IP UPDATE

Opposers Beware: Your Own Mark May Not Be Protectable

by Connor M. Larson | Apr 17, 2025 | Trademarks

The US Court of Appeals for the Federal Circuit affirmed the Trademark Trial & Appeal Board’s dismissal of an opposition to the registration of the marks IVOTERS and IVOTERS.COM while also noting that the US Patent & Trademark Office (PTO) might want to reconsider whether it permits registration of those marks. Heritage Alliance v. Am. Policy Roundtable, Case No. 24-1155 (Fed. Cir. Apr. 9, 2025) (Prost, Taranto, Stark, JJ.)

American Policy Roundtable (APR), a publisher of campaign and political information since June 2010, filed applications to register the marks IVOTERS and IVOTERS.COM for “providing a web site of information on current public policy issues, political campaigns and citizen concerns related to political information” after the PTO approved the marks for publication. Heritage filed an opposition.

Since the 2008 US presidential election season, Heritage has published online voter guides under the names “iVoterGuide” and “iVoterGuide.com” (the iVoters marks). Without a valid registration but having priority of use, Heritage filed an opposition asserting its common law rights in the iVoters marks.

The Board considered Heritage’s opposition but ultimately found that Heritage’s mark was not distinctive. The Board first considered whether the iVoters marks were inherently distinctive and determined they were not just descriptive but “highly descriptive.” The Board next considered whether the iVoters marks had acquired distinctiveness through secondary meaning but found that the record evidence Heritage submitted was inadequate to support a finding that the iVoters marks had any source-identifying significance. Heritage appealed.

On appeal, Heritage argued that the Board had erred by finding the iVoters marks to have neither inherent nor acquired distinctiveness and that the Board violated the anti-dissection principle by evaluating the individual components of the marks instead of the marks as a whole. The Federal Circuit disagreed. The Court found the Board’s determination that the iVoters marks were highly descriptive to be supported by substantial evidence because the prefix “i” generally refers to something internet based. Heritage chose not to challenge the Board’s finding that “VoterGuide” and “.com” were not distinctive, a ruling the Court characterized as “facially reasonable.”

The Federal Circuit also disagreed with Heritage’s argument that the Board improperly evaluated the marks’ individual components. The Court found the Board properly considered the marks as a whole through its determination that the iVoters marks “on their face refer to online voter guides” and because no evidence demonstrated that the combination of the individual components conveyed “any distinctive source identifying impression contrary to the descriptiveness of the individual parts.”

Heritage argued that the Board had erred in its determination that notwithstanding over five years of use, the iVoters marks did not have statutory acquired distinctiveness. Under Section 2(f) of the Lanham Act, registration applicants may submit evidence that a mark has acquired distinctiveness because as a consequence of extensive use and promotion of the mark, consumers now directly associate the mark with the applicant as the source of those goods. Heritage argued that the Board should have accepted its five-plus years of continuous use as prima facie [...]

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High Burden Dooms Intra-District Transfer Request

by Hannah Hurley | Apr 17, 2025 | Patents

The US Court of Appeals for the Federal Circuit denied a mandamus petition requesting transfer from the Marshall division to the Sherman division within the US District Court for the Eastern District of Texas, finding that there was lack of clear error and no abuse of discretion in the district court’s decision to deny transfer. In re SAP America, Inc., Case No. 25-118 (Fed. Cir. Apr. 10, 2025) (Dyk, Prost, Chen, JJ.) (per curiam).

Valtrus Innovations and Key Patent Innovations (collectively, Valtrus) filed a patent infringement lawsuit against SAP. SAP moved for an intra-district transfer from the Marshall division, where the case was originally filed, to the Sherman division. In support of the motion, SAP cited the presence of SAP offices, relevant witness residences, and two SAP employees, all located in Sherman. Valtrus opposed the transfer, pointing out that co-pending litigation in Marshall involved the same asserted patents.

The district court denied SAP’s motion, even though the co-pending case had been closed. The district court also pointed out that most of SAP’s witnesses were out of state or international, making either Texas division equally inconvenient for those witnesses. SAP appealed.

The Federal Circuit reviewed the district court’s ruling under the stringent standards for mandamus relief, which are as follows:

There is no other adequate means to attain the desired relief.
There is a clear and indisputable right to relief.
The writ is appropriate under the circumstances.

Under the Federal Circuit’s 2022 decision in In re Volkswagen, there must be “clear abuses of discretion that produce patently erroneous results.”

