US News and World Report and Best Lawyer included Barry Irwin in their 2020 Edition of “Best Lawyers in America” and named Irwin IP as a “Law Firm of the Year” in Intellectual Property Litigation and Patent Law! Best Lawyers are selected after a rigorous evaluation and include the Top 5% of private practitioners. And, only 2,106 of 14,931 law firms evaluated were recognized as a Best Law Firm. Irwin IP thanks all of those who were involved in the submission, evaluation, and review process.
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Plaintiff Tapatio, known for its ubiquitous hot sauce bottles labeled with red arching font and a yellow-clothed Mexican horseman in a sombrero, sued the defendant for using the mark “Tiowaxy” in connection T.H.C.-infused hot sauce. The Tiowaxy bottle bears the same red arching font and imagery. Tapatio moved for a permanent injunction and default judgment on its trademark infringement, unfair competition, and dilution by tarnishment claims, as the defendant never filed any opposition papers.
The judge found that Tapatio had adequately plead its claim for trademark infringement, in part, because “Plaintiff’s products and the ‘Tiowaxy’ products are in direct competition with each other and thus ‘are in the closest proximity under the likelihood of confusion analysis.’ . . . Both Plaintiff and Defendant use the same marketing channels, including Instagram and other social media platforms, and hot sauce is an inexpensive product likely to be an ‘impulse’ purchase by most consumers, which increases the likelihood of confusion.” Tapatio Foods, LLC, 2019 WL 6168416, at *3. Further, the magistrate judge found that Tapatio had adequately alleged tarnishment, because Tapatio is a famous mark and the defendant’s hot sauce was infused with T.H.C., satisfying the traditional tarnishment requirement that the alleged infringing mark involve either drugs or sexual activity.
Notably, the magistrate judge did not question Tapatio’s allegations that traditional hot sauce and THC-infused hot sauce were not only directly related, but directly competing products. As marijuana and other related active products are currently illegal under federal law, those in the marijuana industry that act lawfully according to state law are, nevertheless, unable to obtain federal trademark protection for their products at this time. As a result, a common strategy for such businesses is to develop their trademark portfolios by concurrently branding and selling related, but non-leaf-touching, products in the hope that, one day, they will be able to claim that the leaf-touching product warrants the protection of those earlier priority dates. By finding that non-T.H.C. and T.H.C.-infused products are both directly related and directly competing, the magistrate judge appears to have blurred the line between leaf-touching and non- leaf-touching product markets, thereby strengthening not only trademark rights of non-leaf-touching mark holders, but also the rights of participants in the marijuana industry who may seek to bring common law trademark claims against non-leaf-touching product competitors.
Columbia Sportswear (“Columbia”) sued Seirus Innovative Accessories (“Seirus”) for infringement of both a utility and a design patent relating to a heat management element in cold-weather outerwear. The design patent was directed to a wave-pattern design weave. Seirus established that the utility patent was anticipated and obvious, a finding sustained on appeal, but the district court granted summary judgment of infringement on the design patent claim, and a jury awarded damages of approximately $3 million. Seirus appealed the grant of summary judgment, arguing that the district court ignored several minor differences in the accused design:
The Federal Circuit agreed and reversed the finding of summary judgment, remanding the case for a jury trial on infringement. Specifically, the appeals court found that the district court improperly dismissed minor differences, on a piecemeal basis as each individually not impacting the overall visual impressions, such as differences in the size, thickness, and orientation of the wave pattern, rather than considering the similarity of the overall visual impression of the designs from the standpoint of an ordinary observer. Columbia, at 18. Additionally, the district court wrongly ignored the logo, relying on a previous Federal Circuit case L.A. Gear Inc. v. Thom McAn Shoe Co., 988 F.2d 1117, 1125 (Fed. Cir. 1993). Now, the Federal Circuit finds that when a logo is part of the design, it is proper to consider a logo’s appearance and placement alongside other potential differences in the infringement analysis.
