WHD Intellectual Property Litigation Blog

Have you recently received one or more official-looking notices or invoices relating to your trademarks, but were unsure who the notice was actually coming from? Does the notice indicate for a small fee, you can obtain registration or monitoring services? Were you surprised the notices were sent to you directly from the trademark office rather than through your attorney? If you answered yes to these questions, you have probably been the recipient of one or more trademark registry scams. Read more...

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said, "The America Invents Act passed with the president's strong leadership after a decade of effort to reform our outdated patent laws.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.

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.

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.

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.

The Uniform Domain Name Dispute Resolution Policy (UDRP) was designed to provide a quick, low-cost arbitration-like process for resolving domain name disputes.  Governed by the World Intellectual Property Organization, a UDRP complainant must establish that (i) the domain name at issue is confusingly similar to their trademark, and (ii) that the domain name is used in bad faith. While the UDRP is effective in many situations, the case Volvo Trademark Holding AB v. Volvospares.com illustrates one of its big problems—proving bad faith in "grey areas."In this case, the domain name www.volvospares.com was used to sell low-priced parts for Volvo cars; the problem was that the registrant had no connection with Volvo. When Volvo filed a complaint under the UDRP, the arbitrator did not find the domain to have been registered in bad faith because the website had a disclaimer that it was not related to Volvo, and there was no other proof of misrepresentation. However, when Volvo filed a federal cyber-squatting complaint, where the discretion of the judge is far broader, Volvo won transfer of the domain name. The court found what should have been clear in the UDRP—there was intent to divert sales using the Volvo mark.The case illustrates one of the problems with the UDRP. While the UDRP is very efficient and effective in open-shut cases, it is often better to file a cyber squatting complaint where more complex issues of fact will arise.

After six years of battling with Google in the courtroom over Google's sale of Rescuecom's trademarked adwords, Rescuecom has dropped its trademark infringement lawsuit.As we previously wrote, in April 2009, the Second Circuit Court of Appeals held that Google's sale of trademarked adwords constituted "use in commerce."  This holding was a major victory for Rescuecom as some courts had previously been readily dismissing adwords cases on this issue at the very early stages of litigation.  The case was remanded to district court where Rescuecom next had to prove that the sale of trademarked adwords also constituted "likelihood of confusion," the second prong of a trademark infringement action.  The case has been closely followed by both the business and legal communities since the issue of whether use of trademarked adwords can constitute trademark infringement is largely unsettled.So why would Rescuecom simply drop its important case after years of litigation?Apparently Rescuecom found itself on both sides of the adwords action.  Rescuecom purchased the Google adwords "geek squad" to optimize its own search engine ranking.  In October 2009, Best Buy demanded that Rescuecom stop using "geek squad" as an adword.  Rescuecom then quietly brought a declaratory judgment action in the Northern District of New York claiming that its use of the "geek squad" adwords was legitimate.  Best Buy counterclaimed, alleging trademark infringement and substantially the same allegations Rescuecom had asserted in its Google case.  That case is still pending.  It appears, however, that Rescuecom found it difficult to argue both sides of the issue.  Unfortunately, this means the Rescuecom case will not result in the precedent many were waiting for.Interestingly, however, this issue is still percolating internationally.  In September 2009, the European Court of Justice's Advocate General issued an advisory opinion which held that use of trademarked keywords by Google or third-party users through Google's AdWords program did not constitute trademark infringement.  Instead, the Advocate General found that Google was providing information society services.  The advisory opinion, however, is not binding and several cases are still pending in European courts, including the heated adwords lawsuit between Louis Vuitton and Google.

The Northern District of Texas has held that the question of whether modifying a cell phone so that it could work on a third party's mobile phone network (or "reflashing" the phone) constitutes trademark infringement must be determined at trial—and not by summary judgment. The key question: does reflashing constitute "use in commerce" as required under the Lanham Act?In the case, MetroPCS Inc. v. Virgin Mobile USA LP, MetroPCS took branded Virgin Mobile phones and "reflashed" them so that they could work on the MetroPCS cell network. The Virgin Mobile phones were originally locked so that they could only function on a Virgin Mobile cell network—and obviously the phones bear the Virgin Mobile trademark. Virgin Mobile is arguing that reflashing the phones to operate on a different network in effect creates new phones—thus satisfying the "use in commerce" requirement—and therefore the fact that the phones still bear the Virgin Mobile trademarks constitutes trademark infringement.The case illustrates a novel application of trademark law, and while its ultimate success is still undetermined, it may open the door to new application of trademark law in the information technology arena.

An 8-year legal battle ended last week between McDonald's Corp. and the restaurant McCurry over use of the prefix "Mc." McCurry is a restaurant in Kuala Lumpur that serves traditional Indian and Malaysian food, but with a "fast-food ambiance" (see mccurryrecipe.com/). McCurry describes itself as the "first Indian Fast Food Outlet" in Kuala Lumpur.McDonald's sued McCurry in 2001 for trademark infringement for use of the prefix "Mc"—but the Malaysian Federal Court affirmed a lower court ruling last Tuesday that there was a distinguishable difference between hamburgers and curry ("McCurry" is short for Malaysian Chicken Curry according to the owners of McCurry).Interestingly, the McCurry restaurant also uses a red and white color scheme, and also uses a smaller tagline under the name—which looks very similar to the "millions and millions served" tagline under the well-known McDonald's signs. Taken together—a stated intent to create "Western style fast-food ambiance", a similar color scheme, similar signage, and a similar name with the same dominant prefix—it seems a good argument that there was a clear intent to evoke the image associated with McDonald's. Perhaps a trade dress lawsuit would have been more appropriate than a straight trademark infringement suit based only on the word mark itself. In fact, if you look at the McCurry home page there is a video showing the interior of the restaurant—which looks almost identical to any McDonald's restaurant.

In April 2009, the Second Circuit Court of Appeals issued a favorable ruling to Rescuecom, finding that Google's sale of adwords - which often include third party trademarks - constituted "use in commerce" of trademarks under the Lanham Act. The Rescuecom ruling has since prompted a flurry of lawsuits against Google, with claims that its sale of adwords to third parties and competitors constitutes trademark infringement.These cases face a variety of challenges, however. One of the most difficult hurdles for plaintiffs will be proving a likelihood of consumer confusion - something none of them have yet done.  Another substantial obstacle is Google's aggressive defense of its Trademark Adwords Policy. Indeed, Google has taken a very proactive approach in the adword litigation arena.  In May 2009, a class action lawsuit was filed against Google in the Eastern District of Texas. After failing to serve Google for two months, Google turned the tables on its would-be opponent and filed a complaint in late July 2009 against the individual named in the class action seeking a declaratory judgment and a breach of contract claim.That has not stopped the action, however. The newest trademark owner to join the adwords wars against Google is Flowbee International, Inc., who filed a complaint in the Southern District of Texas on August 13, 2009.Stay tuned for more developments.