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Category Archives: Prosecution

SoCal IP Institute :: October 1, 2012 :: Inequitable Conduct and Judgment as a Matter of Law

We will be discussing two Federal Circuit cases during our weekly SoCal IP Institute meeting on Monday, October 1, 2012. Brief synopses are presented below.

Outside the Box Innovations, LLC. v. Travel Caddy, Inc., Case No. 2009-1171 (Fed. Cir. September 21, 2012) (attached).

Travel Caddy brought suit against Outside the Box Innovations claiming infringement of two of their patents, U.S. Pat. No. 6,823,992 and its continuation, U.S. Pat. No. 6,991,104 both directed to tool carrying cases.  The district court held that the patents were unenforceable based on inequitable conduct during the prosecution of the patents.  Travel Caddy had failed to inform the patent examiner of the existence of litigation in the parent patent prior to the issuance of the ‘104 patent.  Travel Caddy also incorrectly claimed small entity status.  Travel Caddy clearly met the small entity status requirements in having fewer than 500 employees, but Travel Caddy had a commercial arrangement with its distributor and seller, The Rooster Group, who was a large entity of over 500 employees.

On appeal, the Federal Circuit reversed the decision of unenforceability for incorrectly claiming small entity status.  The Court reversed not on the ground of materiality, but on the basis of a lack of intent.  The Court held that  the requirements of Therasense were not met because “there was no clear and convincing evidence of intent to deceive the PTO.”

Regarding the holding of unenforceability for not disclosing the litigation in the parent patent, the Federal Circuit reversed the district court’s pre-Therasense finding of both materiality and intent. On materiality, the Federal Circuit ruled that the failure to disclose the existence of a litigation when there was no citation of prior art, nor any pleading of invalidity or unpatentability in the complaint of the litigation as it existed during pendency of the continuation application, did not constitute clear and convincing evidence of materiality.  On intent, the Court held that there is no evidence that the withholding of the information concerning the litigation could have deceived the examiner and no suggestion of deliberate action to withhold it in order to deceive the examiner.

Mirror Worlds, LLC. v. Apple, Inc., Case No. 2011-1392 (Fed. Cir. September 4, 2012) (attached).

Mirror Worlds owns three patents at issue in this case: US Patents 6,006,227; US Patent 6,638,313; and US Patent 6,725,427.   Mirror Worlds brought a patent infringement action in the District Court for the Eastern District of Texas against Apple claiming that Apple’s Spotlight, Time Machine and Cover Flow features in their Mac operating system infringe the patents.  Cover Flow lets users scroll through album cover art when browsing for music in their iTunes libraries. The feature also works for documents, pictures and other material stored in a computer. Spotlight searches the computer’s hard drive while Time Machine automatically saves copies of files.  Mirror Worlds asserted claims of both direct infringement and induced infringement.

The district court granted Apple’s oral motion for judgment as a matter of law that Apple did not induce infringement of any of the patents.  The district court stated that Mirror Worlds failed to introduce substantial evidence to show that defendant itself induced its customers to infringe the disputed patent’s method claims. The issue of direct infringement by Apple was submitted to the jury, wherein the jury found Apple liable for willfully infringing all three asserted patents and awarded $208.5 million in damages. However, the district court granted Apple’s motion for judgment as a matter of law and vacated the jury verdict.

The Federal Circuit affirmed, concluding that Mirror Worlds failed to present substantial evidence of direct infringement and damages.  The district court had concluded that Mirror Worlds did not establish infringement under the doctrine of equivalents because Mirror Worlds did not provide substantial evidence to show that the accused products have an equivalent for the “cursor or pointer” limitation.  The Federal Circuit also agreed that the evidence presented at trial was not sufficient to support the damages awarded by the jury.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, October 1, 2012 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Noelle Attalla by 9 am Monday morning.