In Airbus S.A.S. v. Firepass Corp., the Federal Circuit reversed the Patent Trial and Appeal Board’s finding that had held a patent directed to an athletic training and therapeutic chamber (used to simulate training at high altitude) was not analogous art against claims directed towards fire suppression methods. Case No. 2019–1803 (Fed. Cir. Nov. 8, 2019). This decision aligns the criteria for determining whether art is analogous with the assessment of the knowledge of a person of ordinary skill in the art prescribed by KSR Int’l v. Teleflex Inc. and its progeny.
The core dispute in Airbus v. Firepass was whether a prior art patent (“Kotliar”) directed to a chamber for simulating high altitude training by reducing oxygen content, was analogous art to claims directed to preventing or suppressing fires in enclosed and human-occupied spaces (such as the cabin of an aircraft) via oxygen deprivation. During the inter partes reexam proceeding from which the Airbus appeal arose, the examiner rejected the challenged claims as obvious in view of Kotliar in further view of various secondary references directed towards oxygen deprivation-based fire suppression methods. Appealing the rejection to the Board, Firepass asserted that Kotliar, which was invented by the same inventor as the challenged claims, was not analogous art. The Board agreed, finding that there was no articulated rational link between Kotliar, which was directed towards “human therapy, wellness, and physical training” and the problem confronting the inventor (i.e. “fire suppression/prevention”). The Board refused to consider Airbus’ argument to the contrary—that various background references showed that reducing oxygen concentration within breathable limits was a known method for fire suppression—because the examiner did not specifically use those references to support the rejection.
The Federal Circuit has long required that only references “analogous to the claimed invention” be considered as prior art for purposes of obviousness. This restriction prevents hindsight from clouding an obviousness determination. Two separate tests govern whether a reference constitutes analogous art: (1) whether the art is from the same field of endeavor, regardless of the problem addressed and, (2) if not, whether the reference still is reasonably pertinent to the particular problem with which the inventor is involved. The latter test asks whether a person of skill in the art would have reasonably looked to a reference in attempting to solve the problem at hand. The Federal Circuit in Airbus held that the Board correctly concluded that Kotliar and the challenged claims were not from the same field of endeavor, but erred by failing to consider Airbus’ evidence that Kotliar was nonetheless reasonably pertinent art. On appeal, the Board contended that precedent requiring consideration of such background references, such as Randall Mfg. v. Rea, 733 F.3d 1355 (Fed. Cir. 2013), was directed only towards determining whether there was a motivation to combine references (per KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007)). The Court disagreed, and held that the background knowledge possessed by a person of ordinary skill in the art was equally relevant to assessing whether art is analogous as it was to assessing motivation.
A panel of the Ninth Circuit Court of Appeals reversed and remanded a decision by the Central District of California dismissing a complaint brought against Taylor Swift alleging that she stole the lyrics for her hit song “Shake It Off.” The District Court dismissed the complaint on the basis that the allegedly-copied lyrical sequence lacked sufficient originality to be afforded copyright protection. In its reversal, the Ninth Circuit reminded the Court that it is not the Court’s duty to judge the creative worth of an expressive work.
Sean Hall and Nathan Butler filed suit against Taylor Swift alleging that lyrics from her popular song “Shake It Off” were copied from their 2001 song “Playas Gon’ Play,” performed and released by the group 3LW. Hall and Butler’s song contains the following lyrics: “Playas, they gonna play / And haters, they gonna hate….” Swift’s “Shake It Off,” written in 2014, contains the following: “‘Cause the players gonna play, play, play, play, play / And the haters gonna hate, hate, hate, hate, hate….”
