April 2015

Mr. T Debuts New Reality TV Show “I Pity The Tool” 

Mr. T, a client of Cislo & Thomas who owns the trademark “I Pity The Fool,” is starting a new home improvement TV show called “I Pity The Tool.”  In the show, Mr. T and his team help homeowners in Chicago renovate their homes and “reestablish themselves.” The show will be broadcasted on the DIY Network and will debut later this year. Cislo & Thomas is very proud of Mr. T and wishes him the best of luck in his new show.

Click here to watch a sneak preview of the show.

Managing Partner, Daniel M. Cislo Gives Advice to New Attorneys

Cislo & Thomas LLP is privileged to have our Managing Partner, Daniel M. Cislo, featured in Legal Counselor for providing time-tested and valuable advice to new attorneys. One piece of advice he wants younger lawyers to keep in mind is that “at the end of the day, there is greater value for he or she who brings in the work more often than he who does the work.”  However, Mr. Cislo emphasizes that doing good work is also the key to bringing in clients based on reputation and therefore, the symbiotic relationship between doing good work and bringing in clients is the key to building a healthy and successful practice.

To watch the full segments of Mr. Cislo’s interview, click here

Foreign Filing Restrictions on Where to File First

In the United States, any inventor, regardless of his/her citizenship, may apply for a patent on the same basis as a U.S. citizen, so long as there are no foreign patent filing restrictions from the residing country of the applicant where the invention was invented. 

Below is a chart showing which countries have the different levels of limitation relating to foreign filings for the first patent application filing, namely: 

Foreign Patent Filing Restrictions Chart

No Limitation Argentina, Australia, Austria, Brazil, Hong Kong, Indonesia , Ireland, Japan, Liechtenstein, Mexico, Monaco, New Zealand, Philippines, Poland, Portugal, South Africa, Sri Lanka, Switzerland, Taiwan, Thailand, Venezuela
Applications Related to National Security Require Foreign Filing License Belgium, Czech Republic, Denmark, Finland, Germany, Israel, South Korea, Luxembourg, Netherlands, Slovak Republic, Sweden, United Kingdom
Foreign Filing License Required  Canada1, France2, India, Italy, Malaysia, Singapore, Spain, United States
Requires Domestic First Filing  Belarus, China, Cyprus3, Greece3, Hungary3, Kazakhstan, Russian Federation, Vietnam4
1 License only required for government employees2 Only applies where inventors are French nationals or the company’s principle place of business is France. A European patent application as the first filing does not require a foreign filing license.3 First filing must be domestic where inventors are nationals (and in some cases permanent residents).

Also requires Vietnamese inventors without an obligation to assign to file first in Vietnam.

If you have any questions pertaining to this article or about any countries that are not listed in the Foreign Patent Filing Restriction Chart, please contact Cislo & Thomas LLP.

Federal Circuit Holds “A” Means “Two or More”

In Eidos Display LLC v. AU Optronics Corp. (Fed. Cir. 2015), the Federal Circuit depended on the standard practice in the field of the invention to determine that “a contact hole for source wiring and gate wiring connection terminals” meant each terminal has its own hole because the industry practice was to form one contact hole for each of the connection terminals and the patentee did not show any teaching of how to depart from the common practice. 

Although it was technically feasible to form a shared hole for multiple terminals, the Federal Circuit stated that “if the patentee wanted to deviate from the standard practice … some teaching of how to depart … would not only be expected, but is required.” 

The analysis went further into the construction of the word at issue, “a.”  The Federal Circuit analogized that “a,” in this particular context, meant “two or more” just like how the phrase “I am going to create an electric car for the United States and United Kingdom” means that two cars are to be created—one left sided steering for the U.S. and another right sided steering for the U.K. 

The Federal Circuit distinguished this analysis from rewriting the claim, which the court is not permitted to do. Instead, the Federal Circuit considered it as interpreting how one of ordinary skill in the art would construe the claim language.

Click here to read the full opinion.

In Retrospect, Target Could Have Avoided Spending Million on Canadian Trademark

Companies that potentially may do business in Canada should file a Canadian “intent-to-use” trademark application for approximately $250, with the possibility of keeping the application alive for four years or more for approximately $2,000.  

A Canadian trademark application allows as many classes of goods or services without additional changes in the application fee.  Therefore, when filing the “intent-to-use,” one can potentially add on classes that one’s company has not yet expanded into but may possibly develop into in the future.

