October 2016

Supreme Court to Review First Design Patent Case in a Century: Apple v. Samsung 

Takeaway: The Supreme Court has agreed to take up the blockbuster design patent case between Apple and Samsung, where the Federal Circuit Court of Appeals held that the damages that Samsung had to pay to Apple was almost $550 million.

In 2012, a jury held that Samsung’s phones infringed Apple’s utility and design patents and ended up paying $548 million to Apple while appealing to the Supreme Court. In its petition, Samsung stated that the damages awarded based on three Apple design patents were “ridiculous.”

Samsung argued that the patented designed only made a small contribution to Apple’s profits, but was ordered to pay 100% of the profits for several phone designs.

The Samsung attorneys assented that “[t]he decision … [is] an open invitation to litigation abuse and has already prompted grave concern across a range of US companies about a new flood of extortionate patent litigation, especially in the field of high technology.”

The design patents at issue are D618,677, covering a black rectangle with rounded corners), D593,087, covering bezel on surrounding rim, and D604,305, covering colorful grid of 16 icons.

In the amicus brief  filed by tech companies backing Samsung, they argue that Section 289 of the Patent Act, which dates to the 19th century, only envisages awards of an infringer’s total profits on “relatively simple products.” It reads in part:

“That bill was premised on the assumption that “it is the design that sells the article,” and that the design, as the primary feature of the article, is the only thing that “makes it possible to realize any profit at all.” The 1886 Congress did not have complex, multicomponent products in mind—much less products incorporating modern technologies. Indeed, the available evidence suggests that Congress was not considering products with significant functional features at all.”

The brief is signed by eight tech giants: Dell, eBay, Facebook, Google, H-P, Newegg, Pegasystems, and Vizio.

On the other hand, Apple is arguing that the appeals court found Section 289 “explicitly authorizes the award of total profit.”

While Apple believes that Samsung’s petition “depends on a made-up narrative in which Samsung, not Apple, is the innovator, despite the overwhelming evidence that Samsung copied the iPhone’s innovative design,” Samsung “welcome[s] the Court’s decision to hear our case. The Court’s review of this case can lead to a fair interpretation of patent law that will support creativity and reward innovation.”

Celebrating #CreepyIP for Halloween 2016

Illustration of a patent for a winged suit to fly away from a burning building.

Takeaway: For several years now, the United States Patent and Trademark Office (“USPTO”) has been posting archived patents and trademarks that belong in their seasonal rendition of its Today in Patent and Trademark History series known as “Creepy IP.”

In honor of Halloween, here are a couple of #CreepyIP patents and trademarks they have posted:

• the trademark for Ghostbusters®
• a sound mark for Darth Vader®
• a patent for a winged suit to fly away from a burning building
• a patent for producing lifelike simulations to inanimate objects
• a patent for vampire-shaped pasta

Lanham Act Celebrates 70^th Anniversary

Takeaway: The Lanham Act, the U.S. federal trademark statute, just celebrated its 70^thbirthday.

Trademarks represent brands, and the goodwill associated with those brands and their reputations.  The Lanham act has been able to protect trademarks that have come in all shapes and forms—words, phrases, symbols, graphics, sounds, colors, etc.

The Global Intellectual Property Center, the International Trademark Association, the American Bar Association, the Intellectual Property Owners Association, and the American Intellectual Property Law Association hosted a celebration in honor of the Lanham Act.

CEO of the International Trademark Association Etienne Sanz de Acedo.

Photo by Joshua Roberts / © U.S. Chamber of Commerce

Apple Files Patent Application for Paper Bag

Takeaway: The U.S. Patent and Trademark Office (USPTO) recently published an Apple patent application for a paper bag.  The paper bag has a “white solid bleached sulfate paper with at least 60 percent post-consumer content.”

Along with Apple’s other thousands of patent applications that may or may not make the cut onto its shelves, this retail bag aims to be more environmentally responsible.