Upon motion by Swift, the District Court for the Central District of California dismissed the complaint on the basis that the lyrics that Swift allegedly copied—consisting of nothing more than two brief, banal truisms distilled down to only six relevant words—lacked sufficient originality to warrant copyright protection. The Copyright Act provides that copyright protection shall be afforded to all “original works of authorship fixed in any tangible medium of expression.” 17 U.S.C. 102. The amount of creative input generally required to meet this requirement is low. But courts, nonetheless, generally do not afford copyright protection to words or short phrases, unless they are sufficiently creative. The Court took judicial notice, and plaintiffs acknowledged, that “by 2001, American popular culture was heavily steeped in the concepts of players, haters, and player haters” and that combining the two truisms—“playas gonna play” and “haters gonna hate”—was “simply not enough.” The District Court noted “[i]n order for such short phrases to be protected under the Copyright Act, they must be more creative than the lyrics at issue here.” Because copyright infringement requires copying of the protectable (i.e., copyrighted) elements of a work, the District Court dismissed the complaint for failure to state a claim.
In a short opinion, a panel from the Ninth Circuit reversed and remanded. The Ninth Circuit reminded the District Court that originality is ordinarily a question of fact and that it is not the role of the Court to “constitute itself as the final judge of the worth of an expressive work.” The Court quoted Justice Oliver Wendell Holmes Jr.’s words from more than a century ago that “[i]t would be a dangerous undertaking for persons trained only to the law to constitute themselves final judges of the worth of pictorial illustrations, outside of the narrowest and most obvious limits.” At bottom, the Ninth Circuit found that, because no facts established an absence of originality—neither on the face of the complaint nor through the judicially noticed matters—dismissal was not appropriate.
The Federal Circuit unanimously held that all Administrative Patent Judges (“APJs”) were Principal Officers who bypassed the constitutionally required Presidential appointment and Senate confirmation process, thus violating the Appointments Clause of the U.S. Constitution art. II, § 2, cl. 2. In the same opinion, the Federal Circuit corrected the infirmity by striking from the statute governing their employment, 35 U.S.C. § 6(a), the “for cause” removal provision of 5 U.S.C. § 7513(a) (incorporated through 35 U.S.C. § 3(c)). As such, all currently appealable cases from the Board may be heard for Appointment Clause violations and subject to remand for new proceedings before a new panel.
Although the Appointments Clause challenge was not raised before the Board during the inter partes review,1 the Federal Circuit waived that requirement due to the importance of the Constitutional question. The Federal Circuit evaluated whether the United States Patent and Trademark Office Director had enough oversight to make the APJs inferior officers and therefore not subject to the Appointment Clause. The Federal Circuit analyzed this issue under the Edmond oversight factors: power of review, strength of supervision, and power of removal.2 As to power of review, the Federal Circuit determined that this factor weighed against finding APJs inferior officers because the Director has no power to overturn or review the final written decisions issued by the Board. As to power of removal, the Federal Circuit found this also weighed against finding APJs inferior officers, because the Director may only remove officers “for cause.” While the Court recognized the Director’s strong supervisory powers to issue binding precedential decisions, institute reviews, assign panels, and promulgate rules; the Court held that such functions were insufficient to make the APJs subject to the oversight of the Director. After equating the powers of the APJs and the Director to the powers of the Copyright Royalty Judges and the Librarian, which also violated the Appointments Clause,3 the APJs clearly violate the Appointments Clause of the Constitution. To correct the infirmity, the Federal Circuit exercised its authority to sever the problematic provisions. Following the Supreme Court’s lead in Free Enterprise Fund and the D.C. Circuit’s approach in Intercollegiate, the Federal Circuit struck the application of the “for cause” removal restriction to the APJs.4 In light of this holding, the Federal Circuit found that final written decisions “where the final decision was rendered by a panel of APJs who were not constitutionally appointed and where the parties presented an Appointments Clause challenge on appeal, must be vacated and remanded.”
The Central District of California recently ruled on summary judgment that Ironhawk Technologies, Inc.’s, (“Ironhawk”) “SmartSync” mark was descriptive and entitled to little or no protection. The District Court’s analysis relied on the Ninth Circuit’s Sleekcraft eight factor likelihood of confusion test1 and particularly concluded that Ironhawk’s “SmartSync” mark was conceptually weak and Ironhawk’s products were not closely related to Dropbox Inc.’s (“Dropbox”) products to result in a likelihood of confusion.
