Wealth of Ideas Blog

Another Unintended Consequence of the America Invents Act

Submitted by General Patent on Wed, 04/17/2013 - 12:23

This past December, the feature article in our e-newsletter, Wealth of Ideas, detailed several ways that the America Invents Act has basically backfired on the American patent system. (See "America Invents Act Turns Out to Be a Law of Unintended Consequences".)

Sure, the AIA has given big business a significant gift in the form of the change to a first-to-file patent system. And yes, the anti-joinder provision has led to a sharp surge in patent lawsuit filings because patent owners are no longer allowed to sue multiple infringers at once. (That was supposed to scare "patent trolls" away from the court system, but seems to have only created more lawsuits.)

Now Ron Katznelson, writing for the IP Watchdog blog, has identified other reasons for the sharp increase in patent lawsuit filings - and though it's not all about the anti-joinder rule, it sure as heck is a consequence of the AIA.

Katznelson observes that the patent lawsuit filings are "dominated by newly issued patents." Why would that be? He theorizes that "the AIA-created administrative proceedings of Inter Partes Review (IPR), Post Grant Review (PGR), and the Transitional Program for Covered Business Method Patents (TPCB), which is governed by PGR rules" have a lot to do with it.

If a patentee files suit for patent infringement within three months of the patent issuing, then the court may not stay a motion for preliminary injunction based on the existence of a PGR or TPCB petition. So it behooves patent owners to find infringers and file suit as quickly as possible - and of course, against each infringer individually.

"It is ironic and perhaps predictable that it is the AIA that appears to be the dominant cause of the recent major uptick in patent lawsuits," Katznelson concludes. Isn't the AIA great?

A Trademark Lawsuit that Could Drive You to Drink

Submitted by General Patent on Mon, 03/18/2013 - 14:16

Most of us who survived college with our dignity intact are pretty content to put it behind us. But if you're not already happy to have joined the ranks of the grown-ups, this story of an alcohol-fueled trademark dispute might do the trick:

"Power hour" is a drinking game in which participants take a swig of beer every minute for an hour. Apparently the game is so popular that it inspired a singer-songwriter named Ali Spagnola to record "The Power Hour Album," which contains songs that we assume encourage the chug-a-luggery of cheap beer.

Unfortunately for Spagnola, someone else had trademarked "Power Hour" first - and sent her a cease-and-desist letter (but only after trying to make money off her DVDs).

Starting around 2000, Steve Roose began creating a Power Hour empire of videos and websites dedicated to the drinking game. And he applied for (and received) a trademark on the term "Power Hour." As Spagnola tells the story on her blog, Roose first offered to produce and sell Spagnola's DVDs, and even get them into the prestigious (we're joking) Spencer's Gifts line of retail locations. But the partnership suddenly ended when Spagnola contacted Roose to find out why she hadn't received any money, and received a cease-and-desist email in return.

For a number of reasons, Spagnola prevailed in her opposition to Roose's trademark. To wit:

  • Spagnola alleged that "'power hour' refers to a drinking game in which 'players consume one shot of beer each minute, for a period of one hour,'" and that “the game predates Applicant’s software, and does not require Applicant’s software.'"
  • Roose himself referred to Power Hour as an "age old drinking game" on his website, which was only "spiced up" with the addition of his interactive content.
  • Roose had contacted Spagnola via email with offers to work with her without asserting exclusive rights over the term "Power Hour" or objecting to Spagnola's use of the term. In those early emails, Roose even referred to Spagnola's products as “power hour mixes of music” (before he decided to send her a cease and desist email).

The final decision in the case, issued by the U.S. Patent and Trademark Office's Trademark Trial and Appeal Board: "The opposition to the registration of POWER HOUR is hereby sustained under Section 2(e)(1) of the Trademark Act because the mark is descriptive and lacks acquired distinctiveness under Section 2(f), but dismissed on the ground of genericness."

So Spagnola prevailed, but the experience cost her around $30,000 in legal fees. But upon winning the case, she was "so excited I did like 7 power hours that night. In under 45 minutes!"

If you're still reading this and haven't been playing "Power Hour: The Home Game," you might be interested to know that Roose took down his "Power Hour" websites and is now (according to Spagnola's website) a realtor. And so ends the strange story of Binge Responsibly, LLC vs. Power Hour, LLC. Cheers!

Patent Lawsuits Double in Eastern District of Texas in 2012

Submitted by General Patent on Wed, 02/20/2013 - 14:07

Well, at least business is booming somewhere: The plaintiff-friendly federal courts in the Eastern District of Texas saw a dramatic jump in the number of patent lawsuits filed, from 607 in 2011 to 1,263 in 2012 - a 108 percent increase in just a year.

