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Top Ten Most Important Trademark Cases

By Stephen B. Schott
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Patent attorneys appreciate patent law’s rigidity. Unlike many areas of the law, there are hard rules and unextendible deadlines. In some ways, this inflexibility reflects the personality of the scientists and engineers who benefit from it. But if patent law is predictable and rigid, trademark law is its antithesis: unpredictable and changeable. Its practitioners dabble in a dark art that patent practitioners cannot sometimes appreciate. As a mentor of mine used to say, “The beauty of trademark law is that you can argue any point and support it with 10 cases.”
Some of the reason trademark law can support many positions is that where patent law is largely regionally consistent, trademark law may not be. Further, trademark law is often subjective so what trademarks are confusing to one jury may not be to another. Thus, while it was not challenging to come up with a Top Ten Patent Cases article and presentation, the same is not true for trademarks. But given the challenge, here’s my shot at a top ten—that turned out to be eight—trademark cases.
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There may be limits on an individual’s rights to use his own name. Taylor Wine Co., Inc. v. Bully Hill Vineyards, Inc. (2d Cir. 1978). This case is famous for its story. Taylor Wine was and is a winery in the Finger Lakes region of New York. Walter Taylor, grandson of Taylor Wine’s founder, began selling wine under his name: Walter Taylor. In a series of colorful cases, the courts denied Walter Taylor the right to sell wines under his own name and went so far as to conclude in one case, “[Walter Taylor], in short, [can] not pretend that his grandfather or his father passed anything on to him as a vintner.” Ouch. The reasoning was based on Taylor’s lack of relation to the wine business before his purchase of a winery and many years after the establishment of the Taylor Wine brand. (The top of Walter Taylor's Bully Hill Love My Goat wine label reads “They may have my name but they didn’t get my goat.”)
Use of a mark establishes use in commerce, which is a trademark requirement. Zazu Designs v. L'Oreal, S.A. (7th Cir. 1992). In this case, L’Oreal knew that Zazu intended to use the mark ZAZU in hair products but L’Oreal began a wide distribution using the ZAZU mark before Zazu began its own widespread sales. In finding Zazu’s trademark rights not valid, the court stated that “Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated.… But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration.The Lanham Act allows only trademarks 'used in commerce' to be registered.”
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Factors to consider when determining whether there is a likelihood of confusion between two marks. Polaroid Corp. v. Polarad Elecs. Corp. (2d Cir. 1961). AMF Incorporated v. Sleekcraft Boats (9th Cir. 1979). When determining whether one mark infringes another, the test is whether there is a likelihood of confusion between the marks. In making this determination, a court considers the following factors:

  • strength of the senior user’s mark. The stronger or more distinctive the senior user’s mark, the more likely the confusion.
  • similarity of the marks. The more similarity between the two marks, the more likely the confusion.
  • similarity of the products or services. The more that the goods or services are related, the more likely the confusion.
  • likelihood that the senior user will bridge the gap. If it is probable that the senior user will expand into the junior user’s product area, the more likely there will be confusion.
  • the junior user’s intent in adopting the mark. If the junior user adopted the mark in bad faith, confusion is more likely.
  • evidence of actual confusion. If the trademark owner can show that the average reasonably prudent consumer is confused, it is evidence of infringement.
  • sophistication of the buyers. The less sophisticated the purchaser, the more likely the confusion.
  • quality of the junior user’s products or services. The lesser the quality of the junior user’s goods, the more harm is likely from consumer confusion.
  • related products and services. The more related the products and services, the more likely the confusion.

