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Deleting Goods from Registration Subject to Cancellation During Audit May Result in Adverse Judgment

by | Jan 26, 2023 |

The Trademark Trial & Appeal Board (Board) addressed, for the first time, whether the deletion of goods and services as a result of a post-registration audit during a cancellation proceeding triggers Trademark Rule 2.134 and found that it does. The Board required the respondent to show cause as to why its deletion of certain goods from the challenged registration should not result in an adverse judgment. Ruifei (Shenzhen) Smart Technology Co., Ltd. v. Shenzhen Chengyan Science and Technology Co., Ltd., Cancellation No. 92077931 (TTAB Jan. 12, 2023) (Lykos, Lynch, Larkin, ATJ)

Ruifei (Shenzhen) Smart Technology petitioned to cancel a trademark that was registered to Shenzhen Chengyan Science and Technology Co., Ltd. (Chengyan) based on abandonment and fraud. Ruifei thereafter filed a motion for leave to amend its pleadings and concurrently filed a motion for partial summary judgment. Finding that Chengyan did not contest the motion for leave to amend, the Board granted Ruifei’s motion and accepted the proposed amended petition to cancel. The summary judgment motion, however, was deferred, pending Chengyan’s response to the instant order.

After the cancellation proceeding was initiated, Chengyan filed a Section 8 Declaration of Use in connection with the contested registration and received a post-registration office action audit. In response to the audit, Chengyan deleted some of the goods from the contested registration’s identification.

Ruifei mentioned the amendment to the contested registration in its motion for partial summary judgment. The Board, having been made aware of the deletion of goods, held that the amendment raised new issues requiring Chengyan’s input before it could consider the motion for partial summary judgment.

Without the written consent of a petitioner, a respondent’s deletion of goods or services from a registration subject to a pending cancellation action typically would result in judgment against the respondent under Trademark Rule 2.134. The purpose of this rule is to prevent respondents in cancellation proceedings from avoiding judgment by cancelling certain goods or services to render the cancellation action moot.

Trademark Rule 2.134(b) provides respondents with the opportunity to explain why certain goods or services were cancelled under Section 8 to avoid judgment being entered against them:

After the commencement of a cancellation proceeding, if it comes to the attention of the . . . Board that the respondent has permitted its involved registration to be cancelled under section 8 . . . an order may be issued allowing respondent . . . to show cause why such cancellation . . . should not be deemed to be the equivalent of a cancellation by request of respondent without the consent of the adverse party and should not result in entry of judgment against respondent.

The Board had not previously considered a situation in which goods or services were deleted as a result of a post-registration audit but held that the “same concerns . . . and [] policies underlying Trademark Rule 2.134(b) apply.” Accordingly, the Board granted Chengyan 20 days to file a response showing why its deletion of certain goods should not [...]

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Bursting the Bubble on Prosecution Delays

by | Jan 26, 2023 |

Addressing a case where a patent owner filed hundreds of applications as part of a strategy to maintain extraordinarily lengthy patent coverage, the US Court of Appeals for the Federal Circuit affirmed a district court’s determination that the patent owner had engaged in a calculated and unreasonable scheme to delay patent issuance. Personalized Media Comms., LLC v. Apple Inc., Case No. 21-2275 (Fed. Cir. Jan. 7, 2023) (Reyna, Chen, JJ.) (Stark, J., dissenting).

The Uruguay Round Agreements Act and General Agreement on Tariff and Trade (GATT) amended the US patent term to 20 years from the effective filing date, instead of 17 years from the issue date. GATT took effect on June 8, 1995. In the months leading up to GATT’s enactment, some would-be patentees seeded patent applications with tremendous disclosures to anchor future applications and obtain the longer pre-GATT term. Practitioners referred to this time period as the GATT bubble. Personalized Media Communications (PMC) submitted 328 GATT bubble applications, from which PMC sought somewhere between 6,000 and 20,000 patent claims. The term of these patents would be 17 years from their issue date instead of 20 years from their priority date.

PMC asserted that Apple’s FairPlay digital rights management software infringed a patent covering a decryption method and won a jury verdict of $330 million. After the verdict, the district court held a bench trial and ultimately found that the patent was unenforceable because of prosecution laches, a doctrine that bars the assertion of patents where the patentee caused unreasonable delay in obtaining the patent, to the detriment of the accused infringer. PMC appealed.

