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Last week in Luv n’ Care, Ltd. v. Laurain, the Federal Circuit put the lower court in time out and probably made Eazy-PZ, LLC (EZPZ) cry just a little bit harder. In this precedential decision involving U.S. Patent No. 9.462,903, the appellate panel vacated a Western District of Louisiana judgment of no inequitable conduct and affirmed the lower court’s judgment of unclean hands. However, the panel also vacated the lower court’s grant of partial summary judgment of invalidity. The parties will now have to get back to the table (or bench) to find out whether the ʼ903 patent is unenforceable and/or valid, and whether EZPZ’s behavior will result in further punishment.

The Invention

903-Patent-Self-Sealing-Integrated-Tableware-and-Dining-Mat

The ʼ903 patent describes and claims a surface contact self-sealing integrated tableware and dining mat. As shown in FIG. 5 of the ʼ903 patent, the self-sealing integrated tableware and dining mat includes a rubber-like planar portion 20 surrounded by an outer edge 22. A receptable 32 lies on the upper surface 26 and has a raised perimeter 28 defining at least one concavity 30 (e.g., in FIG. 5, the receptable 32 includes an oval portion 32B and a pair of bowls 34). The mat has an undersurface 24 disposed for sealable contact with an underlying surface to prevent lateral displacement of the mat. In other words, a toddler can’t move or flip the mat over without peeling the undersurface 24 from the underlying surface starting first at the outer edge 22.

The Back Story

Almost eight years ago, Luv n’ care, Ltd. and Nouri E. Hakim (LNC) sued Lindsey Laurain and EZPZ in the District Court of the Western District of Louisiana under the Lanham Act (and Louisiana’s Unfair Trade Practices and Consumer Protection Law) based on what LNC alleged to be “acts of unfair competition” by EZPZ. LNC also sought declaratory judgment that U.S. Design Patent No. D745,327 is invalid, unenforceable, and not infringed. A few months later, when the ʼ903 patent was issued and assigned to EZPZ, LNC added the newly issued patent to its declaratory judgment claim. EZPZ counterclaimed against LNC for infringement of the ʼ327 and ʼ903 patents and also alleged copyright, trademark, and trade dress infringement, violation of LUTPA, and unjust enrichment. 

LNC moved for partial summary judgment of invalidity of the ʼ903 patent, which the district court granted. In a bench trial, which involved only LNC’s allegations of inequitable conduct of the ʼ903 patent and unclean hands by EZPZ, the court found that LNC did not meet its burden with respect to unenforceability of the ʼ903 patent, but that EZPZ was barred from obtaining relief on any counterclaims remaining in the suit due to unclean hands based on litigation misconduct. Ouch. 

The Appeal

The issues on appeal were numerous:

  1. Whether the district court erred in finding that the doctrine of unclean hands bars EZPZ from obtaining relief on its claims;
  2. Whether LNC failed to prove the ’903 patent is unenforceable due to inequitable conduct;
  3. Whether the claims of the ’903 patent are invalid as obvious; and
  4. Whether the district court erred in denying LNC attorney fees and costs.

To dispose of the most straightforward issue first (with respect to this specific appeal only), the lower court’s obviousness finding was vacated and remanded because, according to the appellate panel, genuine disputes of material fact are evident from the record. In other words, obviousness was not ripe for summary judgment.

Turning back to the first issue, the appellate panel found no error in the district court’s holding and affirmed. More specifically, the panel rejected EZPZ’s argument that that EZPZ’s litigation misconduct did not rise to the level of “unconscionable acts” or have the requisite nexus to the ’903 patent infringement claims. In this vein, EZPZ’s misconduct, which included, for example, (a) lack of disclosure of patent applications related to the ’903 patent (at least one of which involved claim construction relevant to a disputed claim term in the ʼ903 patent) until well after the close of fact discovery and dispositive motion practice, (b) attempts to block LNC’s efforts to discover the inventor’s prior art searches, and (c) repeated evasive testimony, was deemed by the panel to be directly relevant to the development of LNC’s litigation strategy.

On the second issue, LNC gets a second bite at the apple now that the appellate panel vacated the district court’s holding that LNC failed to meet its burden with respect to inequitable conduct and remanded for further proceedings. To set the stage for the reprimand from the panel, the opinion first reminded the lower court that 1) to prove inequitable conduct, a party must show by clear and convincing evidence that the patentee a) withheld material information from the PTO, and b) did so with the specific intent to deceive the PTO, and that a) and b) are separate requirements. The lower court was then instructed to determine whether the acts by the patentee during prosecution amounted to affirmative egregious misconduct and were, therefore, per se material (without need to prove its impact on the PTO’s patentability determination). If the lower court determines that the acts by the patentee do not amount to affirmative egregious misconduct, then it must evaluate whether the PTO’s patentability decision may have differed if the patentee had accurately described the prior art and disclosed the video showing certain features of the prior art. In addition, since the panel vacated the lower court’s finding that other prior art was cumulative and, thus, non-material, the lower court has to revisit that issue. Moreover, the lower court must reevaluate EZPZ’s deceptive intent based on misconduct in the aggregate. In this aspect, the panel explained that,

[w]hen a person having a duty of candor and good faith has engaged in serial misconduct during the prosecution of the same or related patents, it is not enough for a court to consider each individual act of misconduct without also considering the collective whole.

Here, the district court did not apply this legal standard and, thereby, abused its discretion. The district court considered each of Ms. Laurain’s and Mr. Williams’ individual acts of misconduct in isolation and failed to address the collective weight of the evidence regarding each person’s misconduct as a whole.

The lower court was also scolded for its finding that EZPZ’s misrepresentations during prosecution amounted only to gross negligence. Rather, as the panel chastised, “[s]uch purposeful omission or misrepresentation of key teachings of prior art references may, instead, be indicative of a specific intent to deceive the PTO.”  

