Notice by Related Entity Triggers Damages; Even Numerical Ranges Have Equivalents
By Hosang Lee
Addressing the issues of adequacy of notice under § 287(a) and application of doctrine of equivalents to claims having numerical ranges, the U.S. Court of Appeals for the Federal Circuit relaxed the strict requirement that § 287 notice be sent by the patent owner and held that a claimed recitation of a numerical range does not foreclose equivalents. U.S. Philips Corp. v. Iwasaki Elec. Co., Ltd., Case No. 07-1117 (Fed. Cir., Nov. 2, 2007) (Linn, J.).
The plaintiff, U.S. Philips, is the assignee of a patent claiming a high-pressure mercury vapor discharge lamps filled with a gaseous mixture in which “at least one of the halogens Cl, Br or I is present in a quantity between 10-6 and 10 -4 µmol/mm3.” Mr. Rolfes, the patent portfolio manager of Philips International B.V., sent Iwasaki a letter on his Philips International B.V. letterhead. That stationery did not identify U.S. Philips as the patent owner and did not disclose the corporate relationship between U.S. Philips and Philips International B.V., an IP holding company. It did identify Mr. Rolfes as “Patent Portfolio Manager” speaking for “Corporate Intellectual Property, Philips International B.V.” U.S. Philips later filed an infringement suit against Iwasaki alleging infringement of the patent and seeking damages back to the date of the notice letter.
The district court found that Rolfes’ letter, though it identified “U.S. Philips Corporation, New York, N.Y.”, as the patent assignee, did not constitute adequate notice for triggering damages as it did not come from the actual patent owner. The Federal Circuit reversed, noting that the information printed on the patent (attached to the letter) was enough to put an accused infringer on notice of the patent owner’s identity, even though the assignment information printed on the face of a patent is not a conclusive indication of the patent’s current ownership. Thus, the Court found the notice requirement, as explained by the Federal Circuit in Lans v. Digital Equipment, was satisfied since the patent owner was in fact identified, and the letter was sent as an invitation to contact B.V., the party having ultimate responsibility for licensing and enforcement of the patent.
On claim construction, the district court’s construed the claim term, “a quantity between 10-6 and 10 -4 µmol/mm3,” to be a range between, but not including either bound, i.e., 10-6 and 10 -4 µmol/mm3. Specifically the district court found that the range was not bounded by an order of magnitude or an approximation. The Federal Circuit affirmed, dismissing U.S. Philips’ argument that a number such as 10 -4 means something different and less precise than 1 x10 -4.
However, the Federal Circuit reversed the district court’s holding that infringement of the recited numerical range under the doctrine of equivalents would vitiate the claim limitation and that resort to the doctrine of equivalents was therefore foreclosed as a matter of law. Rather the Court found that the recitation of a numerical range does not preclude reliance or the doctrine of equivalents (distinguishing its holding in Moore v. Standard Register that the “qualitative” term “majority” could never encompass less than 50 percent) and remanded the matter to district court to consider, on a case-by-case basis and based on a Festo estoppel analysis, whether any of Iwasaki’s lamps infringe under the doctrine equivalents.
The Convenience of Incorporating by Reference May Have Inconvenient Consequences: Walking the “Judicial Tightrope”
By André De La Cruz
Finding that continuity of disclosure was not maintained throughout a chain of related patents, the U.S. Court of Appeals for the Federal Circuit reversed a district court’s previous holding that the patent at issue was entitled to the benefit of the filing date of an earlier patent under 35 U.S.C. § 120. Zenon Environmental, Inc. v. United States Filter Corp., Case Nos. 06-1266, -1267 (Fed. Cir., Nov. 7, 2007) (Lourie J.; Newman, J., dissenting).
The plaintiff, Zenon Environmental, owner of a patent directed to “large systems for the microfiltration of liquids,” asserted its patent against its primary competitor, U.S. Filter. The patent was the sixth patent to issue in a series of related applications, and it disclosed and claimed a gas distribution system that was originally disclosed in the grandparent application—the grandparent application having been incorporated by reference into the patent in suit. However, in several intervening patent applications, rather than incorporating by reference the entire grandparent application, i.e., in toto, the inventor only cited the grandparent application with respect to the “details relating to the construction and deployment of a vertical skein” and omitted any reference to the gas distribution system disclosed in the grandparent application.
Citing Lockwood v. Am. Airlines, Inc., the Federal Circuit stated that under § 120, in order for a subsequent application to claim priority back to an earlier application, the subsequent applications must comply with the written description requirement of § 112. Specifically, a proper incorporation by reference requires that a person of ordinary skill in the art is able to determine whether the host document describes the incorporated material with sufficient particularity. In this instance, the Court concluded that since the intervening patents disclose an entirely different gas distribution system and that applicant did not clearly and specifically incorporate the grandparent application by reference, there was no continuity of disclosure in the family chain. Hence, the later application was found not to be entitled to claim the benefit of the filing date of the grandparent application.
Far worse (from the patent owner’s perspective) was the Court’s conclusion that since it was not disputed by the parties that the grandparent application “disclose[d] each and every element” of the asserted claims and was filed more than one year prior to the filing of the application for the patent in suit, the grandparent anticipated, and thus invalidated, the patent in suit.
Practice Note: The incorporation by reference of earlier applications is routinely used in patent practice. However, care should be exercised to avoid any limiting effect where the object is to incorporate previous patent applications or patents. This case reminds patent practitioners to be cautious when invoking incorporation of prior applications by reference. One unintentional misstep may result in dire consequences.
$160 Million Jury Verdict Against Microsoft Stands After Unsuccessful Challenge
Contact Paul Devinsky
Letting stand a $160 million judgment against Microsoft, the U.S. Court of Appeals for the Federal Circuit recently affirmed a jury verdict finding that Microsoft willfully infringed Z4 Technologies’ patents relating to methods for preventing computer software piracy. Z4 Technologies, Inc. v. Microsoft Corp., Case No. 06-1638 (Fed. Cir., Nov. 16, 2007) (Linn, J.).
Z4’s two patents describe and claim a method whereby software may be deactivated upon failure of a user to submit proper registration information to a representative within a specified grace period after first use. Z4 alleged that the “Product Activation” feature of Microsoft Windows and Microsoft Office infringed these patents. After a jury found Microsoft willfully infringed the patents and awarded damages, the Court awarded Z4 attorneys’ fees. Microsoft filed a motion for a judgment notwithstanding the verdict (JNOV) and for a new trial. After both motions were denied, Microsoft appealed.