A mark must be deceptively misdescriptive to be invalid. In re Nantucket (CCPA 1982).  In this case, a North Carolina company called Nantucket, Inc. applied to register NANTUCKET for sales of t-shirts. The USTPO and the Appeals Board rejected the application as "primarily geographically deceptively misdescriptive" since the company had nothing to do with the Nantucket area. The court found that the USPTO did not give enough weight to the word “deceptive" in the law and even discussed the US House of Representative’s debate during the statute’s enactment. "Debate in the House concerning the word "deceptively" indicates that it is not mere surplusage, that its addition was intentional, not accidental, and that it has meaning.” The court found that people do not associate Nantucket with t-shirts and therefore the use of NANTUCKET with t-shirts is not deceptive. (In contrast, selling MAINE branded lobsters would be improper if the lobsters were actually from Rhode Island.)
Proof of secondary meaning is an issue only with respect to descriptive marks: Suggestive and arbitrary or fanciful marks are automatically protected upon registration, and generic terms are unprotectable even if they have acquired secondary meaning. Zatarain's, Inc. v. Oak Grove Smokehouse, Inc. (5th Cir. 1983). Zatarain’s owned the marks FISH-FRI, which had been in use for a long time and CHICK-FRI, which had been in use for less time. Trademarks can be classified as generic, descriptive, suggestive, or arbitrary/fanciful, and descriptive and Oak Grove challenged the Zatarain’s marks as merely descriptive. The court found that both marks were indeed merely descriptive and thus would only be registerable if they had developed secondary meaning. "Factors such as amount and manner of advertising, volume of sales, and length and manner of use may serve as circumstantial evidence relevant to the issue of secondary meaning.” For FISH-FRI, the court found that Zaitarain was using FISH-FRI to successfully indicate to the public that it was the producer of the product rather than just the product itself. Given CHICK-FRI’s shorter time in use, however, the court found that it had not acquired secondary meaning and canceled the mark.

Even a limited background use of a mark can be enough to create a likelihood of confusion. Playboy Enterprises, Inc. v. Netscape Communications Corp. (9th Cir. 2004). When searching for Playboy Enterprise, Inc.’s mark PLAYBOY, Netscape's search engine Excite brought up certain “click here” labeled advertisements that were linked to a non-Playboy website. The court held that even though consumers could not see that there was an association of the “click here” ad and the search term Playboy, there was confusion, and this confusion was not nominal because the “click here” advertisements could have been identified in other ways to make it clear they were not associated with Playboy Enterprise, Inc.
False advertising requires that a plaintiff must show either that the advertisement 1) is literally false or 2) is literally true yet likely to mislead or confuse consumers. Johnson & Johnson Merck Pharmaceuticals, Co. v. Smithkline Beecham Corp. (2nd Cir. 1992).  Smithkline ran an advertisement calling attention to the fact that J&J’s MYLANTA contained aluminum and its own TUMS product did not. J&J claimed that Smithkline did this because there were media reports about a link between aluminum and Alzheimers, and that J&J’s conduct amounted to false advertising. In denying J&J’s claim, the court found that false advertising requires that a plaintiff must show either that the advertisement 1) is literally false or 2) is literally true yet likely to mislead or confuse consumers.
If you have a suggestion for trademark cases to round out my top ten, please contact me.
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Patentable Subject Matter: The USPTO’s Guidelines after Alice

An Article in Schott, P.C.’s IP Law For Start-ups Series
By Stephen B. Schott
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As promised when the Supreme Court issuedAlice, the answer to the question “What is patentable?” will be developing over the next several years. But just a few weeks removed from the decision, the USPTO has issued the first of its guidelines for how it will deal with applications after Alice.
The USPTO Guidelines
Shortly after the decision, the USPTO issued preliminary examination instructions to its examiners to help them follow Alice. This often happens as the USPTO adjusts its practices in the wake of a significant case or change in the law.
The USPTO's instructions reiterate Alice’s two step test for determining patentability.
Step 1. "Determine whether the claim is directed to an abstract idea."
The USPTO gives a few examples of “abstract ideas” such as "fundamental economic practices, certain methods of organizing human activities, an idea of itself, and mathematical relationships/formulas.”
Step 2. "If an abstract idea is present in the claim, determine whether any element, or  combination of elements, in the claim is sufficient to ensure that the claim amounts to  significantly more than the abstract idea itself. In other words, are there other limitations in the claim that show a patent-eligible application of the abstract idea, e.g., more than a mere instruction to apply the abstract idea? Consider the claim as a whole by considering all claim elements, both individually and in combination."
Claim limitations referenced in Alice that may be enough to qualify as "significantly more” when used with an abstract idea include:

  • Improvements to another technology or technical fields,
  • Improvements to the functioning of the computer itself, and
  • Meaningful limitations beyond generally linking the use of an abstract idea to a particular technological environment.

