Drop Stop® To Be Featured on Shark Tank’s New Spin-off TV Show “Beyond The Tank”
Drop Stop®, one of Cislo & Thomas’s valued clients, will be on Shark Tank’s New Spin-off TV Show “Beyond The Tank” on Tuesday, April 5, 2016 on ABC at 10:00pm. In 2013, inventors Jeffrey Simon and Marc Newburger pitched Drop Stop® on Shark Tank and made a deal with Lori Greiner for 20% equity in Drop Stop for $300,000.
On follow-up episodes of Shark Tank, Drop Stop announced a $2,000,000 purchase order with Walmart and that Drop Stop was available for sale in Bed Bath & Beyond in a “Lori Greiner Shark Tank” branded display. In February 2015, Drop Stop was named one of the nine most successful Shark Tank businesses.
On Shark Tank’s spin-off TV show called “Beyond The Tank,” entrepreneurs from the show will show behind the scenes of what life is like since being on Shark Tank.
We congratulate Drop Stop® for another amazing feat and look forward to watching them on “Beyond The Tank” on Tuesday, April 5, 2016 on ABC at 10:00pm
Supreme Court To Review Samsung v. Apple Design Patent Case
Takeaway: Pay attention to the first design patent lawsuit that the Supreme Court has agreed to review in a century that will address whether damages for a design patent should be applied based on an infringing design component or the whole product.
On March 21, 2016, the Supreme Court agreed to review the highly publicized Federal Circuit design patent decision regarding design patent infringement of Apple’s cell phone design by Samsung. Samsung Electronics Co., Ltd. v. Apple Inc., U.S., No. 15-777, cert. granted 3/21/2016.
The Supreme Court limited the review to the second question in the petition: “Where a design patent is applied to only a component of a product, should an award of infringer’s profits be limited to those profits attributable to the component?”
The Federal Circuit explained that an infringer “shall be liable to the owner to the extent of [the infringer’s] total profit,” as prescribed in 35 U.S.C. § 289, which authorizes the award of total profit from the article of manufacture bearing the patented design.
Therefore, Judge Prost stated that the statutory language prevented them from agreeing with Samsung that there needed to be a showing of causation of profits linked to the infringing component. The Court held that Apple was “entitled to” the entire profits no matter how little the patented design features contributed to the value of Samsung’s phones.
Samsung’s petition for certiorari contended that the Federal Circuit should not allow the profit award to cover Samsung’s entire profits of nearly $400 million from the sale of smartphones that infringed the patented design.
Further, Samsung argued that the Federal Circuit misinterpreted 35 U.S.C. § 289 because the “article of manufacture” was never defined to be applied as the entire product or the portion of the product of the design patent. Samsung hopes that the Supreme Court will hold that the statute, as interpreted by the Federal Circuit, will allow design-patent holders to obtain damages far exceeding the value of the design patent and may be an open invitation to litigation abuse.
European Trademark Owners May Need to Make Article 28 Declarations
Takeaway: Before the deadline on September 23, 2016, European trademark owners of applications filed prior to June 22, 2012 may need to clarify within their trademark specification which goods and services they intended to seek protection for their mark or else they may only receive protection covered by the pure literal meaning of the class heading.
The Community Trade Mark (“CTM”) is a single trademark registration that covers all countries in the European Union. On March 23, 2016, the amended EU Trade Mark Regulation (Regulation (EU) 2015/2424) will take effect.
One of the amendments is that description of goods and services will be interpreted strictly by the class headings of the Nice Classification unless they are clarified in the trademark specification.
For new applications, the same scope of specificity is required for goods and services in respect to what protection is being sought to “be identified by the applicant with sufficient clarity and precision to enable the competent authorities and economic operators, on that sole basis, to determine the extent of the protection sought (Article 28(2)).”
Therefore, if a trademark owner believes that the goods and services that need to be protected are not necessarily what would be strictly interpreted from the class that the trademark is protected under, there will be a six-month grace period from March 23, 2016 to September 23, 2016 to make an Article 28(8) declaration.
