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 Intellectual Property
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January
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 Wins Licensing Dispute on Summary
Judgment |
|
On December 15, 2009, Judge Sand of the
Southern District of New York granted summary judgment to
GRR client H.S.W. Enterprises, Inc. based on the
principles of licensee estoppel. In his eleven page
opinion, Judge Sand held that the defendant-licensee could not
now challenge the validity of the licensed mark since it had
acknowledged its validity in the original license agreement
("licensee estoppel"). Judge Sand then granted summary
judgment to plaintiff on this claim, establishing the basis
for a substantial monetary award.
For the
last 40 years, plaintiff H.S.W. Enterprises has operated
high-end Korean restaurants in Virginia and Chicago under the
trademark WOO LAE OAK. In 2007, the plaintiff
entered into a ten-year license agreement with the
defendant-licensee, permitting it to use the WOO LAE OAK mark
for restaurants in New York and Los Angeles. When the
defendant failed to pay the agreed upon license fee, H.S.W.
Enterprises sued to recover those payments and additional
substantial penalties. In response, the
defendant-licensee counterclaimed, attacking the validity of
the licensed mark. In its decision, the court granted
H.S.W. summary judgment on its breach of contract claim, and
expressly rejected the basis of defendant's
counterclaim.
H.S.W. Enterprises is represented by
GRR attorneys Richard S.
Schurin and Maria A.
Savio. A copy
of Judge Sand's decision can be found here. |
| Another Crazy Invention |
|
In our November
edition, we highlighted a few crazy inventions. For
the New Year, I thought that we would revisit this topic,
highlighting a patent application with a New Year's theme that
exemplifies why the Patent Office is overburdened and taking
years to examine legitimate inventions.
This application was filed on December 30, 2003, and you
have to wonder whether the applicant had started celebrating a
day early. It discloses a New Year's celebrating device
having a vertically standing support pole with tracks thereon
upon which a movable ball with lights that slides is
mounted. When the ball reaches its destination at the
bottom of the pole, the New Year's display lights light up and
the ball lights flash. Sound familiar?? This pole and
ball drop for a New Year's celebration device has been used in
Times Square since 1907!
Not surprisingly, this application was initially rejected
by the Patent Office, and then subsequently abandoned by the
applicant.
The full application can be seen
here.
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| Appeals Court
Affirms Injunction Against Microsoft |
|
In a major blow, Microsoft has
been ordered to strip the ability to open custom XML elements
from its flagship word processor, Microsoft Word. In our
September
2009 newsletter we reported that a Federal Court in Texas
issued an injunction against Microsoft, finding that Microsoft
Word infringes a patent owned by i4i, Inc., a Canadian
software maker, for opening custom XML files. Microsoft
appealed the lower court's decision, and on December 22, 2009,
the Court of Appeals for the Federal Circuit affirmed the
Texas District Court's ruling, but amended the injunction so
that Microsoft has until January 11, 2010 to change its Word
program to avoid infringement.
The injunction only affects sales
of Word occurring after January 11, 2010. Microsoft will
separately pay monetary damages to i4i to cover existing
infringement. Microsoft will also release a patch
removing the infringing feature from existing versions of
Word. Since a minority of advanced users take advantage
of custom XML, the vast majority of Microsoft Word users will
be unaffected by the court's decision. Microsoft has
announced that it intends to request a review of the Court of
Appeals' decision by all of the judges on the
court.
|
| Whose Genes Are They,
Anyway? |
|
In our December
2009 newsletter, we reported that Judge Sweet refused
defendants' motion to dismiss the case of Association for
Molecular Pathology, et al., v. Myriad Genetics, et al.,
09-Civ. 4515 (SDNY). On December 24, 2009, the United
States Patent and Trademark Office ("USPTO") filed a motion
and memorandum of law opposing the plaintiffs' summary
judgment motion. The USPTO asserts that "isolated and/or
purified genes are patentable chemicals" and, accordingly,
issuing genetic patents does not violate the First Amendment
but to the contrary is compatible with "freedom of information
and thought." The USPTO also defends genetic patents and
dismisses the plaintiffs' claims that the constitutional
promotion of "the Progress of Science and the useful Arts, by
securing for limited Times to Authors and Inventors the
exclusive Right to their respective Writings and Discoveries"
is somehow violated by gene patenting. The motion
presents more complex issues for Judge Sweet, and we expect to
report on his decision in the next several
months. For
further information, contact Amy B.
Goldsmith. |
| CAB CALLOWAY: Act
II Plays Out in District Court |
|
In our December
2009 newsletter, we reported on a decision of the
Trademark Trial and Appeal Board ("TTAB") in an opposition
action between various family members claiming rights in the
trademark CAB CALLOWAY.
The losing party in that
proceeding has appealed the TTAB decision by filing a civil
action in Federal Court District Court in Manhattan.
While most TTAB decisions are appealed to the Federal Circuit
Court of Appeals, the Trademark Law does provide for appealing
TTAB decisions by way of a District Court action, although
only a very small percentage of appealed cases take this
route.
Stay tuned for further
developments!
|
| Google Convicted of
Copyright Infringement in France |
|
The French are very protective of
the rights of authors. Google learned this lesson the
hard way when on December 18, 2009 a French court ruled that
the well reported Google Books Project violates French law by
impermissibly copying protected works. The Google Books
Project has scanned and digitized millions of books,
approximately half of which are in languages other than
English. Google plans to share a portion of the profits
with the rights holders of the works, but there are many who
believe Google must first seek permission before scanning any
copyrighted works.