Claim limitations referenced in Alice that are not enough to qualify as "significantly more" when used with an abstract idea include:

  • Adding the words "apply it" (or an equivalent) with an abstract idea, or mere instructions to implement an abstract idea on a computer, and
  • Requiring no more than a generic computer to perform generic computer functions that are well-understood, routine and conventional activities previously known to the industry.

Former Federal Circuit Court of Appeals Chief Judge Michel stated that this “something more” test is “vague” and  leaves some patent owners and their lawyers "put to sea with no chart.” The USPTO’s guidelines can’t correct that defect in the Alice opinion, but they at least give us some initial guidance.
As litigation and prosecution develop post-Alice, I will provide more updates on the patentable subject matter standard. [Update 1: First Federal Circuit case finding software patentable afterAlice]
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How to Keep an Inventor's Notebook

An Article in Schott, P.C.’s IP Law For Start-ups Series
By Stephen B. Schott
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An inventor’s notebook can be a breeding ground for your creative ideas. Capturing your ideas and improving on them over time in a single notebook lets you revisit older ideas or combine ideas as you solve a problem. And if you think of the notebook like a brainstorming tool for your creations, you might find that just like in a brainstorming session, your best ideas come out in later pages after you have tackled a problem in more predictable ways. So go out and buy an inventor notebook to keep track of your inventions. Slide it in your backpack or briefcase and keep it handy. And once you do start one, keep the following in mind.
Legal Reasons to Keep an Inventor’s Notebook
A few years ago, an inventor notebook was a critical piece of documentation used to establish an inventor's date of invention. But with recent changes to US law that reward patents based on the first inventor who files their application, establishing a date of invention may be important but it is not as critical as it used to be.
Nevertheless, there are still important reasons to document your inventions in a notebook.

  1. Your notebook shows the date you conceived of the invention  Let’s say someone in your workplace gets access to your notebook and copies your idea. Your notebook can serve as evidence of their theft. Remember: Patents are only awarded to inventors, not people who steal ideas and apply for the patents.
  2. The notebook acts as a log of who has seen your invention. As I mention below, you should record who has access to your workspace and notebook. This record can be critical if someone steals your idea. But be careful: any public disclosure can bar you from getting patents in non-U.S. countries and in the U.S., a public disclosure starts a clock ticking: Within one year of the disclosure, you must file a patent application or you will be barred from doing so in the future.
  3. Your notebook pages can help your patent attorney prepare a patent application. The sketches, tables, and writeup that you keep in the notebook can help your attorney draft a patent application.

Features of an Inventor's Notebook

  • Permanent binding. Your notebook should have a permanent binding with no removable pages.
  • Gridlines. For sketching and tables, gridlines can be helpful.
  • Page numbers. You can number your pages or buy a notebook with pre-numbered pages.
  • Protective cover. Your notebook will benefit from being hard-covered or at least having a a durable cover.

Format for Entering Information in the Notebook

  • Use pen. I don’t draw well so this goes against my being. Everything that you put into your notebook should be permanent and uneraseable. If you make a mistake, simply line it out and keep writing. Don’t white it out or otherwise make your notebook unreadable.
  • Do not tear pages from your notebook.
  • Number your pages consecutively if they are not numbered.
  • Do not leave gaps in your writing. If you are moving from one idea to another, draw a line after your last written line and begin the new idea. Blank spaces give the impression that you could add material later—you don’t want that impression.
  • Date and sign every entry.
  • Get a witness who is bound by a nondisclosure agreement to sign your entries.