Target, however, failed to file such an application and was confronted with a prior registration for “Target” for use in association with clothing retail stores.  Target challenged the prior registration but ended up spending in the “8 figures” to purchase the prior registration instead.  

Had Target just filed an “intent-to-use” application, it would have avoided such an expensive mess for possibly only $250.  To avoid ending up in a similar financial rut as Target did, the simple solution is to file a Canadian “intent-to-use” trademark application covering a plurality of classes.  

Copyright Co-Owner May Unilaterally Transfer Any Owned Exclusive Copyright Interest

The U.S. Court of Appeals for the Ninth Circuit clarified its prior ruling in Sybersound v. UAV, and held that a copyright co-owner may unilaterally transfer any exclusive copyright interest he or she possesses.  Corbello v. DeVito, Case No. 12-16733 (9th Cir., Feb. 10, 2015) (O’Scannlain, J.) (Sack, J., sitting by designation, concurring).  

The issue in the case was whether an agreement for Thomas DeVito and Nicholas Macioci to transfer exclusive rights to their former bandmates, Franki Valli and Bob Gaudio, to use facets of their lives related to the band in the development of a musical, Jersey Boys, constituted a transfer of DeVito’s antedated copyright interest in his autobiography written by a ghostwriter.  If it did, the second issue was if the ghostwriter’s heir, Donna Corbello, would be entitled to a portion of the proceeds of sales of the autobiography.

The 9th Circuit relied on New York law and held that the agreement unambiguously stated the term “biography” in the agreement, which plainly included the autobiography drafted by the ghostwriter.  Thus, the 9th Circuit held that the agreement was a transfer of ownership of derivative-work rights in the autobiography, rather than a nonexclusive license.

The 9th Circuit distinguished Sybersound v. UAV, which held that under § 201(d) of the Copyright Law (17 USC), a co-owner of a copyright may transfer any of the exclusive rights comprised in a copyright without permission from his co-owner.  The 9th Circuit clarified that Sybersound exemplified the basic principle that one can only give away as much as one’s share in a copyright, but Sybersound was not intended to be interpreted as a limitation to a co-owner’s ability to unilaterally transfer any exclusive copyright interests that he possesses.  

Thus, the 9th Circuit reasoned, because copyright co-owners must account to one another for any profits earned by exploiting that copyright, the district court erred in rejecting Corbello’s claims for accounting and declaratory relief.

Judge Sack concurred that the case should be remanded but disagreed that the term “biographies” unambiguously included the autobiography, and that the agreement only transferred certain derivative rights in the autobiography.  Judge Sack also disagreed with the majority’s interpretation of Sybersound, arguing that the transfer created a non-exclusive license, meaning that Corbello’s sole accounting remedy lies against DeVito, the co-owner.

Dispute Over Decades-Old “Happy Birthday to You” Copyright Claim

A current copyright lawsuit against Warner/Chappell, a subsidiary of Warner Music Group, who claims copyright to “Happy Birthday to You,” asserts that the song is actually in the public domain. The plaintiff is a filmmaker who produced a documentary about the song and was charged $1,500 for using it. The class action seeks a declaration that the song has been in the public domain, as well as an order that Warner refund fees collected over the past three years (approximately $6 million).

The copyright in question may be rendered void due to defective copyright notice, failure to file proper renewal applications, as well as lack of evidence of authorship. As Plaintiff’s documentary explains, the song was written for kindergarten students in the late 19th century and originally called “Good Morning to All.” The melody was later combined with new words, though it is unclear if anyone owns the copyright to that arrangement. George Washington University law professor Robert Brauneis suggests that the song has probably been in the public domain since between 1921-1963.

Judge George King of the Central District of California has heard Motions for Summary Judgement. If the motions are not granted, the case will go to trial.

Patent Portfolio Acquisition Scenarios to Bear in Mind

To avoid a failed acquisition of a patent portfolio, there are certain steps that need to be taken long before the portfolio is market-ready and other steps that must be taken during the deal-making process.  Further, the sale of discrete IP assets involve much more focused negotiation and documents dealing with the conditions and transfers of the specified assets as compared to asset purchases, where IP rights are transferred along with non-IP rights.  Make sure to keep in mind how the following scenarios could affect your future patent portfolio acquisitions.

Some standards-setting organizations require that inventors sign an agreement to attend meetings, wherein the agreement states that any patent they file after the meeting that is read on the standard will be available to license by third parties on a fair, reasonable, and non-discriminatory basis. This could significantly affect the future value of such patents.

