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 Intellectual Property News |
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September 2011
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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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Attorney Presentations & Publications
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On October 12, 2011, Alison L. Karmelek will be part of a panel discussion reviewing Supreme Court patent law decisions from 2011. Click here for more information.
On October 25, 2011, Amy B. Goldsmith will be giving a presentation on Reality Television: Copyright Issues and Participant Contracts. Click here for more information.
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GP's Trademark Claims Flushed Away
| | | In a lawsuit brought back in 2009, Georgia-Pacific claimed that the trademarks it registered in a quilted diamond pattern used on rolls of its "Quilted Northern" brand toilet paper had been "ripped off" by competitor Kimberly-Clark, who in 2008 came out with its premier "Cottonelle" brand of TP using an apparently similar quilted design. The Seventh Circuit, in a decision issued a little more than a month ago, effectively "flushed" Georgia-Pacific's trademark claims down the toilet. The Court of Appeals agreed with the lower court's finding that Georgia-Pacific's quilted diamond design was functional and therefore not entitled to federal or common law trademark protection. And it did so in a rather humorous decision. Here's a snip of it (the full decision is available here):
EVANS, Circuit Judge. Toilet paper. This case is about toilet paper. Are there many other things most people use every day but think very little about? We doubt it. But then again, only a select few of us work in the rarefied air inhabited by top-rate intellectual property lawyers who specialize in presenting and defending claims of unfair competition and trademark infringement under the Lanham Act, 15 U.S.C. §§ 1051 et seq. And the lawyers on both sides of this dispute are truly first-rate. Together they cite some 119 cases and 20 federal statutes (albeit with a little overlap) in their initial briefs. We are told that during the "expedited" discovery period leading up to the district court decision we are called upon to review, some 675,000 pages of documents were produced and more than a dozen witnesses were deposed. That's quite a record considering, again, that this case is about toilet paper.
We'll start by introducing the combatants. In the far corner, from an old cotton-producing state (Dixie: "I wish I was in the land of cotton, old times there are not forgotten.") and headquartered in the area (Atlanta) where Scarlett O'Hara roamed Tara in Margaret Mitchell's epic Gone With the Wind, we have the Georgia-Pacific Company. Important to this case, and more than a bit ironic, is that the name of Georgia-Pacific's flagship toilet paper is Quilted Northern. In the near corner, headquartered in the north, in Neenah, Wisconsin (just minutes away from Green Bay), and a long way from the land of cotton, we have the Kimberly-Clark Corporation. Ironically, its signature toilet paper brand is called Cottonelle.
Simply stated, under U.S. law, if a design is "functional", the owner cannot claim trademark protection, as this could inhibit future creativity and innovation. When considering whether a design is functional, courts will routinely examine several factors, most notably (1) the existence of a utility patent that is directed to the functionality of an item's design elements and (2) advertising for the item that touts the functional advantages of the item's design elements.
The Seventh Circuit found that the improved feature to which one of Georgia-Pacific's patents was directed, namely embossing a quilt-like diamond lattice filled with signature designs to improve perceived softness and bulk, is the very same feature to which its registered trademarks were directed. The Court was also very persuaded by the fact that the advertising of Georgia-Pacific tied the quilted feature to numerous functional benefits, such as softness, comfort and absorption.
Accordingly, the Court found that the quilted pattern on Georgia-Pacific's toilet paper represented a utilitarian element of TP, rather than a unique identifying element, and was thus not eligible for trademark protection. In other words, the trademark rights which Georgia-Pacific thought they had were unceremoniously "wiped" away. Kind of a "crappy" result for Georgia-Pacific.
For more information, contact Jeffrey M. Kaden.
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.XXX Sunrise Applications Now Being Accepted
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The "sunrise" period for trademark owners wishing to block others from registering their trademarks as .xxx domain names opened on September 7, 2011 and will run through October 28, 2011. Trademark owners who apply for a blocking registration will not own a .XXX domain name; rather, they are purchasing the right to have their mark excluded from registration for ten years.
XXX domain names will be available on a "land rush" basis from November 8 through 25, 2011, and will be generally available starting on December 6, 2011.
For further information, contact Amy B. Goldsmith or Marc P. Misthal, who counsel clients on domain name issues.
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Update on Genetic Patent Issues
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The ACLU was not happy with the Federal Circuit's decision reversing the lower court and declaring that that Myriad's patents on the actual breast cancer genes were patentable. (See our prior reports here, here, here and here). In response, on August 29, 2011, the ACLU filed a petition for rehearing before the same three judges, rather than a request for the entire bench to review the case. Although the Federal Circuit denied the request on September 13, 2011, it is instructive to review because it presages the ACLU's likely focus on appeal to the Supreme Court.
