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Head East: Contract Disputes Act Claims Must Be Filed in DC

by | Sep 28, 2023 |

The US Court of Appeals for the Ninth Circuit concluded that the Contract Disputes Act (CDA) “impliedly forbids” federal contractors from bringing most trade secret misappropriation claims against federal agencies in district court. Instead, the CDA requires contractors to bring such claims before the US Court of Federal Claims or the agency board of contract appeals, both of which are located in Washington, DC. United Aeronautical Corp. v. United States Air Force, Case No. 21-56377 (9th Cir. Sept. 7, 2023) (Smith, Lee, JJ.) (Collins, JJ., dissenting).

United Aeronautical Corporation (Aero) develops firefighting products, including the Mobile Airborne Fire Fighting System for use in aerial firefighting. The US Forest Service contracted with Aero to develop an updated aerial system to assist the agency in fighting fires. The ensuing prototype necessarily incorporated significant amounts of Aero’s intellectual property. To protect that information, Aero and the Forest Service executed a Data Rights Agreement (DRA) providing that “the technical data produced . . . or used or related” to developing the prototype “shall remain the property of [Aero],” but specifying that the Forest Service “shall have unlimited rights to view and use the data required for the continued use and operation of the” prototype. The Forest Service proceeded to share Aero’s data with the Air Force, which developed an upgraded aerial firefighting system it marketed internationally.

Aero sued the Air Force for misappropriating its trade secret information. Procedurally, Aero brought its claims under the Administrative Procedure Act (APA), seeking a declaration that the Air Force’s actions violated the Trade Secrets Act and federal procurement law, and an injunction prohibiting any further use of that data to develop competing products. Although the Air Force believed it was permitted to use Aero’s trade secrets pursuant to the DRA, it also argued that Aero’s complaint must be dismissed for lack of subject matter jurisdiction. The district court agreed, concluding that the CDA vests exclusive jurisdiction over federal-contractor disputes with the Court of Federal Claims where, as here, the dispute is related to a procurement contract. Aero appealed.

The Ninth Circuit affirmed the dismissal. Aero argued that the APA permits any “person suffering legal wrong[s] because of agency action” to seek redress in a federal district court and that the Air Force’s misappropriation of Aero’s trade secret information—in violation of the Trade Secrets Act—was exactly that. The Ninth Circuit disagreed, concluding that the nature of Aero’s claims (misappropriation, not breach of contract) and the relief it sought (an injunction, not damages or specific performance) mattered little. What mattered was the existence of a contract between the contractor and an agency that “related to” the intellectual property at issue.

Under the APA, a private party cannot bring suit when its claims are “impliedly forbidden” by a different statute that vests exclusive jurisdiction with another tribunal. The Ninth Circuit concluded that the CDA “impliedly forb[ade]” Aero’s claims since it was enacted to create a dispute resolution system for claims concerning federal procurement contracts, vesting exclusive jurisdiction of these disputes with [...]

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Pre-Enforcement Commercialization Isn’t “Impossible” Basis for Personal Jurisdiction of Nonresident Defendant

by | Sep 28, 2023 |

The US Court of Appeals for the Ninth Circuit reversed a district court’s dismissal of trademark declaratory judgment claims, finding that pre-enforcement commercialization activities can be used to establish personal jurisdiction. Impossible Foods Inc. v. Impossible X LLC, Case No. 21-16977 (9th Cir. Sept. 12, 2023) (Lucero, Bress, JJ.) (VanDyke, J., dissenting).

Impossible Foods is a Delaware corporation manufacturing plant-based meat substitutes, including the “Impossible Burger.” Impossible X, a Texas LLC, is Joel Runyon’s one-person company selling apparel and nutritional supplements using a website and social media. San Diego, California, was Impossible X’s “base point” for two years, serving as Runyon’s apartment and workspace. A LinkedIn profile listed San Diego as the headquarters, and social media frequently tagged San Diego as Impossible X’s location. When vacating his lease, Runyon signed the document as “Joel Runyon, Impossible X LLC.” Even after leaving, Runyon took at least eight trips to California between 2017 and 2019 for the purpose of performing Impossible X work and promoting the Impossible brand.

In 2020, Impossible X filed a notice of opposition at the Trademark Trial & Appeal Board for Impossible Food’s trademark application. Impossible Foods responded with a declaratory judgment action in 2021 in California, seeking a finding of noninfringement and that its rights to the IMPOSSIBLE mark were superior. Impossible X sought dismissal, arguing that the district court lacked personal jurisdiction.

