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GRR Convinces Patent Office To Overturn Rejection of Patent Application   

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ON THE LIGHTER SIDE

Charlie Sheen:  the Man, the Apparel, the Game, the Drinks...and the List Goes On! 

IP LAW IN PRACTICE

Court Refuses to Approve Google Books Settlement

Back in 2004, Google announced that it had entered into agreements with several major research libraries to digitally copy books and other writings in their collections in order to create the most comprehensive collection of knowledge ever imagined.  Google claimed that its actions were permissible fair uses of copyrighted material.  The Authors Guild disagreed and filed a class action lawsuit against Google of behalf of all authors for copyright infringement.  Since the suit is a class action, the result of the lawsuit would have a binding effect on all copyright owners who did not affirmatively opt out.

In 2008 the parties reached a preliminary settlement, which was amended in 2009 to its current form.  The Amended Settlement Agreement authorized Google to, among other things, (1) continue to digitize books, (2) sell subscriptions to an electronic books database, (3) sell online access to individual books, and (4) sell advertising on pages from books.   The terms of the Agreement would only apply to out of print books and would not grant Google any exclusive rights.  Basically, Google would not be granted any rights to books which are still available from publishers, and copyright owners would still be allowed to grant licenses relating to their works to third parties.  The Settlement would further create a Books Rights Registry which would collect a percentage of Google's profits and distribute the percentage to copyright owners. 

A number of members of the class not only opted out of the settlement but filed objections to the settlement.  Objections were also filed by entities such as Microsoft and the government of France.  The objections included: that proper class action procedures and protections were not adequately met; that judicial approval of the agreement would violate Congress's constitutional authority over copyright law; that rights granted to Google by the Agreement would effectively give Google a monopoly over digital books in violation of the Sherman Act; that the Agreement did not provide adequate protections regarding the vast amount of private information Google would control; and that the Agreement would violate international treaties regarding copyright law.

Upon careful consideration of the facts and prevailing legal standards, Judge Chin agreed with the objectors.  Judge Chin found that there was a substantial question as to the existence of antagonistic interests between the parties negotiating the Agreement and certain members of the class, most notably the owners of orphan works (i.e. works protected by Copyright where the owner cannot be easily located or identified).  Further, Judge Chin found that approval of the Agreement was beyond the Court's authority for at least three reasons.  First, the Agreement constituted a forward-looking business arrangement that went beyond the scope of the original lawsuit.  Second, the Agreement would effectively rescind exclusive rights granted by Congress - rights that only Congress can rescind.  And third, the Agreement would raise international concerns not meant to be dealt with in a class-action settlement.

What happens now is unclear.  The parties could appeal Judge Chin's order and the case could make its way to the Supreme Court.  Alternatively, the parties could resubmit a narrower agreement and ask Judge Chin for reconsideration.  If there is no appeal and no resubmission, the case will revert back to the original dispute - whether Google's copying is a fair use.  While the fair use issue is vastly different from the issues raised by the Settlement, it nonetheless constitutes an interesting and novel legal issue.  We will continue following developments in this case.

For further information, contact Joshua Matthews, whose practice includes the enforcement of copyrights.  

Shaping Patent Law:  The Supreme Court and Assignments   

This is the second in a series of articles regarding patent-related cases now before the U.S. Supreme Court.

Historically, patent rights in the United States are owned by inventors.  Inventors may "assign" their patent rights to another entity. In the employment context, an inventor typically assigns his/her rights to an employer, often at the time employment begins, even before any invention is envisioned.  A case now before the U.S. Supreme Court raises questions regarding the wording of such assignments and how a relatively new law, the Bayh-Dole Act, has an impact on those rights when a patent issues as a result of federally funded research.

In Stanford v. Roche, a researcher, upon accepting employment with Stanford University, agreed that he "will assign" to Stanford rights to any inventions.  Work regarding measuring HIV viral load he was doing at Stanford was (1) partially federally funded and (2) done in conjunction with and at Cetus, a predecessor company to Roche.  During the work effort, upon entering a Roche facility, the Stanford employee signed a "visitor's agreement" which included the phrase "I do hereby assign" intellectual property rights to Roche. 