The Federal Circuit, after upholding the jury verdict, finding a “legally sufficient evidentiary basis” for it, turned to the denial of Microsoft’s motion for a new trial based on allegedly erroneous jury instructions. Microsoft argued that the district court erred by not instructing the jury that the burden of proving invalidity “is more easily carried when the references on which the assertion is based were not directly considered by the [PTO] examiner during prosecution.”
Rejecting this argument, the Court agreed that a party “may” more easily carry its burden of proving invalidity when a prior art reference was not before the Patent and Trademark Office (PTO) but noted that a jury instruction to that effect is not mandatory. In addition, the Court cautioned that such an instruction might improperly “lead the jury to believe that the burden of proof is less than clear and convincing when prior art was not considered by the PTO.” Therefore, the Court held that the district court did not abuse its discretion by refusing to accept Microsoft’s proposed jury instruction.
The Federal Circuit also rebuffed Microsoft’s argument that the district court’s obviousness instruction was contrary to the Supreme Court’s decision in KSR, insofar as the jury was instructed that a finding of obviousness required “a teaching, suggestion or incentive to combine” the prior art in the manner claimed, finding the error to be “harmless.” In so doing, the Court observed that the “only direct evidence of obviousness introduced by Microsoft was the conclusionary testimony of its expert.”
Finally, Microsoft requested a remand for a new trial on damages in light of the Supreme Court’s decision in Microsoft v. AT&T. Microsoft argued that the jury erroneously based its damages calculation based on worldwide sales—a damages theory rejected by the Supreme Court in the context of 35 U.S.C. § 271(f) and copies of software made from “golden master” disks. The Federal Circuit denied Microsoft’s request for a remand on damages because “the jury did not and could not have relied on § 271(f) in determining its damages award.” Neither the complaint nor the jury instructions referenced § 271(f). According to the Court, the jury was instructed only as to infringement under § 271(a), and “we must assume that the jury properly confined its analysis and ultimate finding of liability to the instructions given under § 271(a).”
Practice Note: Based on the language in this opinion, a possible open question is whether it would constitute prejudicial error were a district court to instruct a jury that the burden of showing invalidity “may” be easier to carry based on prior art not considered by the PTO.
Clear and Unmistakable Disavowal of Claim Scope Required for Prosecution History Estoppel
By Thomas George
Overturning a district court’s finding of prosecution history estoppel, the U.S. Court of Appeals for the Federal Circuit held that an allegedly disclaiming statement made during prosecution was not a “clear and unmistakable” disclaimer to one skilled in the art. Elbex Video, Ltd. v. Sensormatic Electronics Corp., Case No. 07-1097 (Fed. Cir., Nov. 28, 2007) (Moore, J.; Cote, J., dissenting).
The district court ruled that an allegedly disclaiming statement made in response to an office action limited the claimed “receiving means” to a “monitor” that receives the first code signal. The lower court concluded that “whether by mistake or otherwise,” the inventor “agreed” to limit the “receiving means” to a “monitor” that receives the first code signal from a camera. Although the district court acknowledged that obvious errors in statements made before the U.S. Patent and Trademark Office (USPTO) are not necessarily binding, it concluded that the patentee’s statements were nevertheless binding since the prosecution statements “would not have been viewed by one of ordinary skill in the art to be obvious errors.”
The Federal Circuit reversed, finding that the “receiving means” was not limited to the “monitor” because the allegedly disclaiming statement did not amount to a “clear and unmistakable” surrender of claim scope for three reasons. First, the Court noted that the allegedly disclaiming statement was unsupported by “even a shred of evidence from the specification.” According to the Court, there is “nothing in the specification to suggest that the first code signal ever reaches the monitor.” Second, the Court conceded that, when read in isolation, the statement in the prosecution history could be argued to be a disclaimer. However, the Court concluded that, when the prosecution history as a whole is considered, the inventor’s response to the USPTO is not clear. The Court noted that two paragraphs after the alleged disclaimer, the inventor made another statement that implies that the “receiving means” is not limited to a “monitor” and this other statement “is fully supported by the written description and provides further indication that the earlier statement in the same document was not a clear and unmistakable surrender.” Third, the Court observed that, if the “receiving means” was limited to a “monitor,” then the disclosed device would be inoperable because the second code signal from the monitor would never reach the cameras. The Court noted that “[e]ven [the alleged infringer’s] own technical witness testified that he ‘ha[d] trouble figuring out how [transmitting the code signals to and from the monitor] would work.’”
Judge Cote dissented. In his view, when the prosecution history and the patent are considered together, the evidence is “clear and unambiguous” that the allegedly disclaiming statement made in the response was a “strategic choice and an unmistakable surrender of claim scope” and thus the patentee should not be allowed to recapture what it chose to surrender during prosecution in order to obtain a patent.
Practice Note: For prosecution history estoppel to apply, the alleged disavowal must be “clear and unmistakable” to one skilled in the art. Statements made during prosecution that are ambiguous and inconsistent with the rest of the intrinsic evidence may not amount to a “clear and unmistakable” disavowal.
Federal Circuit Lacks Jurisdiction over Remand Order on Patent-Related Claims Where District Court Declined Supplemental Jurisdiction
By Evan A. Parke
Addressing the jurisdictional effect of a remand order by a district court declining supplemental jurisdiction over patent-related claims, the U.S. Court of Appeals for the Federal Circuit ruled that because such an order is based on lack of subject matter jurisdiction, it is barred from federal appellate review. Hif Bio, Inc. v. Yung Shin Pharmaceuticals, LTD, Case No. 06-1522 (Fed. Cir., Nov. 13, 2007) (Gajarsa, J.).
The case arose from a dispute between a number of companies concerning rights to various inventions. The case was originally filed in state court but was subsequently removed to district court where a 12-count complaint was filed alleging a number of state law claims and a violation of the Racketeer Influenced and Corrupt Organizations Act (RICO). After dismissing the RICO count, the district court declined to exert supplemental jurisdiction over the inventorship claims and remanded the case to state court. The ruling was appealed to the Federal Circuit.
An issue of first impression for the court, the Federal Circuit undertook an analysis of 28 U.S.C. §1447 and its related jurisprudence before concluding the appeal was barred, i.e., it had no jurisdiction to review the merits of the remand order. The Court noted that §1447(d) provides “[a]n order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise.” However, the Court concluded that Supreme Court jurisprudence had tempered this jurisdictional bar consistent with the language of §1447(c) such that the bar was limited to the review of remand orders based on a lack of subject matter jurisdiction and defects unrelated to subject matter jurisdiction.