The doubling of patent cases in that district is a direct result of a provision in the America Invents Act (AIA), which prohibits patent owners from suing several defendants at once for separate acts of infringement. The AIA's supporters had hoped that the high cost of suing infringers separately would deter patent trolls, otherwise known as "patent owners who don't manufacture products based on their patented invention but peskily insist on enforcing their patent rights nonetheless."

And there's a loophole the AIA didn't manage to prevent: Plaintiffs may be required to file a separate lawsuit against each alleged infringer, but once those suits are filed, they can request that multiple cases be consolidated for pretrial purposes - a request that's often granted so the courts can handle the workload.

With the AIA's biggest change yet to come next month - namely, the switch to a First-to-File patent system - it will be interesting to see what other unintended consequences the AIA produces...and how smart patent attorneys find a way to work around them to their clients' advantage.

Freedom of (Trademarking) Religion

Submitted by General Patent on Mon, 01/07/2013 - 22:12

An artist in Holland just found out that he can't trademark the name of Allah.

Artist Teun Castelein filed an application with the Benelux Office for Intellectual Property (BOIP), which is headquartered in The Hague, to register "Allah" as a black-on-white typograhic logo. But shortly thereafter he learned that his request was rejected - despite the fact that he claims "Jesus" and "God" have been accepted as registered trademarks by the BOIP. And in India, a lawsuit arose a few years ago when two companies produced dairy products under brand names that both included the word "Krishna."

But back to our frustrated artist:

"I can only conclude that, according to the BOIP, all religions are not equal. I don't agree; all religions must be treated the same," said Castelein of the BOIP's decision on his trademark request.

Here in the U.S., you cannot trademark "Terms that Disparage, Falsely Suggest a Connection with, or Bring a Person, Institution, Belief or National Symbol into Contempt or Disrepute." But there are several trademarks involving the word "Jesus" and "God," mainly for use on religious-themed jewelry, clothing and printed matter.

And in Canada, "Jesus Christ" is a registered trademark for a garment manufacturer from whom you can even order directly - just follow the instructions on the website: "Make your CHEQUE or MONEY ORDER payable to Jesus Christ. Sorry, no credit cards, or coins."

So can you trademark deities or religious figures? Looks like it depends on where you live and what you intend to do with the trademark. And trademarking "Allah" in order to "test the limits of the free market" apparently doesn't cut it in The Hague.

The (Fluctuating) Cost of Free Music

Submitted by General Patent on Wed, 12/12/2012 - 12:46

Over three years ago, we first told the story of Jammie Thomas-Rasset, who was found guilty of copyright infringement over 24 songs she had downloaded and shared via the Kazaa file-sharing service.

Initially hit with a $222,000 judgment for damages, Thomas appealed and was hit with a $1,920,000 judgment in her second trial. She appealed again, and the damages amount was reduced (but not by much) to $1.5 million. The $1.5 million verdict was then slashed to $54,000, which is much better but still pretty overwhelming for Thomas, a Native American and mother of four who works as a "natural resources coordinator" for a band of Ojibwe Indians.

U.S. District Court Judge Michael Davis has overturned jury decisions against Rasset-Thomas three times now. He ruled that the initial $222,000 fine was "disproportionate t the damages suffered" by the RIAA. When the second trial brought her a verdict of $1.5 million, Judge Davis called the award "appalling," "severe and oppressive" and "obviously unreasonable."

"In this particular case," he wrote in the verdict, "involving a first-time willful, consumer infringer of limited means who committed illegal song file-sharing for her own personal use, an award of $2,250 per song, for a total award of $54,000, is the maximum award consistent with due process. This reduced award is punitive and substantial. It acts as a potent deterrent.”

That was a year and a half ago. Given the wild fluctuations in the amounts of the jury awards against her, you might think that Thomas-Rasset would stop while she's ahead (and $54K, while it may seem excessive for a measly 24 songs, beats the heck out of $1.5M).

But instead Thomas-Rasset is still at it, and has petitioned the U.S. Supreme Court to hear her case. The petition argues that her due process rights were violated because the Copyright Act doesn't provide for an "abuse of discretion" review of damages awards. Thomas-Rasset believes that the damages penalty imposed on her represents not so much a punitive measure for her own acts of infringement, but as a deterrent to others.

And her lawyers point out in a statement that precedential Supreme Court cases from the 1990s and 2000s could lead to a more favorable verdict for Thomas-Rasset, if only the Supremes will hear her case:

"In those cases, Thomas–Rasset argues, the Supreme Court held that damages imposed in a civil case must bear a reasonable relationship to the actual injury inflicted on the plaintiff by the defendant. Because the damages in her case seek to punish her for file-sharing in general rather than her own conduct in particular, Thomas–Rasset contends
that those damages are unconstitutional under these cases."

