IP UPDATE
Exploring the Latest in Intellectual Property Law
IP UPDATE
Exploring the Latest in Intellectual Property Law
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The Naked Truth About Trademark Cancellation: Only Harm, No Proprietary Interest Required

by | Aug 5, 2020 |

The US Court of Appeals for the Federal Circuit determined that a contracting party that contractually abandoned any proprietary interest in a mark may still bring a cancellation action if it can “demonstrate a real interest in the proceeding and a reasonable belief of damage.” Australian Therapeutic Supplies Pty. Ltd. v. Naked TM, LLC, Case No. 19-1567 (Fed. Cir. July 24, 2020) (Reyna, J.) (Wallach, J., dissenting).

Australian sold condoms with the marks NAKED and NAKED CONDOMS, first in Australia in early 2000, then in the United States in 2003. Two years later, Australian learned that Naked TM’s predecessor had registered a trademark NAKED for condoms in September 2003. Australian and Naked TM communicated by email regarding use of the mark for a few years. Naked TM contended that the parties reached an agreement; Australian disagreed and said no final terms were agreed upon. Australian filed a petition to cancel the NAKED trademark registration. Ultimately, and after trial, the Trademark Trial and Appeal Board (TTAB) concluded that Australian lacked standing because it had reached an informal agreement that Naked TM reasonably believed was an abandonment of any right to contest Naked TM’s registration of NAKED. Thus, the TTAB found that Australian lacked a real interest in the proceeding because it lacked a proprietary interest in the challenged mark. Australian appealed.

The Federal Circuit reversed. First, the Court clarified that the proper inquiry was a matter of proving an element of the cause of action under 15 USC § 1064 rather than standing. The Court explained that, contrary to the TTAB’s conclusion, “[n]either § 1064 nor [its] precedent requires that a petitioner have a proprietary right in its own mark in order to demonstrate a cause of action before the Board.” Assuming without deciding that the TTAB correctly determined that Australian had contracted away its rights, the Court found that fact irrelevant. Ultimately, even though an agreement might be a bar to showing actual damages, a petitioner need only show a belief that it has been harmed to bring a petition under § 1064.

The Federal Circuit found that Australian had a reasonable belief in its own damage and a real interest in the proceedings based on a history of two prior applications to register the mark, both of which the US Patent and Trademark Office rejected on the basis that they would have created confusion with Naked TM’s mark. The Court rejected Naked TM’s argument that Australian’s abandonment of those applications demonstrated there was no harm, instead concluding that Australian’s abandonment of its applications did not create an abandonment of its rights in the unregistered mark. Moreover, as a prophylactic rationale, the Court explained that Australian’s sales of products that might be found to have infringed the challenged registration also create a real interest and reasonable belief in harm.

Judge Wallach dissented. Although he agreed that the TTAB erred by imposing a proprietary-interest requirement to bring suit under § 1064, he disagreed that Australian properly demonstrated an alternative, legitimate interest—i.e., a belief [...]

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Joined Parties Have Rights Too

by | Jul 22, 2020 | ,

In vacating an unpatentability decision by the Patent Trial and Appeal Board (Board), the US Court of Appeals for the Federal Circuit found that the rights of a joined party to an inter partes review (IPR) proceeding applies to the entirety of the proceedings and includes the right of appeal. Fitbit, Inc. v. Valencell, Inc., Case No. 19-1048 (Fed. Cir. July 8, 2020) (Newman, J.).

Apple petitioned the Board for IPR of certain claims of a patent owned by Valencell. The Board granted the petition in part, instituting review of certain claims and denying review of other claims. After institution of the Apple IPR, Fitbit filed an IPR petition for the instituted claims and moved for joinder with Apple’s IPR. The Board granted Fitbit’s petition, granted the motion for joinder and terminated Fitbit’s separate proceeding.