The Federal Circuit affirmed. First, it examined whether the district court had properly concluded that PMC unreasonably delayed. Based on a wide swath of record evidence, all three panel members—Judges Reyna, Chen and Stark—agreed that, like the patentee in Hyatt v. Hirschfeld, PMC had engaged in an intentional scheme to delay patent issuance and extend its monopoly. PMC tried to distinguish its case from Hyatt by arguing that it had developed, with the US Patent & Trademark Office, a consolidation procedure to prioritize review of certain applications. The Court concluded that the structure of the agreement still unreasonably drew out resolution of PMC’s applications, however. The Court also approved of the district court’s reasoning based on the number of applications filed and the introduction of new (albeit narrowing) elements to the claims 16 years after the priority date.

Turning to prejudice, the Federal Circuit concluded that the district court did not act improperly in determining that the delay and improper conduct continued to harm Apple up through the filing of suit in 2015. The Court found that the patent had issued based on a pending claim that PMC did not disclose during PMC-Apple license negotiations and which PMC could quickly get granted and assert against Apple.

Judge Stark dissented, stating that he would conclude that the prejudice Apple faced did not happen during the period in which PMC unreasonably delayed issuance. Judge [...]

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PTO Introduces Intellectual Property Identifier Tool

by | Jan 26, 2023 |

On January 18, 2023, the US Patent & Trademark Office announced the launch of its new Intellectual Property (IP) Identifier tool. This tool is designed for those who are less familiar with IP and assists users in determining whether they have IP and identifies what IP protections are available to support their business, invention or brand. The tool also briefly explains patents, trademarks, copyrights and trade secrets.

The IP Identifier tool comprises two modules: The Basic IP Identifier and the Advanced IP Identifier. The Basic IP Identifier module consists of six questions that allow users to quickly identify the type of IP they should protect. The Advanced IP Identifier module explains the specific types of IP and includes links to additional resources, including how to file an application for protection. A third module, Managing Your IP Assets, is currently under development.



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I Know That Brand . . . Or Do I? Reviewing the Eleventh Circuit’s Likelihood of Confusion Analysis

by | Jan 26, 2023 |

The US Court of Appeals for the Eleventh Circuit reversed and remanded a district court’s summary judgment ruling finding no likelihood that consumers might be confused as to any relationship between competitors operating in the same state, in similar trade channels and using a mark having the same primary word component. The Court held that a reasonable factfinder could determine that there was a likelihood of confusion between the parties’ marks as used in commerce. FCOA LLC v. Foremost Title & Escrow Services LLC, Case No. 19-13390 (11th Cir. Jan. 12, 2023) (Branch, Grant, Tjoflat, JJ.)

FCOA is an insurance company that has been selling and marketing insurance policies using FOREMOST marks since 1952. Foremost is a shell company selling title insurance on behalf of a law firm. Both parties operate in Florida. Seven months after Foremost started using its FOREMOST mark, FCOA sent Foremost a cease-and-desist letter. Foremost disputed the trademark infringement allegations and denied having any knowledge of FCOA or FCOA’s FOREMOST marks. The district court denied FCOA’s summary judgment motion and granted Foremost’s cross-motion for summary judgment, holding that FCOA failed to show a likelihood of confusion between the marks. FCOA appealed.

The Eleventh Circuit reviewed the district court decision de novo. Since there was no dispute that FCOA’s marks were valid, the Court focused its trademark infringement analysis on whether Foremost’s FOREMOST mark was likely to cause consumer confusion. It did so by analyzing its eight likelihood of confusion factors:

  • Actual confusion is the most important factor in the analysis. The Eleventh Circuit found no evidence that consumers actually confused the parties’ marks in the period between Foremost’s allegedly infringing acts and the lawsuit filing. Therefore, this factor weighed against a likelihood of confusion.
  • A mark’s strength/distinctiveness is the second most important factor because it analyzes the scope of the mark’s protection. The Eleventh Circuit found that FCOA’s FOREMOST mark was distinctive because, although the word mark in isolation is descriptive, it achieved secondary meaning through consumer recognition and commercial strength. The Court did not find Foremost’s list of likely inactive businesses using FOREMOST to be compelling rebuttal evidence. Therefore, this factor weighed in favor of a likelihood of confusion.
  • Similarity of the marks is relevant because the likelihood of confusion increases as the marks share more overall similarities. The Eleventh Circuit focused on the distinctive parts of the marks, noting that both logos feature FOREMOST prominently in bold, have two lines of text and are similarly centered and stylized. While there are differences in the logo fonts and colors, the Court determined that this factor still weighed in favor of confusion because consumers are unlikely to be discerning about these differences.

  • Similarity of the products that the marks represent is relevant in determining whether consumers think the marks originate from a single source. The Eleventh Circuit determined that [...]

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That Stings: Consent to Jurisdiction Must Be Effective at Filing to Invoke Fed. R. Civ. P. 4(k)(2)

by | Jan 19, 2023 |

The US Court of Appeals for the Federal Circuit, on petition for writ of mandamus, vacated the district court’s transfer order and remanded the transfer to be considered under the clarified parameters of Fed. R. Civ. P. 4(k)(2) and 28 U.S.C. § 1404. In re: Stingray IP Solutions, LLC, Case No. 2023-102 (Fed. Cir. Jan. 9, 2023) (Lourie, Taranto, Stark, JJ.)

Stingray filed patent infringement suits in the US District Court for the Eastern District of Texas against TP-Link, a company headquartered and organized in China. TP-Link moved to transfer to the Central District of California (CDCA) under 28 U.S.C. § 1406 citing an alleged lack of personal jurisdiction that Rule 4(k)(2) did not cure because TP-Link would be amenable to suit in the CDCA. TP-Link also moved for transfer under 28 U.S.C. § 1404(a). The district court granted the motion to transfer under § 1406 based on the rationale that TP-Link was amenable to suit in the CDCA and relying on affirmative reservations made by TP-Link that the CDCA had proper jurisdiction and venue. The district court denied TP-Link’s § 1404(a) motion as moot following the transfer. Stingray filed a mandamus petition asking the Federal Circuit to determine whether TP-Link’s unilateral, post-suit consent to personal jurisdiction in another state defeated application of Rule (4)(k)(2).

The Federal Circuit first determined that mandamus review was appropriate in this case in order to resolve the question of whether a defendant can defeat personal jurisdiction under Rule 4(k)(2) by unilaterally consenting to suit in a different district, a jurisdictional question that has divided district courts. Some district courts have held that personal jurisdiction cannot be established under Rule 4(k)(2) if a defendant states that it is amenable to suit in another state, while others have concluded that defendants must do more than simply designate an alternative forum in order to avoid application of Rule 4(k)(2).

Rule 4(k)(2) was originally introduced to close a loophole where non-resident defendants without minimum contact with any individual state suitable to support jurisdiction, but with sufficient contacts with the United States as a whole, were able to escape jurisdiction in all 50 states. The rule essentially provided that under federal claims, serving a summons or filing a waiver of service could establish personal jurisdiction if the defendant was not subject to a state’s general jurisdiction and exercising jurisdiction would be consistent with the US Constitution and laws.

Here, the case focused on the “negation requirement” of Rule 4(k)(2) where the defendant is not subject to any jurisdiction of a state court. This case addressed the question of whether a defendant’s post-suit, unilateral consent to suit in another state prevents the requirement that a defendant is not subject to a state’s general jurisdiction from being satisfied.

The Federal Circuit determined that the “negation requirement” requires defendants to identify a forum where jurisdiction would have been proper at the time of filing, regardless of consent. The Court determined that therefore a defendant cannot use a “unilateral statement of consent” to [...]

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Absent Expressed Rationale of Obviousness, Federal Circuit Calls for Do-Over

by | Jan 19, 2023 |

The US Court of Appeals for the Federal Circuit reversed a ruling by the Patent Trial & Appeal Board (Board) where, on appeal, the US Patent & Trademark Office’s (PTO) rationale for sustaining the Board’s obviousness rejection did not reflect “the reasoning or findings the Board actually invoked.” In Re Google, LLC, Case No. 22-1012 (Fed. Cir. Jan. 9, 2023) (Moore, C.J., Lourie, Prost, JJ.)