With respect to the final issue on appeal, the panel agreed with LNC that the court erred by not naming LNC as the prevailing party. This is highly relevant because, if a court deems a case exceptional, it may award attorneys’ fees to the prevailing party. As to LNC’s prevailing party status, the panel explained that LNC brought the case against EZPZ seeking a declaratory judgment of non-infringement, invalidity, and unenforceability of the ’903 patent. Since EZPZ came to the table without washing its hands, it became unable to enforce its’903 patent against LNC. As such, even though some of LNC’s claims were not successful (including its LUTPA claims) or dismissed without prejudice, and the unenforceability of the ʼ903 may change on remand, the inability for EZPZ to obtain relief from LNC for any alleged infringement of the ʼ903 patent, the ’327 design patent, and trade dress still puts LNC in the winning spot for the purposes of the prevailing party portion of the attorneys’ fees analysis. Since this prong is met, the attorneys’ fee award now hinges on whether the lower court on remand finds the case to be exceptional (at its conclusion and based on the totality of the circumstances).

Key Takeaways

The lower court has a lot of clean up to do on remand. On the other hand, EZPZ can do nothing to erase its acts and omissions during prosecution of the ʼ903 patent or during the litigation itself.  Indeed, with respect to the inequitable conduct allegation, the panel seems to be strongly suggesting to the lower court that the bevy of acts and/or omissions during prosecution do constitute inequitable conduct. 

And, with respect to attempting to predict the lower court’s ultimate finding on exceptionality, we can consult a few previous decisions from the Federal Circuit where exceptionality was found to be lacking. In this vein, an earlier post on OneSubsea, IP v. FMC Technologies, Inc., No. 22-1099 (Fed. Cir. May 23, 2023) teaches us that zealous advocacy alone is insufficient to make a case exceptional. In other words, an aggressive litigation strategy does not equate to the type of litigation misconduct typically required for a finding of exceptionality under 35 U.S.C. § 285.  Litigation misconduct rising to the level of a finding of unclean hands as we have here feels quite different than an aggressive litigation strategy. In addition, unlike in United Cannabis, Corp. v. Pure Hemp Collective Inc., No. 22-1363 (Fed. Cir. May 8, 2023), where Pure Hemp argued exceptionality based on an inequitable conduct allegation that was eventually voluntarily dismissed by Pure Hemp, LNC’s arguments do not seem to be “extremely weak” or “unsupported” such that they will not be found to satisfy 35 U.S.C. § 285. Indeed, from these two cases (and providing that the lower court on remand finds inequitable conduct), it seems that EZPZ’s bad behavior may result in LNC getting its legal bills paid.

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Earlier this week, the Federal Circuit granted Meril Life Sciences safe passage out of the infringement storm — otherwise known as Edwards Lifesciences — continuing to chase it (at least for now). More specifically, a divided panel of the Federal Circuit issued an opinion affirming the Northern District of California’s grant of summary judgment to Meril Life Sciences based on the finding that the importation of two heart valve systems fell within the safe harbor provision of 35 U.S.C. § 271(e).   

The Back Story

The dispute between Indian-based Meril Life Sciences and Edwards Lifesciences Corporation and Edwards Lifesciences, LLC (collectively Edwards) started almost five years ago in late fall 2019. The case involved patents owned by Edwards relating to artificial heart valves using in treating patients with aortic stenosis. While we focus here on only the patent infringement aspect of the parties’ dispute, Edwards also accused its competitor Meril Life Sciences of falsely advertising the safety and efficacy of the Myval transcatheter heart valve and misrepresenting clinical trial results.

Meril imported heart valves into the United States on two separate occasions. The first importation occurred in January 2017 to allow the University of Washington to conduct pre-clinical investigations using the heart valve. The second importation occurred in September 2019 when a Meril employee brought two heart valves with him on a flight to the U.S. for an industry conference held in San Francisco. The two samples were kept in a bag with the following declaration:

This is to inform you that the demo samples carried by Mr. Nilay Lad is for the demonstration purpose only. It is consist [sic] of Demo samples of Medical devices. They have no commercial value & hence it is not used for any sales purpose. The demo samples are NON-STERILE. NOT FOR HUMAN USE. NOT FOR SALE. NOT APPROVED FOR SALE IN UNITED STATES. FOR DEMO PURPOSE ONLY AT TCT 2019, SAN FRANCISCO.

The heart valves never left the bag once arriving in San Francisco and left the U.S. shortly thereafter to visit Europe with a second Meril employee. 

When Edwards brought suit about a month after the second importation, Meril took the position that the importations were covered by the safe harbor provision of 35 U.S.C. § 271(e)(1), which provides:

It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention . . . solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products.

More specifically, Meril argued that it never displayed the heart valve at the San Francisco conference, and that both importations were reasonably related to the development of eventual Food and Drug Administration submissions.

The district court granted summary judgment of non-infringement in favor of Meril finding that Meril’s importations fell within the safe harbor provision § 271(e)(1) and thus were not infringing acts. In doing so, the district court rejected Edwards’ arguments that Meril’s activities were for a commercial purpose. It instead determined that Meril’s activities (including preclinical studies) were all reasonably related to developing information for eventual submission to the U.S. Food and Drug Administration (FDA) and, as such, fell within the safe harbor regardless of the alleged purpose of those activities.

The Appeal

Edwards appealed, but only with respect to the second importation. The question before the panel was:

whether 35 U.S.C. § 271(e)(1)’s safe harbor applies when undisputed evidence shows Meril’s importation of two demonstration samples of its transcatheter heart valves to a medical conference was reasonably related to recruiting investigators for a clinical trial to support FDA approval.

The Federal Circuit panel held that safe harbor does apply. The majority explained that if Meril had displayed the valve at the conference, such demonstration would have been covered by the safe harbor. Likewise, even though Meril ultimately did not display the valve at the conference, any importation of the valve for such demonstration would fall within the safe harbor. In addition, since at the time of the conference Meril had taken noteworthy steps towards obtaining FDA approval, Meril’s importation of the valve to the conference was reasonably related to the submission of information to the FDA (including educating investigators at the conference about the valve). 

The Key Takeaways

Section 271(e)(1) is intended to allow competitors, before the expiration of a patent, to engage in what might otherwise be considered an infringing activity if the use is reasonably related to obtaining regulatory approval. In this aspect, determining whether alleged infringing acts fall under 35 U.S.C. § 271(e)(1)’s safe harbor focuses on acts or uses and not on purposes, intent, or motive. In fact, safe harbor shields conduct regardless of the phase of research, and even if the information is never ultimately submitted to the FDA as part of an approval application. Moreover, intent is irrelevant in determining whether an alleged infringing act is protected by the safe harbor. In other words, the why or how is not important. Rather, the relevant inquiry under 35 U.S.C. § 271(e)(1)’s safe harbor is whether the act or use was reasonably related to submitting information to the FDA. In short, if an otherwise infringing act is reasonably related to FDA approval, the safe harbor applies (regardless of the purpose behind the use). 

