On December 6, 2013, the US Supreme Court agreed to hear an appeal of the Court of Appeals for the Federal Circuit’s en banc decision in CLS Bank v. Alice Corp, No. 2011-1301 (2013). In CLS Bank, the Federal Circuit held that a business method was not transformed from an unpatentable abstract idea into patentable subject matter merely because the method was implemented as software running on a computer.
The Federal Circuit, which has primary responsibility for interpreting US patent law, has struggled for over a decade to define the standards that district courts should apply to evaluate the patentability of business method patents in particular, and computer programs in general. In CLS Bank, the court upheld the district court’s finding that all claims of the patent-in-suit, directed to a business method for facilitating financial transactions, were invalid because they were not drawn to patent eligible subject matter. The court’s ten-member en banc panel, however, released seven different decisions in support of their conclusion—none of which garnered majority support. Thus, the court provided trial courts with little guidance on this important issue and essentially left the law as fractured as ever. It is hoped that the Supreme Court will use the CLS Bank appeal to bring much needed clarity to the question when, if ever, business methods and computer software are patentable.
Contributory Cybersquatting Not an Actionable Claim
In Petroliam Nasional Berhad v. GoDaddy.com, Inc., (No. 12-5584) (9th Cir. 2013), Petronas, a major oil and gas company located in Kuala Lumpur, Malaysia alleged a claim for contributory cybersquatting against GoDaddy, the world’s largest domain name registrar. Cybersquatting is “the bad faith registration of a domain name that is identical or confusingly similar to another’s distinctive mark.” Petronas filed suit for contributory cybersquatting under the Anticybersquatting Consumer Protection Act, 15 U.S.C. 1125(d), after a third party registered the domain names “petronastower.net” and “petronastowers.net” and then used GoDaddy’s automated services to direct the domain names to an adult entertainment web site. The district court granted summary judgment in favor of GoDaddy. The Ninth Circuit affirmed, holding that the Act did not provide a cause of action for contributory cybersquatting because: (1) no such cause of action can be found in the plain text of the statute; (2) Congress did not intend to implicitly include common law doctrines applicable to trademark infringement in the Act because the Act created a new cause of action distinct from traditional trademark remedies; and (3) allowing suits against domain name registrars for contributory cybersquatting would not advance the goals of the statute.
Supreme Court Favors Enforcement of Contractual Forum Selection Clauses
In Atlantic Marine Construction Co., Inc. v. U.S. District Court For The Western District of Texas, 571 U.S. ___, No. 12-929 (December 3, 2013), the Court issued an opinion strongly favoring enforcement of contractual forum-selection clauses and holding that a party who files suit in violation of such a clause faces a heavy burden to avoid transfer of the case. The Court held that forum-selection clauses should be enforced under the venue statute, 28 U.S.C. § 1404(a), and stated that “a proper application of § 1404(a) requires that a forum-selection clause be “given controlling weight in all but the most exceptional cases.”
In particular, in conducting a Section 1404(a) analysis where a contractual forum selection clause is at issue, the plaintiff’s choice of forum shall be afforded no weight. Per the Court, “when a plaintiff agrees by contract to bring suit only in a specified forum—presumably in exchange for other binding promises by the defendant—the plaintiff has effectively exercised its ‘venue privilege’ before a dispute arises. Only that initial choice deserves deference, and the plaintiff must bear the burden of showing why the court should not transfer the case to the forum to which the parties agreed.” The Court specifically noted that trial courts should not consider the parties’ private interests, such as convenience of the witnesses or the location of evidence when conducting the transfer analysis. Private-interest factors are to be deemed to weigh entirely in favor of the preselected venue. The Court also held that “when a party bound by a forum-selection clause flouts its contractual obligation and files suit in a different forum, a § 1404(a) transfer of venue will not carry with it the original venue’s choice-of-law rules.” In other words, the law of the contractually selected forum will apply.
USPTO Institutes Patents for Humanity Pilot Program
Patents for Humanity is a voluntary awards competition to recognize patent owners who apply their patented technology to address humanitarian needs. Per the USPTO, the program advances the president’s global development agenda by rewarding companies who bring life-saving technologies to underserved people of the world. Participants describe in their applications how they’ve used their patented technology or products to address humanitarian challenges. Judges will choose winners in four categories: medical technology, food and nutrition, clean technology and information technology. Awardees will receive a certificate redeemable to accelerate select matters before the USPTO and public recognition for their efforts, including an award ceremony at the USPTO. Per the USPTO, the award certificate can be redeemed to accelerate: the prosecution of a patent application, an ex parte reexamination proceeding, and an appeal to the Board of Patent Appeals regarding a twice rejected claim in a pending patent application, including reissue applications.
