In a decision likely to be lauded by patent applicants and owners, the Federal Circuit recently issued an opinion that affirms its staunch position that the bar to prove a patent owner made a disclaimer that impacts the claim scope is high. The opinion provides some useful quotes that prosecutors and litigators representing applicants and owners will likely be interested in calling upon when presenting argument against assertions that a previously taken position amounts to a disclaimer or disavowal by the applicant/owner.
In a decision dismissing plaintiffs’ claims of service mark infringement, the District of Massachusetts held that the plaintiffs’ transfer of “goodwill” in an asset purchase agreement also transferred plaintiffs’ rights to their service marks. In Pereyra and City Fitness Group, LLC v. Sedky, et al. (No. 15-cv-12854, 2015 WL 7854061, December 3, 2015) plaintiffs City Fitness and its sole owner, Roberto Pereyra, alleged that defendants unlawfully used City Fitness’s service marks after the parties executed an Asset Purchase Agreement (APA) that did not explicitly transfer the service marks to the defendants. Pereyra and City Fitness negotiated the APA with the defendants for the sale of City Fitness’s three Eastern Massachusetts health clubs, as well as the company’s assets. City Fitness operated its health clubs under the trade name “Leap Fitness” and registered two service marks under that name. The Leap Fitness marks appeared on the company’s signage, letterhead, business cards, t-shirts and its website. Defendants continued to use the marks for identification, marketing and promotional purposes after the deal with City Fitness.
Last month, the U.S. District Court in the Northern District of California ruled that the Federal Circuit’s somewhat bare pleading standard for direct patent infringement is no longer sufficient following recent amendments to the Federal Rules of Civil Procedure, which went into effect on December 1, 2015. The court ruled that the plausibility pleading standard under Bell Atlantic Corp. v. Twombly and Ascroft v. Iqbal now applies to direct patent infringement claims. Continue reading
The U.S. District Court for the Western District of Washington held, in Recognicorp, LLC v. Nintendo Co. Ltd., et al, that claims to certain methods and systems for encoding/decoding image data are not patent-eligible under 35 U.S.C. § 101. Recognicorp is an illustrative example of the use of preliminary motion practice to dispose of patent cases on the pleadings and of how software-based inventions that are premised on seemingly simple algorithms are particularly susceptible to early dismissal.
Last week, the United States Court of Appeals for the Sixth Circuit issued a decision in the case of Cyber Solutions International LLC v. Pro Marketing Sales, Inc. Although the decision blazes no new legal territory, the facts of the case and rulings offer important lessons for both lenders and licensees.
The decision recounts the start up efforts of an emerging company focused on cybersecurity technology. As the company grew, it obtained a secured loan from a lender. In return for the loan, the company granted the lender a first position lien on all company assets including intellectual property. As is typical in any secured financing, the lien extended not just to property then owned by the company but also to property subsequently acquired by the company. Pursuant to the loan arrangement, the company agreed to standard provisions such as a restriction on its ability to sell its assets outside of the ordinary course of business without the permission of the lender.
The blog post discusses how legal provisions, such as a simple confidentiality agreement, a consulting agreement or a multi-billion dollar license, are often a source of misunderstanding, confusion and frustration.
In the post, Konstantin Linnik, who serves as co-chair of the Legal & Regulatory Working Group at MassBio, and his co-author Isaac Hubner relay the story of Dr. Joseph Grocela, a urologist at Massachusetts General Hospital who also moonlighted as a medical device entrepreneur, and detail how misunderstanding a basic legal provision in an employment contract may lead to dashed dreams and a lengthy legal dispute.
They point out that the lesson is to always read and understand any agreement, even if it’s not called a contract, and seek legal help to understand implications when in doubt.
To read the MassBioHQ blog post, click here.
On December 22nd the Court of Appeals for the Federal Circuit issued its sua sponte en banc In re Tam decision regarding the constitutionality of the “disparaging” marks bar under Section 2(a) of the Lanham Act. A Federal Circuit panel previously upheld a Trademark Trial and Appeal Board (the TTAB) decision affirming the refusal under the disparaging marks provision of Section 2(a) of a trademark application for the mark “THE SLANTS.” Would a “substantial composite” of Asians find the phrase THE SLANTS disparaging? The answer was “yes”, as detailed in our earlier blog posting on this case. Judge Moore, writing for the Federal Circuit panel in initially affirming the appeal decision, however, raised the question as to whether the court should consider the constitutionality issues about the registration standard raised by Mr. Tam on an en banc basis. Her peers agreed to do so.
The Federal Circuit recently revisited a question first answered earlier this year in Versata Dev. Grp., Inc. v. SAP Am., Inc., 793 F.3d 1306 (Fed. Cir. 2015) (Versata II): When is a patent eligible for Covered-Business Method Review (CBM review) under AIA §18?
Earlier last month, Director of the United States Patent and Trademark Office (USPTO) Michelle Lee announced the Enhanced Patent Quality Initiative to increase the clarity of issued patents so as to ensure that patent holders and potential users are better informed of the full scope of the patents’ rights when making important business decisions. The initial programs under this initiative will include:
- Clarity of the Record Pilot and Training programs, which will emphasize the importance of maintaining a clearer, more detailed file history. As part of the pilot, examiners will include important claim constructions and more detailed explanations of allowances and rejections as part of the prosecution history; and
- Creation of a Master Review Form, which will track the process of quality reviews to ensure that the review process is unified across all reviewers and will allow these results to be shared with the public. The form will allow for increased data collection of reviews of examiners’ work product across all levels of the USPTO and provide analytics to ensure that the law was properly interpreted and that the applicable reasoning was correctly applied.
The high-level goals of this initiative are to provide greater insight into the criteria that the USPTO uses to evaluate examiners and greater consistency of examination of patent applications across the agency. While a date for the initial programs was not yet formally announced, we will likely see their effects sometime in the new year. Happy patenting!
The America Invents Act (AIA) introduced several changes to inventor oath/declaration practice that took effect in 2012. One such change is the ability to incorporate an inventor’s required declaration statements into an assignment document, thereby reducing the number of documents that must be executed by an inventor in connection with filing a patent application. If an applicant elects to go this route, a single combined declaration and assignment document can be recorded at the United States Patent and Trademark Office (USPTO) and a copy will be automatically placed in the application’s file wrapper. It appears to be the case, however, that this automatic copying by the USPTO of the combined declaration and assignment into the file wrapper for an application triggers a Notice of Incomplete Reply if there is an outstanding Notice to File Missing Parts or Notice to File Corrected Application Papers that identifies a deficiency in addition to the lack of an oath/declaration—despite the fact that the applicant has not made any reply to such a notice.