Ironhawk uses its “SmartSync” mark as the name of a software program that uses compression and replication to transfer data efficiently in “bandwidth-challenged environments.” Dropbox uses its “Smart Sync” mark as a title for its cloud-based storage feature, which allows users to choose whether files are stored locally or online only. Dropbox’s “Smart Sync” is not a stand-alone product, but rather a feature of certain paid prescription plans. Ironhawk filed a trademark infringement suit against Dropbox asserting likelihood of confusion between Ironhawk’s “SmartSync” mark and Dropbox’s “Smart Sync” mark. Dropbox moved for summary judgment.
In granting summary judgment, the District Court found Ironhawk’s mark to be descriptive, and thus, “conceptually weak” and entitled to little or no protection, because the term “SmartSync,” describes at least some of the characteristics of Ironhawk’s product, namely “intelligent” transport, compression, and synchronization. And despite Ironhawk’s 15 years’ use, the District Court noted Ironhawk provided no evidence of “commercial strength, or actual marketplace recognition,” outside of the market for military software. In regards to the similarity of the products, the District Court noted that although both are software involving the transfer of electronic data, the parties’ products are not closely related enough to result in a likelihood of confusion. Dropbox’s “Smart Sync” feature was aimed at individuals and businesses trying to save storage space on their computer’s hard drive. Ironhawk’s “SmartSync” software was aimed at efficient data transfer and was only used by the United States Navy.
This case is a good reminder that when selecting trademarks, businesses should be wary of choosing descriptive and thus conceptually weak marks. Oftentimes marketers desire a descriptive mark for a new product or service because it allows consumers to immediately identify the product or service being offered just by reading the mark itself. However, what works for marketing does not always work for legal protection. Although it may cost more initially to select a suggestive or fanciful mark and build its brand awareness, selecting a descriptive mark often costs more down the line due to the time and money it can take to police and enforce such a mark.
Any new rule or pilot program by the United States Patent and Trademark Office (“USPTO”) is important to both prospective petitioners and patent owners because both parties should consider all available options when appearing in a proceeding before the Board. In three Inter Partes Review (“IPR”) proceedings for Mylan Pharmaceuticals, Inc. v. Sanofi-Aventis Deutschland GmbH, the Patent Trial and Appeal Board has issued its first guidance under its motion to amend (“MTA”) pilot program.1 This new, optional program, which went into effect in March 2019, provides a patent owner two options not previously available: first, the patent owner may seek preliminary, non-binding guidance from the Board regarding its motion to amend patent claims; second, the patent owner may then revise its motion to amend based on the petitioner’s opposition and the Board’s preliminary guidance.2
In its first Preliminary Guidance (issued in three separate papers for the three IPRs), the Board addressed the burden of the patent owner—Sanofi-Aventis Deutschland gmBH (“Sanofi”)—to show a reasonable likelihood that its MTA satisfied the statutory and regulatory requirements, as well as the burden of the petitioner—Mylan Pharmaceuticals, Inc. (“Mylan”)—to demonstrate a reasonable likelihood that the proposed substitute claims are unpatentable.3 Specifically, across all three IPRs, the Board found that Sanofi demonstrated a reasonable likelihood that it satisfied the statutory and regulatory requirements associated with the MTA. First, Sanofi submitted a reasonable number of substitute claims, e.g., no more than one substitute claim for each challenged claim. Further, the proposed substitute claims responded to a ground of unpatentability in the trial, did not enlarge the scope of the claims, and did not add new subject matter.
However, as indicated above, the Board also addressed Mylan’s burden to demonstrate a reasonable likelihood that the proposed substitute claims are unpatentable. Specifically, in each IPR, the proposed substitute claims were rendered obvious by various combinations of prior art. Notably, the Board rejected both the petitioner’s and the patent owner’s attempts to incorporate by reference arguments from other papers into the opposition and MTA, respectively. Although the Board found that there is a reasonable likelihood that the proposed substitute claims would be unpatentable based on obviousness, the Board also held that, on the record available, the petitioner failed to show that the proposed substitute claims were indefinite based on the terms “the body” or the “arc shaped body.”