Meril may have won this round, but Edwards’ pulse is still strong. Indeed, the dispute between Edwards Lifesciences and Meril Life Sciences spans numerous jurisdictions and numerous patents. Moreover, in his dissent, U.S. Circuit Judge Alan D. Lourie agreed that the majority followed Federal Circuit precedent in reaching its decision but opined that the full circuit court should overturn that precedent.

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A new federal bill aims to put golf courses on “par” with other architectural designs by expanding federal copyright protection to golf courses. Copyright law in the United States, rooted in the U.S. Constitution, ensures protection for “original works of authorship fixed in any tangible medium of expression” (17 U.S.C. § 102(a)). This broad definition covers everything from literature to music to photographs, and — since a 1990 amendment to the Copyright Act — the design of buildings. This inclusion marked an acknowledgment of the creative and intellectual effort involved in architectural design, extending copyright’s reach to protect the fruits of architects’ labors.

Building on this tradition of evolving copyright protection to reflect the changing landscape of creative works, a new bill introduced in the 118th Congress seeks to further expand the ambit of copyright law. Known as the Bolstering Intellectual Rights against Digital Infringement Enhancement Act, or the “BIRDIE Act” (H.R. 7228), this proposed legislation aims to bring golf course designs under the umbrella of architectural works, with a focus on the ease of digital recreations. One rationale behind the bill is to offer protections for golf course designs, particularly in response to the expanding industry of golf simulators.

Introduced by U.S. Reps. Brian Fitzpatrick (R-PA) and Jimmy Panetta (D-CA), the bipartisan bill seeks to align the intellectual property rights of golf course architects with those afforded to other creative professions. Golf courses, with their intricate designs that blend functionality with aesthetic appeal, embody a form of artistic expression and architectural ingenuity. However, these designs are not expressly covered under the Copyright Act. The BIRDIE Act seeks to rectify this oversight by explicitly including golf course designs within the definition of “architectural works.”

Specifically, the bill proposes to amend Section 101 of Title 17 of the U.S. Code to cover not only the overall layout and design of a golf course but also its components, such as landscaping, irrigation systems, paths, greens, tees, practice facilities, bunkers, lakes, and topographic features. The BIRDIE Act’s provisions would be applicable to works created on or after December 1, 1990, as well as to unconstructed works embodied in unpublished plans or drawings as of that date. While some of the most renowned golf courses in the United States, like Augusta National and Pebble Beach, were established well before 1990, numerous courses have undergone updates or redesigns that could now qualify for copyright protection under the BIRDIE Act if enacted. Thus, a wide array of existing and future golf course designs would benefit from copyright protection, safeguarding the interests of creators against unauthorized use or replication.

Although the bill is limited to golf course designs, extending copyright protection in this manner may have broader implications. In 2011, the Seventh Circuit held in Kelley v. Chicago Park District that a “living garden,” even if arranged in an aesthetically pleasing manner, was not entitled to copyright protection. Like a garden, golf course design is not limited to inanimate objects or things, but instead involves both the changing landscape and the living flora that make courses memorable. If the BIRDIE Act became law, would that change the decision in Kelley, meaning a gardener could receive copyright for his garden? But that’s not all — Kelley has been relied upon by the Copyright Board more recently in decisions restricting copyright protection for works with “nonhuman authorship,” including works prepared by generative artificial intelligence. If passage of the BIRDIE Act undercuts Kelley, does it also undercut these recent decisions about AI authorship?

We leave those questions for the reader to ponder. For now, should this bill become law, it would open new avenues for protecting and leveraging intellectual property in golf course design, offering enhanced control over the use of these designs, and potentially unlocking new revenue streams through licensing. It also raises broader doctrinal questions about just who or what qualifies as the “author” of a work. Maybe one day soon, golf balls will no longer just be lodged in an ordinary bunker; instead, golfers may declare that the ball is ensnared in an original work of authorship, fixed in a tangible medium of expression. While this may not alleviate the frustrations of hitting an approach shot from a sand trap, it would empower golf course designers and architects to prevent unauthorized and unfettered recreations of their designs.

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The Federal Circuit just “re-issued” its precedential decision in Great Concepts, LLC v. Chutter, Inc. (No. 2022-1212), where it had previously reversed the USPTO’s cancellation of a registered trademark. There was no substantive change in this modified version of the prior opinion where the majority held that the Trademark Trial and Appeal Board lacked the power to cancel a trademark registration based on fraud in a declaration of incontestability. However, the reappearance of this decision, the operative facts, and potential action taken by the TTAB on remand invites a bit more discussion.

A Somewhat Quick Recap of the Backstory and Appeal

A more detailed version of the back story and discussion of the appeal can be found in our last post. In short, Great Concepts beat Dan Tana (by a few years) to the trademark office to register its DANTANNA’S mark (Registration No. 2929764) for restaurant services. As a result, the USPTO refused registration of DAN TANA for restaurant services and Dan Tana filed a cancellation petition of DANTANNA’S based on its common law DAN TANA mark, which for the reasons explained in our previous post, was dismissed with prejudice.

About five years later, Dan Tana’s successor, Chutter, Inc., picked the fight back up and filed a new petition to cancel the DANTANNA’S registration, alleging that Great Concepts’ 2010 Section 15 declaration constituted fraud warranting cancellation of its registration under Section 14 of the Lanham Act. Briefly, the fraud angle related to the portion of the Section 15 affidavit explicitly stating that no proceedings involving the DANTANNA’S mark were pending, which was inaccurate based on Civil Action No. 1:08-CV-975-TWT. When the TTAB agreed with Chutter and issued a cancellation order, Great Concepts appealed to the Federal Circuit.

The Federal Circuit reversed and remanded to the TTAB because the alleged fraudulent statement was not made while obtaining the registration, but rather when attempting to establish incontestability, and the TTAB lacked the power to cancel the registration. In this vein, the majority did not reach the issue of whether Great Concepts’ former attorney acted fraudulently.