The ACLU's main rehearing points were as follows:
Standing:
· Dr. Ostrer (the only party left with standing after the appellate decision) is a member of the American College of Medical Genetics, who has organizational standing since gene patenting is a topic related to the purpose of the College;
· In her declaration, Ellen Matloff stated that Myriad advised her and other Yale geneticists that if they conducted BRCA1/2 testing, they would violate Myriad's patents; under the Federal Circuit's reasoning that standing accrues if Myriad directed communications about the patents to any party, Ms. Matloff has standing.
Wrong on the Facts and the Law:
· Error in Claim Construction: By focusing on the chemical structure of the patented gene sequences, rather than the function of those sequences, to determine that the isolated DNA is chemically markedly different from native DNA and thus not a product of nature, the appellate court ignored the actual language of the claims, which are defined by function, not structure ("Patent '282, claim 1, for example, reaches any chemical that 'codes for a BRCA1 polypeptide' or any fragment of that polypeptide"); factually, these include many different chemical structures which are found in nature and which have a functional purpose, coding for a protein; in ignoring the claimed function in favor of chemical structure, the Court made a claim construction error
· Factually Wrong: DNA fragments such as those patented by Myriad naturally occur in the body via the processes of cellular replication (where cells make copies of themselves, during meiotic recombination, and when DNA breaks into fragments; in all of these cases, covalent bonds are naturally broken
· Facts Not in the Evidentiary Record: "Judges Lourie and Moore relied on facts not in the evidentiary record and failed to consider other, relevant facts clearly establishing that the
claimed fragments are products of nature as a matter of both fact and law"
Interestingly, Myriad also filed for rehearing; briefing is due on September 16, 2011. Myriad's petition focuses on Dr. Ostrer's departure from NYU, which Myriad claims destroys declaratory judgment jurisdiction. Dr. Ostrer will now be employed by Albert Einstein College of Medicine. But Myriad's request is a two-edged sword: if rehearing is granted and the case is dismissed for lack of standing, presumably the favorable decision will be vacated (Myriad did not request this result!).
We will continue to watch this case unfold.
For further information, contact Amy B. Goldsmith, whose undergraduate studies focused on genetics.
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Bankrupt Nortel Networks Receives $4.5 Billion for Portfolio of 6,000 Patents
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In August, a consortium including Microsoft, Apple, RIM, Ericsson and Sony purchased 6,000 patents from bankrupt Canadian telecommunications company Nortel Networks for a reported $4.5 billion, or $750,000 per patent. The purchase provides a prime example of the importance of patent protection for technology companies.
Many of the Nortel patents covered technologies involved in 4G telecommunications and Wi-Fi computer networking. Google had initially bid $900 million for the portfolio and the ten figure final price tag paid by the consortium was most likely caused by the exploding market for smart phones. Google has entered the smart phone market via its Android mobile operating system. Microsoft, Apple, RIM, Ericsson and Sony are clearly fearful of the market share Google and Android have already acquired and will continue to acquire. The one advantage the more established smart phone makers have over Google and Android is patent protection. By preventing Google from acquiring the Nortel patents, the established smart phone makers have ensured that they can bring patent infringement suits against Google and companies using the Android operating system without increased fear of retaliatory suits being filed against them. In a world where products include increasing amounts of cooperating technologies, the defense of choice for many patent infringement defendants is to accuse your accuser of infringing a patent you own. The counter suing strategy is often effective in forcing settlements and cross-licensing agreements.
At the same time as the Nortel patents were being shopped around, Google was successful in a separate purchase of 1,000 patents from IBM. While the amount paid by Google is not publically available, the patents mainly focused on data storage, an area in which Google is a leader.
Whose patents will be bought next? For more information contact Joshua Matthews, whose practice includes counseling clients on patent matters.
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Watch Your Step: Louboutin's Red-Soled Trademark Called Into Question
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Christian Louboutin S.A. v. Yves Saint Laurent America, Inc., 11 CV 2381 (VM) (S.D.N.Y. Aug. 10, 2011).
You may have seen them on the catwalk, read about them in industry magazines or unknowingly sung their praises in Jennifer Lopez's 2009 pop song, but if you've followed haute fashion at any point in the past decade, it's been hard to miss Christian Louboutin's red-soled high-heeled shoes. The designer has garnered a cult following for his high-end footwear with red lacquered soles, and they don't come cheap - a pair of these flashy shoes can command up to $1,000.
