December 2018

Intellectual Property Filings Continue to Grow

Takeaway: There is high demand for intellectual property protection in China.

The World Intellectual Property Organization (“WIPO”) recently released its IP indicators report showing that IP filings around the world continue to grow in a positive direction. The report showed the following growth worldwide:

– In 2017 there were 5.8% more patent applications filed than there were 2016.

– In 2017 there were 30% more trademark applications filed than there were 2016.

– In 2017 there were 0.2% more industrial design applications filed than there were 2016.

– In 2017 there were 11.7% more plant varieties applications filed than there were 2016.

Additionally, the report showed that the Chinese IP office continues to dominate intellectual property filings in the world. China alone received 1.38 million patent applications and 5.7 million trademark applications, whereas the United States only received 643,349 patent applications and 638,847 trademark applications.

Is it deceptive to call your brand “Hawaiian Style” if the product is not made in Hawaii?

Takeaway: It is always important to think about whether your branding is going to mislead consumers.

Pinnacle Foods, in a class action lawsuit, is being sued for allegedly using false and deceptive advertising and fraudulent and unfair business practices for calling their potato chips “Hawaiian Kettle Style.” According to the lawsuit, customers of Pinnacle Foods are being deceived as to the source of the chips, which is giving Pinnacle an unfair advantage due to the false and deceptive advertising.

This case presents an important question for companies who are developing their brands. Just how far do you have to distance your brand from a geographic reference to not be misleading to customers? Just providing imagery that represents a specific location does not necessarily mean that the content is false advertising. The lawsuit, originally filed in state court, has been moved to Federal Court. It will be interesting to see how the lawsuit is resolved.

Think about companies like Coca Cola who place imagery of polar bears on their products; does that mean their product is coming from the Arctic Circle? Obviously the answer is no in that situation. However, there is a degree of fuzziness in this question, largely because placing imagery of specific cultural and geographic references can make a consumer think of that specific location. An image of a hula dancer, for example, will likely make a person think of Hawaii, a state that does produce Pinnacle food products. When you are buying a bag of chips with a hula dancer on the front, you are much more likely to think the chips are made in Hawaii than you are to think Coca Cola built a manufacturing facility in the North Pole.

Award Against University of Wisconsin of $31,617,498

Takeaway: Business owners and universities alike should make sure they fully understand what the terms of their intellectual property licensing agreements entail. 

University of Wisconsin ordered to pay nearly 32 million dollars after a Delaware federal court determined that they should have paid that amount to Washington University in St. Louis in a patent licensing deal. The patent was directed to treatment for hyperparathyroidism and was developed by scientists from both University of Wisconsin and Washington University in St. Louis.

According to the court, the two schools had a license agreement to share profits from U.S. Patent No. 5,597,815. According to Washington University in St. Louis’s attorney, the agreement entitled Washington University in St. Louis to one third of the royalties from the patent. However, the actual details of the agreement and how the court calculated damages remain undisclosed, because the opinion was filed under seal.


Reality Star Must Pay $610,000 for Trademark Infringement

Takeaway: It is never a good idea to breach a settlement agreement and ignore a court’s order.

Margaret Josephs, a reality television star from “The Real Housewives of New Jersey,” and her company MacBeth Collection LLC were found to owe Vineyard Vines $610,000 in damages and attorney’s fees for breaching a settlement agreement and ignoring the court’s order.

This ruling came from a case back in 2015 where Vineyard Vines sued Margaret Josephs for trademark infringement. Before the case went to trial, the parties entered into a settlement agreement and the court ordered a permanent injunction preventing Margaret Josephs (and affiliated entities) from further infringement of Vineyard Vines’ trademarks.

Subsequently, Margaret Josephs directed a third-party company to use Vineyard Vines’ trademarked whale logo, which the court found to be in breach of the settlement agreement and in violation of the court’s permanent injunction. These violations resulted in the court ordering damages in the amount of $500,000 in liquidated damages from the agreement and $110,000 in attorney’s fees.

Update on Brexit’s Impact on Intellectual Property Rights

Takeaway: United Kingdom and European Union have agreed on a draft of regulations that could change intellectual property rights.

With the exit of the United Kingdom (“UK”) from the European Union (“EU”) set to take place on March 30, 2019, people are still wondering what kind of ramifications it will have on the world. One aspect of the exit will be a change to the structure of intellectual property laws.

As of now, the UK and EU have agreed to a draft of regulations in relation to the exit, which does include regulations having to do with changes in their intellectual property laws.

Under the draft, Trademarks that have been filed and proceed to registration in the EU will remain effective in the UK after their exit. However, if the application has not proceeded to registration before the exit of the UK, the applicant will have 9 months to file for a trademark in the UK claiming priority to the original EU application.

As far as copyrights are concerned there is very little reference to changes in the current system. However, the draft does mention that databases that have obtained copyright registration will retain their copyrights in both the UK and the EU after the transition.


