Intellectual Property Lawyers

Trademarking the senses: smell marks and other non-traditional marks

2012-01-18T16:30:00Z

When thinking of trademarks, logos, symbols and slogans are typically the first things that come to mind. Such visual marks have been the oldest and most accepted way to represent the sources of goods and services, with the first registered trademark being issued to Bass Ale in 1875. Indeed, the Lanham Act defines a trademark as "any word, name, symbol, or device, or any combination thereof."

Recently, however, companies have found other means to distinguish their products -- and to obtain trademark protection for those means. In some countries, businesses have even attempted to register animations, sounds, smells, and even tastes as trademarks for their products.

In the United States, color was determined to meet the legal requirements for trademark protection, in the 1995 case Qualitex Co. v. Jacobson Products Co., Inc. The Qualitex Company had been using a particular green-gold color on its dry cleaning pads, and registered the color as a trademark in 1991. After Qualitex brought a trademark infringement suit against competitor Jacobson Products, the Supreme Court held that color could be a valid trademark, as the particular color of Qualitex's pads had acquired a secondary meaning over time, sufficient to identify Qualitex as the source of the green-gold pads.

Non-visual stimuli have also been registered as trademarks. In 2009, the Argentine Trademark Office registered its first smell mark -- a fragrance of various fruits, which will be applied to containers. A total of five such marks were issued to L'Oréal. While the Argentine trademark law does not expressly cover scents, it does provide for a broad interpretation of distinctive signs, allowing for the registration of smell marks.

As smell is one of the strongest type of human memory, having potential to evoke distant images and emotions, it may even be that a distinctive scent is one of the most potent and effective ways to distinguish one's products from others on the market. Other smell mark registrations, in various countries, have included the "scent of fresh cut grass" for tennis balls, "a floral fragrance reminiscent of roses as applied to tyres," and plumeria scented sewing thread.

To be continued...

Kodak mulls Bankruptcy, looks to sell Patents

2012-01-06T21:17:08Z

In the past week it has come to light that Eastman Kodak Co. has begun preparations to file for Chapter 11 bankruptcy, a move which would mark a new low point in the storied company's slow decline. Over the past decade, as Kodak watched its core product, film, slowly vanish from the marketplace, it made the strategic decision to target the inkjet printer market, a decision that has failed to pay off.

The one asset that may allow Kodak to avoid bankruptcy is its intellectual property holdings. Kodak has been trying to follow the example of Nortel, a company that also fell behind the technological edge but was able to auction off its patent portfolio for more than $4 billion. Some experts have estimated Kodak's portfolio to be just as valuable as Nortel's, and argue that it represents the struggling company's most valuable asset.

This demonstrates once again the enormous importance of intellectual property to any company. When a business is on the cutting edge technologically, patents can provide a defense against competitor encroachment, and a lack of protection can have disastrous results, such as the nightmare scenario that Google recently avoided. Patents remain just as important, however, when a company such as Kodak falls behind the technological edge, serving as an important store of value and providing a tangible representation of a company's intangible investment in research and development.

Patent Bar Scheduled to Start Testing AIA

2011-12-14T15:14:46Z

On or around January 31, the patent bar will be updated to include some of the new laws implemented in accordance with the American Invents Act. While changes to the patent bar usually result in an increase in test takers, we do not think this update should be cause for concern. Notably, the update will only include additions which regard the rules which: "a) permit prioritized examination of patent applications (Track I) and (b) revise the standard for granting inter partes reexamination requests. Additionally, the registration examination will include questions concerning the November 22, 2011 rules governing practice ex parte appeals before the Board of Patent Appeals and Interferences."

From a practical viewpoint, it is wise to start learning the law which is currently in existence, but from a strictly test-taking viewpoint, these updates are relatively small and simple. Please keep reading for an overview of the updated rules.

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]]> Prioritized Examination: The key here is that any inventor may request prioritized at the time of filing an application upon payment of a $4800 fee ($2400 for small entities) in addition to the normal filing fees. Another key is to recognize that this is different from accelerated examination.

