patents in litigation had been invalidated, now about two-thirds are upheld.

There are some disadvantages to patents over other types of protection. Patents have a short, limited life compared to copyrights, trade secrets and trademarks. Utility patent applications filed on or after June 8, 1995 have a term of twenty years from the earliest effective filing date. Design patents have a term of fourteen years from the patent's date of issuance. By contrast, trade secret protection and trademarks can last indefinitely if properly handled.

A patent can be enforced only after it has been issued by the U.S. Patent and Trademark Office. Patent prosecution takes significantly longer than the copyright registration process—typically two to three years. Trade secrets do not require government approval. The American Inventors Protection Act of 1999 has remedied this disadvantage to some extent. Patent applications filed on or after November 29, 2000 will ordinarily be published eighteen months from their earliest priority date. Earlier publication may be requested. A patent applicant can give notice of the patent publication to competitors believed to be infringing. If the patent application issues as a patent, with claims intact from the published application the patentee may be entitled to collect a royalty from the infringer for the time following the notice even though a patent had not yet been issued. Where competitors are using or may start using the technology of the patent, acceleration of the patent examination process may be desirable to stop competitors from using the claimed technology as quickly as possible.

Obtaining a patent requires providing a very complete disclosure to the public, especially in the United States. Such a disclosure may be useful to the competition, who may not otherwise know how to practice the invention. This is a downside to seeking provisional protection through publication of a patent application. Trade secrets, on the other hand, are kept secret from competitors.

Another disadvantage is that patents are usually more expensive to obtain than copyrights, trademarks and trade secrets. As just noted, patent applications require a fairly thorough written disclosure. There are usually one or more office actions—communications from the patent examiner at the U.S. Patent and Trademark Office objecting to or rejecting the claimed subject matter—that require careful responses. Further, although smaller than the attorney fees involved, the various official patent fees are greater than the official fees for copyrights and trademarks. The costs of obtaining and maintaining a foreign patent are generally much greater than in the United States. Foreign patent counsel must be retained, translations prepared, etc. Although the cost of obtaining a patent may seem high when compared to the cost of registering a trademark or a copyright, the cost of obtaining a patent will frequently seem minuscule when compared to the value of an invention to a company. [Read more about patents]

Trade Secrets

2011-03-21T06:42:00.000-07:00

Although the strengthening of patents by the institution of the Federal Circuit Court of Appeals in the 1980s may have caused trade secret law to receive less attention as a form of protection for intellectual property, trade secrets can nevertheless be the best form of protection in many cases. For example, even though many of its ingredients are well known, the formula for the Coca Cola® brand soft drink, first developed in the late 1800s, is still considered a trade secret. Certain kinds of valuable information, such as customer lists, cannot be protected by patents, but can be protected as trade secrets. Where a trade secret is patentable, trade secret protection may be used instead of a patent or while the patent is pending.

What is a Trade Secret?
The law of trade secrets varies somewhat from state to state, but in general, a trade secret can include any confidential information that provides a competitive advantage.

Courts generally look at the following factors in determining whether something is a trade secret:

-How secret the information is. Trade secrets must not be known to the public or be readily ascertainable by the public.
-The efforts made to protect the secrecy of the information. A trade secret owner need not use heroic measures but must use reasonable precautions to maintain the secrecy of the information.
-The value of the information. A trade secret owner must have an advantage over those who do not know the secret.
-The amount of effort or money a trade secret owner spends developing the information. The more expenditures or efforts made developing the information, the more likely it will be considered a trade secret.

A wide range of types of information has been given trade secret protection, including, for example, computer programs, manufacturing methods, scientific processes and formulas, food recipes, codes for determining discounts, and customer lists. Trade secrets do not include general skills acquired by employees. [Read more about trade secrets]

One Hand Taketh Away, the Other Giveth: For Method Claims, It’s Tough to Prove Joint Infringement, But for System Claims, It’s Easier

2011-03-14T08:09:00.000-07:00

By Kerry L. Timbers, Co-Chair of our Litigation Practice Group

Just two months ago, patent owners had cause for concern over the tightening of the standard for proving joint infringement of a “split” claim, one for which no single entity directly performs all the steps of the claim.

As we reported, the Federal Circuit held, in Akamai v. Limelight Networks, that where a method claim requires two actors to perform the method, there can be no infringement unless one of the actors controls the other, either under an agency theory or by contract.

Exactly one month later, the Federal Circuit went in the opposite direction with split claims for systems, making it much easier to prove infringement. The court’s opposing outcomes for method vs. system claims cannot help but encourage patent applicants to use different types of claims in describing their inventions. (A method claim seeks protection for a series of steps for performing a function or achieving a result. A system claim seeks protection for a combination of interacting components.)

In Centillion Data Systems, LLC. v. Qwest Communications Int’l Inc., the court addressed a system that provided telephone billing information to customers. The claimed system included a back-end computer system maintained by Qwest, and a front-end system, a computer program running on the customer’s own computer. The customer could install software provided by Qwest and “subscribe” to obtain monthly billing reports automatically generated by the back-end system, or could seek specific reports generated by the back-end system.

The court had never addressed the question of what represents “use” of a system claim where elements of that system are in the possession of more than one actor. While agreeing that Qwest itself did not use the entire system -- it used only the back-end system, and did not control the customer -- the court held that the customer used the entire system merely by putting the system into service, both by subscribing and by ordering specific reports. “[B]ut for the customer’s actions, the entire system would never have been put into service.”

In coming to this conclusion, the court did not acknowledge the strange result: It is now very difficult to prove infringement of split claims reciting a method, but very easy to prove infringement of split claims reciting a system. In discussing a customer’s use of a system, the court took note of, but did not rely upon, Akamai and its influential predecessor, BMC Resources, Inc. v. Paymentech, L.P (Fed. Cir. 2008), cases that dealt with split method claims.

Instead, the court looked exclusively to a precedent defining “use” of a system in the context of territoriality, specifically, whether use took place in the U.S. when Blackberry owners in the U.S. sent messages using equipment located both in the U.S. and outside the U.S. NTP, Inc. v. Research in Motion, Ltd. (Fed. Cir. 2005). That case had taken a very broad view of use, holding that a person “uses” the entire system -- even the parts located outside the U.S. -- merely by placing the system into use by sending a message from a Blackberry in the U.S.[Read the Full Article]

Is the Scope of a Patent’s Coverage Determined by Its Claims, Or by Its Specification? Top Patent Judges Disagree.

2011-03-07T07:48:00.000-08:00

By Jakub Michna, a member of our Patent Practice Group

A recent decision by the Federal Circuit—the court that hears appeals from all patent cases—highlights the court’s deep division over the role that the specification of a patent plays in claim construction. While the majority opinion confirms that it is the claims of the patent that govern the scope of protection to which an invention is entitled, the dissent argues that the specification should play a more meaningful role.

(The specification of a utility patent describes the invention, often by highlighting its advantages over existing technology. This is invariably followed by the claims, which define what the patent “covers.”)

Anyone submitting a patent application should be mindful of the potential implications of this debate. Through comprehensive drafting, an applicant can navigate the rift within the Federal Circuit.

Arlington Industries, Inc. v. Bridgeport Fittings, Inc. involves a device for connecting electrical cables to junction boxes. In the past, such electrical connectors used a threaded lock nut to connect the cable to the junction box. The problem with this configuration is that the installer needed two hands to make the connection, one hand to hold the junction box and the other to thread the lock nut.

Arlington’s patent disclosed a solution to this problem—an electrical connector with a “circular spring metal adaptor” used to snap the electrical cable into the junction box.

The trial judge ruled that Bridgeport’s Whipper-Snapper product line did not infringe claim 8 of the patent, chiefly because he construed the term “circular spring metal adaptor” in that claim to require a split. The judge reasoned that, without the split, the adaptor could not spring when being inserted into the junction box. Since Bridgeport’s adaptor did not include a split, it did not infringe the claim.

On appeal, the Federal Circuit found fault with the claim construction and overruled the judge’s holding. The court pointed out that claim 8 did not require a split limitation and that the district court improperly imported this limitation from the specification into the claim. The court reinforced the conclusion it had reached in the well-known Phillips v. AWH Corp. case from 2005: “It is a ‘bedrock principle’ of patent law that the ‘claims of a patent define the invention to which the patentee is entitled the right to exclude.’” [Read the full article]

Resisting The Trademark Disclaimer Temptation

2011-02-28T06:28:00.000-08:00

By Peter Karol, a member of our Litigation Practice Group

Disclaimer requirements are something of a fly in the trademark ointment. A call from your attorney (“Great news!”) informs you that the Patent and Trademark Office has all but allowed your application. Just one small thing - you need to disclaim three of the four words in your mark. So, is it time to uncork the champagne, or gear up for a fight with the PTO? Naturally, it depends on the mark.