Some agreements require sellers to give a third party the right to refuse any IP acquisitions, which would dissuade a buyer from investing in conducting any due diligence checks.

The ability to sue for past damages must be explicitly transferred in all prior assignments in order for the rights to past damages to be transferred after the patents are sold.  

If a government entity funds the research and development that is associated with the patents, the government may have rights to share the proceeds of the transaction or have a say in terms of the commercialization of the patents.  The seller should deal with such issues and/or work out an escrow agreement with the government before any acquisition deals.

There is no requirement under U.S. law to record prior patent assignments.  However buyers will usually want to see that the current title holder in the U.S. Patent and Trademark Office is the seller before closing a transaction.

Any discovery of prior art that was not disclosed to the U.S. Patent and Trademark Office discovered during a potential buyer’s diligence effort may result in not only a failed acquisition, but also possibly an invalidity finding in a court proceeding.  Therefore, sellers should make sure they have done a thorough due diligence search themselves.

If the inventors never assigned title of the patent to the company they worked for at the time the patent was filed, then none of the subsequent transfers took place legally.  If an assignment agreement was signed when the inventors were hired or the inventors agree to sign a new assignment agreement, it could cure the inadequate transfer of rights.

“Fast Track” Introduced for EU-Community Trademarks

At its 20th anniversary, the Office for Harmonization in the Internal Market, also known as OHIM, introduced a new procedure to facilitate faster examination and publications of applications.  OHIM manages registrations for Community Trademarks and Designs for the 28 European Union member states.  Their new procedure is named “Fast Track.”  If applicants meet certain conditions, such as paying official fees upfront and selecting goods and services from the pre-approved database, they can take an expedited registration route.

Read more about the conditions and benefits of Fast Track here.

USPTO Updates AIA Rules in Response to User Feedback

The United States Patent and Trademark Office’s (“USPTO”) Director, Michelle Lee, announced rulemakings aimed at improving post-grant American Invents Act (“AIA”) proceedings.  Some of these improvements are effective immediately while others will roll out over the summer and beyond. 

Lee is calling the first phase of these improvements the “Quick-Fix” package:  simple changes effective immediately.  The quick fixes mainly include increases to relevant page limits:  Motions to Amend and subsequent documents received a 10 page allowance increase.  This summer, the USPTO will issue more substantive changes to the Patent Trial and Appeal Board (“PTAB”) rules, likely including an easier claim amendment process, live testimony at oral hearing, discovery to establish real-party interest, and single-judge institution decisions.

The above changes were largely based on a 2014 request for public user input.  The USPTO intends to continue this approach, demonstrating the work-in-progress nature of AIA proceedings.  In particular, the USPTO responded to repeated criticism about the claim amendment process by increasing page limits and relaxing prior-art requirements, demonstrating that the USPTO is taking user feedback seriously.

For more information about the America Invents Act or related matters, please contact Cislo & Thomas LLP.

Conception Must Be Shown—Reduction to Practice is Insufficient to Allude Conception Date

The United States Patent and Trademark Office’s Patent Trial and Appeal Board (“PTAB”) instituted an inter partes review of a design patent of a multiple crock buffet server and ruled that the patent at issue was unpatentable because it was anticipated and rendered obvious by the prior art.  Sensio, Inc. v. Select Brands, Inc., Case No. IPR2013-00500 (PTAB, Feb. 9, 2015) (Wood, APJ).  

An inter partes review (“IPR”) is a trial proceeding conducted by the PTAB to review the patentability of one or more claims in a patent only on a ground that could be raised under anticipation and obviousness, and only on the basis of prior art consisting of patents or printed publications.

Petitioner Sensio filed for an IPR of Select Brands’ design patent and submitted three prior art references to support its claim of unpatentability, with the earliest publication date of these references being April 21, 2010.  Select Brands conceded that the three prior art references disclosed the claimed design, but argued that the reduction to practice of its design was prior to April 21, 2010 and, to that effect, antedated the prior art.  

Relying on the inventors’ declarations that alleged that a Chinese company for Select Brands made a prototype embodying the claimed design at their direction in January 2010, Select Brands provided technical documents to corroborate the earlier reduction to practice date and argued that because it had demonstrated actual reduction to practice before the April 21, 2010 date, proof of conception was irrelevant.  

The Board disagreed and held that inventor testimony alone is not enough—corroboration must be shown.  According to the Board, “the Federal Circuit’s view that conception must be shown whenever a party seeks the benefit of another party’s reduction to practice” supported their holding. 

