November 2015

Cislo & Thomas LLP Hosts Q&A at Techweek Los Angeles1

On November 12, Cislo & Thomas LLP hosted a Q & A event at Techweek Los Angeles as part of its conference and expo to educate start-ups and entrepreneurs on IP related topics.   Our attorneys at Cislo & Thomas LLP were able to assist dozens of individuals and start-ups while learning about the latest trends in technology.

Cislo & Thomas LLP hopes to host more Q & A sessions like the one at Techweek in order to help understand and address the most current concerns in the growing Silicon Beach area.  If you are aware of any expos that may be interested in having us host a Q & A panel or the like, please contact [email protected].

Cislo & Thomas LLP Hosts At SoCalBio Conference2

On November 6, Cislo & Thomas LLP hosted a booth in sunny Long Beach California at the annual SoCalBio Investor and Partnership Conference.   As a co-sponsor of the event, the Cislo & Thomas team was introduced to some of the newest developments and technologies in the biosciences industry and fielded numerous questions throughout the day about the firm and our provisional patent filing tool, PatentFiler.com.

Attendees of the conference were particularly enthusiastic about PatentFiler.com, a new online portal created by Managing Partner Daniel M. Cislo to enable inventors to file a provisional patent easily and inexpensively.   The conference provided extremely beneficial information to attendees from leading industry sources, with portions of the conference dedicated to research developments, entrepreneur presentations, and various networking events.

CrowdPatent Uses PatentFiler To Secure Early Protection of IP Rights

CrowdPatent, the world’s first platform uniting inventors, investors and companies in the exploitation of inventions, has relaunched its platform.

CrowdPatent integrates our highly successful Patentfiler website to facilitate crowdsourcing funds for patenting inventions. While Patentfiler serves as an innovative platform that allows for simple and effective provisional patent filing, CrowdPatent enables searching for individuals or start-ups.

Together, PatentFiler and CrowdPatent aim to be in the forefront for providing inventors with the funds and means to obtain the legal protection necessary to go forward in bringing their innovative inventions to the market. Please visit https://patentfiler.com and https://crowdpatent.com for more information. 

Little Trees Air Freshener Prevails In Trade Dress Suit

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Car-Freshener Corp. (“CFC”), the owner of the well-known pine tree-shaped air fresheners “Little Trees,” sued Exotica Fresheners Co. (“Exotica”) for selling products that CFC alleged infringed on CFC’s trademark in January 2014. The jury found that Exotica infringed on CRC’s trademark, and in addition to changing its packaging, Exotica was order to pay $52,000.

CFC alleged that Exotica’s products were “likely to cause confusion, mistake or deception as to the source, origin, or sponsorship of Exotica’s goods, and to falsely mislead consumers into believing that Exotica’s products are affiliated or connected with or are approved by CFC.”

The question for the jury was whether some consumers were likely to be confused by the overall look of the product, known as its “trade dress.”

CFC acknowledged that there are differences between the two brands, such as Exotica’s freshener being shaped like a palm tree versus CFC’s iconic pine. However, CFC’s lawyer argued that the packaging is similar enough that some buyers might mistakenly think that Exotica and CFC are somehow related.

Further, there is a long history of trademark and trade dress infringement by Exotica, including using the same scent names such as “Black Ice,” “Icee Black,” and “Icey Black,” which are marks owned by CFC.

Little  Trees dominates the market with total sales of $100 million a year while Exotica sells only about $110,000 worth of tree-shaped air fresheners a year in the United States, with most of its business overseas.  CFC’s lawyer told jurors that the disparity in market size was exactly what made Little Trees a tempting target for companies looking to take advantage of the product’s familiarity.

The jury seemed to agree that Exotica was merely piggy-backing on the success of the Little Trees product offered by CFC and that Exotica infringed on CFC’s trade dress.

YouTube Steps Up to Protect Content Believed to Be Strong Examples of Fair Use

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YouTube understands that many homemade videos that are clearly considered fair use under the Copyright Act become subject to Digital Millennium Copyright Act (“DMCA”) takedowns, which is burdening to content creators.

YouTube has announced that four video creators will come under YouTube’s legal protection, under a program unveiled in a blog post. The blog mentioned videos made by a game reviewer, a UFO debunker, an Ohio pro-choice group, and a commentator and comedian.