The PTO will often require an applicant to “disclaim” exclusive rights to one or more terms in a mark. Even though the PTO has determined that the mark as a whole may be registered, it finds that a certain “component” part of the mark would be unregistrable standing alone (that is, that the component is merely descriptive, generic, etc.).

An ice cream parlor applying to register ABRACADABRA ICE CREAM, for example, would likely be required to disclaim exclusive rights to “ICE CREAM” apart from the mark as shown. The ICE CREAM element, after all, is clearly generic and unregistrable when taken alone. While Abracadabra should be able to prevent others from calling themselves ABRACADABRA FROZEN YOGURT, the thinking goes, it should not be able to go around town shutting down every parlor that uses the term ICE CREAM in its name.

Applicants are often quick to accept disclaimers, for understandable reasons. After all, the objection can be resolved with an inexpensive and quick phone call, and the examiner is often dangling the promise of immediate publication. However, there are good reasons to fight a disclaimer, particularly where the material sought to be disclaimed is central to your branding.

Although disclaimed subject matter may still be protected under various theories, a disclaimer should be approached as, in essence, a donation of the subject words or elements to the public domain. Accordingly, anyone tempted to disclaim should ask herself, “Would I be upset if my direct competitor started using those terms in its own marketing?” If the answer is yes, then she should strongly consider taking a stand against the requirement.

Sears, for example, was recently faced with such a question when it sought to register the familiar mark SEARS BLUE SERVICE CREW for its retail department-store services (i.e., its in-store sales team). In re Sears Brands, LLC, App. Ser. No. 77/558,337 (T.T.A.B. Dec. 20, 2010). (Read the full article)

Unused Capabilities of a Product Can Infringe Well Written Patent Claims

2011-02-21T09:37:00.000-08:00

By George Jakobsche, a member of our Patent Practice Group

Can a disabled functionality within a product infringe a patent? The answer depends, of course, on how the patent is worded, as noted by the Federal Circuit in several instructive cases.

In Fantasy Sports Properties, Inc. v. Sportsline.com (2002), software for operating a fantasy football league and awarding bonus points for unusual plays was found to infringe a device claim, which recited “means for scoring … wherein [players] receive bonus points.” The recited means were found to be present in the accused software even though users of the software had to configure the software so that it would award the bonus points.

What if a device, such as a lock or a computer program, is capable of operating in two modes, only one of which infringes a claim? The question of infringement depends on whether the claim requires actually performing the recited operations or merely the capability of operating in the proscribed way.

Method claims require actually performing the recited steps. If one or more steps are not performed as recited or at all, the claim is not infringed. For example, in Southwest Software, Inc. v. Harlequin Inc. (2000), a manual operation of selecting a calibration set used to provide accurate gray tones on computer screens avoided infringing a method claim, because the claim required selecting the calibration set automatically by a computer program.

On the other hand, a carefully worded claim can cover a device based on the device’s capabilities, even if it is not actually used in a proscribed way, and even if the device is locked to prevent such operation. In Finjan, Inc. v. Secure Computing Corp., decided in November 2010 by the Federal Circuit, a virus-detection software module that was locked and required a software key to enable was nonetheless covered by a device claim that recited “a logic engine for preventing execution of [a suspicious software module].” The court ruled that software written to serve that purpose was infringing, even if that functionality was not active in the software as it was deployed. (Read the full article)

Joint Patent Infringement Is Now Even Harder to Prove

2011-02-10T06:16:00.000-08:00

By Kerry L. Timbers, Co-Chair of the Litigation Practice Group

The Federal Circuit has recently stiffened the requirements for proving infringement of a “split” method claim -- one where no single entity directly performs all the steps of the claim. Such claims, such as those addressed in last month's decision in Akamai Techn., Inc. v. Limelight Networks, Inc., list a number of steps, not all of which are performed by the alleged infringer. For example, one or more steps listed in the claim might be performed by a subcontractor or a customer.

The Akamai patent concerned the storage and delivery of discrete portions of website content. Limelight did not perform all the steps of the patent, as one of the steps was to be performed by customers. The customers had to “tag” web content that was to be handled a certain way, and Limelight then served the content in a more efficient way.

We have learned from earlier cases that, to establish liability, a patent owner must show that an alleged infringer has performed all steps of a patent claim. Alternatively, to establish “joint liability,” the patent owner must prove that any steps not performed by the alleged infringer are performed as part of an agency relationship or under the “direction or control” of the alleged infringer, such that the actions can be legally attributed to the alleged infringer. BMC Resources, Inc. v. Paymentech, L.P. (Fed. Cir. 2008).

Contracting with someone else to perform such steps would meet these requirements, but the law had been unresolved as to whether merely providing instructions, such as to a customer, would suffice where the customer was not under any legal obligation to perform the steps. In finding no infringement in BMC Resources, the Federal Circuit pointed to the lack of “evidence of instructions or directions,” implying that such evidence could establish the “direction or control” test for infringement.

The Akamai case closes the door on that option, making clear that mere directions or instructions to another entity -- absent a legal obligation of that entity to perform the steps -- is insufficient to establish infringement of a split claim.(Read the full article)

How Exclusive Must an "Exclusive Licensee" Be in Order to Sue for Patent Infringement?

2011-02-07T11:51:00.000-08:00

By Kimberly Seluga, a member of our Litigation Practice Group

The Federal Circuit recently decided that in order to bring an infringement action an exclusive licensee need not have the right to exclude all others from practicing a patent.

Rather, as clarified in WiAV Solutions LLC v. Motorola, Inc., capacity to sue, or “standing,” depends on whether the exclusive licensee’s rights are at least exclusive as to the particular parties he wishes to sue for infringement. If so, that licensee can show legal injury from the infringement, a necessary condition for standing.

As it happens, an exclusive licensee may be able to sue some parties and not others. The court’s decision provides more certainty for exclusive licensees and potential accused defendants as to who may sue whom, a question not always easily answered.

The standing of an exclusive licensee – whether he has demonstrated sufficient injury to be entitled to bring a suit for infringement – has long been the subject of Federal Circuit jurisprudence. Despite its name, an “exclusive licensee” does not have to be the only party with exclusive rights to a particular patent. A patent can have more than one exclusive licensee, with each licensee having exclusive rights to a portion of the patent rights.

For example, a party’s exclusive license may be limited to a particular field of use or geographic area. Also, a party may be considered an exclusive licensee even if the patent was previously licensed to another party on a non-exclusive basis.

If an exclusive licensee holds all substantial rights in the patent, he has standing to sue an alleged infringer in his own name. Under this circumstance, the licensor has effectively assigned the patent to the licensee.

An exclusive licensee with fewer than all substantial rights (such as an exclusive licensee in a limited field of use), however, must name the patentee as a co-plaintiff in the infringement action. Non-exclusive licensees lack standing altogether.

In WiAV Solutions, the Federal Circuit declared that an exclusive licensee need not have the right to exclude all others from practicing a patent in order to bring an infringement suit. WiAV, the exclusive licensee in the wireless handset field for certain patents owned by Mindspeed Technologies, accused Motorola and several other defendants of infringing the licensed patents. (Read the full article)

Double Your Patents, Double Your Trouble? A Departure in Double-Patenting Law

2011-01-31T05:55:00.000-08:00

By Timothy Murphy, Co-Chair of the Patent Practice Group

The Federal Circuit has recently departed from long-established law on obviousness-type double patenting. The decision, in Sun Pharmaceutical Industries, Ltd. v. Eli Lilly and Company, creates risks for patent owners who obtain patents that are related to each other, especially where those patents are continuations-in-part of an earlier application.

Double-Patenting Basics
Under U.S. law, the Patent and Trademark Office is supposed to issue only one patent per invention. 35 U.S.C. § 101. Thus, the PTO should reject a claim in a pending patent application where that claim is identical to a claim in a previously issued patent—even when the application and the patent have the same owner and same inventors. Such a rejection is called a “statutory double-patenting” rejection.

When a later-pending claim is not identical to a claim previously issued to the same applicant but is obvious over that claim, the PTO is supposed to make an “obviousness-type double-patenting” rejection. Because the doctrine of obviousness-type double patenting was developed by the courts and is not based on the patent statute, it is sometimes called “non-statutory double patenting.”

If the PTO fails to make either a statutory or obviousness-type double-patenting rejection when it should have, a court can find the later-issued claim unenforceable if the later claim is the same as or obvious over the earlier-issued claim.

Deciding whether the later claims are obvious over the earlier claims requires an analysis similar to the standard obviousness analysis, where claims are determined to be obvious or non-obvious over the prior art.

In the standard obviousness analysis, you identify the differences between the claims in a patent application and the closest prior art reference—typically a prior product, a patent, a scholarly article or other writing—and then determine whether these differences would have been obvious to a person of ordinary skill in the field, in view of what else is taught and suggested by the rest of the prior art.