The issue, then, became whether a remand based on declining supplemental jurisdiction was within the class of remands proscribed by the language of §1447(c) and thus barred from appellate review by §1447(d). The Federal Circuit found that it was, ruling that in every instance where a court declines supplemental jurisdiction, this necessarily involves a predicate finding that the claims at issue lack an independent basis of subject matter jurisdiction.
Practice Note: Should you be relying upon the patent-related nature of state claims alone to secure appellate jurisdiction before the Federal Circuit, be forewarned: if a district court remands your case to state court, the Federal Circuit will not visit the merits of any appeal.
Corroboration for Priority
Contact Paul Devinsky
Affirming the Patent and Trademark Office’s Board of Patent Appeals and Interferences (the Board), the U.S. Court of Appeals for the Federal Circuit provided specific guidance concerning the sufficiency of corroborating evidence for establishing reduction to practice in the context of interference practice. In re Harold R. Garner, Case No. 07-1221 (Fed. Cir., Dec. 5, 2007) (Moore, J.).
The patent applicant, Harold R. Garner, provoked an interference with an earlier-filed patent application after it was cited against him during prosecution of his patent application. To do this, Garner amended his application to copy the claims of the senior application and submitted evidence under Rule 202(d) that he had reduced his invention to practice before the senior application’s effective filing date.
The Board granted the interference request, but determined that Garner’s initial filing for priority was insufficient. Moreover, Garner’s attempt to remedy the deficiency by submitting additional evidence of priority was procedurally flawed because it was untimely. Only after the Board issued an order to show cause as to why judgment should not be entered against Garner in the interference did he proffer three important evidentiary items: the specification of his provisional application; the specification of his utility application; a 37 C.F.R. §1.131 declaration that he had filed during prosecution. The Board rejected these items as “new evidence” under Rule 202 concerning interference proceedings and refused to consider them because they were not part of Garner’s original filing. Without sufficient evidence of an earlier reduction to practice to establish priority, the Board issued judgment against Garner.
On appeal, the Federal Circuit first considered whether Garner’s evidence was untimely. The Court first acknowledged that the U.S. Patent and Trademark Office (USPTO) is entitled to substantial deference in interpreting its own regulations. Even so, the Court concluded that the Board’s interpretation of “new evidence” was inconsistent with Rule 202 because it resulted in different treatment of patent specifications under different subsections of that rule. To be consistent with other subsections of the rule, the Court held that Garner’s provisional and utility patent specifications were not “new matter” because they were in his original patent application filings. Accordingly, Garner was permitted to rely on these pieces of evidence, but he was not permitted to rely on the §1.131 declaration.
Nevertheless, the Court affirmed the Board’s adverse decision regarding whether the evidence was sufficient to show corroboration of reduction to practice. Even with his patent specifications in evidence, Garner’s submissions to the Board did not sufficiently corroborate his claim of actual reduction to practice. At most, the evidence corroborated the existence of a device, but that is insufficient. Quoting its own decision in Cooper v. Goldfarb, the Court noted that the law does not require that every point of a reduction to practice be independently corroborated. However, the Court found corroboration of the existence of Garner’s device insufficient to establish corroboration of reduction to practice without corroboration that the device worked for its intended purpose. Thus, the Court held that the Board’s failure to consider Garner’s additional evidence amounted to harmless error and affirmed the Board’s Judgment that Garner failed to make a prima facie showing of priority.
Practice Note: First, be sure to include all corroborating evidence of priority in your original Rule 202(d) filing for interference. Second, ensure the evidence you submit shows not only the existence of the invention, but also that it worked for its intended purpose.
Patent for Hunting Blind Not Infringed
By Todd Hales
Finding that the patentee “failed to produce any evidence to the contrary,” the U.S. Court of Appeals for the Federal Circuit affirmed the district court’s finding that the patentee did not raise a genuine issue of material fact as to infringement of the patent directed to a hunting blind. Stumbo v. Eastman Outdoors, Case Nos. 2007-1186, -1205 (Fed. Cir., Nov. 28, 2007) (Moore, J.).
Steve Stumbo filed suit against Eastman Outdoors, Inc. and Ameristep Corp. for infringement of U.S. Patent No. 5,628,338 (the ’338 patent) directed to a hunting shelter or blind having a “closable vertical opening,” depicted as a slit opening at a side edge or vertical corner, through which a person can enter or exit the blind. The defendants’ accused products also included openings, albeit triangular-shaped openings. The defendants moved for summary judgment as to all of Stumbo’s claims, arguing that the accused products do not infringe the ’338 patent, either literally or under the doctrine of equivalents. The district court construed “closable vertical opening” as a “slit-like opening that runs straight up and down or perpendicular to the plane of the horizon.” The court concluded that, based on this construction, no genuine issue of material fact existed as to whether the accused products infringed the ’338 patent, literally or under the doctrine of equivalents. Stumbo appealed the district court’s decision to grant summary judgment of non-infringement.
The Federal Circuit reviewed the district court’s summary judgment decision de novo, but did not turn a blind eye to the district court’s line of reasoning. The Court adopted the lower court’s construction of “closable vertical opening” and found that there was no dispute as to literal infringement under this construction. Under the doctrine of equivalents analysis, the Court found that the specification stated that leg members of the blind “must flex in order to enable the door opening to expand for ingress and egress.” Eastman Outdoors and Ameristep both offered testimonial evidence that the accused products do not have this structural limitation and do not operate in substantially the same way with substantially the same result. In dismissing a declaration submitted by Stumbo, the Court stated that Stumbo “has not produced a single shred of particularized evidence as to how the vertical opening of the ’338 patent creates substantially the same result [as the accused products].” The Court further stated that the conclusory declaration “did not explain how either opening operated or how the differences were insubstantial” and explained that “[h]aving failed to produce any evidence to the contrary, Stumbo has not raised a genuine issue of material fact as to infringement” by the accused products. Given these findings, the Court affirmed the district court’s grant of summary judgment of noninfringment.
Practice Note: This case serves as yet another reminder to those drafting and prosecuting patent applications to avoid, as much as possible, imperative language in the specification or in arguments. The Court used the same phrase from the specification (i.e., “leg member must flex”) to confine the scope of the asserted claims in both the literal infringement and doctrine of equivalents analyses.
A Significant Threshold to Establish Fraud under Rule 60(b)
By David L. Romero, M.S
The U.S. Court of Appeals for the Federal Circuit affirmed a district court’s grant of summary judgment which held that, in order to prove a prima facie case of fraud and set aside a prior judgment under Federal Rule of Civil Procedure 60(b), a party must demonstrate mistake, inadvertence or excusable neglect on the part of the opposing party or present newly discovered evidence showing such conduct. The Court also clarified rule 60(b)(3), holding that a party seeking relief in a case in which fraud was alleged greater than one year following judgment must demonstrate egregious acts of fraud which could not have been reasonably discovered within the one-year window. Apotex Corp. v. Merck and Company, Inc., Case No. 06-1405, (Fed. Cir., Nov. 16, 2007) (Newman, J.).
The ruling stemmed from a suit brought by Apotex in1996 against Merck in the Northern District of Illinois, charging that Merck’s process of tablet formulation infringed two of Apotex’s U.S. patents. The court held the patents invalid under 35 U.S.C. 102(g), finding Merck had invented the process of formulation prior to Apotex’s effective date of invention and had not concealed, suppressed or secretly practiced the invention (Apotex I). At trial, it was generally undisputed that Merck had invented the process prior to the effective filing date of the Apotex patents, however, Apotex asserted that in failing to seek patent protection, Merck had in fact practiced the process in secret. As such, Apotex asserted its claims were valid in view of Merck’s concealment. The court disagreed based on testimony demonstrating that Merck had previously disclosed the process publicly in two instances. Based on the previous disclosures, the court held that Merck had not suppressed, concealed or kept the process secret. The U.S. Court of Appeals for the Federal Circuit affirmed (Apotex II).
More than one year later, Apotex brought suit against Merck in district court alleging that several statements made by Merck during the previous litigation were fraudulent and, as such, judgment should be set aside under rule 60(b). Apotex argued that during the prior litigation Merck failed to disclose “critical” aspects of the invention and in doing so had perpetrated fraud upon the court. The Court disagreed, finding that the critical factors did not pertain to claims in the Apotex patents, but rather constituted attorney argument concerning reasonable inferences related to evidence presented at trial. The Court held that to set aside judgment under rule 60(b), the fraudulent activity must have impeded the judicial machinery and, further, must be limited to events that wholly affected the integrity of the court. The Court stated that such instances of fraud were not subject to the one-year limitation but, in any event, must be brought to the attention of the court within a reasonable time of discovery.
German Federal Patent Court Invalidates Pfizer’s LIPITOR® Patent
By Christoph Lüer
Invalidating all relevant claims of the patent-in-suit, the Federal Patent Court of Germany handed down a decision for Ranbaxy Laboratories’ German subsidiary Basics GmbH in its case against Warner Lambert’s European Patent 0,409,281 (EP ’281) owned by Pfizer [Reference-No: 3 Ni 36/05 (EU)].
EP ’281 covered an enantiomer calcium salt which has a positive pharmaceutical effect in the treatment of hypercholesterolemia and hyperlipidemia. Pfizer marketed a cholesterol-lowering drug under the brand-name LIPITOR® (sold as “Sortis” in Germany) covered by EP ’281. The Court found that the subject matter of claims 1 through 3 is not novel due to prior art citations in U.S. Patent No. 4,681,893 (US ’893) as well as in WO 89/07 598 A2 (WO ’598). Further, the Court held that claim 4 does not amount to an inventive step in view of U.S. Patent No. 4,375,475 (US ’475) and US ’893, as well as a 1987 publication in a scientific journal.
The court based its decision on two prior art documents: WO ’598 and US ’893. Although the basic chemical composition of the enantiomer calcium salt is not mentioned verbatim in these documents, the court found the references sufficient to enable a person skilled in the art to recognize the chemical compound of the enantiomer calcium salt from the cited documents. The court concluded that claim 1 of EP ’281 lacks novelty. The court further nullified claim 2 of EP ’281 because this claim is directed to virtually the same chemical composition as claim 1.
The court also invalidated claim 3 of EP ’281 for lack of novelty. Claim 3 is directed to the use of the enantiomer calcium salt recited in claims 1 and 2 for the production of a pharmacokinetic potent composition for the treatment of hypercholesterolemia and hyperlipidemia. The Court held that this effect had been mentioned in prior art documents.
Finally, the court invalidated claim 4 of EP ’281 due to a lack of inventive step. Claim 4 is directed to two alternative production techniques for the pharmaceutical composition of claim 3. The court opined that the first alternative production technique had been utilized before and described in US ’475. According to the Court, a person skilled in the art would have been able to manufacture the pharmaceutical composition according to this method. The second alternative production technique was found not to constitute an inventive step because it results from the cited prior art documents.
Practice Note: This decision is a step of Ranbaxy’s worldwide legal efforts to destroy patent protection for Pfizer’s Lipitor. Therefore, it is not surprising that Pfizer has appealed this decision to the German Federal Court of Justice. It can be expected that a final decision of the German Federal Court of Justice will take up to three years.
Parody Prevails: Louis Vuitton v. Chewy Vuiton
By Natalie A. Ward
Affirming the district court decision, the U.S. Court of Appeals for the Fourth Circuit upheld judgments that Haute Diggity Dog’s “Chewy Vuiton” products neither infringe Louis Vuitton Malletier’s (LVM) copyrights nor infringe or dilute LVM’s trademarks or trade dress. Louis Vuitton Malletier S.A. v. Haute Diggity Dog, LLC, Case No. 06-2267 (4th Cir., Nov. 13, 2007) (Niemeyer, J.).
LVM is an internationally renowned manufacturer of luxury leather goods, including luggage, handbags and other accessories. LVM owns registered trademarks for its LOUIS VUITTON mark, a stylized “LV” monogram and a monogrammed canvas design that appears on its bags and other products. LVM also owns copyrights for multicolored and other similar canvas designs. LVM’s bags are sold exclusively in boutique stores and high-end department stores at prices ranging from $995 to $4500.