The criteria to establish specific personal jurisdiction over a nonresident defendant are as follows:

  • The defendant must purposefully direct its activities toward the forum or purposefully avail itself of the privileges of conducting activities in the forum.
  • The claim must arise out of or relate to the defendant’s forum-related activities.
  • Exercise of jurisdiction must be reasonable.

The district court acknowledged that the personal jurisdiction question here was a “close one” and concluded that while Impossible Foods satisfied the purposeful direction or availment requirement, the declaratory judgment action did not arise out of or relate to Impossible X’s contact with California. Impossible Foods did not begin use of its mark in commerce until June 2016, at which point Runyon had already left California. The district court found that the parties did not have a live dispute until June 2016, and Impossible X’s contacts with California prior to that time were irrelevant to personal jurisdiction. Impossible Foods appealed.

The Ninth Circuit analyzed each prong of the jurisdiction test and reversed the dismissal. First, the Court agreed with the district court that Impossible X purposefully directed activities toward California and availed itself of privileges of conducting activities by building its brand and establishing trademark rights there. A court typically treats trademark infringement as tort-like for personal jurisdiction purposes and applies the purposeful direction framework. The Ninth Circuit explained that there is no need to adhere to an “iron-clad doctrinal dichotomy” between purposeful availment and direction, however. The Court leaned on “purposefulness” vis-à-vis the forum state and “easily” concluded that Impossible X purposefully directed its activities toward California and/or availed itself of the benefits and privileges [...]

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PTO Issues Oral Hearing Guide for Patent Trial & Appeal Board Proceedings

by | Sep 28, 2023 |

On August 31, 2023, the US Patent & Trademark Office (PTO) published an Oral Hearing Guide to aid parties with oral arguments before the Patent Trial & Appeal Board. The newest Oral Hearing Guide updates the 2019 Oral Hearing Guide published on August 30, 2019, and is meant to be read in conjunction with the procedures set forth in the 2019 PTAB Trial Practice Guide.

The Oral Hearing Guide addresses the following topics:

  • PTO locations for oral hearings
  • Request for an oral hearing
  • Notification of hearing in ex parte and reexamination hearings
  • Notification of hearing in America Invents Act (AIA) trials
  • Authorized persons to present oral arguments
  • Attendance at hearings
  • Guidelines for counsel during argument.

With a few minor exceptions, the administrative processes and procedures largely mirror those set forth in the 2019 Oral Hearing Guide and the 2019 PTAB Trial Practice Guide. The key changes are summarized below.

A Request for Oral Hearing in ex parte and reexamination proceedings must be filed as a separate paper with the required fee paid within a non-extendable time period. The Board will issue a Notice of Hearing to the parties involved once a case has been scheduled for oral argument, typically eight weeks before the scheduled hearing session. The Notice of Hearing provides information about the scheduled hearing, including the date, time, location, appearance options and general information about the oral hearing procedures before the Board.

In trial proceedings under the AIA—i.e., inter partes reviews (IPRs), covered business method reviews (CBMs or CBMRs), post-grant reviews (PGRs) and derivations—each party to a proceeding is afforded an opportunity to present its case before at least three members of the Board and is notified of the date and location options of an oral hearing in a Scheduling Order. The Guide further elaborates on the processes for requesting an oral argument, including the issuance of the Notice of Hearing (or Scheduling Order) when an oral hearing is requested. The Scheduling Order notifies the parties of the finalized hearing date, time and location. Once the Board has issued a Hearing Order, parties requiring a different arrangement should contact the Board with their request.

The Guide stipulates that the parties should state in their respective requests for oral argument whether they prefer a video hearing or an in-person hearing, and for in-person hearings, which available location the party prefers. To the extent the parties disagree, they should meet and confer. If the dispute cannot be resolved by meeting and conferring, the parties should inform the Board of each party’s individual preferences. The Board will notify the parties of its decision in accordance with current office policy.

The Guide further provides updated information stipulating that optional demonstrative exhibits must be marked with the words “DEMONSTRATIVE EXHIBIT – NOT EVIDENCE” in the footer and further elaborates on the procedures for parties to request pro hac vice admission for non-registered patent practitioners to participate in proceedings. Finally, the Guide discusses [...]