Obviousness-type double patenting calls for the same analysis, except that you isolate the differences between the later claim and the earlier claim of the same applicant. Then you determine whether these differences would have been obvious to a person of ordinary skill in the field in view of what is taught and suggested by the rest of the prior art.

It had long been established that, in determining whether the later claims would have been obvious over the earlier claims, “the patent disclosure may not be used as prior art.” See, e.g., Application of Vogel, 422 F.2d 438, 441 (CCPA 1970).

To overcome an obviousness-type double-patenting rejection, a patent applicant can, of course, argue that the later claims would not have been obvious over the earlier claims. Alternatively, a patent applicant—or, in some cases, a patentee—can file a terminal disclaimer for the later patent.

A terminal disclaimer is a binding statement that the later patent will expire no later than the earlier patent and that the later patent will be enforceable only as long as it and the earlier patent are commonly owned. (A terminal disclaimer cannot be used to overcome a statutory double-patenting rejection, as a later claim should never be allowed where it is identical to an earlier-issued claim.)[Read the full article]

“25% Rule” is Drawn and Quartered: Court Rejects Popular Method for Computing Patent Infringement Damages

2011-01-24T07:10:00.000-08:00

By Joel Leeman, a member of our Litigation Practice Group

A patent owner is entitled to damages to compensate for infringement of patent rights in an amount not less than a reasonable royalty. According to venerable precedent, a prevailing patentee may seek the royalty that would result from a hypothetical negotiation between the parties, occurring when the infringement began. (In some circumstances, the patent holder will instead seek lost profits.)

For many years, patent owners have used the so-called “25% rule” as a starting point for determining just what level of royalties is “reasonable.” Under that rule, 25% of the pre-tax profit attributable to sales of products embodying the invention should go to the inventor.

Courts have long bowed to the rule’s widespread acceptance among the brotherhood of economic consultants, from whose ranks spring the army of expert witnesses who have touted the rule’s usefulness. Even infringers have rarely challenged the rule’s admissibility.

Now the Federal Circuit—the court that hears appeals from all patent cases—has emphatically announced that the 25% profit-split that the rule calls for is too arbitrary to suit the messy facts of particular cases. In Uniloc v. Microsoft, the court admits that it has “passively tolerated” the rule, but declares it will do so no longer.

For all the wrenching changes to patent law that the Supreme Court and Federal Circuit have wrought in recent years, the calculation of reasonable-royalty damages has been tucked into something of a time warp. Two approaches that were introduced decades ago have long held sway: the 25% rule and the Georgia-Pacific case. (Read the full article)

Jingle All the Way…To the Tune of $1.3 Billion: Oracle Wins Largest-Ever Copyright Infringement Award

2011-01-17T07:23:00.000-08:00

By Nicole Rizzo Smith, a member of our Litigation Practice Group

In the world of technology titans, SAP has landed itself on the naughty list this year. In a copyright infringement action brought by Oracle against rival SAP for stealing software and customers, a federal jury last month awarded Oracle $1.3 billion, the largest copyright infringement award ever.

SAP’s subsidiary, TomorrowNow, which provides technical support for software used by large corporate data centers, admitted to copying a large library of Oracle’s software and customer manuals in an effort to boost its sales to Oracle customers.

Oracle alleged that SAP infringed 120 of its copyrights, and SAP admitted liability. Thus, the only question before the jury was by what measure and how much should Oracle be compensated.

The damages award could have been measured by Oracle’s lost profits from the defection of customers to SAP, or by the fair market value of the license that SAP would have had to pay to Oracle for using the software. The Northern California jury took the latter course, and heard the parties’ widely divergent views of the value of such a license.

Oracle claimed a license would have been worth as much as $3 billion over the lifetime of the software. SAP argued that the value would have been between $28 to $40 million because only a few hundred Oracle customers actually were persuaded to use the software. (Read the entire article)

With Supreme Court Deadlock, Cloud Lingers Over Gray Market Goods

2011-01-10T06:56:00.000-08:00

By Lisa M. Tittemore, Chair of our Trademark and Copyright Practice Groups

Copyright law can have a direct impact on the availability and pricing of the products we purchase. This is true in many ways, one of which was recently addressed by the United States Supreme Court in Costco v. Omega, a case involving Costco’s sale of gray-market watches.

In Costco, the court had the opportunity to address a persistent conundrum involving the “first sale doctrine” and answer the question: May a distributor -- without the authorization, and even against the will of the copyright owner -- resell copyrighted products in the U.S. that were made abroad, intended only for sale abroad, and purchased abroad? The justices’ 4-4 tie left the question unanswered, to the disappointment of the many people watching the Court and hoping for a definitive resolution.

It is well established that the purchaser of a copyrighted work made within the U.S. may resell or otherwise transfer it to another party without violating the copyright owner’s rights. The first sale doctrine, codified in the Copyright Act at 17 U.S.C. § 109, explicitly permits this further distribution after an authorized first sale of a “lawfully made” work, and “exhausts” the copyright owner’s exclusive right of distribution.

Only the distribution right may be exhausted, not the other exclusive rights of the copyright owner (e.g., the right to copy, the right to make derivative works). Thus, if you buy a copyrighted book, you may resell the book or give it as a gift to someone else, but you may not make additional copies of it to distribute.

For many years, and especially since the Supreme Court’s 1998 decision in Quality King Distributors, Inc. v. L’Anza Research International, Inc., copyright scholars have debated the legality of importing into the U.S. for distribution copyrighted goods which were made abroad and intended only to be sold abroad (so called “gray market goods”). The question turns largely on what constitutes a “lawfully made” item in this context.

In Costco v. Omega, Omega sued over Costco’s sale in the U.S. of authentic Omega watches which were unauthorized gray market goods. Costco had obtained the watches from a third party which had purchased them from authorized Omega distributors overseas. On the back of the watches was a symbol that Omega had registered with the U.S. Copyright Office, enabling Omega to assert a claim under the Copyright Act. (Read the entire article)

The DMCA Re-Fanged: Courts Now At Odds Over Copyright Protection for Software Security Devices

2011-01-03T07:07:00.000-08:00

By Thomas Carey, Chair of the Business Practice Group

The Digital Millennium Copyright Act makes it unlawful to circumvent a technological measure that effectively controls access to a work protected by copyright, and to traffic in devices designed to accomplish that end.

In last month’s IP Update, we expressed wonderment at the reasoning of the Fifth Circuit Court of Appeals in MGE UPS Systems Inc. v. GE Consumer and Industrial Inc. In that case, the court was unable to find a violation of the DMCA where software had been modified without authorization so that it would not check for the presence of an external hardware device that the software vendor distributed only to authorized users of the software.

The Fifth Circuit relied on a 2004 opinion of the Federal Circuit Court of Appeals involving garage door openers and their remote control devices. Chamberlain, a manufacturer of these devices, had developed an opener that uses an algorithm to frequently change the codes required to open the garage door. The Chamberlain remote controller uses the same algorithm to generate the code that it sends to the opener.

Skylink, a competitor that makes its own openers and remote controllers, also makes a “universal” controller that can replicate Chamberlain’s algorithm, permitting its openers to operate Chamberlain’s openers.

Chamberlain alleged that the sale of Skylink’s controller was a DMCA violation. It pointed out that its openers and controllers had embedded software protected by copyright; and that the algorithm for changing codes was a technological measure that controlled access to that embedded software.

Despite this clear mapping of the facts to the wording of the DMCA, the Federal Circuit found no DMCA violation because operating the Skylink universal remote did not result in any copying of the Chamberlain software; it only caused the software to function. Thus, the court said, there was no connection between the defendant’s thwarting of the plaintiff’s scrambling algorithm and any copyright infringement.

Relying on this Federal Circuit precedent, the Fifth Circuit concluded in MGE UPS Systems that the unauthorized use of the hacked software was not a DMCA violation because there was no evidence that the defendant had created the hacked version of the software. The court did not view the DMCA as giving a copyright owner the power to prevent the use of the software it had created.

Now another court of appeals, the Ninth Circuit, has issued an opinion with a very different reading of the statute, one that provides much greater support to copyright owners. It starts with a video game . . . (Read the entire story)

Business Method Claims after Bilski:The Federal Circuit Weighs in on Abstractness

2010-12-28T13:22:00.000-08:00

By Alexander J. Smolenski

The Federal Circuit has recently provided fresh guidance on what is patentable subject matter. Its decision promises to get many computer-based innovations over the eligibility hump, but alerts inventors to other pitfalls on the path to securing patent protection.

Addressing whether a claimed process is too “abstract” to be patentable under 35 U.S.C. §101 (the statute defining the subject matter eligible for patenting), the court sets a low bar, ruling that an invention’s abstractness must “exhibit itself so manifestly as to override the broad statutory categories” of patent eligibility. This is the court’s first elaboration on patent eligibility since the Supreme Court issued its decision in Bilski v. Kappos this past June.

