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 Intellectual Property
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June 2009
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The purpose of this newsletter 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 Defeats Motion to Dismiss; Case to
Proceed |
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| On behalf of auto dealer Manhattan Motorcars Hamptons,
GR&R attorneys George Gottlieb,
Barry A. Cooper,
Diana Muller and
Lesley
Matty brought an action against Automobili
Lamborghini S.p.A. and auto dealer Champion Motor Group, Inc.
for damages arising from failed dealership negotiations with
Defendant Lamborghini and Lamborghini's promises to award
plaintiffs a dealership on Long Island. Additionally,
GR&R moved for a declaratory judgment that plaintiffs were
entitled to continue using the LAMBORGHINI trademark in
connection with the sale and servicing of cars.
Defendants moved to dismiss plaintiffs' action, arguing that
the parties did not have a contractual relationship and that
Lamborghini did not induce plaintiffs to invest resources in
exchange for the award of a new dealership. Upon
referral from the district court judge, the magistrate judge
held that plaintiffs had asserted certain valid causes of
action and that the case should proceed with discovery and
trial. The matter is now before the district judge for
consideration of the magistrate judge's decision. The
magistrate judge's decision can be found here. |
| Attorney
Presentations &
Publications |
|
Amy B. Goldsmith
will be participating as a panel member in a "Starting A
Business" seminar at New York University on June 17, 2009,
beginning at 10:00 am. More information can be found here. Ted Weisz was the
featured expert in the May 15, 2009 issue of "Media
Jockey", a newsletter from Xanthus Communications.
The article can be found here.
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| U.S. Supreme Court to
Review Fate of Business Method Patents |
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The U.S. Supreme Court has granted a petition for
certiorari in Bilski v. Doll to review the
patentability of business method patents. In recent
years, business method patents, which typically cover complex,
computer-based business models and novel ways of doing
business, have come under intense pressure by the Federal
Circuit Court of Appeals. In cases such as In re
Bilski and In re Ferguson, the Federal Circuit
found that the business method claims at issue did not meet
the "machine-or-transformation" test, which requires a
patentable method either to (1) be tied to a particular
machine or apparatus, or (2) transform a particular article
into a different state or thing. Since the claims did
not meet either of these requirements, they were held invalid
under the Patent Act. Relying on In re Bilski,
courts have been invalidating claims of issued business method
patents and software patents in general, while the U.S. Patent
Office has been rejecting such claims in pending patent
applications even before they issue. The grant of the
certiorari petition offers the Supreme Court the opportunity
to reverse this trend.
For further information,
contact Steven
Stern. |
Google AdWords Continue
to Be Controversial
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In the wake of the recent Rescuecom decision (reported
here), Google's
AdWords program continues to make news as Google makes changes
to its trademark policies and is the subject of a class-action
lawsuit in Texas.
On May 14, 2009, Google announced
that it would change its policy regarding the use of someone
else's trademark in the text of a sponsored ad. See
Google's announcement. Under the current
policy, in the U.S., Google would, upon receipt of a complaint
from a trademark owner, remove any sponsored ad using a
trademark without the trademark owner's permission. With
the new policy, found here, Google will
permit the use of another's trademark in a sponsored ad in
certain circumstances, such as comparative advertising or
where an authorized retailer advertises products it is
selling. This change will only apply to the United
States and brings Google's policy in line with those of Yahoo!
and MSN. In another change, Google has also announced
that it will allow advertisers in 190 countries (see list here) to bid on
trademarks as AdWords to trigger the appearance of
advertisements.
