IP UPDATE
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IP UPDATE
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Results for "Trademark Precedent"
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Federal Circuit Lacks Appellate Jurisdiction over Standalone Walker Process Claims

by and | Jun 24, 2021 | ,

The US Court of Appeals for the Federal Circuit ordered the transfer of a case asserting standalone Walker Process antitrust claims involving an unenforceable patent to the regional circuit, in this case the US Court of Appeals for the Fifth Circuit. Chandler v. Phoenix Services LLC, Case No. 20-1848 (Fed Cir. June 10, 2021) (Hughes, J.) The case originated in the US District Court for the Northern District of Texas, over which the Fifth Circuit has appellate jurisdiction. The decision to transfer was based on a subject matter jurisdiction analysis for Walker Process claims. The Federal Circuit reiterated that its precedent does not mandate exclusive Federal Circuit jurisdiction over all Walker Process cases.

In 2006, Phoenix Services and Mark Fisher (collectively, Phoenix) acquired a company called Heat On-The-Fly and its patent to protect a purported proprietary fracking process. Heat-On-The-Fly, and later Phoenix, sought to enforce the patent against numerous parties. During the patent application process, however, Heat On-The-Fly had failed to disclose numerous public uses of the fracking process prior to the application filing. In 2018, in an unrelated case, Energy Heating, LLC v. Heat On-The-Fly, the Federal Circuit, held that “failure to disclose prior uses of the fracking process rendered the . . . patent unenforceable due to inequitable conduct.” The plaintiffs in the case at hand, Ronald Chandler, Chandler MFG., Newco Enterprises and Supertherm Heating Services (collectively, Chandler), alleged that Phoenix’s continued enforcement of the patent violated Walker Process pursuant to § 2 of the Sherman Act.

Walker Process monopolization claims originate from a 1965 Supreme Court decision that recognized an antitrust cause of action under the Sherman and Clayton Acts when a party fraudulently obtains a patent for the purpose of attempted monopolization. Walker Process Equipment, Inc. v. Food Machinery & Chemical Corp. To succeed on a Walker Process claim, a plaintiff must satisfy two elements:

  • The plaintiff must show that the defendant obtained the patent through knowing and willful fraud on the US Patent & Trademark Office and enforced that patent with knowledge of its fraudulent procurement.
  • The plaintiff must be able to satisfy all other elements for a Sherman Act monopolization claim.

Pursuant to 28 U.S.C. § 1295(a)(1), the Federal Circuit retains jurisdiction over any civil case arising under any act of Congress relating to patents. In this instance, the Federal Circuit stated that Walker Process antitrust claims may relate to patents “in the colloquial use of the term,” but under 1988 Supreme Court precedent, Christianson v. Colt Indus., the Federal Circuit’s jurisdiction only extends to cases where the cause of action is created under federal patent law, or where the plaintiff’s right to relief “necessarily depends on resolution of a substantial question of federal patent law.”

Here, the Federal Circuit relied on its own 2018 precedent where it analyzed subject matter jurisdiction for Walker Process claims. Xitronix Corp v. KLA-Tencor Corp. (Xitronix I). Xitronix I involved alleged fraud by the defendants to obtain a patent. The Court acknowledged [...]

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Initial Confusion? Relax, Eighth Circuit Has Your Number

by | May 20, 2021 |

Addressing a novel issue regarding when confusion must occur for it to be actionable, the US Court of Appeals for the Eighth Circuit concluded that initial-interest confusion was a viable infringement theory. Select Comfort Corp. v. Baxter, Case No. 19-1113 (8th Cir. May 11, 2021) (Melloy, J.)

Select Comfort owns registered trademarks, including “SELECT COMFORT,” “SLEEP NUMBER” and “WHAT’S YOUR SLEEP NUMBER,” for adjustable air mattresses, which it sells online and in stores across the United States. Baxter sells competing air mattresses online and through a call center. Select Comfort brought a suit asserting trademark infringement, trademark dilution and false advertising theories against Baxter. Select Comfort alleged that Baxter used Select Comfort’s registered trademarks in an identical or confusingly similar manner to advertise Baxter’s mattresses and divert consumers to its website and phone lines instead of Select Comfort’s. Select Comfort also alleged that Baxter made false representations about its products and failed to dispel consumer confusion about the products. At trial, Select Comfort pointed to similar terms in Baxter’s online advertising text, graphics and domain addresses, in addition to examples of actual confusion about the products in Baxter’s call-center transcripts.