As we have reported, Bilski invalidated a patent related to hedging the seasonal risks of buying energy. Confirming that abstract ideas, laws of nature and physical phenomena are not patentable, the Supreme Court found that Bilski’s patent was fatally abstract. However, in doing so the Court provided minimal advice as to the definition of abstractness.

Thus, there was much anticipation that, in Research Corporation Technologies Inc. (RCT) v. Microsoft Corp., the Federal Circuit would define the borders of the “abstract idea” exclusion for patentable subject matter.

RCT asserted against Microsoft six patents related to digital image halftoning, a technique that allows computers to present many shades and color tones with a limited number of pixel colors. The district court judge struck down two of the patents as invalid under 35 U.S.C. §101, finding, in part, that the asserted claims were not patentable subject matter as they did not satisfy the “machine or transformation” test [1] articulated by the Federal Circuit in Bilski [2]. RCT appealed. (Read the full story)

FAQ About Copyrights

2010-12-28T07:33:00.000-08:00

Our attorneys advise clients regarding the protection provided by law to copyrightable works. Copyright law has changed significantly over the years. This summary does not address prior versions of the federal copyright statute. The summary is provided for informational purposes only, and does not constitute legal advice. Any specific question about copyright law should be directed to an attorney in our Copyright Practice Group.

Q: What is a copyright?

A: The term "copyright" refers to a set of intangible property rights that an author has in certain works that he or she has created. These rights are governed by federal statute, and include the exclusive right to reproduce the work, to prepare works derived from the copyrighted work, to distribute copies to the public, and to perform or display the work publicly. The copyright owner can prevent others from reproducing or using the copyrighted work in an unauthorized manner, subject to certain "fair use" exceptions, such as limited use of the material for teaching, news reporting and commentary.

The copyrights in a work are separate from the work itself and, in the absence of an agreement to the contrary, are not transferred when the work itself is sold or given away. Thus, an artist who creates a painting and sells it to a collector has not given up the copyrights in the work and may prevent the collector from making and selling posters or postcards of the painting. Although the collector does not have copyrights in the work, under U.S. copyright law, he or she does have the right to display and sell the work itself.

Q: What kinds of material are protected by copyright?

A: The works protected by the federal copyright laws include literary works (including computer programs), musical works, dramatic works, pantomimes and choreographic works, pictorial, graphic, and sculptural works, motion pictures and audiovisual works, sound recordings, and architectural works.

Q: What is the difference between copyright, patent and trademark?

A: Copyright law, patent law and trademark law are independent legal doctrines, and are governed by separate federal statutes. However, some works may be protected under more than one doctrine. Generally speaking, copyright law protects original works of authorship that are fixed in a tangible form of expression, such as books, paintings, sculptures and films. Patent law protects novel and non-obvious inventions, such as machines, manufacturing processes and synthetic drugs. Trademark law protects brand names, such as Reebok® and Pepsi®.

Copyright law protects the expression of a work, but not the underlying ideas. Thus, the copyright owner of a movie cannot prevent others from making movies with the same basic plot elements or themes unless so much material is copied from the original work that the works are substantially similar. Ideas, methods or processes contained in an expression, though not protected under copyright law, can sometimes be protected under patent law. This is often the case with computer software. In addition, although copyright law often does not apply to titles, names, short phrases or slogans, these works may be protected under trademark law. Because our firm's practice includes patent law and trademark law in additional to copyright law, we are able to assist our clients in developing the best strategy for the protection of their intellectual property rights.

Q: How are copyrights obtained?

A: Under the current law, at the moment that a copyrightable work is physically created, it is automatically and immediately protected by copyright law. It is not necessary to obtain a copyright registration, although there are several advantages to doing so. A copyright notice may be placed on publicly distributed copies of the work regardless of whether the copyright has been registered. While not required by law for works first published after March 1, 1989, a copyright notice provides the important function of informing the public of the author's claim of copyright and, in the event of copyright infringement litigation, can eliminate the defense of "innocent infringement" (i.e. that the infringer was not aware of the copyright claim), which may affect the amount of damages the owner of a registered copyright can recover.

Q: Who owns the copyrights in works?

A: Generally speaking, the author of a work is the sole owner of the copyrights in that work. In the case of a work that is jointly authored by two or more people, the copyrights will be owned jointly by those people in equal shares. These rights can be altered by contract, however, and it is a good idea to decide at the beginning of a project who the copyright owner will be and to prepare a written agreement reflecting that arrangement in order to minimize the possibility of litigation later on.

Q: Who owns the copyrights in works made for hire?

A: The copyright statute provides that the owner of copyrights in a "work for hire" is the party for whom the work was created, not the party that actually created the work. What is a work for hire? The statute defines a work for hire as (1) a work prepared by an employee within the scope of his or her employment; or (2) a work prepared for another if the parties enter into a written "work for hire" agreement and the works consist of contributions to a collective work, translations, instructional or explanatory texts, and certain other materials specified in the statute. Thus, if an employee prepares a work within the scope of his or her employment, the employer and not the employee is considered to be the author and the copyright owner. Consultants or independent contractors, on the other hand, generally retain the copyrights in the works that they create in the absence of a work for hire agreement. We have advised employers, employees and independent contractors regarding copyright matters and, when necessary, have drafted copyright assignments, licenses and contracts in order to transfer ownership and other rights in accordance with the true intentions of the parties.

Q: Where can I get additional information?

A: For additional information or assistance with a particular copyright issue, please contact a member of our Copyright Practice Group. In addition, the U.S. Copyright Office publishes circulars concerning a number of copyright issues. These circulars can be obtained by calling the Copyright Office at (202) 707-3000 or visiting the Copyright Office's home page.

Patent Prosecution Pointers

2010-12-20T06:54:00.000-08:00

If you have any questions about patent defense and enforcement, contact a member of our Patent Practice Group.

Many of the common pitfalls in the defense and enforcement of patent rights can be avoided through careful planning and early consultation with competent patent counsel. Although we assess the needs of each client individually, we find that the following "practice pointers" are applicable to most companies or individuals who create patentable inventions.

•Set up a patent committee including heads of marketing, business development, engineering, and in-house legal department to work with patent counsel to develop and hone a patent strategy that is implemented on a company-wide basis to advance your company's business. Educate your co-inventors and employees as to why patents are important.

•To protect your investment in research and marketing, consider developing a multi-pronged approach to protecting your intellectual property, incorporating utility patents, design patents, copyright, trademarks and/or trade secrets. Since there are differences between patents and other types of intellectual property, employing several types of intellectual property to protect a product line can be very valuable.

•Have written agreements signed by any employee or third party who may be inventing on your behalf. Otherwise, it may not be clear who owns the patent.

•Educate co-inventors and employees about the importance of adequate documentation of development, including witnessing by non-inventors. Such documentation could be very valuable in an interference

•Have searches performed to determine the novelty and the non-obviousness of inventions. In many industries, it is also prudent to learn of patents that may cover your product.

•Consult with a patent attorney early in the development process. A patent application may be filed before a prototype is built, and it is often prudent to file a patent application as quickly as possible.

•Use provisional patent applications to establish an early date of invention.

•Watch for possible statutory bars to filing patent applications and remember that foreign countries generally do not have a grace period and the U.S. has only a one-year grace period.

•Consult with a patent attorney about the advisability of having a formal, comprehensive clearance opinion prepared if a patent belonging to another presents a possible problem.

•In order to maximize your recovery in a patent infringement suit, make sure that you and your licensees are properly marking the patented products.

Court Makes it Easier to Prove Patent Infringement By Standards-Compliant Products

2010-12-13T05:58:00.000-08:00

By Tom Tuytschaevers, a member of our Patent Practice Group

A recent court decision makes it easier to prove patent infringement where the operation of a product complies with an industry standard. Direct infringement may now be established by proving that the patent covers the standard, says the Federal Circuit in Fujitsu et al. v. Netgear.

To determine whether a process infringes a patent, one typically compares the steps recited in the patent to the steps performed by the accused process. If each step of the claim has a corresponding step in the accused process, then performing the process infringes the patent.

If a product performs a patented process as part of its operation, then the operation of that product infringes the patent. Consider, for example, a patent claim that covers the way your mobile phone interacts with a cellular network. The claim may be infringed only when you are engaged in a call.

This presents a challenge for the patent owner. How does he enforce a patent against a competitor when the competitor enables or contributes to infringement of a patent, for example, by making the product which is used to infringe the patent but does not itself perform the process that infringes the patent?

Patent law answers with the doctrine of “contributory” patent infringement. Contributory infringement, which is codified in 35 U.S.C. 271(c), imposes infringement liability on a person who knowingly sells a device used to practice a patented process, provided the component or device is not “a staple article or commodity of commerce suitable for substantial noninfringing use.”