The Second Circuit Rules on Digital First Sale Doctrine

Takeaway: There is no digital first sale doctrine in the United States.

Historically, copyright owners have been limited in their ability to police the resale of their copyrighted content. For example, if you buy a textbook at the beginning of a semester of school or if you buy a music record, you may resell that item even though it contains copyrighted material. This concept is known as the “first sale doctrine” because after a copyright holder sells their “first” copy of that material to a specific consumer, their rights to control that copy are eliminated. In turn, the purchaser of the copyrighted material may resell that product, but they may not “copy” that product.

Now, in a digital world, the question has become whether the first sale doctrine may apply to the ever-expanding space of digital media content. Looking to the examples above, in a digital world, if you buy a book in the form of a .pdf to read on your tablet, may you resell that item under the first sale doctrine?

On December 12, 2018 the Second Circuit Court of Appeals answered this question, and they say the answer is no. In the case of Capitol Records LLC v. ReDigi Inc., the Second Circuit decided on issues regarding the resale of digital music. ReDigi is a company that started with the idea of creating a marketplace for consumers to resell their digital music when they were finished with the song. Their system allowed a user to upload their song for resale, and if the song was sold to someone else, ReDigi’s software would delete the original file from the seller’s computer. According to the Second Circuit, ReDigi’s business model is illegal under the current copyright laws.

They reasoned that it was not the deletion of the original copy that mattered, but rather the fact that a “copy” was made in the process of reselling the digital song. Even with physical media such as textbooks and music records a person is not allowed to make a copy of the product they held. The Second Circuit reasoned that they were not allowed to disregard the terms of the statue, which indicates that the only person allowed to make a copy of copyrighted material is the copyright owner.

Avoid Trouble when Collecting Data from your California-based Customers

There is a growing fear online regarding the use of customer’s information due to the upsurge of identity theft and various other online crimes. This has been increasing in the headlines from major corporate hacks to Facebook data privacy issues. However, these concerns are no longer just a fear of the consumer. Business owners and entrepreneurs that operate online should be concerned as well. Therefore, privacy is rapidly becoming an important consideration when you develop your online strategy.

Due to these concerns, California has enacted laws that require you to let your customers know when your website is collecting their information. So if you are collecting the “personally identifiable information” of any California residents, make sure you are aware of the requirements necessary to stay in compliance with California’s laws.

What type of information counts?

According to California law, if you are collecting any of the following, you should make sure you are in compliance with the posting requirements:

(1)?A first and last name;
(2)?A home or other physical address, including street name and name of a city or town;
(3)?An e-mail address;
(4)?A telephone number;
(5)?A social security number;
(6)?Any other identifier that permits the physical or online contacting of a specific individual;
(7)?Information concerning a user that the web site or online service collects online from the user and maintains in personally identifiable form in combination with an identifier described in this subdivision.

Where do you have to post this warning?

The California statute says that you must “conspicuously post” the warning. However, what this essentially means is that you need to post the warning on the landing page of your website.

The warning may be the actual privacy policy, or an icon that links back to the actual privacy policy. If an icon is used, make sure the color of the icon “contrasts with the background color of the web page or is otherwise distinguishable.”

Jeffrey Sheldon of Cislo & Thomas LLP Presents:

January 17th: Patent Application Preparation in View of Recent Court Decisions: Updates and Strategies Webcast by Practicing Law Institute

Do you prepare patent applications? If so, join patent authority Jeffrey Sheldon’s webcast on January 17th as he provides you with an insightful and timely update on patent preparation strategies based on new developments in the law. Obtain the skills and best practices you need to provide better client service, and increase chances that your patent will issue and survive an IPR and litigation. Discussions will include:

  • Best strategies in writing applications in view of possible abstract idea and product of nature rejections
  • How to make provisional applications prior art as to third parties
  • Functional language versus product by process language – what is it?
  • Broad claims and the enablement challenge
  • Should the background portion of a patent application be skinny?
  • The potential trap of multiple embodiments in a design application
  • How many drawings in a design patent application?
  • Challenging inventorship
  • Using “and” and “or” terms
  • Priority claim

To learn more, visit:

March 1 – May 9: Patent Law Practice: Learn to Be a Successful Patent Practitioner 2019 Course (Practicing Law Institute Course)

For those who want to be patent practitioners and patent practitioners that want to sharpen their skills, join Jeffrey Sheldon in an online virtual classroom, starting March 1st. This 10-week program will cover all of the basics of patent prosecution, including:

  • Interviewing an Inventor and Obtaining a Patentability Study
  • Conducting a Patentability Search/Evaluating Search Results
  • Drafting Claims
  • Ordering Drawings and Writing a Patent Application
  • Provisionals, Design, and Information Disclosure Statements
  • Restriction Requirements and Responding to First Office Actions
  • Responding to Final Rejection
  • Infringement and Validity Opinions
  • Foreign Filing
  • Post Issuance

To learn more, visit: