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Neither Narrow Proposed Claim Construction nor Work Product Claim Justify Withholding Material Factual Information

by Cecilia Choy, Ph.D. and Hannah Hurley | Jun 1, 2023 | Patents

The Patent Trial & Appeal Board of the US Patent & Trademark Office (PTO) canceled all challenged claims across five patents because the patent owner failed to meet its duty of candor by selectively and improperly withholding material information that was inconsistent with its patentability arguments. Spectrum Solutions, LLC v. Longhorn Vaccines & Diagnostics, LLC, IPR2021-00847; -00850; -00854; -00857; -00860 (PTAB May 3, 2023) (Braden, Yang, Derrick, Pollock, APJs) (per curiam) (Braden, APJ concurring).

The Board instituted inter partes reviews (IPRs) against five Longhorn patents based on petitions filed by Spectrum. During the proceedings, Longhorn filed motions to amend, after which the Board issued preliminary guidance suggesting that Spectrum established a reasonable likelihood that the proposed substitute claims were unpatentable. Longhorn engaged Assured Bio Labs (ABL) to conduct biological testing that would support its arguments distinguishing a prior art reference, but Longhorn made attorney work product objections in Spectrum’s ABL depositions and withheld testing data inconsistent with its arguments on the patentability of the original and proposed substitute claims. The Board subsequently allowed additional questioning on certain ABL testing, after which Spectrum filed a motion for sanctions, requesting judgment against Longhorn, a finding that the prior art reference taught the claim limitations and precluding Longhorn from contesting the finding, and an award to Spectrum of compensatory expenses, including attorneys’ fees.

The Board determined that sanctions of adverse judgment as to all challenged claims was appropriate because Longhorn failed to meet its duty of candor and good faith. The Board explained that parties have a duty of candor and good faith before the Board that requires any factual contentions to be well supported by evidence. Parties have “a duty to disclose to the [PTO] all information known . . . to be material to patentability.” (37 C.F.R. §1.56(a).) Information is material to patentability when it is “not cumulative to information already of record or being made of record in the application and . . . it refutes, or is inconsistent with, a position the applicant takes in . . . asserting an argument of patentability.” Taking a position contrary to any known fact while shielding factual information from the Board violates the duty of candor and good faith to the PTO, even if the party may otherwise withhold the information as being immaterial to patentability or privileged.

The Board criticized Longhorn’s proposed claim constructions as too narrow and contrary to the express language in both the original and proposed substitute claims. The Board explained that although Longhorn was free to maintain arguments grounded on Longhorn’s claim constructions, that did not excuse Longhorn’s duty of candor and good faith dealing, including disclosing material information relating to the Board’s preliminary claim constructions. Longhorn could not “simply withhold information” that the PTO would find material to patentability and should instead contest the Board’s constructions at trial.

The Board also explained that Longhorn took an overly strict view of what was material to claim patentability and a lax view as to the duty of candor [...]

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Weeded Out: Mark for Drug Paraphernalia Described as “Essential Oil Dispenser” Refused Registration

by Tessa Kroll | May 18, 2023 | Trademarks

Addressing the registrability of marks for cannabis-related products, the Trademark Trial & Appeal Board upheld an Examiner’s refusal to register marks for an “essential oil dispenser” based on extrinsic evidence that the dispenser was primarily used with cannabis extract. In re National Concessions Group, Inc., Ser. Nos. 87168058 and 87183434 (TTAB May 3, 2023) (Thurmon, Greenbaum, English, ATJs) (precedential).

National Concessions sought registration of the word mark BAKKED and a stylized drop logo for an “essential oil dispenser, sold empty, for domestic use” on the Principal Register. The specimen provided by National Concessions illustrated the two marks on an oil dispensing pen identified as “THE DABARATUS.” After reviewing National Concessions’ website—where THE DABARATUS was touted as “THE ALL-IN-ONE TOOL FOR DABBING” that delivers “THE PERFECT DOSE OF CANNABIS EXTRACT”—the Examiner concluded that THE DABARATUS was unlawful drug paraphernalia under the Controlled Substances Act (CSA) and refused registration of the marks. National Concessions appealed on the following three grounds:

The goods are not drug paraphernalia because they are used to dispense essential oil.
The exemption in Section 863(f)(1) of the CSA applies because National Concessions was permitted to sell the goods under Colorado state law.
The exemption in Section 863(f)(2) of the CSA applies because the goods are traditionally intended for tobacco products.