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Watermelon Sugar: Candy Shape and Color Deemed Functional

by | Sep 21, 2023 |

The US Court of Appeals for the Third Circuit upheld a district court’s decision that a candymaker cannot trademark the shape and colors of watermelon candy, finding that the combined colors and shape of the candy are functional because they help signal to consumers that the candies have a watermelon flavor. PIM Brands Inc. v. Haribo of America, Inc., Case No. 22-2821 (3rd Cir. Sept. 7, 2023) (Chagares, Bibas and Matey, JJ)

PIM is a leading confectionary company that introduced its Sour Jacks Wedges, a chewy gummy candy, in the early 2000s.

PIM obtained a federal trademark registration in “the shape of a wedge for candy, with an upper green section with white speckles, followed by a narrow middle white section and followed by a lower red section with white speckles.”

Haribo, a well-known German confectionery company, introduced its own watermelon-flavored sweet treat in 2019. Like the Sour Jacks Wedges, Haribo’s candy is red, white and green, with an elongated watermelon wedge shape. PIM sued Haribo for trademark and trade dress infringement under the Lanham Act and for unfair competition under New Jersey common law, alleging that Haribo copied PIM’s Sour Jacks Wedges design.

Haribo countered that PIM’s trade dress was functional and requested that the district court cancel PIM’s trademark. Haribo claimed that it designed its chewy candy’s shape and colors to match its flavor (watermelon) and that PIM’s trademark should not have been granted since it closely resembled an actual slice of watermelon. The district court agreed, finding that PIM’s trademark design was functional and not protectable since PIM’s combination of colors and shape helps identify the candy’s watermelon flavor. PIM appealed.

PIM acknowledged that the coloring of its watermelon candy was functional since it identified the candy’s flavor. However, PIM argued that the candy’s wedge shape identified the brand and challenged the district court’s decision because it did not consider the wedge shape in isolation from the colors when assessing functionality.

The Third Circuit rejected PIM’s argument, concluding that each feature of the candy’s trade dress serves a single function, which is to identify its flavor, and therefore is ineligible for trademark protection. The Court explained that a design is functional if it is useful for anything beyond branding. The Court cited to its 2021 decision in Ezaki Glico v. Lotte International America, explaining that “[e]ven if the design chosen both promotes a brand and also ‘makes a product work better,’ it is functional and unprotectable.” The Court went on to explain that if design choices (e.g., shape and color) serve the same function (e.g., identifying the flavor), they should be considered together.

PIM further argued that its Sour Jacks Wedges do not match exactly with watermelon, noting that the bottom could be more curved and have a thinner band of darker green, the wedge could be wider, the point could be sharper and a deeper red, and there could be black seeds. The [...]

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In Good Hands: Compilation of Publicly Available Information Can Still Be a Trade Secret

by | Sep 21, 2023 |

The US Court of Appeals for the First Circuit affirmed a district court decision, finding that a compilation of customer-related information, even if publicly available, is a protectable trade secret. Allstate Insurance Co. v. Fougere, Case No. 22-1258 (1st Cir. Aug. 29, 2023) (Gelpi, Lynch, Thompson, JJ.)

Allstate hired two agents—James Fougere and Sarah Brody-Isbill—to sell the company’s auto and casualty insurance products in Massachusetts. In connection with their employment, both agents signed exclusive employment agreements that imposed numerous responsibilities, including an obligation to maintain information identified by Allstate as confidential, an undertaking not to misuse or improperly disclose the information and a promise to return the information to Allstate when their agency relationships terminated. Allstate eventually terminated its agreement with the agents because of noncompliance with Allstate regulations and Massachusetts state law.

After the agreements were terminated, Allstate believed the agents had retained confidential information belonging to Allstate and had been using it to solicit Allstate customers. Allstate ultimately learned that the agents had kept confidential Allstate spreadsheets that contained the names of thousands of Allstate customers, along with their renewal dates, premiums, types of insurance, Allstate policy numbers, driver’s license numbers, home addresses, phone numbers and email addresses.

Allstate filed suit against the former agents, bringing claims under both Massachusetts law and the federal Defend Trade Secrets Act (DTSA). The agents brought counterclaims under Massachusetts law, alleging that Allstate failed to provide adequate notice before their terminations, misappropriated information that belonged to the agents and wrongfully interfered with the agents’ contractual relations by engaging in bad-faith business practices. On summary judgment, the district court found that the agents misappropriated Allstate’s trade secrets and dismissed the agents’ counterclaims. The agents appealed.

