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In a recent precedential decision, the Federal Circuit shot down arguments from appellants Phillip Morris Products S.A., Phillip Morris USA, Inc. and Altria Client Services LLC (Phillip Morris) that challenged the ban on its imported electronic cigarettes handed down from the International Trade Commission (ITC).

The fight between the tobacco competitors started around this time three years ago in 2020 when RAI Strategic Holdings, Inc., R.J. Reynolds Vapor Company, and R.J. Reynolds Tobacco Company (Reynolds) asked the ITC to issue an exclusion order barring Phillip Morris from importing into the U.S. its IQOS line of heated tobacco and electronic cigarette products. Reynolds based this ask on the alleged infringement by the IQOS products of U.S. Patent Nos. 9,901,123 and 9,930,915 (the ʼ123 and 915 patents, respectively). The asserted claims in the ʼ123 patent are directed to “electronically-powered, aerosol-generating smoking articles” that heat tobacco (rather than burning it), which provides an inhalable vapor or aerosol substance. The ʼ915 patent relates to a reusable control unit for use with a disposable smoking article. However, since a successful complainant at the ITC can only obtain such an exclusion order if there is a domestic industry to be protected, Reynolds also asserted in the complaint that its VUSE line of electronic cigarettes satisfied both the economic and technical prongs of domestic industry.

The administrative law judge who oversaw the proceedings agreed with Reynolds on all accounts, including infringement of both the ʼ123 and ʼ915 patents (and non-obviousness of claims 27-30 of the ʼ123 patent), the presence of a domestic industry, and that “the public interest evidence of record [did] not weigh against entry of a remedy.” A limited exclusion order was recommended. With respect to the ʼ123 patent and its obviousness argument (the portion of the decision that is the focus of the remainder of this post), Philip Morris had attempted to plug the hole left by Morgan’s lack of a central heater with a) its expert’s opinion that central heaters were well known and regarded before the effective filing date of the ʼ123 patent and b) reference to the discussion in the ’123 patent that “[s]election of the power source and resistance heating elements can be a matter of design choice.” The ALJ was not persuaded and found that Morgan’s teaching of multiple circumferentially placed heaters around the outside of the housing “shows that it would not have been obvious to modify Morgan to include a centered heater.”

Phillip Morris then told the Commission that the ALJ improperly “require[ed] an express ‘motivation’ to modify Morgan with a centered heater,” even though a person of ordinary skill in the art would have been motivated by the known advantages of central heaters to modify Morgan. However, the Commission sided with the ALJ and explained that (a) since the evidence did not show or support a limited number of design choices, the placement of the heater was not a matter of a simple design choice and (b) the discussion of design choice in the ʼ123 patent was not in reference to the location or type of heater.

On appeal, Phillip Morris argued that it did show that claims 27-30 of the ʼ123 patent asserted claims were obvious and that the “court’s precedent dictates that when a feature is ‘a simple design choice,’ to be selected from among ‘a finite number of identified, predictable solutions,’ it ‘would have been obvious’ to pursue one of the known, predictable solutions.” The Federal Circuit ultimately disagreed and said that “[w]hile the issue of obviousness in view of Morgan is a close one, we are not convinced that the Commission erred in its fact findings or its ultimate conclusion” and extinguished Phillip Morris’s hopes of chipping away at the ITC’s findings.

So, what made this obviousness challenge such “a close one” for the appellate panel?

The ultimate question of obviousness is a legal question that the Federal Circuit reviews de novo with underlying factual findings that it reviews for substantial evidence. The panel seems to suggest that it may not have reached the same non-obviousness conclusion as the ITC under a de novo review. But, since Phillip Morris disputed underlying factual findings, the panel was confined to review the disputed issues under the substantial evidence standard. Under this standard of review, even if some evidence detracts from the Commission’s conclusion, the Federal Circuit “must affirm a Commission determination if it is reasonable and supported by the record as a whole. In fact, “the possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency’s finding from being supported by substantial evidence.” Indeed, while the appellate panel reviewed the ʼ123 patent and found that, when

[r]ead in context with the remainder of the specification, the Commission’s understanding [that the discussion of design choice in the ʼ123 patent was referring to the amount of resistance in the resistance heating elements and the voltage and current provided by the power sources rather than the arrangement and positioning of the resistance heating elements] is not unreasonable,

one could likely argue either side based on the excerpt below (in Col. 29, lines 32-50).

In fact, reviewing the first and last sentences of this paragraph, it seems that either or both of the battery selection or the resistance heating elements can vary and be a matter of design:

For all embodiments described above, the selection of battery and resistance heating elements can vary, and can be a matter of design.

. . .

Selection of the power source and resistance heating elements can be a matter of design choice, and be readily apparent to one skilled in the art… (emphasis added)

Yet, it appears that the ALJ and Commission focused instead on the second and third sentences and the particular example discussed therein related to selecting voltage, current, and resistance provided by the resistance heating elements to conclude that the teaching in this paragraph was not in any way referencing to the location or type of heater.

