July 2015

Cislo & Thomas’ Client Michael Amini Receives LA Times Recognition as Thriving Furniture Designer

Cislo & Thomas LLP congratulates client Michael Amini for being featured in the Los Angeles Times as a result of his numerous achievements; Amini is a lifestyle-branding furniture designer who started his own furniture company Amini Innovation Corp (AICO).

The article highlights the arduous journey Mr. Amini has overcome to build one of the most highly successful furniture companies in the world. As a company, AICO has found the balance between being a business powerhouse by actively pursuing competitors that would try to infringe its intellectual property, while also maintaining a generous level of philanthropic activism, such as contributing to the founding of the Michael Amini Transfusion Medicine Center at the City of Hope.

Mr. Amini is always on the lookout for new designs and “has an ability to see things differently and to use what he sees as the basis for new designs for his intricate and impeccable furniture.”  This is one of the many reasons why he is able to be as successful as he is now.

Cislo & Thomas LLP is proud to witness first-hand Mr. Amini’s journey to success and applauds him for all of his past endeavors and those to come.

See the rest of the LA Times articles here.

Attorney Kara Stoll Appointed Newest Federal Circuit Judge

Kara Stoll, a former partner at Finnegan Henderson, has been unanimously confirmed by the United States Senate as the newest judge on the United States Court of Appeals for the Federal Circuit with a resounding 95-0 vote.

Stoll will be taking the spot of retired Judge Randall Rader and will be the first minority woman to serve on the Federal Circuit.

Throughout her practice, Stoll has focused on patent litigation appeals before the Federal Circuit and represented clients in more than 35 appeals before the Patent Trial and Appeal Board (PTAB) of the U.S. Patent and Trademark Office (USPTO).

Her extensive background involving patents is comparable to Judge Raymond Chen who was previously the Solicitor at the USPTO.  The pair will be a great asset for resolving complex patent issues in the future.

Google Launches New Prior Art Finder

Google has recently launched a more comprehensive prior art finder that displays results from Google Patents, Google Scholar, Google Books, and the rest of the web.  Users can either search for key terms or for particular patent applications using application numbers.

This improved search engine will provide both practitioners and non-practitioners with more access to discovering prior art.

Click here to try out Google’s latest patent search engine.

USPTO Website to become Incompatible with Google Chrome

As a result of losing a copyright case against Oracle, tech giant Google has had to eliminate support on Chrome for the Netscape Plugin Application Programming Interface (NPAPI) that is required to run certain Java applications.  NPAPI plugins have been disabled by default, with complete removal of NPAPI support slated for September 2015.  Representatives state that this decision was made to increase security and speed while reducing complexity.  Java security breaches have victimized major tech corporations such as Microsoft, Apple, Facebook, and Twitter in recent years.  Critics point out the correlation to a legal dispute between Google and Oracle, which owns the intellectual property rights to the Java software platform.

Many government websites require Java.  This will impact U.S. patent applicants as it reduces the digital resources offered by the USPTO website.  EFS-Web (online submission) and Private PAIR (status inquiry) both utilize Java to authenticate users.  The USPTO recommends the use of alternative browsers such as Firefox, Safari, and Internet Explorer.

Read the announcement here.

Jury to Decide if Amazon’s Search Results Infringe Watch Company’s Trademark

On July 6, 2015, the U.S. Court of Appeals for the Ninth Circuit reversed a decision of a federal court in Los Angeles holding that Amazon’s search results, in a specific instance, did not constitute trademark infringement.

Multi-Time Machine, Inc. (“MTM”) makes MTM Special Ops watches, which are high-end military-style time pieces.  MTM does not sell its watches on Amazon, nor does it allow its distributors to sell its watches on Amazon.

However, from time-to-time, consumers have entered “MTM Special Ops” (or the like) in the search box on Amazon.com, and, according to the Ninth Circuit’s opinion, the search results returned a list of other military-style watches not offered by MTM’s competitors, even though “MTM Special Ops” was still listed in the search box and elsewhere on the search results page.

According to the Ninth Circuit’s opinion, Amazon’s returned search results did not indicate that it did not offer MTM’s watches for sale.  In the same breath, the Ninth Circuit indicated that some of Amazon’s competitors (buy.com and overstock.com) will return competitor’s products in their search results, but will also indicate that the searched-for products are not available on their respective sites.  This point seemed to be a big deal to the Ninth Circuit in reaching its conclusion that the district court’s ruling in favor of Amazon was erroneous.

In this instance, essentially the Ninth Circuit said that a reasonable jury could find that the manner in which Amazon responded to a search query could lead to “initial interest confusion” among consumers.

“Initial interest confusion” does not occur when a consumer is confused about the source of a product at the time of purchase, but rather, prior to the time of purchase where a trademark owner’s mark is used to generate interest in a competitor’s product.

