trademark, intellectual property litigation, and patent updates for the non-u.s. counselor

www.bakerdaniels.com

Trademark, Intellectual Property Litigation, and Patent Updates for

the Non-U.S. Counselor

Brad R. Maurer and Louis T. PerryAbigail M. ButlerKevin Erdman

Friday, June 5, 2009

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United States Trademark Practice

Considerations for the International Client

Brad R. Maurer and Louis T. Perry

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U.S. Trademark Prosecution

Historic U.S. Rule:Trademark owners must use a mark in

commerce before they can obtain a federal registration

Registration recognizes rights that a trademark owner has already created through actual use of a mark in “commerce”

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U.S. Trademark Prosecution Exceptions:

Section 1(b) Applications (“Intent to Use”)

Section 44(e) Applications (based on foreign application or registration)

Section§ 66(a) (Madrid Protocol extensions)

But …importance of actual “use” lingersuse must be shown to

maintain the registration

use must exist to enforce the registration

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U.S. Trademark Prosecution: Use and Maintenance

International registrants should commence use of a mark in U.S. as soon as possible

Statutory presumption of abandonment after three years of non-use (risk of cancellation?)

International registrants, like a U.S. registrant, must file affidavits of use to maintain a registration

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U.S. Trademark Prosecution: Use and Maintenance (cont’d)

Affidavits of Use: When? Between the fifth

and sixth year following the registration date and at the end of each successive ten-year period

Why? U.S. protection focused on actual use, therefore requirement to confirm ongoing use of the mark in U.S. commerce for every good and/or service listed

Consequences: Failure to file affidavit

of use results in cancellation of a registration in its entirety

Failing to file an accurate affidavit of use exposes the registration to potential cancellation for “fraud.” See Medinol Ltd. V. Neuro Vasx Inc., 67 USPQ2d 1205 (TTAB 2003) 6

U.S. Trademark Prosecution: Pitfalls for the Madrid Registrant

Affidavit of Use and Renewal: For a U.S. registration,

renewal/use filed together Under Madrid, renewal

takes place at IB …BUT TO MAINTAIN THE

U.S. EXTENSION, AN AFFIDAVIT OF USE MUST ALSO BE FILED WITH USPTO TEN YEARS AFTER REGISTRATION

Consequences: Failure to file affidavit

of use = cancellationLate filing grace period

also different for a Madrid Extension: no grace period for 5/6 year, and only 3 months for 10 year

Filing window difference at 10 year(6 months vs. 12 months)

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U.S. Trademark Prosecution: Pitfalls for the Madrid Registrant

Other Differences from Section 1 and 44 based applications:Not eligible for

Supplemental RegisterVague description of

goods/services and International Classification by IB

Response to Office Action due within 6 months regardless of when IB forwards (first OA sent to IB)

No possibility to amend mark (Section 1 and 44 possibility for amendment if not “material”)

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U.S. Trademark Prosecution: Suggestions for International Owners

Current registrations Audit U.S registration portfolio considering use and fraud. If an important mark appears vulnerable, consider filing an additional application with a goods and services description that provides the required coverage but does not highlight fraud vulnerability in prior registration

Looking forward Registration under § 44(e) and § 66(a) does not relieve the

trademark owner of its responsibility to demonstrate actual use in U.S. commerce with respect to the listed goods and services—ENFORCEMENT DEMANDS USE ANYWAY

Because of classification restrictions, foreign trademark owners should consider filing applications for their most

significant marks directly in the United States9

U.S. Trademark Prosecution: Look Before Leaping

Pre-filing Search and Opinion A comprehensive search conducted by a reputable vendor is

one of the tools available to assess the risk of whether similar trademarks are registered or used in connection with similar goods or services by a third party (no guarantee, however)

Comprehensive searches can cost approximately $500 for word marks and upwards of $1,000 for design marks

The cost of an analysis of the search results and the preparation of an opinion letter varies with the extent and nature of the results, but generally ranges in between $1,500 and $3,000.

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U.S. Trademark Prosecution (cont’d)

Trademark watch serviceNotice of potentially conflicting trademark

applications and registrations when published for registration

Monitor status of applications of interest

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Enforcing Rights: Protecting a Mark

Administrative: Opposition and Cancellation Proceedings Filed with the TTAB Damages are unavailable – relief is limited to

cancellation or refusal to register the mark Only concerned with registration of a mark

Judicial: U.S. Courts Injunctive relief, statutory damages and/or attorneys’

fees, other damages Typically filed with federal district courts Criminal penalties for trademark counterfeiting

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Cease and Desist LetterContents and possible declaratory judgmentBe willing to carry out threats or lose

credibility Likelihood of Confusion

Multi-factor testWill you need a survey, and at what cost?Intent

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Anti-Dilution Statutes for Famous TrademarksIdentical or similar mark “Blur” the capacity of the famous mark to

identify and distinguish its goods“Tarnish” the reputationNo need to show likelihood of confusion

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QUESTIONS?

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Considerations In U.S. Patent Litigation

Abigail M. Butler

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Major stages of U.S. Patent Litigation

Jurisdictional Requirements and Foreign activities that may infringe U.S. patents

Strategic considerations for co-pending patent litigation

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In a Nutshell… Time Consuming

– D. Ct.: 3-5 years– Appeals and Returns: 7-10 years

Expensive– Average cost of $2.6M if

$1M or more is at risk

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1. Pleadings

2. Discovery period

3. Claim construction and Markman

proceedings

4. Summary Judgment and other pretrial

motions

5. Final pretrial proceedings

6. Trial19

Pleadings

Complaint

Answer to Complaint

Motions to Dismiss

– Lack of personal

jurisdiction

– Lack of subject matter

jurisdiction

– Adequacy of pleadings20

General Jurisdiction Most common way foreign defendants are

pulled into U.S. Requires systematic & continuance

contacts Prior business contacts Activities of domestic subsidiary

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Jurisdiction Based On Internet Use

Sliding Scale - Interactive v. Passive

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Discovery

Interrogatories

Document Requests

Depositions

Site Inspections

Expert Discovery

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International Discovery Requests

28 U.S.C. § 1782 governs production of evidence in the U.S. for use in a foreign or int’l tribunal

Twin Aims: to provide efficient means of assistance to participants in int’l litigation in U.S. Federal Courts and to encourage similar means of assistance from foreign countries

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International Discovery Requests

Allows Court to order deposition testimony and production of documents

May be available to private international arbitration proceedings

Parties to an international arbitration agreement may wish to expressly preclude

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Claim Construction & Markman Proceedings

Markman v. Westview Instruments– Judges should perform claim construction

Vitronics Corp. v. Conceptronics– Introduced hierarchy of evidence to be used in

construing claims

Cybor v. FAS Technologies– Federal Circuit overrides District Court

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Timing Considerations Typically done before or in conjunction with

Motions for Summary Judgment

What is considered?– Words themselves

– Patent specification

– File history

– Extrinsic evidence

Involves exchange of briefs

and a hearing

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Summary Judgment

A motion for judgment without a trial

Proper if undisputed facts warrant

judgment as a matter of law

Infringement, validity,

enforceability

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Final Pretrial Proceedings

Witness & Exhibit lists

Stipulations

Motions in Limine

Trial Brief

No

surprises! 29

Trial

Jury Selection (voir dire)

Opening Arguments

Witnesses (fact and expert)

Closing Arguments

Deliberations

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Creativity Is Rewarded

A picture is worth a million words

(and maybe a million dollars)

Select a theme and stick to it

Shotgun v. Sniper-rifle

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Tell A Story

Unify and explain why people

did what they did

Motivate the listener

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Judicial Research

Experience level, e.g., “Rocket Docket”

Education

Utilize local bar

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Appeal Route

Federal Circuit, circa 1982 (Fed. Cir.)