What to Include in the Notebook
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  • Describe your invention in words and drawings. Answer the questions: (1) How does it work, (2) What materials does it use, (3) When did you think of it, (4) What other fields could it be used in?
  • Label your figures “Fig. 1, Fig. 2" and use arrows and labels to refer to your drawings or steps in flowcharts.
  • If you want to include a drawing or chart printed outside the notebook, make a circle or appropriate shape around it, date the shape, describe the attachment and permanently affix the page into the notebook. If you can leave a gap on one side of your attachment to show the blank page beneath it, that is best.
  • Include variations on your idea, even if they are a little far-fetched. Today’s far-fetched idea may be widely adopted in the future.
  • Make a record of the people who see your invention. As you do this, understand that any public disclosure can bar you from getting patents in non-U.S. countries and that in the U.S., a public disclosure starts a clock ticking: Within one year of the disclosure, you must file a patent application or you will be barred from doing so in the future. The takeaway: Be careful who you show your invention to.

Backup and Safety

  • Backup your notebook. The notebook will be your best source of documentary evidence but that doesn’t mean that you shouldn’t back it up. Make copies of your pages and securely store them electronically or in paper.
  • Keep your notebook safe. When not in use, keep your notebook somewhere private and secure.

If you have questions, contact me.
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The Supreme Court Rules on Public Performance and Copyright

By Stephen B. Schott
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Last week, the Supreme Court wrapped up a busy term for intellectual property cases. The latest and final IP case it decided was American Broadcasting Cos., Inc. v. Aereo, Inc. Aereo is a copyright case involving a copyright holder’s exclusive right to "perform the copyrighted work publicly.” In reviewing the technology at issue, a majority of the Court found that Aereo’s software violated this right. Justices Scalia, Thomas, and Alito dissented.
At the heart of this case is/was a growing Internet company with a technology that allowed users to rent a “dime-sized” TV antenna in a local market and stream the locally broadcast content remotely. In this way, a user could watch local programming in Philadelphia, Buffalo, or Los Angeles from anywhere in the world. Aereo’s own short video does a better job explaining its technology than the Supreme Court or this author.

Aereo successfully defended itself in the appellate court by arguing that the streaming it offered was personal, and thus not public as required under the statute. Aereo bolstered this claim by noting that when two users want to access the same local programming, its system assigned each of the users their own antenna and own individual stream.
The Court’s Analysis
The Supreme Court applied a two-part test to this case: (1) Did Aereo “perform” under the statute, and if it did, (2) Did Aereo perform “publicly?”
The performance question. The Court reviewed a history of the performance requirement, in particular that Congress amended the Copyright Act in 1976 to define acts by predecessors to today's cable providers' transmissions as “performances." The Court then concluded that Aereo is like a cable provider and thus it performs.
The public performance question. Again, the Court compared Aereo’s transmissions to those of cable companies and found them similar. Regarding the difference that Aereo only transmits programming to individual users, the Court stated, "We do not see how the fact that Aereo transmits via personal copies of programs could make a difference.”
The Aereo Holding: Consequential or Not? 
Justice Scalia, never one to shy away from a chance to pen a dissent, summed up the majority’s reasoning:

The Court’s conclusion that Aereo performs boils down to the following syllogism: (1) Congress amended the Act to overrule our decisions holding that cable systems do not perform when they retransmit over-the-air broadcasts; (2) Aereo looks a lot like a cable system; therefore (3) Aereo performs…. That reasoning suffers from a trio of defects….

And Jason Rantenen outdid Scalia in capturing the Court’s comparison of Aereo’s technology to cable companies: “If it’s basically the same as a duck, it’s a duck.”
Scalia concluded with an admonishment that this opinion would give content providers a wide net to accuse emerging technologies of copyright infringement whenever they looked-like-cable-TV. Introducing this dark specter, he noted that the Court nearly made a similar error in the 80s when it came within a vote of outlawing VCRs.
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We came within one vote of declaring the VCR contraband 30 years ago…. The dissent in that case was driven in part by the paintiffs’ prediction that VCR technology would wreak all manner of havoc in the television and movie industries…. Hence, the proper course is not to bend and twist the Act’s terms in an effort to produce a just outcome, but to apply the law as it stands and leave to Congress the task of deciding whether the Copyright Act needs an upgrade.