Inter Partes Reexamination Requests: The only inter partes update to the test regards the standard for granting a request inter partes reexamation. In accordance with the AIA, the standard has been changed from "substantial question of patentability" to "reasonable likelihood that the requester would prevail," which should increase the burden on requesters who desire inter partes reexamination.

(Note: As of September 16, 2012, inter partes reexamination will be elimated in favor of inter partes review. However, inter partes review is not being tested on the updated test, the patent bar will strictly test the standard for inter partes reexamination for requests made prior to September 16, 2012.)

Ex Parte Patent Appeals: The update regarding ex parte patent appeals will probably be where you want to spend your time. The rules have been updated to remove several briefing requirements from appeal briefs, allow the board earlier jurisdiction over appeals, and generally smoothline the appeals process. As we discussed in an earlier post, many of the updated rules are very logical and remove burdensome aspects of the process that many practitioners were frustrated with. If you do not have time to learn all of the new rules, try to pick the answer which reflects a logical, streamlined process. If you are interested in learning in all of the nuances, please check back soon, as we are preparing a comprehensive review of the new BPAI rules.

So if you are planning on taking the patent bar and can't find an open seat before January 31, 2012, don't be too worried.

Supreme Court Hears Oral Argument on Mayo v. Prometheus: §101 Issues

2011-12-09T15:43:36Z

Earlier this week, the Supreme Court heard oral arguments in Mayo v. Prometheus, an important case that deals with many of the same §101 issues as were present in Bilski earlier this year.

Briefly, Prometheus concerns patents on a method for determining optimal dosage levels for drugs used to treat autoimmune diseases. In the claimed process, a particular drug is administered to a patient, and the levels of the drug's metabolites present in the patient are then determined. The process also includes steps wherein presence of a metabolite at certain levels indicates a need to increase or decrease the amount of drug administered in the future.

This case first came to the Federal Circuit after it had decided In re Bilski, but before the Supreme Court issued its decision in Bilski v. Kappos. As a result, the Federal Circuit applied the machine-or-transformation test as the definitive test under §101, and found the claims to be patent-eligible. According to the Federal Circuit, the administering and determining steps were transformative and therefore satisfied the second prong of the test, and as a result the claims did not wholly preempt the use of the correlations between metabolite levels and therapeutic efficacy or toxicity.

After Bilski v. Kappos, the Supreme Court vacated this case and remanded it to the Federal Circuit for reconsideration, giving that court one of its first opportunities to attempt to apply and interpret Bilski. On remand, the Federal Circuit characterized the central question as whether Prometheus's claims are drawn to a natural phenomenon, the patenting of which would entirely preempt its use, or whether the claims are only drawn to a particular application of the phenomenon. Mayo, argued, before the Federal Circuit and again this past week before the Supreme Court, that this was the sole controlling standard, and that Bilski stood for the proposition that, while the machine-or-transformation test is a helpful clue, it cannot be outcome-determinative in this analysis. According to Mayo, even if the claims passed the machine-or-transformation test, more analysis, such as a robust preemption analysis, would be necessary to make a subject-matter eligibility determination. Prometheus, on the other hand, argued that the Bilski ruling only meant that patents which did not satisfy the machine-or-transformation test were not necessarily unpatentable, but did not go so far as to say that some patents that do satisfy the test are unpatentable.

The Federal Circuit ultimately agreed with Prometheus. Does this conception of patent-eligible subject matter comport with the result in Bilski? In Bilski, the Court never mentioned the machine-or-transformation test as anything other than a useful tool, and a helpful clue in patent-eligibility analysis. And, as noted by the Federal Circuit, in Benson the Supreme Court stated that "[t]ransformation and reduction of an article to a 'different state or thing' is the clue to the patentability of a process claim that does not include particular machines." So, while the Supreme Court does support the machine-or-transformation test as useful, it has never explicitly ruled that a claim that passes the test is also per se not preemptive. However, by the same token, it has never explicitly found a claim that does pass the test to be unpatentable. So, while this line of reasoning in Prometheus does extend somewhat beyond current Supreme Court precedent, it is at least not inconsistent with that precedent. It will be interesting to see, when the decision in this case finally comes down, whether the Supreme Court is willing to stretch as far as the Federal Circuit.