Under Volkswagen, a court must consider both private and public factors when deciding whether to transfer venue. The private factors are:

The relative ease of access to sources of proof.
The availability of a compulsory process to secure the attendance of witnesses.
The cost of attendance for willing witnesses.
All other practical issues that make trial of a case easy, expeditious, and inexpensive.

The public interest factors are:

The administrative difficulties flowing from court congestion.
The local interest in having localized issues decided at home.
The forum’s familiarity with the law that will govern the case.
The avoidance of unnecessary conflict of laws issues or in the application of foreign law.

The Federal Circuit found that the district court erred in assigning weight to the co-pending litigation in Marshall, which had been closed and had all defendants dismissed by the time the motion to transfer was resolved. The Court added that the district court improperly weighed the court congestion factor against transfer based solely on the case’s smooth progression to trial.

Despite these errors, the Federal Circuit concluded that SAP failed to demonstrate that the denial of transfer was erroneous. The district court had plausibly found the convenience of the two divisions comparable for most potential witnesses who resided outside of Texas, and that SAP had not sufficiently shown that its Sherman-based employees had relevant knowledge or would be trial witnesses. The Court therefore denied [...]

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Munich Court Addresses Implementer’s Obligation To Provide Security in FRAND Negotiations

by Dr. Henrik Holzapfel and Dominik Rissmann | Apr 17, 2025 | EU Update, Patents

The Munich Higher Regional Court issued a decision concerning the fair, reasonable, and nondiscriminatory (FRAND) negotiation process and an implementer’s obligation to provide security if a license offer for standard essential patents (SEPs) is rejected. HMD Global v. VoiceAge, Case No. 6 U 3824/22 Kart, (Judgment of 20 March 2025).

In this case, the Munich Higher Regional Court attempted to fill a gap left by the Court of Justice of the European Union (CJEU) in Huawei v. ZTE regarding an implementer’s obligation to provide adequate security for royalties. This obligation arises when an implementer rejects a SEP holder’s license offer and the SEP holder rejects the implementer’s counteroffer, so there is no agreement on a license.

The Munich Court found that the implementer, HMD Global, provided an inadequate security that was based on HMD Global’s lower counteroffer. The Court explained that it is the SEP holder’s, here VoiceAges, final offer (i.e., the requested royalty) that is determinative for calculating the security amount that an implementer should provide. This is because a willing licensee must accept the SEP holder’s offer if a court declares it to be FRAND and the royalties subject to this offer must be covered by the security. The Court emphasized that an implementer can only establish that it is a willing licensee by making a counteroffer and providing adequate security after rejecting the offer.

However, the Munich Court left open the issue of whether security must be provided if the SEP holder’s final offer is obviously not FRAND, noting that there may be “special cases” where the SEP holder’s final offer may not be determinative of the security without further defining those cases.

The CJEU’s Guidelines to FRAND Negotiations Are Not a Rigid Set of Rules

The Munich Court also took a critical stance in response to the European Commission’s amicus curiae brief and found that the FRAND guidelines set by the CJEU in Huawei v. ZTE are not to be viewed as a rigid set of rules but rather as a “dynamic concept for negotiation.” A court is not limited to assessing the FRAND defense by strictly examining in sequence each step of the CJEU’s guidelines, which includes the following:

The SEP holder must send a notice of infringement to the implementer.
The implementer must declare to be a willing licensee.
The SEP holder must make a FRAND offer.
If the offer is not FRAND, the implementer is allowed to reject it but must make a counteroffer.
The implementer must provide adequate security for royalties if the SEP holder rejects the implementer’s counteroffer.

The European Commission argued that a court must examine each step before moving on to the next one. This means that, for example, once a court has found that the implementer is a willing licensee, the court must leave the implementer’s subsequent (possibly non-FRAND) conduct out of consideration and cannot undermine the implementer’s established willingness to take a license. A court must then assess whether [...]

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Ill-Gotten Gains: Unjust Enrichment Remedy Not Barred by Limitation of Liability Provision

by Taylor MacDonald | Apr 17, 2025 | Trade Secrets

Examining the issue of trade secret misappropriation when parties have contractually limited their liability from breach, the US Court of Appeals for the Eleventh Circuit reversed the district court’s dismissal of the case, finding that a plaintiff could still recover damages under a theory of unjust enrichment. Pemco Aircraft Engineering Services Inc. v. The Boeing Company, Case No. 22-13776 (11th Cir. Apr. 4, 2025) (Pryor, Branch, Carnes, JJ.)

