On September 16, 2011, President Obama signed the America Invents Act (AIA) into law. The AIA makes numerous changes to U.S. Patent Laws. To help with the transition, the U.S. Patent and Trademark Office (USPTO) has created an on-line guide that contains information about the changes the Act will bring. Some of those changes, such as patent fees, went into effect on Monday, September 26, 2011.  Other changes will fall into place over the next twelve to eighteen months. The site also includes a timeline that shows some major highlights in the coming year.  Finally, the USPTO website provides the opportunity to submit comments on the AIA and the agency’s implementation of the law.

Earlier today President Obama signed the Leahy-Smith America Invents Act (AIA) into law, just several days after the USPTO issued the eight millionth patent. The AIA represents the most comprehensive change to U.S. Patent Law in more than 50 years. While many provisions do not take immediate effect, the provision mandating a 15% increase in many USPTO fees takes effect on September 26, 2011. If you have an application nearly ready to be filed, a patent maintenance fee due, or an issue fee that can be paid, taking action by September 26, 2011 will avoid the 15% fee increase.

As reported by Fox news, President Obama will sign the "America Invents Act" Friday with an event in the Washington, DC area. Speaking to reporters on Air Force One, White House Press Secretary Jay Carney said, "The America Invents Act passed with the president's strong leadership after a decade of effort to reform our outdated patent laws. Patent reform is an issue both the White House and Congress have pushed for some time. The America Invents Act, previously known as the Patent Reform Act of 2011, was passed by the House in June with large bipartisan support. The U.S. Senate approved the House version of the bill last week voting 89-9.

This year, the Internet Corporation for Assigned Names and Numbers (ICANN) approved a new .XXX top level domain (TLD) for the online adult entertainment industry. This is great news for the porn industry. However, companies in other industries aren't so excited about the prospect of having to register their trademarks with .XXX domain names, or alternatively, potentially allowing third parties to register their trademarks with the .XXX TLDs and then link the domain to porn sites. But all is not lost, and ICANN has set up a procedure for trademark owners to protect their marks.The .XXX domains will become available in stages. From September 7, 2011 through October 28, 2011, concurrent "sunset" periods will run whereby owners of registered trademarks both inside and outside the adult entertainment industry may take action to reserve .XXX TLDs corresponding to their registered trademarks. One of the sunset periods, "Sunset B," is specifically geared toward non-adult industry owners of registered trademarks. During this time, trademark owners can reserve their trademark.xxx to prevent others from registering and using the domain name. However, to be eligible, the owner must hold a valid US or foreign trademark registration for the exact mark that it is seeking to block as of September 1, 2011. The owner must also pay a one-time fee, which has not yet been finally determined but is expected to be $200-$300. Once filed,, the blocked .XXX domain name will link to a standard page stating that the domain has been reserved, and the trademark owner will not be listed in WHOIS in connection with the domain and will not actually own the registration.After the sunset periods end, general availability for all .XXX TLDs will begin on December 6, 2011.If you have registered trademarks you would like to block from the .XXX TLD, or if you have further questions, please contact Mindi Giftos at (608) 234-6076 or mgiftos@whdlaw.com for more information. You may also visit http://www.icmregistry.com/sunrise-b.php.

On the heels of the recent Federal Circuit en banc decision in Therasense, Inc. v. Becton, Dickinson & Co., — F.3d — (Fed. Cir. 2011), the U.S. Patent and Trademark Office (USPTO) is proposing to revise Applicants’ duty to disclose by limiting the scope of materiality. Particularly, the USPTO is proposing to adopt the “but-for-plus” standard for materiality.

The proposed new rule, 37 CFR §1.56(b), would read as follows:

The most important element of the proposed rule change is the fact that simply failing to disclose information will not be considered material if the pending claim is itself allowable, without inclusion of the information. If Applicants go beyond simple omission, and engage in “affirmative acts of egregious misconduct,” those acts will be treated as material.

The USPTO explained that bringing its rules in line with the reasoning in Therasense will reduce the frequency with which applicants and practitioners are charged with inequitable conduct, reduce the number of submissions of marginally relevant prior art, and provide a simpler, unitary standard for the patent bar to implement, while at the same time continuing to prevent applicants from deceiving the USPTO and breaching their duty of candor and good faith.

The public is invited to submit comments to the proposed rule by September 19, 2011.