Therefore, the Board held that Select Brands’ design patent is unpatenable in light of each of the three prior art references submitted by Sensio.

Music Industry Heavyweight Goes Head-to-Head with YouTube

Irving Azoff, former Executive Chairman of LiveNation Entertainment, threatened to pull over 20,000 of his clients’ copyrighted songs from YouTube in light of Google’s planned launch of Music Key, a YouTube subscription service to compete with Pandora and Spotify. 

Azoff did not believe YouTube had made all necessary deals for this service.  Big record labels made deals with YouTube, but smaller independent labels reacted negatively to the licensing terms. His clients include John Lennon, Pharrell Williams, Boston, Smokey Robinson, and the Eagles.

Azoff wants to make a statement regarding higher royalty payments to songwriters and is fronting a new venture named Global Music Rights, which aims to use Azoff’s negotiating leverage to extract higher performance rights royalties for songwriters through IP licensing services. 

Owners of songwriter and publishing rights traditionally struggle to receive compensation from digital services.  Azoff’s message is that, as consumers gravitate more towards streaming services, digital services should contribute more compensation to the composers.

Nespresso Dispute a’Brewing

Jean-Paul Gaillard, who was chief executive of Nestle’s Nespresso unit from 1988 to 1997, is now suing Nestle for patent infringement.  Gillard owns a business named Ethical Coffee Company, which makes coffee capsules for Nespresso machines.  

In a complaint filed on January 20, 2015, Gaillard claims that Nestle introduced a harpoon mechanism in 2010, which stopped rival capsules from working properly in Nespresso machines, allegedly constituting patent infringement.  Ethical Coffee said it suffered at least $174 million in losses since this change. 

Nestle denies any claims of patent infringement and plans to fight the case in court.  View the patent in question here.

One Woman’s Icy Response to “Frozen”

Nearly everyone in the U.S. has seen Walt Disney Picture’s “Frozen,” the highest-grossing animated film of all time, by now.  The film delighted audiences in the U.S. and worldwide and was the most popular theme for children’s costumes this past Halloween.

At least one person, however, was not so delighted by this film, most especially it’s trailer.  Kelley Wilson, an animator and independent filmmaker, filed suit against The Walt Disney Co.  for copyright infringement, claiming that Disney’s blockbuster and specifically the First Look trailer borrowed substantial elements from her short film “The Snowman.” 

So far, the judge in the case has agreed that there are enough similarities in the teaser to allow the case to proceed.  It will be important for Wilson to prove to a jury that Disney had access to her material before creating their own.  

To compare the videos for yourself, watch Wilson’s “The Snowman” here and compare it to Disney’s First Look Trailer here.

Doha Negotiators Revisit Geographical Indication Issues

The council on Trade-Related Aspects of Intellectual Property Rights (TRIPS), a World Trade Organization (WTO) committee, revisited its Doha Round negotiations concerning geographical indications this past December.  Geographical indications are place names that identify a certain product such as “Champagne” or “Roquefort.”  

These long-running negotiations have been inactive since 2011, but now the committee aims to complete their talks and set up a geographical indications register for wines and spirits by July 2015. 

Click here to read more details about the December 2014 meeting and here to learn more about geographical indications.

Anti Patent Troll Legislation Reintroduced

Representative Bob Goodlatte of Virginia has reintroduced his bipartisan “Innovation Act,” which is very similar to his previous 2013 Bill aimed at non-practicing entities (patent trolls).  The bill proposed additional burdens for plaintiffs, such as demonstrating a reasonable basis for their claims early on, while lessening the burden on defendants by limiting discovery expenses, for example.  Here are some of the bill’s main features:

– The Act would require the Patent Trial and Appeal Board (“PTAB”)to use the district court’s claim construction standard, which includes a less permissive range of prior art, during inter partes review.

– Patent owners must disclose all assignees, licensees, and interested parties, which may help to determine the true identities of plaintiffs, who often operate through shell corporations and similar structures.

– The court may stay actions against customers in which the manufacturer is a party.

– Discovery prior to the claim construction ruling is limited to information necessary for determining the meaning of the terms.

– Patent owners are required to clearly articulate their case, i.e. identify each claim of infringement, in the complaint.

– Unless their position is deemed reasonably justified in law or falls under other special circumstances, non-prevailing patent owners must pay for all fees and expenses of the prevailing defendant.