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Trademark Trial & Appeal Board Gets a DuPont 101 Lesson

by | Feb 22, 2024 |

Addressing errors in the Trademark Trial & Appeal Board’s likelihood of confusion analysis in a cancellation action, the US Court of Appeals for the Federal Circuit vacated and remanded, holding that the Board erred by failing to give sufficient weight to the first DuPont factor (similarity of the marks) and failing to consider the relevant evidence for the third (similarity of established trade channels). Naterra International, Inc. v. Samah Bensalem, Case No. 22-1872 (Fed. Cir. Feb. 15, 2024) (Moore, Stoll, Cunningham, JJ.)

In 2020, Naterra International filed a petition to cancel Samah Bensalem’s registration for BABIES’ MAGIC TEA for use in connection with “medicated tea for babies that treats colic and gas and helps babies sleep better” based on a likelihood of confusion with Naterra’s multiple registrations for BABY MAGIC for use in connection with infant toiletry products such as lotion and baby shampoo. The Board denied Naterra’s petition, finding that Naterra failed to prove a likelihood of confusion. The Board found that while the first DuPont likelihood of confusion factor (similarity of the marks) weighed in favor of a likelihood of confusion, factors two (similarity of the goods) and three (similarity of established trade channels) did not, and Naterra’s BABY MAGIC mark “fell somewhere in the middle” for factor five (fame of the prior mark). The Board found that factors four (conditions of purchasing), six (number and nature of similar marks in use on similar goods), eight (length of time and conditions of concurrent use without evidence of actual confusion), 10 (market interface between applicant and owner of a prior mark) and 12 (extent of potential confusion) were neutral. Naterra appealed.

Naterra argued “that substantial evidence does not support the Board’s finding that the similarity and nature of the goods (DuPont factor two) and trade channels (DuPont factor three) disfavor a likelihood of confusion,” and that the Board did not properly weigh the first (similarity of the marks) and fifth (fame of the prior mark) DuPont factors.

DuPont Factor Two – Relatedness of the Goods

The Board rejected Naterra’s expert testimony that other so-called “umbrella” baby brands offered both infant skincare products and ingestible products, calling it “unsupported by underlying evidence.” The Federal Circuit disagreed, stating that “testimony that third-party companies sell both types of goods is pertinent to the relatedness of the goods.” Nonetheless, because the Court could not determine whether the Board rejected the expert testimony for other reasons, it remanded the case for further consideration and explanation of its analysis on this point.

DuPont Factor Three – Similarity of Trade Channels

The Board found that the third factor weighed against a likelihood of confusion, stating that it lacked the “persuasive evidence” necessary to “conclude that the trade channels are the same.” The Federal Circuit found that the Board erred by not addressing relevant evidence, namely Bensalem’s admission that the parties’ goods were sold in similar trade channels. The Court also noted that the Board “did not identify in its decision any evidence showing a lack of [...]

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We Meant It – No Incorporation by Reference

by | Feb 22, 2024 |

The US Court of Appeals for the Federal Circuit issued a sua sponte order regarding the impermissibility of incorporating by reference arguments from one brief into another, especially when doing so causes the brief to exceed the permitted word count. Promptu Sys. Corp. v. Comcast Cable Commc’ns, LLC, Case No. 22-1093 (Fed. Cir. Feb. 16, 2024) (Moore, CJ; Prost, Taranto, JJ.) (per curiam).

On January 11, 2024, the Federal Circuit heard oral arguments in four related cases involving Promptu and Comcast. During oral argument, the Court asked counsel for the appellee to submit a brief within 10 days, totaling no more than 10 pages, to show why he should not be sanctioned for attempting to incorporate by reference multiple pages – almost 2,000 words – of argument from the brief in one case into another, thereby causing the brief to exceed the word limit.

The Federal Circuit recounted that it has “repeatedly held” that incorporating by reference to exceed word count is not permitted, citing its holdings on this issue in Microsoft v. DataTern (2014) and more recently in Medtronic v. Teleflex Life Sciences (2023). Appellee counsel responded that he was unaware of the Microsoft decision until the appellant’s reply brief had already been filed. The Court accepted his assertion but noted with disapproval that the precedential Microsoft decision admonished “the exact same law firm before us now for the exact same behavior,” and that once made aware of the Microsoft decision, counsel did nothing to remedy the impropriety.