After briefing, the Board suspended the appeal and remanded the applications to the Examiner to request information from National Concessions concerning the legislative histories of Sections 863(f)(1) and (2) of the CSA and the relevant provisions of Colorado state law. The Examiner then issued a Supplemental Final Office Action maintaining the refusal of both marks, and the Board continued proceedings.

The Board began its analysis by outlining the relevant provisions of the CSA, explaining that for a mark to be eligible for registration, the goods must be legal under federal law. Under Section 863(a) of the CSA, it is unlawful to sell “drug paraphernalia,” which is defined as “any equipment, product, or material of any kind which is primarily intended or designed for use in … introducing into the human body a controlled substance, possession of which is unlawful under [the CSA],” including marijuana and marijuana-based preparations. The CSA includes exemptions for any person authorized by local, state or federal law to distribute such items (Section 863(f)(1)) or any item that is traditionally intended for use with tobacco products (Section 863(f)(2)).

The Board first found that National Concessions’ “essential oil dispenser” was prohibited drug paraphernalia under the CSA, even though the product was not unlawful as described in the application. The Board noted that extrinsic evidence, such as an applicant’s marketing materials or product instructions, can be used to show a violation of the CSA even if the application does not reveal a per se violation. After considering National Concessions’ website as well as third-party websites and articles, the Board agreed with the Examiner that National Concessions’ “essential oil dispenser” was primarily intended to dispense cannabis oil for “dabbing”—a method of inhaling superheated cannabis concentrates. The [...]

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PTO Proposes Patent Fee Increases

by Amol Parikh | May 4, 2023 | Patents

The US Patent & Trademark Office (PTO) announced proposed patent fee increases. Patent fees would increase by about 5% across the board because of inflation.

Certain fees would be increased by substantially more than the 5% inflationary increase to reduce subsidization from other fee sources. For example, the overall design patent fees would increase by 48%, based on a 27% increase in filing, search and examination fees and a 76% issue fee increase. The PTO also proposes a 100% increase in the excess claim fee for each claim over 20, and a 25% increase in the fee for each independent claim over three. Because the costs of reviewing patent term extensions is complex, the PTO proposes fee increases of 196% to 468%. The PTO also proposes a fee of $500 for filing an After Final Consideration Pilot (AFCP) 2.0 request, and new fees for filing an information disclosure statement (IDS) that causes the number of applicant-provided citations to exceed 50, 100 or 200 citations, respectively.

To offset the loss of future maintenance fee payments, the PTO proposes fees of $1,500 for continuing applications filed more than three years from the earliest benefit date and $3,000 for continuing applications filed more than seven years from the earliest benefit date.

Other proposed fee increases are intended to expedite the patent examination process. For example, the PTO proposes a 25% increase in the fee for a second request for continued examination (RCE) and an 80% increase for a third or subsequent RCE. The fee for a terminal disclaimer filed after the first action on the merits and before a final rejection would increase by 194%. After a final rejection or notice of allowance, the fee would increase by 371%. On or after a notice of appeal, the increase would be 547%, and the proposed increase for filing a terminal disclaimer in an issued patent would be 724%.

The PTO further proposes increasing Patent Trial & Appeal Board America Invents Act (AIA) trial fees by 25%. The PTO also proposes new fees for inter partes review (IPR) and post grant review (PGR) petitions that exceed the word count limits. For example, the PTO proposes a 50% higher fee for petitions that exceed the word count limit by up to 50%, and a 100% higher fee for those that exceed the limit by up to 100%.

A public hearing is scheduled for May 18, 2023. Those wishing to present oral testimony at the hearing must submit a written request by May 11, 2023. Written comments on the proposed fees will be accepted until May 25, 2023.

The PTO anticipates that the fee changes will be implemented around January 2025.

More details, including a complete list of the proposed fee increases, can be found on the PTO website.

Strike 1: Priority. Strike 2 :Likelihood of Confusion. Strike 3: You’re Out under Section 2(d).

by Jake B. Vallen | Apr 27, 2023 | Trademarks

The Trademark Trial & Appeal Board affirmed the rejection of three trademark applications, finding that the applied-for marks would cause confusion with a record-setting major league baseball player. Major League Baseball Players Ass’n v. Chisena, Opp. Nos. 91240180; 91242556; 91243244 (TTAB Apr. 12, 2023) (Cataldo, Heasley, Larkin, ATJ.) (precedential).