After the Apple/Fitbit IPR hearing, but before any Final Written Decision was issued, the Supreme Court decided SAS Institute v. Iancu (IP Update, Vol. 21, No. 5), holding that the America Invents Act requires that all patent claims challenged in an IPR petition must be reviewed by the Board if the petition is granted. Accordingly, the Board re-instituted the Apple/Fitbit IPR to add the previously denied patent claims. The Board’s Final Written Decision found the originally instituted claims unpatentable, but the newly instituted claims not unpatentable. After the decision, Apple withdrew from the proceeding. Fitbit appealed the decision as to newly instituted claims that had been found not unpatentable.

On appeal, Valencell challenged Fitbit’s right to appeal as to the newly instituted claims. 35 U.S.C. § 319 provides that “[a]ny party to the inter partes review shall have the right to be a party to the appeal.” Valencell argued that Fitbit does not have the status of “party” for purposes of appeal because Fitbit did not request review of the newly instituted claims in its initial IPR petition, did not request leave to amend its initial petition after the Supreme Court’s decision in SAS Institute and did not submit a separate brief with respect to the non-instituted claims after the joined IPR was re-instituted. Valencell also argued that because the Board stated that Fitbit would have “limited participation, if at all, and required Fitbit to seek authorization from the Board before filing any papers,” Fitbit was not a full participant in the joined IPR.

Fitbit responded that Valencell did not object to Fitbit’s joinder and did not object to or seek to qualify Fitbit’s continued participation after the Board re-instituted the joined IPR to include the new claims, so there was only one IPR. Fitbit also cited the Board’s statement in granting its joinder motion that the “[d]ecision addressing the status of each challenged claim in this proceeding applies to all parties.” Fitbit acknowledged that it did not seek to file a separate brief after the new claims were added to the IPR, but claimed no separate brief was needed to present the issues.

The Federal Circuit agreed with Fitbit, finding that the circumstances [...]

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Reliance on Common Sense Permitted in Obviousness Analysis

by | Jul 9, 2020 | ,

The US Court of Appeals for the Federal Circuit affirmed a final written decision from the Patent Trial and Appeal Board (PTAB) finding patent claims directed to aircraft lavatories obvious based on prior art because a skilled artisan would have used common sense to incorporate a missing limitation into the prior art. B/E Aerospace, Inc. v. C&D Zodiac, Inc., Case Nos. 19-1935, -1936 (Fed. Cir. June 26, 2020) (Reyna, J.).

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Announcement: USPTO COVID-19 Prioritized Examination Program

by | Jun 23, 2020 |

The United States Patent and Trademark Office (USPTO) has announced a new prioritized examination program to expedite the examination of applications for marks used to identify qualifying COVID-19 medical products and services. Applications that qualify for the program will immediately be assigned to an examining attorney for review, which expedites examination by approximately two months. The USPTO will not charge additional fees for applications that qualify for the program because it considers the COVID-19 outbreak to be an “extraordinary situation” for trademark applicants.

To qualify for prioritized examination, the trademark or service mark application must cover a product that is subject to the United States Food and Drug Administration (FDA) approval for use in the prevention and/or treatment of COVID-19, or a medical service (including medical research) for the prevention and/or treatment of COVID-19.

The USPTO started accepting petitions to advance the initial examination of applications for qualifying COVID-19-related marks beginning June 16, 2020.

Read the full announcement here.



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Fee Shifting Under § 285 Does Not Apply to Conduct Solely Arising in IPR

by | Jun 10, 2020 | ,

Considering for the first time whether fee shifting of § 285 applies to exceptional conduct arising solely from an inter partes review (IPR) proceeding, the US Court of Appeals for the Federal Circuit held that § 285 does not authorize an award of fees based on conduct at the United States Patent and Trademark Office (USPTO) during the course of an IPR proceeding. Amneal Pharma. LLC v. Almirall, LLC, Case No. 2020-1106 (Fed. Cir. June 4, 2020) (Dyk, J.).