Haute Diggity Dog (“Haute Diggity”) manufactures inexpensive pet chew toys and beds whose names parody high-end perfume, cars, shoes, wines and handbags. The products are sold in pet stores and one or two department stores for less than $100. Examples sub-brands include “Chewy Vuiton” (parody of Louis Vuitton), “Furcedes” (parody of Mercedes), and “Sniffany & Co.” (parody of Tiffany & Co.). LVM filed suit against Haute Diggity in 2002 for various trademark, trade dress and copyright infringement claims. Upon cross-motions for summary judgment, the district court entered judgment in favor of Haute Diggity. LVM appealed. The “Chewy Vuiton” dogs toys resemble miniature LVM handbags which, according to the 4th Circuit “undisputedly evoke LVM handbags of similar shape, design and color.” Nevertheless, with respect to trademark infringement, the court concluded that Haute Diggity’s marks, while “undeniably similar” to LVM’s marks, were successful, effective parodies that obviated any likelihood of confusion and thus, trademark infringement. The court noted that Haute Diggity’s dog toys “irreverently present haute couture as an object for casual canine destruction” and convey “‘just enough of the original design to allow the consumer to appreciate the point of parody,’ but stop well short of appropriating the entire marks that LVM claims.” Through a detailed analysis of likelihood of confusion factors, the court emphasized differences in the parties’ marks and marketing to support its affirmation of the lower-court decision.
Likewise, the court found that LVM failed to make a case of trademark dilution by blurring because it had not met the “increased burden to demonstrate that the distinctiveness of its famous marks is likely to be impaired by a successful parody.” The court dismissed a fair use defense, concluding that the Haute Diggity’s imperfect adaptation of LVM’s designs was a satire not likely to be construed as actual use of the famous LVM marks. Lastly, the court quickly disposed of LVM’s claim for dilution by tarnishment, which was merely supported by hypothetical arguments its reputation would be harmed if a pet were to ever choke on a “Chewy Vuiton” squeak toy.
The court concluded by affirming, in summary fashion, the district court’s judgments with respect to LVM’s counterfeiting, trade dress and copyright claims, the latter of which was characterized as a thinly-veiled trademark/trade dress infringement claim.
Practice Note: Haute Diggity didn’t get chewed this time, but take note that parody defenses can be risky and don’t always work out so well.
Keeping Confusion and Dilution at Bay
By Terry W. Ahearn
Deciding whether various forms of the trademark “Perfumebay” infringe upon the trademark “eBay,” the U.S. Court of Appeals for the Ninth Circuit upheld the district court’s finding that the trademark “perfumebay” was likely to be confused with “eBay,” and affirmed an injunction barring the use of “conjoined forms” of the mark. The Ninth Circuit also upheld the lower court’s finding that “non-conjoined forms” of the mark (i.e., Perfume Bay) do not create a likelihood of confusion. In overturning the lower court’s finding of no likelihood of dilution, the Ninth Circuit held that “non-conjoined forms” of the mark could, nevertheless, dilute the “eBay” mark. Perfumebay.com Inc. v. eBay Inc., Case Nos. 05-56794, -56902 (9th Cir., Nov. 5, 2007) (Rawlinson, J.).
When considering claims of trademark infringement online, courts apply the “internet trilogy” of Sleekcraft factors in evaluating confusion: similarity of the marks; relatedness of the goods and services; the parties’ simultaneous use of the Web as a marketing channel. The court found similarity between the marks given that “perfumebay” incorporates the “eBay” mark in its entirety, the “perfumebay” domain names fully incorporate the “eBay” mark and search engine results yield both “perfumebay” and “eBay” links.
The other two factors similarly weighed against Perfumebay. Both eBay and Perfumebay sell similar products on the internet, and both utilize the internet for marketing and advertising. Analyzed from how the marks are used on the internet, as opposed to how they are pronounced or what they mean, the court upheld the finding of a likelihood of confusion between “perfumebay” and “eBay.”
The court, however, affirmed the finding of no likelihood of confusion with regard to the “non-conjoined versions” of “Perfume Bay.” The separated forms of the mark do not include eBay’s entire mark, thus, according to the court, eliminating the confusion when conjoined forms are used in online advertising, search engine results or as domain names (as non-conjoined marks cannot be registered as domain names).
The court overturned the district court’s finding of no likelihood of dilution. Focusing on the strength of the “eBay” mark, the Court found that Perfumebay’s use of the suffix “Bay” may cause consumers to no longer associate the usage of the ‘Bay’ suffix with eBay’s unique services, causing the “uniqueness” of eBay’s mark to be diluted in direct proportion to the extent internet users disassociate the “eBay” mark with eBay’s services. In a footnote to its opinion, the court stated that even the non-conjoined forms of “Perfume Bay” mark could have a dilutive effect on the distinctiveness of the “eBay” mark.
Practice Note: The difference between the likelihood of confusion and no confusion in this case was the space between two words. Nevertheless, the court found that either form of the “Perfume Bay” mark could cause consumers to “dissociate” the uniqueness of the “eBay” mark. The court’s position on dilution seems to minimize the importance of the “equitable balance” that it discusses in connection with confusion. Also, the weight given to the distinctiveness factor may indicate that the Ninth Circuit has now lowered the threshold showing required to establish dilution under the Lanham Act.
If a Customer Cannot See the Product on Which Mark Is Affirmed, No Confusion Possible
By Jeremy T. Elman
Addressing issues of trademark infringement and Florida’s Deceptive and Unfair Trade Practices Act, the U.S. Court of Appeals for the Eleventh Circuit affirmed summary judgment ruling that where the product on which a mark is affirmed cannot be seen by a customer, there is no likelihood of confusion. Custom Mfg. & Eng'g, Inc. v. Midway Services., (11th Cir., Nov. 21, 2007) (Tjoflat, J.).
The plaintiff, Custom Manufacturing & Engineering, Inc. (Custom) had agreed to design for defendant Midway Services (Midway) a water-meter reading system to be installed in residential complexes, but Midway had cancelled the contract on the ground that Custom had breached it and hired a competitor to finish the job. In the midst of litigating the resulting breach of contract action, Custom alleged Lanham Act trademark infringement and false designation of origin as well as tortious interference with business relations under Florida’s Deceptive and Unfair Trade Practices Act. The goods on which Custom’s mark was affixed were subcomponents (circuit boards) manufactured for use in a product that was marketed to apartment complex owners and managers, not to Custom’s customers. The district court affirmed summary judgment for the defendant, and the plaintiff appealed.
The 11th Circuit stated that the question in this case involves the likelihood of confusion in the post-sale context—namely, whether Custom’s or Midway’s potential customers are likely to be confused as to the origin of the circuit boards. The 11th Circuit noted that a likelihood of confusion analysis entails more than the mechanistic summation of the number of factors on each side; it involves an evaluation of the “overall balance.”