Petition Thresholds for Post Issuance Matters under the America Invents Act

2011-11-30T18:08:11Z

The new "Inter partes review" proceedings adjudicated before the newly created Patent Trial and Appeal Board, and the new "post-grant review" process will be implemented with the Group 2 Rules of the America Invents Act. While the USPTO is still accepting comments on the Group 2 Rules, one of the major changes in these post issuance matters is the threshold for review of a petition filed under either process.

The "substantial new question of patentability" threshold previously required for inter partes reexaminations will be replaced with a "showing that there is a reasonable likelihood that the petitioner will prevail with respect to at least one claim challenged." Meanwhile to initiate the post grant review process, a petition must show that "it is more likely than not that at least one claim challenged is patentable."

While the USPTO has indicated that the two standards are in fact different, the ultimate interpretation of each remains to be seen. However, interested parties should take note that the new thresholds will represent a higher showing than pre-AIA standards.

USPTO publishes new set of BPAI Final Rules

2011-11-25T20:46:26Z

Due to a mounting backlog of cases to be decided before the Board of Patent Appeals and Interferences, the Patent and Trademark Office has published a new set of rules that are expected to streamline ex parte appeals before the BPAI. The modified rules include several measures intended to simplify and expedite appeals practice, including:

Changes to several aspects of the content of the appeal brief, such as the removal of the requirements to state the status of claims and amendments, the grounds of rejection to be reviewed, and the evidence and related appeals appendices.
The presumption that the appellant is appealing all rejected claims in the application, obviating the necessity for an explicit statement of the claims being appealed.
Removal of the requirement for the Examiner to acknowledge the appeal brief, allowing the Board to have jurisdiction over the appeal upon filing of the brief.
Changes to the factual situations that constitute a new ground of rejection by the Examiner.

The full content of the changes to the BPAI Final Rules may be found in the Federal Register. The rules are to go into effect on January 23, 2012.

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The Microsoft - Barnes & Noble Saga

2011-11-15T16:24:59Z

In March, after failed licensing negotiations with Barnes & Noble, Microsoft filed against the bookseller and manufacturers Foxconn and Inventec in the U.S. District Court for the Western District of Washington and with the International Trade Commission, claiming the Nook e-reader infringed on five Microsoft patents. Specifically, Microsoft alleged infringement in the way the Nook displays retrieved images, shows the status of downloaded material on a small screen, edits electronic documents and renders annotations. The trial is scheduled for February, 2011 in Washington.

This is part of Microsoft's attempt to obtain license agreements from phone and tablet manufacturers that infringe on Microsoft's expansive 60,000+ patent portfolio (See Microsoft Sues Motorola for Patent Infringement, and our Smartphone Patent War series Part 1, Part 2 and Part 3 for more on Microsoft's role in the ongoing Patent War). Microsoft's aggressive stance is making the tech industry nervous, especially in light of Microsoft's recent partnership with Nokia, another patent superpower.

Earlier this month, as a response to Microsoft's allegations, Barnes & Noble asked the Justice Department to conduct an antitrust investigation into Microsoft's business practices. In a letter to the DOJ, Barnes & Noble alleged that Microsoft has been "attempting to raise its rivals' costs in order to drive out competition and to deter innovation in mobile devices" and that "Microsoft's conduct poses serious antitrust concerns."

In retort, Microsoft filed a motion with the International Trade Commission on November 9, to compel Google to produce documents or witnesses relating to Google's possible evaluation of Barnes & Noble's allegations, namely whether Microsoft's alleged conduct has had any business effect on Android OS distribution. Microsoft hopes to show that Google remains unharmed by Microsoft's recent litigation.

As the value of exclusive patent rights afforded to inventors and assignees clashes with the need to protect market competition and consumer welfare, Microsoft may find itself once again on the defensive in an antitrust dispute.

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Where Will the Next Satellite Patent Office be Located?

