2010 June

We are pleased to announce that Woodard, Emhardt partners Thomas Henry, Spiro Bereveskos and Daniel Lueders have been named Super Lawyers for 2010. Additionally, Woodard, Emhardt associate Marta Paul has been named a Rising Star for 2010. Congratulations to all!

Woodard, Emhardt partner Holiday W. Banta was a featured presenter at the Butler University initiation of students chosen for membership in Phi Beta Kappa on April 10, 2010. The President of Butler University, Dr. Bobby Fong, was also a featured speaker. Phi Beta Kappa is the nation’s oldest and most respected academic honor society, of which Ms. Banta is a member. Ms. Banta is President of Alpha Association of Indiana, the first Phi Beta Kappa alumni association in Indiana. Congratulations to all Phi Beta Kappa initiates for 2010!

Partners Holiday W. Banta and T.J. Cole celebrated their 5th year as chairs of the 12th Annual Elegant Vintages International Wine Auction, which was a total sell-out and raised over $130,000 for the Indianapolis Zoo. The event took place in downtown Indianapolis on Saturday, March 20, 2010, at the Conrad Hotel. Many other Woodard Emhardt members volunteered at the event. Numerous wine lots were auctioned off, including many rare bottles, as well as many intriguing non-wine items, such as unique jewelry and exclusive “back-stage” zoo experiences.

Woodard, Emhardt partner Chuck Schmal was one of the featured speakers at a recent CLE reviewing interesting case law and other developments in the past year in the areas of patent, trademark, copyright and internet law. Mr. Schmal’s presentation focused on developments in patent law during 2009. The seminar was held at the new Indianapolis Bar Association (“IBA”) Education Center on April 27, 2010 and was hosted by the Intellectual Property Section of the IBA. Please contact us for more information on Intellectual Property CLEs sponsored by the IBA.

Mr. Schmal’s presentation materials can be accessed by clicking here.

In a recent decision, the Federal Circuit ruled a company’s patent unenforceable due to the inequitable conduct committed by the company’s non-inventor president. As background, Avid’s founder and president, Dr. Hannis Stoddard, hired three engineers to develop a product based on his idea of identifying and processing recovered animals. Dr. Stoddard was not an inventor on the patent that ultimately issued, but he did demonstrate an early version of the technology at a trade show more than a year prior to the filing date of the issued patent. This demonstration was not disclosed to the United States Patent and Trademark Office (“USPTO”) during prosecution of the patent, and Dr. Stoddard did not dispute that this information was withheld with specific intent to deceive the USPTO for the purposes of obtaining a patent. He argued that he was neither an inventor nor an attorney and therefore owed no duty of candor to the USPTO; however, the district court disagreed and found Avid’s patent unenforceable for inequitable conduct committed by Dr. Stoddard. 

The regulations governing inequitable conduct are provided by 37 C.F.R. §1.56 (“Rule 56”), which imposes a duty to disclose information to the USPTO when an individual is (1) associated with the filing and prosecution of a patent application, and (2) knows that the information in question is material. For purposes of identifying who owes a duty of candor to the USPTO, Rule 56 defines “individual(s) associated with the filing or prosecution of a patent application” as (1) each named inventor, (2) each attorney or agent that prepares or prosecutes the application, and (3) every other person who is substantively involved in the preparation or prosecution of the application and who is associated with the inventor or assignee. 37 C.F.R §1.56(c). 

Dr. Stoddard is neither an inventor nor an attorney or agent involved in the preparation or prosecution of the patent, so the issue of whether or not he owed a duty to candor to the USPTO involved an analysis of whether or not he was “substantially involved” in the preparation or prosecution of the patent, and whether or not the prior demonstration was material to patentability. 

With respect to “substantially involved,” the Federal Circuit identified a number of factors in affirming the ruling of the district court that Dr. Stoddard met this requirement. Some of these factors included his position and responsibilities in the company, his involvement in hiring the engineers/inventors to develop the product, and his communication with the inventors during prosecution of the patent in Europe. 