The French Court ordered Google to pay approximately
300,000 Euros (US$430,000), a relatively nominal sum for a
large company such as Google. The ruling also
requires Google to remove all extracts of certain French books
from the online database. Such a removal could prove
problematic to Google because the premise of the project is to
create an all encompassing database. Google has
responded by asserting that the ruling is a hindrance
to the French people because it will limit their access
to Google's digital library and will disadvantage them in
comparison to other countries.
As discussed in our December
2009 newsletter, Google recently agreed to revise a
settlement agreement in the U.S. to exclude works originating
outside of the U.S., U.K., Canada and Australia. When
one combines the trouble Google is having in France with the
prior concession, it creates the impression that the Google
Books Project is becoming the Google English Books
Project. For further information, contact Joshua
Matthews. |
| Showing "Bona Fide Intent to Use a Mark"--The DICK'S
NUTS Case |
|
Trademark applicants can file
applications to register marks based on actual use of a mark
or, alternatively, based on intent-to-use ("ITU") a
mark. In an ITU application, the applicant must state by
way of declaration that it has "a bona fide intent to use the
mark in commerce" with respect to the recited goods or in
connection with the recited services. But what constitutes
such intent and how is it proven? The Trademark Trial
and Appeal Board ("TTAB") recently considered that issue in American
Sports Licensing, Inc. v. Seth L. Bent, Opposition No.
91184551 (TTAB Dec. 14, 2009).
In American Sports,
Mr. Bent, an individual representing himself without a lawyer
(never a good idea, in our opinion), filed an ITU application
to register DICK'S NUTS for apparel and for food
products. He was opposed by American Sports, the owner
of several trademarks for DICK'S for clothing, sporting goods
and retail store services. Based on certain discovery
answers of Bent, American Sports asked the TTAB to rule in its
favor by way of summary judgment, arguing that a trial was
unnecessary because Bent could not show that he had a bona
fide intent to use the DICK'S NUTS mark at the time that he
filed his ITU application. American Sports pointed out
that Bent had no corroborating documentary evidence: no
business plan, no surveys, studies or market research and no
knowledge of potential competitors or customers.
In its ruling, the TTAB
recognized that bona fide intent must be objective and not
subjective - merely asserting that an applicant has an intent
to use a mark is insufficient to establish that the intent is
bona fide. The TTAB also held that documentary proof is
usually necessary to corroborate bona fide intent.
Nonetheless, the TTAB noted that the applicant, an individual
who was starting up a new business, should be given some
leeway in proving at trial that his intent to use the DICK'S
NUTS mark was bona fide. Accordingly, the TTAB denied
American Sports' summary judgment request and ruled that the
case should proceed to trial where Bent would have an
opportunity to show that his intent to use the DICK'S NUTS
mark for clothing and for food products was bona fide at the
time he filed his ITU application.
Although Mr. Bent and his
nuts have survived to fight another day, the DICK'S NUTS case
stands for the proposition that it is necessary to show a bona
fide intent to use the mark at the time that the ITU
application is filed, that such intent must be objective and
not subjective and that such intent will require corroborating
evidence.
For
more information, contact Barry A.
Cooper. |
| Patent Mismarking: The Forest Group, Inc. v.
Bon Tool Company |
|
One or more patent numbers often
appear on a product or on packaging for a product. The
U.S. Patent Law encourages "patent marking" by enabling a
successful patent owner to recover patent damages from an
infringer if the patent owner's product is marked. Under the
Patent Act, if the product is not marked, patent damages
cannot be awarded until such time as the alleged infringer is
given actual notice that there is infringement by letter or by
initiation of a patent infringement lawsuit.
But what about
the situation where a product is marked with a patent number,
but it turns out that the product is not covered by the
patent? What is the result of such "false
marking"? Not only is this impermissible, but the Patent
Act makes false marking punishable by a fine of "not more than
$500 for each offense." Moreover, under the Patent Act,
any person may sue to collect the penalty, with half the
penalty given to the person successfully suing and the other
half given to the United States.
The Court of Appeals for the
Federal Circuit recently considered the false marking
provision of the Patent Act in The Forest
Group, Inc. v. Bon Tool Company, Appeal No. 2009-1004
(Fed. Cir. Dec. 28, 2009). In that case, the lower court
found that Forest falsely marked its S2 stilts and awarded Bon
Tool $500, the maximum penalty based on a single act of false
marking. Bon Tool argued that the lower court was wrong
to base the penalty on a single decision to mark the product
rather than on a per article basis. In other words, Bon
Tool argued that the penalty should be based on each item
(i.e., each S2 stilt) that was falsely marked. To no
one's surprise, Forest argued that the district court was
correct. It warned that any other result would subject patent
owners who falsely marked products to ruinous lawsuits
commenced by "false marking trolls" - companies who exist
solely to bring actions to recover 50% of any false marking
penalty award. Indeed, Forest noted that in the appeal,
one such "troll" company formed for the express purpose of
bringing false marking actions had submitted a "friend of the
court" brief supporting Bon Tool's position.
Despite predictions of such
ruinous awards, the Federal Circuit agreed with Bon Tool and
ruled that the penalty for false marking had to be calculated
based on the number of articles that had been falsely
marked. It found that not only was this interpretation
consistent with the language of the false marking statute, but
it would encourage third parties to monitor products with the
salutary purpose of preventing patent owners from
impermissible falsely marking their products.
Nonetheless, the Federal Circuit noted that while the district
court had the discretion to assess the per article fine at any
amount up to $500 per article, it also had wide discretion to
award less than $500 per article, especially for small,
inexpensive items produced in large quantities, in which case
a fraction of a penny might be appropriate. The court
sent the case back to the lower court so it could determine
the appropriate damages award. For more
information, contact Barry A.
Cooper. |
|
|
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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