The 11th Circuit held that it is unlikely that the apartment owners and managers to whom Midway sold the water-meter reading systems would remove these covers and examine the circuit boards contained therein. The court also found that third parties, such as repairmen and firemen, are not properly considered “customers” under the Lanham Act. Even if the court had accepted as true that such persons were customers, the plaintiff presented no evidence of a likelihood of confusion. The court stated that recovery under the Lanham Act requires, at a minimum, “that confusion, mistake, or deception be ‘likely,’ not merely ‘possible.’” The court went on to state that “[l]ike the proverbial tree falling in a forest, the unauthorized use of a trademark that is never perceived by anyone cannot be said to create a likelihood of consumer confusion.”
Practice Note: This case stands for the proposition that trademark plaintiffs must identify both the relevant customers of their products and provide evidence in the record from such customers to prove a likelihood of confusion.
Scope of Protection of the Community Design Right
By Cheng Tan
The English Court of Appeal has now set an important precedent in Europe and provided the first authoritative guidance on the nature and scope of the Registered Community Design. Procter & Gamble Co v. Reckitt Benckiser (UK) Ltd., (EWCA Civ 936, 2007) (Jacob, L.J.).
Procter & Gamble (P&G) sued Reckitt Benckiser (Reckitt) over the design of a canister with a nozzle spray of Reckitt’s air freshener (Air-Wick product), claiming that it infringed P&G’s Registered Community Design (in its Febreze product) relating to a canister with a spray nozzle.
Article 10 of Council Regulation EC 6/2002 regarding Community Design Registration (the Community Design Regulation) contains two pertinent provisions: “[t]he scope of the protection conferred by a Community Design shall include any design which does not produce on the informed user a different overall impression;” “[i]n assessing the scope of protection, the degree of freedom of the designer in developing his design shall be taken into consideration.”
After the High Court ruled in favor of Procter & Gamble, finding that the two designs were too similar; Reckitt appealed.
The Court of Appeal overturned the decision of the High Court, Lord Justice Jacob of the Court of Appeal providing general guidance on the application of Article 10 explaining that when considering whether a design has been infringed, the court must take the position of an objective “informed user.” In product design cases, the “informed user” is considered to be more discriminating than the “average consumer” (an objective construct used to gauge likelihood of confusion under trademark law) and is presumed to be fairly familiar with design law issues. As explained by Lord Justice Jacob, the point of a design protection is to protect a design as a design. Therefore, what matters is the overall impression created by the design, i.e., would the user buy the design (or product), consider it or appreciate it for its individual design? This inquiry involves the user viewing the article at the time it is bought, not just half-remembering it later in time.
The Court of Appeal further explained that the effect of Article 10(2) was to narrow the scope of design protection. Small differences will be enough to create a different overall impression, especially in cases where freedom of design is limited. The correct analysis focuses on differences in overall impression created by the two designs as perceived by the informed user when he or she looks carefully at the product, rather than the informed user’s recollection of the products subsequent to viewing them. Where a product design produces a “different overall impression” from a registered design, that will be enough to avoid infringement. The difference need not be a “clear difference,” because an informed user is presumed to be familiar with design issues and able to discriminate differences. The main features of the design should be considered at a sufficient level of detail to properly consider the overall impression given to an informed user. One example of such a feature suggested by Lord Justice Jacob would be the quality of the article.
In this case, the Court of Appeal found sufficient differences in the overall impression between the two aerosol cans that the Air-Wick can was considered non-infringing.
Practice Note: The use of an objective informed user perspective and the different overall impression test now seem to be clarified. Nonetheless, the analysis still retains a level of subjectivity.
The Registration Requirement Bars Claims Based on Unregistered Copyrights
Contact Paul Devinsky
The U. S. Court of Appeals for the Second Circuit reversed the certification of a class of plaintiffs consisting of freelance authors (and the trade groups representing the authors) and subsequent approval of a settlement of these plaintiffs’ copyright infringement claims arising out of the unauthorized electronic reproduction of their works. In Re Literary Works in Electronic Databases Copyright Litigation, Case No. 05-5943 (2nd Cir., Nov. 29, 2007) (Straug, J.; Walker, Jr., J. dissenting).
The named plaintiffs consist mainly of freelance writers who contracted with publishers to author works for print publication. The plaintiffs retained the copyrights in their works. Although the contracts did not grant the publishers the right to electronically reproduce those works or otherwise license them for electronic reproduction, the publishers did so. The plaintiffs brought this class action suit on the theory that through the electronic reproduction of their works, the defendants (publishers of original electronic content and companies that operate databases that license electronic content from publishers) infringed their copyrights.
The district court referred the parties to mediation. Before the mediator, the defendants argued that because the vast majority of the plaintiffs’ works were unregistered, the district court would not be able to certify the majority of the claims for inclusion in any proposed class and, therefore, the case had little settlement value. The defendants relied upon § 411(a) of the Copyright Act, which provides that “no action for infringement of the copyright in any United States work shall be instituted until preregistration or registration of the copyright claim has been made in accordance with this title.” Despite this jurisdictional issue, the parties engaged in years of negotiations until they reached settlement. The settlement agreement divided the plaintiffs’ claims into three groups: Category A claims concern copyrights that were registered prior to any infringement; Category B claims concern copyrights that were registered after the infringing reproduction but before the filing of the lawsuit; and Category C claims concern copyrights that were registered after the lawsuit or not at all. The majority of the plaintiffs’ claims fell into Category C. The different classes were eligible for different damages and under the settlement agreement, if the total cost of the claims exceeded a certain amount, the amount paid to Category C would be reduced—potentially to zero. Objectors opposed the class certification and settlement approval, arguing that the settlement was inadequate and unfair to Class C. After prolonged proceedings, the district court nonetheless granted final class certification and settlement approval, never reaching the issue of whether it had jurisdiction to certify a class consisting largely of claims arising from unregistered copyrights. The objectors appealed.
In reversing the district court’s class certification and settlement approval, the 2nd Circuit construed the registration requirement of § 411(a) to be one of a subject matter jurisdiction. The court rejected the plaintiff’s argument that § 411(a) merely set forth a “claim processing rule.” The court also rejected the argument that where one plaintiff’s claim arises from a registered copyright, § 411(a) vests jurisdiction over any related infringement claim. Rather, the court held that each claim within the certified class—as opposed to simply the named plaintiffs—must satisfy this subject matter requirement of § 411(a). The court analogized § 411(a) to the Article III jurisdictional requirement and the amount-in-controversy requirement of the diversity statute, 28 U.S.C. §1332, noting that each has been held to apply to each individual member of a class. Finally, the court rejected the argument that the supplemental jurisdictional statute, 28 U.S.C. §1367(a), provides an alternate source of jurisdiction for the claims stemming from unregistered copyrights.