“We are offering legal support to a handful of videos that we believe represent clear fair uses which have been subject to DMCA takedowns,” writes YouTube copyright lawyer Fred Von Lohmann. “With approval of the video creators, we’ll keep the videos live on YouTube in the U.S., feature them in the YouTube Copyright Center as strong examples of fair use, and cover the cost of any copyright lawsuits brought against them.”

Although it is impossible for YouTube to protect every video that has a strong fair-use defense, Von Lohmann believes that “even the small number of videos we are able to protect will make a positive impact on the entire YouTube ecosystem, ensuring YouTube remains a place where creativity and expression can be rewarded.”

YouTube’s proactive involvement in the copyright space in the digital age will undoubtedly impact what constitutes fair use and potentially reduce unwarranted DMCA takedown requests.  YouTube creators can be a little more reassured that a huge corporation like YouTube is willing to standup for content that falls under fair use and against copyright owners who overly exert their rights.

“My videos have been subjected to repeated and unwarranted DMCA takedown requests,” wrote one video maker, Hugh Atkin. He has sent counter-notifications, only to have identical takedown notices pop up months later. “I would urge YouTube to look at ways of discouraging such obviously vexatious abuses of process on the part of claimants.”

However, the four examples that YouTube chose so far are extremely clear examples of fair use. If, or when, YouTube decides to protect a video that is a little more questionable in terms of whether or not it falls under fair use, the legal battle would be nothing short of interesting.

United States Patent and Trademark Office (“USPTO”) Launched “Global Dossier,” An Online Interface For Global Patent Access

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On November 23, the United States Patent and Trademark Office (“USPTO”) launched Global Dossier, which is a secure, online access to the file histories of related applications from participating IP Offices, which currently include the IP5 Offices (USPTO, EPO, JPO, KIPO, and SIPO).

By using this service, users can see the patent family for a specific application, containing all related applications filed at participating IP Offices, along with the dossier, classification, and citation data for these applications. The service also provides Office Action Indicators to help users identify applications that contain office actions, a Collections View for saving documents and applications for review later on in the session, and the ability to download the documents in an application.

“Through Dossier Access, the public will be able to obtain data that is timely, reliable, understandable, standardized, and of high quality,” the USPTO said in a statement.

The Global Dossier Initiative is a set of business services being developed by the IP5 Offices aimed at modernizing the global patent system and delivering benefits to all stakeholders through a single portal/user interface.

Global Dossier will provide a single, secure point of access for the management of dossier and examination information, enabling and encouraging streamlining of office procedures among different IP Offices. This will lead to improved efficiency and predictability of global patent family prosecution with increased cost savings provided to patent applicants.

Federal Circuit Affirms International Trade Commission’s $6.2 Million Fine Despite Subsequent Patent Invalidity

The Federal Circuit upheld the International Trade Commission’s (“ITC”) $6.2 million fine against DeLorme InReach LLC (“DeLorme”) for violating a consent order and importing parts that infringed a communications system patent, despite the court concluding in a separate ruling that the asserted claims were invalid.

In a unanimous decision, three judges on the appeals court panel affirmed a Virginia federal judge’s decision from last November that various claims of BriarTek IP Inc.’s patent for its emergency communications device were invalid.

However, in a separate ruling, the majority of the judges said the finding does not undo the fine ordered by the ITC after it held that DeLorme violated a consent order by importing parts of a satellite-device that infringed the then-valid patent.

The judges said the terms of the order are clear and that nowhere does it say that an invalidity finding can be applied retroactively to cancel the agreement.  DeLorme’s “argument is inconsistent with the plain language of the consent order itself,” Circuit Judge Kimberly Moore wrote on behalf of the majority panel.

The appeals court also rejected arguments that the $6.2 million fine was “grossly excessive,” even though the fine was among the highest fines it has ordered to date.  Judges noted the fine — which amounted to $27,500 for each of the 227 days that DeLorme was allegedly in violation of the order — was far less than the $100,000 per day maximum allowed by law.

DeLorme attorney Peter J. Brann stated that they were “dumbfounded that a bare majority of the court would … uphold an enormous penalty imposed by the ITC for using imported, but non-infringing, parts in one sub-component of a device that is manufactured in the United States which was part of a system that allegedly infringed an invalid patent.”

The Federal Circuit’s reasoning was that under DeLorme’s interpretation of the consent order, if the patent were to expire while the enforcement decision was on appeal, the court would have to vacate that decision.