Establishing a case of contributory infringement requires the patent owner to prove, among other things, that there is direct infringement by someone – for example, that a consumer actually used a product to infringe the patent. Such proof can be difficult and expensive when the direct infringers are the end-users of the product.

Fortunately, proving such direct infringement just got easier for patents that cover standards-based products, thanks to the Federal Circuit’s September ruling in Netgear. (Read the full article)

Department of Justice Seeks to Handcuff Gene Patents

2010-12-07T05:46:00.000-08:00

By Justin Huddleson, Ph.D., a member of our Patent Practice Group

Last spring, in the so-called Myriad Genetics case, Judge Robert Sweet of the federal court in New York City famously invalidated nearly all DNA-based patents in a sweeping opinion that we discussed in our April 2010 issue.

The case is now on appeal to the Federal Circuit, and the Department of Justice has filed an amicus curiae (“friend of the court”) brief on behalf of the U.S. government. The U.S. had never before expressed its views on this question in the litigation context.

Although the Department sought to temper Judge Sweet’s holding and find an acceptable middle ground, its brief argues that isolated genomic DNA is not patent-eligible. However, it fails to provide a rational basis for excluding isolated genetic sequences from the realm of patentable subject matter.

To review, the case started when the American Civil Liberties Union orchestrated a challenge on behalf of various nonprofit medical and research societies, scientists and cancer patients. These plaintiffs sued to invalidate patent claims related to two human genes in several patents owned by Myriad Genetics and the University of Utah Research Foundation.

The patents cover aspects of purified BRCA1/2 DNA sequences, their corresponding amino acid sequences, and methods of using the DNA and amino acid sequences to test and identify cancer-predisposing mutations in patients.

The sequences at issue comprise part of the genetic sequences encoding the BRCA1 and BRCA2 proteins. These genes are now recognized as important hereditary predictors of breast cancer.

The inventors identified the correlation between BRCA mutations and breast cancer. They proceeded to isolate or purify the gene from human cells--a process that involves removing the gene from a complex arrangement of DNA and chromosomal proteins--and cloned and sequenced a complementary DNA (“cDNA”) of the BRCA mRNA. This revealed the amino acid sequence of the BRCA proteins.

The fundamental issue before the district court was whether isolated, purified DNA sequences and inventions utilizing such sequences are patent-eligible.

On March 29, 2010, Judge Sweet concluded that (1) isolated DNA within the meaning of the patent is of the same essential quality of DNA as it exists in cells and, therefore, claims directed to isolated DNA are not patent-eligible subject matter; and (2) the method claims of the patents are abstract mental processes which likewise constitute unpatentable subject matter under the test articulated by the Federal Circuit, and later affirmed by the Supreme Court, in In re Bilski. (Read the entire article)

The DMCA De-Fanged: Why Software Developers Need to Register Their Software With the Copyright Office

2010-11-29T06:24:00.000-08:00

By Thomas Carey, a member of our Business Practice Group

Developers of high-end software face a serious piracy risk because software is generally easy to copy. One common technique to control piracy is to require the customer to install a pre-programmed device (a ‘dongle’) onto the computer running the software. (This device often inserts into a USB slot.)

Each time the software is fired up, it checks to see that the proper dongle is attached to the computer. If it is not, the software shuts down. In this way, people who come into possession of an unauthorized copy of the software are prevented from using it.

This mechanism seems like just the sort of technological measure that the authors of the Digital Millennium Copyright Act (DMCA) meant to reinforce. That law makes it illegal to “circumvent a technological measure that effectively controls access to a work protected under this title.”

Software developers often fail to register their works with the Copyright Office. This habit has arisen because developers are concerned about the requirement to deposit source code with the Copyright Office; because software is constantly being modified, so there is a continuous need to update the filing (what a hassle!); and because of a belief that technological measures are sufficient to prevent copying. If technology stops the pirate, why bother with copyright registration?

Developers going down this path have also had backup legal protection in the DMCA, which affords many of the same remedies as copyright infringement without the need to register with the Copyright Office. (Read the entire article)

Supreme Court Will Tackle Interplay of University and Inventor Patent Rights

2010-11-22T06:27:00.000-08:00

By Samuel J. Petuchowski, a member of our Patent Practice Group

Under U.S. law, invention rights ultimately derive from the personal rights of one or more inventors. In fact, unlike practice in the rest of the world, U.S. patents issue in the name of their inventors, not the entities that employ them. Inventors, in turn, may assign their rights, and, in some cases, are required to do so, whether by contract, by judicial precedent or by statute.

Patent rights have attributes of personal property (35 U.S.C. § 261), subject, however, to specific provisions of the Patent Act, one of which is being scrutinized this term by the U.S. Supreme Court, in Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems Inc., U.S. No. 09-1159, cert. granted 11/1/10.

The specific question is whether the Small Business Patent Procedures Act of 1980, more commonly known as the Bayh-Doyle Act, assures that rights derived from government-sponsored research always flow to the university or small business that actually receives a government research grant or contract. The statute provides that if the contractor/grantee declines to assert title, the government may waive its own rights, leaving ownership to the inventor.

The schoolyard affords well-established notions of tangible property: If you give something to someone, particularly with a written confirmation, it’s theirs to keep. But, what if the property is an idea? Rights in less tangible property are less easily intuited, as is evidenced by widespread misunderstanding of rights associated with subject matter posted to the Internet. (Read the full article)

Copyright Decision Deals Crippling Blow to Infringer: Decorative Furniture Not Merely Functional

2010-11-08T07:44:00.000-08:00

By Lisa M. Tittemore, Chair of our Copyright and Trademark Groups

When evaluating whether a particular item or object infringes someone’s copyright, it is essential to determine whether the work is protectable by copyright in the first place. In many cases, the issue will raise a question regarding functionality, as functional items are generally not protected by copyright. Specifically, the question will arise: Is the item at issue a work of protected expression, or is it “merely” a functional item, not protected by copyright? This question is not as easy to answer as it may seem, and courts have struggled for years to develop consistent tests for doing so.

In Universal Furniture, Inc. v. Collezione Europa USA, Inc., the Fourth Circuit Court of Appeals, hearing an appeal from the Middle District of North Carolina, confronted this issue in affirming a decision involving furniture design that resulted in a damages award of more than $11 million.

Universal had alleged that its competitor Collezione which, according to the Fourth Circuit, has “a reputation as being a knock-off furniture company,” had unlawfully copied its furniture collections. Collezione’s president “acknowledged that his company routinely imitated other companies’ furniture designs.” Nonetheless, Collezione argued that it was not liable for infringement because, among other things, Universal’s designs were not conceptually separable from the furniture’s utilitarian aspects, and thus not entitled to copyright protection. (Read the full article)

When is a Sale Not a Sale? When a Software License Says So

2010-10-25T07:36:00.000-07:00

By Meredith Ainbinder, a member of our Litigation Practice Group

In 2008, we reported on Vernor v. Autodesk, Inc., a federal judge's ruling that caused alarm for software vendors. The decision concluded that slapping the word “license” on a software transaction that smells more like a sale than a license cannot prevent downstream sales of the program.

Mr. Vernor tried to resell on eBay copies of Autodesk’s CAD software that he bought second-hand. Autodesk argued that Vernor was bound by the “license” under which the original purchaser bought the software. That license forbade resale or other transfer of the software.

Because the original purchase involved a single payment and allowed the buyer to retain the software, the judge called it a sale, one that triggered the first-sale doctrine under copyright law.

That doctrine allows the initial transferee to sell or give away his lawfully acquired copy of the software without violating copyright law (although there could still be a breach of contract if the sales agreement prohibited further sales). In turn, downstream transferees such as Vernor could also sell the software without running afoul of copyright laws.

This decision stirred anxiety among software companies that believed they had entered into proper license agreements. Businesses were faced with the difficult task of revamping agreements to require the return of software and with the job of policing compliance with these new provisions. (Read the full article)

Software Makers, Take Note: Court Defines "Circumvention" Downward

2010-10-18T06:39:00.000-07:00

By Kerry L. Timbers, a member of our Litigation Practice Group

Hacking a security device in order to use software is not a violation of a law barring the circumvention of technology that “controls access” to copyrighted works, such as software. The Fifth Circuit makes this fine distinction in MGE UPS Systems Inc. v. GE Consumer and Industrial Inc.

Copyright law, in the form of the Digital Millennium Copyright Act, or DMCA, provides: “No person shall circumvent a technological measure that effectively controls access to a work protected under this title.”

This generally makes it illegal to circumvent technological measures that control access to a work, such as software used to prevent copying of DVDs, digital rights management (DRM) technology for music files, or software or hardware “keys” used to lock software programs with a password. Prohibited circumvention is illegal, whether or not there is any actual copyright infringement involved.

Thus, it has typically been held that “cracking” codes in order to access and copy music or movies is a violation of the DMCA. For example, last summer in a highly publicized case involving RealNetworks, a court halted the sale of software that would allow users to copy DVDs to their laptop computers or other devices for viewing.