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SoCal IP Institute :: September 24, 2012 :: Induced Infringement and Covenants Not to Compete

We will be discussing one Federal Circuit case and one California Court of Appeal case during our weekly SoCal IP Institute meeting on Monday, September 24, 2012. Brief synopses are presented below.

Akamai Techs., Inc. v. Limelight Networks, Inc., Case Nos. 2009-1372, -1380, -1416, -1417 and McKesson Techs., Inc., v. Epic Systems Corp., Case No. 2010-1291 (Fed. Cir. August 31, 2012) (attached).

This decision involved two cases that were decided together in this en banc rehearing.  In the first case, Akamai Technologies, Inc. owns a patent that covers a method for efficient delivery of web content.  Akamai alleged that Limelight Networks, Inc. directly infringed and induced infringement of their patent. The patent’s method claims required “placing some of a content provider’s content elements on a set of replicated servers and modifying the content provider’s web page to instruct web browsers to retrieve that content from those servers.” Limelight maintained a network of servers and placed some content elements on its servers. However, Limelight did not modify the content providers’ Web pages and instead taught its customers how to modify the pages.

In the other case, McKesson alleged that Epic induced infringement of their patent covering a method of electronic communication between healthcare providers and patients.  Epic licensed its software to healthcare organizations, which allowed healthcare providers to communicate electronically with patients.  Epic did not perform any of the steps of the method patent, rather the infringing steps were performed partially by patients, who initiate communications, and partially by healthcare providers.

The district courts found in both Akamai and McKesson that the defendants did not infringe the asserted patents because they neither performed all of the claimed steps themselves nor exhibited the necessary control over the other parties that did perform the claimed steps.

The Federal Circuit initially upheld the decision.  However, in this en banc rehearing, the Court considered whether a defendant may be held liable for induced infringement if the defendant has performed some of the steps of a claimed method and has induced other parties to commit the remaining steps (as in Akamai), or if the defendant has induced other parties to collectively perform all the steps of the claimed method, but no single party has performed all of the steps itself (as in McKesson).”

In overturning their earlier decision in BMC Resources, Inc. v. Paymentech, L.P., 498 F.3d 1373 (Fed. Cir. 2007), the Court held that a single actor is not required to perform all of the infringing steps. The Court stated that liability for induced infringement exists where the accused infringer knows of the patent and induces performance of the steps of the patented method by causing, urging, encouraging or aiding the performance of such steps.  In order for a party to be liable for induced infringement, it is no longer necessary to show that a single entity performed all the steps of the claimed method.   Furthermore, it is no longer necessary for the accused infringer to “control or direct” the actors who perform the steps of the method.

Fillpoint, LLC. v. Maas, Case No. G045057 (Cal. Ct. App. August 24, 2012) (attached).

Michael Maas was an employee of Crave Entertainment Group, Inc., which was acquired by Handleman Company.  As part of the acquisition, Maas executed a stock purchase agreement selling all of his stock in Crave to Handleman.  The stock purchase agreement contained a three-year non-compete clause.  Maas also entered into a new employment agreement with Crave containing a one-year non-compete, customer non-solicit, and employee non-solicit covenants, all of which would begin to run upon the termination of his employment. The stock purchase agreement included an integration clause referencing the form employment agreement. Additionally, Maas’ employment agreement referred back to the stock purchase agreement and stated that the stock purchase agreement would prevail in the event of any conflict between the agreements.

Maas eventually resigned from Crave three years after the acquisition and about six months later, began working for a competitor of Crave.  Fillpoint, LLC, which had acquired Crave from Handleman, brought suit against Maas for breach of his employment agreement. The Superior Court of Orange County concluded that: (1) the covenants in the stock purchase agreement and the employment agreement were separate; and (2) the covenants not to compete and not to solicit in the employment agreement were unenforceable under California’s general rule against such covenants (Business and Professions Code Section 16600).