– Jurisdiction based solely on subject matter

rather than geographical location

– Provides uniformity

– Binding precedent throughout U.S., unless

superseded by Supreme Court or by

applicable changes in the law34

Foreign Activities That May Raise U.S. Infringement Issues

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Making, using, or selling a U.S. patented product or process in another country

does not, by itself, infringe a U.S. patent, but….

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Importing a patented product into the U.S. is an act of direct infringement

Includes products made by a U.S. patented process

Remedy is Damages and/or Injunction

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2 Ways To Stop Infringing Imports

Litigation in federal

district court

Filing a proceeding

with the International

Trade Commission

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ITC Proceedings v. District Court Litigation

Personal Jurisdiction– District Courts must have personal jurisdiction

over the alleged infringer

– ITC has national in rem jurisdiction over all

products imported into the U.S.

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SUBJECT MATTER ITC DISTRICT COURTS

Judge Administrative Law Judge (deals with nothing but IP cases)

Judge may not be well-versed with the technology, or with patent cases in general. Deals with a wide variety of cases

Evidence Relaxed evidentiary rules (allows all evidence which seems useful and relevant, including hearsay). Also allows worldwide discovery beyond named parties

FRE and Discovery is generally limited and governed by the FRCP (But, see28 U.S.C §1782.)

Style of Proceeding Formal, evidentiary hearing which does not necessarily include Markman proceedings

Pretrial hearings and motions, Markman proceedings, and trial

Damages May issue C&D Order; or Exclusion Order which may apply to violators beyond those named by respondent

Injunctive Relief (limited by eBay) and Monetary Damages

Appeal Route Federal Circuit Federal Circuit

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Infringement In The U.S. WithSales Outside The U.S.

May be awarded damages based on sales of a patented product made outside U.S. when infringer exports a component of the product abroad

Allows the U.S. patentee to avoid the expense and risk of filing multiple lawsuits in different countries, while still recovering sales where no patent protection was obtained

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Strategic

Considerations

for

Co-Pending

Patent Litigation

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Statements made under oath in one proceeding may be

admissible elsewhere

– Molins PLC v. Textron, Inc.

Jurisdictional Differences in Claim Construction– Improver Corp. v. Remington Consumer Prods.

Effect of Foreign Judgments and Settlements

– Vas-Cath, Inc. v. Mahurkar

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Thank you!

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FICPI Patent Update

By: Kevin ErdmanPartner, BAKER & DANIELS LLP

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Substantive Patent Update Design Patent change in infringement

– Old standard “Point of Novelty”– New standard “Ordinary Observer”– Lay Jury prominent in decision– Favors Design Patent Owner

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Substantive Patent Update Evolving Nonobviousness standards KSR plays out in different technologies

Chemical Mechanical Electrical Biotech Software

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Substantive Patent Update Written description for “means plus function”

elements and ordinary elements under the doctrine of equivalents Courts are holding patent terms to explicit definitions Single embodiments often constrain definition of claim

terms Multiple embodiments and explicit disclosures of

equivalent structures important in specification

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Procedural Patent Update Tafas update, what happened to the “new

rules”– Court banned limit on continuations– Court allowed other aspects of “new rules”– Patent Office withdrew “new rules”– Further rules likely to shift burdens and costs

to patent applicants

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Procedural Patent Update Information Disclosure Statements

Include English language equivalents where possible McKesson decision held withholding information from

related prosecutions (office actions and responses) was inequitable conduct

Obligation to report on related proceedings including office actions and responses

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Procedural Patent Update Electronic filing and timing issues

All documents may be submitted electronically, forward scanned documents with signatures rather than physical documents

Specifications best provided as Word documents, or PDF with embedded text

Priority documents and prior art must be submitted earlier in the process

Impact of KSR v. Teleflex KSR v. Teleflex, 127 S.Ct. 1727 (2007)

– Issue:• For combination patents, determining when it is appropriate

to combine teachings from the prior art for purposes of an obviousness analysis.

– Holding: • Reversed Court of Appeals for Federal Circuit’s “rigid”

application of teaching-suggestion-motivation test (“TSM test”). The correct test is an “expansive and flexible” one.