Google’s patent application covers a method of filtering search results to display age-appropriate results using a “content rating score” in combination with a predetermined threshold value to determine which results will be presented. The application discloses several ways that the threshold value can be calculated, including using the length of the search query as a proxy for the age of the user, with longer queries being associated with older users and leading to a lower threshold score (allowing more mature content to be shown).

The application received a final rejection from the examiner, who asserted that the claims would have been obvious under 35 U.S.C. § 103 based on two prior art references, Parthasarathy and Rose. Parthasarathy disclosed a method to determine a content score to use for ranking results, while Rose disclosed a method to assign result importance based on query length. The examiner argued that it would be obvious to combine Rose and Parthasarathy to achieve the claimed method that recited a “predetermined threshold value” based on the number of words in a query. The examiner acknowledged that Parthasarathy did not disclose a threshold based on a number of words but found that Rose did, citing Rose’s modified relevance-ranking algorithm. He reasoned that it would have been obvious to combine Rose and Parthasarathy to achieve the claimed threshold because “analyzing a query for determining the query length and using the query length as a threshold is very well known in the art and doing so would further provide for assigning weight to a long or a short query for retrieving documents.” Google appealed the examiner’s decision to the Board, which affirmed the examiner’s rejection and adopted the examiner’s findings. Google appealed to the Federal Circuit.

On appeal, the PTO argued that because there were only two ways a person of ordinary skill in the art could modify Parthasarathy’s threshold to incorporate Rose, either of the modifications would have been obvious. However, the Federal Circuit found that this argument was not supported by the Board’s decision. The Court explained that while the Board did conclude that modifying Parthasarathy’s threshold to take into account the length of the query would have been obvious, the Board did not provide any detail as to how that would be achieved. In the absence of specific fact-based findings by the Board, the Court explained that it could not adopt the PTO’s argument, which rested on facts not found in the Board’s decision. A ruling relying on these facts would have resulted in a violation of basic administrative law principles since a court may only uphold an agency action on [...]

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Dictionaries Don’t Know Best: The Intrinsic Record Prevails (Again)

by | Jan 19, 2023 |

The US Court of Appeals for the Federal Circuit addressed the tension between the intrinsic and extrinsic record in claim construction, holding that the intrinsic record should be relied on first. The Court therefore reversed a district court finding of indefiniteness based on dictionary definitions and expert testimony. Grace Instrument Industries, LLC v. Chandler Instruments Company, LLC, Case Nos. 21-2370; -2370 (Fed. Cir. Jan. 12, 2023) (Chen, Cunningham, Stark, JJ.)

Grace owns a patent for a liquid pressurized viscometer used commonly to test the viscosity of drilling fluid that is used to drill oil wells. Grace’s viscometer uses an “enlarged chamber” between a lower chamber and a pressurization fluid inlet. According to the patent specification, this enlarged chamber was designed to reduce the measurement error in prior viscometer models that was caused by the mixing of sample fluid and pressurization fluid or by friction emanating from a seal in the viscometer. Within the lower chamber of the patented viscometer, there is a rotor having a “means for driving said rotor to rotate.”

Grace sued Chandler, claiming that Chandler infringed Grace’s viscometer patent. During claim construction, the district court found that the term “enlarged chamber” was indefinite, and that because it was a “term of degree,” it must be compared against something objective. The district court entered its final judgment in favor of Chandler. Grace appealed.

The Federal Circuit reversed, explaining that the “enlarged chamber[’s]” size did not need to be compared against any baseline object, but rather needed to be “large enough to accomplish a particular function.” The Court relied on the specification, which explained that the viscometer described in the patent reduced the mixing of sample fluid and pressurization fluid that was common in older viscometer models by using an “enlarged chamber.” The Court also cited the prosecution history, where the applicant explained that the invention solved a “long lasting problem” by reducing the measurement error caused by the friction of the seal or mixing of the fluids in older viscometer designs. Thus, the Court reasoned that a person of ordinary skill in the art would understand that the “enlarged chamber” must be large enough to prevent the mixing of the pressurization fluid and sample fluid to avoid the measurement errors associated with prior art viscometers.