However, in a partial dissent, Circuit Judge Richard G. Taranto said he would have remanded the case back to the ITC for further briefing on what effect the invalidity decision should have on the civil penalty. He noted that the ITC has specifically argued that such a remand was necessary.

“To decide the issue ourselves at this stage, I believe, we would have to conclude that the answer is clear as a matter of law,” he wrote.  “I do not currently think that the answer is clear,” he added later.

Non-USPTO Trademark Solicitation Fraud Indictment in California

Trademark owners are required to satisfy certain ongoing requirements, including the submission of maintenance documents and associated fees, in order to retain the benefits afforded by a federal trademark registration.

Many companies unaffiliated with the United States Patent and Trademark Office (“USPTO”) routinely send solicitations to trademark owners with offers concerning their registrations.  Some of those are legitimate, such as services for recording trademarks with U.S. Customs and Border Protection, while others are not.

Companies have attempted to trick filers into paying fees for unnecessary services by creating the appearance of an association with the USPTO by using names that include one or more of the terms “United States,” “U.S.,” “Trademark,” “Patent,” “Registration,” “Office” or “Agency.”

Although the USPTO has worked closely with U.S. Attorney’s Offices and other federal, state, and local agencies to ensure that the information necessary to identify and prosecute those companies engaged in fraud is readily available, it is up to the trademark owners to be educated and to avoid falling for such mass-mailing frauds.

The USPTO urges trademark owners to thoroughly review all correspondence information to confirm that they are dealing with the USPTO rather than a third-party service provider. The USPTO has noted that all official physical mail correspondence concerning a U.S. trademark will come from the “United States Patent and Trademark Office” in Alexandria, Virginia, and all official email correspondence will be from the domain “@uspto.gov.”

Federal Circuit Cautions Against Limiting Invention to One Embodiment in the Specification

In Imaginal Systematic, LLC v. Leggett & Platt, Inc., No. 2014-1845, 2015 U.S. App. LEXIS 19555 (Fed. Cir. Nov.  10, 2015), Imaginal sued Leggett & Platt, Inc., (“L&P”) and Simmons, alleging infringement of its patent for a process of building box springs.

In an earlier lawsuit, Imaginal prevailed in an infringement suit that held that L&P’s TopOff machine for stapling wire grids to frames to make mattress foundations was an infringement. L&P modified its machine, and Imaginal alleged that the redesigned product also infringed its patent.

The issue on appeal turned on the construction of the term “without the use of a vision guidance system.” The district court looked to the ordinary meaning of the words “vision” and “guidance” and construed “vision guidance system” to mean a “system that uses a vision or sight based method to control or direct the movement or direction of something.”

Consequently, the court rejected Imaginal’s argument that a “vision guidance system” should have a narrower meaning, according to the disclosure of another patent (the ’789 patent), incorporated by reference into the patent-in-suit (the ‘402 patent).

The district court held that because the accused redesigned TopOff product “uses a vision-based method to control or direct the movement of both the frame/grid and the staplers,” it uses a “vision guidance system” and thus does not infringe the ’402 Patent.

Imaginal appealed, arguing that the district court ignored the written description and claim language; relied too heavily on general purpose dictionary definitions; and improperly excluded a preferred embodiment.

The Federal Circuit disagreed and stated that nothing in the patent claims or specification restricted the vision guidance system to only one particular system that is excluded from the claims (“without”).

In this particular case, the element being argued was to be excluded from the claims, and the broad construction of the term was to the detriment of the patent owner.  Therefore, this case serves as a warning for elements that are to be excluded from the claims, there should be multiple claims that comprise different scopes for the excluded element.

The Top Seven Takeaways from the 2015 Federal Rules Amendments

Effective December 1, 2015, amendments to Federal Rules of Civil Procedure 1, 4, 16, 26, 34, 37 and 84 seek to streamline litigation to make discovery proportional to the case and improve case management.  Because the amendments will apply to pending cases as well as to cases commenced after December 1, federal practitioners need to learn all their implications now.

Here are the seven most important takeaways from the 2015 amendments:

1)     “Proportional” Discovery

Under pre-existing Rule 26(b) (1), the scope of discovery includes “any nonprivileged information relevant to any party’s claims or defenses,” for good cause shown and pursuant to court order, discovery may expand to include information relevant to “the subject matter involved in the action.”  Discoverability will turn on a case-by-case assessment of the information’s importance in that case.

Eliminating the “subject matter” prerequisite, the Amendments define the scope of discovery as “matter relevant to the parties’ claims and defenses and proportional to the needs of the case,” considering six factors:  “(1) the issues at stake in the action, (2) the amount in controversy, (3) the parties’ relative access to relevant information, (4) the parties’ resources, (5) the importance of the discovery in resolving the issues, and (6) whether the burden of the proposed discovery outweighs its likely benefit.”

To streamline discovery, ideally, the parties and court should consider sequencing discovery to focus on those issues with the greatest likelihood to resolve the case.

2)     “Reasonably Calculated” Is No More

The Amendments have eliminated the phrase “reasonably calculated” and Rule 26(b)(1) now provides what the deleted provision was always intended to mean:  that “[i]nformation within this scope of discovery need not be admissible in evidence to be discoverable.”

3)     Active Case Management Encouraged

Rule 1 has been amended to provide that the Rules should be “construed” and “administered” to “secure the just, speedy and inexpensive determination of every action and proceeding.” The amendments seek to promote a culture shift toward more active case management by judges, with counsel’s cooperation.

Amended Rule 16 encourages live case management conferences and encourages courts to direct the parties to request a conference with the court before filing any discovery motion. With more engagement, an early focus on the scope and sequence of discovery may lead to proceedings that are more efficient.

4)     Earlier Document Requests

Under the amended Rules, even though responses are not due until 30 days after the initial 26(f) conference, any party may deliver document requests as early as 21 days after service of the complaint.

The allowance of earlier service is designed to focus the parties’ (and the court’s) consideration of what discovery is proportional and to tee up issues sooner.  This will also give the receiving party of the service earlier notice of the scope of materials sought, which will make length extension requests less tenable.

5)     More Substantive Document Request Responses

Rule 34 added new requirements that aim to eliminate boilerplate language that fails to serve any purpose in resolving document issues.  Objections are required to be stated “with specificity.”

Further, production must be completed “no later than the time for inspection specified in the request or another reasonable time specified in the response.” Essentially, parties may need to supplement their responses as they learn what materials they are withholding, and why.

6)     More Forgiving E-Discovery Sanctions

Rule 37 sets a new national standard (where the Circuits had differed) that will make evidentiary sanctions rare such that they are imposed only where: (1) information that should have been preserved is lost because a party failed to take reasonable steps to preserve it, (2) it cannot be restored or replaced through additional discovery, and (3) the court finds prejudice to another party.

If all this occurs, the court may order “measures no greater than necessary to cure the prejudice.” Additional, evidentiary sanctions may be ordered only “upon finding that the party acted with the intent to deprive another party of the information’s use in the litigation.”

7)     Tighter Case Schedules

The default time for the court’s issuance of the Rule 16 scheduling order has been shortened from 120 days to 90 after any defendant has been served, or 60 (shortened from 90) days after any defendant has appeared (in the absence of a finding of good cause).

Since the Rule 26(f) discovery conference is required to occur 21 days before the date for a Rule 16 scheduling order, the discovery conference also moves up by 30 days. The default time limit for serving a complaint under Rule 4 is also reduced from 120 days to 90, absent good cause shown.

Prospects Remain Strong for Continued Growth in Design Patent Applications

The Intellectual Property Owners Association (IPO) recently published its 2015 IP Spotlight, a report detailing U.S. intellectual property trends. The report highlights 2014’s top design patent and trademark recipients, litigation trends, and statistics from the United States Patent and Trademark Office (“USPTO”).

This years’ list of the top 50 companies having been granted design patents was dominated by technology, automotive, and consumer product companies, with foreign corporations representing more than 40% of the top 50 with a total of 20 companies.

For over a decade, there has been a steady climb in number of filings and grants for design patents boosted by the development of the U.S. and global innovation economy.

In 2014, this trend continued, despite smaller rates of growth than in years past. According to the IPO data, in 2014 the top 50 design patent recipients received a combined total of 4,743 design patents, compared to 4,599 granted to the top 50 recipients in 2013.

Despite the recent slowdown, however, the prospects remain strong for continued growth in design patent applications in the coming years, especially as innovators look toward design patents to strengthen their IP portfolios.

Not surprisingly, new products and new innovations create increased demand for design protection, explaining why numerous leading companies fluctuate yearly between inclusion and exclusion from the rankings.

As companies continue to emphasize the importance of design protection globally, it would not be surprising to see an increase in the number of new companies that emerge onto the Intellectual Property Owners Association’s 2015 ranking of companies granted the most U.S. design patents.