Regardless of whether this was a close one for the Federal Circuit or whether it “would have reached the same result as the Commission had the matter come before [it] for decision in the first instance,” the Commission’s final determination with respect to the validity of the ’123 patent was affirmed, and Phillip Morris is banned from importing and selling its IQOS products. And, as discussed in a related post, Phillip Morris now has to recharge its battery to fight against infringement allegations against the IQOS products brought by Healthier Choices Management and recently revived by the Federal Circuit.

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On April 4, 2023, jazz musician Charles Bertini emerged victorious in his legal battle against the tech giant Apple Inc. To provide some background, in 2015, Apple launched a streaming service and filed for federal trademark protection of its APPLE MUSIC mark in connection with “production and distribution of sound recordings and arranging, organizing, conducting, and presenting live musical performances.” Bertini, with his brother serving as his attorney, opposed the application on the basis that APPLE MUSIC would cause confusion with his “Apple Jazz” brand, which he had used since 1985 in connection with festivals and concerts and eventually with distributing sound recordings under his record label. Although Bertini never registered APPLE JAZZ, he maintained common law trademark rights in the mark, which can defeat an application under Section 2(d) of the Lanham Act (15 U.S.C.A. § 1052(d)) in instances in which the trademarks could be confused.

Initially, the Trademark Trial and Appeal Board (TTAB) found, and both parties agreed, that Bertini’s APPLE JAZZ was distinct and had a priority date of June 13, 1985, in connection with “[a]rranging, organizing, conducting, and presenting concerts [and] live musical performances.” Both parties also agreed that there was a likelihood of confusion between APPLE JAZZ and APPLE MUSIC. Thus, the only issue before the TTAB was deciding who was the senior user of the APPLE mark.

Apple argued that it was entitled to a priority date of August 1968, based on trademark rights it purchased from Apple Corps for the APPLE mark (Reg. No. 2034964). Apple argued that it was entitled to tack its 2015 use of APPLE MUSIC onto Apple Corps’ 1968 use of APPLE, meaning Apple would be the senior user of the APPLE mark. The doctrine of tacking allows trademark owners to modify their marks over time without losing priority, provided that the old and new marks create the same, continuing commercial impression, but the standard for tacking is strict. The TTAB ultimately found that Apple Corps continuously used its APPLE mark on gramophone records, and other recording formats since August 1968, and that Apple was entitled to tack its 2015 use of APPLE MUSIC onto Apple Corps’ 1968 use of APPLE. The TTAB dismissed Bertini’s opposition.

Bertini appealed. The U.S. Court of Appeals for the Federal Circuit found that the TTAB misapplied the doctrine of tacking, that Bertini had priority of use for APPLE JAZZ as to live musical performances, and reversed the Trademark Trial and Appeal Board’s dismissal of Bertini’s opposition to Apple’s application to register APPLE MUSIC. The Federal Circuit noted that this case raised “a question of first impression regarding the appropriate tacking standard in the registration context: whether a trademark applicant can establish priority for every good or service in its application merely because it has priority through tacking in a single good or service listed in its application.” The Federal Circuit found that the TTAB errored in allowing Apple to claim absolute priority for all the services listed in its application based on a showing of priority for one service listed in the application.

The Federal Circuit concluded that the TTAB conflated the tacking standard with the standard for oppositions. “An opposer can block a trademark application in full by proving priority of use and likelihood of confusion for any of the services listed in the trademark application,” the panel said. “The reverse is not true.”

Bertini and his brother were pleased with the Federal Circuit’s decision and hope that “this decision will also help other small companies to protect their trademark rights.” Apple hasn’t yet decided whether to appeal the Federal Circuit’s decision, but we will continue to monitor and provide an update in the event this matter proceeds to the Supreme Court.

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When entering into a trademark license agreement most trademark owners do not consider the possibility that their agreement actually may be a franchise, which would subject them to specific disclosure requirements and a number of relationship responsibilities not normally present in a trademark license.    

Recently, the owner of a restaurant concept entered into what it thought was a routine trademark license agreement with a licensee to operate a “Rooh” branded Indian restaurant in Chicago. To its surprise and dismay, after filing suit in U.S. federal district court in San Francisco to enforce certain terms of the license agreement, the licensor, Good Times Restaurants, found itself entangled in the California Franchise Investment Law (CFIL) when the licensee asserted claims against the licensor under the CFIL and other state franchise laws. 

In the recent case of Good Times Restaurants, LLC v. Shindig Hospitality Group, the licensee, Shindig Hospitality, filed a counter claim alleging fraud and misrepresentation, which the licensor sought to dismiss. In its motion to dismiss, the licensor argued that the grant of the right to open a restaurant using the “Rooh” trademark and business concept did not meet the definition of franchise under the CFIL or any other franchise laws claimed by the licensee to be violated.

