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Developments in Intellectual Property Law

U.S. Supreme Court Determines Government Cannot Challenge Patent for Post Issuance Review under the AIA

Return Mail, Inc. v. United States Postal Services

By Fritz Klantschi
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On June 10, 2019 the United States Supreme Court in Return Mail, Inc. v. United States Postal Service, 868 F.3d 1350 (“Return Mail v. USPS”) held that the federal government is not a “person” able of instituting AIA review proceedings.

Background

The decision centered around Section 18(a)(1)(B) of the America Invents Act (“AIA”), concerning Covered Business Method (CBM) patents, and reads “[a] person may not file a petition for a transitional proceeding with respect to a covered business method patent unless the person or the person’s real party in interest or privy has been sued for infringement of the patent or has been charged with infringement under that patent” (emphasis added). Return Mail, Inc. had sued the U.S. Postal Service in the U.S. Court of Federal Claims (“USCFC”) alleging infringement of its patent, and, in turn, the USPS challenged Return Mail’s patent under the AIA. A prior blog post on this site discussed the background of the case in further detail.

Supreme Court Decision

Justice Sotomayor delivered the opinion of the Court in a 6-3 decision. The Court held that, unless there is an express definition of the term “person” in the patent statutes, the courts must proceed with the presumption that the government is not a person, absent an affirmative showing to the contrary.

The USPS made three arguments that the Court addressed.

  1. 1. The USPS argued that AIA post-issuance review proceedings must include the government because other references in the patent statutes appear to do so. The Court however found that at least 18 references to “persons” in the Patent Act and the AIA showed no clear trend that the term “person” included the government.

 

  1. 2. Next, the USPS argued that, because the government has a longstanding history with the patent system, Congress must have intended to allow the government access to the AIA post-issuance reviews. The USPS and the dissent by Justice Breyer both noted that since 1981 the Patent Office treated federal agencies as “persons” who may request an ex parte reexamination. The majority however countered that they might take account of this “executive interpretation” if they were determining whether Congress meant to include the government as a “person” for purposes of the ex parte reexamination procedures. The Court also noted, even assuming the government may petition for ex parte reexamination, there are differences between an ex parte reexamination and an AIA proceeding such that there are good reasons why Congress might have authorized the government to request a “hands-off” ex parte reexamination but not be a party to a full-blown adversarial proceeding of an AIA review proceeding. The Court found there to be no “settled” meaning of the term “person” with respect to the AIA review proceedings and the Manual of Patent Examining Procedures (“MPEP”) does not justify putting aside the presumptive meaning of “person.”

 

  1. 3. Finally, the USPS argued that it must be a “person” because, like other infringers, it is subject to civil liability and can assert a defense of patent invalidity. The Court held however that, unlike a private party, the government faces lower risks in an USCFC trial because it cannot be subject to an injunction and there are legal limits on the damages that can be ordered. Since the USPS faces a lower risk, the Court found it is reasonable for Congress to treat federal agencies differently, even though the burden of proof for invalidity is greater at the USCFC (clear and convincing standard) than for an AIA proceeding (preponderance of the evidence). Also, excluding federal agencies from using the AIA review proceedings avoids the “awkward situation” of having a civilian patent owner defend its patent against one federal agency overseen by another government agency, the PTAB.

Conclusion

The Court held that a federal agency, such as the USPS, is not a person who may petition review under the AIA post-issuance proceedings. The decision of the U.S. Court of Appeals for the Federal Circuit was therefore reversed and the case remanded.  It can be argued, however, that it would be more efficient for the PTAB to hear validity claims in cases where a federal agency is sued for patent infringement, as opposed to the USCFC, which is the only court in which the government can be sued for patent infringement.  Congress may decide to amend the AIA to include the federal government as a “person” and address the estoppel provisions of the AIA to include the USCFC along with the ITC and civil actions.

The Return Mail decision does not address the ability of government contractors petitioning the PTAB to institute an AIA review proceeding to protect their interests. Government contractors have done so in the past.  Whether a government contractor can intervene will depend, in part, on whether the government contract that procured the alleged infringing product included a patent indemnity clause.