Almirall owns certain Orange Book-listed patent rights to medication used to treat acne. Its competitor, Amneal, planned to market a generic version of the acne medication. Before seeking approval to do so, Amneal filed an IPR petition challenging the validity of certain claims of Almirall’s patents. Amneal then filed an Abbreviated New Drug Application (ANDA), identifying Almirall’s patents in the Paragraph IV certification. Almirall subsequently filed a district court action against Amneal for infringement. Shortly after the district court action was filed, the parties entered into settlement negotiations, during which Almirall offered Amneal a covenant-not-to-sue, provided that Almirall drop its pending IPR. The parties were unable to reach agreement at that time, and the IPR culminated in the Patent Trial and Appeal Board (PTAB)’s final written decision, finding the challenged claims not unpatentable. Amneal appealed the PTAB’s final determination. Shortly after the appeal was filed, the parties reached an agreement and jointly moved to dismiss the appeal. Almirall also moved for fees under § 285 for Amneal’s allegedly unreasonable conduct in maintaining its IPR, even after Amneal offered it a covenant-not-to-sue.

Comparing IPRs to interference proceedings, the Federal Circuit looked to a decision of its predecessor, the Court of Customs and Patent Appeals, which determined that § 285 did not extend to appeals of administrative proceedings at the USPTO, and IPRs were no different. Stopping short of proclaiming a categorical rule that § 285 applies only to conduct in district court proceedings, the Court explained that at most, § 285 speaks to awarding fees that were incurred during, in close relation to, or as a direct result of district court proceedings. In the circumstance here, where the alleged exceptional conduct was solely before the USPTO and an appeal of the USPTO decision—not a district court’s decision—an award under § 285 was not appropriate. In addition, the Court noted that the USPTO has its own procedures for sanctioning exceptional conduct under 37 C.F.R. § 42.12, where the PTAB may award “compensatory expenses, including attorney’s fees,” among other sanctions.



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The “Plotting” Thickens: Claims that Solve Known Problem with Known Methods Are Obvious

by | May 14, 2020 | ,

The US Court of Appeals for the Federal Circuit applied KSR and its obviousness progeny, finding that patent claims directed to location plotting were obvious under 35 USC § 103. Uber Techs., Inc. v. X One, Inc., Case No. 19-1164 (Fed. Cir. May 5, 2020) (Prost, CJ).

X One sued Uber Technologies asserting a patent directed to exchanging location information between mobile devices, such that a user could add other mobile device users to a “Buddy List,” share her location with listed buddies or temporary “instant buddies,” and see the locations of her buddies on a map. The patent’s purported novelty lay in “two way position information sharing,” creation of location sharing “groups,” and “temporary location sharing” that “automatically expires.”

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Federal Circuit Sinks Another Attempt to Use PTO Guidance

by | May 7, 2020 |

The US Court of Appeals for the Federal Circuit found claims directed to methods of fishing to be patent ineligible, affirming a Patent Trial and Appeal Board (PTAB) decision that the claims were directed to the abstract idea of selecting a fishing hook based on observed water conditions. In re: Christopher John Rudy, Case No. 19-2301 (Fed. Cir. Apr. 24, 2020) (Prost, CJ).

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Article III Standing Required to Appeal Final Decisions by the PTAB

by | May 7, 2020 |

Addressing the issue of Article III standing in an appeal of an inter partes review (IPR) decision, the US Court of Appeals for the Federal Circuit dismissed the appeal because the party appealing failed to establish an injury sufficient to confer standing. Argentum Pharms. LLC v. Novartis Pharms. Corp., Case No. 18-2273 (Fed. Cir. Apr. 23, 2020) (Moore, J.).

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Assignor Estoppel Does Not Apply to AIA Challenges

by | May 7, 2020 | ,

The US Court of Appeals for the Federal Circuit reiterated that while assignor estoppel prevents a party that assigned a patent to another party from later challenging the validity of the assigned patent in district court, it does not preclude the party from challenging the validity of the assigned patent in an America Invents Act inter partes review (IPR) proceeding. Hologic, Inc. v. Minerva Surgical, Inc., Case Nos. 19-2054; -2081 (Fed. Cir. Apr. 22, 2020) (Stoll, J.) (Stoll, J., additional views).

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