Summer 2008

Design Patent Infringement Standards Simplified – Boon to Design Patent Owners

The patent appeals court, the Federal Circuit, recently issued a unanimous opinion simplifying how courts determine design patent infringement. The court discarded the longstanding “point of novelty” test, which a prior decision had said to require a “non-trivial advance over the prior art.” Infringement is now determined solely by the “ordinary observer” test developed in 1871 by the Supreme Court’s Gorham decision. The Gorham test focuses on whether there is “substantial similarity” between the patented design and the accused product. In addition, courts must now judge this similarity while keeping in mind the prior art, which may highlight the differences between the patent and the accused product. These changes should make it easier to prove design patent infringement, although we expect that the test will be further shaped by case law in the years to come. Egyptian Goddess, Inc. v. Swisa, Inc., 2008 U.S. App. LEXIS 20104 (Fed. Cir. 2008).

Copyright Infringement Damages Are Limited if Infringement Occurs After the Copyright Holder Obtains its Registration – File Copyright Applications Early!
In general, if one obtains a copyright registration before the commencement of infringing activities, the registrant is entitled to obtain statutory damages and attorney fees against the infringer. The Ninth Circuit Court of Appeals ruled recently that the first act of infringement commences a single continuing act of infringement, and that separate shipments of infringing goods do not constitute separate acts of infringement. Thus, after the first shipment of infringing goods, a copyright owner cannot recover statutory damages and attorney fees by subsequently registering its copyright. Derek Andrew, Inc. v. Poof Apparel Corp., 528 F.3d 696 (9th Cir. Wash. 2008). Therefore, it is important to register copyrights as soon as possible, to preserve the right to obtain statutory damages and attorney fees against infringers. Please call us if you have any questions about filing for copyright registration.

First Sale Doctrine is not a Defense to Copyright Infringement for Grey Market Goods Made and Sold Outside the United States
In a typical case, if authentic goods are sold by an authorized seller, the copyright holder’s rights are extinguished and the goods may be sold and resold through unauthorized sellers. This is known as the “first sale doctrine.” In many grey market transactions, goods are manufactured outside the U.S., sold outside the U.S. in authorized sales, and then brought into the U.S. and sold by unauthorized distributors. In the Ninth Circuit, the first sale doctrine does not apply as a defense to such unauthorized U.S. sales, where a U.S. copyright protects a design on the goods. Thus, the U.S. copyright holder has an action against the unauthorized seller for copyright infringement. In this case, Costco bought Swiss-made watches outside the United States from an authorized seller, and resold them in the United States. The watchmaker asserted U.S. copyright infringement against Costco, an unauthorized seller, for a copyrighted design on the back of the watch. Omega S.A. v. Costco Wholesale Corp., 2008 U.S. App. LEXIS 18800 (9th Cir. Cal. Sept. 3, 2008). Make sure that any grey market goods bought for resale are either made in the U.S. or are purchased in the U.S. from an authorized seller.

Cislo & Thomas LLP Builds a Home for a Needy Family in Baja
In May 2008, employees of Cislo & Thomas donated their entire weekend to building a home for a needy family of five in Baja, Mexico. In addition to providing the labor, the firm also donated all the funds to build the house. “Not only was it a great team-building exercise,” said Managing Partner Dan Cislo, “but it was gratifying to be able to give something to those less fortunate than us.” Legal Assistant Erin MacDonald was in charge of rounding up the Cislo volunteers, and did a superb job. The project was organized by Baja Christian Ministries, which selects the deserving families and coordinates volunteers to build houses in Mexico.

Peter S. Veregge, Esq.- Newsletter Editor