Earlier in the case, in connection with summary judgment, the district court found that the relevant consumers were sophisticated as a matter of law, and, citing Eight Circuit precedent, rejected application of a theory of initial-interest confusion. The district court instead instructed the jury that in order to prevail on its trademark infringement claim, Select Comfort had to prove likelihood of confusion at the time of purchase. Based on this limiting instruction, the jury rejected Select Comfort’s trademark infringement claims. Select Comfort appealed.

The Eighth Circuit reversed. The Court explained that the district court erred on the availability of an initial-interest confusion as an infringement theory. For trademark infringement claims, the likelihood of confusion test is a fact-intensive inquiry with many factors. However, circuit courts have not definitively agreed on when confusion must exist. Must confusion occur only at the time of ultimate purchase, or can it also exist during pre-sale? The theory of initial-interest confusion involves the latter scenario, namely, when confusion about a product’s ownership causes a customer to have initial interest in the product, even if there is no actual sale at the time of the confusion. Actionable initial infringement protects competitors from getting a free ride on the goodwill of an established mark if a consumer falsely infers an affiliation between the companies.

In the precedential 2010 Eighth Circuit case Sensient Techs. v. Sensory Effects Flavor, the Court neither rejected nor adopted the initial-interest/pre-sale confusion theory. Instead, it merely found that the theory did not apply where consumers were sophisticated (i.e., where they exercise a high degree of care in purchasing products, a factor weighing against likelihood of confusion). Here, influenced by Lanham Act amendments and other circuit courts, the Court addressed the issue previously left open: whether the initial-interest confusion may be actionable in the Eighth Circuit in cases where the jury is left to [...]

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Zero Hero: Disclaiming Disputed Term Renders Dispute Moot

by | Apr 15, 2021 |

The Trademark Trial & Appeal Board redesignated as precedential a decision dismissing a beverage company’s opposition to trademarks using the term “ZERO” for zero-calorie drinks after the trademark applicant disclaimed the term ZERO in its pending applications, the sole remedy requested in the opposition. Royal Crown Co., Inc. v. The Coca-Cola Co., Opposition Nos. 91178927 (Parent Case); 91180771; 91180772; 91183482; 91185755; 91186579; and 91190658 (TTAB May 3, 2019) (redesignated precedential Mar. 30, 2021) (Hightower, ATJ). The US Court of Appeals for the Federal Circuit agreed with the Board’s decision, holding that disclaiming the term ZERO rendered the dispute moot. Royal Crown Co., Inc. v. Coca-Cola Co., Case No. 19-2088 (Fed. Cir. Aug. 3, 2020) (Lourie, J.)

Royal Crown and Coca-Cola are competitors in the beverage market. Coca-Cola filed 16 applications to register marks appending the term ZERO to some of its existing beverage brands, such as Coke Zero, Coke Cherry Zero and Sprite Zero. Royal Crown filed oppositions to each of the 16 applications (later consolidated), arguing that the marks were generic or merely descriptive of the beverages’ zero-calorie attributes, and that the registrations should be denied without a disclaimer of the term ZERO. The Board initially held that Coca-Cola’s applications could be registered without a disclaimer of the term ZERO, finding that Royal Crown failed to show that ZERO was generic for zero-calorie products in the genus of soft drinks, sports drinks and energy drinks, and that Coca-Cola proved that the term ZERO had acquired distinctiveness for soft drinks and sports drinks, although not for energy drinks. On appeal, the Federal Circuit vacated the decision and remanded the case back to the Board with instructions to apply the correct legal standard for genericness of the term ZERO, including examining whether the term ZERO referred to a key aspect of the genus when appended to a beverage mark, and to make an express finding regarding the degree of the mark’s descriptiveness.

On remand, the Board ordered the parties to rebrief certain issues. Instead, Coca-Cola filed an unconsented motion to amend each of its applications to disclaim the term ZERO. Coca-Cola argued that the disclaimer rendered the remaining issues in the case moot and that no further action was required by the Board. Although disclaimer was the sole remedy Royal Crown originally sought in its oppositions, Royal Crown protested that the disclaimer was procedurally improper and not case-dispositive. Royal Crown argued that its requested relief included a determination that ZERO was generic or merely descriptive, and that while a disclaimer was the manner in which that relief was demonstrated, a disclaimer did not moot the legal issues raised. Royal Crown asked the Board to defer ruling on the motion to amend until it had issued a full decision on the merits.