Unfortunately for the licensor, the court disagreed, and ruled that there were enough facts to satisfy the four elements of the definition of franchise under the CFIL. By that definition, a franchise is an agreement that:

  • Associates the franchisee’s business with the franchisor’s trademark;
  • Grants the franchisee the right to engage in the business of offering, selling or distributing goods or services;
  • Requires the franchisees to pay, directly or indirectly a franchise fee; and
  • Prescribes in substantial part a marketing plan or system. 

The California statute does not differ materially from the Federal Trade Commission Franchise Rule that governs the sale of franchises on the national level. The FTC Franchise Rule defines a franchise to be where (i) the franchisee sells goods or services that are associated with the franchisor’s trademark, (ii) the franchisor exercises significant control, or gives franchisee significant assistance in the franchisee’s operation of the business, and (iii) the franchisee pays a fee to the franchisor as a condition of obtaining or commencing business. Historically, both the FTC Franchise Rule and the California statute have been broadly applied.

In this case, the licensor claimed that not all of the franchise elements were present in its relationship with the trademark licensee. Specifically, it argued that that the license fee was not for the right to enter into a business, but was for the right to use the Rooh trademark; that the agreement as a whole did not grant the licensee the right to enter into a business; the franchise fee requirement was not met because the licensee never paid it; the agreement did not prescribe a marketing plan; and that, because the agreement was titled a “Consulting and License Agreement,” it was not covered by the franchise definition. 

The court was not persuaded by the licensor’s arguments and found that (i) the fee to be paid by the licensee gave it the right to enter into the business; (ii) the licensee was given the right to open the restaurant (whether or not it actually did so); (iiI) whether or not the licensee paid the required license fee was immaterial (the fact that the fee was required was enough to satisfy the definition); (iv) the significant control or assistance requirement was satisfied by the suggested advertising and sales program; and (v) the title of the agreement was immaterial given that “the title is not an element of the franchise definition” and “[i]f it were[,] franchisor’s could ignore the CFIL definition by simply labeling their agreement in a particular way.”

The court also rejected the licensor’s argument that claims brought under Illinois’s franchise act should also be dismissed. In response to that argument, the court noted that, like the California law, Illinois’s franchise law embraced the FTC Franchise Rule franchise definition. Specifically, it noted that “other franchise related claims all use similar definitions of what constitutes a franchise.”

The court’s decision on the motion reminds us that, when contemplating entering into a trademark license agreement, a licensor should be particularly careful in how it structures its relationship with the licensee in order to avoid the franchise tripwires, which are not always obvious. While a licensor has the right to receive a fee for the grant of trademark rights, and to control how a licensee uses that mark, those rights can easily collide with the franchising model. The definitional prong that trips up the majority of trademark owners who unknowingly find themselves to be franchisors is the significant control or assistance requirement. A trademark licensor whose license agreement contains mandatory advertising or operational requirements, or provides a licensee with operational assistance or marketing recommendations, risks its relationship becoming a franchise thus exposing it to an entire bundle of regulations, obligations, and possible liabilities.    

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On March 29, 2023, Congress held a hearing on collegiate name, image, and likeness (NIL) issues in collegiate sports. The hearing comes a little over a month after the NCAA issued its first ruling in an NIL infractions case and less than a month after former Massachusetts Gov. Charlie Baker assumed duties as president of the NCAA. While the hearing had constructive dialogue on NIL issues, it eventually veered towards discussions on the ramifications of college athletes being deemed employees of their schools. Despite the hearing’s focus shifting away from the specific topic of NIL, many of the witnesses and representatives advocated for a federal NIL standard to provide clarity and uniformity for college athletes.

The Innovation, Data, and Commerce Subcommittee of the House Committee on Energy and Commerce held the first federal hearing on NIL in over two years. The chairman of the subcommittee, Rep. Gus Bilirakis, who recently wrote an op-ed advocating for a national NIL standard, said that passing a federal NIL law would provide transparency and clarity for college athletes. “The lack of uniformity across different states and institutions has created confusion and uncertainty, and a federal standard is needed so that all athletes are playing by the same rules,” Bilirakis said. “In short, we must strike a delicate balance between the rights of college athletes to profit from their NIL while keeping the amateur status for all college athletes.”

Lawmakers questioned six witnesses during the hearing, including two college sports administrators, the president of Virginia State University, former Florida Gator and NFL player Trey Burton, a current Florida State softball player, and the founder of the College Football Players Association (CFBPA). The majority of the witnesses encouraged Congress to act on NIL, expressing a need for a uniform NIL standard and citing concerns over the current patchwork of state NIL laws and the potential for NIL to be used for recruiting and pay-for-play.

“The current NIL chaos means student-athletes are left to fend for themselves,” said Rep. Cathy McMorris Rodgers. “And those at the top of their game must figure out how to maneuver through a multitude of agents, collectives, and high-dollar contract offers, all while maintaining their academic and athletic commitments.”