In his dissent, Judge Walker argued that the legislative history of Title 17 confirms that § 411(a) is a claim-processing rule, not a jurisdictional bar. According to Judge Walker, the legislative history indicates only that registration is a prerequisite to certain remedies (i.e., statutory damages and attorneys’ fees) not that registration is required to secure copyright protection. Indeed, as noted by Judge Walker, registration is not a condition for copyright protection, as copyright protection “subsists … in original works of authorship fixed in any tangible medium of expression.” Judge Walker also cited to several cases from other circuit courts that have enjoined the infringement of unregistered copyrights.
Circumstantial Evidence Does Not Create a Triable Issue of Material Fact
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The U.S. Court of Appeals for the Sixth Circuit upheld the district court’s grant of summary judgment in favor of defendant-appellee Universal-MCA Music Publishing (Universal), agreeing that plaintiff-appellant Bridgeport Music, Inc. (Bridgeport) had failed to set forth specific facts showing a triable issue of material fact. Bridgeport Music, Inc., et al. v. WB Music Corp., et al., Case No. 06-5546 (6th Cir., Nov. 21, 2007) (Gibbons, J.).
The plaintiff, Bridgeport, owned the copyright to the P-Funk All Stars’ song “Pumpin’ It Up.” A few years later, Calvin Broadus (a/k/a Snoop Dogg) collaborated with Priest Joseph Brooks and Lenton Hutton on the recording “Change Gone Come.” In May 1999, Soul Town released the album Well Connected and in October 2000, D-3 Albums released the album Dead Man Walkin. Both albums contained the recording “Change Gone Come.” Neither of these albums nor any recording containing “Change Gone Come” was manufactured, distributed or sold by Universal. Hutton and Universal entered into an “Exclusive Songwriter & Co-Publishing Agreement,” by which Universal acquired a 25 percent interest in the copyright of songs such as “Change Gone Come,” as well as “universe-wide exclusive administration rights” over Hutton’s works, including the right to license the use of certain compositions. Under its agreement, Universal received some royalties in connection with “Change Gone Come” but did not control public performances of “Change Gone Come” and never performed it. Also, Universal never manufactured or sold or distributed either album. Bridgeport (on the other hand) never received any royalties from the alleged sampling of “Pumpin’ It Up” in “Change Gone Come,” and never licensed the use of “Pumpin’ It Up” in “Change Gone Come.”
After Bridgeport discovered the alleged infringement, it brought suit naming Universal as a defendant. Universal moved for summary judgment of non-infringement. The magistrate judge issued a report recommending that the district court grant Universal’s motion, having determined that there was “no genuine issue of material fact regarding whether Universal issued a license in the infringing works.” The magistrate judge further concluded that the “receipt of royalties alone was insufficient to create contributory copyright infringement.” After, the district court adopted the magistrate’s recommendation, Bridgeport appealed.
Bridgeport asserted that Universal had granted an oral, written or implied license in “Change Gone Come” as a consequence of the fact the recording appeared on the albums Well Connected and Dead Man Walkin. In rebuttal, Universal introduced an affidavit attesting to the fact that it had not issued any licenses in connection with “Change Gone Come,” thereby shifting the burden to Bridgeport. Relying on binding 6th Circuit precedent, Rhyme Syndicate, the 6th Circuit concluded that the circumstantial evidence relied upon by Bridgeport cannot create a genuine issue of material fact. “The evidence of an infringing act and Universal’s partial ownership interest in the ‘Change Gone Come’ copyright does not permit the inference that Universal granted a license.”
Bridgeport also argued that Universal was liable for both vicarious and contributory infringement alleging Universal had a right to “police” the alleged infringement (giving rise to vicarious liability) and knew or should have known of the infringement (giving rise to contributory infringement). The court made short work of both theories, finding no factual support in the record to support supervision or control over the infringing activity (vicarious) or evidence that Universal induced, caused or contributed to the infringement by another party (contributory).
Rules Are Rules: File Fee Request Within Deadline or No Costs for Prevailing Party
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In a recent decision, the U. S. Court of Appeals for the Seventh Circuit ordered the defendant-appellant to pay the plaintiff-appellee’s attorneys’ fees, yet denied the appellee’s petition as untimely under the Federal Rule of Appellate Procedure 39(d)(1). JCW Investments, Inc., v. Novelty, Inc., Case No. 02 C 4950 (7th Cir., Nov. 28, 2007) (Wood, J.).
The plaintiff, Tekky Toys, designed and sold a line of “farting dolls.” “Pull My Finger® Fred” was its first such doll. The creators applied for and received a copyright registration on Fred, which they subsequently assigned to Tekky. The defendant, Novelty, manufactured and sold a similar product entitled “Fartman.” Tekky first learned of Fartman in March 2002, and filed suit three months later, alleging copyright infringement, Lanham Act trademark infringement (for use of the phrase “Pull My Finger”) and Illinois unfair competition. Tekky won a jury verdict for $575,000. Novelty appealed, and the 7th Circuit affirmed. Thirty days later, Tekky filed a petition for attorneys’ fees, expenses and costs in district court in the amount of $78,000.
The court quickly dispensed with Tekky’s petition. Under the Federal Rule of Appellate Procedure, a bill of costs must be filed within 14 days of entry of judgment. Tekky’s petition was filed 30 days after final judgment and was therefore denied as untimely. Citing no authority to support its position, Novelty argued that Rule 39(d)(1)’s 14-day deadline should similarly apply to Tekky’s request for attorneys’ fees and thus should be denied as untimely. The 7th Circuit disagreed, reasoning that “[i]n the absence of a statutory or rule-based deadline,” a general rule of diligence should govern. The court concluded that Tekky was diligent in preparing and submitting its request. Novelty then attempted to persuade the court that an award of fees was unwarranted because its appeal was not frivolous. The 7th Circuit summarily dismissed this argument, stating “[t]he strength of Tekky’s case against Novelty weighs heavily in favor of awarding fees, as the copyright infringement in this case was flagrant, and the trademark infringement was willful.” Thus, Tekky was “entitled to an award of the fees that it reasonably incurred in defending Novelty’s appeal.” The court did, however, reduce the fee award by $7,000, half of the cost requested for Tekky’s lead counsel to prepare the instant petition.