But as David Post points out, "The majority is at pains, in several places, to say that the case is just about broadcast television and the re-transmission of broadcast signals.” For example, rather than simply allowing its holding to stand without commenting on Scalia’s dire predictions, it went out of its way to state that the holding was quite limited.

Aereo and many of its supporting amici [Professor Post being one of these] argue that to apply the Transmit Clause to Aereo’s conduct will impose copyright liability on other technologies, including new technologies, that Congress could not possibly have wanted to reach. We agree that Congress, while intending the Transmit Clause to apply broadly to cable companies and their equivalents, did not intend to discourage or to control the emergence or use of different kinds of technologies. But we do not believe that our limited holding today will have that effect.

Developing case law will shed light on this decision’s consequences. In the meantime, there is little doubt that content providers will use the looks-like-cable-TV test in an attempt to capture all manner of emerging technologies.
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Top Ten Plus One Most Important Patent Cases

This is based on my Top Ten Most Important Patent Cases article, and the plus one is Alice v. CLS Corp.
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Is Your Software or Business Method Patentable? The Supreme Court Weighs In

An Article in Schott, P.C.’s IP Law For Start-ups Series
By Stephen B. Schott
Summary
Alice Corp v. CLS Bank Int'l Supreme Court Opinion
Alice
Today, the Supreme Court took a swipe at business method patents that merely take a known abstract idea and implement that idea using a computer. The Alice Court was careful to distinguish between (1) unpatentable known abstract ideas that were the subject of the case, and (2) abstract ideas that contain “something more…thereby ’transform[ing]’ them into patent-eligible subject matter.’”
The Court called the patent claims at issue “known” and “long prevalent,” and characterized their implementation on a computer a “basic function” that was “’well-understood, routine, [and] conventional.’” The Court took pains to point out that not all abstract ideas implemented using a computer are patent-ineligible, but this particular well-known idea was.
The decision may not, however, have widespread consequences for most patent holders. The Court cited one of its earlier opinions to point out what methods could be patentable. In that opinion (Diamond v. Diehr), the Court found that a computer-implemented method was patentable subject matter “because it improved an existing technological process.” This is an important indicator that software remains patentable subject matter in the Court’s opinion.
It’s going to take years for the US Patent and Trademark Office and courts to interpret and implement the Court’s new test that to be patentable subject matter, a patent claim must provide “something more,” a vague requirement no doubt soon to be dubbed the “something more test.” This something more test would be a hit with Alice in Wonderland’s Mock Turtle, who might conclude, "Well, I never heard it before, but it sounds uncommon nonsense.”
In the meantime, patent claims will not be patentable if they merely take a known idea and implement it generically on a computer.
An Enjoyable Conclusion
It’s worth starting at the end of the opinion because the Court hinted at something that most lay readers will agree with: Lawyers are sneaky.
The Court concluded its opinion by noting that the issue of patentable subject matter is not subject to the “draftsman’s art." The Court then drew a colorful quote from an 1886 patent case: “The concept of patentable subject matter under §101 is not ‘like a nose of wax which may be turned and twisted in any direction….’” This was a snub to some patent attorneys who spent many of the last 10 or more years tacking magic words like “performed on a computer” onto known methods in an attempt to transform the known method into patentable subject matter. The Court said that patent attorneys don’t possess magic words that permit such a transformation.
The Alice Opinion
Justice Thomas introduced Alice’s much-maligned patent claims early in the Court’s opinion, quoting one of them fully in a footnote:

33. A method of exchanging obligations as between parties, each party holding a credit record and a debit record with an exchange institution, the credit records and debit records for exchange of predetermined obligations, the method comprising the steps of:
(a) creating a shadow credit record and a shadow debit record for each stakeholder party to be held independently by a supervisory institution from the exchange institutions;
(b) obtaining from each exchange institution a start-of-day balance for each shadow credit record and shadow debit record;
(c) for every transaction resulting in an exchange obligation, the supervisory institution adjusting each respective party’s shadow credit record or shadow debit record, allowing only these transactions that do not result in the value of the shadow debit record being less than the value of the shadow credit record at any time, each said adjustment taking place in chronological order, and
(d) at the end-of-day, the supervisory institution instructing on[e] of the exchange institutions to exchange credits or debits to the credit record and debit record of the respective parties in accordance with the adjustments of the said permitted transactions, the credits and debits being irrevocable, time invariant obligations placed on the exchange institutions.