Michael P. Chisena sought registration of the standard character marks ALL RISE and HERE COMES THE JUDGE, along with the following design mark for use in commerce on “clothing, namely, t-shirts, shirts, shorts, pants, sweatshirts, sweatpants, jackets, jerseys, athletic uniforms, and caps.”

New York Yankees outfielder Aaron Judge and the Major League Baseball Players Association (MLBPA) filed Notices of Opposition challenging Chisena’s registration for likelihood of confusion under Section 2(d) of the Trademark Act, 15 U.S.C. § 1052(d), among other things.

At the outset, the Board addressed the issue of whether Judge and MLBPA were entitled to a statutory cause of action challenging the registration of Chisena’s marks. The Board found standing, concluding that both Judge and MLBPA had “legitimate interest[s] in the outcome of this opposition” because granting Chisena’s registration “would provide a prima facie right to exclusive use of [the] marks on [the] identified apparel, in competition with the apparel marketed by Opposers’ licensees.” The Board reasoned that this stake in the outcome of the opposition created a sufficiently high level of potential harm to Judge and MLBPA to support standing.

Turning to the merits of the Section 2(d) claim, the Board explained that Judge and MLBPA must “prove both priority of use of their pleaded marks and a likelihood of confusion between those marks and those Applicant ha[d] applied to register.”

First, the Board addressed priority of use of ALL RISE and HERE COMES THE JUDGE, as well as judicial designs, such as a gavel, courthouse image or the scales of justice, as trademarks on t-shirts, baseball caps and other athletic apparel. Judge and MLBPA established that Judge had been an MLBPA member since 2016 and that since then, “numerous licensees have obtained approval to produce and market products bearing his personal indicia.”

Chisena responded with multiple arguments in favor of priority but the Board found none to be persuasive. The Board reasoned as follows:

“[T]he relevant purchasing public [would] clearly perceive[] ‘JUDGE’ in the context of ‘HERE COMES THE JUDGE’ as a play on words, embracing both its judicial and surname meanings.”
“[B]aseball fans and commentators began using ‘ALL RISE’ as a play on Aaron Judge’s last name early in his career,” and whether it is a nickname or not, there is “a protectable property right in any term the public has come to associate with . . . goods or services.”
The slogans and symbols function as trademarks because “consumers who encounter [them] on t-shirts and other athletic apparel would recognize, associate, and perceive them as pointing to a single source: Aaron Judge.”
“[T]he judicial phrases and symbols . . . serve to perform the [...]

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No Spark Here: TTAB Refuses to Register Similar Mark for Real Estate Services

by Kathleen Lynch | Apr 27, 2023 | Trademarks

The US Court of Appeals for the Federal Circuit upheld the Trademark Trial & Appeal Board’s refusal to register a mark due to the “close similarity” between the applied-for mark and a previously registered mark. In Re: Charger Ventures LLC, Case No. 22-1094 (Fed. Cir. Apr. 13, 2023) (Prost, Reyna, Stark, JJ.)

Charger Ventures applied to register SPARK LIVING, identifying its services as rental property management and real estate leasing and listing. Based on an existing mark, SPARK, which identified other real estate services such as rental brokerage, commercial property leasing and management, the Examining Attorney ultimately refused to register Charger’s mark, despite Charger twice amending its application and disclaiming the word LIVING. Charger appealed to the Board, which used the 13 DuPont factors to analyze likelihood of confusion. The Board focused on five of the DuPont factors:

Similarity of the marks: SPARK LIVING fully incorporates SPARK, and LIVING is both descriptive and disclaimed, making it “subordinate to SPARK.”
Similarity of the nature of goods/services: While not identical, commercial and residential real estate services may “emanate from a single source under a single mark.”
Similarity of trade channels: There exists “some overlap” between commercial and residential real estate trade channels.
Class of purchasers: Although real estate purchasers exercise a high level of care, “even . . . sophisticated purchasers are not immune from source confusion.”
Strength of the mark: Although SPARK is somewhat commercially weak, “even weak marks are entitled to protection.”