2011-11-09T14:36:41Z

Of course, this whole discussion is moot unless congress actually decides to open satellite offices, and this may take longer than it seems. A satellite office is scheduled in Detroit next summer, but under the America Invents Act (AIA), Congress has the authority to open two additional offices by 2014. Whether it elects to do so is another question. If Congress does decide to open additional satellite offices, Congress is directed by the AIA to open offices in geographically diverse locations while giving consideration to "the availability of scientific and technically knowledgeable personnel in the region." However, it appears that lobbyists, and not the criteria, are guiding the decision.

The main issue here, as it always is, is money. Congressman and various interest groups are all acutely aware of the economic advantages of a local patent office, and thus, the matter has come to the forefront for lobbyists in the nation's capital. A satellite office, directly and indirectly, creates hundreds of jobs and provide the locality with an economic boost. Considering the current economic climate, these advantages would be extremely valuable, not only to the community that receives them, but to the Congressman who is able to obtain them.

Detroit was an easy first choice. In light of the reapidly declining automotive industry and the general economic state of the city, it seemed like Detroit needed a satellite office. However, as soon as the America Invents Act was officially signed into law on September 16, 2011, the lobbying has heated up for the other two possible locations. California, New Mexico, Texas and Colorado are among the states making strong pushes for satellite office. While each state is publicly toting how their state best fits the AIA criteria, it would be naive to think there is not behind the scenes jockeying going on for these extremely valuable offices.

In our humble opinion, California seems to be the odds-on favorite at this point, as it would provide geographic balance , has large groups scientific and technically knowledgeable personnel congregated in hot spots throughout the state, such as Silicon Valley and Palo Alto, and maybe most importantly, has been experiencing some well publicized economic problems. Stay tuned for developments.

USPTO Announces First Allowed Application Under New Prioritized Examination (Track 1) Program

2011-11-04T14:21:19Z

Before a joint meeting of the Pauline Newman IP American Inn of Court and the Giles S. Rich American Inn of Court, Director Dave Kappos announced that the USPTO has allowed an application under the new Track 1 accelerated examination program. The program was implemented September 26, 2011, which means the application was allowed approximately one month from the initial filing.

Track 1 is part of the three track program established under the America Invents Act and provides for accelerated examination if certain requirements are met and payment of a $4,000 fee is received. The objective of the program is to provide a final disposition on qualifying applications within 12 months of being granted prioritized status.

Director Kappos also indicated that the number of applications accepted under Track 1 may be capped at around 10,000 in order to ensure that a final disposition is provided on each within twelve months. Director Kappos estimated that approximately 1,200 applications have been filed under the program thus far.

The Smartphone Patent War, pt. 3: An Uneasy Detente

2011-11-02T13:39:24Z

In light of the ever increasing, expanding and confusing smartphone patent litigation and licensing landscape, we have put together a three part series to apprise you of the current developments. Hopefully part one begins to untangle the mess for you. If you missed Parts 1 and 2, please find links here: Part 1 and Part 2.

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In the last installment, we discussed the basics of patent pooling, a cooperative approach to patent licensing, as well as some of the reasons why such an approach was not able to develop here. What actually has developed is exactly the type of scenario that patent pools are often used to avoid. The smartphone industry is now locked in an uneasy détente, a patent Cold War that could conceivably go hot with massive, industry-crippling lawsuits at any instant. For a time, Google appeared to be falling behind in the arms race, as the apparent "patent gap" loomed between the Android operating system and its competitors at Microsoft, Apple, and Research in Motion. This worry came to a head after a recent auction for a suite of patents owned by now-defunct Nortel, when a consortium including these three companies appeared to have succeeded in blocking Google from what some considered its last real chance of catching up. In one fell swoop, Google's acquisition of Motorola Mobility and its portfolio of more than 17,000 issued patents has gone quite a long way toward closing the gap and bringing the industry to an equilibrium that is relatively stable, if somewhat tense. Essentially, Google has secured the intellectual property equivalent of Mutually Assured Destruction.

