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May 2017

Cislo & Thomas LLP Exhibits at International Trademark Association (INTA) Annual Meeting in Barcelona

Cislo & Thomas LLP was a proud participant and exhibitor of the largest attended Barcelona Annual Meeting hosted by the International Trademark Association on May 20 – 24. Over 10,000 patent and trademark attorneys were at the 139th Annual meeting flying in from every corner of the globe.

At INTA, Cislo & Thomas LLP presented its PatentFiler.com online portal, which was well-received by intellectual property attorneys around the world. Cislo & Thomas LLP plans on attending the conference next year in Seattle, with more exciting and cutting-edge technology that will help both clients and attorneys file quality provisional patent applications quickly and at reasonable costs.

It was a joy to reconnect with old friends from all over the world while meeting some new ones as well.

“Google” Is Not Generic

Takeaway: The Ninth Circuit held that GOOGLE remains as a viable and protectable trademark and has not been genericized the way terms like KLEENEX have.

In David Elliott et al. v. Google, a Ninth Circuit Court of Appeals panel affirmed the district court’s summary judgment in favor of Google in an action that sought to cancel the GOOGLE trademark on the grounds that it has become generic.

Plaintiffs used a domain name registrar to obtain over 700 domain names with the word “google” in them such as googledisney.com and googlebarackobama.net. Google, Inc. objected to these registrations and filed a complaint with the National Arbitration Forum (“NAF”) which is authorized to decide certain domain name disputes. The NAF sided with Google that the domain names are confusing similar to Google’s trademark for GOOGLE and were registered in bad faith.

Consequently, Plaintiffs brought an action in Arizona District Court for a petition to cancel the GOOGLE trademark on the grounds that the word google is primary understood as “a generic term universally user to describe the act[] of internet searching.”

Plaintiff argued that the majority of the relevant public use the word “google” in the form of a verb, such as “google it” as to mean to search something online. Google argued that Plaintiff failed to present sufficient evidence to support a jury finding that “google” was a generic name for internet search engines. The Ninth Circuit reviewed the district court’s grant of summary judgment de novo and viewing the evidence in the light most favorable to Plaintiffs and asks “whether there are any genuine issues of material fact and whether the district court correctly applied the relevant substantive law.”Plaintiff argued that the majority of t

The Ninth Circuit held that the relevant substantive law in this case is the “who-are-you/what-are-you” test under Yellow Cab Co. of Sacramento v. Yellow Cab of Elk Grove, Inc., 419 F.3d 925, 929 (9th Cir. 2005). “If the relevant public primarily understands a mark as describing “who” a particular good or service is, or where it comes from, then the mark is still valid. But if the relevant public primarily understands a mark as describing “what” the particular good or service is, then the mark has become generic.”

The court concluded that Plaintiffs’ were flawed in their reasoning because Plaintiffs failed to understand that a claim of “genericness” must always relate to a particular type of good or service and that verb use does not automatically constitute generic use. The court agreed with the lower court that Plaintiff failed to supply sufficient evidence that indicates that the relevant public associates the word “google” as a generic name for all internet search engines.
For Your Foreign Patent Protection, Should You Opt Out of the European (EU) Unified Patent Court (UPC) and European Unified Patent (UP)?

Takeaway: For those patent applications and patentees who wish to seek patent protection in Europe may want to opt out of the new Unified Patent Court (UPC). The pre-registration period starts in September 2017 and ends in December 2017. Please contact your patent attorneys to determine if opting out is the right strategy for your European IP portfolio.

The new European Unitary Patent (UP) and the Unified Patent Court (UPC) will be implemented later this year and patent applicants and patentees may choose to opt out and continue filing with the classic European patent system. The UP will cover up to 25 member states of the EU, possibly including the United Kingdom despite Brexit, while the UPC will oversee litigation, revocation, and invalidity actions related to the UPs and also certain existing and future “classical” European patents.

With the UP as a viable option for patent applicants, the following are the three possible ways patent applicants can obtain patent protection in the EU:

1. File national patent applications directly with each of the member states of the EU separately;
2. File a classical European Patent Application (EPA) and upon grant, select from the one or more 28 member countries of the European Patent Organization (EPO) to have the EPA be validated; or
3. File a UP and upon grant, will provide unitary protection in all 25 member countries, with the option of proceeding down the classic validation route for the remaining countries of the EPO that have not signed to be a part of the UPC Agreement.

The UPC will overlook and handle post grant litigation, revocation, and invalidity actions for any new UP and current European Patents that did not specify to opt out of the UPC jurisdiction. Therefore, if you currently own any European patents and wish to opt out, the pre-registration period starts in September 2017 and ends in December 2017. Any European patents that fail to opt out when the UPC Agreement comes into force will automatically be opted in and could be subject to an action in the UPC.

Filing a UP may be more cost-effective since it has a single registration fee and a single annual renewal fee as opposed to having to seek validations in multiple countries under the classical route, which can be rather costly. Further, if or when there is a post grant patent decision regarding a patent, there need not be separate decisions held across different member states. However, the UPC is uncharted waters with no case law precedent as opposed to the more established legal systems in the member countries. We recommend that you discuss your options with your patent attorney before deciding whether or not to opt out of the UPC and/or file a UP.