However, Jason Stahl of the CFBPA was adamant that the federal government did not need to be involved in college NIL. “It is the position of the CFBPA that the federal government should stay out of the NIL free market as they would stay out of the NIL free market for every other American citizen,” Stahl said. “The vast majority of evidence suggests athletes monetizing their NIL has had an overwhelmingly positive effect…to the extent that there are problems in the NIL free market…they are extraordinarily manageable by industry stakeholders, including players through their independent players’ associations.”

New NCAA President Charlie Baker issued a statement after the hearing stating that “the lack of transparency in today’s NIL marketplace puts student-athletes in jeopardy of exploitation by bad actors. Plus, differing state laws regulating NIL (currently more than 30) put student-athletes across the country on an uneven playing field.” The NCAA president stated that he is “optimistic Congress will take action to create fair, equitable, and sustainable NIL guidelines that protect and benefit student-athletes nationwide.” For advocates of a uniform federal NIL law, the hearing is at least a sign that Congress is considering action. The House and Senate have previously held seven hearings on NIL since the topic of NIL gained attention, yet no NIL bill has made it out of committee. So, while the NCAA may be optimistic about a national NIL standard, a federal NIL bill still has a tough hill (pun intended) to climb.

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Well Amgen, that didn’t seem to go so well. 

As a follow up to our post last week, the Supreme Court heard oral arguments in Amgen, Inc. v. Sanofi (No. 21-757). While we obviously don’t have a crystal ball, the questions from the high court suggest that Amgen’s claims are about to be delivered a knock-out punch in this last round. 

As expected, many of the Court’s questions to Amgen centered around how many isolated monoclonal antibodies would actually be covered by the claims-at-issue in U.S. Patent No. 8,829,165 and U.S. Patent No. 8,859,741 given that such antibodies must (i) bind to the featured residues and (ii) block binding of PCSK9 to LDLR. The justices seemed really uncomfortable with the idea that any and all antibodies — known and unknown — that obtain the featured functional results would be covered. In fact, at one point, Justice Clarence Thomas said “I think I’m somewhat confused as to exactly what your invention is” and asked “[s]o what is it exactly?”  The Court also wrestled with the issue of how much experimentation would be required to reach the full scope of the claims. Amgen’s eventual admission during oral argument that its functional genus claims would cover millions of yet unidentified antibodies did not help matters. 

Sanofi and the U.S. government both capitalized on the Court’s noticeable skepticism toward Amgen’s arguments that its claims are enabled and valid despite the broad scope. Sanofi came out swinging and stated that “[t]hey’ve overclaimed, they’ve underenabled, their patent is invalid.” According to Sanofi’s counsel, “functional genus claims are terrible” and “[t]hey retard the science.” The government took its jabs too and contended that a genus claim is only proper if each and every embodiment within the genus has been enabled and suggested that the Court clarify that “you really do need to enable each of the different embodiments that you’re claiming [and] that you can’t say these ones don’t matter…” In this regard, the government told the Court that the 26 antibodies specifically disclosed in Amgen’s patents are all that is enabled.

Will the Court agree with the U.S. government that broad genus claims are “a danger to innovation and especially in the medical field” and deliver the fatal blow to Amgen’s claims? And, if it does, what will that mean for any issued claims with similar functional language? Or will the Court narrowly decide this issue in the context of antibody patents (or similarly unpredictable arts)? We will update you when the Supreme Court renders its decision.

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Patent owners worry about what they can and cannot publicly say about infringement of their patent rights. Accused infringers may believe that certain public statements by patent owners are actionable on the basis that such statements interfere with business, are defamatory, or both. Last month, the Federal Circuit clarified what can and cannot be said about patent rights and infringement when it vacated a preliminary injunction that restricted patent owner Lite-Netics, LLC, from speaking publicly about infringement of its magnetic holiday string lights patents by competitor Holiday Bright Lights (HBL). As a result, Lite-Netics (and other patent owners similarly situated) has the green light to speak publicly about infringing activity, and infringers provided that its patent-related speech is not objectively baseless.   

Background

A few months before bringing suit against HBL in the United States District Court for the District of Nebraska for infringement of U.S. Patent Nos. 7,549,779 and 8,128,264 for magnetic decorative lights (Lite Patents), Lite-Netics sent a first notice to its customers (some of which were shared customers with HBL) making them aware “of recent attempts by other companies to make and sell similar products” as claimed in the Lite Patents and stating its intention to go after these allegedly infringing competitors. Shortly after the suit against HBL was filed, Lite-Netics sent a second notice to its customers specifically identifying HBL as an infringer of the Lite Patents. The second notice included a copy of the first page of the complaint filed against HBL and also threatened suit against any company using or reselling HBL’s Magnetic Cord and Magnetic Clip string light products. In response to the complaint and Second Notice, HBL moved to dismiss the complaint, filed counterclaims based on federal and state-law unfair competition, as well as several other state-law torts, and moved for a temporary restraining order (TRO) and a preliminary injunction based on two of the state law counterclaims (i.e., tortious-interference and defamation) in an attempt to stop Lite-Netics from making accusatory statements about HBL.