Just as in the real Cold War, it is likely that what we see on the surface represents only a fraction of the maneuvering that continues just outside the public eye. One interesting line of conjecture holds that the purchase of Motorola Mobility was Google's long-term objective all along. According to this line of reasoning, Google has been interested in buying Motorola Mobility ever since it was spun off from its parent corporation of Motorola in January of this year. The somewhat unusual collection of technologies comprising Motorola Mobility - including smartphones and internet television, two areas into which Google has recently expanded - lends credence to the idea that Motorola packaged the company intentionally and specifically to appeal to Google. According to this theory, Google shied away from the purchase after government regulators, including the Federal Trade Commission, began to make noise this summer about antitrust investigations into the software giant. Google then proceeded to pursue other portfolios, including the Nortel patent suite, in part to goad its competitors into taking action. When they banded together to defeat Google in that auction, Google took the opportunity to cry foul, and to spin its long-planned acquisition of Motorola Mobility as a purely defensive move designed to protect itself from what it called anticompetitive practices. Whether or not this version of events is accurate, it exemplifies the type of wheels-within-wheels strategic maneuvering that occurs under the type of patent détente in which these companies are engaged.

A number of lessons can be learned by companies who want to avoid Google's apparent missteps. First and foremost, the most obvious lesson is that you should join or start a patent pool or other cooperative arrangement if you can. If the situation permits, patent pools are really excellent tools for creating and increasing efficiency in a technological area. They allow potential competitors to collaborate, and therefore mitigate the waste of resources that is often the result when large technology companies engage in extensive patent litigation. In essence, patent pools allow companies to avoid the courtroom and focus their energy on simply doing business.

Second, if you decide to go it alone, understand the dangers you face. There are many reasons why cooperative strategies such as patent pools don't work out. If that happens, it is important to anticipate the type of standoff that will result if you are successful within a technological space. Google was almost left out in the cold. For a long time, their business strategy lacked an emphasis on intellectual property, and this very likely could have resulted in the death of the Android operating system. Although it appears that the Motorola Mobility purchase has salvaged the situation in relatively dramatic fashion, Google could have saved itself a major headache and a significant amount of money if it had incorporated a robust program of patent acquisition into its overall strategy from the outset.

The Smartphone Patent War, pt. 2: A kinder, gentler alternative

2011-10-28T17:59:30Z

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One possible approach that could have deflated the budding smartphone patent war at an early stage is a cooperative strategy called patent pooling. In a patent pool, two or more companies in a technological field come together and agree to cross-license their intellectual property holdings in order to cooperate for the benefit of all involved. Patent pools are useful because they are efficient. They give users and manufacturers of a technology a one-stop-shopping experience, and guarantee access to an entire technology space through the door of one relatively simple licensing arrangement.

One common example of patent pooling involves developing a patent pool around an already established technological standard in order to safeguard its boundaries and streamline compensation for the companies that created and continue to use the standard. Generally, in cases like this members of the committee overseeing the standard begin by hiring an independent evaluator. The independent evaluator examines potential pool submissions and determines whether these patents are essential to the pool. Essentiality can be determined under a number of different criteria, for instance whether a patent is technically necessary for the standard, whether it is commercially necessary for the standard, or whether a patent is necessarily infringed 100% of the time by a device that is compliant with the standard. Once the essential patents are determined, the holders of these patents form a group, which meets to determine the rules governing licensing agreements and other administrative matters. At this point, especially in modern patent pools, government regulators such as the Department of Justice may become involved. Once approval is obtained, a pool Administrator is hired, and then goes about signing up licensees, distributing royalties, and monitoring infringement.

Although patent pools may sound like a straightforward and collegial strategy for efficiently managing the growth of an entire industry, they are not ideal for every situation. For example, a pool may simply fail to get off the ground. If a critical mass of licensors contributing patents to the pool is not present, the pool can simply fail for lack of momentum. If several of the big players in the industry, or even one very large player, does not join the pool, there may not be enough coverage offered to entice others to join. Competing licensing arrangements for related technology may also frustrate pool formation and adoption.