With respect to materiality, the Federal Circuit dismissed Avid’s argument that the demonstration was not material to the patentability of the claims even though it would not have lead to a proper §102(b) rejection by the USPTO. Indeed, the demonstration involved a preliminary product that failed to contain all of the elements of the issued patent claims. Moreover, an infringement jury was given information regarding the demonstration and still found the patent valid. However, the court reasoned that the demonstration, while not invalidating, was the closest prior art and was thus material. By doing so, the court relied on the “reasonable examiner” standard, which was written out of the old Rule 56 (i.e., prior to the 1992 amendments). The current Rule 56 is much more objective and likely would have found this demonstration non-material to patentability. 

The Federal Circuit thus affirmed the lower court’s ruling that Avid’s patent was unenforceable for inequitable conduct committed by Dr. Stoddard. This case seems to be a close call, and it certainly didn’t help that Dr. Stoddard purposefully withheld the information knowing that it would likely have some impact during prosecution. If anything, this case serves as a reminder to submit any relevant information to the USPTO even if the person aware of this information is only remotely involved in the preparation and prosecution of a patent application. 

See Avid Identification Sys. v. Crystal Import Corp., No. 09-1216 (Fed. Cir. April 27, 2010).

The Ninth Circuit issued an ironic ruling last month regarding levying domain names to satisfy a prior judgment. In Office Depot, Inc. v. Zuccarini (9th Cir., Feb. 2010), the Ninth Circuit ruled that a creditor can levy a domain name of a debtor to satisfy a judgment. 

John Zuccarini registered hundreds of domain names incorporating other individual’s trademarks, including “officedepot.com.” Office Depot successfully sued Zuccarini under the Anticybersquatting Consumer Protection Act (“ACPA”), 15 U.S.C. § 1125(d). The ACPA provides a cause of action for trademark owners against persons who register their mark(s) as domain name(s) to profit from the trademark. Office Depot obtained a judgment against Zuccarini, but was unable to collect and subsequently assigned the judgment to DS Holdings. 

DS initially sought to have 109 “.com” domain names that were registered to Zuccarini transferred directly to it. However, a California statue prohibited the court from ordering transfer of property held by a third party (a registrar maintains domain name registrations). DS then successfully had the court appoint a receiver to take possession of the domain names and sell them to satisfy the judgment. 

The irony is that this judgment arose from Zuccarini’s liability from registering these domain names to sell to trademark owners for profit. Now, DS will presumably sell the same domain names to the same trademark owners to satisfy the judgment. While this situation likely does not meet the definition of bad faith required under the ACPA, the end result is the same: a third party selling a domain name confusingly similar to another party’s trademark. 

In any event, this decision provides a roadmap to levying domain names to satisfy a judgment. In many cases, domain names would not be worth the effort to seize. But in other cases, domain names can have significant commercial value, making such efforts worthwhile.

In case you don’t have enough videos to watch, the United States Patent and Trademark Office (“USPTO”) launched a portion of its new Trademark Information Network where anyone can view news broadcast-style videos on its website that cover important topics and can teach you about the various phases of the trademark registration process. The site, which is not yet fully populated, will provide video walk-through of the entire trademark application process. Examples of the videos that will be available include: 

•  Before You File – overview of the most important issues you should be aware of when filing a trademark application, including trademark availability searching, ownership information, differences between drawings and specimens, identifications of goods and services, and filing bases.
•  Searching – use of the Trademark Electronic Search System (TESS) and an overview of the system and tips for how to use the system effectively.
•  Applicant Information – focuses on what is meant by the term “applicant.”
•  Drawing Issues – focuses on what is meant by the term “drawing” and how to comply with the requirements for submitting a drawing to the USPTO.
•  Goods and Services Issues – focuses on identifying the correct “goods and services” for filing in association with your application.
•  Basis Information – provides specifics about the filing requirements for both Section 1(a), Use-in-Commerce, and Section 1(b), Intent-to-Use-in-Commerce, filing bases.
•  Specimen Issues – provides examples of acceptable specimens and highlights the differences between a “drawing” and a “specimen.”
•  After You File – provides an overview of the most important issues you should be aware of after filing your application. It covers such topics as using the USPTO’s electronic resources to keep your application current, who to contact with questions, and what you must do to avoid abandonment.
•  Post-Registration Issues – provides an overview of the most important issues you should be aware of after your application has matured into a registration. The video explains the required maintenance documents that you must file to keep your registration alive, as well as discusses an optional filing to enhance the legal strength of your registration. 