The Board did not announce the weight it afforded to each factor but found that Charger failed to overcome the high similarity between its mark and SPARK. The Board therefore affirmed the Examining Attorney and refused to register SPARK LIVING. Charger appealed to the Federal Circuit.

As to factor 1, Charger argued that the Board erred in finding similarity of the marks. The Federal Circuit disagreed, noting that Charger disclaimed LIVING from its mark. The Court explained that disclaimer has no legal effect on likelihood of confusion because consumers do not know which words have been disclaimed. The Court found that the Board properly considered the full mark and that the marks were clearly similar.

As to factors 2 and 3, Charger argued that the previous SPARK registration could not be newly extended to include residential real estate services. The Federal Circuit rejected Charger’s argument, finding that many marks bridge the commercial and residential gap and that a registration’s listed services do not limit the trade channels in which the mark actually operates.

Regarding factor 4, Charger argued that SPARK and SPARK LIVING appealed to different classes of purchasers. The Federal Circuit disagreed, finding that Charger had failed to show that residential property owners were distinct from commercial owners.

Charger asserted that the Board improperly analyzed factor 5, since a mark’s weakness is “paramount” to likelihood of confusion. However, the Federal Circuit agreed with the Board that Charger failed to overcome the registered mark’s presumption of validity, despite other “spark” marks in the field. The Court [...]

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PTO Requests Comments on Revisions to AIA Trial Proceedings

by Amol Parikh | Apr 27, 2023 | America Invents Act, Patents

On April 21, 2023, the US Patent & Trademark Office (PTO) announced that it is seeking public input on proposed modifications to the rules of practice for inter partes reviews (IPRs) and post grant reviews (PGRs) before the Patent Trial & Appeal Board to better align the practices with the PTO’s mission to promote and protect innovation and investment in the same and to provide a less expensive alternative to district court litigation to resolve certain patentability issues while also protecting against patentee harassment.

The PTO is considering promulgating rules that the Director—and, by delegation, the Board—will use to do the following:

Exercise the Director’s discretion to institute IPRs and PGRs
Provide a procedure for separate briefing on discretionary denial that will allow parties to address relevant issues for discretionary denial without encroaching on the page limit to address the merits of a case
Give petitioners the ability to pay additional fees for a higher word-count limit
Clarify that all settlement agreements, including pre-institution settlement agreements, are required to be filed with the Board.

To create clear, predictable rules where possible, as opposed to balancing tests that decrease certainty, the PTO is considering changes that would provide for discretionary denials of petitions in the following categories, subject to certain conditions and circumstances as discussed further in the Official Notice:

Petitions filed by certain for-profit entities
Petitions challenging under-resourced patent owner patents where the patentee has brought or is attempting to bring products to market
Petitions challenging patent claims previously subject to a final adjudication upholding the patent claims against patentability challenges in district court or in post-grant proceedings before the PTO
Serial petitions
Petitions raising previously addressed prior art or arguments
Parallel petitions
Petitions challenging patents subject to ongoing parallel litigation in district court.

The PTO also seeks comments on proposed threshold definitions that apply to one or more of these categories of petitions subject to discretionary denials. Those definitions set forth the criteria used to determine the following:

What constitutes a “substantial relationship” between entities sufficient to trigger or avoid discretionary denial
When claim sets are deemed to have “substantial overlap” with challenged claims
What constitutes “compelling merits” sufficient to trigger an exception to discretionary denial.

For example, one proposal with respect to the “substantial relationship” is a requirement that a patent owner and petitioner disclose anyone with an ownership interest in the patent owner or petitioner, any government funding related to the patent, any third-party litigation funding support, and any stake any party has in the outcome of the America Invents Act (AIA) proceeding or any parallel proceedings on the challenged claims.

Additional changes being considered by the PTO include the following:

Absent exceptional circumstances, requiring petitioners to file a stipulation that neither they nor their privy or real parties in interest have filed prior post-grant proceedings (PGRs, IPRs, covered business methods or ex parte reexaminations) on the challenged claims
If petitioners’ post-grant proceeding is instituted, requiring that [...]