In MGE, however, the court distinguishes between the cracking of technological measures designed to prevent access to and use of a copyrighted work, as opposed to measures designed to prevent copying of the work -- and held that cracking security measures that merely prevent access and use are allowed. (Read the full article)

Updated Guidelines on What Is "Obvious" Reflect an Updated PTO

2010-10-12T07:19:00.000-07:00

By Bruce D. Sunstein, a member of our Patent Practice Group

On September 1, the United States Patent and Trademark Office issued updated guidelines for use by patent examiners in determining when the subject matter claimed in a patent application should be rejected for being obvious.

The updated guidelines differ from the original guidelines, issued in 2007 in one major respect: They acknowledge that not all inventions are obvious. The original guidelines, occupying nine densely worded pages of the Federal Register, discuss not a single example of an invention that surmounts the obviousness hurdle.

The updated guidelines, issued under the new, more patent-friendly regime of David Kappos, who has been Director of the PTO since August 2009, are more balanced. Of the substantive examples dealing with obviousness determinations, nine reflect a finding of obviousness and ten reflect a finding of nonobviousness.

The original guidelines were triggered by the decision of the Supreme Court in KSR v. Teleflex, which, as we reported in 2007, made it easier to reject patent applications and to invalidate issued patents for obviousness. The updated guidelines reflect developments in the law since KSR v. Teleflex. (Read the entire article)

The Federal Circuit Hems in the Patent Misuse Doctrine, Making Patent Pooling Safer

2010-10-04T07:01:00.000-07:00

By Thomas Carey, a member of our Business Practice Group

Competitors sometimes choose to share patent rights by pooling their patents and authorizing each entity to license the combined bundle of patents. These arrangements have long been of concern under the antitrust laws because of the opportunity that they provide for competitors to engage in price-fixing, market allocation, and other practices that cross the line under the antitrust laws.

But there are policy considerations that favor patent pools as well, including promotion of industry standards, avoidance of fragmented patent rights that may impede rather than promote progress, and reaping the benefits of collaborative research and development. For that reason, patent pools have often been deemed lawful.

A patent pool is a consortium of companies, often competitors, that license their patents to each other, enabling the companies to pursue technologies that might otherwise have been foreclosed to them.

Those involved in patent pooling have been troubled by two related legal headaches: the specter of antitrust liability, and the concern that the doctrine of patent misuse might invalidate some or all of the patents in the pool. The Federal Circuit’s August 30, 2010 opinion in Princo Corp. v. International Trade Commission eases that second anxiety. (Read the full article)

Bimbo Knows the Muffin Man . . . and Teaches Him a Lesson in Trade Secrets

2010-09-20T06:50:00.000-07:00

By Joel Leeman, a member of our Litigation Practice Group

Employers who are zealous about keeping their trade secrets under wraps face their toughest challenge when a key employee jumps to the competition. Under what circumstances, they wonder, can the employee actually be stopped from taking that new job?

A federal appeals court recently suggested that it is hard to impede employee mobility, but not as hard as it once seemed. An employer need not show that the new position would result in “inevitable disclosure” of its trade secrets. In Bimbo Bakeries v. Botticella, the Third Circuit said it is enough if the facts show a “substantial threat” of misappropriation.

Chris Botticella was a senior executive at Bimbo Bakeries, the maker of goods sold under such brand names as Thomas’, Entenmann’s, and Boboli. He was one of an elite group of individuals who had access to the formulas for all of Bimbo’s products, including the secret behind the “nook and crannies” texture of Thomas’ English Muffins, which sell like hot cakes, on the order of half a billion dollars per year.

After almost nine years with Bimbo, Botticella announced he was taking a position at Hostess Brands, makers of Twinkies, HoHos, and Wonder Bread. While at Bimbo, Botticella had signed a confidentiality agreement, agreeing never to disclose Bimbo’s proprietary information, but he was under no restriction as to where he could work. (Read the entire article)

When Does an "Offer for Sale" Made in Another Country Result in Infringement of a U.S. Patent?

2010-09-07T10:29:00.000-07:00

By Thomas Carey, a member of our Business Practice Group

A recent Federal Circuit decision involved a non-infringing product that had never entered the United States. Nonetheless, the court ruled that infringement of United States patents may have occurred. How could this be?

The product was commissioned by a Danish company, manufactured by a contractor in Singapore, leased (while being made) to a subsidiary of a Norwegian company, and modified while in Singapore specifically to avoid infringing U.S. patents. While the lawsuit unfolded, the product was still in Singapore.

The trial court found that no infringement could arise under these facts and granted summary judgment to the defendant shipping company. On appeal, the Federal Circuit established a precedent in finding that these facts could support a claim of infringement.

The product in question was no trifle: it was an oil drilling platform. This platform had dual sets of equipment used to lower drilling casing and equipment into the sea in a coordinated fashion that accelerated the deep-sea drilling process. The concept had been developed by Transocean Offshore Deepwater Drilling Inc. and protected by a family of patents that Transocean enforced with vigor. (Read the full article)

Copyright Protection for Fashion Design:

2010-08-31T11:29:00.000-07:00

By Nicole Rizzo Smith, a member of our Litigation Practice Group

Coco Chanel once said, “Fashion is made to become unfashionable.” Perhaps due to this truism, fashion design is largely unprotected by intellectual property law in the United States.

Fashion trends are the ever-changing offspring of imitation – without widespread copying, a trend would not be trendy. Thus, the work of designers is freely copied in the fashion industry, and legal protection for unique ideas is scarcely found.

This deficit of protection leaves fashion designers in a precarious position, as their creative expressions routinely become the subject of low-quality reproductions sold to the masses at relatively low prices. Retail associations and consumer groups seek to preserve this status quo because it makes popular trends available to everyone.

These groups fear that providing fashion design with the same copyright protection afforded other creative works would create a fashion stratification – only the elite would sport the “protected” designs, while everyone else would be relegated to an abysmally unfashionable existence.

Narrowly tailored copyright protection has been introduced by Senator Charles Schumer that strikes a balance between these competing perspectives. The Innovative Design Protection and Piracy Prevention Act (S. 3728) contains some provisions like those in a pending House bill (H.R. 2196). (Read the full article)

Congress May Restore Copyright Protection to Public Domain Foreign Works Despite First Amendment Concerns

2010-08-23T07:40:00.000-07:00

By Thomas Carey , a member of our Business Practice Group
Research assistant Katherine Zhou provided valuable support in the writing of this article

Once a book, song or artwork falls into the public domain, it becomes forever available for use by members of the public, who need not worry about the author’s intellectual property rights. Such is the bargain between artists and the public that is enshrined in the U.S. constitution and in the laws of innumerable other countries.

Or so we all thought. This is a story about works that fell into the public domain but, due to a global treaty, suddenly regained copyright protection. Not everyone was pleased.

On June 21, 2010, the U.S. Court of Appeals for the Tenth Circuit upheld the constitutionality of Section 514 of the Uruguay Round Agreements Act (URAA). That provision restores copyrights for certain foreign works, including those that had entered the public domain because of failure to adhere to formalities that have since been repealed. The opinion in Golan v. Holder overturned a district court decision about which we reported earlier.

The URAA[1] had restored copyright protection for thousands of works, including Virginia Wolf’s “A Room of One’s Own”, J.R.R. Tolkien’s collected works, hundreds of Picasso paintings, and numerous compositions of Serge Prokofiev. They had lost (or never obtained) copyright protection in the United States because they failed to bear a copyright notice upon their publication, or the artists failed to register their works with the U.S. copyright office, or both. (Read full article)

The Federal Circuit Boots Another Patent Case Out of Texas, and Sends a Message

2010-08-16T07:17:00.000-07:00

By Edward Dailey, a member of our Litigation Practice Group
Research assistant Katherine Zhou provided valuable support in the writing of this article

The Eastern District of Texas has garnered a reputation as a “patent friendly” jurisdiction where juries are quick to award victory to plaintiffs. Success in this district, it is said, smiles even upon non-practicing entities, commonly known as patent trolls, who purchase patents from others and enforce them aggressively against deep-pocketed corporations.

Reality, of course, is more complicated; the Eastern District is hardly the Wild West for patent defendants. Nevertheless, this court continues to attract more than its share of cases in which the basis for venue is questionable. Not surprisingly, the Federal Circuit Court of Appeals has reviewed several challenges to Eastern District venue, and, when circumstances dictate, has not been reluctant to label Texas an inconvenient, even fictitious, venue. (Read the full article)

Bratz Beats Barbie: Appeals Court Reverses Jury Verdict and Rejects Constructive Trust

2010-08-09T05:59:00.000-07:00

By Thomas Carey , a member of our Business Practice Group
Research assistant Katherine Zhou provided valuable support in the writing of this article

For years, toy manufacturers Mattel, Inc. and MGA Entertainment have dueled over the popular Bratz line of dolls. We reported in 2008 that Mattel had won a series of victories on its claims of copyright infringement and unfair competition.