On appeal, the Court of Appeal for the Fourth District found that the trial court erred in its conclusion that the covenants in the stock purchase agreement and the employment agreement were separate.  The Court of Appeal held that the agreements must be read together as an integrated agreement because of the cross references between the stock purchase agreement and employment agreement.  Furthermore, the two agreements were part of a single transaction because they were entered into between the same parties and around the same time. The Court then determined that the covenants in the employment agreement were intended to restrict Maas’ right to pursue his profession in the future and, thus, did not meet Section 16601’s limited exception.  For these reasons, the Court held that the covenants in the employment agreement could not “be reconciled with California’s strong public policy permitting employees the right to pursue a lawful occupation of their own choice” and were unenforceable.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, September 24, 2012 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Noelle Attalla by 9 am Monday morning.

SoCal IP Institute :: August 13, 2012 :: Trademark Abandonment and Claim Construction

We will be discussing two Federal Circuit cases during our weekly SoCal IP Institute meeting on Monday, August 13, 2012. Brief synopses are presented below.

Lens.com, Inc. v. 1-800 Contacts, Inc., Case No. 2011-1258 (Fed. Cir. August 3, 2012) (attached).

The Wesley-Jessen Corporation obtained Trademark Registration No. 2,175,334 for the mark LENS in connection with “computer software featuring programs used for electronic ordering of contact lenses in the field of ophthalmology, optometry and opticianry.”  Lens.com, an online retailer of contact lenses applied for the mark LENS in connection with “retail store services featuring contact eyewear products rendered via a global computer network.”  The PTO cited the ’334 Registration as a bar based on likelihood of consumer confusion and refused registration of the mark as merely descriptive of services.  Lens.com initiated a cancellation proceeding against Wesley-Jessen’s ’334 Registration, but later withdrew its cancellation petition under a settlement agreement and obtained the ’334 Registration for the mark LENS.  Then, in 2008, 1-800 Contacts initiated its own cancellation proceeding alleging that Lens.com abandoned or fraudulently obtained the mark LENS because Lens.com never sold or otherwise engaged in the trade of computer software. The Trademark Trial and Appeal Board granted summary judgment of abandonment on the ground that the “software is merely incidental to sale of contact lenses, and is not a ‘good in trade,’ i.e., ‘solicited or purchased in the market for its intrinsic value.’”

The Federal Circuit affirmed, stating that the Board properly determined that the mark LENS is not in “use in commerce” in association with software on the issue of abandonment.

Interdigital Communications, LLC v. Int’l Trade Comm’n, Case No. 2010-1093 (Fed. Cir. August 1, 2012) (attached).

InterDigital owns U.S. Patent Nos. 7,190,966 and 7,286,847, which relate to apparatuses and methods for controlling transmission power during the “handshake” portion of a wireless cellular communication.  The ‘847 patent is a continuation of the ‘966 patent.  InterDigital filed a complaint with the International Trade Commission alleging that Nokia, Inc. and Nokia Corp. violated the Tariff Act with the importation into the U.S., sale for importation, or sale within the U.S. after importation of certain 3G mobile handsets and components that infringe the patents.

After construing the claim term “code” to mean “a spreading code or a portion of a spreading code” and the claim term “increased power level” to mean that “the power level of a transmission is higher than that of a previous transmission” and “the power level of a code signal increases during transmission,” the ITC found that Nokia did not infringe InterDigital’s patents.

The Federal Circuit reversed the Commission’s findings and remanded for further proceedings.  In particular, the Federal Circuit found that the ITC had erred in its construction of the claim terms “code” and “increased power level,” which in turn had led to erroneous determinations of non-infringement.  With respect to the claim term “code,” the Federal Circuit found that the ITC had erred in limiting the term to spreading codes.  With respect to the claim term “increased power level,” the Federal Circuit found that the ITC should have construed “increased power level” to include both intermittent and continuous increases in power.  Accordingly, under the Federal Circuit’s broader constructions, the ITC’s determination that Nokia did not infringe the ‘966 and ‘847 patents needed to be reversed.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, August 13, 2012 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Noelle Attalla by 9 am Monday morning.