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Nitpicking Allowed When Determining Statutory Damages

by Sarah Bro | Apr 13, 2023 | Copyrights

On the second round of a copyright dispute, the US Court of Appeals for the Seventh Circuit affirmed in part, reversed in part and remanded (again) to the district court to apply the “independent economic value test” handed down by the Court in the first iteration of the dispute to determine what constitutes as “one work” for purposes of calculating statutory damages where a jury finds infringement on multiple works registered in a single copyright application. Amy Lee Sullivan, dba Design King v. Flora Inc., Case No. 15-cv-298 (7th Cir. Mar. 31, 2023) (Flaum, Scudder, Eve, JJ.)

In 2013, graphic design artist Amy Sullivan sued herbal supplemental company Flora for copyright infringement after Flora used Sullivan’s illustrations in a manner exceeding the scope of the parties’ license agreement. The district court instructed the jury that Sullivan could receive separate statutory awards for 33 acts of infringement on 33 individual illustrations, which were the subject of two separate US copyright registrations, as compilations. The jury issued a statutory damages award of $3.6 million. Flora appealed.

In its decision on the first appeal, the Seventh Circuit adopted the independent economic value test to address the standard for determining whether multiple related works of authorship are each entitled to a separate statutory damages award, or if the related works constitute one compilation warranting only a single statutory damages award. Because the record in Sullivan’s case was insufficient to make that determination and assess proper damages, the Seventh Circuit remanded to the district court to determine whether Sullivan’s illustrations had standalone “distinct and discernable value to the copyright holder.”

On remand, the district court found that Flora waived several arguments challenging the independent economic value of certain of Sullivan’s illustrations, and therefore entered the same jury verdict. Flora appealed again.

After a lengthy analysis on the scope of remand, the Seventh Circuit found that the district court violated its mandate on remand because it did not put the independent economic value assessment to a jury, and instead decided the factual issue on the same record the appeals court had previously found insufficient. The Court then moved to its summary judgment analysis and reiterated the independent economic value test for considering whether Sullivan’s 33 illustrations constituted 33 individual works or instead were parts of two compilations. The Court articulated several relevant factors that went into its totality of the circumstances analysis, including whether the copyright holder marketed or distributed the works independently or as a compendium, whether the works were produced together or separately, how the works were registered for copyright protection and, ultimately, whether the market assigned value to the works.

The Seventh Circuit concluded that Flora raised facts and arguments relating to the independent economic value test that were within the scope of remand and not waived. Flora was not prohibited from arguing several primary positions. First, Flora noted that it provided Sullivan with only two invoices for both “illustration collections,” and Sullivan registered the illustrations in two compilation copyrights, [...]

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“Goods in Trade” in the Age of the Internet

by Lillian Spetrino | Apr 6, 2023 | Trademarks

The Trademark Trial & Appeal Board recently redefined what it takes in the age of the internet to meet the “goods in trade” requirement for registrability by holding that the Lens.com three-factor test is the universal legal standard for that inquiry. In re The New York Times Company, Serial Nos. 90106071, 90112154, 90112577, 90115155, 90115491, 90115337 (TTAB Mar. 30, 2023) (Lykos, J.) (precedential).

The New York Times applied to trademark six column names: “The New Old Age,” “A Good Appetite,” “Hungry City,” “Work Friend,” “Off the Shelf” and “Like a Boss.” The Examining Attorney issued a final refusal, explaining that the specimens did not demonstrate that the marks were used on separate goods in trade. The Times appealed. The question before the Board was whether the printed columns were independent “goods in trade.”

The Board reversed the refusal and held that The Times could register the marks. While past decisions had found that non-syndicated print newspaper columns failed to rise to the level of “goods in trade,” the Board reasoned that those decisions were based on the fact that such columns were only available to consumers as part of an overall purchase of a particular print publication—but in the age of the internet, that is no longer the case. The Board reasoned that determining whether a non-syndicated column is a good in trade should not depend on the format in which it is offered.

The Board held that going forward, the appropriate test to apply to non-syndicated print columns or sections in printed publications or recorded media is the three-part test found in the 2012 Federal Circuit Lens.com decision. The Federal Circuit test outlines the following factors to consider when evaluating whether an applicant’s goods are “goods in trade”:

Are the goods for which registration is sought a conduit or necessary tool useful only in connection with the applicant’s primary goods or services?
Are the goods for which registration is sought so inextricably tied to and associated with the primary goods or services as to have no viable existence apart from them?
Are the goods for which registration is sought neither sold separately nor do they have any independent value apart from the primary goods or services?