Agreeing with Coca-Cola, the Board found that since the disclaimer was the relief sought by Royal Crown and the form of the disclaimer was acceptable, entered the disclaimer and dismissed Royal Crown’s opposition.

Practice Note: In the original appeal from [...]

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Collaterally Estopped: Do Not Re-Examine the Same Issues

by | Mar 4, 2021 |

In an appeal from an inter partes re-examination of a patent having both original and newly presented claims, the US Court of Appeals for the Federal Circuit ruled that a decision in earlier inter partes reexaminations of related patents had a preclusive effect that collaterally estopped the Patent Trial and Appeal Board from making new findings on the same issue that was determined in the prior re-examinations. SynQor, Inc. v. Vicor Corp, Case No. 19-1704 (Fed. Cir. Feb. 22, 2021) (Hughes, J.), (Dyk, J., dissenting).

Background

In 2011, SynQor asserted several patents, including the ‘190 patent, the ‘702 patent and the ‘290 patent, against Vicor. Vicor petitioned for reexamination of the ‘190, ‘702 and ‘290 patents, arguing that the claims of the ‘190 patent were unpatentable over two references: Steigerwald and Cobos. SynQor argued that an artisan would not have combined Steigerwald and Cobos because they taught circuits that operated at incompatible frequencies.

Past Appeals of Related Patents

On appeals from the reexaminations of the ‘702 and ‘290 patents, the Board affirmed that the challenged claims of the ‘702 patent were not unpatentable, because “there are incompatibilities in frequency between [Cobos and Steigerwald].” Similarly, after finding SynQor’s evidence that Steigerwald and Cobos operated at incompatible frequencies more credible than Vicor’s opposing evidence, the Board found the challenged claims of the ‘290 patent not unpatentable based on a combination of Steigerwald, Cobos and a third reference.

SynQor and Vicor had previously appealed the Board’s decisions in the reexaminations of the ‘702 and ‘290 patents to the Federal Circuit. As to the ‘290 patent, the Federal Circuit had affirmed the patentability of the challenged claims, holding that substantial evidence supported the Board’s finding that an artisan would not combine Steigerwald and Cobos because of their frequency incompatibility. The Court had also affirmed the Board’s decision finding the ‘702 patent not unpatentable, but did not (and was not asked to) reach the Board’s finding that Steigerwald and Cobos were incompatible.

Board Re-xamination of the ‘190 Patent

As to the ‘190 patent (at issue in this appeal), the Board found that Steigerwald and Cobos were not incompatible. In concluding that the challenged claims of the ‘190 patent were unpatentable over Steigerwald and Cobos, the Board was “not persuaded that the switching frequency differential is sufficient to render the combination unsuitable.” It found a new claim unpatentable based on a new ground of rejection, and SynQor opted to re-open prosecution of the new claim.

The ‘190 patent expired in January 2018. In February 2019, the Board issued its decision regarding the claims in the ‘190 reexamination, again rejecting SynQor’s argument that Steigerwald and Cobos had incompatible frequencies, and concluded that “the evidence points strongly to the lack of a frequency range discrepancy between Cobos and Steigerwald.” SynQor appealed.

Appeal as to the ‘190 Patent

On appeal, SynQor argued that common law issue preclusion arising from the ‘702 and ‘290 patent re-examinations should have collaterally estopped the Board from finding that an artisan would be [...]

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IP Implications of the Consolidated Appropriations Act, 2021

by | Jan 14, 2021 | , ,

On December 27, 2020, Congress signed the Consolidated Appropriations Act, 2021, into law. The omnibus act includes new legislation affecting patent, copyright and trademark law. A brief summary of key provisions is provided below.

Patents – Section 325 Biological Product Patent Transparency

42 USC § 262(k) was amended to require that the US Food and Drug Administration (FDA) provide the public with more information about patented biological products. Within six months, the FDA must make the following information available to the public on its Database of Licensed Biological Products or “Purple Book,” and it must update the list every 30 days:

  • A list of each biological product, by nonproprietary name, for which a biologics license is in effect
  • The license date and application number
  • The license and marketing status (as available)
  • Exclusivity periods

The amendment requires that the holders of a license to market a biologic drug now disclose all patents believed to be covering that drug. The new law is designed to prevent errors that could delay biosimilars from coming to the market.

