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 Intellectual Property
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April
2010 |
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The purpose of this newsletter is to keep in
touch with our friends and colleagues as well as
provide practical information and news relating to
Intellectual Property law.
Please forward this newsletter to anyone who
might be interested. Previous issues of
GRR Intellectual Property News can be found on our
website. | |
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| GRR Client Prevails on
Motion to Dismiss Counterclaims |
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On April 6, 2010, Senior Judge
Debevoise of the Federal District Court for the District of
New Jersey granted GRR client United Food Importers' motion
to dismiss Defendants' counterclaims. The court held that
the Defendants, in their counterclaims, were attempting to
assert the rights of a third party against United Food
Importers. Such claims are generally not permitted and
are rarely seen, particularly in counterclaims. In
ruling in favor of United Food Importers, the court
explained that there was no precedent for asserting the
rights of a third party in a counterclaim and pointed out
that the Supreme Court had ruled that "a litigant . . .
cannot rest a claim to relief on the legal rights or
interests of third parties".
United Foods was represented by GRR attorneys Richard Schurin and Barry Lewin. A copy of the court's opinion
can be found here. |
| Attorney
Presentations & Publications |
|
On April 15, 2010,
Amy B. Goldsmith will be speaking at the International Trade
Committee Meeting of the Hauppauge Industrial Association about
Intellectual Property Protection in China. Click
here for more information.
On April 12, 2010,
Barry Lewin was a guest lecturer at Tufts University for a course
entitled "Introduction to Engineering Management." Barry spoke on
the topic of "Building Value through Protection of Intellectual
Property."
On April 7, 2010,
George Gottlieb and
Marc P. Misthal were part of a panel discussion at the New York
County Lawyers' Association on Representing the Fashion Client.
On March 29, 2010,
Amy B. Goldsmith participated in panel discussion entitled
"The Nuts & Bolts of Import/Export for Small Businesses - Navigating
Rules and Regulations" at the CUNY Conference on Asian American Economic
Development.
Amy B. Goldsmith's CLE presentation on Genetic Patents is now
available from Lawline.com. Click
here for more information.
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| More Unusual Inventions |
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Some of the patents that have
been issued by the Unites States Patent Office are truly
bizarre. From time to time we highlight these unusual
patents. Two more are described below:
U.S. Patent No. 4,344,424 entitled "Anti-Eating Facemask"
This invention addresses "the temptation to eat, which leads one
to eat excessively," which is exacerbated by the "ever
present and the ready availability of attractively prepared,
taste-tempting foods." According to the inventor, persons
who will have use for this device include "the housewife who
must frequently cook meals during the day which generally
includes the preparation of fattening foods such as pies,
pastries and the like." If you look carefully, you can see
that the drawing includes an actual padlock. Presumably the
husband is supposed to hold the key. In case you were
wondering, the inventor of this device is not Dr. Hannibal
Lecter but Lucy Barmby of Sacramento, California. Marriage
counselors, this is an opportunity for you!
U.S. Patent No. 5,934,226 entitled "Bird Diaper"
This patent relates to a diaper to be worn by a bird. Perhaps
New York City should consider purchasing a few million of
these for its resident pigeon population.
For more information contact Richard S. Schurin. |
| Beware of the New
(Patent) Bounty Hunters |
|
Once a patent issues, products
covered by the patent and sold in the United States should be properly
marked to give notice that these articles are protected under the Patent
Act. Under the "false marking" provisions of the Patent Act, if
the patent marking on an article is incorrect, the manufacturer or
seller of such an article may be fined no more than $500.
In the past, courts have held that that the sale of any number of falsely
marked articles constituted a single instance, and thus a single fine
was awarded. However, in a recent case (available
here), the Federal Circuit reversed years of precedents and ruled
that the fine is applied to each article that has been
sold. Accordingly, a manufacturer of thousands of falsely marked
articles can be subjected to a fine of no more than $500 for each
falsely marked item sold, amounting to millions of dollars in fines.
As a result of this ruling and several unusual provisions in the false
marking statute, "bounty hunters" have appeared who have already filed a
number of law suits against manufacturers of billions of articles with
allegedly false markings. New legislation has been proposed to overturn
this controversial ruling, but at this time it is unclear as to whether
Congress will pass such legislation.
Other provisions of the false marking statute have also contributed to the
rise of the "bounty hunters." For example, anyone can bring a false
marking case; the party bringing the case need not have suffered any
harm as a result of the false marking. Moreover, the fine in a false
marking case is unrelated to the cost or price of the article, so the
fine could be the same whether the article costs less than $0.01 or more
than $100,000. Further, any fine awarded by the court is split between
the United States government and the party that brought the false
marking action.