SoCal IP Institute :: August 6, 2012 :: Claim Construction

We will be discussing two Federal Circuit cases during our weekly SoCal IP Institute meeting on Monday, August 6, 2012. Brief synopses are presented below.

Grober v. Mako Prod. Inc., Case No. 2010-1519, -1527 (Fed. Cir. July 30, 2012) (attached).

Grober owns patent No. 6,611,662 towards a platform for stabilizing a camera for filming motion pictures from moving vehicles.  In 2004, Grober sued Mako for infringement of the ’662 patent and then Mako filed an inter partesreexamination.  While the reexamination was still pending, the district court held that Mako’s products did not infringe the ’662 patent and dismissed.  The district court looked at the claim term “payload platform” and determined that the term is limited to a horizontal surface, based on Grober’s statements made to the PTO in the pending reexamination.  The PTO eventually confirmed the validity of the asserted claims in the reexamination.

On appeal, the Federal Circuit held that Grober’s reexamination statements were not direct enough to constitute prosecution disclaimer.  Grober’s statements were not an unambiguous disavowal that clearly and unmistakably disclaims claim scope or meaning.  The Federal Circuit looked to the claim language and specification of the’662 patent to more broadly define “payload platform” to mean “a three-dimensional structure upon which the payload (e.g., a camera) is directly mounted upon or affixed to.”   Case remanded for reconsideration.

01 Communique Lab., Inc. v LogMeIn, Inc., Case No. 2011-1403 (Fed. Cir. July 31, 2012) (attached).

01 Communique owns Patent No. 6,928,479, which relates to technology that enables one computer to access another computer remotely via the Internet.  The patent discloses use of a locator server computer as an intermediary between a remote computer and a personal computer. In 2010, 01 Communique sued LogMeIn alleging infringement of the ’479 patent.  The district court entered summary judgment of noninfringement, based on construction of a single claim term “location facility.”  The ’479 patent describes a “location facility” as software on the locator server computer that locates the personal computer.  The district court held that the patent was limited to the location facility being on a single server, while LogMeIn’s software uses multiple servers.

The Federal Circuit vacated the summary judgment of noninfringement, finding the claim construction erroneous.  The Federal Circuit said the patent wasn’t limited to a single server, and ruled instead it could comprise “one or more computers.”

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, August 6, 2012 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Noelle Attalla by 9 am Monday morning.

SoCal IP Institute :: July 9, 2012 :: Summary Judgment and Presumption of Validity

We will be discussing one Ninth Circuit case and one Federal Circuit case during our weekly SoCal IP Institute meeting on Monday, July 9, 2012. Brief synopses are presented below.

Rearden LLC v. Rearden Commerce Inc., Case No. 10-16665 (9th Cir. June 27, 2012) (attached).

Plaintiff Rearden LLC filed suit against Rearden Commerce, asserting numerous claims relating to similarities in the parties’ marks and names. The US District Court for the Northern District of California granted Rearden Commerce’s motion for summary judgment as to plaintiff’s trademark claims.  The district court found Rearden Commerce was entitled to judgment as a matter of law on the claims of false designation of origin under the Lanham Act, the Anticybersquatting Consumer Protection Act (“ACPA”), California’s common law of trademark infringement, and the California Unfair Competition Law (“UCL”).   On appeal, the Ninth Circuit Court of Appeals vacated the district court, holding that genuine issues of material fact existed, which precluded summary judgment in favor of Rearden Commerce. The case was remanded for further proceedings.

Sciele Pharma Inc. v. Lupin Ltd., Case No. 2012-1228 (Fed. Cir. July 2, 2012) (attached).

Lupin filed an Abbreviated New Drug Application (ANDA) with the FDA to market a generic version of Fortamet, an extended-release tablet of metaformin hydrochloride.  In response, the plaintiff filed a lawsuit asserting infringement of their Patent No. 6,866,866.  Before the lawsuit had reached a final judgment, Lupin attempted to launch its generic product.  The plaintiff obtained a preliminary injunction preventing Lupin from selling its product.