Finally, the language the Court used with respect to ex parte reexaminations may foreshadow the prospect that the federal government is not a person under 35 U.S.C. §301(a) which provides that “[a] person at any time may cite to the Office in writing . . .  prior art . . . which that person believes to have a bearing on the patentability of any claim of a particular patent,” and therefore cannot request an ex parte reexamination proceeding.

Proposed U.S. Copyright Office rule would make it easier and less expensive for individual authors to register multiple works

By Suzanna M. M. Morales
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A rule proposed by the U.S. Copyright office could soon make it easier for individual writers like bloggers and freelancers to register copyrights for up to fifty online literary works with a single filing.

The proposed rule would allow a single individual to register up to fifty separate short literary works that are first published online. The proposed filing fee would be $55 for the entire filing. This should be compared with the current $35 filing fee for each single work. If the proposed rule is enacted, it would result in savings of up to $1,695 for registering fifty works as a group rather than through single work applications.

Proposed Registration Requirements

Under the proposed rules, a short work would be 100 to 17,500 words. This length requirement would exclude short phrases, such as Tweets, on one end, and novellas, on the other. Failure to comply with the length requirement may result in rejection of the entire application.

The works must be created by a single individual, and cannot be works made for hire.

The resulting registration would cover only the literary works. Any accompanying materials, such as artwork or photography, would not be protected by the registration. The proposal would require the application to be submitted online, attaching the works, unless the applicant is able to prove exceptional circumstances requiring a waiver of the online filing requirement.

In order to qualify for registration under the proposal, the works must be first published online, even if they are later published in another format. However, it would not be necessary for all of the works to be published on the same website or online platform. The works must also all be published within a three-month period.

Criticisms by Authors’ Groups

In publicly-available comments submitted in response to the Copyright Office’s Notice of Proposed Rulemaking, the Authors Guild noted that authors may not have control over whether their works are first published online or in print, and may not even know whether their works are made available in a way that constitutes “publication” under U.S. Copyright Law. The Authors Guild also requested that the word limit be broadened from 100-17,500 to 50-40,000 to accommodate short blog posts and poems on the one hand and long-form journalism and short fiction on the other.

Comments by the National Writers Union suggested that a single application should cover 500 works, rather than 100, noting that group registrations for photographs can cover up to 750 works. The Science Fiction and Fantasy Writers of America noted that the proposed rule would not cover collaborations by multiple authors.

Our firm will continue to follow this proposed rule and will provide updates on relevant developments.

Overview of ITC Decision in Chuck Taylor All Star Trade Dress Case

By Stephen M. Ankrom
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The Court of Appeals for the Federal Circuit recently vacated a final determination by the International Trade Commission (“ITC”) in Converse Inc.’s long-running trademark infringement battle over the Chuck Taylor All Star sneaker.[1]  The Federal Circuit’s key holdings are discussed below.

Background: Converse’s claimed rights in the Chuck Taylor trade dress

In 2014, Converse filed a complaint in the ITC seeking a general exclusion order pursuant to section 337 of the Tariff Act of 1930, 19 U.S.C. § 1337, (“section 337”),[2] forbidding entry into the United States of footwear that violate Converse’s common law and federally registered trademark rights in the Chuck Taylor shoe.  Specifically, Converse asserted rights in the “design of the two stripes on the midsole of the shoe, the design of the toe cap, the design of the multi-layered toe bumper featuring diamonds and the line patterns, and the relative position of these elements to each other.”

A central issue before the ITC was whether Converse’s mark had acquired secondary meaning., which is necessary for trade dress protection in product design.  In 2016, the ITC held in a final determination that Converse’s trademark in the midsole design of its Chuck Taylor All Star shoes had not acquired secondary meaning, and consequently there was no violation of section 337.  On appeal, the Federal Circuit vacated the ITC’s determination and remanded for further proceedings.