We'll be watching this case in 2013 to see whether Thomas-Rasset gets her chance to be heard by the Supreme Court, or if the Supremes turn her down and she has to just face the music and dance.

Patent Lawsuits Over Funny Shoes, Volume 2

Submitted by General Patent on Sun, 12/02/2012 - 23:13

What is it with kooky shoes and lawsuits? Last June, we reported on a lawsuit between Gucci and Guess over some overpriced bowling shoes. Now we are pleased to inform you that Vibram and Fila have settled their litigation over "barefoot shoes" - AKA those funky neoprene and mesh shoes with the individual toe casings. They're kind of like those silly toe socks you got as holiday gifts back in the 1970s from your Aunt Mabel.

The difference is that while striped toe socks are now considered cool (by some) in a "retro ironic" kind of way, Vibram's FiveFinger shoes and Fila's Skele-Toes shoes are touted as the next best thing to being barefoot, which enthusiasts of barefoot running (or barefoot living in general) claim has health benefits for the foot muscles, knees, legs and back.

That's the reasoning behind these odd shoes, anyway. Despite the fact that barefoot-living enthusiasts scorn Skele-Toes and FiveFingers because they are, well, shoes, and most people who wear normal shoes think the "barefoot shoes" look silly, the style is surprisingly popular. Which brings us to our lawsuit settlement.

Though the terms of the settlement between Fila and Vibram weren't disclosed, we do know that the lawsuit centered on the alleged infringement of two design patents and one utility patent, "Footwear having independently articuable toe portions." Vibram's shoe has 5 toe compartments and Fila's has only 4 (the two smallest toes share a room), but the two styles are similar enough to justify a patent lawsuit (and odd looks if you wear them to the office).

There are other shoe brands that offer barefoot shoes, so Vibram may still have some litigation on its plate. And with these barefoot shoes priced much higher than regular shoes (in many cases), it's likely that more companies will soon foot the bill for using Vibram's patented shoe designed. (Sorry, couldn't resist a pun.)

Cisco Tries New Approach to Patent Lawsuits Filed by NPEs

Submitted by General Patent on Mon, 11/12/2012 - 21:11

Over a year ago, we reported on the patent lawsuits brought by Innovatio IP Ventures LLC against a host of companies that offer free WiFi to their customers. The defendants in that litigation include over 220 individual hotels in Illinois. Interestingly, however, Innovatio didn't file lawsuits against Motorola Solutions and Cisco Systems - the companies that manufacture the WiFi equipment used in the alleged infringement.

But Cisco, Motorola and Netgear Inc. aren't taking chances. The three companies are co-plaintiffs in a lawsuit filed against Innovatio. In their complaint, the plaintiffs claim that Innovatio - which they say has sent about 8,000 "threatening letters" to hotels, restaurants, coffee shops and other WiFi-providing retailers - uses tactics that are “misleading, fraudulent and unlawful" and amount to an extortion scheme that violates anti-racketeering laws.

It's an uphill fight for Cisco et al, because to prevail in their claims, they'll have to prove that 1) Innovatio's allegations are full of hot air and 2) Innovatio knew they were full of hot air and filed suit anyway. As of this writing, any day now, Innovatio is expected to ask the federal judge assigned to the case to dismiss it.

But the plaintiffs' windmill-tilting might yet accomplish something. If the case isn't dismissed, it could prove to be a real bee in Innovatio's bonnet, diverting time and resources from the company's many other legal battles. And for the critics of non-practicing entities, that outcome might be worth the time and expense involved in filing a lawsuit.

In other news, Cisco's CEO, John Chambers, called on IT companies such as Apple, Samsung and Microsoft to stop suing each other. "IT companies should not be suing peers," he said last month at a Gartner Symposium conference in Florida, because fighting such lawsuits "slows down the industry." (We're not holding our breath on that one, either.)

Don't Quote Me on That

Submitted by General Patent on Tue, 11/06/2012 - 12:54

We're all for copyright owners' rights, but this one might be stretching a bit: The owners of the copyrights to the late William Faulkner's literary works sued Sony Pictures Classics and a group of movie exhibitors because of two sentences uttered by actor Owen Wilson in Woody Allen's 2011 movie Midnight in Paris.

Faulkner Literary Rights LLC filed the suit in a U.S. District Court in Mississippi, claiming that Sony and the other defendants didn't request permission to use the quote.

Here's what Wilson's character said: "The past is not dead! Actually, it's not even past. You know who said that? Faulkner. And he was right. And I met him, too. I ran into him at a dinner party."