 On January 1, 2008, the U.S. Patent and Trademark Office (PTO) granted Louboutin's trademark application for the registration of a red outsole for women's high fashion designer footwear (Red Sole Mark), and with it, conveyed a grant of federally protected rights in the color red for outsoles to the designer.
Several years later, on April 7, 2011, Louboutin brought a lawsuit against Yves Saint Laurent America (YSL), another luxury fashion house, for selling four pairs of shoes with red outsoles in its 2011 cruise collection. Specifically, Louboutin asserted various claims under the Lanham Act, including trademark infringement, false designation of origin and dilution. Interestingly, the YSL shoes in question were monochromatic, meaning that the entire shoe was red, and not just the sole. YSL claims that it has marketed other shoes with red outsoles in past collections.
YSL responded with counterclaims for cancellation of Louboutin's Red Sole Mark and damages. Louboutin then moved for a preliminary injunction to prevent YSL from marketing its red-soled shoes during the pendency of the action.
Judge Victor Marrero asserted that in order to obtain a preliminary injunction, Louboutin had to first demonstrate that its Red Sole Mark merits protection. (Note that given its trademark registration, Louboutin had a statutory presumption that its mark was valid). As discussed in June's newsletter, color may be registrable as a trademark -- if it distinguishes goods and identifies source without serving any other significant function. The judge narrowed the question in the instant case to whether the Lanham Act extends protection to a trademark composed of a single color used as a defining quality of an article in the fashion industry, where color is generally decorative, and hence, may serve a non-trademark function.
Judge Marrero ultimately held that Louboutin's claim to red was overly broad and expressed serious doubts about whether he possesses a protectable mark. Given this, the Court denied Louboutin's motion for a preliminary injunction and also intimated that he would have granted a summary judgment motion from YSL - an extraordinary, unsolicited statement!
On August 12, 2011, Louboutin appealed Judge Marrero's denial of its preliminary injunction motion to the Court of Appeals for the Second Circuit. The Second Circuit's ultimate decision will no doubt be of interest to the trademark community and Louboutin-wearers everywhere.
For further information contact Rachel M. Weiss, who counsels clients regarding trademarks.
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Spiderman, Iron Man and The X-Men vs. The Copyright Act
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Marvel Worldwide, Inc.v. Kirby, 10 CV 141 (CM) (S.D.N.Y. July 28, 2011).
In 2009, the heirs of Jack Kirby, a legendary Marvel Comic artist, sought to terminate Kirby's assignment of certain copyrights in Spiderman, The Fantastic Four, Iron Man, Thor, The X-Men and other comic books to Marvel. In doing so, Kirby's heir invoked a provision of the Copyright Act which permits the author (or their heirs) of a copyrighted work in its first or second copyright terms as of January 1, 1978 to terminate any assignment of copyright made prior to that date. After the parties were unable to reach a negotiated settlement, Marvel filed a lawsuit seeking a declaration that Kirby's work for Marvel was a work made for hire and therefore was not susceptible to a termination of rights.
Marvel and Kirby's heirs both made motions for summary judgment, and after considering both motions, the court ruled that Kirby's work qualified as a work made for hire and was not subject to termination. In reaching this conclusion, the court relied on the testimony of Stan Lee, who explained that he generally gave artists such as Kirby the general contours of a particular story and then let the artist draw the story; Lee would then add dialogue and edit the artwork. According to the court, Kirby was a free-lance artist for Marvel and his heirs did not come forward with any evidence to the contrary. The court rejected the argument that a subsequent assignment from Kirby to Marvel indicated that Marvel believed that Kirby possessed copyright rights, explaining that there was no basis for believing that Kirby had any rights to assign to Marvel. Accordingly, the court ruled that the termination notices sent by the Kirby heirs were of no effect because the works covered by the termination notices were works for hire and therefore owned directly by Marvel.
The issue of copyright termination will continue to be of importance as works created in 1978 and thereafter become eligible for termination. For example, songwriters such as Bob Dylan, Tom Petty, Bryan Adams, Loretta Lynn, Kris Kristofferson and Tom Waits have already filed termination notices. Other songwriters, such as Bruce Springsteen and Billy Joel, have not yet announced their plans.
For further information contact Marc P. Misthal, whose practice includes counseling clients on copyrights matters.
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Intellectual Property News Editorial Board: Amy B. Goldsmith (agoldsmith@grr.com) and Marc P. Misthal (mmisthal@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 over 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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