Chandler argued that the term “enlarged chamber” was not a term of art. The Federal Circuit agreed but explained that “the intrinsic record sufficiently guides a skilled artisan as to the meaning of the term” as used in the patent. The Federal Circuit found that the district court erred in relying on a dictionary definition (extrinsic evidence) to contradict the meaning of the term found within the intrinsic record. The specification’s instructions for the meaning of a claim term should prevail over extrinsic evidence. Rebuffing Chandler’s argument, the Court explained that the specification does not need to explicitly define the claim term to govern the interpretation of that term.

The Federal Circuit remanded the case to the district court to reconsider indefiniteness in [...]

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Swing and a Miss: Failed Interferences Don’t Affect Later Ones

by | Jan 19, 2023 |

The US Court of Appeals for the Federal Circuit affirmed the Patent Trial & Appeal Board’s (Board) interference decision finding that priority belonged to the junior party based on sufficiently corroborated reduction to practice. Dionex Softron GmbH v. Agilent Technologies Inc., Case No. 21-2372 (Fed. Cir. Jan. 6, 2023) (Reyna, Chen, Stark, JJ.)

Both parties attempted to instigate an interference by copying each other’s claims regarding a method of operating a liquid chromatography system. Agilent first substantially copied Dionex’s claims but failed to secure declaration of an interference and subsequently amended its claims. Dionex then copied verbatim Agilent’s amended claims, successfully provoking an interference. The Board identified Dionex as the senior party and Agilent as the junior, placing the burden for priority on Agilent.

At the interference, Dionex moved for judgment based on lack of written description for the relevant count language (emphasis added):

. . . determining a movement amount of the piston within the chamber from a first position to a second position to increase a pressure in the sample loop from an essentially atmospheric pressure to the pump pressure, based on the pump pressure […] wherein decreasing the volume includes forwarding the piston within the chamber by the determined movement amount from the first position to the second position.

Dionex contended that Agilent’s specification lacked written description for “determining a movement amount” and subsequently “forwarding the piston,” wherein the order of those two separate operations was important and lacking support. Dionex also contended that while the relevant specification was Dionex’s patent for a majority of count terms, some terms, such as “determining,” should be viewed in light of Agilent’s application. The Board disagreed and found that Agilent’s specification was controlling and contained adequate written description to support the count.

In finding Agilent’s written description adequate, the Board rejected Dionex’s contention that the claims required a determination of movement amount before forwarding the piston. Applying the broadest reasonable interpretation standard, the Board found that the count language permitted determination of movement amount while forwarding the piston and that consequently there was adequate support in the specification.

Both parties moved for judgment on priority. The Board granted Agilent’s motion, finding that even as the junior party, Agilent proved conception and reduction to practice before Dionex’s earliest conception date. Applying the rule of reason, the Board found that the testimony of one of Agilent’s co-inventors was sufficiently corroborated by two coworkers to show successful reduction to practice by the critical date. The Board also credited Agilent’s coworker testimony in denying Dionex’s contention that Agilent’s reduction to practice lacked a pressure senor and credited testimony stating that a high-pressure pump with a built-in pressure system was used. The Board also declined Dionex’s request to draw a negative inference from the lack of testimony of the other co-inventor, crediting Agilent’s explanation that the testimony would have been cumulative. Dionex appealed.

On appeal, the Federal Circuit found that the Board had correctly treated Agilent’s specification as the “originating specification” because it was Dionex’s [...]

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More Delays: Appeal Dismissed under Collateral Order Doctrine

by | Jan 12, 2023 |

The US Court of Appeals for the Federal Circuit dismissed a patent holder’s interlocutory appeal for lack of jurisdiction under the collateral order doctrine. Modern Font Applications LLC v. Alaska Airlines, Inc., Case No. 21-1838 (Fed. Cir. Dec. 29, 2022) (Reyna, Cunningham, JJ.) (Newman, J., dissenting).