Practice Note: The Federal Circuit did not award sanctions against appellate counsel but sternly warned future litigants that it is improper to incorporate by reference arguments from one brief into another unless in compliance with Fed. R. App. P. 28, and that such incorporation is never permitted if it results in exceeding the applicable word limit. The Court stated that going forward, such a violation “will likely result in [an award of] sanctions.”



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Lost Connection: Preliminary Injunction Against Unreleased Product Is a No-Go

by | Feb 15, 2024 |

Addressing a preliminary injunction motion directed to a competitor’s yet-to-be-released product, the US Court of Appeals for the Federal Circuit determined that the district court did not abuse its discretion in finding that the patent holder failed to establish irreparable harm based on speculative evidence. SmartSky Networks, LLC v. Gogo Bus. Aviation, LLC, Case No. 23-1058 (Fed. Cir. Jan. 31, 2024) (Cunningham, Chen, Hughes, JJ.) (non-precedential).

SmartSky Networks and Gogo Business Aviation are competing aviation network providers that offer air-to-ground in-flight internet networks for aircrafts. SmartSky sued Gogo in early 2020, alleging that Gogo’s 5G network infringed four patents related to wireless in-flight internet connections. SmartSky also moved to preliminarily enjoin Gogo from selling its 5G network, which is not yet operational and has yet to be released. In late 2022, the district court denied SmartSky’s motion for preliminary injunction, finding that SmartSky had not shown a likelihood of success or irreparable harm. SmartSky appealed.

SmartSky first moved to supplement the record with new materials relevant to market share, sales and switching costs. The Federal Circuit first denied SmartSky’s motions to supplement the record, noting that it would not consider new evidence on appeal absent extraordinary circumstances, such as instances where the court can take judicial notice of new facts or where the facts would alter the appropriateness of injunctive relief. Because the district court found no likelihood of irreparable harm, despite acknowledging that SmartSky had shown consumer stickiness and direct competition between the parties, the Court concluded that documents related to market share, sales and switching costs would not alter the appropriateness of injunctive relief. The Court further declined to take judicial notice of the facts, which were subject to dispute.

The Federal Circuit then turned to SmartSky’s argument that the district court erred in finding no likelihood of irreparable harm from lost sales and market share, price erosion, lost reputation and goodwill, and lost research and development and investments. Regarding lost sales, SmartSky argued that the district court ignored Gogo’s sales of AVANCE L5 equipment (used for Gogo’s 4G and 5G networks) and that Gogo’s 5G network was not “yet-to-be-released” because it had been on sale since late 2021. The Court found these arguments unpersuasive. The Court noted that SmartSky did not dispute that Gogo had yet to launch its 5G network and found that the district court did not abuse its discretion in concluding that any such sales were quantifiable. As for AVANCE L5, the Court observed that the equipment was currently sold as part of Gogo’s unaccused 4G network, and that the alleged harm would only occur if Gogo launched its 5G network and customers upgraded. Thus, the Court found that any harm from the sales of AVANCE L5 was highly speculative, particularly because the parties are not the only two players in the market and customers may have other non-infringing options.

SmartSky next argued that the district court ignored testimony that customers used Gogo’s pricing to negotiate discounts from SmartSky. The Federal Circuit disregarded this [...]

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No Fair Use for Photo Used Without Required Attribution

by | Feb 15, 2024 |

The US Court of Appeals for the Fourth Circuit concluded that the copyright on a photograph of an entertainment icon was the subject of a valid copyright registration and that use of the photograph in an article missing the author’s required attribution language was not otherwise “fair use.” Philpot v. Independent Journal Review, Case No. 21-2021 (4th Cir. Feb. 6, 2024) (King, Wynn, Rushing, JJ.)

Larry Philpot, a professional concert photographer, photographed Ted Nugent at a concert in July 2013. In August 2013, Philpot registered the photograph with the US Copyright Office and published the photograph on Wiki Commons under a Creative Commons License specifying that anyone could use the photograph for free as long as they provided the following attribution: “Photo Credit: Larry Philpot of www.soundstagephotography.com.”