In many instances, a false marking may be inadvertent. For example, an
article on the market may be marked by a manufacturer who does not
realize that the patent has expired. Alternatively, the design of an
article may have been changed without a manufacturer realizing that, as
a result of this change, the article is no longer covered by the patent.
To avoid exposure to a false marking action, we are urging our clients, to
review the patent markings for all their products as soon as possible. GRR
is ready to assist if you have questions.
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| Yours, Mine and Ours:
But Not Myriad's! |
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On March 29, 2010, Judge Sweet
granted the plaintiff's motion for summary judgment in Association
for Molecular Pathology v. Myriad Genetics (see our December 2009 and
January 2010 newsletters) and invalidated certain claims
in seven Myriad patents covering breast cancer genes which are used in
testing for breast cancer. This revolutionary decision, available
here, was not expected.
The Court declared that the
patents in issue covered unpatentable products of nature since Myriad
had simply produced and claimed "isolated DNA" which is native DNA in
purified form. The Court also struck down claims in Myriad's
patents covering methods of analyzing and comparing gene sequences on
the ground that the claimed matter consisted of unpatentable mental
processes; in the Court's view, the claims included only general
statements about analyzing and comparing gene sequences and were not
limited to any particular method. The Court also struck down
claims covering the isolation and purification of DNA, explaining that
these processes do not transform DNA and thus the claims did not cover
patentable material under existing case law (the case that the Court
relied upon, In
re Bilski, is currently being reviewed by the Supreme Court).
In reaching its conclusions, the
Court explained that an invention must possess "markedly different
characteristics" from what is found in nature to be patentable under the
Patent Act. In evaluating the Myriad patents, the Court noted that
isolated DNA contains the same sequences of information as native DNA,
and the fact that the isolated and native sequences are the same
is what actually enables Myriad's genetic tests to work and detect the
presence of breast cancer gene mutations. Accordingly, Judge Sweet
opined that there are no "markedly different characteristics" between
the isolated DNA and native DNA. This decision is startling since the
rationale is directly contrary to the Patent Office's rulings on gene
patents.
If similar invalidation actions
are brought elsewhere, other courts may adopt Judge Sweet's reasoning.
The plaintiffs in the case may also choose to evaluate whether Myriad's
other patents on breast cancer and other genes can be struck down. And
the biotech industry may demand that patent applications be more
carefully written to avoid Judge Sweet's reasoning. Lastly, other
biotech companies may re-evaluate whether to offer breast cancer
testing...if they believe that Judge Sweet's decision is likely to be
upheld.
Myriad has already stated that
it will appeal the decision. No matter who prevails on appeal, the
unsuccessful party will likely ask the Supreme Court to review the
decision. As a result, it will be some time before a final
decision is rendered on patenting genes.
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| Accelerated Patent
Application Examination |
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In August of 2006, the United
States Patent Office implemented a new, accelerated patent
application examination program designed to provide final
disposition of an application within 12 months of filing.
Patent applications submitted for the Accelerated
Examination program must include a patentability search and
an application support document, both of which are not
required for a standard patent application. The
application support document must contain a detailed
comparison of the proposed claims to the references obtained
in the search, an identification of the relevant sections of
the references and an explanation of why the claim is novel
and non-obvious in view of the references cited. Based
on these submissions, the Patent Office decides whether to
grant accelerated examination.
When the program was introduced in 2006, many practitioners were
skeptical about the program's value. Practitioners believed
that preparing the application support document could
substantially increase the cost of a basic patent
application. Furthermore, many patent lawyers feared that a
missed reference in the search or a missed citation within a
reference could result in a violation of the duty of
disclosure, leading to an invalid patent.
Three and a half years later, the Patent Office has released
statistics for the accelerated examination program. Of the
3,530 Petitions received by the USPTO requesting accelerated
examination, 3,343 have been decided with 2,131 (64%) being
granted. Of those granted, 2,014 have completed
prosecution. The program has produced 1,246 patents, an
allowance rate of 62%. Even Apple, Inc. has used accelerated
examination to obtain a patent covering certain features of
the iPhone. When compared to the USPTO's 2009 allowance rate
of 42%, it appears that applications that make it past the
petition stage are faring relatively better.
To date, we are not aware of any accelerated applications having
been tested in court. Thus, the uncertainty of duty of
disclosure violations remains. However, the statistics show
that a significant number of applicants are successfully
using the program.
For further information, contact Joshua Matthews. |
| Appeals Court Affirms
Ruling that eBay is not Liable for Third Party Sales of
Counterfeit Tiffany Products |
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Tiffany (NJ) Inc. v. eBay Inc., No. 08-3947 (2d Cir. April 1, 2010).