“The following disclosure relates to a bag, such as a retail shopping bag,” Apple writes in its patent application. “The bag may be formed entirely of paper, with the potential exception of adhesives for fixing together portions of the bag. This can help to reduce any environmental impact from production, use and disposal of the bag. The bag may be formed of a container and a handle.”

In its detailed description, Apple says that its bag is designed to be a “high-end retail bag.” Its mention of “post-consumer content” means that 60 percent of the bag’s paper material has been recycled. Ultimately, that amount will help Apple limit its environmental impact across all phases, including production, use and disposal of the bag.

In general, Apple says, any bag with more than 40 percent or 50 percent recycled material might be “prone to tearing.” To circumvent those problems, Apple’s bag has “reinforcement inserts” that keep it strong while still offering more recycled paper.

Whether or not we see these bags in the future will be dependent on if Apple has already found a better alternative.

Amazon Awarded Patent for Pocket-Sized Voice-Controlled Drone

Takeaway: Amazon has recently been awarded a patent for a drone, or an unmanned aerial vehicle, which can be used to help police in chases, aid firefighters in tackling blazes, and even find lost children.

The drone will have built-in software that is capable of voice-recognition for a user to control from an app, according to the United States Patent and Trademark Office filing.  Potentially, Amazon could be using Alexa, its artificial intelligence personal assistant, in its drones.

The drone will have a microphone and a camera that will allow it to carry out several functions outlined by the patent including:

• Finding a lost child whereby the drone’s camera will identify a person’s face or perhaps a barcode printed on the child’s clothes
• Locating a vehicle when a person can’t find it in a parking lot by recognizing traits such as the make, model or color of the vehicle
• In search and rescue missions to find downed airliners, sailors or ships lost at sea
• To identify people trapped in a burning building
• Following a suspect so that a police car could cut off the runner
• Recording stunts or other activities, effectively replacing current helmet cameras.

Further, the drone could also act as a bodyguard. “In situations in which a user feels uncomfortable or in danger, such as walking down a city street at night, the UAV may act as a deterrent to potential attackers, provide piece of mind, and, in a worse case scenario, document the crime for police,” the USPTO filing said.

Being awarded a patent, Amazon is now one step closer to developing this technology.

A Rare En Banc Federal Circuit Reversal: Apple v. Samsung

Takeaway: On October 7, 2016, the Federal Circuit reinstated a $120 million jury award for Apple against Samsung. Apple Inc. v. Samsung Electronics Co., 2015-1171 (Fed. Cir., Oct. 7, 2016).

A Federal Circuit panel had previously reversed a denial of judgment as a matter of law for Samsung and the en banc Federal Circuit reversed the panel decision, finding that there was substantial evidence for the jury verdict.

The initial verdict found that Samsung had infringed Apple’s patent covering a slide-to-unlock feature, an autocorrect feature, and a “quick link” feature that automatically turns information like addresses and phone numbers into links that made up of the majority of the damages, $99 million of the total $120 million.

The en banc Federal Circuit found that the three-judge panel reviewed outside of the appropriate scope and examined evidence outside the record of the case.  “The panel reversed nearly a dozen jury fact findings including infringement … despite the fact that some of these findings were not appealed and without ever mentioning the applicable substantial evidence standard of review.”

Each member of the original three-judge panel, Judges Prost, Dyk, and Reyna, filed dissenting opinions, arguing that procedurally, the en banc review was unwarranted since normal practice would allow further briefing from the parties and amici, which was not followed in this case.

Chief Judge Prost contended in the dissent that the majority incorrectly heightening the important of secondary considerations for nonobviousness. Judge Dyk echoed his concern that the law of obviousness had been changed in many ways, including that the majority’s opinion turned that legal question into a factual issue for the jury, based on its substantial evidence analysis. Judge Reyna also argued that the majority was trying to change the law of obviousness, especially regarding secondary considerations, in a “backdoor” manner.  However, the majority states that is only affirming exiting obviousness law.