In 2016, Independent Journal Review (IJR) published an article titled, “Signs Your Daddy Was a Conservative.” One of the “signs” listed in the article was whether “your daddy” was a fan of “The Nuge.” The article used Philpot’s photo in conjunction with this list item. Rather than including the required attribution with Philpot’s photo, IJR included a link to Nugent’s Wikipedia page, which in turn linked to the Wiki Commons site where the photograph was hosted with the proper attribution. IJR generated only $2 to $3 in advertising revenue from the article.

Philpot sued IJR for copyright infringement in May 2020. IJR moved for summary judgment based on its fair use defense and alternatively for a finding that Philpot’s registration was invalid. Philpot moved for summary judgment of valid registration and that IJR’s use did not meet the requirements of fair use. The district court found that there was a genuine issue of material fact regarding the validity of Philpot’s registration but granted IJR’s motion for summary judgment of fair use. Philpot appealed both findings.

Following the statutory four-prong fair use framework and the Supreme Court 2023 fair use analysis in Andy Warhol Foundation for the Visual Arts v. Goldsmith, the Fourth Circuit considered whether IJR’s use of the photo was transformative and of a commercial nature or for nonprofit educational purposes. A secondary use is transformative when it has a “further purpose or different character” than the original work. The larger the difference is, the more likely a court is to find that the use constitutes “fair use.” The district court found the work transformative because IJR placed the photo in a new context (i.e., a list of “Signs Your Daddy Was a Conservative.”) The Fourth Circuit, however, found that IJR’s use was not transformative because the two uses “shared substantially the same purpose,” which was to depict Ted Nugent. Beyond cropping negative space in the photo, IJR did not alter or add new expression to the photo and did not “add new purpose or meaning.”

In considering whether the work was for a commercial purpose, the Fourth Circuit questioned whether IJR stood to profit from its use of the photo, not whether IJR was successful at that venture. While the article [...]

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Sliced and Diced: Operating Manuals Are Printed Publications

by | Feb 15, 2024 |

The US Court of Appeals for the Federal Circuit reversed the Patent Trial & Appeal Board’s non-obviousness determination, finding that the Board erred in determining that an operating manual did not qualify as printed publication prior art. Weber, Inc. v. Provisur Technologies, Inc., Case Nos. 22-1751; -1813 (Fed. Cir. Feb. 8, 2024) (Reyna, Hughes, Stark, JJ.)

Provisur owns two patents related to advanced high-speed mechanical slicers used in food processing facilities that precisely slice and package food items such as meats and cheeses. The key components recited in the patent claims are a “loading apparatus” designed to load food items, a “feeding apparatus” responsible for supplying food items to a slicer, and a “stop gate” intended to regulate the assembly of food items prior to their entry into the slicing mechanism.

Weber filed inter partes review (IPR) petitions challenging the validity of several claims of the patents based on certain operating manuals. During the IPR proceedings, the Board determined that Weber’s operating manuals did not qualify as prior art printed publications because they were distributed selectively and subject to confidentiality restrictions. The Board also concluded that the prior art combinations, which included Weber, failed to disclose crucial claim limitations, notably the “disposed over” and “stop gate” limitations. The Board found the challenged claims not unpatentable. Weber appealed.

Weber argued that the Board erred in determining that the operating manuals were insufficiently accessible to constitute printed publications, specifically contending that the Board misapplied the Federal Circuit’s 2009 decision in Cordis Corp. v. Boston Scientific Corp. The Court agreed. It explained that unlike Cordis, where academic monographs were limited to distribution among a select few, Weber’s operating manuals were intended for distribution to purchasers of the machines and others to provide instructions on food slicer usage and maintenance. The Court explained that the evidence in the form of delivery records and email exchanges showed that manuals were available to customers upon purchase or request. The Federal Circuit also noted that the manuals were not bound by any confidentiality restrictions. The Court thus concluded that the operating manuals qualified as printed publications.