A Little More on the Next Phase at the TTAB

The TTAB just received the Federal Circuit’s judgment, so there is nothing final to report yet. However, it is clear that, while the registration cannot be cancelled by the TTAB (at least for fraud), the TTAB now must determine the impact of the fraudulent Section 15 declaration on the incontestability status of Great Concepts’ mark. Reading the tea leaves (and going off of the majority’s “encouraging” comments set forth below), it is likely that Great Concepts will no longer enjoy incontestable status:

we further agree that some significant sanction is ‘necessary to deter the further development of such a cavalier attitude toward statements in affidavits under section 15.’

. . .

We do not, however, think our opinion means that committing fraud in connection with obtaining incontestability becomes a costless offense.

. . .

Loss of incontestable status is not nothing…

As a reminder, when a trademark has incontestable status, the registration itself is conclusive evidence of the validity of the mark, the ownership of the mark, and the owner’s exclusive right to use the registered mark in commerce. Put another way, incontestable status means something.  In fact, if a third party is sued for trademark infringement of an incontestable mark, it is limited in its defenses since it cannot challenge the mark on the grounds that it is merely descriptive or that the infringing brand is more recognizable. 

In addition, the TTAB has a fresh opportunity to consider whether other sanctions should be imposed on Great Concepts (or its former attorney). In this aspect, the majority appears to be advocating for some further action by the TTAB on remand:

More importantly, nothing in this opinion should be read to mean that the Board is powerless to address fraud, including fraud committed solely in conjunction with the filing of a Section 15 declaration… [including that] the Board may sanction any attorney who commits fraud before it.

While not directly on point, the PTO’s Office of Enrollment and Discipline has, in the past, brought the hammer down on attorneys for not adequately understanding the USPTO trademark signature requirements and failing to take reasonable steps to ensure filings were signed in accordance with USPTO trademark signature rules. In one such case, this type of violation of USPTO Rules of Professional Conduct, resulted in the following sanction:

  • Public reprimand;
  • Probationary period of 12 months; and
  • Potential 12-month suspension if any provision of the Agreement, Final Order, or the USPTO Rules of Professional Conduct is violated during the probationary period.

Under the facts of this case, Great Concepts’ former attorney could receive disciplinary action at least on par with — if not worse than – that sanction, considering the lingering bad taste that the TTAB might have right now. We’ll keep you posted on the TTAB’s next steps.

In the meantime, it is worthwhile to reiterate that affidavits should be undertaken only after appropriate investigation and due diligence and with a clear appreciation that the statements made have serious consequences both from a potential loss of rights for the mark holder and sanctions and penalties for the declarant. Indeed, since the majority’s decision did not disturb the TTAB’s holding that “reckless disregard satisfies the requisite intent for fraud on the USPTO in trademark matters,” we may see more fraud claims in the future based on reckless disregard for the truth of the statements being made. 

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Is Travis Kelce’s newfound status as Taylor Swift’s boyfriend enough to meet the United States Patent and Trademark Office’s (USPTO) “acquired distinctiveness” standard? He plans to find out with the help of Time Person of the Year, Taylor Swift. Swift is no stranger to using intellectual property to effectively protect her brand and music. In fact, the Eras Tour and “Taylor’s Version” are a seemingly successful attempt at reclaiming the rights to her music. Not only does she own the copyrights to her music, but she has also filed multiple trademark applications for phrases such as 1989 TAYLOR’S VERSION and LOVER, among others.

Rumor has it that Swift advised Travis Kelce to file trademark applications to protect his name in addition to other phrases. True or not, Kelce has filed five trademark applications for: (1) TRAVIS KELCE, his own name; (2) “FLIGHT 87”, in reference to his football jersey number; (3) “ALRIGHT NAH”, his signature catch phrase; (4) “KILLA TRAV” his Instagram name; and (5) “KELCE’S KRUNCH,” which could be used to build on a cereal collaboration Kelce had with Hy-vee. These applications span various classes to include items such as “printed posters,” “hoodies,” “bobblehead dolls,” and “entertainment services,” among other things. The USPTO has not yet rendered its response to any of Kelce’s applications.

Kelce will likely face several issues in prosecuting these applications. First, a person can register their whole name, nickname, or insignia that clearly references a real person’s identity where the person referred to expressly consents to the registration. The name or likeness of a living person cannot be used as a trademark without express consent because the right of publicity prevents commercial exploitation of a person’s identity.  It can be expected the USPTO will require Kelce to submit a consent statement for at least TRAVIS KELCE and KILLA TRAV.

Second, where a mark is “primarily merely a surname,” the USPTO will reject the application unless the applicant can show acquired distinctiveness. In registering KELCE’S KRUNCH, the USPTO will likely require Kelce to demonstrate that “Kelce” has become distinct enough to signify the source of the goods or services. Adding “Krunch” may enable Kelce to overcome a rejection that his applied for mark is “primarily merely a surname” if he can show that the mark is not perceived by the public as “primarily merely a surname.” Certainly, a celebrity can become a distinctive and recognizable brand through attention and fame, however, Kelce may face an additional hurdle since his brother, Jason Kelce, is also a well-known football player in the NFL.  While Kelce was famous on his own accord before his Swiftie Era, his relationship status with Swift has elevated the distinctiveness of his brand. In fact, almost every television broadcast of Kansas City Chiefs games features shots of Swift enthusiastically cheering on Kelce. Notably, Kelce would not be the first professional athlete to attempt to trademark their name. Tom Brady has filed multiple trademark applications for his own name, TOM BRADY, for various goods and services, one of which was recently granted by the USPTO.

However, not only will Kelce have to demonstrate distinctiveness of the marks, but he will have to show that the applied for mark refers to the source of a product or service, along with the fact that the goods or services applied for have been commercialized. Kelce has currently submitted Section 1(b) “intent to use” applications. Ultimately, assuming the USPTO agrees that the applied for marks are distinctive and adequately refer to the source of the goods or services, he will need to show that the applied for mark has been used in commerce before the USPTO will allow the mark to register. An intent to use application allows him time to begin the trademark review process while he works towards putting the marks to use in commerce.

While most of us won’t have the chance to skyrocket to fame as Taylor Swift’s current plus one, it is important to consider the distinctiveness of a proposed mark and the appropriate goods or services for registration in evaluating potential branding for a business. It can be helpful and have the potential to be a huge cost savings to evaluate potential trademarks before committing dollars to branding your business. We will have to wait and see if Kelce’s applications pass USPTO muster.