Seems like although the implications of this case may be limited to its specific facts, greater deference suggests that future panels may hesitate to overturn district court decisions.

Federal Rules of Civil Procedure Form 18 Does Not Satisfy Pleading Requirement for Joint Infringement

The Federal Circuit held in Lyda v. CBS Corporation, No. 2015-1923 (Fed. Cir., Sept. 30, 2016) that a complaint of joint patent infringement fails to meet the pleading requirement as set forth in Bell Atlantic v. Twombly and Ashcroft v. Iqbal, which are the Supreme Court standard cases governing pleading requirements.

The Federal Circuit noted that while the Federal Rules of Civil Procedure (“FRCP”) sets forth its own set of pleading requirements in Form 18 of FRCP Rule 84, it does not cover complaints of joint infringement and a more rigorous standard under Twombly and Iqbalmust be followed.

Edwin Lyda sued CBS for joint patent infringement alleging that the patent infringement was carried out by an independent contractor operating under the direction and control of CBS as well as by independent third parties that operated under the direction and control of independent third parties.  CBS filed a motion to dismiss for failure to state a claim.

The Federal Circuit confirmed the District Court’s finding tat Luda failed to “plead[] facts sufficient to allow a reasonable inference that all steps of the claimed method are performed and either (1) one part exercise the request ‘direction or control’ over the others’ performance or (2) the actors form a joint enterprise such that performance of every step is attributable to the controlling party.”

However, Rule 84 and Form 18, were abrogated by an amendment of the FRCP in 2015, and therefore this case may not have significant independent effects, but is a good reminder of the heightened pleading standard.

Lifetime Industries, Inc. v. Trim-Lok, Inc., Case No. 3:13-CV-819 RLM, U.S.D.C., Northern District of Indiana, 2016.

Takeaway: Cislo & Thomas won its second motion to dismiss a complaint for failure to state a claim upon which relief could be granted on behalf of Trim-Lok, and the Court entered judgement in favor. 

Lifetime Industries, Inc. (LTI) sued Trim-Lok for patent infringement. Trim-Lok (represented by Cislo & Thomas) moved to dismiss the case because LTI was unable to allege facts that Trim-Lok was a direct infringer or that Trim-Lok had any intent for its customers to infringe LTI’s patent.  LTI repeatedly attempted to correct its defect, but after three failed attempts, the court finally dismissed the case.  Trim-Lok has filed a motion for attorney’s fees because Trim-Lok was not a direct infringer, and Trim-Lok never encouraged or intended its customers to infringe LTI’s patent; and therefore, Trim-Lok believes LTI brought the lawsuit with ulterior, competitive motives.

UC Regents & SonoSim, Inc. v. Medaphor Limited, Case No. CV 16-2847-GW (MRWx), U.S.D.C., Central District of California, 2016

Takeaway: Cislo & Thomas successfully defeated a motion to dismiss one of its client, SonoSim, from a patent infringement case, including its co-plaintiff UC Regents.

SonoSim is the exclusive licensee of the patent-in-suit for the University of California Board of Regents (“UC Regents”).  SonoSim along with the patent owner, UC Regents brought suit against MedaPhor for patent infringement. MedaPhor attempted to dismiss SonoSim from the suit.  The court agreed with SonoSim that it had standing to sue, and that SonoSim could have  even brought the  suit in its  own name as it had originally done.  This case is significant because in most cases involving a licensor and an exclusive licensee, either the licensor sues by itself without standing to sue because it gave away all substantial rights to the exclusive licensee, or the exclusive licensee sues without standing because it did not receive all substantial rights from the licensor. In either of the previous situations, the licensor and exclusive licensee could sue together to avoid  the standing issue.  This case is unique because SonoSim attempted to avoid the standing issue by bringing the suit with the licensor.   MedaPhor unsuccessfully tried to classify SonoSim as a bare licensee with no standing to sue regardless of whether the licensor was joined.