Turning to claim construction, the Federal Circuit reversed the Board’s interpretation of the “disposed over” and “stop gate” limitations. Consistent with long-standing precedent, the Court emphasized the importance of examining intrinsic evidence, including the claims themselves, the specification and the patent’s prosecution history. Weber argued that the claims’ language implied a broader feed apparatus positioning over the loading apparatus without strict alignment requirements. Supported by expert opinions, Weber contended that neither the claim language nor the specification mandated direct alignment. The Court agreed with Weber. The Court emphasized that “disposed over” demanded only a general positioning of the feed apparatus above the loading apparatus, not a direct positioning as the Board had construed.

Similarly, concerning the “stop gate” limitation, the Federal Circuit agreed that the Board’s determination was not supported by substantial evidence because evidence, such as the manuals, disclosed the claimed conveyer mechanism in a manner sufficient to establish its [...]

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Even a Non-Explicit Claim Construction Can Be Erroneous

by | Feb 15, 2024 |

The US Court of Appeals for the Federal Circuit reversed a Patent Trial & Appeal Board decision finding the challenged patent claims not obvious over the prior art. The Court found that the Board, after concluding that no claim construction was required, implicitly construed the claim limitation at issue and did so erroneously. Google LLC v. EcoFactor, Case Nos. 22-1750; -1767 (Fed. Cir. Feb. 7, 2024) (Reyna, Taranto, Stark, JJ.)

Google filed a petition for inter partes review (IPR) challenging claims of an EcoFactor patent related to dynamic climate control systems that factor outside weather conditions and thermal conditions inside the home to balance comfort and energy savings. The challenged claims define a method for reducing the cycling time of a climate control system involving “retrieving a target time at which [the] structure [(e.g., a house)] is desired to reach a target temperature.” The challenged method claims recite a step of “determining a first time prior to said target time at which [the] climate control system should turn on to reach the target temperature by the target time.” The relevant claim limitation reads:

[D]etermining a first time prior to said target time at which said climate control system should turn on to reach the target temperature by the target time based at least in part on [i] said one or more thermal performance values of said structure, [ii] said performance characteristic of said climate control system, [iii] said first internal temperature, [iv] said first external temperature, and [v] the forecasted temperature.

During the IPR proceedings, the parties disputed whether a prior art reference disclosed a method involving determining a first time prior to the target time based on a first internal temperature. Google argued that the prior art taught a calculation of a first time prior to the target time based on thermal performance values (input [i]) calculated from internal temperature values (input [iii]). EcoFactor argued that each of the inputs in the claim limitation was a distinct value not dependent on or calculated from any other input. Based on the claim language, the Board determined that claim construction was unnecessary and concluded that inputs [i] – [v] of the relevant claim limitation were separate inputs using different data. The Board concluded that Google had not shown that the challenged claims were unpatentable, reasoning that Google’s theory of obviousness relied on a single input as the basis for both input [i] and input [iii].

Google appealed. Google argued that although the Board stated that no construction was necessary, it incorrectly construed the claim limitation to require five discrete inputs.

The Federal Circuit agreed with Google, finding that the Board’s assessment of the claim limitation implicitly established the claim scope by requiring inputs [i] – [v] to be completely separate. The Court reasoned that the plain claim language did not provide any indication that none of the listed inputs could be based on any other input(s). Imputing this requirement into the limitation was therefore an act of claim construction.

The Federal [...]

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McDermott IP Focus 2024 | Session 1: The Weaponization of Prosecution Laches

by and | Feb 13, 2024 |

McDermott is committed to providing insightful commentary on intellectual property (IP) developments from around the world to our Japanese clients. In light of that effort, we are pleased to announce that our free webinar series, McDermott IP Focus, will continue in 2024.

During these sessions, we will explore global developments in IP, including disputes, transactions, and procurement, with a significant focus on what Japanese companies need to know during this ever-changing business landscape.

The first session will take place on February 21, 2024, and focus on the use and weaponization of prosecution laches. Discussion topics will include:

  • The recent surge in using prosecution laches as a defensive weapon
  • New US case law addressing prosecution laches
  • Using prosecution laches against patentees
  • Best practices for defending against prosecution laches

Click here for additional information and to register.