Effect of Converse’s trademark registration

The Federal Circuit found fault with the ITC’s analysis in a number of areas.  First, the Federal Circuit found that the ITC erred by not distinguishing between those alleged infringements that began before Converse obtained its trademark registration and those who began infringing afterward.  Much of the ITC’s decision turned on whether Converse had a valid federal registration, which was registered on September 10, 2013.  A valid federal trademark registration entitles the owner of the mark to a presumption that the mark is valid, including that it has acquired secondary meaning.  15 U.S.C. §§ 1057(b), 1115(a).

The ITC’s focus on the federal registration was an error, the Federal Circuit held, because the remaining respondents in the ITC action had first uses prior to the registration date, and the registration’s presumption of validity operates prospectively from the date of registration and cannot support a presumption of validity for the period before registration.  The Federal Circuit held that on remand, Converse must establish without the benefit of the presumption conferred by a federal registration that its mark had acquired secondary meaning before the first infringing use by each respondent.

Secondary meaning standard

The Federal Circuit sided with Converse in holding that the ITC applied the incorrect legal standard when performing the secondary meaning analysis.  The Federal Circuit held that the test for secondary meaning involves weighing six factors:

  1. 1. association of the trade dress with a particular source by actual purchasers (typically measured by customer surveys);
  2. 2. length, degree, and exclusivity of use;
  3. 3. amount and manner of advertising;
  4. 4. amount of sales and number of customers;
  5. 5. intentional copying; and
  6. 6. unsolicited media coverage of the product embodying the mark.

The Federal Circuit held that the ITC’s test was erroneous, among other reasons, because it set forth length, degree, and exclusivity of use as separate factors, which caused undue weight to be placed on what the Federal Circuit considered to be substantially interrelated factors.

According to the Federal Circuit, the ITC also erred in relying too heavily on prior uses that predated the first infringing uses and the date of registration.  Reasoning that the most relevant evidence is the trademark owner’s and third parties’ use of the mark in the recent period before first use or infringement, the Federal Circuit instructed that the ITC, on remand, rely principally on uses within the five years prior to the first use when considering the “length, degree, and exclusivity of use.”  Uses older than five years may be considered only if there is evidence that such uses were likely to have impacted consumers’ perceptions of the mark as of the relevant date.

The ITC also considered prior uses that the Federal Circuit determined not to be substantially similar to the mark when it performed its secondary meaning analysis.  According to the Federal Circuit, “several of the instances of third-party use cited in the ITC’s decision are shoes that bear at most a passing resemblance” to Converse’s mark.  Others instances of prior use were reproduced in low resolutions such that any meaningful comparisons could not be made.

The Federal Circuit also found that the ITC erred by placing substantial weight on a survey submitted by the respondents (the Butler survey) to support its determination that Converse’s mark had not obtained secondary meaning.  The Butler survey was taken more than ten years after the earliest infringing use of Converse’s mark, and thus should be given little probative weight in the ITC’s analysis.  Additionally, the ITC erred by finding that the Butler survey weighed against a finding of secondary meaning when the survey only found a lack of evidence of secondary meaning.  Unless the survey affirmatively shows lack of secondary meaning, a lack of survey evidence of secondary meaning is a neutral factor which does not favor either party.

The ITC’s determination was vacated, and the Federal Circuit remanded the case back to the ITC for further proceedings consistent with the ruling.

[1] Powley & Gibson, P.C. represent Converse Inc. in lawsuits brought in the Eastern District of New York asserting infringement of the Chuck Taylor trademark by various manufacturers, distributors, and retailers.  These caseshave been stayed pending resolution of the matter before the ITC.

[2] Section 337(a)(1)(c) makes unlawful the “importation into the United States, the sale for importation, or the sale within the United States after importation” of articles that infringe a trademark.