The Article 28(8) declaration will allow trademark owners to clarify, from an alphabetical list, which goods and services they were intending to seek protection with their trademark specification that is beyond what is covered by the pure literal meaning of the class heading.
It is best to ask your trademark attorney to help you review your EU trademark portfolio to determine whether a declaration can and should be made.
Serious Commercial and Scientific Implications For Patent Battle Involving Crispr
Takeaway: Pay attention to the biggest gene patent pre-suit at the Patent and Trademark Appeals Board over ownership rights complicated by two patent filing histories around the time the American Invents Act shifted the U.S. to a “first-to-file” system.
CRISPR (“Clustered Regularly-Interspaced Short Palindromic Repeats”) is a biotechnology breakthrough technology that allows scientists to “hack” into the DNA with more precision than ever before and manipulate the genomes of life, from single cell organisms to plants and maybe eventually humans. With potentially billions of dollars in licensing rights at stake, the rights to the CRISPR technology has recently gone under the microscope in an interference proceeding at the Patent and Trademark Appeals Board (“PTAB”) at the United States Patent and Trademark Office (“USPTO”).
The two scientists involved are Dr. Feng Zhang, a bioengineer at The Broad Institute, and Dr. Jennifer Doudna, a molecular biologist at the University of California, Berkeley.
In March 2013, Dr. Doudna, along with French researcher Emmanuelle Charpentier and five other scientists as co-inventors, filed a patent application with 155 claims that related to CRISPR.
In October 2013, Dr. Zhang filed his own CRISPR patent application, later than Dr. Doudna, but obtained a speedier review and was issued the CRISPR patent in 2014. The two parties were not able to resolve their issues through negotiation and thus the issue of patent ownership was eventually brought to the USPTO.
Interestingly, because the United States switched from a “first-to-invent” system to a “first-to-file” system in March 2013, the key question is whether Dr. Zhang, who filed after Dr. Doudna, is eligible to be grandfathered under the old rules.
The “interlocutory stage” of the case just began, which is similar to that of an early stage of a civil law suit where one party seeks to dismiss the complaint based on the basic facts. The review process will be lengthy; the preliminary process itself could take a year. The case can then be appealed to the U.S. Court of Appeals for the Federal Circuit, although the two sides could potentially reach a settlement agreement depending on the outcome.
Are Physical Card or Chance Games Patentable?
Takeaway: A physical card or chance game may be patentable if it includes new or original physical elements, such as a new or original deck of cards but generally, “a set of rules for a game” are per se patent-ineligible
In In re Smith, No. 2015-1664 (Fed. Cir. March 10, 2016) (opinion by Judge Stoll, joined by Judges Hughes and Moore), the Federal Circuit agreed with the USPTO’s rejection of claims for “the abstract idea of rules for playing a wagering game and use conventional steps of shuffling and dealing a standard deck of cards.”
In October 2010, Ray and Amanda Tears Smith filed a U.S. patent application for a method of conducting their “Pacific Rim Blackjack” card game, including steps such as having the dealer accept wagers from the players and shuffling and dealing the initial cards to each player and the dealer. In June 2011, the Examiner rejected the patent application for failing to satisfy the “machine-or-transformation” test from the case Bilski v. Kappos, 561 U.S. 593 (2010).
Despite the Smiths’ efforts in amending their claims, the Examiner continued to reject their amended claims directed to the physical version of the game, leading the Smiths to appeal the Examiner’s decision to the PTAB.
The PTAB found that the claimed method was directed to a set of rules for conducting a wagering game and therefore unpatentable for trying to claim a patent-ineligible abstract idea. Further, the PTAB explained that the manipulations of the deck of cards (e.g., shuffling, dealing) were conventional steps in playing a wagering game and were insufficient to transform the recited methods into patent-eligible subject matter.
In reviewing the claims, the Federal Circuit alluded that claims drawn to no more than “a set of rules for a game” are per se patent-ineligible but also emphasized that not “all inventions in the gaming arts would be foreclosed from patent protection under § 101.” The court provided any example of a potentially patent-eligible invention—a game using a new or original deck of cards might survive the second step of the two-step test of Alice.