Not only was Mattel awarded $100 million by a jury, but the trial court later issued a permanent injunction ordering MGA to refrain from any further sales and production of Bratz dolls and placed the entire Bratz line of toys in a constructive trust for the benefit of Mattel.

The basis for this remedy was that Carter Bryant, an employee of Mattel who had been working on its Barbie doll line, conceived of the Bratz product line in 2000 while still employed by Mattel. He had drawn a small series of sketches, conceived of the “Bratz” and “Jade” trade names, and commissioned a sculpture of a Bratz doll.

After all this work, he revealed these drawings and trade names to MGA Entertainment rather than Mattel. A few weeks later, he jumped ship to MGA to continue his work on the Bratz product line. In 2001, MGA released its first Bratz dolls. (Read entire article)

Who's Holding the Bag? When a Website Sells Infringing Articles, Credit Card Companies May Face Liability

2010-08-02T07:26:00.000-07:00

By Thomas Carey , a member of our Business Practice Group
Research assistant Katherine Zhou provided valuable support in the writing of this article

Can a company that provides credit card services be held liable for the activities of merchants using its accounts?

In 2007, the Ninth Circuit, an influential federal appeals court, held that Visa and Mastercard could not be held liable for copyright infringement even though their credit card services were used to sell infringing photographs. Perfect 10 v. Visa Int'l Service Ass'n. The court reasoned that, because the credit card companies exercised no control over the infringing websites, their connection to the infringement was too remote to establish secondary liability.

One judge dissented. He noted that the credit card companies had established special procedures for handling websites involved in selling supposedly infringing merchandise, and maintained that Visa and Mastercard were as instrumental in the infringement at hand as were Napster and Grokster, both of which had notoriously distributed peer-to-peer file sharing software that enabled widespread, unauthorized copying of copyright-protected music files.

The same Ninth Circuit, which has appellate jurisdiction over federal courts in many Western states, had previously held Napster liable for contributory infringement, and, in a case that we previously reported, the U.S. Supreme Court had similarly held Grokster liable for contributory infringement. (Read the full article)

Silence is Deadly: The Peril of Inaction After Calling Someone an Infringer

2010-07-26T06:47:00.000-07:00

By Joel Leeman, a member of our Litigation Practice Group

A recent lesson to patent owners is this: After you threaten a potential infringer with enforcement of your patent, be prepared either to keep the conversation going or to assert the patent in litigation. Silence can be dangerous after the initial contact.

In Aspex Eyewear v. Clariti Eyewear, the Federal Circuit reinforced the applicability of equitable estoppel to patent litigation. “Equitable estoppel” is a venerable legal concept that may apply when one party acts (or refrains from acting) and another party relies on that conduct. Simply put, estoppel prevents A from later asserting a claim against B if B takes certain action in reliance upon A’s conduct. (Read the full article)

Solo Cup Puts The Lid On False Patent-Marking Case

2010-07-19T07:12:00.000-07:00

By Tom Tuytschaevers, a member of our Patent Practice Group

The Federal Circuit now holds that marking a patent number on a product, while knowing the patent does not cover the product, is a violation of the false marking statute, unless the accused party can prove that it had a good faith belief that its action was appropriate. This fact-specific defense provides limited comfort to manufacturers.

Marking an article with a patent number is appropriate when the article is actually covered by the patent, and is desirable for the patent owner because it opens the door to pre-litigation infringement damages. However, an inaccurate patent-marking on a product can lead to liability under 35 U.S.C. § 292, which provides:

Whoever marks upon, or affixes to, or uses in advertising in connection with any unpatented article, the word “patent” or any word or number importing that the same is patented for the purpose of deceiving the public . . . [s]hall be fined not more than $500 for every such offense.

Further, “Any person may sue for the penalty, in which event one-half shall go to the person suing and the other to the use of the United States.” (Read the full article)

Bilski v. Kappos: The Supreme Court Strikes a Blow for Inventors

2010-07-06T07:34:00.000-07:00

By Thomas Carey, a member of our Business Practice Group

No pending appeal to the Supreme Court has filled inventors and innovators with more dread than Bilski v. Kappos. Before the court was nothing less than the question of what can and cannot be patented.

Some feared a sweeping decision that would wipe away entire categories of patents, including those covering software, business methods, and many types of medical diagnostics. On June 28, 2010, the Supreme Court issued its opinion and inventors heaved a sigh of relief.

The majority opinion confirmed that abstract ideas, laws of nature and physical phenomena are not patentable, but declined to conclude that software or business methods are inherently unpatentable abstract ideas, or that medical diagnostics involve only unpatentable physical phenomena or laws of nature.

Indeed, the court rejected as overly rigid the Federal Circuit’s approach for determining what methods can and cannot be patented.

As we have reported, Bernard Bilski filed a patent related to hedging the seasonal risks of buying energy. The patent claims had very general language. Mr. Bilski was rebuffed by the patent examiner, who found that the application described an abstract idea, not an invention. This view was upheld by the Board of Patent Appeals. (Read the full article)

Promises, Promises: Cutting Off Unwanted Patent Litigation With a Covenant Not to Sue

2010-07-06T07:29:00.000-07:00

By Meredith Ainbinder, a member of our Litigation Practice Group

Many innovators seek patent protection for their ideas, while ardently hoping that they will not be forced to sue to enforce their rights. Most patentees prefer to spend their time and money on continued efforts to innovate and run their businesses.

Sometimes, however, patent owners find themselves on the defensive end of a lawsuit, often after simply informing a competitor of their rights or offering a license to a company in their technology space. This is because our highest courts have upheld the right of competitors who receive such communications to file declaratory judgment actions — lawsuits that ask a judge to determine whether or not the asserted patent is valid and infringed.

Potentially infringing competitors thereby seize one advantage: They get to choose when and in what court their differences with a patent holder will be decided. For many patent owners, this makes the IP landscape a minefield and discourages straightforward business resolutions of common patent concerns.

A patent owner with no desire to engage in protracted litigation has little certainty about how to stay out of court. Under the law, one party may sue another if, as the U.S. Supreme Court restated in MedImmune, Inc. v. Genentech, Inc. (2007), “…the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” (Read the full article)

Nine Months Later: Colting Slips Away from The Catcher

2010-06-28T06:27:00.000-07:00

By Peter Karol, a member of our Litigation Practice Group

Last summer, a federal judge in New York barred Fredrik Colting and his publisher from selling Colting’s novel 60 Years Later: Coming Through the Rye, finding it likely to infringe J.D. Salinger’s enduring classic The Catcher in the Rye. The decision was ardently debated by legal and literary scholars, civil libertarians, journalists and Salinger fans alike.

Commentators tended to agree that Colting’s appropriation of various elements of Catcher (characters, language, bits of narrative, theme, etc.) was an infringement not likely to constitute permissible, transformative parody under the Copyright Act. Colting (who wrote under the name J.D. California) damaged his persuasive powers in this regard by marketing the novel as a “sequel.” (Read the full article)

Overzealous Trade-Secret Plaintiff Gets His Just Desserts

2010-06-14T06:54:00.000-07:00

By Joel Leeman , Litigation Partner, Sunstein Kann Murphy & Timbers LLP

Trade secrets are like pie recipes, says a California appeals court. The baker who steals the recipes might be liable for misappropriating trade secrets, but the customer who buys a pie may eat it without fear of liability.

In Silvaco Data Systems v. Intel Corp., the court compared computer source code to a proprietary pie recipe that may be legally protected. However, executable object code is like the pie itself: Since the consumer does not learn the recipe by eating the pie, he does not share the baker’s liability for its misappropriation.

Silvaco protects as a trade secret the source code of its software used to automate the design of electronic circuits. Some years ago, Silvaco won an injunction barring a competitor from selling a similar product after convincing a judge that the competitor had misappropriated its trade secret. (Read full article)

Going Once, Going Twice: Tiffany Makes Another Bid to Restrict Auctions of Counterfeit Jewelry on eBay

2010-06-07T07:49:00.000-07:00

By Steve Abreu , attorney, Sunstein Kann Murphy & Timbers LLP

The old maxim “buyer beware” is well-suited to internet shopping. This is particularly true on eBay, the world’s largest online auction site, where the buyer not only lacks the advantage of inspecting the goods, but must often deal with a seller identified only by his online screen name. Among the vast selection of goods available on eBay is the jewelry, silver and other fine goods of Tiffany & Co, sold largely by anonymous third-party sellers.

Tiffany itself sells goods only in its stores, websites and catalogs, choosing to forego such channels of sale as department stores, discount stores, or wholesale stores. To preserve the mystique of its products, Tiffany closely polices uses of its trademarks, including the hue of its packaging, so distinctive as to be known as Tiffany-blue.