Tilting at Windmills: The Registrability of “Covfefe” and Other Social and Political Catchphrases

By Matthew F. Abbott
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In the age of trending hashtags and rapid news cycles, certain social and political catchphrases succeed in capturing the zeitgeist and streak meteor-like across the cultural landscape.   A common misapprehension of trademark law is that it may be used by a quick acting applicant to lock up exclusive rights in the use of these culturally significant phrases to sell branded merchandise.  While this practice has been consistently rejected by the U.S. Patent & Trademark Office (USPTO), it has continued for years, fueled by a turbulent political landscape and a widespread misunderstanding as to the limits of registrability under the Lanham Act.

On May 31, 2017, President Trump tweeted as follows:

Trump’s inscrutable use of the term “covfefe” sparked immediate widespread speculation and discussion throughout traditional and social media. That same day, John E. Gillard, the first of twenty five similar applicants, applied to register the mark #COVFEFE on the Principal Register for “hats; T-shirts, wristbands as clothing; hoodies; jackets; jerseys; ties as clothing; tops as clothing” in International Class 25.  The Trademark Examining Attorney refused registration of the proposed mark on the basis that #COVFEFE does not function as a trademark for the goods identified in the application.  Gillard thereafter appealed to the Trademark Trial and Appeal Board (TTAB), which affirmed the refusal to register in a recently issued decision.

I. Prior Attempts to Register Social and Political Catchphrases

Mr. Gillard is not the first to attempt to register a trademark for a phrase that has gained widespread notoriety and cultural significance as a result of its prevalence in social and traditional media.

  • In 2011, eleven trademark applications were filed for the phrase “Boston Strong,” a rallying cry for the city of Boston following the Boston Marathon bombing.
  • In 2015, two trademark applications were filed for the phrase “Je Suis Charlie,” words offered in solidarity for the victims of the terrorist attack at the Paris offices of the magazine Charlie Hedbo.
  • In 2017, seven trademark applications were filed for the phrase “Nevertheless, She Persisted,” quoting Senate majority leader Mitch McConnell’s explanation of why he silenced Senator Elizabeth Warren when she attempted to read a letter that the late widow of Dr. Martin Luther King Jr. wrote criticizing Jeff Sessions during his confirmation hearings for Attorney General. The phrase quickly became a feminist rallying cry and hashtag used to support Senator Warren.
  • In October 2016, twenty trademark applications were filed for the phrase “Nasty Woman” following Donald Trump’s use of the phrase in reference to Hilary Clinton during the third presidential debate. The phrase instantaneously became a feminist rallying cry and launched a cottage industry of “Nasty Woman” products
  • The turbulent 2016 presidential election also inspired trademark applications for several other phrases, including “Bad Hombre,” “Alternative Facts,” “Basket of Deplorables” and “Grab Them By The Pussy.”

Each of these applications were refused by the USPTO on the basis that the proposed mark could not function as a trademark by indicating the applicant as the source of goods and services.

II. Registrability of Social and Political Catchphrases under the Applicable Law

While there is a common misapprehension that the prompt registration of a trending catchphrase will grant exclusive rights to the use of that catchphrase, the law is well-settled that in order to register a trademark, the proposed designation must actually function as a trademark by identifying the applicant’s goods and distinguishing them from goods sold by others. 15 U.S.C. § 1127; D.C. One Wholesaler, Inc. v. Chien, 120 U.S.P.Q.2d 1710, 1713 (T.T.A.B. 2016).  The Trademark Manual of Examining Procedure (TMEP) § 1202.04 provides that “merely information matter fails to function as a mark to indicate source and thus is not registrable.” In particular, “if consumers are accustomed to seeing a term or phrase used in connection with goods or services from many different sources, it is likely that consumers would not view the matter as a source indicator for the goods or services.” Id.  The “critical inquiry” in determining whether a phrase functions as a trademark is now the proposed mark is viewed by the relevant public. D.C. One Wholesaler, 120 U.S.P.Q.2d at 1713.  A term or phrase is merely informational where consumers are accustomed to seeing it used in everyday speech by a variety of sources.  TMEP § 1202.04(b).  Such “widely used messages” include “slogans, terms or phrases used by various parties to convey . . . social, political, or similar informational messages that are in common use or are otherwise generally understood.” Id.