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With the U.S. Supreme Court beginning a new session, many are wondering what new issues the Court will address this term. One case the Court is scheduled to hear involves the relationship between the Lanham Act and First Amendment. Specifically, the Court will determine whether Section 1052(c) of the Lanham Act, which prohibits individuals from registering for a trademark that includes the name of a living person without their consent, violates the free speech clause of the First Amendment.

A Little Background

In 2018, California attorney Steve Elster applied for a trademark for the slogan “TRUMP TOO SMALL.” The U.S. Patent and Trademark Office (PTO) rejected Elster’s application, citing Section 1052(c) of the Lanham Act. In response, Elster argued that refusing his trademark application violated his free speech right to criticize public officials. The PTO was not persuaded by Elster’s First Amendment claim, deeming it irrelevant whether the trademark was intended to be an exercise of free speech rights or political commentary, because there is “no statutory or case law carve out for political commentary.” Elster appealed to the PTO’s Trademark Trial and Appeal Board (TTAB), again arguing that the Lanham Act’s prohibition was an unconstitutional restriction on free speech. The board denied Elster’s appeal.

The Appeal

Elster then appealed the board’s decision to the U.S. Court of Appeals for the Federal Circuit. In February 2022, a three-judge panel reversed the TTAB’s decision and found that applying Section 1052(c) of the Lanham Act to prohibit Elster’s trademark application was unconstitutional content-based discrimination. Because trademarks are considered a form of private speech, the Federal Circuit’s decision focused on “whether the government has an interest in limiting speech… if that speech involves criticism of government officials.” According to the panel, Section 1052(c) must be subject to some form of heightened constitutional scrutiny. In this regard, the panel found that statute would fail to satisfy both strict and intermediate scrutiny “because the government does not have a privacy or publicity interest in restricting speech critical of government officials or public figures in the trademark context…” Therefore, while the Court held that the application of Section 1052(c) to Elster’s trademark was unconstitutional, the Court did not decide whether the statute itself was unconstitutional. However, the Court did suggest as much. Specifically, the panel commented that the statute “raises concerns regarding overbreadth… [and] a substantial number of [it’s] applications would be unconstitutional.”

The PTO appealed the Federal Circuit’s decision, and on June 5, 2023, the Supreme Court granted the government’s petition for a writ of certiorari. The Court is scheduled to hear oral arguments November 1, though how the Court will rule remains to be seen. This case highlights the juxtaposition of protecting free speech while ensuring that individuals retain their privacy and publicity rights. Whatever the Court decides, the decision will have consequences for both First Amendment and intellectual property law. Follow Bradley’s IP IQ blog for updates after oral arguments in November.

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In Corephotonics, Ltd. v. Apple Inc., the Federal Circuit partially signed off on Apple’s win before the Patent Trial and Appeal Board (PTAB) invalidating a number of patents owned by Corephotonics relating to dual-aperture cameras and methods of using the images from both lenses when zooming while capturing video to prevent “jumping” (U.S. Patent Nos. 9,661,233, 10,230,898, 10,326,942, and 10,356,332 referred to here as the Camera Patents). One of the main questions on appeal, according to Corephotonics, was whether the PTAB erred in finding Apple’s prior art analogous to the Camera Patents. Unfortunately for Corephotonics, the Federal Circuit did not see the image in the same way as presented by the patent owner.

Pre-Appeal

After Corephotonics sued Apple for infringement of the Camera Patents in the Northern District of California in 2017, Apple shot back and filed a number of inter partes review (IPR) petitions challenging the validity of all of the claims asserted by Corephotonics (Apple IPRs). In all of its petitions, Apple included grounds for unpatentability citing a combination of prior art references, including U.S. Patent No. 8,081,206 to Martin and U.S. Patent Publication No. 2012/0026366 to Golan. Briefly, Martin teaches ways to make 2D images look like 3D images by “critically aligning images” captured from different points of view. Golan teaches camera systems with a one-time calibration process that corrects for the different points of view of two lenses. Specifically, Golan’s calibration technique stops an image from “jumping” while digitally zooming in or out (i.e., when switching from a wide lens to a telephoto lens and vice versa). 

Despite the fact that Corephotonics filed preliminary responses to the petitions, Corephotonics waited until after the PTAB instituted the Apple IPRs to complain about purported flaws in Apple’s analogous art arguments — namely that Apple’s contention regarding the same field of endeavor was at least ambiguous because it appeared that Apple was comparing Martin and Golan to each other and not the Camera Patents. In response to Corephotonics’ criticism, Apple sharpened its position in its reply briefs stating that the Camera Patents, Golan, and Martin are all in the same field of endeavor. Apple also argued that Martin and Golan were pertinent to the problem faced by the inventors of the Camera Patents. In its final written decision, the PTAB agreed that Martin was “reasonably pertinent to the problem” and ultimately found all challenged claims of the Camera Patents obvious over Martin and Golan (along with other references).

The Appeal

On appeal, Corephotonics argued that the Board improperly (procedurally) allowed Apple to cure its legally flawed analogous art contention made in its petitions and then further erred by making analogous art findings that were different from what Apple promoted in its petition and reply. The Federal Circuit reviewed the PTAB’s legal determinations de novo.

Recall that, according to Corephotonics, Apple first made its analogous art argument in its replies — not its petitions. While Corephotonics believed the lateness of Apple’s analogous art arguments to be an issue, the Federal Circuit did not agree. Instead, the appellate panel clarified that “petitioners may use a reply to respond to such [deficiencies in analogous art] arguments raised by patent owner.” More specifically, Apple’s arguments and evidence in its replies were not considered to be part of a new theory of unpatentability, but were instead responsive to Corephotonics contentions regarding analogous art. In fact, as further explained by the appellate panel,

[t]here is nothing “entirely new” about arguing that the same combination of prior art references identified in a petition as being in the same field of endeavor as the patent being challenged are also pertinent to the same problem faced by the inventor of the challenged patent.