Irrespective of any changes Google
makes to its policies, it seems that trademark owners are
still unhappy with Google's sale of their trademarks as
triggers for displaying sponsored ads. On May 11, 2009,
just days before Google announced the changes to its trademark
policies, FPX, LLC, filed a class-action lawsuit in federal
district court in Texas alleging trademark infringement and
related claims based on Google's sale of trademarks as
keywords. The complaint, which can be found here,
specifically refers to Google's keyword suggestion tool, which
was central to the decision in Rescuecom. If FPX's suit can
clear procedural hurdles, such as class certification, then
the central question will be whether internet users are likely
to be confused by Google's sale of keywords to trigger the
appearance of third party ads. If a likelihood of
confusion is found, Google may have to change its trademark
policies again.
For further information, contact Marc P.
Misthal.
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| European Victories for eBay |
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Decisions by courts in France and the U.K. both found
that eBay is not liable for the sale of counterfeit and
"knock-off" products by third-party sellers using the
company's online auction sites, echoing last year's decision
in Tiffany (NJ) Inc.
v. eBay, Inc.
In 2007, French cosmetics
company L'Oreal Paris sued eBay for trademark infringement in
France, the U.K., and several other European jurisdictions,
arguing that eBay is jointly liable for the sale of
counterfeit products by its online users because eBay's
auction software enables buyers to bid and make payments and
facilitates the delivery of goods. Like Tiffany in the
U.S., L'Oreal argued that brand owners should not bear the
burden of policing eBay's auctions and that eBay should do
more to prevent infringing sales.
Earlier this month, the Tribunal de Grande
Instance de Paris ruled in favor of eBay, finding that the
company's internal procedures for addressing counterfeit sales
fulfilled its obligation of "fair dealing" under E.U.
Directives. The French court then ordered L'Oreal and
eBay to mediate their differences and produce a joint course
of action to deal with such issues going forward (see decision
here). This
was eBay's first victory in France, less than a year after it
was ordered to pay compensation to Hermès International and
LVMH Moet Hennessy Louis Vuitton SA for the online sale of
counterfeit handbags, perfume and related luxury items.
Unfortunately for L'Oreal, the UK High Court
ruled on May 22, 2009 that eBay is not liable for the actions
of its users (see decision here), for
reasons similar to those given by the French
court.
While it appears that eBay has emerged
victorious in both the U.S. and European courts, these
decisions do not necessarily spell the end of eBay's legal
troubles. L'Oreal recently appealed a Belgian court's
decision in favor of eBay and L'Oreal's suit against eBay in
Spain is still pending. Furthermore, the U.K. High Court
referred several key questions on the issue of infringement to
the European Court of Justice (ECJ) and also identified
certain measures that eBay could take to combat the sale of
counterfeit and knock-off products. Only time will tell
whether eBay's current policies are truly sufficient to
prevent sale of knock-off and counterfeit goods.
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| Did My
Copyright Certificate Get Lost in
Space? |
|
The U.S. Copyright Office implemented an electronic
filing system for copyright applications last summer.
The system was intended to streamline filing and expedite the
issuance of registration certificates. According to a
recent article in the
Washington Post, many registrants are continuing to
file paper applications, resulting in a backlog at the
Copyright Office. As a result, it is taking the
Copyright Office approximately eighteen months to process a
paper application (which must be entered into the computer
system by hand). In response to the story in the
Washington Post, the Copyright Office announced that it
is taking from five to eight months to process applications
electronically. Given these statistics, for the most rapid results
the best way to proceed is to file the application and deposit
electronically (the deposit is the item that you want
protected: eg., a book, a photograph, a plush toy).
Generally, applicants should file copyright applications
within three months of the first time the work is published to
be afforded benefits such as attorneys' fees and an option to
elect statutory damages. Processing times should improve
once the Copyright Office is more familiar with the system.
The moral of the story is to act quickly...the Copyright
Office will catch up to you! For further information
contact Amy B.
Goldsmith. |
Sale of New Domains
Delayed
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Although it had originally hoped to begin accepting
applications for new Top Level Domains (TLDs) by the end of
2009 (see article here), the
International Corporation for Assigned Names and Numbers
(ICANN) announced that it does not anticipate beginning to
accept applications for new TLDs until the first quarter of
2010. The delay is to allow for further discussion of
issues relating to the implementation of new TLDs, including
the protection of trademark rights. Click here to read the
announcement from ICANN.