Once a pool does get started, it may flounder because joining the pool does not present an attractive economic proposition. This may be, for instance, because administrative and royalty fees are set too high. Pools may also set terms for early adopters, who receive more favorable rates than those signing up later. This can also discourage acceptance by an industry. In other situations, such as unbalanced technology spaces in which a handful of large corporations do the majority of the manufacturing, those large manufacturers may pay more money by joining a pool than they would save by striking out on their own. Having a large number of products covered means large royalties paid into the pool, often placing money in the hands of competitors, which can be an unappealing circumstance for some participants. One of these large manufacturers can avoid the large royalty payments by taking advantage of the fact that in a patent pool, infringement suits are filed by the individual patent owners, not the pool itself. If one of these large manufacturers has its own independent patent position that is relatively strong, it can chip away at the pool by taking on the other manufacturers one-on-one.

While all of these problems are evident in the current smartphone patent standoff, there is also another major barrier to the development of a patent pool for managing the smartphone market: a fundamental incompatibility in the business strategies of the major industry players. In essence, Google takes in the vast majority of its revenue from advertising sales, not hardware or software sales, unlike its competitors. Google's main goal is to get people online and viewing ads, as often as possible and for as long as possible. As a result, Google is not interested in charging royalties, and in fact provides its Android operating system free of charge to smartphone manufacturers, with the goal of keeping those smartphones relatively inexpensive so that more people use them more often. This is directly at odds with, for instance, Apple's business model, which relies primarily on hardware sales, or Microsoft's, which relies on licensing fees from software. Because of these diverging goals, it is difficult to imagine how these three companies would ever be able to reach a patent pooling or other cross-licensing scheme that is mutually advantageous.

In the next installment, we will take a closer look at the tense situation that has resulted from the breakdown of patent pooling and other cooperative strategies.

The Smartphone Patent War, pt. 1

2011-10-26T20:03:01Z

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As we reported earlier, on August 15, 2011, Google announced that it would be spending $12.5 billion to purchase Motorola Mobility, a company that currently designs and manufactures smartphones, tablets, Bluetooth accessories, set-tops, DVRs, and other communication devices for its parent company, Motorola. Although the research and manufacturing capacity of Motorola Mobility is by itself very valuable and no doubt was an appealing target for Google, a consensus has developed that this purchase was equally motivated by something that has recently become very important to the search giant: Motorola Mobility owns a suite of more than 17,000 issued patents relating to mobile devices and smartphone technology.

This purchase is simply the latest step in Google's scramble to defend itself in the increasingly hostile smartphone marketplace. Unlike most of its competitors, before the Motorola Mobility acquisition Google's patent holdings were relatively sparse. This was not much of a problem for Google until the last few years, when the huge increase in the value of the smartphone market has led to a corresponding explosion in the number of lawsuits related to the technology.

This extensive litigation has led to a growing list of seeming absurdities. For instance, for every Android-enabled phone that it sells in the United States, HTC, a large smartphone manufacturer, must pay a licensing fee not to Google, but to its competitor Microsoft, due to a patent-licensing agreement. Recently, Microsoft announced that, according to its estimation, companies that account for more than 50% of Android-enabled phones worldwide are involved in some sort of patent-licensing agreement with Microsoft. It is beginning to become clear that the current strategies being employed in this technology space are inefficient almost to the point of unsustainability.

In the next installment, we will take a look at an alternative to this unstable IP landscape called patent pooling, as well as some of the reasons why such a solution was not able to take root here.

Does 337 Apply to Foreign Trade Secret Missapropiation?

2011-10-19T19:07:39Z

On October 11, 2011 the Federal Circuit handed down an opinion in TianRui Group Co. v. ITC which decided whether section 337 authorizes the International Trade Commission (ITC) to apply domestic trade secret law to conduct which occurred in a foreign country. The Federal Circuit affirmed the ITC's application of domestic trade secret law to activities which occurred abroad. In answering this question, the Federal Circuit also handled a matter of first impression: what forum's trade secret law applies in a section 337 case?

In this case, Amstead, an American company, held two processes for manufacturing steel railway wheels as trade secrets. Amstead had previously practiced both of these methods domestically, but no longer uses one secret process, the "ABC process" domestically, instead choosing to license the process to several Chinese based foundries. One such company that Amstead had entered into licensing negotiations with was a Chinese company named TianRui, but negotiations failed. After negotiations soured, TianRui hired nine employees from another Chinese firm whom had previously successfully negotiated a licensing agreement for the ABC process. Amstead alleged, in front of the ITC, that these employees disclosed details of the ABC process despite Amstead's warnings and confidentiality agreements. TianRui did not dispute these allegations on appeal.