Senate Seeks to Prohibit the Grant of Future Patents to Tax Planning Inventions
By Paul Devinsky and Rita W. Siamas
While the Senate’s proposed “Patent Reform Act of 2007” (S.1145) will likely wait until the early months of 2008 for further consideration, lawmakers have introduced an additional proposal that may be offered as an additional amendment to S. 1145. On November 15, 2007, leaders of the Senate Finance Committee introduced “The Stop Tax Haven Abuse Act.” One provision of the Act would prohibit the U.S. Patent and Trademark Office from granting future patents for “tax planning inventions” designed to “reduce, minimize, avoid, or defer” taxpayer liability. Presidential candidate and United States Senator Barack Obama is one of the bill’s co-sponsors.
Senate Finance Committee Chairman Max Baucus (D-Mont.), a co-sponsor, explained that, “the growing number of attorneys and accountants applying for patents of tax strategies and techniques is cause for concern. … Taxpayers should not have to pay a toll charge or worry that they’re violating patent law when they try to file their tax returns. Tax practitioners should be able to provide advice and services to their clients without paying a fee to the patent holder.”
Tax patents are classified in the controversial category of “business method patents.” Popularity of business method patents has risen sharply since 1998, when the U.S. Court of Appeals for the Federal Circuit confirmed their legality in its State Street ruling. According to a Senate Judiciary Committee press release, the U.S. Patent and Trademark Office has granted 60 tax patents since 1998, such as municipal bond patents for structured finance products. Ninety-nine tax patent applications are currently under examination.
The Senate proposal is similar to one approved by the House of Representatives in September 2007 as part of H.R. 1908, its version of the Patent Reform Act of 2007. The Senate proposal, however, appears to prohibit a broader range of tax methods than the House proposal (in addition to tax plans, strategies, techniques and schemes, the Senate proposal prohibits tax processes and systems). Tax preparation software and other tools used solely to prepare tax returns would not be part of the prohibited methods under either bill, however. According to co-sponsor Carl Levin (D-Mich.), the bill will be offered as an amendment to the S. 1145, which was approved by the Senate Judiciary Committee in July and is pending further consideration.
House Proposes Creation of an IP Enforcement Czar, Seeks Stronger Trademark and Copyright Enforcement
By Paul Devinsky and Rita W. Siamas
After tackling patent reform, the House of Representatives seeks to strength enforcement against piracy, trademark infringement and copyright infringement. On December 5, 2007, leaders of the Judiciary Committee introduced the “Prioritizing Resources and Organization for Intellectual Property Act of 2007” (PRO IP Act) (H.R. 4279).
Major features of the PRO IP Act include establishing the Office of the United States Intellectual Property Enforcement Representative (USIPER), which would serve as the President’s chief intellectual property advisor, as well as creating an Intellectual Property Enforcement Division within the DOJ. The Act also strengthens current laws, such as increasing the copyright damages recoverable by allowing each song to be counted as a separate offense. The Act also allows the DOJ to seize and auction any computer or other property used to “facilitate” a copyright crime (called “Civil Action Forfeiture”).
The Act received significant support in a December 13 hearing before the House Subcommittee on Courts, The Internet, and Intellectual Property. NBC Executive Vice President and General Counsel Rick Cotton, representing the Coalition Against Counterfeiting and Piracy, declared that “The Pro IP Act is a needed declaration of war, escalating the priority of this vital public policy by deploying dedicated enforcement resources to the battle.”
Teamsters president Jim Hoffa also testified to support the Act. “Some people might think it’s no big deal to buy a knockoff handbag or fake DVD, but it is.” Hoffa continued, “These crimes kill jobs—good jobs that my union has fought to protect for more than a hundred years.” Hoffa testified that the American entertainment industry loses approximately 370,000 jobs yearly due to lost revenue from pirated and counterfeit media.
The Chairman of the Motion Picture Association of America Dan Glickman commented in a statement, “I believe that the American business community can speak in one voice today in support of these legislative efforts to protect intellectual property. He continued, “I am pleased to see a concerted effort by Congress to address this growing problem.”
The Act has its critics, however. Gigi B. Sohn, representing the public interest group Public Knowledge, testified, “The bill rightly targets enforcement of copyright law against commercial infringers, but some of these same enforcement provisions are likely to hurt ordinary consumers.” Regarding the damages proposals, Sohn stated, “Increasing penalties is one of the least necessary, and quite possibly counter-productive, actions the Committee could take.” “Instead of following the course of this bill,” Sohn testified, “the Committee should look to the future, to a more realistic and rational copyright regime that can adapt pre-VCR copyright laws to a post-YouTube world.”
Google’s senior copyright counsel, William Patry, commented on his personal blog that the Act may be the “most outrageously gluttonous IP bill ever introduced in the U.S.” Regarding the damages proposals, Patry stated, “[This] is intended to benefit the record industry but will have terrible consequences for many others; the provision has nothing to do with piracy and counterfeiting; instead it seeks to undo rulings in the 2000 MP3.com litigation, a decidedly non-piracy or counterfeiting case.” The “zero tolerance” of the Act is dangerous, Patry warns, because it “threatens respect for law itself. People do not obey laws they abhor, and there is much to abhor in H.R. 4279.”
The Electronic Frontier Foundation has also expressed criticism of the Act. “If the entertainment industry wants to pile on extraordinary penalties for the commercial pirates,” writes EFF Activist Richard Esquerra, “it also seems like a good time to make adjustments that recognize that lesser penalties are appropriate for noncommercial, personal copying.” “Unfortunately,” states Esquerra, “the PRO IP Act is just another in a long line of one-way ratchet proposals that amplifies copyright without protecting innovators or technology users.”
New Rules For IDS
By Paul Devinsky
The U.S. Patent and Trademark Office (USPTO) has announced that the executive branch has approved the new Information Disclosure Statement (IDS) rules proposed by the USPTO in an official Gazette notice issued in July 2006. The new rules could be implemented as early as January 2008.
The rules changes impose “additional disclosure” requirements for IDS that encourage applicants to submit an IDS citing a limited number of documents (20) before issuance of a first Office Action (OA). Specifically, under the proposed new rules there is no “additional disclosure” required when submitting an IDS before issuance of first OA if the number of citations is 20 or less—except in the case of large documents (more than 25 pages) or foreign language documents. The proverbial “stick” side of the motivation is in the form of increasingly burdensome additional disclosure requirements (see chart below) applicants will encounter when filing an IDS after a first OA. The following timeline is based on one published by the USPTO to explain the “additional requirements” of the proposed IDS rules, requirements that grow increasingly burdensome as the application moves through each of the four time periods set forth in the proposed rules. Also, under the proposed rules, all IDS fee requirements will be eliminated.