In other words, the appellate panel found no procedural error in the PTAB’s acceptance of Apple’s analogous art arguments at the reply phase because those arguments merely bolstered its previous arguments. In contrast, had Apple brought forth a new prior art reference in its replies for a contention that was meaningfully distinct from what was identified in the petitions or that was not in its petitions at all, the PTAB would not have been able to invalidate the Camera Patents  based on that new prior art because Apple would have violated the “newness” and “responsiveness” procedural restrictions. 

Corephotonics also substantively disagreed that Martin and/or Golan were analogous art.    Since the determinations that each of the cited prior art was analogous art are issues of fact, the Federal Circuit reviewed the PTAB’s findings for substantial evidence. While the appellate panel deemed the PTAB’s determination that Golan was in the same field of endeavor (and, thus, analogous art) to be supported by substantial evidence, it found the PTAB’s determination that Martin was reasonably pertinent to the problem to be quite blurry. In this aspect, because the PTAB made an undisputed error when providing its conclusion regarding Martin’s analogous nature, the Federal Circuit remanded to the PTAB for it to explain why Martin is (or is not) analogous art and to determine how this finding affects its overall obviousness conclusion. 

The PTAB’s overall obviousness conclusion may change in part or as a whole if it did, as suggested by the Federal Circuit, confuse “fields of view” and “points of view” when assessing the problem addressed by Martin and its analogous nature and Martin then becomes unavailable as prior art. Or, the PTAB may explain that its error was indeed “a mere ‘typographical error’ and . . . harmless,” rationalize why Martin remains analogous art, and leave its obviousness conclusion intact. We will have to wait to see once the picture more fully develops.

Nevertheless, this decision provides some good reminders regarding analogous art and obviousness:

  • Prior art references are applicable to the obviousness inquiry only when they are analogous to the claims being challenged. This decision demonstrates why it is important to focus on even the smallest of distinctions when arguing that a reference is or is not analogous art since it may make a difference in whether a reference is able to be used in an obviousness argument.
  • Showing that a reference is analogous requires satisfying at least one of two separate tests: “(1) whether the art is from the same field of endeavor, regardless of the problem addressed and, (2) if the reference is not within the field of the inventor’s endeavor, whether the reference still is reasonably pertinent to the particular problem with which the inventor is involved.” While field of endeavor and pertinent problem are separate tests used to determine whether a reference is analogous prior art, these two tests do not provide independent, different grounds for obviousness or new rationales.
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On Wednesday, a divided panel of the Federal Circuit issued a precedential decision reversing the USPTO’s cancellation of a registered trademark (Great Concepts, LLC v. Chutter, Inc., No. 2022-1212).  As detailed in the opinion, the majority held that the Trademark Trial and Appeal Board lacked the power to cancel a trademark registration based on fraud in a declaration of incontestability.

The Back Story

In 2003, Great Concepts applied to register DANTANNA’S for restaurant services.  In March 2005, the mark was registered (Registration No. 2929764).  Then, in June 2005, Dan Tana applied to register DAN TANA for restaurant services.  The USPTO refused registration at the end of the year based on the DANTANNA’S registration. 

In June 2006, Dan Tana argued against the refusal and also filed a petition to cancel DANTANNA’S registration alleging a likelihood of confusion with Dan Tana’s common law DAN TANA mark for the LA-based restaurant.  According to the petition, Dan Tana’s is known as a “legendary Hollywood hotspot” and the “ultimate LA hangout” with patrons such as George Clooney, Matt Damon, and Brad Pitt.  To even things out—for those that have not had the opportunity to visit any of the Atlanta area DANTANNA’S—the self-described “upscale sports restaurants” offer a tasty, braised beef short rib.  In any event, three and a half years later, in December 2010, the TTAB dismissed the cancellation proceeding with prejudice “based on petitioner’s apparent loss of interest” after Dan Tana failed to respond to an order to show cause.

Tana had also filed a civil action for trademark infringement against Great Concepts in the Northern District of Georgia (Civil Action No. 1:08-CV-975-TWT) in 2008.  The district court granted summary judgment in favor of Great Concepts, which was ultimately upheld on appeal by the Eleventh Circuit and made final in August 2010 (and likely the cause for Dan Tana’s “loss of interest” in the cancellation proceeding). 

Earlier in 2010, Great Concepts’ former counsel had submitted a combined Section 8 and 15 declaration that sought to both maintain the DANTANNA’S registration (under Section 8) and obtain incontestable status (under Section 15).  The Section 15 affidavit, among other statements, explicitly stated that no proceedings involving the DANTANNA’S mark were pending:

The mark is in use in commerce on or in connection with the goods and/or services identified above, as evidenced by the attached specimen(s) showing the mark as used in commerce. The mark has been in continuous use in commerce for five (5) consecutive years after the date of registration, or the date of publication under Section 12(c), and is still in use in commerce. There has been no final decision adverse to the owner’s claim of ownership of such mark, or to the owner’s right to register the same or to keep the same on the register; and there is no proceeding involving said rights pending and not disposed of either in the U.S. Patent and Trademark Office or in the courts.

However, as previously discussed, the cancellation proceeding (and related litigation) were still ongoing.

In 2015, Chutter, Inc. (Dan Tana’s successor) filed a new petition to cancel the DANTANNA’S registration, alleging Great Concepts’ 2010 Section 15 declaration constituted fraud warranting cancellation of its registration under Section 14 of the Lanham Act.  The TTAB agreed, found Great Concepts’ prior counsel knowingly made false statements with intent to deceive the USPTO, held that the fraudulent declaration enabled Great Concepts to obtain a new right—incontestability, and issued a cancellation order.  Great Concepts appealed the TTAB’s cancellation of its DANTANNA’S mark to the Federal Circuit.

The Appeal

The appeal primarily centered around how Section 15 and Section 14 relate to one another.  Obtaining “incontestability” status for a mark requires compliance with Section 15 of the Lanham Act (15 U.S.C. § 1065). Specific to the facts here, the statute requires the mark owner to file “an affidavit … with the Director” that includes a number of required statements.  One such statement is that “there is no proceeding involving said rights pending.”  As discussed above, Great Concepts’ Section 15 affidavit made this statement (even though the cancellation proceeding was still pending).