In recent years, Tiffany has introduced programs that educate buyers to purchase genuine goods from retail stores. The programs were born of the discovery that many bidders for TIFFANY-brand goods on eBay are miffed when they realize they have bought counterfeit goods. As part of its trademark-policing efforts, Tiffany has bought goods passed off as genuine Tiffany on eBay and learned that about 75 percent were counterfeit. (Read the full article)

Google Fends Off More Challengers to its Keyword Advertising

2010-06-01T08:49:00.000-07:00

By Lisa Fleming, Partner, Sunstein Kann Murphy & Timbers LLP

Two recent rulings in the area of keyword advertising add to the growing list of decisions that bolster Google in its ongoing battle with trademark owners over use of keyword advertising. An additional victory in the copyright area supports the company’s image-search service.

The trademark litigations, like many before them, were provoked by Google’s practice of allowing advertisers, through Google’s Adwords service, to purchase keywords corresponding to their competitors’ trademarks. Google’s use is limited to allowing advertisers to select keywords so that their advertisements are presented as results. (Read the entire article)

"Best Mode" of the Whole Invention Must Be Described

2010-05-17T06:56:00.000-07:00

By Timothy Murphy , Partner, Sunstein Kann Murphy & Timbers LLP

The Federal Circuit recently ruled two patents invalid for failing to satisfy the “best mode” requirement. In doing so, the court rejected the patentee’s argument that the best mode need be disclosed only for the “innovative aspects” of the invention. Instead, the best mode must be disclosed for the entire invention as claimed.

The Federal Circuit further held that the patentee’s best mode violation was done with sufficient intent to warrant finding the two patents unenforceable for inequitable conduct. The court’s opinion, in Ajinomoto Co. v. International Trade Commission, upheld a ruling of the ITC. (Read the full article)

Can Ignorance Be a Defense? The Evolving Law of Inducement of Patent Infringement

2010-05-03T07:26:00.000-07:00

By Robert Kann, Managing Partner, Sunstein Kann Murphy & Timbers LLP

Can you be held liable for “inducing” infringement of a patent if you have no knowledge of that patent and you sell a non-infringing product which someone else puts to an infringing use?

According to a recent Federal Circuit opinion, one can be found liable for inducing infringement of a patent by acting with “deliberate indifference” as to the existence of the patent even if one does not have actual knowledge of the patent. SEB v. Montgomery Ward & Co., Inc.

Evidence of such indifference may include circumstances where the accused is a sophisticated market participant, knowledgeable about patents, and generally aware that a competitor patents its products. (Read the entire article)

Museum Conflict Clarifies Rights of Artists

2010-04-26T06:11:00.000-07:00

By Lisa Tittemore partner at Sunstein Kann Murphy & Timbers LLP

The First Circuit Court of Appeals has bolstered the protection of artists’ rights in a January 27 decision that gives valuable clarification of the Visual Artist Rights Act (“VARA”). The opinion in Massachusetts Museum of Contemporary Art Foundation, Inc. v. Büchel is of particular interest because VARA, which confers on visual artists the “moral” rights of attribution and integrity, is rarely the subject of appellate review.

Christoph Büchel’s vision for “Training Ground for Democracy,” a football field-sized work of installation art, called for bringing together a vast array of objects, many of them large. The Swiss artist’s list included a Cape Cod cottage, a carousel, a bar from a tavern, an old-time movie theater and several large vehicles. Mass MoCA is among the few museums that can exhibit works of such gargantuan scale. (Read the full story)

Federal Judge Would Invalidate All DNA Patents, But His Rationale Is Controversial

2010-04-14T13:10:00.000-07:00

By Justin P. Huddleson, Ph.D. and Bruce Sunstein
The authors are members of the firm's Life Sciences Practice Group

In a thoughtful opinion of March 29, Judge Robert Sweet has adopted a position that, if widely accepted, would invalidate essentially all DNA patents. In Association for Molecular Pathology v. U.S. Patent and Trademark Office, Judge Sweet, of the Southern District of New York, cites Supreme Court precedent in support of his view that isolated genes are directed to a “product of nature” and are therefore not eligible to be patented.

In fact, the decision flouts recent holdings of the Federal Circuit and sets up a potential fight in the Supreme Court about what kinds of things can be protected by patents. (Read the entire article.)

Trying to Curb "Drive-By Jurisdictional Rulings": Supreme Court Clarifies Purpose of Registration Requirement in Copyright Cases

2010-04-12T07:03:00.000-07:00

By Moses Heyward , attorney at Sunstein Kann Murphy & Timbers LLP

Is the registration requirement in the Copyright Act a precondition for jurisdiction, such that an infringement claim involving unregistered works must be dismissed? In Reed Elsevier, Inc. v. Muchnick, the Supreme Court held that the registration requirement does not restrict a federal court’s subject-matter jurisdiction, and in the process explained how courts should distinguish jurisdictional requirements of a statute from non-jurisdictional requirements.

With limited exceptions, 35 U.S.C § 411(a) requires that “no civil action for infringement of the copyright in any United States work shall be instituted until preregistration or registration of the copyright claim has been made in accordance with this title.” (Registration is nothing more than formally recording one’s trademark with the United States Patent and Trademark Office.) (Read the entire article.)

Federal Circuit Stamps Out Feud Between Postal Service and Sculptor

2010-04-05T07:07:00.000-07:00

By Nicole Rizzo Smith

A federal appeals court has ruled that the U.S. Postal Service violated an artist’s copyright when it issued a stamp based on a photograph of his war memorial sculptures.

In 1990, a sculptor and Korean War veteran, Frank Gaylord, won a contest to create a Korean War Veterans Memorial in Potomac Park in Washington, D.C. Mr. Gaylord’s design was a haunting tribute to Korean War veterans, featuring 19 stainless steel statues of foot soldiers in formation. (Read the entire article.)

Federal Circuit Puts An End To PTO's Patent-Term Adjustment Follies

2010-03-30T08:52:00.000-07:00

By Kimberly Seluga

Additional months – or even days – of patent life can often be highly profitable in the context of certain products, especially pharmaceuticals. The potential value of a longer patent term is illustrated by two pharmaceutical companies’ willingness to take on the PTO in order to provide their patents with a few more breaths of air.

At the focal point of their case was the federal law that requires the PTO to grant patent term adjustments to eligible applicants based on PTO delay. Any patentee who disagrees with the PTO’s adjustment determination may submit a request for reconsideration to the PTO within two months of the patent issue date and has the further option of appealing to the United States District Court for the District of Columbia within 180 days of the patent issue date. See 37 C.F.R. § 1.705(d); 35 U.S.C. §156(b)(4)(A). (Click here for the complete article.)

The Penalty for False Patent-Marking Just Got Much Pricier

2010-03-17T11:20:00.000-07:00

By Thomas Tuytschaevers

Marking an article with a patent number is appropriate and generally desirable when the article is actually covered by the patent, because it puts the public on notice that an item is protected by the patent. Also, a patent owner may recover pre-litigation damages against an infringer if he has properly marked his patented articles with the patent number.

Patent marking is a double-edged sword, however, as discussed in our previous article. An inaccurate patent marking on a product can lead to liability under 35 U.S.C. § 292, which provides, among other things:

Whoever marks upon, or affixes to, or uses in advertising in connection with any unpatented article, the word “patent” or any word or number importing that the same is patented for the purpose of deceiving the public . . . [s]hall be fined not more than $500 for every such offense. (Read the entire article)

Has STARBUCKS Been Diluted? The Ongoing Effort to Protect Famous Marks

2010-03-09T06:49:00.000-08:00

By Steve Abreu

Can a New Hampshire-based coffee roaster sell its brand of premium dark roast coffee under the name “Black Bear Mr. Charbucks Blend Coffee” even if no one would confuse his product with world-famous Starbucks Brand coffee? An appellate court took steps toward answering this question when applying an act of Congress intended to protect owners of famous trademarks like STARBUCKS.

Owners of famous marks are entitled by law to protection from uses of marks that would blur the famous mark. “Blurring” a mark means impairing its distinctiveness. For example, although consumers might not associate a restaurant named TIFFANY with the famous jeweler, the restaurateur’s use is considered to “blur” the distinctiveness of the mark because the mark would now be affiliated with both food service and jewelry. In this example, even if consumers knew that each enterprise was owned by different entities, the distinctiveness of the famous user’s mark is lessened because there are now other users of TIFFANY. (Read the whole article)

"Pay for Delay" Settlements: The FTC's 2010 Annual Report

2010-02-22T13:16:00.000-08:00

by Thomas Carey

The Hatch-Waxman Act requires that patent litigation settlement agreements between pioneer and generic drug makers be submitted to the Federal Trade Commission, which must release an annual report summarizing them. (Read more)