Source: https://cisloandthomas.com/december-2015/
Timestamp: 2019-04-23 13:02:32+00:00

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The Supreme Court held in Teva v. Sandoz that the Federal Circuit erred by applying a de novo standard of review, considering the question for the first time and disregarding the decisions below, rather than applying the “clear error” standard to the district court’s factual findings, giving district courts more deference. Rule 52(a) of the Federal Rule of Civil Procedure requires deferential “clear error” review over any findings of fact but the Federal Circuit has consistently reviewed claim construction as conclusions of law that are allowed for de novo review.
The Supreme Court vacated and remanded the Federal Circuit’s decision by a 7-2 vote. The Court explained that in its earlier decision Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996), “the ultimate question of claim construction is for the judge” however “the appellate review of actual matters” still follows an ordinary rule for clear error. Therefore, when it comes to claim constructions based only on evidence intrinsic to the patent such as the claims, specifications, and prosecution history, the Federal Circuit may review de novo. However, extrinsic evidence, such as “background science or meaning of a term in the relevant art during the relevant time period,” must be reviewed for clear error on appeal.
Litigants may now try to shape their arguments in patent cases to either add extrinsic evidence or avoid extrinsic evidence in claim construction to affect their chances on any appeal.
The Supreme Court upheld a long-standing precedent set in Brulotte v. Thys Co., a 1964 decision, which restricted the ability of a patent holder from charging a royalty beyond the term of the patent, in Kimble v. Marvel. The issue was that the parties failed to set an end date for the royalties and, apparently, contemplated that the royalties would continue for as long as the product was being sold.
The Supreme Court reasoned that “…when the patent expires, the patentee’s prerogatives expire too, and the right to make or use the article, free from all restriction, passes to the public.” Further, the Court acknowledged that it was sticking with Brulotte under the principle of stare decisis, which provides that the Court should generally stand by prior decisions.
Licensees of patents will want to include other intellectual property, such as trademarks and/or trade secrets, to be licensed and have a step down in the royalty rate upon expiration of patent(s).
The Supreme Court held that a defendant’s good-faith belief that a patent is invalid is not a defense to a claim of induced infringement under 35 U.S.C. 271(b). Commil USA, LLC v. Cisco Systems, Inc. Accordingly, the long-held principle that a patent is presumptively valid outweighs and undermines any belief of invalidity by a defendant, even if it was in good faith.
Defendants will always want to have a written and competent opinion of counsel as to non-infringement to help defend a claim of willful patent infringement.
The top five technology fields for global patent applications last year were computer technology, electrical machinery, measurement, digital communication, and medical technology. 2.68 million patent applications were filed last year worldwide, a 4.5% increase from 2013, and 1.18 million patents were granted worldwide, a 0.3% increase from 2013. Further, there were 10.2 million patents enforced worldwide in 2014.
The Supreme Court held that when a test relies on what an ordinary consumer understands to be the impression that a mark conveys, the test “falls comfortably within the [purview] of the jury.” The Supreme Court clarified that judges may still make a tacking determination on a motion for summary judgment if the parties have chosen to try their case before a judge; otherwise, the tacking issue is property reserved for the jury.
In an ideal world a company will want to continue using the same trademark over time, but if the mark is modified there is now a greater chance that the earlier use of the mark will be respected.
On March 24, 2015, the Supreme Court held that if the Trademark Trial and Appeal Board (“TTAB”) decides on a likelihood-of-confusion issue for purposes of registration, then it has issue preclusion effects in district courts regarding infringement if a mark owner uses its mark in ways that are materially the same as the usages included in the mark’s registration application.
The Supreme Court held that the “likelihood of confusion for purposes of registration is the same standard as likelihood of confusion for purposes of infringement.” The Court conceded that the TTAB and the district courts are concerned with different purposes; the TTAB is concerned with whether marks “resemble” each other, while the courts are concerned with “use in commerce” for infringement purposes.
TTAB Litigants must now be very careful in their handling of TTAB matters as the ultimate findings may have dramatic effects later in Federal Court. We expect that TTAB cases will be more hard fought or avoided altogether in favor of Federal Court.
The top five trademark offices that received trademark applications in 2014 were China, United States of America, OHIM (EU Office), France, and Japan. The top five industry sectors that received trademark applications were agriculture, research & technology, clothing, business, and health. Last year, the total number of trademark classes specified in applications reached 7.45 million, a 6% increase from 2013, and the total number of trademark classes specified in registrations reached 2.15, an 11.1% increase from 2013. Further, there were 33.1 million active trademark registrations enforce worldwide in 2014.
On Friday, December 4, 2015, Cislo & Thomas LLP co-hosted an annual professional networking and speaking engagement with the Parenteral Drug Association entitled, “Quality, Regulatory and Intellectual Property.” The Parenteral Drug Association is the leading global provider of science, technology, and regulatory information for the pharmaceutical and biopharmaceutical community. This national think tank focuses on developments in the field of parenteral drugs, also known as therapeutics administered to patients via an intravenous rather than oral routes.
The event took place at Keck Graduate Institute, and featured a lecture by Cislo & Thomas Patent Associate Dr. Michael Anderson regarding patents and ecommerce in the field of pharmacology and biotechnology. Dr. Anderson spoke and fielded audience questions on the America Invents Act, the value of provisional patents in biotechnology, in addition to emerging popular ecommerce technologies like PatentFiler.com.
Other featured speakers included Dr. William Sietsema (Global Regulatory Liason for Caladrius Biosciences), who discussed next-generation developments in stem cell therapies, and Steve Speer (Director of the West Region, Propharma Group), who reviewed modern regulatory developments in the biopharmaceutical industry.