The agents argued that the customer information was available from various publicly available sources and therefore did not constitute a trade secret. The First Circuit disagreed, explaining that the compilation of publicly available information could constitute trade secrets, particularly where attempts to duplicate that information would be “immensely difficult.” The Court also found that the factual record suggested that not all of the customer information was publicly available—and certainly not in the same compilation as it would be from Allstate.

The agents also argued that the customer information had no economic value. In analyzing this argument, the First Circuit looked to the employment agreements between the former agents and Allstate, which specifically stated that the misuse of Allstate’s confidential information would cause “irreparable damages” to Allstate. The employment agreements also provided a mechanism for terminated agents to sell their “economic interest” back to Allstate. The Court also relied on its finding that this sort of information would be valuable to Allstate’s competitors in attempting to market policies to Allstate customers so that the competitor could offer lower pricing. Taken together, the Court found that the customer data had economic value.

The agents next argued that Allstate had not sufficiently protected the customer information. The First Circuit, affirming the district court, found that Allstate had multiple protections in place. [...]

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Tragic Ending: Award-Winning AI Artwork Refused Copyright Registration

by | Sep 21, 2023 |

The US Copyright Office (CO) Review Board rejected a request to register artwork partially generated by artificial intelligence (AI) because the work contains more than a de minimis amount of content generated by AI and the applicant was unwilling to disclaim the AI-generated material. Second Request for Reconsideration for Refusal to Register Théâtre D’opéra Spatial (Copyright Review Board Sept. 5, 2023) (S. Wilson., Gen. Counsel; M. Strong, Associate Reg. of Copyrights; J. Rubel Asst. Gen. Counsel).

In 2022, Jason Allen filed an application to register a copyright for a work named “Théâtre D’opéra Spatial,” reproduced below.

The artwork garnered national attention in 2022 for being the first AI-generated image to win the Colorado State Fair’s annual fine art competition. The examiner assigned to the application requested information about Allen’s use of Midjourney, a text-to-picture AI service, in the creation of the work. Allen explained that he “input numerous revisions and text prompts at least 624 times to arrive at the initial version of the image.” He went on to state that after Midjourney created the initial version of the work, he used Adobe Photoshop to remove flaws and create new visual content and used Gigapixel AI to “upscale” the image, increasing its resolution and size. As a result of these disclosures, the examiner requested that the features of the work generated by Midjourney be excluded from the copyright claim. Allen declined to exclude the AI-generated portions. As a result, the CO refused to register the claim because the deposit for the work did not “fix only [Mr. Allen’s] alleged authorship” but instead included “inextricably merged, inseparable contributions” from both Allen and Midjourney. Allen asked the CO to reconsider the denial.

The CO upheld the denial of registration, finding that the work contained more than a de minimis amount of AI-generated content, which must be disclaimed in a registration application. The CO explained that when analyzing AI-generated material, it must determine when a human user can be considered the “creator” of AI-generated output. If all of a work’s “traditional elements of authorship” were produced by a machine, the work lacks human authorship and the CO will not register it. If, however, a work containing AI-generated material also contains sufficient human authorship to support a claim to copyright, then the CO will register the human’s contributions.

Applying these principles to the work, the CO analyzed the circumstances of its creation, including Allen’s use of an AI tool. Allen argued that his use of Midjourney allowed him to claim authorship of the image generated by the service because he provided “creative input” when he “entered a series of prompts, adjusted the scene, selected portions to focus on, and dictated the tone of the image.” The CO disagreed, finding that these actions do not make Allen the author of the Midjourney-created image because his sole contribution was inputting the text prompt that produced it.

The [...]

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Hit Rewind: Analogous Art and Field of Endeavor

by | Sep 21, 2023 |

Addressing the Patent Trial & Appeal Board’s application of the field of endeavor and reasonably pertinent tests for determining analogous art, the US Court of Appeals for the Federal Circuit found that the Board should not have required a petitioner to precisely articulate the relevant field of endeavor for the patent and prior art using the magic words, “field of endeavor.” However, the Court agreed with the Board that the prior art was not reasonably pertinent because it concerned a different problem than the challenge addressed by the patent. Netflix, Inc. v. DivX, LLC, Case No. 22-1138 (Fed. Cir. Sept. 11, 2023) (Stoll, Hughes, and Stark, JJ.)