On appeal, Lupin argued that the ’866 Patent is obvious based on two prior art references that were before the PTO during prosecution. The Federal Circuit stated that whether or not a reference was previously considered by the PTO, the standard of proof is the same: clear and convincing evidence of invalidity.  However, the fact that references were previously before the PTO could impact the weight the court or jury assigns to the evidence.  The Federal Circuit concluded that the district court’s obviousness analysis was flawed because it incorrectly rejected Lupin’s substantive arguments on disclosure and motivation to combine.  Because the district court incorrectly concluded that defendant failed to raise a substantial question of validity regarding the asserted claims of the patent, the grant of preliminary injunction to stop the sale of the generic was vacated.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, July 9, 2012 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Noelle Attalla by 9 am Monday morning.

SoCal IP Institute :: July 2, 2012 :: Doctrine of Equivalents, Unexpected Results and Teaching Away

We will be discussing two Federal Circuit cases during our weekly SoCal IP Institute meeting on Monday, July 2, 2012. Brief synopses are presented below.

Wm. Wrigley Jr. Co. v. Cadbury Adams USA LLC, Case No. 2011-1140, 2011-1150 (Fed. Cir. June 22, 2012) (attached).

This suit involved infringement assertions between two competitors in the chewing gum industry.  Cadbury contended that Wrigley infringed its Patent No. 5,009,893, which claims chewing gum containing a combination of menthol and a coolant known as WS-3, while Wrigley contended that Cadbury infringed its Patent No. 6,627,233, which claims chewing gum containing a combination of menthol and a coolant known as WS-23.

In the district court, Cadbury obtained summary judgment of anticipation and obviousness of the ‘233 patent, while Wrigley obtained summary judgment of noninfringement of the ‘893 patent.  Both parties appealed.  The Federal Circuit affirmed both holdings stating that Wrigley’s WS-23 coolant and menthol combination did not infringe Cadbury’s patent under the doctrine of equivalents.  Additionally, Wrigley’s patent was held invalid as anticipated by U.S. Patent No. 5,688,491 (Shahidi), and obvious in view of the prior art, particularly because there were no unexpected effects of the WS-23 coolant and menthol combination.

In Re Mouttet, Case No. 2011-1451 (Fed. Cir. June 26, 2012) (attached).

In 2006, Mouttet filed a utility patent application for a “Crossbar Arithmetic Processor,” disclosing a computing device for processes such as addition, subtraction, multiplication, and division using nanoscale materials in a crossbar array with conductive wires. The examiner rejected all claims as obvious and the Board of Patent Appeals and Interferences affirmed. On appeal, although all the claim elements were in the prior art, Mouttet argued teaching away and non-combinability of the prior art references, specifically a change in operating principle.  The Federal Circuit affirmed the Board’s decision, stating that substantial evidence supports the conclusion that the claimed invention would have been obvious to one having ordinary skill in the art.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, July 2, 2012 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Noelle Attalla by 9 am Monday morning.

SoCal IP Institute :: June 4, 2012 :: Standard of Review for Obviousness and Hindsight Bias

We will be discussing two Federal Circuit cases during our weekly SoCal IP Institute meeting on Monday, June 4, 2012. Brief synopses are presented below.

Plasmart v. Kappos & Wang, Case No. 2011-1570 (Fed. Cir. May 22, 2012) (attached).

Appellee sells the TwistCar, a scooter with a handlebar that is twisted to propel the scooter.  Appellee also owns patent No. 6,722,674, which claims a scooter with a safety wheel mounted to a “supporting arm fowardly extended from said driven portion of said twister member.”  Appellant Plasmart filed for inter partes reexam, where the examiner rejected the claims as obvious over the prior art.  The prior art includes two Chinese patent applications.  The first reference discloses a tricycle with two safety wheels that are mounted off the ground and attached to the body base.  The second reference discloses a scooter similar to the TwistCar, but without any safety wheels.  On appeal to the BPAI, the Board reversed and found several of the claims patentable.