– Renewed focus:• Person of Ordinary Skill in the Art who exercises “common

sense.”52

The way it was pre-KSR Explicit finding of a “teaching, suggestion,

or motivation” in the prior art that would compel a PHOSITA to combine prior art elements.

This was known as the “TSM” test. POINT: to address obviousness and avoid

hindsight bias.

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The way it is today The Supreme Court in KSR rejected any

“rigid” application of the TSM test. TODAY:

– The test is “expansive and flexible.”– “Common sense” is the key inquiry.– An explicit reference is no longer required.

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How does KSR impact you? ANSWER: It Depends. Different fields of art seem to be impacted

differently. Compare: mechanical, electrical, software,

chemical, and biotech.

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MECHANICAL PATENTS TREND:

– Patent claims are easier to invalidate under the obviousness doctrine.

– Recent BPAI and Federal Circuit decisions that use KSR have most often found claims were obvious because the results were predictable.

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Representative Mechanical Case

Ex Parte Bernard, Appeal 2008-2609, 2008 WL 4823235 (Bd. Pat. App. & Inter. Nov. 5, 2008):– Invention at issue: The fastening components

at certain joints in a motor vehicle powertrain.– Holding: Board affirmed the examiner's finding

that the claims at issue were obvious.

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Representative Mechanical Case

Ex Parte Bernard, 2008 WL 4823235 (BPAI Appeal 2008-2609) (Nov. 5, 2008):– In light of KSR, these claims were simply a combination of

old elements, "each performing the same function it had been known to perform."

– Quoting KSR, the Board held that when elements work together in "an unexpected and fruitful manner," the invention is not obvious.

– Using language from KSR, the combination did nothing more than "combine known elements for their known functions to yield, predictably, a mechanical assembly of the components at critical joints of a vehicle powertrain." 58

Considerations for Mechanical Claim Drafting

Predictability of the operation and use of mechanical elements creates difficulties.

Therefore, applicants should direct examiner to the unknown uses of the claimed mechanical elements.

Additionally, point to unexpected performance characteristics of those elements.

And do so in either the specification or by affidavit during prosecution.

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ELECTRICAL PATENTS TREND:

– Similar to mechanical patents.– Predictability of the art appears to be creating

a trend of invalidity. BUT…

– The examiner is still required to point to “some articulated reasoning” to support a conclusion of obviousness. See Ex Parte Assaf Govari, Appeal 2008-6324, 2009 WL 789956 (Bd. Pat. App. & Interf., March 23, 2009).

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Representative Electrical Case In re Translogic Tech., Inc., 504 F.3d

1249 (Fed. Cir. 2007) (reh'g and reh'g en banc denied, Jan. 24, 2008).– Invention at issue: multiplexer circuitry.– Holding: Affirmed the BPAI’s obviousness

rejections.

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Representative Electrical Case In re Translogic Tech., Inc., 504 F.3d 1249

(Fed. Cir. 2007) (reh'g and reh'g en banc denied, Jan. 24, 2008).– The court began by noting that "a person of ordinary

skill is also a person of ordinary creativity, not an automaton." In re Translogic at 1260 (citing KSR at 1742).

– No explicit motivation required; nor does the obviousness analysis require one to point to the prior art for “precise teachings directed to the specific subject matter of the challenged claim.” Id. At 1262 (citing KSR at 1741). 62

Representative Electrical Case In re Translogic Tech., Inc., 504 F.3d 1249

(Fed. Cir. 2007) (reh'g and reh'g en banc denied, Jan. 24, 2008).– Now, “a court can take account of the inferences and

creative steps that a person of ordinary skill in the art would employ.” Id.

– Here, the problem solved by the patentee yielded nothing more than predictable results, and could be achieved by a PHOSITA “pursuing known options within his or her technical grasp.” Id.

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Considerations for Electrical Claim Drafting

Similar considerations as for mechanical patent claims.

Additionally, the specification may include both the known uses of the disclosed circuits and then articulate differences in how and why the circuit elements are used in the claimed combination.

