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2019 IP Law Year in Review: Trademarks

Executive Summary

Trademark jurisprudence in 2019 may be best summarized in two words: questions and answers. Decisions handed down at the district court level have teed up key questions that are poised to be answered by the United States Supreme Court in the 2020 term—such as the protectability of certain “.com” trademarks, as well as the standard for obtaining particular damages in trademark infringement disputes. For brand owners and trademark practitioners, 2019 will also go down as a year that provided answers to many important questions. For example, on numerous occasions in 2019, the Trademark Trial and Appeal Board answered questions as to whether certain designs or designations have the capability to function as a source-identifying trademark. The United States Patent and Trademark Office (USPTO) answered questions relating to the cannabis industry and how the 2018 Farm Bill would be applied in the review of US trademark applications listing goods or services for CBD products. And, the Supreme Court answered an important question for trademark licensees regarding their rights when a trademark licensor goes bankrupt. This report provides a summary of 2019’s most important questions and answers when it comes to trademark law, and serves as a useful guide for navigating trademark prosecution and enforcement efforts into the year ahead.

Trademarks

  1. Treatment of Generic & Descriptive Marks
  2. Potential Damages Available In Trademark Infringement Cases
  3. Cannabis, CBD, and Trademarks
  4. Trademark Licenses in Bankruptcy

2020 Outlook

As we await further answers to our most pressing trademark questions in 2020, we anticipate that this year will bring unique opportunities to apply traditional tenets of trademark law to modern-day disputes and business considerations. So long as marketing efforts continue to incorporate influencers, short-form and interactive content, artificial intelligence, blockchain technologies, and other initiatives to elevate brand profiles, trademark practitioners and the courts will need to be creative in applying traditional interpretations of relevant trademark laws and policies to trademark protection strategies and infringement disputes. In 2020, the USPTO also will be forced to continue to address the ever-crowded brand space by furthering its crack-down on fraudulent trademark applications, clearing dead weight from the USPTO register, and maintaining its strict registrability and failure-to-function assessments to make room for new and growing brands. Finally, in 2020 and beyond, we expect that trademark considerations will continue to color other legal matters and disputes, including corporate transactions, data ownership and privacy, and bankruptcy and restructuring, thus showing the immense commercial value and power of brands.

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Prior Covenant Insulates Party from Suit Despite Later Agreement

In a divided panel decision, the US Court of Appeals for the Federal Circuit concluded that a merger clause in the parties’ settlement agreement did not extinguish a prior covenant not to sue. Molon Motor & Coil Corp. v. Nidec Motor Corp., Case No. 19-1071 (Fed. Cir. Jan. 10, 2020) (Lourie, J) (Reyna, J, dissenting).

In 2004, Molon sued Nidec’s predecessor, Merkle-Korff, for infringement of Molon’s patent. In response, Merkle-Korff filed declaratory judgment counterclaims against two other Molon patents, seeking declarations of invalidity and non-infringement. Molon subsequently offered Merkle-Korff a covenant not to sue (2006 covenant) on the counterclaim patents. The covenant provided a unilateral non-exclusive license covering products existing at the time with no limits to specific markets.

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Making the Most of Markush

The US Court of Appeals for the Federal Circuit expanded the Markush doctrine, determining that the claim language “comprising . . . [at least] . . . a group consisting of . . .” absent some basis or extrinsic evidence for limiting the group, such a group could capture an alleged infringement  having an additional component  present, as long as the additional component is “functionally similar” to the component identified in the Markush group limitation. ,Amgen Inc. v. Amneal Pharm. LLC, Case No. 18-2414 (Fed. Cir. Jan. 7, 2020) (Lourie, J).

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Inherency Can Be Used in Obviousness Analysis to Supply Missing Limitation

Finding that inherency can be used to show the presence of a missing claim limitation, the US Court of Appeals for the Federal Circuit affirmed a district court decision that asserted claims in pain management method patents were invalid as obvious. Persion Pharmaceuticals LLC v. Alvogen Malta Operations Ltd., Case No. 18-2361 (Fed. Cir., Dec. 27, 2019) (Reyna, J.).

Persion has US Food and Drug Administration (FDA) approval for its extended release hydrocodone product, Zohydro ER, and also owns two patents directed to methods of treating pain with extended release hydrocodone in patients with mild to moderate hepatic impairment. Persion sued Alvogen for infringement of certain claims in these two patents after Alvogen filed an Abbreviated New Drug Application (ANDA) requesting approval from the FDA to market a generic version of Zohydro ER. The asserted claims include: (i) non-adjustment claims directed to administering a dose of hydrocodone to patients with mild to moderate hepatic impairment without adjusting the dose relative to a healthy liver patient, and (ii) pharmacokinetic claims directed to pharmacokinetic parameters achieved after treatment with hydrocodone.

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