Pemco and Boeing, who are usually competitors, entered into an agreement to jointly bid for a government contract. The parties’ contract had three separately executed parts that functioned as one agreement. When the contractual relationship fell apart, Pemco sued Boeing for breach of contract and trade secret misappropriation. Based on Boeing’s contractual breach, a jury awarded Pemco more than $2 million of out-of-pocket damages. The district court dismissed the trade secret misappropriation claim, however, as time-barred under Alabama law. After Pemco appealed, the Eleventh Circuit reviewed and determined that the trade secret misappropriation claim arose under Missouri law, not Alabama law, and that under Missouri law, Pemco’s trade secret claims were not time-barred. On remand, Pemco brought amended trade secret misappropriation claims under Missouri law, which the district court dismissed based on the parties’ contract, which limited liability. Pemco appealed.

The issue on appeal was whether the parties’ contractual limitation of liability provision precluded any damages, even for misappropriation. The contractual provision lists the categories of damages that the parties disclaimed, namely, incidental, punitive, and exemplary, or consequential damages. The Eleventh Circuit explained that two sophisticated parties negotiating at arm’s length are permitted by Missouri public policy considerations to contractually limit future recovery for even intentional torts. By including punitive and exemplary damages, which are available only for tort claims and not contractual ones, the parties clearly intended to include torts related to the contract within its scope. Thus, even though trade secret misappropriation is a tort and not a contractual claim, the Court found that the claim was restricted by this provision and Pemco was therefore limited in its potential recovery.

The Eleventh Circuit next looked to whether the jury award had sufficiently compensated Pemco. The district court found that a Missouri trade secrets claim was barred in this context because of a full recovery under the related contract claim. The Court, however, distinguished the two causes of action. So long as the trade secrets claim provides a separate, non-duplicative remedy, it can stand on its own despite other recoveries under the contract. The Missouri Trade Secrets Act explicitly provides for an unjust enrichment remedy not available for contractual breach and the parties chose not to limit recovery for unjust enrichment. Thus, the Court concluded that this remedy was available as a trade secret claim that was not, and could not have been, available to Pemco under the contract.

Boeing advanced two arguments against the availability of an unjust enrichment remedy. Boing argued that any further award would be duplicative of the previous jury award and that unjust enrichment constitutes a [...]

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Not Secret and Not Used: Misappropriation Claim Dismissed

by Dexter Hamilton | Apr 17, 2025 | Trade Secrets

The US Court of Appeals for the Fifth Circuit upheld a district court’s grant of summary judgment in favor of the defendants, finding that the plaintiff failed to identify a trade secret and presented no evidence of its use or disclosure. DeWolff, Boberg & Associates, Inc. v. Justin Pethick and The Randall Powers Co., Case No. 24-10375 (5th Cir. Apr. 3, 2025) (Smith, Clement, Duncan, JJ.)

In 2018, Justin Pethick was a DeWolff, Boberg & Associates (DBA) employee. That year, DBA’s competitor, The Randall Powers Company (Powers), hired Pethick as regional vice president of sales. After Pethick began working at Powers, some prospective DBA clients hired Powers for consulting services. DBA sued Powers for trade secret misappropriation, asserting that Pethick stole its trade secrets and used them to poach clients. The district court granted summary judgment in favor of Powers and Pethick. DBA appealed.

The Fifth Circuit affirmed but on alternative grounds. To prevail on a misappropriation claim under Texas law (where the initial suit was brought), “a plaintiff must show that (1) a trade secret existed, (2) the trade secret was acquired through a breach of a confidential relationship or discovered by improper means, and (3) the defendant used the trade secret without authorization from the plaintiff.”

On appeal, Powers first argued that the information DBA claimed was trade secrets, such as contact information, meeting notes, and “confidential information related to business opportunities,” did not qualify as protectable trade secrets. DBA pointed to “large swathes of database information” without distinguishing what exactly was supposedly a trade secret. The Fifth Circuit found it was unclear as to what materials were trade secrets, noting that it had “no obligation to sift through the record in search of evidence to support a party’s opposition to summary judgment.” The Court held that summary judgment was justified on this basis.

The Fifth Circuit further held that, even assuming the information qualified as trade secrets, summary judgment was still warranted because there was no evidence that Powers and Pethick used the information. Although Pethick had requested a copy of a document that DBA claimed contained trade secrets prior to joining Powers, there was no evidence that he ever possessed it while at Powers. To the contrary, the forensic expert retained by DBA to remove its data from Pethick’s computer did not find the document. The Court concluded that DBA failed to demonstrate any use of an alleged trade secret.