Federal Circuit Clarifies On Sale Bar for Both Pre-AIA and Post-AIA Patents

Takeaway: In Helsinn Healthcare S.A. v. Teva Pharms. USA, Inc., (Fed. Cir. May 1, 2017), the Federal Circuit held that pre-AIA patents are barred by an offer for sale even if the contract is contingent upon FDA approval and that the AIA did not change the statutory meaning of the on-sale bar. Thus, always file patent applications before such agreements or at lease within one year of such an agreement.

Helsinn Healthcare applied for four patents all claiming priority back to one provisional patent application filed over one year after Helsinn entered into a contract for sale of the claimed product. Of the four patents, three were filed before the enactment of the America Invents Act and one was filed after.

The agreements at issue that Helsinn entered into included a Supply and Purchase Agreement and were announced via press release and included redacted copies of the agreement with the price and specific dosage formations omitted. The Supply and Purchase Agreement included a provision that the agreement would only go into effect pending favorable clinical trials and FDA approval.

The District Court found that the pre-AIA patents were not invalid under the on-sale bar because the Supply and Purchase Agreement was a contract for future sale and the invention was not yet reduced to practice and ready for patenting at the time of the agreement. As for the post-AIA patent, the patent was also not invalid under the AIA on-sale bar because the dosage covered by the agreement was not made public.

The Federal Circuit reversed the District Court’s findings, stating that the Supply and Purchase Agreement was a contract for sale and being contingent on FDA approval does not change that since a contract containing a condition precedent is a valid and enforceable contract. Further, the court held that FDA approval is not a prerequisite for an invention to be ready for patenting as to satisfy there being an offer for sale condition for pre-AIA patents.

The Federal Circuit also stated that it need not address whether secret and confidential sales would be considered an on-sale bar for post-AIA patents since the agreement in this case was publically announced and it need not announce the dosage and details of the invention for it to be considered publically disclosed as an offer to sale to fall within the on-sale bar.

Universities Take On E-Commerce Websites Selling Apparel Bearing Their Trademarks and Trade Dress

Takeaway: Dozens of Universities are suing GearLaunch and Thatcher Claflin Spring for operating an ecommerce website that sells unlicensed and unauthorized apparel that bear the Universities’ respective trademarks and trade dress. Never sell university branded clothing without a license.

On April 24, 2017, dozens of governing boards of Universities and Universities, including The Regent of the University of California and Duke University, have filed a Complaint for, inter alia, counterfeiting, trademark infringement, unfair competition, and trademark dilution of their names, logos, mascots, color schemes, trade dress, and other source-identifying indicia that serve as valuable trademarks to the Universities.

GearLaunch have been in similar trademark infringement lawsuits in the past, such as alleged infringement of the HARLEY-DAVIDSON marks, INDIAN MOTORCYCLE marks, HAMILTON marks, and those involving various musicians, including the Rolling Stones, Queen, Justin Bieber, and Lady Gaga.

The Complaints explains that each of the Universities have licensing programs that allow third-party businesses to use their marks and are subject to quality control and supervision and royalties are paid by the licensees to the Universities which in term support, inter alia, academic programs, student scholarships, and athletic programs.

The Complaint appends an Exhibit of examples of T-shirts that GearLaunch allegedly sell on their site that allegedly infringe on the Universities’ trademarks. However, given GearLaunch’s track record, the parties will most likely settle.

Copyright Office Offers Pilot Program For Bulk Filings

Takeaway: On May 9, 2017, the Copyright Office rolled out a pilot program for Bulk Submission of Claims to Copyright. The pilot program is offered only for single literary works such as fiction, nonfiction, autobiographies, etc. that have a single author.

Although it appears that this would be more appealing for photographers, it is possible that the Copyright Office is slowly moving in that direction, using this pilot program as a test of its IT system and its capabilities of handling such bulk filings.

This pilot program is a result of the Copyright Office’s research in 2013 that led to a creation of a report stating that the website needed a better user-interface and more accurate public records.

Supreme Court Unanimously Rules That Sale of Patent Product in U.S. Exhausts All Patent Rights

Takeaway: The Supreme Court held that a patent owner cannot control the use or disposition of a patented product after an authorized sale to a purchaser, either domestically or abroad.

The case, Impression Products, Inc. v. Lexmark International, Inc. (2017), involves Lexmark, which designs, manufactures, and sells printer toner cartridges internationally and other “remanufacturers” that buy used cartridges, refills them, and sells them at a reduced price.

Because of this problem, Lexmark created a “Return Program” that allows customers to buy cartridges at a discounted price if they agree to use the cartridge only once and not transfer it to anyone by back to Lexmark. Consequently, the “remanufacturers” were sued by Lexmark for patent infringement for their refurbishing and reselling of the cartridges.

The Supreme Court reversed the Federal Circuit and held that “patent exhaustion is uniform and automatic,” meaning that once a patented product is sold in an authorized sale, a patent owner’s rights is automatically exhausted, regardless if the product was sold in the U.S. or abroad.