Lower Court Decision

The district court initially granted the TRO for 14 days and then extended it for another 14 days. In deciding on the preliminary injunction motion, the district court evaluated the (1) HBL’s likelihood of success on the merits of its tortious-interference and defamation claims; (2) the likelihood of irreparable injury to HBL without the injunction; (3) the balance of equities; and (4) the public interest. With respect to the first factor, the district court acknowledged that state-law tort claims based on the communication of patent rights “are preempted by federal patent laws, unless the claimant can show that the patent holder acted in bad faith.” However, the court found that federal preemption did not apply because Lite-Netics’s infringement allegations lacked any merit and, as such, its assertions to its customers against HBL were made in bad faith.  On that basis, the court ruled that HBL would likely succeed on its tortious-interference and defamation claims and, because the other three factors favored issuance, granted the preliminary injunction.

The injunction ordered Lite-Netics (and its officers, directors, shareholders, and other agents) to refrain:

from making statements via letters, emails, Facebook, Twitter, or any other social media, mass media, direct marketing, robocalls, press releases, blogs, websites or otherwise suggesting “copying” by HBL, suggesting HBL customers will be burdened as additional defendants in this or any lawsuit, or suggesting that HBL is a patent infringer.

Lite-Netics appealed.

Appellate Reversal

While the Federal Circuit agreed that precedent dictated that HBL’s state-law claims could survive federal preemption if there was a showing of bad faith by Lite-Netics in asserting infringement, the panel disagreed with the lower court that there was such a bad-faith showing.  The appellate panel explained that (a) bad faith cannot be met in the absence of a showing that the claims asserted were objectively baseless and (b) an infringement allegation is objectively baseless only if no reasonable litigant could realistically expect success on the merits. In reviewing Lite-Netics’s infringement allegations, the panel found that there was an objectively reasonable basis for a number of those allegations at this stage of the litigation (i.e., before full claim-construction proceedings and/or expert reports). It thus held that the lower court abused its discretion in finding that Lite-Netics could not have “realistically expect[ed] success on the merits” and acted in bad faith.

Key Takeaway

The Federal Circuit noted here that “[t]he First Amendment principles are particularly significant when an injunction against speech is at issue” and previously explained that “[t]his is . . . an injunction against communication, a much more serious matter. . . that must be used with care and only in exceptional circumstances.” Those exceptional circumstances require a showing of bad faith, which requires a showing that the infringement allegations are objectively baseless.  A patent infringement allegation is objectively baseless only if “no reasonable litigant could realistically expect success on the merits.” To be clear, an incorrect allegation of patent infringement is not necessarily objectively baseless (even if claim construction ultimately goes in a direction that does not support the patent owner’s infringement allegations). In fact, a patent owner that is “acting in good faith on its belief as to the nature and scope of its rights, is fully permitted to press those rights ‘even though he may misconceive what those rights are.’”

Enjoining a patent owner’s communication of its patent rights is rare (even if that communication turns out to be incorrect). Patent owners have the green light to speak freely about their rights (and others infringing on those rights) but must do so in good faith. 

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On Wednesday, March 22, the Supreme Court heard a case for the dogs — and trademark law. Whiskey maker Jack Daniel’s Properties, Inc., sued dog toy parody company VIP Products LLC for trademark infringement and dilution over VIP’s Bad Spaniels dog toy, which is a plush toy resembling the Jack Daniel’s Old No. 7 Tennessee whiskey bottle.

The dog toy substitutes the branding that is normally depicted on the Jack Daniel’s bottle with pup-themed phrases, such as 43% POO BY VOL and 100% SMELLY. Further, the “Old No. 7 Brand Tennessee Sour Mash Whiskey” product name is spun into the “Old No. 2 On Your Tennessee Carpet” for a classic scatological joke.

Humorous or not, the issue involves the conflict between the Lanham Act’s grant of federal trademark rights and an individual’s right to free expression under the First Amendment. The district court found both infringement and dilution, finding that the VIP “Bad Spaniels” toy was likely to be confused with, and caused dilution by tarnishment of, Jack Daniel’s trade dress and trademarks in its well-known liquor bottles and labels. However, the Ninth Circuit reversed, finding that VIP’s dog toy was protected speech under the First Amendment.

The Arguments

The primary question presented before the Supreme Court is whether the Rogers test for First Amendment protection of expressive works applies to an artistic, or humorous, use of a trademark, which would trump the standard likelihood of confusion analysis. Secondly, at issue is whether VIP’s parodic use can qualify as “noncommercial” and, therefore, preclude a claim of dilution by tarnishment.