The specific question now on appeal at the U.S. Supreme Court involves the Bayh-Dole Act, in which universities and small businesses may leverage intellectual property discovered under federal funds by merely asserting ownership of patent rights, something Stanford claims to have done in this case.  Under the wording of Bayh-Dole, ownership may transfer without explicit agreement of the inventor.  Stanford is now arguing, in effect, that both the Stanford assignment and the Roche Visitor's Agreement were irrelevant to ownership of the rights because of Bayh-Dole and that the researcher conveyed nothing to Roche.  The Court will consider the following: Had he properly assigned his rights to Stanford? To Roche? Or does the Bayh-Dole Act take precedence?

About a year ago, the Federal Circuit held that the Roche assignment was valid because the earlier Stanford assignment was not an actual assignment.  Stanford relied on the "will assign" wording and the Court held that the agreement was no more than a promise to assign but not an actual assignment.  Because Stanford sat on any potential rights it had, the employee could and did assign the patent rights to Roche.  Stanford has appealed based on Bayh-Dole.

No matter how the Supreme Court rules, the case is instructive to inventors and corporations for several reasons.  First, the wording of assignments in employment agreements can have an impact on ownership of future inventions.  Also, even after obtaining patent rights, employers should train employees to recognize that they have assignment obligations based on various factors, such as how the work was funded. Further, universities and corporations must be careful to make sure that employees are well trained to seek counsel if they are asked to sign agreements.  Also, universities and corporations may need to take proactive steps to assert rights when federal funding is involved.  Remember: if you don't own patent rights, you cannot enforce them. 

For further information, contact Barry Lewin, whose practice includes preparation and prosecution of patent applications for mechanical devices as well as for telecommunications and information technologies. 

U.S. Patent Office to Begin Fast Track Patent Application Program

On May 4, 2011, the U.S. Patent Office will begin allowing patent applicants to designate their applications as "Fast Track" applications.  All "Fast Track" applications will be given prioritized review with a goal of reaching a final determination on patentability within twelve months.  The only burdensome requirement of the program is a $4,000 fee to be paid in addition to the application fee.  The program is not available to already filed applications (though a new continuation can be used to enter the program) and the program requires that applications be limited to four independent claims and thirty total claims. 

For further information, contact Joshua Matthews, whose practice includes U.S. patent prosecution.  

Living in Interesting Times:  Developments in China   

As nations, Britain and China have been on opposite sides of the fence on many issues.  Now the British luxury car company Land Rover is battling the Chinese trademark agency itself (formally, the Trademark Review and Adjudication Board (TRAB) under the State Administration for Industry and Commerce (SAIC)). The Beijing Municipal No.1 Intermediate People's Court recently accepted a complaint in which Land Rover asked the court to order the agency to review its decision refusing to cancel a trademark registration for the LU HU symbols in the name of Chinese car company Zhejiang Geely, the relatively new owner of Volvo. 

Land Rover alleges use of the Chinese characters for "land tiger", transliterated as LU HU, since the early 1990's, before Geely's 1999 filing date and before Geely received a registration for the same symbol in 2001. Land Rover petitioned to cancel the Geely registration in 2004 on the grounds that the LU HU symbol was associated with Land Rover in China and Geely proceeded in bad faith, with knowledge of Land Rover's use, to file for the identical mark. Land Rover also pled that Geely has received registrations for other famous car brands, including BMW and the Chinese translation for Jaguar. But the TRAB denied Land Rover's cancellation request, and Land Rover took the novel approach of suing the TRAB directly. The first hearing occurred on March 17, 2011, with Geely present.

Land Rover's novel approach to retrieving a trademark illustrates the importance of filing a foreign trademark application as soon as the brand is chosen and cleared, before it's made public. Once the brand has been disclosed, third parties will rush to file, blocking the originator and user of the brand.

In other news from China, the Beijing Administration for Industry and Commerce has published new rules, taking effect on April 15, 2011, banning the use on billboards and other exterior advertising of words which promote "hedonism" and "the worship of foreign made products", such as "supreme", "royal", "luxury" or "high class", which "do not meet the demands of the spiritual civilization."  It's unclear whether the rules are intended to lessen false advertising (fines up to $4,500 are listed, but no mention of enforcement was made) or to reduce the Chinese people's voracious appetite for foreign luxury goods. But the subtext is the widening gap between the poor and the well off in China. Recently, Premier Wen Jiabao spoke of focusing the next 5 year economic plan on "resolving unfair income distribution".

We'll continue to report on China's view of intellectual property and businesses' adaptation to the Chinese market.

For further information, contact Amy B. Goldsmith, whose practice includes the international protection of brands.  

IP DEVELOPMENTS

Fraud Very Difficult to Prove in Trademark Office Proceedings