“One way to measure the greatness of our society is to look at how we treat our weakest members, such as our growing population of people afflicted with Alzheimer’s.” That is a quote from a recent Wisconsin Court of Appeals decision that, although well-intended, may ultimately harm patients suffering from Alzheimer’s disease and related dementia disorders. On April 27, 2011, the Wisconsin Court of Appeals issued an opinion concluding that people suffering from dementia and Alzheimer’s disease should not be subject to Chapter 51 commitments because such conditions are not “treatable.”  In re Helen E.F., 2010 AP 2061 (Ct. App. April 27, 2011). In that case, Helen E.F., an 85-year-old woman with Alzheimer’s dementia, was committed to St. Agnes Hospital pursuant to Wis. Stat. ch. 51 because of her disruptive behavior. Id. at ¶ 9. Three days later, a court commissioner conducted a probable cause hearing on the ch. 51 petition. Id. at ¶ 6. The court commissioner concluded that there was insufficient probable cause to proceed. Id. At that point, the ch. 51 proceeding was converted to a Wis. Stat. ch. 55 protective placement action and a 30-day temporary guardianship was issued. Id. Read more...

In the wake of two recent district court rulings that the patent marking statute, 35 U.S.C. § 292 is unconstitutional, the United States District Court for the Western District of Wisconsin has stepped into the fray to disagree. On March 15, 2011 in an Opinion and Order on defendants' motion to dismiss in Hy Cite Corporation v. Regal Ware, Inc., Case No. 10-cv-168, Hon. William Conley held that the patent marking statute does not violate the "take care" clause of Article II of the United States Constitution. The finding was based in large part on the history of qui tam actions and the fact that the government can in fact intervene if it so chooses. The decision can be read here. The court also applied the Rule 8 pleading standard in determining the sufficiency of plaintiff's allegations in the complaint. This is contrary to many other district courts, who have required plaintiffs to adhere to the heightened standard of Rule 9 in pleading false marking claims.

In keeping with its commitment to protect the lives of children and families, the U.S. Consumer Product Safety Commission is launching “CPSC 2.0,” a comprehensive social networking initiative that will make lifesaving and other safety information more accessible to consumers. Utilizing a variety of technologies and social media sites, CPSC will rapidly expand its reach to millions of consumers.

 

Through social media, CPSC can directly reach millions of the moms, dads and others who need our safety information the most,” said CPSC Chairman Inez Tenenbaum.

If your company buys or sells goods internationally, whether online or otherwise, you will want to familiarize yourself with the newly released Incoterms® 2010. The Incoterms® are an internationally recognized standard in commerce published by the International Chamber of Commerce and are used worldwide in both international and domestic contracts for the sale of goods (such as equipment, parts and computers). The Incoterms® were first published in 1936 and offer internationally accepted rules of interpretation for many common commercial terms.The Incoterms® help contracting parties avoid expensive misunderstandings by clarifying the responsibilities and risks involved in the delivery of goods overseas. The rules are developed and maintained by experts identified by the International Chamber of Commerce with expertise in international business transactions. The Incoterms® are updated generally every 10 years. A copy of the Incoterms® 2010 can be purchased through the ICC website.Now is a perfect time to review your standard purchase and sale agreements to determine whether updates are appropriate. Consider both your paper contracts as well as your online agreements (such as terms and conditions of sale, purchase orders, acknowledgments and the like). For companies that outsource manufacturing and fulfillment operations to foreign parties, now is the time to update those agreements. Likewise, if your company sells and markets products through foreign distribution channels, now is a good time to confirm that those distribution agreements are in conformance with changes to international commercial law.

On October 18, the Fifth Circuit ruled that a software licensee violated a license agreement by allowing its lawyers to access and use the software. The court found that this use was a violation of the license because the license expressly prohibited any use of the software other than that explicitly granted by the license—and no right to allow use "on behalf" of the licensee was granted. (See Compliance Source Inc. v. GreenPoint Mortgage Funding Inc.). The Fifth Circuit reversed the summary judgment motion that had been granted in favor of the licensee at the district level.In the case, GreenPoint installed software that develops and prepares loan documents, and then allowed its attorneys to access and use the software to prepare loan packages for GreenPoint loans. The court found this to be a violation of the license, and stated that it would not "look past the actual language of a licensing agreement and absolve a licensee who grants third-party access merely because that access is on behalf of, or inures to the benefit of, the licensee." In distinguishing prior cases, the court held that the license itself must allow use "on behalf of" the licensee in order for third-party contractors or agents to have the right to access or use the software. While the concept that those rights not granted are reserved is certainly not new, this case highlights the importance of carefully drafting or negotiating license agreements to insure that all of those people you need to use the software actually have the right to do so.