During the Thanksgiving season, Cislo & Thomas LLP endorsed the non-profit charitable group Send Me a Penny, which feeds the homeless in Venice Beach, CA. We participated in feeding, making, and handing out personal care packages on Thanksgiving Day in the morning. All involved felt humbled and blessed to be a part of this outreach in the community.
Patent infringement is defined under 35 U.S.C. 271(a) and includes, among other actions, “offers to sell” infringing goods during the term of the patent. Based on the jury’s factual findings, Amazon.com did not manifest intent of a willingness to enter into a bargain that another person would justifiably believe could be concluded through their acceptance.
Should Sort of Organic Be Considered Organic? Apparently Not.
The California Supreme Court recently ruled that consumers can sue over “misrepresentations in labeling,” when products are misleadingly labeled as organic, overturning an appellate court’s ruling that the proposed class action was preempted by federal law regulating organic produce.
The class action sued Herb Thyme under California’s unfair competition and false advertising laws alleging that consumers were lead to believe that the herbs were 100 percent organic when they were not and consequently paid a premium.
As California is not only one of America’s biggest consumer markets but also the country’s largest agricultural producing state, the implications of this holding will be far-reaching.
Produce sellers must be very careful when using the term “organic” on any labeling to make sure it complies not only with USDD rules, but also California State Law.
At United States Court of Appeals for the Federal Circuit, the Slants attained a big victory, based on the First Amendment, in its challenge of the U.S. Patent & Trademark Office’s (USPTO) refusal of a trademark registration. In attempting to register “The Slants” for a rock band, Simon Tam, an Asian-American, said he was attempting to “take ownership” of Asian stereotypes.
The Federal Circuit stated that the First Amendment “forbids government regulators to deny registration because they find the speech likely to offend others.” Under this holding, unless the U.S. Supreme Court decides to weigh in, it seems likely that the USPTO’s decision to cancel the registration of the “Washington Redskins” will also fail to survive constitutional scrutiny.
It cannot refuse to register marks because it concludes that such marks will be disparaging to others. The government regulation at issue amounts to viewpoint discrimination, and under the strict scrutiny review appropriate for government regulation of message or viewpoint, we conclude that the disparagement proscription of § 2(a) is unconstitutional. Because the government has offered no legitimate interests justifying § 2(a), we conclude that it would also be unconstitutional under the intermediate scrutiny traditionally applied to regulation of the commercial aspects of speech.
Several judges concurred, and others offered dissenting views.
The markholder may still generally use the mark as it wishes; without federal registration, it simply lacks access to certain federal statutory enforcement mechanisms for excluding others from confusingly similar uses of the mark. Mr. Tam may use his trademark as he likes, whether it be encouraging discussion on or taking ownership of racial slurs, or identifying goods and services with his band. In fact, it seems quite likely that Mr. Tam will continue to use his band name to make a statement regardless of federal registration — the expressive purpose of his mark undoubtedly overshadows the commercial considerations.
J. Kyle Bass is known to many as the one of the few that made a fortune in the financial crisis when his hedge fund, Hayman Capital Management, bet big against subprime mortgages. Now Mr. Bass is betting against pharmaceutical companies that he deems to exploit the patent system by sending their patents to the test, through an inter partes review (IPR).
Mr. Bass and Mr. Spangenberg say that their aim is to bring down drug prices that have artificially high prices based on dubious patents. They have even filed patent challenges on a pro bono basis.
Companies try to extend patents on products shortly before they expire, when the door is about to open to generic makers. This practice, called “evergreening” or “product-hopping,” is among the forces keeping drug prices high, experts say.
The two started the Coalition for Affordable Drugs, created to challenge pharma patents, and used the coalition as entity that challenges the allegedly dubious patents. Mr. Bass said the coalition would not strike a settlement deal in any of its patent challenges.
However, the coalition has so far seen mixed results, with the PTAB denying institution of several of the IPRs they filed. Consequently, the two filed as individuals for their latest two petitions, putting their own money behind the claims, for patents owned by companies that they do not have any stock in, hoping to see whether the PTAB will treat petitions differently when they do not come from a hedge fund.
New patent owners not only have to watch out for infringers trying to invalidate their patents, but also Hedge fund managers trying to make a buck.
According to the latest update in the Trademark Manual of Examining Procedure (TMEP), a trademark registration application that claims trade dress rights in product packaging “that is a mere refinement of packaging commonly used on the relevant goods” will be rejected.
Further, with respect to geographical indications, if there is a governmental protection system, then the applicant must identify how the goods in question comply with the protection system.
In addition, services that test the goods or services of third parties with respect to an accreditation or certification will be recognized as services under federal trademark law.
For the most up-to-date version of the TMEP, click here.
Fees for filing petitions to challenge issued patents before the Patent Trial and Appeal Board (PTAB) has risen significantly due to the USPTO newly-purposed fee schedule.
The request for inter partes review, which is a patent validity challenge that is popular among alleged infringers facing charges in litigation, will cost at least $14,000 compared to the previous $9,000. Covered business method challenges would rise from at least $12,000 to at least $16,000.
Because the American Invents Act of 2011 set up these reviews and challenges, the PTO is given, for the first time, authority to set its own fees rather than deferring to Congressional preferences.
Further, basic patent application fees as well as fees for excess claims will rise to $20 such that an application with five independent claims and 25 dependent claims would see a 16% increase in filing fees from $1,920 to $2,220. Additionally, the USPTO will increase its search and examinations fees by $100.
__ Use “Pat. Pending” where applicable, and mark all patented products with Patent Number.
__ Physically secure trade secret information and matters.

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