After reviewing how the case arrived before the Court and its earlier precedent on this topic, the Court quoted the statute regarding patent-eligible subject matter:

Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title. 35 USC 101.

And then it reiterated its two-step test for how to apply this statute:

First, we determine whether the claims at issue are directed to [laws of nature, natural phenomena, or abstract ideas]… [Second,] we then ask “[w]hat else is there in the claims before us? We have described step two of this analysis as a search for an “ ‘inventive concept’”—i.e., an element or combination of elements that is “sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself."

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Applying the first step, the Court concluded that the claims encompass an abstract idea. And in applying the second step, regarding whether the claims contain a combination of elements that distinguish them from a known concept, the Court mixed elements of the 35 USC 102 novelty requirement into its 35 USC 101 patentable subject matter analysis, as it has done in earlier opinions (Mayo v. Prometheus and In re Bilski) and during oral argument. This mix is clear in the Court’s statement that taking a known concept and generically implementing it on a computer is “well understood, routine, [and] conventional” and “one of the most basic functions of a computer.…In short, each step does no more than require a generic computer to perform generic computer functions.”
Lessons for Software Inventors
The bottom line is that software is still patentable subject matter, but it will need to be new—not just an implementation of known concepts. “At some level, ‘all inventions...embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.’…Thus, an invention is not rendered ineligible for patent simply because it involves an abstract concept. [Applications] of such concepts 'to a new and useful end,’ we have said, remain eligible for patent protection.” And the more ties and interaction that the software has with the physical world, the better.
This will be a developing area of law, as it has been for the last 30 years.
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“Hail to the…” Redskins Federal Trademarks Canceled as Disparaging

By Stephen B. Schott
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In a 2-1 split decision, the US Patent and Trademark Appeals Board canceled several trademarks owned by American football's Washington Redskins today. The marks included: WASHINGTON REDSKINS, THE REDSKINS, several stylized variations of REDSKINS, and one mark whose commercial value seems dubious: THE REDSKINETTES.
The Washington Redskins have been under increasing pressure from activists and even 50 US Senators to change their name, and litigation seeking to cancel the REDSKINS name dates back to 1967. This latest decision is another chapter in this long battle.
In canceling the federal trademarks, the Board concluded that "we decide, based on the evidence properly before us, that these registrations must be cancelled because they were disparaging to Native Americans at the respective times they were registered, in violation of Section 2(a) of the Trademark Act of 1946, 15 U.S.C. § 1052(a).”
The law permits refusal for registration or cancelation of any mark that “consists of or comprises immoral, deceptive, or scandalous matter; or matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute.”
The opinion, including its dissent, weighed in at a Hog-like 99 pages and included a detailed review of testimony, history, media coverage, and third party submissions. For example, Kimberly Whitehead wrote this to former Redskins owner Jack Kent Cooke in 1993:

The Washington Redskins must go! No, not the team, but the name, which is totally demeaning of Native Americans and reinforces a negative stereotype that is unjust and unwarranted. The term “redskins” is out of a period when there was a bounty on the heads of Indians and they were scalped. Eighty cents for a man’s skin, 60 cents for a woman’s skin and 20 cents for a child’s skin. It is a period in our history that every American should be ashamed of and the continued use of such a derogatory and offensive term is an abomination. Ben Nighthorse Campbell, the only Native American in the U.S. Senate, says that “the name Redskins carries the same negative connotation as some terms that blacks and whites find offensive.”