In the party’s brief preceding the oral arguments, VIP argued that this Bad Spaniels product only recreated enough elements from the famous whiskey bottle so “people would get the joke.” Further, it commented that Jack Daniel’s is lacking a “sense of humor.” Contrarily, Jack Daniel’s wrote in its petition for writ of certiorari that “VIP’s profit-motivated ‘joke’ confuses consumers by taking advantage of Jack Daniel’s hard-earned goodwill.” In essence, the case turns on whether the Bad Spaniels toy is a permissible parody, rather than a means of riding the goodwill associated with the Jack Daniel’s brand.

The parties took to the Supreme Court with their oral arguments on March 22, 2023. Jack Daniel’s, insisting that confusion is the cornerstone of trademark infringement, highlighted the consumer surveys that indicated consumers were confused by the dog toy. Further, Jack Daniel’s argued that the Bad Spaniels toy is inherently commercial because its primary purpose is to be bought and sold, subjecting it to a dilution claim.

On the other hand, VIP reinforced its stance that anything involving parody is an “easy case” and does not confuse consumers about source. In its view, poking fun at iconic brands is a form of expression, which should be protected by the First Amendment.

The justices seemed interested in narrowing the kind of confusion the Lanham Act governs. They also wrestled with whether the Rogers test should be thrown out entirely or reconfigured. Further, one of the miscellaneous concerns raised by the justices was an underlying desire for judicial efficiency and an avoidance of costly litigation.

The Implications

This case could have serious implications for the commercial landscape, as demonstrated by the variety of amicus briefs filed in the case from the likes of major brands (i.e., Campbell’s, Levi Strauss, and Nike) and the Biden administration in support of Jack Daniel’s on the one hand, and by a number of law professors in support of VIP. Popular brand owners hope to protect their hard-earned reputation and the goodwill associated with their intellectual property. The advocates of free expression want to flaunt their creativity through parodies, without fear of litigation. Both sides will have to await the Supreme Court’s decision as the justices weigh the issues, and we will update you when they do.

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The Supreme Court is set to hear oral arguments in Amgen, Inc. v. Sanofi (No. 21-757) on Monday, March 27, 2023. The highly contentious question before the high court focuses what an applicant must show to meet the enablement requirement of patent law. The specific issue at hand is: 

whether enablement is governed by the statutory requirement that the specification teach those skilled in the art to “make and use” the claimed invention, or whether it must instead enable those skilled in the art “to reach the full scope of claimed embodiments” without undue experimentation—i.e., to cumulatively identify and make all or nearly all embodiments of the invention without substantial “time and effort.”

The appeal comes from a February 2021 decision from the Federal Circuit that upheld the District of Delaware’s finding that Amgen’s asserted claims in U.S. Patent No. 8,829,165 and U.S. Patent No. 8,859,741 were invalid for lack of enablement. Amgen’s claims to isolated monoclonal antibodies that lower cholesterol levels (marketed as Repatha®) were initially found to be valid under 35 U.S.C. § 112. However, Judge Richard Andrews granted Sanofi’s JMOL motion based on the finding that Amgen’s claims are defined by their function (as opposed to structure) and the specification did not enable a skilled artisan to reach the full scope of the claims without undue experimentation. 

The Federal Circuit held that “[w]hether a claim satisfies the enablement requirement of [Section 112] is a question of law that we review without deference” and found no error by the lower court in its conclusion “that undue experimentation would be required to practice the full scope of these claims.” Amgen takes the position that the Federal Circuit’s full scope of the claimed embodiments test for enablement (Full Scope Test) improperly raises the bar above and beyond the text of § 112.  Sanofi’s argument is based on the purported overbreadth of the claims and the lack of enablement of every species in the claimed genus.

Some pundits have opined that the high court is poised to strike down the Full Scope Test. Indeed, since SCOTUS has taken issue with other tests used by the Federal Circuit for being too rigid, it may also deem the Full Scope Test as too stringent. Moreover, some commenters contend that the high court would not have granted certiorari simply to affirm the lower courts’ decisions. That said, SCOTUS will take the solicitor general’s support of Sanofi’s position very seriously when making its decision. 

Many believe that, if the high court decides in Amgen’s favor, the decision could change the patentability of pharmaceutical/life science inventions and have a disruptive effect on innovation in general. In addition, the decision may indicate whether and how the Supreme Court plans to address concerns related to the other prong of 35 U.S.C. § 112 — the written description requirement. In fact, the Federal Circuit has, in recent years, similarly required the written description to support the full scope of the claims. While the decision will likely not come out until summer 2023, we will post with updates. Stay tuned.