And here's the quote, from a passage in Faulkner’s Requiem for a Nun: “The past is never dead. It’s not even past.”

The use of that quote looks a lot like fair use, especially given the fact that it was attributed to Faulkner. But the Faulkner folks disagree, arguing in the Complaint that the "use of the Infringing Quote and of William Faulkner's name in the Infringing Film is likely to cause confusion, to cause mistake, and/or to deceive the Infringing Film's viewers as to a perceived affiliation, connection or association between William Faulkner and his works, on the one hand, and Sony, on the other hand."

Really? You don't just think the movie's scriptwriters were simply quoting a work they enjoyed and properly attributing it to the author in the process?

We suppose the Faulkner copyright owners are worried that viewers will think that the author, who has been dead for 50 years, somehow approved of this motion picture and had some involvement in it. Or maybe sales of Faulkner's books are down and the copyright owners just need to raise some cash. (Perhaps too many schoolkids are looking up the Wikipedia synopsis of As I Lay Dying instead of reading the book?)

The Faulkner folks are seeking compensatory damages, costs and attorney fees, and/or injunctive relief over the two-sentence quote used in the "Infringing Film" (to use the plaintiff's term).

We'll be watching this rather interesting lawsuit as it develops, but in the meantime, we suddenly feel like taking in a Woody Allen movie.

A Bit of (Inaccurate, but) Welcome IP Humor

Submitted by General Patent on Wed, 10/17/2012 - 14:52

Sometimes it's nice to take a break from writing about the more serious side of intellectual property - the litigation, the legislation, the precedent-setting cases - and just reflect on how absolutely crazy it looks to people who don't work with patents, trademarks and copyrights.

So when Cracked posted "5 Everyday Things You Won't Believe Are Copyrighted," we found it so amusing that we forgave the fact that not one of their five examples is a copyright. That's right: the five examples are actually three trademarks and two patents.

Among the trademarks: The "YUUUP!" that Dave Hester uses to bid on storage units in the Storage Wars TV program; the phrases "Super Bowl" and "Super Sunday;" and the New York Police Department. And the patents: One is on two genes that cause breast cancer, and the other covers a type of mouse that Harvard College researchers developed, through transgenic modification, to have an uncanny knack for getting cancer. (It's called the "OncoMouse," which gives a whole new meaning to the phrase "adding insult to injury.")

Just so you know: Copyrights protect an expression of ideas, such as a book, article, piece of music, movie, etc. A trademark identifies the source of a product or service: a company name like Ford or FedEx, a product name like Snickers, or (as the the legalese at the bottom of the page notes) Cracked, Cracked.com, and the "Cracked" logo.

Now you understand IP law a little better than the Cracked writers. (But they're still funnier than most patent attorneys.)

A Cheesesteak Maker's Beef Against the Trademark Office

Submitted by General Patent on Fri, 10/12/2012 - 15:22

Sometimes a business owner (or his attorney) has to get creative to show why he deserves to be awarded a certain trademark. In this case, the owner of Campo's Deli in Philadelphia needs to show why the mark it uses for its signature sandwich - "Philadelphia's Cheesesteak" - is different from some very similar existing marks: Philadelphia's Cheesesteak Co., Philadelphia Cheesesteak Co., and The Original Philadelphia Cheesesteak Co. The plaintiff argues that their mark refers to a particular sandwich and not the company itself (as do the other marks). The owners of Campo's Deli need the mark because they have plans to start a franchise.

Legal arguments and fine points aside, we couldn't help but be impressed by the flowery language used in the plaintiffs' complaint, filed on October 4 at the U.S. District Court in Philadelphia by attorney J. Conor Corcoran. It states (in part) that the "Philadelphia's Cheesesteak" mark "is descriptive of the unique and tremendously delicious goods it offers for sale to the famished masses, and is not, by contrast, an indication of the geographic origin of the sandwich, which would otherwise prohibit registration."

The complaint's prose is so vivid that we can't help thinking of Emma Lazarus (though her masses were huddled, not famished). But wait - there's more. If the Campos obtain their desired trademark, "the purchasing public will know that Plaintiff provides a particular kind of Philadelphia Cheesesteak, of such a tremendous quality, such a gustatory delight, and such a propensity for myocardial infarction that it could only be called 'Philadelphia's Cheesesteak' - the very best example of what is otherwise a very common sandwich." (Did the client really approve the use of "myocardial infarction"? Just asking.)

The Campos are requesting declaratory judgment that the "Philadelphia's Cheesesteak" mark is valid and enforceable and that the trademark be registered at the U.S. Patent and Trademark Office. We're not sure how it will all turn out, but we're suddenly craving a heart-stoppingly tasty sandwich.