Copyrights – The CASE Act of 2020

The Consolidated Appropriations Act incorporates the Copyright Alternative in Small-Claims Enforcement (CASE) Act of 2020, as well as legislation designed to increase criminal penalties for the unauthorized digital streaming of copyright-protected content. The CASE Act includes revisions to the Copyright Act, 17 USC §§ 101 et seq., with the goal of creating a new venue for copyright owners to enforce their rights instead of having to file an action in federal court.

The Copyright Claims Board

The CASE Act established the Copyright Claims Board (a small claims court), which is designed to serve as an alternative forum where parties may voluntarily seek to resolve certain copyright claims regarding any category of copyrighted work. A party may opt out upon being served with a claim, choosing instead to resolve the dispute in federal court. A party to a proceeding before the Board may, but is not required to, be represented by a lawyer. A party may also be represented by a law student who is qualified under applicable law, and who provides such representation on a pro bono basis. The Board consists of three copyright claims officers who may conduct individualized proceedings to resolve disputes and must issue written decisions setting forth their factual findings and legal conclusions.

Procedural Matters

The Board must follow the law in the federal jurisdiction in which the action could have been brought if filed in federal court. Because jurisdictional conflicts may arise where a dispute may have been brought in multiple jurisdictions, the CASE Act provides that the Board may apply the law of the jurisdiction that the Board determines has the most significant ties to the parties and the conduct at issue.

Although formal motion practice is not permitted, discovery is allowed on a limited basis, including requests for documents, written interrogatories and written requests for admission. The Board may consider evidence, documentary and (non-expert) testimony, without the application of formal [...]

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Federal Circuit Will Not Second-Guess IPR Institution Denials

by | Nov 11, 2020 | ,

In a series of non-precedential orders, the US Court of Appeals for the Federal Circuit reiterated that it lacks jurisdiction to hear appeals on whether the Patent Trial and Appeal Board properly decided to deny inter partes review (IPR) petitions based on parallel district court litigation. Cisco Systems Inc. v. Ramot at Tel Aviv University, Case Nos. 20-2047, -2049 (Fed. Cir. Oct. 30, 2020); Google LLC v. Uniloc 2017 LLC, Case No. 20-2040 (Oct. 30, 2020); In re: Cisco Systems Inc., Case No. 2020-148 (Fed. Cir. Oct. 30, 2020); Apple Inc. v. Maxell, Ltd., Case No. 20-2132, -2211, -2212, -2213, 21-1033 (Fed. Cir. Oct. 30, 2020).

The 2011 Leahy-Smith America Invents Act (AIA) created various mechanisms for challenging the validity of issued patents in post-grant proceedings before the US Patent and Trademark Office PTO) by adding transitional covered business method and post-grant review proceedings to existing ex parte re-examination, and expanding and renaming inter partes re-examination to inter partes review (IPR).

Under 35 USC §§ 311, 312, a petition for IPR must identify all real parties in interest, identify and support the prior art grounds for challenges to the claims, and provide “such other information as the Director may require by regulation.” Under 35 USC § 314 and 37 CFR 42.4(a), the Board institutes a trial on behalf of the PTO Director, and a “determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.” In deciding whether to institute the trial, the Board considers, at a minimum, whether a petitioner has satisfied the relevant statutory institution standard. Even when a petitioner has satisfied the institution standard, the Director has statutory discretion under 35 USC 314(a) and 324(a) to deny a petition.

In 2016, the Supreme Court of the United States held in Cuozzo Speed Techs. v. Lee that “the agency’s decision to deny a petition is a matter committed to the Patent Office’s discretion,” and that there is “no mandate to institute review.” The Supreme Court also found that the Director is given broad discretion under 35 USC 315(d) and 325(d) to determine the manner in which “multiple proceedings” before the PTO involving the same patent may proceed, “including providing for stay, transfer, consolidation, or termination of any such matter or proceeding.” Subsequent PTO policies and precedential Board decisions set forth factors affecting the case-specific analysis of whether to institute an AIA proceeding, and particularly a follow-on or serial petition, or discretionary denial due to the timing of parallel district court proceedings.

In Cisco v. Ramot, the Board denied Cisco’s petitions to institute IPRs against two patents that Ramot had asserted against it in a district court case. The decisions denying Cisco’s petitions cited the Board’s discretion under 35 USC § 314(a) not to institute review and relied on the factors determining whether efficiency, fairness and the merits support the exercise of authority to deny institution in view of an earlier trial date in the parallel proceeding. Specifically, the Board [...]