Section 14 of the Lanham Act (15 U.S.C. § 1064(3)) gives the USPTO the power to act on a petition to cancel a registered trademark on a number of bases including, but not limited to, whether the “registration was obtained fraudulently.”  Recall that the TTAB cancelled DANTANNA’S because it found that Great Concepts’ prior counsel knowingly made false statements with intent to deceive the USPTO and held that the fraudulent declaration enabled Great Concepts to obtain a new right—incontestability.  Thus, the question on appeal was whether Section 14 gave the USPTO the power to cancel a registration for fraudulent acts committed while attempting to establish incontestability.

The majority found that Section 14 statute permits cancellation only for fraudulent acts taken while obtaining the registration—not for establishing incontestability.  More specifically, the majority explained that, even though the Section 8 and 15 filings were combined, the fraudulent statement in question pertained only to the Section 15 declaration.  As “a Section 15 declaration only relates to a mark’s incontestability, not its registration,” Section 14 does not apply here.  By way of further explanation, the majority distinguished a scenario where a fraudulent statement was made on renewal under Section 8 because, in that case, the registration itself would be compromised.  Long story short, the TTAB exceeded its power.

Notably, in the dissent, Judge Reyna argued that the majority’s statutory interpretation improperly restricts the TTAB’s ability to combat fraud before the agency.  The majority addressed this argument and passed the baton to Congress:

Even if it were true that our decision would result in an unwelcome increase in fraud perpetrated against the Board – which, again, we do not believe it will – we would nonetheless adhere to the unambiguous language of the statute.

. . .

Whether we would prefer a different result be reflected in the statute is irrelevant to our responsibility to decide the case before us based on the law as it exists.

The Warning

This opinion also serves as a cautionary tale for those filing affidavits with the USPTO.  While checking a box or including a form paragraph for trademark practitioners and corporate declarants certainly seems like a relatively easy and/or harmless task, the statements that are being averred have real consequences both from a potential loss of rights for the mark holder and sanctions and penalties for the declarant.  Indeed, if the warning that a “Section 15 declaration is filed under penalty of perjury . . .  (‘The undersigned being hereby warned that willful false statements and the like are punishable by fine or imprisonment, or both, under 18 U.S.C. Section 1001.’)” is not enough to garner attention, the majority also noted that the USPTO has other means for punishing fraud, including sanctions and penalties against an attorney declarant.

In its final decision in the 2015 cancellation proceeding filed by Chutter, the TTAB explained that “reckless disregard satisfies the requisite intent for fraud on the USPTO in trademark matters.”  So, what it is reckless disregard in this context?  For one, “failing to make an appropriate inquiry into the accuracy of the statements.”  According to the TTAB, this qualifying failure applies even if the declarant is not aware of the legal requirements for a particular affidavit.  In fact, the TTAB explained that Great Concepts’ attorney acted with reckless disregard because he “paid little, or no, attention to the document he was signing under oath and thereby disregarded the significance of the benefits he was obtaining for his client.” 

Moreover, the TTAB considered the failure to attempt to correct the false statement as related to the assessment of whether the requisite intent to deceive the USPTO was met.  Indeed,

a person can commit fraud upon the Office by willfully failing to correct his or her own misrepresentation, even if originally innocent, as long as that person subsequently learns of the misrepresentation, and knows that the Office has relied upon that misrepresentation in conferring a substantive benefit upon that person to which the person knows it is not entitled.

In other words, a cavalier approach toward statements in affidavits is risky business and could result in sanctions, actions (as permitted under 37 CFR 11.18(c)) or criminal prosecution.

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With only two precedential IP decisions coming down from the Federal Circuit in the second half of September, pickings were a little slim for blogging. That said, the opinion in Baxalta v. Genentech (2022-1461) — drafted by Chief Judge Kimberly Moore and joined by Judges Raymond Clevenger and Raymond Chen — is an important one to cover since it demonstrates how the court interpreted and applied the Supreme Court’s recent enablement decision in Amgen v. Sanofi.

Recall in Amgen, the Supreme Court articulated its view that 35 U.S.C. § 112 plainly requires that “[i]f a patent claims an entire class of processes, machines, manufactures, or compositions of matter, the patent’s specification must enable a person skilled in the art to make and use the entire class” and warned that “the more a party claims, the broader the monopoly it demands, the more it must enable.” In this vein, the court characterized the Amgen claims as an attempt to “monopolize an entire class of things defined by their function” even though the class was much broader than the 26 expressly disclosed antibodies and opined that Amgen’s “roadmap” for obtaining antibodies other than those expressly disclosed “amount[ed] to little more than two research assignments.”

The Baxalta claims at issue here were also related to antibodies, i.e., claims covering monoclonal antibodies that could provide an alternative treatment for the blood-clotting disorder Hemophilia A. Claim 1 of U.S. Patent No. 7,033,590 reads as follows:

An isolated antibody or antibody fragment thereof that binds Factor IX or Factor IXa and increases the procoagulant activity of Factor IXa.

The District of Delaware granted summary judgment of invalidity for lack of enablement under 35 U.S.C. § 112. On appeal, Baxalta argued that summary judgment was improper because skilled artisans could make and identify claimed antibodies (with new variable regions) using the hybridoma technology disclosed in the ’590 patent and that such routine screening does not amount to undue experimentation.

The Federal Circuit disagreed. It explained that the hybridoma methods in the ʼ590 patent only disclosed 11 antibodies by amino acid sequence that had the claimed binding properties and that these 11 antibodies amounted to “only 1.6% of the thousands of screened antibodies” resulting from the hybridoma protocol employed by the inventors. Yet, the scope claims at issue could cover “millions of potential candidate antibodies.” As such, the disclosure of only 11 antibodies that possessed the two required functions in the claims and the lack of explanation as to why those 11 antibodies perform the claimed functions (or why the other screened antibodies do not) does not allow a skilled artisan “to predict which of these potential millions of antibodies would have the claimed function.” In fact, according to the Federal Circuit,

[t]he only guidance the [ʼ590] patent provides is ‘to create a wide range of candidate antibodies and then screen each to see which happen to bind’ to Factor IX/IXa and increase procoagulant activity

that, in the eyes of the appellate panel, amounts to nothing more than the type of trial and error found in Amgen to be incapable of satisfying the enablement requirement.