New Patent Rules Effective December 18, 2013
The USPTO has announced several patent rule changes to implement the Patent Law Treaties Implementation Act of 2012, which seeks to harmonize U.S. Patent law with international law and specifically with the Hague Agreement Concerning International Registration of Industrial Design and the Patent Law Treaty. The most significant of these changes include: (1) removing the time limit to revive abandoned patent applications; (2) requiring a showing of only “unintentional delay” to revive an abandoned patent application; (3) a pared down requirement for obtaining a filing date for a U.S. non-provisional patent application, i.e. only a specification need be filed, drawings and claims may be filed up to three (3) months later; and, (4) the ability to restore a claim of priority to a foreign or U.S. provisional application where the non-provisional application is filed more than 12 months after the foreign or U.S. provisional application.
Ninth Circuit Tackles Jim Brown for a Loss
In its recent opinion in James “Jim” Brown v. Electronic Arts, Inc., No. 09-56675 (9th Cir. 2013), the Ninth Circuit upheld the district court’s granting of Electronic Arts’ motion to dismiss Brown’s Lanham Act claim for false endorsement. Jim Brown played running back for the Cleveland Browns from 1957 through 1965 and is widely regarded as one of the greatest professional football players of all time. Brown was inducted to the NFL Hall of Fame after his retirement.
Brown alleged that Electronic Arts had used his likeness on a historical player avatar in several versions of Madden NFL dating back to at least 2001, but had never sought his permission for such use or provided him with any compensation. Brown objected to Electronic Arts’ unauthorized and uncompensated use of his likeness, and therefore filed suit in the Central District of California alleging a claim for false endorsement under Section 43 of the Lanham Act. While the Lanham act is typically used to assert claims for trademark or trade dress infringement, the Ninth Circuit has long held the Act to also be applicable to the unauthorized use of a public figure’s persona. See Waits v. Frito-Lay, Inc., 978 F.2d 1110 (9th Cir. 1992).
Electronic Arts moved to dismiss Brown’s claim invoking the so called “Rogers” exception to the Act. The Rogers test balances the public’s interest in freedom of expression with the competing interest of being free from consumer confusion regarding affiliations and endorsements. Under the Rogers test, the Lanham Act will not be applied to expressive works “unless the [likeness] has no artistic relevance to the underlying work whatsoever, or, if it has some relevance, unless the use of the [likeness] misleads as to the source or content of the work.” See Rogers v. Grimaldi, 875 F.2d 944 (2nd Cir. 1989), adopted by the Ninth Circuit in Mattel, Inc. v. MCA Records, Inc., 296 F.3d 894 (9th Cir. 2002). The district court granted Electronic Arts’ motion to dismiss finding that Brown could plead no set of facts that would allow a Lanham Act claim to succeed under the Rogers test. Brown appealed.
In Brown v. Electronic Arts, the Ninth Circuit methodically applied the facts to the law to reach a seemingly correct legal conclusion. The net effect however, is to essentially foreclose athletes from asserting Lanham Act claims to prevent commercial entities from profiting from their likenesses. After all, Electronic Arts did not use Jim Brown’s likeness in a biography on Jim Brown, the historical figure. Rather, it used Jim Brown’s likeness, without permission or compensation, in a popular and no doubt profitable video game. With the Ninth Circuit being disinclined to allow famous athletes to pursue Lanham Act claims, athletes such as Jim Brown may have more success in obtaining compensation for commercial uses of their likenesses in state court asserting claims under California’s right of publicity statute.
UCLA Alumni IP Panel
Our managing partner had the opportunity to be a part of a panel hosted by UCLA School of Engineering and Applied Sciences. As a UCLA Engineering Alum, Daniel Cislo, along with fellow alumni, spoke with current UCLA undergraduate and graduate engineering students on the importance of intellectual property protection and the developments of provisional patent application filings with the United States Patent and Trademark Office.
Hope Gardens Family Center
Cislo & Thomas LLP is proud to be an Angel Sponsor for the Union Rescue Mission’s Hope Gardens Family Center in helping the economic orphans and women of downtown Los Angeles. Union Rescue Mission’s Hope Gardens Family Center is a transitional living and permanent supportive housing campus that gives single mothers, their children, and senior women experiencing homelessness a chance to leave the streets and find sanctuary in a peaceful setting. We encourage you to join Cislo & Thomas LLP to support the Hope Gardens Family Center and donate at www.urm.org/hearts.