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Deception Inspection: Attorney Faces Discipline for Citing Fake Law

by | Feb 8, 2024 |

The US Court of Appeals for the Second Circuit referred an attorney for potential further disciplinary measures after the attorney cited a nonexistent case created by ChatGPT. Park v. Kim, Case No. 22-2057 (2d Cir. Jan. 30, 2024) (Parker, Nathan, Merriam, JJ.) (per curiam).

Minhye Park sued David Dennis Kim for an action related to a wage dispute. During the district court proceedings, Park continually and willfully failed to respond to and comply with the district court’s discovery orders. Kim eventually moved to dismiss based on Park’s failure to comply with court orders and discovery obligations. Park opposed. After weighing the requirements of Rules 37 and 41(b), the district court concluded that dismissal was appropriate. Park appealed.

The Second Circuit affirmed the dismissal, concluding that Park’s noncompliance amounted to “sustained and willful intransigence in the face of repeated and explicit warnings from the court that the refusal to comply with court orders . . . would result in the dismissal of [the] action.”

Separately, the Second Circuit addressed the conduct of Park’s attorney during the appeal, including a citation to a nonexistent case that was generated using the artificial intelligence (AI) tool ChatGPT. After receiving Park’s reply brief, the Court ordered Park to submit a copy of one of the cited decisions. Park’s attorney responded that she was “unable to furnish a copy of the decision,” explaining that she had difficulty locating a relevant case through traditional legal research tools and therefore used ChatGPT to provide the case caption ultimately cited in the brief.

The Second Circuit found that citation to a nonexistent case suggests conduct that falls below the basic obligations of counsel, and thus referred the attorney to the Court’s Grievance Panel for further investigation and consideration of a referral to the Court’s admission committee. The Court explained that any attorney appearing before it is bound to exercise professional judgment and responsibility, which impose a duty to certify that any papers filed with the court are well grounded in fact and legally tenable. Recognizing that ChatGPT is a significant technological advancement, the Court explained that the use of such tools does not excuse an attorney from separately ensuring that submissions to the Court are accurate or legally tenable. The Court concluded that referral to the Grievance Panel was warranted because the brief presented a false statement of law and the attorney made no inquiry at all, let alone a reasonable inquiry into the validity of the arguments presented. The Court also ordered the attorney to provide a copy of the ruling to her client.

Practice Note: The Second Circuit noted that several courts around the United States have proposed or enacted rules addressing the use of AI tools before a court but explained that such rules are unnecessary to inform attorneys that court submissions should be accurate.



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Bling It On: Laches Prevents Profit Disgorgement in Diamond-Studded Trademark Battle

by | Feb 8, 2024 |

In a dispute involving allegedly counterfeit luxury watches, the US Court of Appeals for the Fifth Circuit affirmed a district court’s finding of trademark infringement and its finding that a laches defense prevented disgorgement of profits. Rolex Watch USA, Incorporated v. BeckerTime, L.L.C., Case No. 22-10866 (5th Cir. Jan. 26, 2024) (Douglas, King, Willett, JJ.)

Rolex is a luxury watch seller with legally protectable interests in numerous trademarks. BeckerTime modifies Rolex-branded watches by adding diamonds, aftermarket bezels, and bands not authorized by Rolex and then sells them as “Genuine Rolex” watches. Rolex filed a lawsuit against BeckerTime, alleging trademark infringement and seeking an injunction and disgorgement of profits. After a bench trial, the district court concluded that BeckerTime infringed Rolex’s trademark but refused to order disgorgement of profits based on BeckerTime’s laches defense. This appeal followed.

On the issue of infringement, BeckerTime argued that the district court erroneously applied the traditional likelihood of confusion analysis without considering the Supreme Court’s decision in Champion Spark Plug v. Sanders (1947). In Champion, the Supreme Court held that a defendant in a trademark infringement case was not obligated to remove trademarks from repaired or reconditioned products. This ruling was grounded in the distinction that these products were distinctly marketed as “repaired or reconditioned” as opposed to brand new items. The Supreme Court clarified that a misnomer exception would only be applicable if the extent or nature of the repair or reconditioning was so profound that using the original name would be misleading, even if terms such as “used” or “repaired” were added to describe the item.