Plasmart appealed to the Federal Circuit which found that the patent was obvious. The Court stated that the Board’s factual findings are reviewed for substantial evidence and the Board’s legal conclusions are reviewed de novo.  The Court stated that it has a large amount of analysis/discretion in determining whether the factual findings lead to a conclusion of obviousness.

The Federal Circuit accepted all of the BPAI’s factual findings regarding the scope and content of the prior art; the level of skill in the art; and the differences between the claimed invention and the prior art. However, the court rejected the BPAI’s ultimate conclusion on obviousness, holding that the “minor distinctions” identified by the Board were insufficient to distinguish the claimed invention from the prior art.  The Court stated that the modification in Appellee’s patent “is nothing more than a predictable use of prior art elements (universal wheels in contact with the ground in front of the twister member) to address a known problem (stability), and would thus have been obvious.”

Mintz v. Dietz & Watson, Case No. 2010-1341 (Fed. Cir. May 30, 2012) (attached).

The Mintzes own Patent No. 5,413,148 toward a casing structure for meat products that permits the meat to bulge between netting strands while avoiding the more complex stuffing process associated with prior knitted meat encasements. Package Concepts & Materials, Inc. (PCM), a former distributor of Mintz products, filed a declaratory judgment action against Mintz and Mintz filed a separate patent infringement action against PCM.  The cases were consolidated and the district court granted summary judgment to PCM, holding that the patent was invalid because of obviousness.

On appeal, the Federal Circuit reversed the holding of invalidity. In its opinion, the Federal Circuit discussed the need to avoid hindsight bias when analyzing obviousness.  The Court provided guidance on ways to avoid hindsight bias: by requiring that use of the “common sense” obviousness argument be supported; by avoiding the use of the patent itself in defining the problem the invention solves; and by emphasizing the need to analyze the objective indicia of nonobviousness.

The district court had relied on a common sense argument to conclude that it would have been “obvious to try” an element of the claimed invention.  The Federal Circuit held that more is required than simply stating that the invention was a result of “common sense”.  The Court indicated that further evidence was required, such as record support showing that the knowledge would have resided in the ordinarily skilled artisan.

The Federal Circuit also found that the district court erred by using the invention to define the problem that the invention solves.  The Court stated that it may be the problem itself that is the inventive contribution, even if the solution to the problem is known.

The Federal Circuit emphasized the importance of considering the objective indicia of nonobviousness in order to avoid hindsight bias. Mintz had provided evidence including unexpected results, expert skepticism, copying, commercial success, praise by others, failure by others and long-felt need.  The district court had failed to give substantive consideration to the objective evidence of nonobviousness.

Accordingly, the Federal Circuit reversed the district court holding of obviousness.  However, the Federal Circuit affirmed the district court’s summary judgment of noninfringement of the patent.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, June 4, 2012 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Noelle Attalla by 9 am Monday morning.

SoCal IP Institute :: May 21, 2012 :: Inherent Characteristics of Prior Art and Deference to Federal Agencies

We will be discussing one Federal Circuit case and one Ninth Circuit case during our weekly SoCal IP Institute meeting on Monday, May 21, 2012. Brief synopses are presented below.

In re Montgomery, Case No. 2011-1376 (Fed. Cir. May 8, 2012) (attached).

The examiner rejected appellant’s claims in a patent application towards a method for treatment or prevention of stroke by administering the drug ramipril.  The claims were rejected as anticipated by four prior art references that described the administration of ramipril to subjects at risk of stroke, but did not specifically disclose treating or preventing stroke with ramipril.  The Board of Patent Appeals and Interferences affirmed the rejection stating that ramipril inherently treats or prevents stroke and it does not matter that those of ordinary skill may not have recognized these inherent characteristics.