Recently, Congressman Bob Latta (R-Bowling Green) introduced new legislation in response to the wave of patent marking lawsuits that have been filed since the Federal Circuit issued its decision in Forest Group v. Bon Tool, which increased possible damages for violations to potentially $500 per article (as opposed to $500 per violation). The legislation, H.R. 6352, the Patent Lawsuit Reform Act of 2010, would revert back to the standard that courts were applying prior to Bon Tool and violators of Section 292 of the Patent Act would be fined a single $500 fine if found guilty of false patent marking. The legislation will also require the individual bringing the false marking lawsuit to have suffered actual harm to have standing. Currently, any individual may bring a claim on behalf of the United States for false patent marking.

“Because of the Forest Group decision, this legislation is now needed to help companies fend off frivolous lawsuits and strengthen current law. During this time of economic uncertainty, companies should not have to worry about expending additional resources on lawsuits based on one court’s interpretation of current law,” Latta stated after introducing the legislation.

The full text of the legislation is not yet available, but you may track the bill's progress and read the press release here.

Consider this common scenario. The business is owned 50%-50% by the two owners.  Their relationship becomes strained and they cannot agree on how to manage the company.  What happens?  In most governance structures, if there is a deadlock, nothing happens. As a practical matter it may be difficult or impossible for the business to: borrow money; lease space; hire a key employee or otherwise expand. Many business owners believe no growth is synonymous with a slow road to winding up and closing down.

1. Formation issues relate to what each partner contributes and what do they get for that contribution. Does everyone contribute cash? Do people contribute other tangible or intangible property? What about a contribution of services? Are owners required to fund future operations through additional capital contributions? What percentage ownership does each partner receive?
   
2. Operational issues are about decision making. Who gets to decide things? Do you require a majority or unanimous vote? Is the authority to decide different for smaller issues than it is for bigger issues? How do you resolve deadlocks or tie votes?
   
3. Finally, the exit issues should take into account (1) the identification of what events trigger an obligation or an option to exit the business; (2) what is the price or how is price determined; and (3) the payment terms. 

On August 31, 2010, the United States Court of Appeals for the Federal Circuit issued its decision in Stauffer v. Brooks Brothers. In its opinion, the Federal Circuit held that the plaintiff patent attorney did have standing to sue Brooks Brothers as a qui tam plaintiff. The court also held that the United States had a right to intervene in the patent marking case. This much anticipated decision is likely to embolden would-be patent marking plaintiffs and the number of patent marking lawsuits will undoubtedly continue to grow. If your company has not yet completed product review to ensure markings are correct and up-to-date, now is a very good time to do so. To read the decision, click here.

In what will be a test of just how broad the scope of protection of the FACEBOOK trademark is, Facebook, Inc. has filed suit against Teachbook.com LLC for trademark infringement and related causes of action in the Northern District of California.  Teachbook.com LLC operates a social networking site for educators and teachers (http://www.teachbook.com/), which according to Facebook is deliberately and willfully misappropriating the FACEBOOK brand.  Facebook is arguing that if third parties can use any "generic plus BOOK" mark for online networking services, the word "book" will become generic for online community services, thereby diluting the FACEBOOK trademark.  Key to this argument is Facebook's position that the word "book" is highly distinctive as used in the context of online communities and networking sites.  Further supporting Facebook's complaint, Teachbook touts its service as a substitute for Facebook on its website.  However, the USPTO saw no likelihood of confusion when they approved Teachbook's federal trademark application in September of 2009.  (Facebook has opposed this registration as well.)This should be an interesting case in evaluating the scope of protection of famous marks.

On July 14, members of Congress introduced a proposed federal data security law for the third consecutive Congressional session, even though the previous two versions of the bill were not acted on. The bill would require businesses to implement, maintain, and enforce reasonable data security policies and procedures, and would apply to all businesses regulated by Gramm-Leach-Bliley, businesses covered by the Fair Credit Reporting Act, and the big catch-all—businesses that maintain or communicate sensitive account or personal information in providing services to covered financial entities. Importantly, the bill would pre-empt the 46 different state laws on data security that already exist—eliminating the conflicting standards that exist today, and closing the gaps where no such law exists.  The bill would only require notification to consumers of breaches of security when harm was reasonably likely—not automatically after any breach. A good idea whose time has come?  We will see...