Applying the Lens.com factors to the print columns, the Board concluded that the columns were “goods in trade” even though they were not syndicated.

As to the first factor, the Board found that the columns were not just a conduit or necessary tool to get to The New York Times newspaper in print. The Board reasoned that the columns were not like an instructional manual or brochure telling the reader how to navigate The New York Times print edition.

Regarding the second factor, the Board found probative that a Google search of the proposed trademarks yielded the columns for which registration was sought. The Board found that this demonstrated that each individual print column was not so “inextricably tied to and associated with The New York Times print edition of the [...]

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PTO Reduces Small and Micro-Entity Fees

by Amol Parikh | Mar 30, 2023 | Patents

The US Patent & Trademark Office (PTO) issued a final rule reducing certain patent fees for small and micro-entities on March 22, 2023. The Federal Register notice can be found here. Small entity filing fee discounts are increased to 60% (from 50%) and micro-entity filing fee discounts are increased to 80% (from 75%). The fee reductions apply to PTO fees for filing, searching, examining, issuing, appealing and maintaining patent applications and patents.

The fee reductions were mandated by the Consolidated Appropriations Act, 2023 (the Act), which included the Unleashing American Innovators Act of 2022. The Act was signed into law by President Biden on December 29, 2022. The new PTO fee schedule can be found here.

Actual or Potential Consumers in Related Goods Context Doesn’t Require PURE Overlap

by Benjamin Ediger, Ph.D. | Mar 23, 2023 | Trademarks

The US Court of Appeals for the Federal Circuit reminded us that, in the context of related goods, the likelihood of confusion analysis does not require that actual or potential consumers of the goods be the same, but only that there be sufficient overlap. In re Oxiteno S.A. Industria e Comercio, Case No. 22-1213 (Fed. Cir. Mar. 9, 2023) (Dyk, Bryson, Prost, JJ.)

Oxiteno filed an intent-to-use trademark application for OXIPURITY, with its goods and services statement ultimately amended to include dozens of chemical products “for use in the pharmaceutical, veterinary, flavor and fragrance, and cosmetic fields.” The application was refused on likelihood of confusion grounds in view of FMC Corporation’s registered OXYPURE mark, largely because the hydrogen peroxide products covered by the OXYPURE registration moved through the same channels of trade as products recited in the Oxiteno application.

Oxiteno appealed the refusal to the Trademark Trial & Appeal Board. The Board analyzed likelihood of confusion using the DuPont factors and found the first four factors most relevant:

Factor 1: The similarity of OXIPURITY and OXYPURE. The Board concluded (as had the Examiner) that the two marks were “similar in sound, meaning and commercial impression,” and found that this factor strongly favored a likelihood of confusion.

Factor 2: The similarity of the covered goods. The Board agreed with the Examiner that the respective goods, while not the same, were sufficiently related to favor a likelihood of confusion finding.

Factor 3: The similarity of channels of trade. The Board reviewed the third-party websites that the Examiner considered particularly dispositive. The websites sold hydrogen peroxide goods covered by the OXYPURE mark and the chemicals Oxiteno intended to sell under the OXIPURITY mark. The Board concluded that the same sources manufactured FMC’s established products and Oxiteno’s intent-too-use products, and directly sold these products to largely overlapping industries.

Factor 4: “[t]he conditions under which and buyers to whom sales are made.” Of the four most relevant factors in this case, this was the only factor that the Board found to favor registration. The Board concluded that the consumers of the established and intent-to-use products would be sophisticated and not act on impulse.

Despite the potential consumers’ presumed sophistication, the Board found that factors 1 through 3 “rendered confusion likely” and thus affirmed the Examiner’s refusal. Oxiteno appealed.

Oxiteno argued that likelihood of confusion could not be found when the actual or potential consumers of the respective products covered by two marks were not the same, as with the relevant products here.

The Federal Circuit affirmed the Board, noting statements made by a company selling Oxiteno’s products that explained why almost every business is a potential purchaser of FMC’s OXYPURE hydrogen peroxide products. The Court also noted that FMC’s brochures stated that it sold its hydrogen peroxide products under OXYPURE and other brand names to the same key industries to which Oxiteno sold its products. The Court, therefore, concluded that substantial evidence supported that at least some [...]

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