Before reaching the extraterritorial application of section 337, the Federal Circuit had to decide which law to apply for a 337 proceeding regarding trade secrets. Amstead, which has its principal place of business in Illinois, argued for the Federal Circuit to apply Illinois trade secret law, but the Federal Circuit swiftly rejected this contention, instead applying a single federal standard. The Federal Circuit reasoned that "in light of the fact that section 337 deals with international commerce, a field of special federal concern, the case for applying a federal rule of decision is particularly strong."

The case, however, did not turn on this determination, as TianRui primarily argued that section 337 cannot reach the activities at hand, regardless of the law applied, because the acts occurred entirely outside the United States. The court did not find TianRui's arguments persuasive, despite the general presumption which is established against extraterritoriality. The court found the presumption of extraterritoriality inapplicable to the case at hand for three main reasons: (1) section 337 is expressly directed at importation of article into the United States; (2) the unfair conduct at issue causes domestic injury; and (3) the application of 337 to the conduct at hand is consistent with Congressional intent. Notably, the court focused on section 337's purpose, and Congress' intent when enacting 337, of preventing unfair methods of conception. By this logic, the Federal Circuit found 337, and thus federal trade secret law, applicable to the acts at hand, under the condition that these acts caused an injury domestic industry.

Thus, the court focused the remainder of its opinion on the issue of injury to domestic industry. TianRui then argued that even if 337 did apply to foreign acts, Almstead's domestic industry was not injured, and if any industry was injured it was foreign which would not justify the application of US trade secret law under section 337. In addressing this argument, the court stated that trade secrets are nonstatutory, and therefore subject to less stringent requirements under 337 which only require "unfair practices [that] threaten to 'destroy or substantially injure' a domestic industry." In applying this standard to the case at hand, the court looked to the ITC's previous ruling. The Commission had previously found that the imported wheels could be in direct competition with Amstead's domestically produced wheels and, thus, injure an "industry" under the meaning of 337(a)(1)(A). Thus, the Federal Circuit, in affirming this ruling, found the Commission's conclusion to be based on proper statutory construction and factually supported by substantial evidence.

Prometheus v. Mayo SCOTUS Argument set for December 7, 2011

2011-10-04T13:22:07Z

The Supreme Court of the United States is scheduled to hear arguments regarding Prometheus v. Mayo on December 7, 2011. This case provides the Supreme Court the oppurtunity to clarify the Bilski ruling regarding patentable subject matter in light of the recent patent reform. In order to refresh your memory, we have provided a summary of the case thus far:

In Prometheus, the patent at issue is a method for administering and subsequently determining the level of toxicity caused by thiopurine drugs used to treat gastrointestinal and autoimmune diseases, including 6-mercaptopurine ("6-MP") and azathiopurine ("AZA"). The latter is merely a "pro-drug" that converts to 6-MP upon administration to a patient. Prior to filing these claims, these drugs had been widely used to treat diseases such as inflammatory bowel disease and Crohn's disease, but had sometimes caused complications with non-responsiveness and drug toxicity. As such, the claimed method is a two-step method for (a) "administering" the drug, and (b) "determining" the levels of the drugs metabolites in order provide the doctor with instructions for the next dosage.

The Federal Circuit has decided this case twice, most recently reviewing the case on remand in light of the Supreme Court's decision in Bilski. Upon hearing the case in the first instance, the Federal Circuit overturned the district court's finding that Prometheus's asserted medical treatment method was drawn to non-patentable subject matter under §101. In making this finding, the Federal Circuit applied the machine-or-transformation test, and found the process to be transformative. However, after the Federal Circuit handed down this ruling, the Supreme Court handed down the famous (or infamous?) Bilski ruling which rendered the machine-or-transformation test "a useful and important clue" of patent eligibility under §101, instead of the sole test. Due to this, the Federal Circuit's initial ruling was vacated, and the case was remanded to be reconsidered in light of the Supreme Court's Bilksi determination.