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Recently, Melissa Jefferson, known professionally as Lizzo, took on the USPTO in a battle to establish trademark rights to a popular lyric from her 2017, Billboard-topping song Truth Hurts. The phrase, “100% That B—h”, which Lizzo admitted was inspired by a tweet, was recently the subject of several lawsuits concerning the authorship of the work (see e.g., Jefferson v. Raisen et al., Case No. 2:19-cv-09107-DMG-MAA). Nonetheless, given the popularity of the song and phrase, Lizzo, through her company Lizzo LLC, filed Application Nos. 88466264 and 88466281 with the USPTO for use on various clothing items on June 10, 2019. The trademark-examining attorney (the “examiner”) refused each application stating that the phrase “is a commonplace expression widely used by a variety of sources to convey an ordinary, familiar, well-recognized sentiment.” After the examiner issued the final refusal, and denied Lizzo’s requests for reconsideration, Lizzo appealed to the Trademark Trial and Appeal Board (ttab). 

What Is a Source Identifier?

The Lanham Act defines a trademark as a mark used in commerce or registered with a bona fide intent to use in commerce. To receive protection under the Lanham Act, the mark must function as a trademark — that is, the mark must serve to distinguish the applicant’s goods from those sold or manufactured by others. Put simply, the mark must indicate the source of the goods — known or unknown. 

How the relevant public perceives the term sought to be registered is critical to determining whether a mark functions as a trademark. If a mark is perceived as “merely informational in nature” the mark is not registerable. Indeed, if a mark is a common term or phrase that the relevant public is accustomed to seeing used by various sources to convey “ordinary, familiar, or generally understood concepts or sentiments,” it is likely to fail to function as a trademark and is merely informational. One common issue, in the context of clothing, is an ornamental use rejection. Ornamental use is when a party uses a trademark in a decorative manner, or to enhance the image of the product, rather than as an identifying source of goods or services. Thus, where the evidence shows that the wording in the mark is commonly used in an informational and ornamental manner on clothing and other retail items produced and sold by others, the mark is likely to be seen for the meaning of its wording and not as a source indicator.

Examiner Arguments

In rejecting Lizzo’s applications, the examiner argued the mark was not source-identifying, and instead, the mark was a message of “self-confidence and female empowerment used by many different entities in a variety of settings” (In Re Lizzo LLC, No. 88466264, 2023 WL 1507238, at *4 (Feb. 2, 2023)). Additionally, the examiner argued that Lizzo’s admitted plagiarism of the famous line undercut her application as she merely “popularized” a commonly used phrase. In support of his arguments, the examiner cited Urban Dictionary, numerous articles, and dozens of screenshots of the phrase used on clothing items unrelated to the popstar. Notably, the examiner provided numerous screenshots of the phrase being used in an ornamental manner, including several from Lizzo’s website.

Lizzo’s Response

In response, Lizzo argued that the examiner failed to demonstrate that the phrase was commonplace or that the public was exposed to the phrase in a widespread manner that would undercut the ability of the mark to operate as a source-identifier. In support of registration, Lizzo submitted copies of additional applications using the phrase for entertainment services and musical sound recordings that the USPTO did not reject for failure to function. Lizzo also submitted copies of take-down requests to third parties using the phrase on merchandise, as well as the responses from merchants offering assistance in policing merchandise going forward. 

Conclusion

In reversing the examiner’s decision, the TTAB noted that the evidence cited by the examiner demonstrating ornamental use undercut his argument for refusal, as much of the evidence referenced Lizzo and her lyrics from the chart-topping single. Similarly, the remaining evidence reaffirmed the phrase’s close association with the singer, which weakened the weight of the evidence against registration. Further, the TTAB noted that the evidence did not convey a common social, political, patriotic, religious or other informational message, and when considered in the entirety of the record, found most consumers would perceive the phrase used on the goods in the application as associated with Lizzo rather than a commonplace expression. More importantly, the TTAB noted that while the term has become “widespread,” there is no evidence that the phrase was commonplace prior to Lizzo’s usage.

Commentary

While not heavily discussed in the opinion, the TTAB’s ruling offers insight on how an applicant’s popularity seemingly transcends traditional trademark law. Generally, the widespread use of a phrase by many, as noted by the examiner, precludes registration. However, despite acknowledging the phrase was not an original thought, Lizzo was entitled to protection largely due to her widespread popularity that, in turn, popularized the phrase through association with her. Needless to say, this opinion should serve as a reminder to less famous trademark applicants that early registration is the best practice in preserving their intellectual property. 

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The Federal Circuit’s recent decision in Minerva Surgical, Inc. v. Hologic, Inc. provides a timeline reminder to inventors and patent applicants: Do not bring your invention into public view before you have filed your patent application, and if you do, remember the one-year critical date for filing. Otherwise, your patent runs the risk of later invalidation.

A Little Background about Minerva Surgical

The invention in Minerva Surgical is a medical device for stopping or reducing abnormal uterine bleeding. In relevant part, the device has a frame with flexible outer elements in contact with a surface that is applied against the uterine lining, and flexible inner elements not in contact with the surface, “wherein the inner and outer elements have substantially dissimilar properties.” Such a frame allowed the device to maintain a small size for insertion but could expand to conform to the uterine wall to stop bleeding.