Netflix filed an inter partes review (IPR) challenging DivX’s patent directed toward a feature called “trick play functionality,” which refers to the ability to fast forward, rewind and skip frames in a multimedia file. The patent’s background explains that the invention generally relates to the “encoding, transmission and decoding of multimedia files.” Notably, the claimed invention implements a multimedia file based on the Audio Video Interleave (AVI) structure with an additional storage structure called an “index chunk.”

In its petition, Netflix asserted that the challenged claims were obvious over two prior art references, Zetts in view of Kaku. Kaku disclosed the use of an AVI file with an index chunk to show image data and/or play sound data in a digital camera. Kaku explained that the invention’s primary object is to reproduce a motion image in a device with minimal memory but clarified that the invention is “applicable to every electronic appliance to reproduce motion images.” Netflix asserted that Zetts disclosed a system for facilitating trick play while Kaku disclosed using an AVI file format with an index chunk to store video/audio data.

In its patent owner response, DivX argued that Kaku was non-analogous art because the challenged patent relates to facilitating trick play in streamed multimedia content, whereas Kaku utilizes M-JPEG files in limited-memory cameras. DivX similarly argued that Kaku was not reasonably pertinent to the problem of “facilitating trick play functionality in streaming services.” Netflix countered that Kaku must be considered for its AVI teachings and/or the “encoding and decoding of multimedia files,” both of which are “applicable to every electronic appliance to reproduce motion images” and render Kaku reasonably pertinent. The Board rejected Netflix’s obviousness argument, holding that it failed to identify the field of endeavor for the DivX patent or Kaku, as well as the problem to be addressed by the DivX patent. Netflix appealed.

The Federal Circuit first considered the Board’s conclusion that Netflix failed to identify an overlapping field of endeavor for Kaku and the DivX patent. The Court explained that the field of endeavor is determined by reference to explanations of the invention’s subject matter in the specification and is not limited to the specific point of novelty or the particular focus within a field. Rather, a field of endeavor may be broadly defined because it relies on the specification’s complete disclosure. Applying this principle, the [...]

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Copyright Office Seeks Comments on Artificial Intelligence

by | Sep 21, 2023 |

The US Copyright Office (CO) issued a notice, seeking comments on copyright law and policy issues raised by artificial intelligence (AI) systems. Artificial Intelligence and Copyright, 88 Fed. Reg. 59942 (Aug. 30, 2023).

The purpose of the notice is to collect factual information and views relevant to the copyright law and policy issues raised by recent advances in generative AI. The CO intends to use this information to advise Congress by providing analyses on the current state of the law, identifying unresolved issues and evaluating potential areas for congressional action. The CO will also use this information to inform its regulatory work and to offer resources to the public, courts and other government entities considering these issues. The questions presented in the notice are grouped into the following categories:

  • General high-level questions
  • AI training, including questions of transparency and accountability
  • Generative AI outputs, including questions of copyrightability, infringement and labeling or identification of such outputs
  • Other issues related to copyrights.

The specific questions can be found in the notice. Given the importance of using shared language when discussing AI, a glossary of terms is also provided, on which commentators can provide feedback. The CO indicated that it does not expect every party choosing to respond to the notice to address every question raised. Instead, the questions are designed to gather views from a broad range of stakeholders.

Written comments are due no later than 11:59 pm (EDT) on October 18, 2023. Written reply comments are due no later than 11:59 pm (EST) on November 15, 2023.



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Less Is More: IPR Claim Amendments May Not Enlarge Claim Scope

by | Sep 14, 2023 |

The US Court of Appeals for the Federal Circuit affirmed a decision from the Patent Trial & Appeal Board denying a motion to amend claims during an inter partes review (IPR) proceeding, explaining that a claim amendment is improper if a proposed claim is broader in any respect relative to the original claims, even if it is overall narrower. Sisvel International S.A. v. Sierra Wireless, Inc., et al., Case Nos. 22-1387; -1492 (Fed. Cir. Sept. 1, 2023) (Prost, Reyna, Stark, JJ.)

Sisvel owns two patents directed to methods and apparatuses that rely on the exchange of frequency information in connection with cell reselection between a mobile station (or user cell phone) and a central mobile switching center. Sierra Wireless filed petitions for IPR alleging that claims of Sisvel’s patents were unpatentable as anticipated and/or obvious in view of certain prior art. During the IPR proceeding, the Board determined that the claim term “connection rejection message” should be given its plain and ordinary meaning of “a message that rejects a connection.”