In response to this Preliminary Guidance, Sanofi may choose to file a revised MTA, where new substitute claims would replace those claims from the original MTA. The final written decision by the Board would address the newly proposed substitute claims in the revised MTA rather previously proposed claims from the original MTA. Nonetheless, patent owners, generally, may look to this first Preliminary Guidance from the Board for direction with their own MTA claims.
The MTA pilot program is expected to be reassessed by the USPTO in March 2020.4
Motiva alleged that HTC directly, indirectly, and willfully infringed of a number of Motiva’s patents directed to video game and virtual reality systems. HTC moved to dismiss two of Motiva’s claims, arguing that Motiva failed to adequately plead its claims for indirect and willful infringement. Specifically, HTC argued that that Motiva failed to allege sufficient factual support regarding HTC’s knowledge of Motiva’s patents, HTC’s intent, noninfringing uses of HTC’s products, and willful infringement.
There are two types of indirect patent infringement: induced and contributory. First, a claim of induced infringement requires active steps taken by the defendant to encourage infringement by another. It also requires the plaintiff to show that the defendant both (1) knew about the asserted patents and (2) knew that the acts induced by the defendant would infringe the asserted patents. Second, a claim of contributory infringement requires the plaintiff to show that the defendant sold or offered to sell a product used in practicing a patent, and that the product has no substantial non-infringing uses, or in other words, no real uses other than to infringe the patent. Contributory infringement also has a knowledge requirement, as the defendant must know that the product it sells will contribute to that infringement.
Motiva argued that HTC’s actions, or lack thereof, satisfied the knowledge requirement of both kinds of indirect infringement, alleging that HTC “has a policy or practice of not reviewing the patents of others (including instructing its employees to not review the patents of others).” Such a policy, Motiva argued, constituted willful blindness to the existence of Motiva’s patents. In Glob.-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754, 768 (2011), the Supreme Court approved of the doctrine of willful blindness to supply the knowledge requirement for indirect infringement, providing a framework of requirements: “(1) The defendant must subjectively believe that there is a high probability that a fact exists and (2) the defendant must take deliberate actions to avoid learning of that fact.” Judge Gilstrap of the Eastern District of Texas agreed with Motiva, finding that a policy of not reviewing patents and instructing employees to not review patents are deliberate actions to avoid learning of infringement.
Further, for similar reasons, Judge Gilstrap agreed with Motiva that its allegations of willful blindness were sufficient to satisfy the actual knowledge requirement for willful infringement, discussing that the Supreme Court’s decision in Global Tech equated actual knowledge with willful blindness, and that its rationale should apply to willful infringement. Further, the Supreme Court’s discussion in Halo of subjective willfulness (“knowing or having reason to know of facts”), suggested to Judge Gilstrap that willful blindness should apply in the willful infringement context. Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923, 1933 (2016).
While this decision certainly bolsters the ability of patent infringement plaintiffs to survive motions to dismiss, it also would effectively require all companies that work in a space to search for patents that they may potentially infringe prior to putting a product on the market. Otherwise, they risk being accused of willful blindness. However, this search may then create circumstances inferring that the company has knowledge of all patents in the space, which may then lead to a determination of willful infringement. Further, it would create a financial burden on companies to dig through thousands of patents. While the expansion of the willful blindness doctrine will help plaintiffs recover for the infringement of their patents, defendants will be caught by willful blindness on one hand, and actual knowledge on the other.
Irwin IP recently obtained a major preliminary victory for it’s client LKQ in its trademark and antitrust case against FCA US LLC. FCA moved to dismiss LKQ’s declaratory judgment trademark claims and certain of LKQ’s offensive claims relating to antitrust and RICO counts. A report and recommendation by the Delaware Magistrate Judge assigned to the case recommended denying FCA’s motion to dismiss in its entirety.