The Alice ruling spelled the determination of patent eligibility as a two-part test: (1) determine whether the claims are directed to a patent-ineligible concept; and (2) determine whether the claim’s elements, considered both individually and as an ordered combination, transform the nature of the claims into a patent-eligible application. The Federal Circuit affirmed the PTAB and the Examiner in rejecting the claims directed to the physical version of “Pacific Rim Blackjack” under the two-step test.
Had the “Pacific Rim Blackjack” been claimed as a computer-based game, the Federal Circuit most likely would have found that the mere inclusion of a conventional processor would be insufficient to transform the recited methods into patent-eligible subject matter, like in Planet Bingo, LLC v. VKGS LLC, 576 F. App’x 1005 (Fed. Cir. 2014).
Therefore, games in the physical realm should focus on new or original physical elements and games in the virtual realm should focus on how the game utilizes a computer system to achieve functionality not otherwise possible, or to solve a specific technological problem.
UPS: United Problem SolversTM
Takeaway: UPS started a campaign to give “UPS” an acronymically new meaning—United Problem Solvers, possibly trying to both broaden its scope of trademark protection as well possibly using that platform to be more than just a mail courier.
Given that UPS (“United Parcel Service”) is notably powerful and well-known trademark, it is no surprise that many applications for “UPS” in other goods, such as carpet and rugs, were denied registration.
For those that were able to overcome UPS’s broad trademark rights, the more successful applicants closely linked the acronym to fully spelled out words and branded their mark in a graphically distinct manner, such as United Properties Southwest.
Under the Trademark Manual of Examining Procedure (“TMEP”), “[a]s a general rule, an acronym or initialism cannot be considered descriptive unless the wording it stands for is merely descriptive of the goods or services, and the acronym or initialism is readily understood by relevant purchasers to be “substantially synonymous” with the merely descriptive wording it represents.”
Interestingly, UPS recently started a campaign to create a new meaning for UPS, “United Problem Solvers” and in order to obtain a federal trademark registration; UPS has recently opposed registration of “Problem Solvers,” by Legion Logistics, LLC, and contending likelihood of confusion with UPS’s prior registration of “Packaging Problem Solvers.”
Therefore, it seems like UPS may be trying to broaden its scope of trademark protection for its potential services under “UPS” through its new campaign.
Restricted Sales and Foreign Sales Do Not Apply to Patent Exhaustion
Takeaway: In the United States, if a patent item is subject to an express restriction that was then violated or if the patented item was sold outside the United States, patent exhaustion does not apply.
Recently the Federal Circuit issued an en banc opinion in Lexmark International, Inc. v. Impression Products, Inc., addressing issues regarding patent exhaustion in light of recent Supreme Court decisions. Patent exhaustion, also known as first-sale doctrine, refers to the extent to which a patent holder can control a patented product after a so-called authorized sale.
The Federal Circuit addressed two issues: (1) whether patent exhaustion applies when a patented item is sold subject to an express single-use/no-resale restriction, and then re-sold in violation of that restriction; and (2) whether patent exhaustion applies when a patented item is sold outside the United States. To both issues, the Federal Circuit held that patent exhaustion does not occur.
In this case, the Federal Circuit held that patent exhaustion did not apply to Lexmark cartridges sold subject to an express single-use/no-resale restriction because patent exhaustion occurs only when the patentee authorized the allegedly infringing action.
In terms of foreign sales, the Federal Circuit reasoned that the patent exhaustion doctrine under the Patent Act is designed to prevent the patentee from receiving a duplicative reward based on a second sale of the same patented item in the U.S. market. Therefore, the Federal Circuit further reasoned, because the Patent Act has no implications in foreign markets, there would be no reward for foreign sales and therefore a second sale in the U.S. market would not be considered a duplicative reward.
However, as the dissent warned, many business that purchase patented products on a global scale may have to confront “a cloud of uncertainty over every sale.”