The Ninth Circuit said this is a problem because “[e]ven if that confusion is dispelled before an actual sale occurs, initial interest confusion still constitutes trademark infringement because it ‘impermissibly capitalizes on the goodwill associated with a mark and is therefore actionable trademark infringement.’”  Opinion at 9.

The Ninth Circuit ultimately said that the weighing of the evidence, and the final determination of whether or not there is trademark infringement, is for a jury to decide.

This is, potentially, a very important ruling.  Amazon is well-known and established as a (or “the”) premier e-commerce platform.  At some level, it might not be difficult for Amazon to change how its search results are generated on the back-end to avoid this potential problem.

If the jury ultimately finds that there was trademark infringement here, this ruling could be seen as a general victory for trademark owners who might have experienced the same or similar issues with Amazon’s search results in the past.  The Ninth Circuit noted that Amazon did not appear to take any corrective measures to avoid this problem in this case.

Whether this has happened to others or whether or not the results of a search query on Amazon constitutes trademark infringement, it is not detailed in the Ninth Circuit’s opinion.  At any rate, the case will now head back to the trial court in Los Angeles for a jury trial.

The full opinion can be found here.

New Economy Class Cabin Hexagon Patent by Zodiac Seats

Source: WIPO

One of the largest airline seat suppliers in the world, Zodiac Seats France, recently submitted a patent application for a new seating arrangement on airplanes that many are considering as nothing short of a nightmare.  Generally, flying on an airplane is already a test of one’s personal space, but with the new “Economy Class Cabin Hexagon” seating configuration, it seems like the idea of comfort has been kicked to the curb and replaced with “increas[ing] cabin density.”

The patent explains that this configuration actually makes it easier to exit because the seats flip up when a passenger stands.  The patent also explains that with typical adjacent seats, passengers “may share opposing portions of an armrest,” but the angled armrests of the hexagon configuration will decrease the “likelihood that the passengers seated in the adjacent seats will contact or interfere with each other.”

It seems like the industry is running out of ideas of how to align and configure seats.  In addition, Jason Rabinowitz, a data research manager at the airline amenities comparison website Routehappy.com, added that there will also be an effort to shrink onboard bathrooms and galleys.

In the meantime, applying for the patent of this arrangement allows Zodiac Seats France to control how it wants to apply this design in the future.  For now, most flyers can only hope it never succeeds!

Read the entire patent application here.

Federal Circuit Refuses M.Z. Berger’s IWATCH Trademark and Why Apple Was Not Involved in the Opposition

When M.Z. Berger & Co. could not prove it had a “bona fide intent” to use the mark IWATCH, the Federal Circuit upheld the Trademark Trial and Appeal Board’s ruling that M.Z. Berger could not register for the trademark IWATCH.  M.Z. Berger & Co., Inc. v. Swatch AG (Swatch SA) (Swatch Ltd.), Case No. 14-1219 (Fed. Cir. June 5, 2015).

The Federal Circuit opined that the documentary evidence and testimonies suggested that M.Z. Berger just wanted to claim the name but had no plans to use it as a trademark.

The insufficient evidence produced by Berger included proposed product drawings that were “prosecution-driven” because they were prepared in response to the examining attorney’s request for more information on how Berger intended to use the mark.  Also included was testimony from Berger’s CEO that even three years after the filing date of the intent-to-use application, no decisions had been made as to what type of watch would be sold with the IWATCH mark or what features it would have.

This was the first time the Federal Circuit discussed whether a lack of intent by an applicant is sufficient grounds for an opportunity to oppose at the TTAB.

“An opposer is entitled to rely on any statutory ground which negates an appellant’s right to the subject registration,” the court said. “Because a bona fide intent to utilize the mark in commerce is a statutory requirement of a valid intent-to-use (ITU) trademark application, the lack of such intent is a basis on which an opposer may challenge an applicant’s mark.”

Interestingly, given the recent release of the Apple Watch and Apple’s aggressive stance against i-formative marks, Apple did not join Swatch in the opposition.  It turns out that American based company OMG Electronics had applied for the IWATCH trademark in September 2012, and a software studio named Probendi has owned the IWATCH trademark in the European Union since 2008.  Therefore, it was wise of Apple to avoid those potential lawsuits by switching to the name “Apple Watch.”

Similarly, Apple chose to use the trademark Apple TV rather than iTV.  Apple wanted to avoid any trademark litigation, such as a potential suit from a British television network named ITV that was set to take legal action should Apple go ahead with the name.

On the other hand, with the iPhone, Apple had to make a deal with Cisco for the rights to the name and with the iPad, Apple paid off a company called Proview for the iPad name in mainland China.

Therefore, Apple had no direct reason to be involved in the case, even though Apple still benefitted from the holding with one less competitor having rights to a similar mark and potentially similar product.