Upon remand, the court once again found the claimed method to be drawn to patentable subject matter. However, this time the Federal Circuit provided alternate, but similar, reasoning. In addition to only examining the claimed method under the machine-or-transformation test for a clue as to the patentability of the method, the Court also analyzed whether the method was merely claiming an abstract idea.

For more information regarding the Federal Circuit's Ruling upon remand, please continue reading.

]]> First, the Court focused on the idea of an "abstract idea," in response to the Supreme Court's determination in Bilski that abstract ideas constituted non patentable subject matter under §101. The Federal Circuit held that the claimed method was not claiming a natural phenomenon, but instead claiming a particular application of a natural phenomenon.

Second, the Court reevaluated the method under the machine-or-transformation test, since the Supreme Court had found this test to provide an important clue as to the patentability of a method. The Federal Circuit, once again, found the claims at hand to recite transformative "administering" and "determining" steps, satisfying the machine-or-transformation test. Importantly, the Federal Circuit found both the administering and determining steps to be transformative, while finding the wherein clauses to be mere mental steps and not patent eligible per se. However, the court determined that, "[a] subsequent mental step does not, by itself, negate the transformative nature of prior steps."

The court ultimately found the claimed method to be patentable subject matter under §101, but also explicitly carved out an exception, stating, "a physician who only evaluates the result of the claimed methods, without carrying out the administering and/or determining steps that are present in all the claims, cannot infringe any claim that requires such steps." The Federal Circuit seemed to recognize that this holding might cause confusion as to which methods constitute patentable subject matter, but it appears the Court attempted to clarify this confusion by defining the scope of the method. In concluding, the Court asked, "'What did the applicant invent?' Grams, 888 F.2d at 839 (citation omitted)", and answered, "a series of transformative steps that optimizes efficacy and reduces toxicity of a method of treatment for particular diseases using particular drugs."

America Invents Act: Signed Into Law Today

2011-09-16T19:45:32Z

Today, at Thomas Jefferson High School for Science and Technology, President Obama signed the Smith-Leahy America Invents Act (Previously H.R. 1249) into law today. Obama signed the bill into law in front of a bipartisan group of congressman, including Senator Patrick Leahy (D-VT) and Rep. Lamar Smith (R-TX). When Obama signed the bill, a number of provisions of the bill became effective immediately:

Best Mode: Effective immediately, best mode will no longer be a valid basis for finding a patent invalid or unenforceable. However, the best mode requirement remains in section 112 and, thus, a patent application may still be rejected for failure to disclose the best mode.

Micro Entities: All micro entities will receive a 75% reduction in fees. Micro entities must: (1) qualify as small entities, (2) not been an inventor on 4 prior applications, (3) have a gross income exceeding three times the median household income for that previous calendar year and (4) not assigned the application to a person or entity who has exceeded the gross income level of part (3). Please see section 10, at pages 89-90 for the exact text.

New Statutory Fee Schedule: The new fee schedule of section 11 is now implemented. Please consult section 11 of the act for, among other fees, the new filing, examination, issue and maintenance fees. Also, this site does a great job of laying out the fees and how they will be affected by the surcharge to be implemented in 10 days. The office also now has the authority to adjust fees for recovering the costs for fees established, authorized or charged under Title 35.

Changes to Venue and Jurisdiction: The default venue for actions brought under 28 USC 32, 145, 146, 154(b)(4)(A) and 293 or 15 USC 1071(b)(4) is now the Eastern District of Virginia (instead of the District Court of D.C., as it was previously). Further, 28 USC 1338 is amended to deny state courts jurisdiction over actions arising under Acts of Congress relating to patents, plant variety protection and copyrights.

False Marking:Effective immediately, only individuals who have suffered a competitive injury as the result of false marking may bring a qui tam suit. Further, virtual markings are now explicitly covered by the false marking statutes. These provisions apply to all cases pending or commenced on or after September 16, 2011.

Bans on Patentability: Any claims directed to or encompassing a "human organism" are now barred. Also, any tax strategy patents related to reducing, deferring or avoiding tax liability are also barred.

More law is scheduled to be implemented in 10 days, on September 26, 2011, so stay tuned for more updates.