Tiffany Inc. sued eBay for trademark infringement and related causes of
action because third parties sold allegedly counterfeit Tiffany products
through eBay and because eBay purchased sponsored link advertisements on
search engines to promote the availability of Tiffany products on its
website. Even though eBay, when notified, removed from sale items that
Tiffany believed were counterfeit, Tiffany took the position that eBay
(and eBay sellers) should be held responsible for the sale of
counterfeit Tiffany goods through eBay's website. The district court
disagreed and ruled in favor of eBay. Tiffany appealed the decision, and
the appellate court affirmed the lower court's decision in most
respects.
The appellate court explained
that eBay itself did not infringe because it was permissible for eBay to
use the TIFFANY mark on its website to inform potential buyers about the
goods available for sale on eBay; the court refused to impose liability
on the ground that eBay cannot guarantee that all purported Tiffany
products offered on eBay are genuine. The appellate court also declined
to impose liability on eBay for the sale of counterfeit Tiffany products
on eBay by third parties, explaining that where eBay was aware that a
specific seller was selling counterfeit products, it terminated the sale
of such products; while eBay knew that some sellers used eBay to sell
counterfeit Tiffany products, such general knowledge did not require
eBay to act to resolve the problem. The appellate court did, however,
find that eBay might have engaged in false advertising since it had
general knowledge that some sellers used eBay to sell counterfeit
Tiffany products and nevertheless purchased ads advising consumers that
they could find Tiffany products on eBay. Accordingly, the appellate
court instructed the lower court to reconsider Tiffany's false
advertising claim.
For further information, contact
Marc P. Misthal.
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| Ignorance of Patent not a
Defense to Charge of Inducing Another to Infringe |
|
SEB S.A. v. Montgomery Ward & Co., 93 U.S.P.Q.2d 1617 (Fed. Cir.
2010).
One way to infringe a patent is
by inducing another to infringe. "Whoever actively induces
infringement of a patent shall be liable as an infringer," saith the
Patent Act. In
DSU Medical Corp. v. JMS Co., 471 F.3d 1293 (Fed. Cir. 2006) (en
banc), the court defined the intent necessary to support a finding of
induced infringement. The court required that the plaintiff must
show that the alleged infringer knew or should have known that his
actions would induce actual infringements and that this necessarily
includes the requirement that he or she knew of the patent.
Thus one could, until recently, hide one's head in the sand and not seek
out information about a patent to avoid infringement by inducement.
Or, as in this case, hide one's attorney's head in the sand to obtain
his non-infringement opinion.
In SEB, however, the
court did not treat the requirement of knowledge of the patent as
controlling. SEB, a French company, had sued Pentalpha, a Hong Kong
company, in the Southern District of New York. Pentalpha obtained a
right-to-use study from an attorney in Binghamton, New York. The
attorney analyzed 26 patents and concluded that there was no
infringement. So far, so good. Pentalpha, however, did not tell the
attorney that it had copied an SEB device. The court of appeals quoted
the district judge's reason for allowing the issue to go to a jury:
SEB is saying that you could infer the specific
intent to encourage the infringement by the fact that Pentalpha's
president doesn't disclose that Pentalpha copied the SEB product to the
people doing the patent search. Pentalpha wants them to do a search that
is doomed to failure, and that that is enough that a reasonable jury
could infer specific intent. Here is the argument. There are a zillion
patent attorneys in New York City, yet they go to this guy in the middle
of nowhere to do this patent search.
As a result, a claim for inducement is now viable even
where the patentee has not produced direct evidence that the accused
infringer actually knew of the patent-in-suit. Instead, inducement
of patent infringement may be proven through evidence that an infringer
consciously avoided knowledge of what would otherwise have been obvious,
namely the existence of a relevant patent.
The final word: Deliberately ignoring the risk that a
copied product is covered by a patent may justify a finding of
infringement based on inducement alone.
For more information, contact
Allen I. Rubenstein.
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Intellectual Property News Editorial Board: Richard S.
Schurin ( rschurin@grr.com), Marc P.
Misthal ( mmisthal@grr.com), and Steven
Stern ( sstern@grr.com) of Gottlieb,
Rackman & Reisman, P.C. Suggestions, questions
and comments should be directed to the Editorial Board by
email or telephone (212) 684-3900. For forty years,
Gottlieb, Rackman & Reisman, P.C. has provided legal
advice and guidance on all aspects of patent, trademark,
copyright, and unfair competition law, tailoring its counsel
to the specific needs of its clients.
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