Minerva first began developing this device in 2008. By August 2009, Minerva lab notebooks demonstrated that a device having a frame with inner and outer elements having substantially dissimilar properties had been identified as a solution to the problem of being able to insert, apply, and remove the device during surgeries without deformation. Inventor testimony further confirmed that the key elements of the frame’s characteristics were known to Minerva’s research and development team by August 2009.

Unveiling the Device

In November 2009, Minerva brought the device to a major gynecological surgery conference held by the American Association of Gynecologic Laproscopists (AAGL). Fifteen fully functional devices were brought to the conference, which was well attended by doctors who would be potential customers. The Minerva booth gave demonstrations of how the device operated, and the chairman of Minerva’s medical advisory board gave a presentation featuring the device. The booth and the general literature highlighted the flexible frame. After the conference Minerva continued to develop the medical device and ultimately arrived at its full, final design.

The earliest patent application was filed on November 7, 2011 — nearly two years after the AAGL conference. A later filed patent application in the family was issued as U.S. Patent No. 9,186,208 (the ‘208 patent).  After Minerva sued Hologic for infringing the ‘208 patent, Hologic won on summary judgment for invalidity of the patent due to anticipation by the alleged 2009 public use of the device. Minerva then appealed.

On appeal, the Federal Circuit reviewed the law concerning public uses or sales under Section 102(b) of the pre-America Invents Act (AIA) patent law. A patent is deemed invalid where the invention was “in public use or on sale” more than one year before the date of applying for the invention in the United States. (While this case involved a patent issued under the laws in place before the AIA went into effect, the Federal Circuit has confirmed in other cases that the standard for finding a “public use or sale,” as the earlier statute was phrased, carried over without change to the AIA’s statutory language defining prior to include an invention “being in public use, on sale, or otherwise available to the public.”) The Federal Circuit applies a two-prong test for finding that the public use bar has been triggered. First, the invention must be “in public use” more than a year before the date of filing. Second, the invention must be “ready for patenting.”

Proving the “Public Use” Bar

To satisfy the first prong of public use, the party challenging the patent must show that the invention “was accessible to the public or was commercially exploited” by the inventor or applicant. Under this set of facts, the Federal Circuit found that the AAGL display and disclosures made the invention “accessible to the public.” The devices brought to the display were “fully functional” in a manner consistent with what was ultimately disclosed and claimed in the ‘208 patent. Minerva demonstrated the device at its booth using a transparent uterine model that made its operation visible to anybody watching and further provided a technical presentation on the device. Minerva tried to argue that a “mere display” of the device did not qualify as public use, but the Federal Circuit found that a “display” only applied to non-working mock-ups, not full demonstrations. The (disputed) fact that Minerva did not allow attendees to actually handle or operate the device did not matter, since in this case Minerva had made the device’s operation clearly visible to anyone walking past the booth. Finally, there were no confidentiality obligations imposed upon any of the doctors, potential investors, or others who visited the booth. The Federal Circuit held that there was no dispute that the device was “accessible to the public.”

Proving the Device “Ready for Patenting”

Turning to the second prong, the Federal Circuit also found no dispute that the device was “ready for patenting.” An invention is “ready for patenting” if it is reduced to practice or is otherwise sufficiently described in documentation to enable a person of ordinary skill to practice the invention. Although only one of these two tests needs to be satisfied, the court found that Minerva actually met both standards. Minerva claimed first that it had not reduced the invention to practice because it had continued to develop the device after 2009 and had not tested the device on live humans (a requirement for FDA approval.) The Federal Circuit dismissed both contentions. Continued developments were not dispositive, the court held, because “later refinements” and “fine tuning” of a claim element do not mean the device is not yet ready for patenting Here, the claim specifically covered the structures that Minerva’s inventors knew to be key to operation as early as August 2009. As to the lack of live human testing, the appellate court simply stated that the level of testing and knowledge for FDA approval is “beyond that required” for showing reduction of the invention to practice. The court also held that the inventor lab notebooks included sufficiently detailed information to allow another person of ordinary skill to follow them and reduce the invention to practice. Having found the invention both “in public use” and “ready for patenting,” the Federal Circuit affirmed the district court’s grant of summary judgment of invalidity.

Conclusion

While Minerva is a straightforward application of the public use bar to invalidate a patent, there are some key takeaways for inventors. First, the critical date is defined by the scope of the claim. If Minerva had a narrower claim, perhaps a dependent claim, that targeted only the later developments, such a narrower claim may have survived because it would not have been subject to the 2009 disclosure. Alternatively, if additional elements were later modified and developed (such as the compliant surface pressed against the uterine wall), including those elements in the claim may have also pushed the claim beyond what was disclosed in 2009. Of course, both of these options mean a narrower claim scope, which perhaps Hologic may not have infringed. But the biggest takeaway is a reminder to all inventors and applicants: Don’t start showing off your device until you have either filed a patent application or decided not to. And if you have displayed the device, make sure to file a patent application within one year from that display to avoid any potential application of the public use bar.