Federal Circuit Reverses Dismissal on Forum Non Conveniens Grounds
Takeaway: In order for a case to be dismissed on forum-non-conveniens grounds, meaning the case is better suited in another court, the forum non conveniens movant must demonstrate adequacy of the alternative forum.
In Halo Creative & Design v. Comptoir Des Indes Inc. (Fed. Cir. 2016), the Federal Circuit reversed and remanded the decision from the N.D. Illinois Federal Court and held that because there was no evidence that a Canadian court would be willing to enforce a U.S. copyright against infringement in the U.S. or that there was infringement in Canada, the case should not have been dismissed on forum-non-conveniens grounds.
Halo, a Hong Kong based company, sued Comptoir, a Canadian company, for infringing its intellectual property rights including design patents, copyrights (pending registration), and non-registered trademark rights for its furniture designs.
Judge Leinenweber from the N.D. Illinois Federal Court dismissed the case on forum-non-conveniens grounds stating that Illinois is not a convenient forum for a Canadian defendant company and that Canada would be a better-suited forum. According to the district court, “the United States has recognized the potential of applying the copyright laws of other nations and perhaps Canada could do likewise.”
The Federal Circuit quickly reversed and remanded, reasoning that:
“It cannot be assumed that a foreign court would adjudicate an intellectual property dispute where the alleged infringement occurred elsewhere [i.e., in the US], and the case otherwise has little or no connection to the chosen forum. The copyright and patent laws of the United States certainly reflect such territoriality. United States copyright law, for example, generally admits of no remedy for extraterritorial infringement unless a predicate act of infringement was first committed within the United States.”
28 U.S.C. § 1404(a) and common law address the forum non conveniens doctrine. Piper Aircraft Co. v. Reyno, 454 U.S. 235 (1981) thoroughly discuss when the U.S. courts should dismiss cases to instead be adjudged by foreign tribunals. The factors to consider include: ease of access to proof; availability of compulsory process of unwilling witnesses; cost savings for the parties; local (immovable) evidence (such as the site of an accident); court congestion; local interest in enforcement; potential conflict of laws, etc.
In Piper, the Supreme Court stated that the alternate foreign forum must be ‘adequate’ although it need not offer identical rights, and under a more liberal Piper interpretation, the alternate forum must at least permit litigation under the same subject matter of the dispute…
A Lanham Act Section 43(a) False Advertising/Association Claim Does Not Rely on Ownership or Use of Mark by Plaintiffs
On March 23, 2016, the Fourth Circuit Court of Appeals held in Belmora LLC v. Bayer Consumer Care AG and Bayer Healthcare LLC, Appeal No. 15-2335 (March 23, 2016), that ownership of a trademark or even use of a mark is not a necessary to have a false advertising/false association claim under Lanham Act Section 43(a).
A §43(a) claim is available to “[a]ny person who believes that he is or will be damaged” as a result of a defendant’s activities. Therefore, the issue under §43(a) is not whether the defendant’s activities infringe the plaintiff’s registered mark but whether the defendant has used in commerce and that plaintiff believes that it is likely to cause it damage.
Having decided that ownership and use of a mark in the U.S. was not a threshold requirement, the Court then had to determine whether Bayer’s allegations that Belmora acts were sufficient to be considered unfair competition of and proximately cause injury to Bayer’s protected zone of interests under the Lanham Act. The Court determined that Bayer satisfied these prongs.
Bayer claimed that Belmora falsely associated its FLANAX product in the U.S. with Bayer’s FLANAX product in Mexico, which encouraged consumers to purchase FLANAX in the U.S. instead of in Mexico. Under §43(a), Bayer was able to contest Belmora’s FLANAX mark in the U.S even though it does not own or use FLANAX in U.S because Bayer reasons that consumers are purchasing FLANAX from Belmora rather than ALEVE from Bayer.
The Fourth Circuit Court of Appeals held that the district court erred in dismissing Bayer’s claims, vacated the decision, and remanded the case to district court. The case is far from over for Bayer still needs to prove its claims with the district court.