Of course, the patent owner may seek recourse through other areas of law, such as contracts law, before any breach of contractual post-sale restrictions. Further, businesses may look into potentially licensing goods and services instead, if applicable.

Regardless, businesses that have an international reach will need to re-strategize in terms of how to approach their international segmentation for patent products, especially regarding to any pricing differences.

Federal Circuit Affirms Lower Court’s Summary Judgment In Favor of Amazon For Copyright and Trademark Noninfringement

Takeaway: An online marketplace like Amazon is protected under the safe harbour provisions outlined in the Digital Millennium Copyright Act if third-party sellers on its site are infringing copyrights of others.

The Federal Circuit upheld the U.S. District Court of Western District of Washington’s summary judgment for Amazon in Milo & Gabby LLC v. Amazon.com Inc., (Fed. Cir. 2017) stating that Amazon is not liable for copyright or trademark infringement based on third parties selling allegedly infringing products on its site and Milo & Gabby failed to preserves its patent infringement arguments.

Milo & Gabby tried to argue that Amazon being the “World’s Largest Internet Retailer,” it should be held liable because they effective sells the goods. Amazon also has a fulfillment service allowing merchants to ship their products to an Amazon warehouse and then Amazon would ship the product upon purchase. However, the court sided with Amazon and stated that because Amazon is not responsible for completing the sales and cannot sell products on their own accord, Amazon is not considered the seller.

Courts have decided similar claims against Amazon for patent infringement and also against other online marketplaces like Amazon. The court explained that while “Amazon’s services made it easier for third parties to consummate a sale, the third parties remained the sellers.”

The court rejected Milo & Gabby’s patent claims on procedural grounds as it tried to raise a new issue on appeal. Further in terms of trademark and copyright infringement, the Federal Circuit agreed with the District Court that there was no valid enforceable trademark and Amazon was protected under safe harbour provisions outlined in the Digital Millennium Copyright Act.

“Because the third-party sellers retain title to the pillowcases at all times and Amazon merely provides an online marketplace … Amazon is not a seller in this case for the purposes of copyright infringement,” the judgment said.

Further, the court dismissed Milo & Gabby’s claim regarding palming or passing off because it was not brought up in the initial complaint, which only specified a false designation of origin claim, which is a much broader claim, and therefore did not provide proper notice to Amazon.

Supreme Court Limits Available Venue for Patent Trolls to Bring Suit

Takeaway: The Supreme Court unanimously ruled that a corporation “resides” where it is incorporated and therefore patent case involving corporations are limited to (1) where the corporation is incorporated and (2) where the corporation has committed acts of infringement and has a regular and establish place of business.

In a short 10-page unanimous opinion, the Supreme Court held in TC Heartland LLC v. Kraft Foods Group Brands LLC (2017) that the residence requirement of 28 U.S.C. § 1400(b) refers only the defendant’s state of incorporation.

Because the Federal Circuit’s prior expansive view on the term “reside,” most parties did not consider filing suit where the corporation has committed acts of infringement and has a regular and established place of business. However, now if a plaintiff does not wish to file suit in the defendant’s state of incorporation, it is now limited to that.

Given that many corporations have incorporated in Delaware, it is likely that there will be an influx of case law moving from the E.D. Texas to Delaware.

Other district courts such as Northern District of California, the Central District of California, the Southern District of New York, and the Northern District of Illinois may also see an influx, as they are districts where many corporations tend to have their corporate headquarters.

What We can Learn From A Brief Look Into the History of the U.S. Patent System

Takeaway: If the United States, both politically and in the legal realm, places more emphasis on the importance of innovation and protecting such innovations, the patent system can be a strong pillar of the American economy.

Taking a time machine back to the late-1960s and early-1970s, the Supreme Court never saw a single patent that was valid.

Then in the late-1970s and early-1980s, Ronald Reagan appointed CEO of Hewlett Packard, John Young to head the Presidential Commision on Industrial Competitiveness, that issued a Commission Report stating that “greater protection must be given [to] intellectual property to enhance incentives for investments in innovation.” As a result, Regan reinvested in the United States Patent and Trademark Office and in turn, a strong patent system was forged.

As we can learn from history for the better, we must remind those in power that a stable patent system is a necessary pillar of a strong economy.

On the legal side, the Federal Circuit, which acts as the chief patent appeals court, is where patent must be enforced as important property rights and the law protecting patents must be unified as to bring stability. On the political side, President Trump, who has yet to announce his plans and visions regarding patent law, needs to set forth an agenda to bring more support and attention to innovation.

It will take real leadership in both the political and legal realms for our U.S. patent system to return to being the strong patent system that existed back in the 1980s.
Managing Partner, Daniel M. Cislo and family back down to Tijuana, Mexico building 3 homes with Malibu Presbyterian Church

Three needy families went from living on dirt floors with old garage doors as walls to nice new homes with concrete slabs, shingled roofs, interior drywall, latrines and electricity. What a joy to serve over Memorial Day weekend and count our own blessing at the same time.”

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