Many people wrote in support of the name as well, and these letters and quotes are also included in the opinion, such as a letter from the Principal Chief of the Seminole Nation of Oklahoma, Jerry G. Haney, who expressed that "the use of the Redskins name by the Washington football team is a source of pride.”
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The Board took note of several facts, including that “[f]rom 1983 on, all dictionary entries...include a usage label indicating the term [REDSKIN] is offensive, disparaging, contemptuous or not preferred.”
Based on the record as a whole, the Board concluded that "In view of the above, petitioners have shown by a preponderance of the evidence that a substantial composite of Native Americans found the term REDSKINS to be disparaging in connection with respondent’s services during the relevant time frame of 1967-1990. Accordingly, the six registrations must be cancelled as required under Sections 2(a) and 14(3) of the Trademark Act.”
Can the Redskins still use REDSKINS? 
Yes, definitely. The Board was careful to note that it cannot deny someone’s use of a trademark, merely its federal registration. "This decision concerns only the statutory right to registration….We lack statutory authority to issue rulings concerning the right to use trademarks.”
And even if it loses its federal registration, the REDSKINS mark can still be asserted against would-be infringers based on the Washington Redskins' state trademark registrations and common law rights. While this is a substantial loss to the Washington Redskins in losing some valuable intellectual property, the bigger loss may be that the Board validates the protests and heightens pressure on Redskins’ owner Daniel Snyder to change the team name.
What happens next? 
After almost 50 years, this isn’t over. The Washington Redskins can appeal this decision and where it goes on appeal from this divided Board decision is pure speculation, although the media and political pressure might play a role in upholding the decision.
Editor’s Note. The author of this article is prone to bias when it comes to American football teams, especially those that beat his beloved Buffalo Bills in the Superbowl. I don’t care if the Washington Redskins win a football game or court case ever again. By the way, I'm waiting on the Buffalo Bills to get sued by all the Williams of the world for disparaging their good names.
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Tesla Donates Its Patents to the Public: "All Our Patent Are Belong To You"

By Stephen B. Schott
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Yesterday, Tesla Motors announced that it "will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology.” It removed all of its patents from its lobby in Palo Alto and says that "applying the open source philosophy to our patents will strengthen rather than diminish Tesla’s position in [the market].” Tesla titled its announcement “All Our Patent Are Belong To You” in a variation of the All Your Base Are Belong To Us Internet meme that you can watch below.
Tesla makes electric cars like its sporty Roadster that has a base model price of $100,000. But with the all-electric and even hybrid market still struggling to gain footing against cheaper gas alternatives, Telsa hopes that promising not to sue for patent infringement will spur competition and demand.
Tesla's promise is vague and leaves open some questions. It won’t sue someone who develops an infringing technology but that doesn’t mean Tesla is adopting an open source model. In true open source, people and companies open their technology vault. Tesla, however, is not making its blueprints, drawings, chemical compounds, circuit diagrams, computer code, etc. freely available to anyone. In fact, according to a Forbes article, Tesla is currently in talks to license its technology to BMW, a license that BMW would not need if Tesla just gave its technology away.
And Tesla is taking advantage of its IP rights in other ways. A TIME article got it wrong when it said, "Tesla wants to share its secret sauce with everyone.” Gas 2.0 made an even more egregious error when it said "With Tesla having the best battery packs in the business, opening their trade secrets could be a major boon to the EV world.” Tesla is not in any way giving away its secrets related to its technology. It merely agreed not to sue for infringement of the 160 patents it currently owns.
Trade secrets, such as the Coca Cola recipe, can often be more valuable than patents. The government awards a patent on the premise that you publicly display your idea in exchange for a 20-year monopoly. Society at large benefits by (1) the limited 20-year protection and (2) the innovation that other inventors must undertake to avoid the publicly disclosed patent. Trade secrets, in contrast, are never made public and thus are the opposite of open source.
Coca Cola Lineup Of Bottles With Dates
A trade secret has its own risks but also some rewards. A trade secret, unlike a patent, never expires. Ever. A company can keep a trade secret monopoly going indefinitely. So far, that’s worked well for products like Coca Cola and WD-40 that dominate their markets. If Coca-Cola had revealed its secret recipe in a patent under the current law, the patent would have expired in 1886. The trade secret risk, however, is that if someone reverse-engineers the secret, it’s theirs. Also, if the secret ever becomes public through some disclosure, the trade secret protection expires. And even if someone figures out a trade secret independently, there is no way to prevent their use of the secret.
Tesla is not the first company to promise not to sue under its patents. In 2005, IBM dedicated 500 patents to the open source communitySun Microsystems gives away patents and Google keeps a running list of patents it will not assert.
How this plays out remains to be seen but if it puts a Tesla Roadster in my driveway sooner, I applaud it.
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Schott P.C. Sponsors World Cup Contest