Modern Font Applications (MFA) is a nonpracticing entity that holds the exclusive license to a patent disclosing a method for operating systems to read and display nonstandard fonts. In 2019, MFA sued Alaska Airlines in district court for patent infringement. During the proceeding, Alaska Airlines designated portions of its source code files as confidential information for attorneys’ eyes only under the district court’s standing protective order. MFA moved to allow its in-house counsel to access the source code, and Alaska Airlines moved to keep it protected. The district court denied MFA’s motion and granted Alaska Airlines’ motion, finding that the source code amounted to a trade secret and MFA’s in-house attorney was properly excluded as a “competitive decisionmaker.” MFA sought interlocutory appeal of the order.

The Federal Circuit found that it lacked jurisdiction to review the discovery order. The Court explained that US Congress holds appellate courts to the final judgment rule, which states that decisions are only appealable if they end disputes on the merits, leaving nothing but execution of the judgment. A “practical construction” of this rule is the collateral order doctrine, which allows appellate review of a “small class” of attendant rulings. To qualify for review under this doctrine, a decision must be “conclusive”; address an important question, separate from the case’s merits; and be such that an appeal of the final judgment would not encompass a review of the decision at issue. The Federal Circuit stressed that the Supreme Court of the United States “has repeatedly emphasized the limited scope” of this doctrine.

The Federal Circuit found that MFA’s appeal failed the third prong of the collateral order doctrine. The Court noted that across appellate jurisdictions, pretrial discovery orders almost always fail this prong because review of final judgments can usually adequately address discovery issues. MFA argued that dismissing its appeal would prejudice MFA both financially and by eliminating its key litigation strategists and that the district court’s error would not be sufficient to overturn a final adverse judgment. The Court was not persuaded, noting that any financial harm was speculative, and that MFA could hire outside counsel or experts instead of relying on its in-house attorney. The Court also reiterated that to merit review under the collateral order doctrine, the issue must be “effectively unreviewable” on appeal, and the likelihood of an appellant’s success is irrelevant. The Court also found that MFA’s appeal failed the second prong because the exclusion of MFA’s attorney was too entangled with the ultimate outcome of the case to be considered an issue “separate” from the case. Because MFA failed two of three collateral order doctrine prongs, the Court did not address the first prong and dismissed the appeal for lack of jurisdiction.

In [...]

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Contingent Statement Doesn’t Unequivocally Abandon Defense of Challenged Claims

by | Jan 12, 2023 |

The Director of the US Patent & Trademark Office (PTO) initiated a sua sponte review of the Patent Trial & Appeal Board’s (Board) adverse judgments in multiple related inter partes review (IPR) proceedings. The PTO Director ultimately ordered that the judgments be vacated and remanded for further consideration. Apple Inc. v. Zipit Wireless, Inc., IPR2021-01124; -01125; -01126; -01129 (Dec. 21, 2022) (Vidal, Dir.)

Apple filed six petitions for IPR, all of which were instituted and assigned to the same panel of Administrative Patent Judges. After institution, Zipit filed responses to two of the IPRs, but not the other four companion IPRs. The Board held a hearing in the two IPRs for which Zipit filed responses. At the end of the hearing, Zipit’s counsel was asked with reference to the four companion IPRs whether Zipit was “not contesting if a final written decision or adverse judgment was entered with respect to those IPRs.” The counsel responded, “correct . . . if the board determines that [Apple has] met their burden of proof with respect to those claims Zipit hasn’t filed any opposition.” Based on this exchange, the Board determined that Zipit abandoned the contests and entered adverse judgments.

The PTO Director initiated review under the interim process for Director review §§ 13, 22, which allows sua sponte Director review, explaining that notice would be given to parties of the proceedings if such a review was initiated. Upon review, the PTO Director did not consider the counsel’s statements to be an “unequivocal abandonment of the contest of these proceedings.” In an IPR, a petitioner has the “burden of proving a proposition of unpatentability by a preponderance of the evidence” and the “burden from the onset to show with particularity why the patent it challenges is unpatentable.” The PTO Director’s interpretation of Zipit’s statements was that “non-opposition was contingent on the Board determining that [Apple] met its burden of proving by a preponderance of the evidence that the challenged claims are unpatentable.”

The PTO Director thus vacated the Board’s adverse judgments and remanded the proceedings to the panel to issue either an order clarifying whether Zipit indeed abandoned the contest or a final written decision addressing the patentability of the challenged claims.



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