The Federal Circuit affirmed the Board’s decision stating that a reference may anticipate inherently if a claim limitation that is not expressly disclosed is necessarily present in the single anticipating reference.  They continued by stating that one of the prior art references discloses a protocol for the administration of ramipril to stroke-prone patients, and administering ramipril to stroke-prone patients inevitably treats or prevents stroke.  Thus, the Federal Circuit held that the prior art inherently anticipated the claims at issue.

Pom Wonderful LLC v. The Coca-Cola Co., Case No. 10-55861 (9th Cir. May 17, 2012) (attached).

Pom Wonderful sued Coca-Cola, the makers of the Minute Maid brand, for false advertising under the Lanham Act and state-law unfair competition and false advertising claims.  Minute Maid advertised their product as “Pomegranate Blueberry” when it only contained 0.3% pomegranate juice and 0.2% blueberry juice.  The district court held that because the Food and Drug Administration had approved of the Minute Maid labels, it barred pursuit of both the name and labeling aspects of Pom’s Lanham Act claim.  The district court also held that Pom lacked standing to bring the state-law claims because Pom did not meet the prerequisite of being entitled to restitution.

On appeal, the Ninth Circuit affirmed-in-part and held that the naming component of Pom’s claim was barred because FDA regulations authorize the label name Coca-Cola had chosen.  However, the Court vacated the district court judgment as to Pom’s state-law claims pointing out that the California Supreme Court had recently made clear that standing to sue under state-law unfair competition and false advertising claims does not depend on eligibility for restitution.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, May 21, 2012 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Elisha Manzur by 9 am Monday morning.

SoCal IP Institute :: May 14, 2012 :: Public Use or Sale and Recapture Rule

We will be discussing two Federal Circuit cases during our weekly SoCal IP Institute meeting on Monday, May 14, 2012. Brief synopses are presented below.

Leader Tech., Inc. v. Facebook, Inc., Case No. 2011-1366 (Fed. Cir. May 8, 2012) (attached).

This patent infringement case relates to software that allows users on a network to communicate and collaborate through “boards” that are accessible through an Internet browser.  In 2008, Leader sued Facebook alleging infringement of their ’761 patent.  The jury in the district court trial found that the ’761 patent was not entitled to the priority date of the provisional application.  The jury also found that the claims of the ’761 patent were invalid for being in public use and on sale more than one year prior to the date the patent application was filed.

On appeal, Leader argued that Facebook failed to offer clear and convincing evidence that the version of Leader’s software offered for sale or used prior to December 10, 2002 fell within the scope of the asserted claims.  The Federal Circuit held that there was legally sufficient evidence to support the jury’s verdict that the version of the plaintiff’s product demonstrated and offered for sale prior to the critical date was an embodiment of the asserted claims.  The court pointed to interrogatory responses and the deposition of Leader’s founder in which Leader admitted that offers for sale of a software product fell within the scope of the asserted claims.

In re Youman, Case No. 2011-1136 (Fed. Cir. May 8, 2012) (attached).

An examiner’s rejection of claims in a reissue patent application for improperly recapturing subject matter surrendered during prosecution of the parent was affirmed by the Board of Patent Appeals and Interferences.

The Board applied the three-step recapture rule analysis.  Under step one, the Board found that the reissue claim was broader than the issued claim, but narrower than the original claim.  Under step two, the Board determined that the broadening related to the surrendered subject matter.  For step three, the Board concluded that other narrowing limitations in the reissue claims were not overlooked during the prosecution and therefore could not avoid the recapture rule.

The Federal Circuit vacated the Board’s decision stating that the Board did not properly conduct step three of the recapture rule analysis.  The Court stated step three as follows: if the patentee modified the added limitation such that it is broader than the patented claim yet still materially narrows relative to the original claim the recapture rule does not bar reissue.  The case was remanded to determine whether the applicant avoided the recapture rule bar on reissue by materially narrowing the claims relative to the original claims.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, May 14, 2012 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Elisha Manzur by 9 am Monday morning.