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SOFTWARE PATENTS TREND:

– Once again, because software is considered a relatively predictable art, a trend similar to that of mechanical and electrical patents is emerging.

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Representative Software Case Ex parte Conversagent, Inc., Appeal

2009-1291, 2009 WL 1346272 (Bd. Pat. App. & Interf., May 12, 2009).– Invention at Issue: “[S]ystems for interactively

responding to queries from remotely located users, e.g., by accessing local and/or remote data sources." (Citing patent abstract.)

– Holding: Affirmed examiner’s obviousness rejections.

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Representative Software Case Ex parte Conversagent, Inc., Appeal 2009-1291, 2009

WL 1346272 (Bd. Pat. App. & Interf., May 12, 2009).– The primary obviousness issue revolved around

embodiments of the patent indicating that instant messages—which were processed by a message processor—were used to respond to the remote user's queries.

– The examiner combined several prior art references to reject the claims-at-issue on obviousness grounds.

– These combinations were held to be “clearly within the ability of one of ordinary skill in the art.” Id. at *4 (citing KSR at 1740).

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Considerations for Software Claim Drafting

Similar to electrical. Disclose how known software components

are used in different ways than previously known in the art.

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CHEMICAL PATENTS TREND:

– The chemical arts are unpredictable– Few situations that involve finite, predictable

results– Recent BPAI and Federal Circuit decisions

most often find claims not obvious

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Representative Chemical Case Ex Parte Warren, 2008 WL 3874499 (BPAI

Appeal 2008-3108) (Aug. 19, 2008): – Invention at issue: Filter material comprising a

dye to be used in conjunction with night vision equipment

– Holding: The Board reversed the examiner's rejection of appellants' patent claims and found that the claims were not obvious

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Representative Chemical Case Ex Parte Warren, 2008 WL 3874499 (BPAI Appeal

2008-3108) (Aug. 19, 2008): – Using KSR language: “[O]ne skilled in the art would not

have found the claimed invention obvious over" the prior art because "[s]ubstituting the prior art elements would have yielded results that were not predictable”

– There were no finite number of identified, predictable solution to the problem solved by the Appellants

– Using KSR’s rejection of a rigid T-S-M test, there was no motivation to substitute the Co2+ compound from one prior art reference with the dye in another prior art reference

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Considerations for Chemical Claim Drafting

Specifically for “obvious to try” allegations, these should be rebutted by including both positive and negative examples to show how the results are actually different and thus not “obvious to try.”

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BIOTECH PATENTS TREND:

– Like the chemical arts, the biotech arts are unpredictable

– Few situations that involve finite, predictable results

– Claims recently litigated before the BPAI or the Federal Circuit are frequently found to be not obvious

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Representative Biotech Case

Ex Parte Mertz, 2009 WL 524950 (BPAI Appeal 2008-3751) (Feb. 27, 2009):

– Invention at issue: Method for determining cancer prognosis and categorizing cancer patients based on the expression of ERR<<alpha>>

– Holding: Board reversed examiner’s rejection of obviousness

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Representative Biotech Case Ex Parte Mertz, 2009 WL 524950 (BPAI Appeal 2008-

3751) (Feb. 27, 2009): – KSR's : "‘[O]bvious to try’ may be sufficient when there is a

design need or market pressure to solve a problem and there are a finite number of identified, predictable solutions."

– Prior art was not related to ERR<<alpha>>– Was obvious to try comparing the amount of ERR<<alpha>> to

other cancer patients based on the teachings of the prior art– But only one of the prior art references discussed

ERR<<alpha>> and mechanisms underlying cancer are unpredictable

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Considerations for Biotech Claim Drafting

Similar to chemical claims, showing negative examples to rebut predictability is key to successful prosecution.

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SUMMARY KSR reinforces the elementary principle that

broad claims are amenable to invalidity attacks.

For the predictable arts, this is particularly true.

However, in “unpredictable” arts like biotech and chemical, KSR’s impact may be less forceful. And this can be amplified with negative examples.

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trademark, intellectual property litigation, and patent updates for the non-u.s. counselor

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