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PTO Seeks Comments on Proposed Rulemaking for Denying Patent Reviews

by | Oct 29, 2020 | ,

The US Patent and Trademark Office (PTO) requested public comments on considerations for instituting trials under the Leahy-Smith America Invents Act (AIA). Comments are due by November 19, 2020.

Patent practitioners have grown accustomed to reviewing the PTO Patent Trial and Appeal Board (Board) administrative guide, precedential or informative opinions, and other published filings and decisions to discern best practices for filing petitions for and defending against inter partes review, post-grant review, covered business method and derivation proceedings before the Board. For example, the latest Board Consolidated Trial Practice Guide (Nov. 2019) (CTPG) is available here. The PTO is considering codifying or modifying its current policies and practices through formal rulemaking and wishes to gather public comments on its current approach and other approaches suggested by stakeholders.

PTO policies and Board decisions such as General Plastic, Valve Corp. I, Valve Corp. II, NHK Spring and Fintiv set forth factors for analyzing whether to institute an AIA proceeding (and particularly a follow-on or serial petition) or issue a discretionary denial due to the timeline for parallel district court proceedings. Many of these policies and cases are also discussed in the CTPG. The PTO already has received input from stakeholders on these policies that expand on the PTO director’s discretionary authority to institute an AIA trial. Most stakeholder comments suggested that the case-specific analysis outlined in precedential opinions and the CTPG achieves the appropriate balance and reduces gamesmanship—for example, by ensuring that AIA proceedings do not create excessive costs and uncertainty for the patent owner or the system, while allowing meritorious challenges to patents to be heard. However, some stakeholders have proposed that the PTO adopt brightline rules, regardless of the case-specific circumstances, to:

  • Use its discretion to preclude claims from being subject to more than one AIA proceeding
  • Permit more than one AIA proceeding only if the follow-on petitioner is unrelated to the prior petitioner
  • Place no limits on the number of petitions that can be filed or the number of AIA trials that can be instituted against the claims of a patent, so long as the petition complies with statutory timing requirements and the institution threshold of showing that at least one claim of the patent is unpatentable
  • Preclude institution of an AIA trial against challenged claims if the patent owner opposes institution and a related district court or US International Trade Commission (ITC) action (in which any of the challenged claims are or have been asserted against the petitioner, the petitioner’s real-party-in-interest or a privy of the petitioner) is unlikely to be stayed
  • Eliminate any consideration of the status of any district court or ITC actions involving the challenged patent, so long as the petition complies with statutory timing requirements and the institution threshold.

These contrasting views prompted the PTO to issue a request for comments on the factors that should be considered as part of a balanced assessment of the relevant circumstances when exercising its discretion to institute an AIA trial. The PTO [...]

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Arthrex Extended to Inter Partes Re-examination

by | May 27, 2020 | ,

The US Court of Appeals for the Federal Circuit denied a petition for panel rehearing regarding the constitutionality of decisions issued by the United States Patent and Trademark Office (USPTO) Patent Trial and Appeal Board (PTAB), holding that its decision in Arthrex, Inc. v. Smith & Nephew, Inc. (IP Update, Vol. 22, No. 11) also applies to final decisions issued by administrative patent judges (APJs) in inter partes re-examinations. Virnetx v. Cisco Systems, Inc., Case No. 19-1671 (Fed. Cir. May 13, 2020) (O’Malley, J.). The Court also denied (per curiam) a concurrently filed petition for rehearing en banc.

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“Waive” Goodbye to Belated Argument that Administrative Patent Judges’ Appointment is Unconstitutional

by | May 14, 2020 | ,

Addressing whether a party can waive a challenge to the constitutionality of Administrative Patent Judges’ (APJs’) appointment, the US Court of Appeals for the Federal Circuit found that the issue is non-jurisdictional and therefore waivable. Ciena Corp. v. Oyster Optics, LLC, Case No. 19-2117 (Fed. Cir. Jan. 28, 2020) (O’Malley, J.) (reissued as precedential May 5, 2020).

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Federal Circuit Sinks Another Attempt to Use PTO Guidance

by | May 7, 2020 |

The US Court of Appeals for the Federal Circuit found claims directed to methods of fishing to be patent ineligible, affirming a Patent Trial and Appeal Board (PTAB) decision that the claims were directed to the abstract idea of selecting a fishing hook based on observed water conditions. In re: Christopher John Rudy, Case No. 19-2301 (Fed. Cir. Apr. 24, 2020) (Prost, CJ).

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