Based on the foregoing, informational political or social slogans, such as “Nasty Woman” or “Boston Strong,” are highly likely to be ineligible for trademark registration

III. Consideration of “#COFVEVE” By the TTAB

Facing an uphill battle in his proposed registration of “#COFVEVE,” Mr. Gillard argued to the TTAB that “#COFVEVE” was distinguishable from previous cases because the term was a “unique and fanciful wording” that was neither a common slogan nor rallying cry, and would not be confused as originating from Trump because it had no definition or true meaning. Failing to substantively address why consumers would view the proposed mark as an indicator of his goods where numerous other “#COFVEVE” goods were available from a variety of other sources, Mr. Gillard argued only that the issue was something he “would have to deal with on [his] own accord.”

Assessing how the designation would be perceived by the relevant public, the TTAB relied on the substantial evidence of articles, memes and tweets regarding the word “covfefe,” as well as “covfefe” merchandise available from numerous sources including t-shirts, hats, mugs, home décor, wines, ales, bumper stickers and specialty sandwiches. The TTAB ultimately concluded that, although there is no true meaning of “covfefe,” the term “is in the nature of a verbal Rorshach test, in which users and observers of the word can project onto it any meaning they wish,” and had thus been used frequently in a non-trademark context.  The TTAB found further that, because the proposed mark was a hashtag, it had functioned to promote discussion of the word “covfefe” using Twitter and would therefore be unlikely to indicate a source of applicant’s goods to the public.  Finally, the TTAB found that the public was accustomed to seeing “COVFEFE” displayed on many varied goods, from numerous sources, and would not view “COVFEFE” as source indicator specific to the applicant.

IV. Conclusion

By their very nature, trending social and political catchphrases are difficult to trademark because they are inherently informational and are unlikely to function as a source indicator based on their widespread use in a variety of media and trade sources. This does not prevent entrepreneurs from harnessing the sudden popularity of a phrase by manufacturing and selling goods that contain that phrase.  However, such entrepreneurs should be aware that they are unlikely to be able to exclude others from selling goods bearing that phrase, let alone obtain a federal trademark registration for that phrase.

William R. Hansen has joined the Firm as partner

 

We are pleased to announce that William R. Hansen has joined the Firm as a partner. Bill has been practicing IP law since 1978.  In those over 40 years, Bill has been one of the leading IP litigators in the U.S. regularly representing large U.S. and International companies in IP matters including trademark and trade dress infringement, false advertising, copyright infringement, patent and trade secret cases. 

In addition to his intellectual property litigation work, Bill regularly provides counsel on all aspects of trademarks and copyrights, including proceedings before the U.S. Patent and Trademark Office, trademark clearance and protection of copyrighted works.

Bill has been named as one of the leading intellectual property attorneys in New York by Chambers USA (2012, 2013), selected to Super Lawyers (2007-2011) in New York IP litigation, named among the world’s top trademark attorneys by Euromoney International Investor, recognized in the Guide to the World’s Leading Trademark Law Practitioners (2008, 2012) and as one of the “World’s Leading Trademark Law Practitioners” by Managing Intellectual Property magazine. 

Prior to joining Powley & Gibson, P.C., Bill had been a Senior partner at the firm Nims, Howes, Collison, Hansen & Lackert, a highly respected law firm that has been involved in much of the case law that provides the framework of today’s trademark law, and where many of us began the practice of IP law. Since 2002, Bill has been a partner at large general practice AMLAW top 150 law firms often in leadership positions.  Bill made the decision to return to an IP specialty firm to better serve his clients.  Admitted to practice law in the State of New York in 1978, Bill is admitted in the U.S. District Court, Southern District of New York, U.S. District Court, Eastern District of New York, U.S. District Court, Northern District of New York, U.S. Court of Appeals, Federal Circuit, and U.S. Court of Appeals, Second Circuit. 

 wrhansen@powleygibson.com

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