SoCal IP Institute :: May 7, 2012 :: Trademark Infringement for Keyword Advertising and Examiner Allowance Rates

We will be discussing one Fourth Circuit case and one Law Review article during our weekly SoCal IP Institute meeting on Monday, May 7, 2012. Brief synopses are presented below.

Rosetta Stone Ltd. v. Google, Inc., Case No. 10-2007 (4th Cir. April 9, 2012) (attached).

Rosetta Stone sued Google in 2009 over the search engine’s sale of advertising space “keyed” to searches on the ROSETTA STONE trademark through its AdWords program, claiming direct and contributory trademark infringement and trademark dilution, among other claims.

Rosetta Stone argued that consumers were confused by the AdWords advertisements into believing that Rosetta Stone was behind ads that in fact were for counterfeit Rosetta Stone software or competitors’ products.  Rosetta Stone also submitted survey evidence showing that consumers were confused, and pointed to internal Google studies acknowledging that consumers were confused about the source or sponsors of AdWords advertisements.

The district court rejected Rosetta Stone’s claims and granted summary judgment to Google, holding that: (1) Google’s keyword ad practices were protected by the “functionality” doctrine of trademark law, (2) Google could not be liable for dilution because it did not compete with Rosetta Stone and, because Rosetta Stone’s mark became more well-known during the period at issue, it couldn’t show actual dilution, and (3) Rosetta Stone’s anecdotal, survey, and documentary evidence of confusion was de minimis and could not support a finding of confusion at trial.  The appellate court reversed the lower court on each of these points.

The Fourth Circuit stated that the lower court misunderstood and misapplied the functionality doctrine in granting judgment for Google. The functionality doctrine protects functional product design features, and “it is irrelevant whether Google’s computer program functions better by use of Rosetta Stone’s nonfunctional mark.”

The Court also held that the lower court erred in ruling for Google on the grounds that it did not use the ROSETTA STONE mark on its own products.   However, U.S. trademark dilution law applies even where the parties do not compete and the statute does not require that the defendant use the mark on its products, but only “in commerce.”

Google had argued that Rosetta Stone’s brand awareness dramatically grew over the relevant timeframe, but the Court pointed out that the law does not require proof of actual harm, but rather only a likelihood of dilution.

The appeals court also found error in the district court’s treatment of the “fair use” exclusion to dilution. It said that the lower court in effect presumed that any non-trademark use was necessarily fair use, and instructed it to “reexamine the nominative fair use defense” on remand, keeping in mind that Google has the burden to prove it.

In sum, the Fourth Circuit corrected various legal errors in the lower court’s opinion and gave the court plenty of direction for its consideration of the evidence on remand.

Sean Tu, Luck/Unluck of the Draw: An Empirical Study of Examiner Allowance Rates, 20 Stan. Tech. L. Rev. (forthcoming) (attached).

The author of this article studied the allowance rates of specific examiners by art unit, technology center and the PTO as a whole.  He looked at over 1.5 million patents in an attempt to analyze every patent ever issued in the last 10 years (from January 2001-July 2011).

The author found two populations of examiners: (1) Examiners who on average, issue a disproportionately small number of patents per year (low allowance rate examiners), and (2) a small but significant population of examiners who issue a disproportionately large number of patents per year (high allowance rate examiners).

The first population of low allowance rate examiners consists mainly of secondary examiners (junior examiner usually with less than 5 years of experience and no signatory authority).  These examiners, on average, issue a very small number of patents per year (less than 5 patents per year).

The second population of high allowance rate examiners consists mainly of primary examiners (senior examiners usually with more than 5 years of experience and full signatory authority).  These examiners, on average, issue a high number of patents per year (more than 50 patents per year).

The author argues that the incentive system may play a role in creating these two distinct populations of examiners. Additionally, he proposes a holistic pre-grant prosecution history review of both low and high allowance rate examiners to ensure a more consistent application of patentability rules.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, May 7, 2012 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Elisha Manzur by 9 am Monday morning.