Spring 2010

Get a Certificate of Patent Coverage To Provide a Defense to False Marking Claims

Penalties for false patent marking can be up to $500 for every article so marked. The Forest Group, Inc. v. Bon Tool Co., 590 F.3d 1295 (Fed. Cir. 2009). The plaintiff, however, must prove that the patent owner subjectively intended to mismark the goods (i.e., did not have a reasonable belief that his markings were correct). In order to provide some protection for our clients against the growing cottage industry of law firms that sue for mismarking, Cislo & Thomas has developed a “Certificate of Patent Coverage.”

We can review a product to determine whether it is covered by one or more of a client’s patents, and if so, issue a certificate of coverage stating that in our opinion, the product is covered by those patents, and that the product may be marked with those patents. As with willful infringement, having an attorney opinion should provide a defense against claims that the patentee subjectively intended to mismark the goods. If you have any questions about your products and their markings, please contact us.

The World Eagerly Awaits the Bilski Decision Concerning Business Method Patents
In our last issue, we discussed the In re Bilski case and its potential impact on business method and other method patents. Apparently the Supreme Court is having some difficulty issuing an opinion on this highly-watched case. The prior record for the delay between oral argument and the issuance of a patent related opinion was 153 days for the seminal obviousness case of KSR v. Teleflex.

The Bilski case has easily broken that record, as it will be at least 224 days before issuance, assuming the opinion is issued on June 21. There is a remote chance that the case could be re-argued and/or decided next term, but we are expecting it to issue before the Supreme Court ends its current term on June 28. Hopefully we will have a full update on the case and its impacts in our next issue.

Supreme Court and Ninth Circuit Decide that Litigants Need Not Wait to Obtain a Copyright Registration Before Filing a Lawsuit
The Supreme Court recently issued its opinion in Reed Elsevier, Inc. v. Muchnick, 130 S. Ct. 1237 (2010), which left a lot of lawyers scratching their heads on how to interpret the holding. The Court held that although copyright registration is a precondition to filing a copyright infringement claim, lack of registration does not restrict a federal court’s subject-matter jurisdiction over infringement claims involving unregistered works. The Court expressly declined to decide whether district courts may or should enforce the registration precondition by dismissing copyright infringement claims involving unregistered works.

The Ninth Circuit subsequently ruled that the registration precondition may be met by simply filing for a copyright registration prior to filing a lawsuit, the regsitration does not have to be issued. Cosmetic Ideas, Inc. v. IAC/Interactive Corp., No. 08-56079 (9th Cir. May 25, 2010). Although this ruling allows a copyright owner some flexibility as to when it may file for registration, as we noted in our last issue, there are numerous benefits to filing for copyright registration as soon as possible, and preferably within three (3) months of any publication of the copyrightable material. These benefits include ownership presumptions, statutory damages up to $150,000 for each willful infringement, and attorney fee recovery.

Follow Up on Your Cease and Desist Letters
In a recent Federal Circuit case, Aspex Eyewear Inc. v. Clariti Eyewear, Inc., (Fed. Cir. May 24, 2010), the court held that a three-year delay between sending a cease and desist letter and filing a lawsuit was sufficient to invoke equitable estoppel and dismiss the case. In that case, the patentee sent cease and desist letters alleging infringement of five patents. The defendant asked which of the claims were allegedly infringed, to which the patentee responded with a letter listing claims in 2 of the 5 patents (the “second letter”). The defendant responded that it did not infringe those patent claims. The patentee did not follow up for over three years, at which time it sent another cease and desist letter asserting infringement of one of the patents that was not identified in the second letter. The parties discussed the issue for the next seven months, at which time the patentee filed suit.

The court found that the patentee’s conduct was misleading, since it failed to identify the asserted patent in the second letter, and further failed to follow up for three years. The defendant had relied on the patentee’s silence as an indication that it would not pursue infringement claims for the asserted patent, and based on that reliance it continued to sell the accused products. Thus, the patentee was equitably stopped from maintaining its infringement suit, and it was dismissed.

Therefore, it is crucial for patent owners, as well as trademark and copyright owners, to follow up with their cease and desist letters. Even though delays in filing suit may be excused for being tied up in litigation with other parties or engaging in sincere licensing negotiations, patentees must be careful that any delays cannot be interpreted as misleading. At a minimum, patentees should follow up on cease and desist letters, particularly where they anticipate a delay in filing suit. For example, a follow up letter stating that the patentee still considers the conduct to be infringing, and that it reserves the right to pursue infringement claims in the future, should counter the argument that the patentees’ silence was an indication that it no longer asserted any infringement. This is just an example, however, and may not preclude estoppel or laches in a particular case. If you have questions as to your specific situation, please call us.

Policing Your Trademarks and Copyrights on the Internet
It is important for trademark and copyright owners to police their marks and works on the Internet. Some courts have found that parties have acquiesced to infringement by failure to adequately enforce unauthorized use on the Internet. Most major online sales outlets like Amazon and Google have takedown procedures for sellers using trademarks without permission.

The trademark owner notifies the sales outlet of its registered trademark, and the sales outlet investigates the claim and enforces the takedown if the unauthorized use violates their trademark policies. There are various services that will monitor the internet for use of certain words or phrases. Whether a trademark or copyright owner uses a service or performs the searches itself, it is important to follow up any discoveries of unauthorized use with enforcement efforts. Otherwise the owner risks losing its rights by acquiescence.

Peter S. Veregge – Newsletter Editor