By Stephen B. Schott
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The World Cup starts on Thursday and even more exciting for soccer/football fans here, the US plays on Monday. I may not like the new Bomb Pop uniforms but I do hope for the best Monday in an early must-win game against the team that eliminated the US in 2010: Ghana.
In honor of the World Cup, Schott, P.C. has sponsored a contest for the Hunter Cheetahs U13 girls soccer team. Each player has a national team and if their team wins the World Cup, they win the contest: A simple way to invest the players in the beautiful game of soccer and the World Cup.
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More to come and let’s hope the winner is the United States, although honestly, it’s a lot safer to bet on the US next year in the Women’s World Cup in Canada.
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Supreme Court Issues Two Patent Opinions

By Stephen B. Schott
On Tuesday, the Supreme Court issued two patent-related opinions.
Inducement—Direct Infringer Needed (Limelight Networks v. Akamai Tech.)
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The law at issue in this case revolves around induced infringement. In layman’s terms, induced infringement arises when one actor does not itself perform all of the steps in a claim. Consider an example where a patent claim requires 39 steps. An accused infringer performs 38 steps but another party performs the 39th. Can the patent owner sue the accused infringer for infringement? What if the accused infringer told the third party how to perform the 39th step? This example illustrates the induced infringement issue.
Turning to the Limelight case, the Federal Circuit held that Limelight did not perform all of the patent’s steps because its users performed some of them, and these users "did not act as agents of, or under the direction or control of, Limelight.”
The Supreme Court overturned this holding, leaving the Federal Circuit a Cubs-like 0-45 for Justices supporting its decisions this term. Like a parent who had a bad day at the office, it took the Federal Circuit to the woodshed for several errors not actually present in the Federal Circuit’s decision.

If [,as the Federal Circuit holds,] a defendant can be held liable under §271(b) for inducing conduct that does not constitute infringement, then how can a court assess when a patent holder’s rights have been invaded?

As Jason Rantanen put it over at Patently-O, the Supreme Court handled this criticism “clumsily” because the Federal Circuit made no such holding.
Setting this squabble aside, the Supreme Court remanded the case with the guidance that  “there [can be] no infringement of the method in which respondents have staked out an interest, because the performance of all the patent’s steps is not attributable to any one person.”
Whether an accused infringer “provid[ing] instructions and offer[ing] technical assistance” to its customers regarding how to perform a claim step is infringement under this standard is a decision that the Federal Circuit will have to make on remand, but it seems unlikely.
Claim Indefiniteness Requires Reasonable Uncertainty (Nautilus v. BioSig)
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The Patent Act requires that a patent specification “conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as [the] invention.” Setting aside a painful that vs. which error in the statute, a claim that fails to meet the statute is unpatentable in an application or invalid in a patent.
The Federal Circuit standard until yesterday was that a claim was not indefinite unless it was “insolubly ambiguous” and not “amenable to construction,” or interpretation by a court. The Supreme Court rejected this standard and inserted in its place a new indefiniteness test.

A patent is invalid for indefiniteness if its claims, read in light of the patent’s specification and prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention.

This “reasonable certainty” standard is a new test and it will take a chain of cases to flesh out what it means and how it differs from the old “insolubly ambiguous” standard. This Nautilusdecision may make it easier to invalidate patent claims but the shift in standard seems more about the language that will now be quoted in future opinions than a change with widespread consequences.
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