The Board also denied Sisvel’s motion to amend the claims of one of the patents, finding that the amendments would have impermissibly enlarged the claim scope. the Board focused on a limitation relating to “setting a value,” comparing the original claims’ requirement with that of the proposed substitute claims. The original claims required that the value be set “based at least in part on information in at least one frequency parameter” of the connection rejection message while the substitute claims recited that the value may be set merely by “using the frequency parameter” contained within the connection rejection message. The Boeasoneasoned that in the proposed substitute claim, the value that is set need not be based on information in the connection rejection message, and thus the claim was broader in this respect than the original claims. After denying the motion to amend, the Board concluded that the original claims were unpatentable. Sisvel appealed.

Sisvel challenged the Board’s construction of “connection rejection message,” arguing that the term should be limited to a message from the specific cellular networks disclosed in the specification. The Federal Circuit rejected Sisvel’s argument, finding that the intrinsic evidence provided no persuasive basis to limit the claims to any particular cellular network disclosure. Having agreed with the Board’s construction, the Court affirmed the unpatentability determination.

Sisvel also challenged the Board’s refusal to permit Sisvel to amend the claims. Sisvel argued that the Board had incorrectly found that the proposed substitute claims were broader than the original claims because when all the limitations were considered as a whole, the scope of the substitute claims was narrower than the original claims.

Citing 35 U.S.C. § 316(d)(3), the Federal Circuit noted that when a patent owner seeks to amend its claims during an IPR, the amended claims “may not enlarge the scope of the claims of the patent.” The Court explained that removal of a claim requirement can broaden the resulting amended claim and concluded that such was the case [...]

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Whisk-y Business: Notice Alone Is Sufficient for Preliminary Injunction

by | Sep 7, 2023 |

The US Court of Appeals for the Fifth Circuit concluded that only notice of a preliminary injunction (PI) motion, and not perfected formal service, is needed to assert jurisdiction to issue an injunction. Whirlpool Corp. v. Shenzhen Sanlida Elec. Tech. Co., Ltd., Case No. 22-40376 (5th Cir. Aug. 25, 2023) (Barksdale, Southwick, Higginson, JJ.)

Shenzhen Sanlida sells stand mixers within the United States, primarily through online sales. Whirlpool filed a complaint for trademark infringement and dilution against Sanlida, arguing that Sanlida’s mixers were too close in appearance to Whirlpool’s iconic KitchenAid stand mixer. Shortly after filing its complaint, Whirlpool requested a PI hearing. In its request, Whirlpool provided evidence that Sanlida had actual notice of the pending hearing. The district court granted the request and scheduled a hearing.

Counsel for Whirlpool and Sanlida attended the hearing. At the hearing, Sanlida argued it had never been properly served under the Hague Convention and that without service, the district court could not assert personal jurisdiction over it. The district court disagreed and granted the PI. Sanlida filed an emergency motion to stay the order, but the district court rejected Sanlida’s request. Sanlida appealed.

Sanlida argued that the district court did not have the power to issue a PI and that it abused its discretion in awarding the injunction. The Fifth Circuit found no error or abuse and affirmed.

The Fifth Circuit explained that service is not a prerequisite to issuing a PI. Citing Fed. R. Civ. P. 65, the Court explained that the only requirement for issuing a PI is notice to the adverse party. Since it was undisputed that Sanlida had notice of the PI hearing, the Court found that the district court had the power to issue the PI. In doing so, the Court distinguished this case—where there was no dispute that the district court would have personal jurisdiction over Sanlida after the process was perfected—from cases where personal jurisdiction was a live question at the PI hearing.

Turning to the merits of the PI, the Fifth Circuit addressed the four factors the district court had to consider before issuing the injunction: likelihood of success on the merits, threat of irreparable injury, balance of harms and public interest.

On the first factor—likelihood of success—the Fifth Circuit found that the district court made no clear error. The two components of the likelihood of success analysis are validity and likelihood of confusion. On both points, the Fifth Circuit upheld the district court’s finding. While Sanlida argued that Whirlpool’s trademark was invalid because it covered “functional” elements, the Court found insufficient factual support for that argument. Nothing in the record showed that Whirlpool’s mixer head shape had any effect on the “cost or quality” of the mixer. Nor did Sanlida point to any evidence showing that the housing shape would put competitors at a “significant non-reputation-related disadvantage.” Without a showing on either element, Sanlida failed to rebut the presumption of validity. Sanlida also failed to show [...]

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