In drawing a comparison to Champion, the Fifth Circuit differentiated BeckerTime’s actions from mere repairs or reconditioning. Unlike the defendant in Champion, BeckerTime went beyond restoration, actively modifying Rolex watches by incorporating diamonds, aftermarket bezels and bracelets or straps. Consequently, the watches BeckerTime sold were materially distinct from those offered by Rolex. The Court reasoned that BeckerTime’s alterations amounted to customization rather than mere restoration, as was the case in Champion. Applying the misnomer exception from Champion, the Fifth Circuit affirmed the district court’s decision, asserting that BeckerTime’s customized watches created a likelihood of confusion among consumers and thereby infringed upon Rolex’s trademark.

On the issue of disgorgement of profits, the Fifth Circuit affirmed the district court’s application of laches to deny an award of disgorgement. Rolex argued that BeckerTime’s deliberate counterfeiting precluded laches, while BeckerTime responded that Rolex had failed to show the required unclean hands or undue prejudice to justify disgorgement. The Fifth Circuit agreed with the district court that Rolex had failed to establish unclean hands by BeckerTime, as the evidence did not show intentional infringement. The Court also agreed that the delay in filing the lawsuit caused undue prejudice to BeckerTime by enabling it to build a successful business.

While Rolex sought a complete ban on BeckerTime’s use of non-genuine bezels and dials on its modified Rolex watches, the Fifth Circuit only partially agreed. Recognizing the potential for consumer confusion, the Court ordered [...]

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Carolina Calling: Sources of Proof Favor Transfer

by | Feb 8, 2024 |

The US Court of Appeals for the Federal Circuit vacated a district court order denying transfer, finding that the sources of proof, compulsory process and localized interest factors all favored transfer. In re Honeywell Int’l Inc., Case No. 23-152 (Fed. Cir. Jan. 26, 2024) (Dyk, Bryson, Taranto, JJ.) (per curiam) (nonprecedential)

Lone Star SCM Systems filed a lawsuit against Honeywell in the Western District of Texas, Waco Division (West Texas) asserting infringement of four patents related to radio frequency identification technology. Honeywell moved to transfer the suit to the Western District of North Carolina (West Carolina), where Hand Held Products, a Honeywell subsidiary that designed, manufactured, imported and sold certain accused products, is headquartered. Honeywell argued that it had identified five potential Hand Held witnesses who would be subject to the transferee’s subpoena power and that relevant and material evidence would be more likely to exist in the transferee district.

The district court denied Honeywell’s motion. The district court analyzed public- and private-interest factors outlined in the Fifth Circuit’s 2008 In re Volkswagen of Am. decision and concluded that although Lone Star could have brought its suit in West Carolina, Honeywell had failed to demonstrate that West Carolina was clearly more convenient. The district court acknowledged that the bulk of the evidence was located in West Carolina but ultimately concluded that the convenience to potential party witnesses favored West Texas, pointing to several Lone Star witnesses who resided in the Northern District of Texas. The court found that the public-interest factors were neutral or similarly offsetting. The district court also found that West Carolina’s local interest favored transfer, but judicial efficiency did not because a transfer would have required relocating this suit away from two co-pending Lone Star infringement suits.

Honeywell petitioned the Federal Circuit for a writ of mandamus. The Federal Circuit determined that the district court’s denial of Honeywell’s transfer motion was patently erroneous. The Federal Circuit explained that the district court’s findings regarding potential party witness convenience and judicial efficiency were contrary to recent Fifth Circuit and Federal Circuit precedent. Regarding the potential party witnesses, the Federal Circuit cited the Fifth Circuit’s 2023 In re TikTok decision, explaining that it was improper to place witnesses residing outside of West Texas but still within the state of Texas on par with those residing in West Carolina. Regarding judicial efficiency, the Federal Circuit found that Lone Star’s position differed little from the circumstances that the Federal Circuit considered in its 2021 In re Samsung Elecs. decision, where the other suits involved different defendants with different hardware and software. Consistent with Samsung, the Federal Circuit concluded that Lone Star’s co-pending suits did not favor West Texas because the other cases were likely to involve significantly different discovery, evidence and issues. The Federal Circuit vacated the district court’s decision and ordered the district court to grant Honeywell’s transfer motion.



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