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Patent Protection Not Available Where Patented
Product Sold More Than One Year Prior to Filing of Patent
Application
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In the early 1990's Paul Nelson designed a new type of
downhill ski. His ski was wider  and shorter than
conventional skis of that time. He first began selling
the skis during the 1992-93 winter season. Nelson, along
with his wife, sold as many as forty-seven pairs of skis
during that season. A user survey accompanied every pair
of skis, a series of newspaper articles was written that
winter asserting that orders for the skis had been received
from eight stores in Western Washington State. In a
declaratory judgment action, K2 Inc. asserted that the patent
was invalid because the invention was on sale more than one
year before the September 23, 1994 filing date of the patent,
and that under the Patent Act Nelson's invention was not
entitled to patent protection. Nelson admitted to
selling the skis more than one year before filing for patent
protection, but countered that his sales fell within the
experimental use exception to the on-sale bar. Nelson
claimed that (a) public testing and evaluation under real
world conditions was necessary, (b) a survey was included with
each pair of skis, (c) [he] actively sought feedback from a
number of purchasers, and (d) design revisions were made based
on user feedback. The District Court disagreed with
Nelson, explaining that Nelson's activities were not of a
sufficiently experimental purpose. The court based its
ruling on the lack of control of the experiment, combined with
the commercial nature of the sales and the commonality of user
surveys. While this decision is being appealed, this
case it serves as an important reminder of why it is important
to promptly file a patent application. |
The Importance of Taking Care in Disclosing
Information
|
|
Fitness Quest, Inc.
v. Monti, No. 2008-1433 (Fed. Cir. May 12,
2009).
Monti entered into a confidentiality
agreement with Fitness Quest before disclosing to Fitness
Quest aspects of his not yet patented invention for an
exercise machine. The agreement prohibited Fitness Quest
from using confidential information unless Fitness Quest
already knew or learned of the information from another
source. After Fitness Quest began to market an exercise
machine, Monti's patent issued and Monti asserted that the
Fitness Quest design was based, at least in part, on
information Monti disclosed to Fitness Quest about a benefit
of his design. Fitness Quest sued Monti seeking a
declaration of non-infringement and non-violation of the
confidentiality agreement. Monti did not dispute that
Fitness Quest may have learned of the design from another
source. The district court found that there was no
breach of the confidentiality agreement, and the Court of
Appeals affirmed that ruling. The Court of Appeals found
that the design benefit itself was either not disclosed by
Monti to Fitness Quest or that the disclosed design by itself
may not have any benefit and, therefore, the confidentiality
agreement had not been violated.
For further
information, contact Barry
Lewin.
|
| McDonald's Loses Trademark Case against
McCurry |
|
McDonald's is a famous trademark and there are McDonald's
restaurants throughout the world, including 185 outlets in
Malaysia. The fame of the McDonald's mark, however, was
not enough to ultimately stop a small restaurant in Malaysia
from using the name McCurry, which the owners claim was an
abbreviation for Malaysian Chicken Curry. After an epic
eight year legal battle, this past month a Malaysian appeals
court unanimously overturned a lower court decision that had
favored McDonald's. In its decision, the court noted
that people who come upon the McCurry restaurant, which sells
only Indian food, including such popular dishes as "fish head
curry" and uses a logo that has a picture of a chicken giving
a double thumbs-up as a logo, were not likely to believe that
the restaurant was associated with McDonald's. Query
whether the court ever considered the possibility that
McDonald's serves a fish sandwich which includes fish heads or
whether McDonald's sprinkles some curry on its 6 piece chicken
meal, in which case it they might have reached a different
decision. For further information, contact Richard S.
Schurin. |
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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 nearly 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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