Cancellation of Washington Redskins Trademark Affirmed by U.S. District Court Judge

After an emotionally charged case for both sides, U.S. District Judge Gerald Lee agreed with the Trademark Trial and Appeal Board (TTAB) in a 70-page opinion which held that the Washington Redskins, of the National Football League, owned trademarks that disparaged Native Americans and also that the law allowing for cancellation did not violate free speech rights of the U.S. Constitution.  Pro-Football Inc v. Amanda Blackhorse et al, U.S. District Court for the Eastern District of Virginia, No. 14-cv-2043.

Amanda Blackhorse was one of the handful of Native American activists who persuaded the TTAB to void the Redskins’ registrations in June 2014 stating, “This has been a long time coming.”

In the appeal, those in favor of the name argued that the cancellations were a violation of the First Amendment as a restriction on allegedly protected speech, as well as a violation of the Fifth Amendment due to Section 2(a) of the Lanham Act which is vague about which trademarks “may disparage” and violates the Takings Clause.

Through his order and opinion, Judge Lee upheld last year’s 2-1 ruling by the TTAB that the team’s name and logo should not be eligible for federal trademark registration because “the federal trademark registration program is government speech and is therefore exempt from First Amendment scrutiny.”  Judge Lee also opined that a federal trademark registration is not “property” for purposes of the Fifth Amendment analysis.

Given the results of the appeal, President of the Washington team, Bruce Allen, stated that they will exhaust appeal process options including bringing the case to the Supreme Court.  Allen stated they “are convinced that [they] will win on an appeal as the facts and the law [are] on the side of [their] franchise that has proudly used the name Washington Redskins for more than 80 years.”

This decision will not force the team to change its name, nor to stop using the marks.  The team can still use the REDSKINS name, sell t-shirts and other merchandise, and can most likely still enforce certain common law trademark rights for its unregistered marks.  It can also seek trademark protection under state law.

However, it does mean that the team loses certain rights and legal protections.  This cancellation dilutes the Redskin’s legal protection against infringement, specifically in terms of blocking counterfeit merchandise at customs or recovering actual damages, attorney’s fees, and obtaining injunctions.

An Introduction to “Secondary Source” use of Trademarks

A trademark usually functions as a source indicator—a symbol of the goodwill of the manufacturer, producer, or distributor of a product.  Many U.S. trademark applications are refused for being overrun with “merely ornamental” material.  In other words, a trademark must carry branding connotations for the product in question (e.g. a company’s trademark on a T-shirt’s hangtag that associates the T-shirt with the company’s brand and quality).

Nontraditionally, trademark owners may license their marks for use on promotional products of which they do not seek to identify themselves as the “primary,” but the “secondary source” instead.

A “secondary source” is a party that authorizes, sponsors, or licenses its trademark.  Most commonly, this occurs when promoting one’s brand through products unrelated to the goods or services that are usually associated with a particular trademark.

As an illustration, a beverage company may license the manufacture of T-shirts with its trademark printed on them.  In this case, the primary purpose of the T-shirts would be to show affiliation with the trademarked beverages.

This does not mean that the beverage company has begun manufacturing T-shirts; the beverage company authorizes them, but they are not the “source” of the T-shirts.  In this case, the beverage company’s trademark that is printed on the T-shirts is the “secondary source.”

As a result of this nontraditional use of trademarks, trademark owners may even be able to register trademarks for products they do not themselves produce (such as T-shirts) if they satisfy the other traditional requirements.

To determine whether material serves a source-identifying function or is merely ornamental, the Trademark Office considers what sort of ornamentation is standard for the goods at issue.  Additional criteria for broadened protection include public perception of the mark and whether or not it is well-known.

Scenarios That Could Still Allow a License for Post-Expiration Royalty Payments in Light of Supreme Court Decision Kimble v. Marvel

In our previous newsletter, we discussed the Supreme Court case, Kimble v. Marvel Entertainment, LLC, which upheld a long-standing precedent set in Brulotte v. Thys Co., that a patent holder could not charge royalties for the use of his invention beyond the terms of the patent, which is generally 20 years from the date of filing the application.

Brulotte has been long criticized for thwarting efficient patent licensing but the Supreme Court could not find enough justification to overrule the precedent sent in Brulotte.  Instead, the Court identified several scenarios that could still allow a license to require post-expiration royalty payments:

  1. a royalty arrangement allowing a licensee to defer payments for pre-expiration use of a patent into the post-expiration period
  2. a royalty that requires payments until the expiration of the latest-running licensed patent
  3. post-expiration royalties that are tied to a non-patent right, even if closely related to a patent
  4. arrangements like joint ventures that enable parties to share the risks and rewards of commercializing an invention

Given these scenarios, parties in a licensing agreement may lean towards forming more developed relationships that expand beyond pure licensing, as indicated by scenarios 3 and 4, in addition to just drafting the licensing agreement. If such payment terms are crafted in light of Brulotte andKimble, unenforceable royalty provisions based on the precedent set by these cases may be easily avoided.