The Anchor in the videos is the Trademark Information Network’s Mark Trademan. We will leave it to you as to whether his name is either a great coincidence or an attempt at humor.

The European Patent Office (“EPO”) has changed its rules for filing Divisional applications. Previously, divisional applications could be filed from any pending European application. Now, the deadline for filing voluntary divisional applications is 24 months from the date of the first official communication by the Examining Division. Note that search reports and search opinions do not trigger the 24 month period because they are issued by the Search Division, not the Examining Division. Also note that a new unity of invention objection establishes a new 24 month period for filing a divisional application. 

For pending applications for which the 24 month period has expired or expires before October 1, 2010, the deadline for filing a divisional application will be extended to October 1, 2010. Please let us know if you would like for us to review your European patent portfolio before the October 1, 2010 deadline. Additionally, if you have a European case of particular importance and would like more information regarding filing a divisional application, please let us know that as well. 

Click here for related information regarding changes to EPO patent practice

The United States Patent and Trademark Office (“USPTO”) is considering a proposal which would make a change to missing parts practice in nonprovisional applications. The proposed change, if adopted, would somewhat extend the existing 12 month decision-making time provided by a provisional application to 24-months. The proposal would benefit applicants by giving them additional time to determine if patent protection should be sought – enabling them to defer additional fees and enabling applicants to focus efforts on commercialization during this expanded provisional period. 

Currently applicants have a one-year period from the filing date of a provisional application to file a corresponding nonprovisional application in order to claim the benefit of the provisional application. The proposed change would not alter this requirement, but instead would provide applicants with more time to reply to a missing parts notice in a nonprovisional application that claims the benefit of a provisional application. A missing parts notice is typically issued when a nonprovisional application is filed without complete payment of the required fees and/or with an unsigned inventor’s declaration. 

Under the proposal, applicants would be permitted to file a nonprovisional application with at least one claim within the 12-month statutory period after the provisional application was filed, pay the basic filing fee, and submit an executed oath or declaration. In addition, the nonprovisional application would need to be in condition for publication and applicant would not be able to file a nonpublication request. Applicants would be given a 12-month period to decide whether to pay the required surcharge and the additional required fees. 

Most notably, the USPTO proposal does not allow an applicant to defer the legal costs incurred in preparing a nonprovisional application. Applicants would still be required to make a decision whether or not to incur those costs and file their nonprovisional application prior to the 12 month window. 

The USPTO is currently accepting comments on its proposal before considering it for implementation. A copy of the USPTO Notice is available here.

“Project Exchange” is a program initiated by the United States Patent and Trademark Office (“USPTO”) allowing applicants having more than one application currently pending at the USPTO to receive expedited review of one application in exchange for withdrawing an unexamined application. The program was initially limited to applicants claiming small entity status; however, the USPTO has more recently announced that this program will be available to all applicants. 

The purpose of this program is to reduce patent backlog at the patent office, as well as give applicants more control over the priority in which their applications are examined. In exchange for abandoning an application that may be less important, an applicant can advance a more important application to the front of the examination queue. In theory, this program will also benefit applicants that do not qualify. Indeed, applicants should see their applications taken up for examination more quickly than would otherwise occur in the absence of this program even if they have only one pending application or do not have a pending application they are willing to abandon. The expanded Project Exchange will be limited to 15 applications per entity through December 31, 2010.

Please contact is if you would like to learn more about “Project Exchange.”