To summarize with the exact words of the appellate panel, “[t] he facts of this case are materially indistinguishable from those in Amgen.” As such, it is no surprise that the Federal Circuit upheld the invalidity finding by the lower court. However, we will need to wait and see how the appellate court will interpret and apply Amgen to different types of inventions. For example, the Supreme Court in Amgen did provide that “[a] specification may call for a reasonable amount of experimentation to make and use a claimed invention, and reasonableness in any case will depend on the nature of the invention and the underlying art.” 

In short, while more cases from the Federal Circuit would be helpful to fully flesh out the Amgen enablement standard, the panel did make it clear that it “see[s] no meaningful difference between Wands’ ‘undue experimentation’ and Amgen’s ‘[un]reasonable experimentation” standards’” and that it “do[es] not interpret Amgen to have disturbed our prior enablement case law, including Wands and its factors.”  Given that the Amgen decision pretty much solidified the Federal Circuit’s general trend of limiting claim scope to what is (mostly) expressly disclosed, it may not be reasonable to expect that genus-type claims in other types of inventions will fare much better.

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As artificial intelligence (AI) grows in prevalence and accessibility, it is important for employers to consider the implications of its use by their employees. One method of anticipating and quelling potential liabilities that may arise is through deploying certain internal AI policies. This article focuses on certain issues employers should strongly consider when drafting and implementing an internal AI policy. In later articles, the use of AI in software development, intellectual property issues, and confidentiality concerns, among other issues, will be explored.

What is AI?

As the modern workplace becomes increasingly more open to and reliant on the use of technology generally referred to as AI for daily tasks, this begs the question, what exactly is AI? At present, there is no uniform definition of AI, however, it is generally understood to refer to computer technology with the ability to simulate human intelligence in order to analyze data and reach conclusions, find patterns, and predict future behavior along with the ability to learn from such data and adapt its performance over time. At its core it is computer software programed to execute algorithms. Additionally, generative AI is a certain type of AI that uses unsupervised learning algorithms to create new digital content based on existing content, which can include things such as images, video, audio, text, or computer code.

Employer Considerations

Employers have many things on their plate, which now includes managing how their employees use AI in the workplace. In looking, for example, specifically at healthcare IT companies, the types of employees can generally be divided into roughly three categories: (1) those involved in the administrative side of the business, (2) those involved in healthcare technology services, and (3) those involved in software development. The considerations relevant to developing an AI policy applicable to the administrative side (human resources, the C-suite, and marketing) are detailed below, while technology services and software specific concerns will be addressed in later editions of this series.

Human Resources

Companies are increasingly using AI for certain repetitive, and data-based human resources and employee management functions. Certain common uses include recruiting, hiring, and onboarding new employees. While it can be more efficient and potentially cost reducing to automate these tasks through the use of AI, there are certain practical, legal, and regulatory challenges that all employers should consider.

Arguably one of the more contentious uses of AI is in the screening, interviewing, and hiring process. While AI is revered for its ability to streamline these processes by automatically ranking, eliminating, and selecting candidates with minimal human intervention, employers should not get lost in the ease of this process without considering the host of federal, state, and local anti-discrimination laws that loom over this process. Violation of these laws could be detrimental to a business.

While some argue that AI programs actually reduce bias in these sorts of decision-making scenarios, it is important to remember that AI is a product of its data set. AI may take into account certain things employers are not legally allowed to consider during the hiring process such as an applicant’s age, race, religion, sexual orientation, or genetic information. This is because certain AI tools may use the internet, social media, or certain public databases to collect information. Further, it is possible that based on the data set and algorithms used, AI recruiting programs may duplicate past discriminatory practices.

Not only are employers exposed to discrimination claims, but they are also exposed to disability discrimination claims. In May 2022, the Equal Employment Opportunity Commission issued a Technical Guidance on AI decision-making tools and algorithmic disability bias that identifies the following three ways in which an employer using these tools may violate the ADA:

  1. Failure to provide a reasonable accommodation needed for the algorithm to rate the individual accurately.
  2. Using a tool that “screens out” a disabled individual (whether intentionally or unintentionally) when the individual is otherwise qualified to do the job, with or without a reasonable accommodation. This may occur if the disability prevents the individual from meeting minimum selection criteria or performing well on an online assessment.
  3. Using a tool that makes impermissible disability-related inquiries and medical examinations.

While no federal law currently regulates the specific use of AI during the recruiting or hiring process, it is necessary to evaluate state and local laws and regulations when drafting internal policies for AI use in human resources. As these laws and regulations are rapidly changing, it is also necessary to monitor changes to state and local laws to ensure all recruiting and hiring practices comply with any applicable laws and regulations so as to protect a business from any liability resulting from any claims of discrimination or other legal issues.

C-Suite

When it comes to the C-Suite, there are certain higher level concerns at play. It is necessary to outline how, and more importantly how not, to use AI as a C-Suite member. One major concern is confidentiality, to include protecting valuable trade secrets. If an employee inputs confidential information into a generative AI program, that information becomes part of the AI program’s data set and ultimately its education. That information can then be recalled or used by the AI program to provide another user, potentially someone outside of the company, that information. This exposure can be detrimental to a business.

This can be particularly problematic when trade secrets are involved. One key to maintaining trade secret protection is to preserve the secrecy of the information. Once that information is input into an AI program, it is likely no longer a trade secret. This can cause a huge hit to a company that holds a lot of value in a trade secret or even in confidential information. As such, it is important to place boundaries and rules regarding how AI programs can be used by employees, but specifically C-suite members who would generally have higher level access to confidential information.

Marketing

Conversely, the marketing team is an example of an internal team that may be able to use AI programs with lesser risk to a company. Generative AI tools can be especially helpful and time saving for a marketing department. Especially when it comes to healthcare IT companies, the marketing team is generally the farthest removed from confidential patient information. While certain policies should be put in place for outlining proper use of generative AI tools, such as ChatGPT, these restrictions can be of lesser concern to employers.

Further, while concerns regarding intellectual property and AI are still early on in their journey through the courts, it is prudent to anticipate any intellectual property issues, specifically regarding copyright or trademark ownership, prior to allowing a marketing team to use AI tools. This helps to avoid issues and confusion at a later date and can negate the need for costly litigation in the future.

As AI programs become more common in the workplace, it is important for employers to begin implementing appropriate internal policies for employee management to avoid costly liability. These internal policies are just one small aspect of properly onboarding and using AI tools within a business. Other potential concerns will be highlighted in later editions of this multi-part series.