Supreme Court Issues Long-Awaited Bilski Decision

At long last, the Supreme Court has issued its opinion in Bilski v. Kappos. As widely expected, the Court affirmed the unpatentability of Bilski’s risk-management method. With a majority opinion authored by Justice Kennedy and concurring opinions offered by Justices Breyer and Stevens, the Court, instead of relying on the Federal Circuit’s “machine-or-transformation” test, relied on prior precedent to conclude that the claimed method was an “abstract idea” and thus not patentable.

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Fast-Track Examination

A pilot program of the Trilateral Patent Cooperation Treat (“PCT”)-Patent Prosecution Highway began January 29, 2010, and is planned to run for two years. The program fast-tracks patent examinations in the European Patent Office (“EPO”), the Japan Patent Office (“JPO”) and the United States Patent and Trademark Office (“USPTO”) for PCT applications receiving a positive written opinion of the International Searching Authority or the International Preliminary Examinating Authority from the EPO, JPO or USPTO. 

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Clock Ticking on European Patent Office Divisionals

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. 

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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. 

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All Aboard for “Project Exchange”

“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. 

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Case Law Update: Biotech Patents Invalidated for Failing to Disclose the Best Mode

The Federal Circuit has affirmed an International Trade Commission (ITC) decision finding two asserted patents invalid because they did not satisfy the best mode requirement of 35 U.S.C. §112.

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Occasionally, a patent practitioner will become aware of a prior art reference after the issue fee has been paid, and the question becomes—will the examiner consider the reference at this late stage? The short answer is “yes”. But as you probably guessed, it requires a little more than a simple phone call to the examiner. 

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Case Law Update: Enforcing a Judgment by Levying a Domain Name

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. 

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Trademark Videos on Demand

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. 

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Case Law Update: Inequitable Conduct Law Continues to Evolve

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. 

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Indiana Super Lawyers and Rising Star

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

Woodard, Emhardt Partner Presents at Phi Beta Kappa Initiation

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! 

Congratulations to Woodard, Emhardt partner Christopher Brown on his 15th anniversary with the firm. Chris started with the firm as a clerk on March 28, 1995, and continued working with the firm as a clerk throughout his last year of law school at Indiana University School of Law – Indianapolis. Chris became an associate attorney with the firm in May of 1996, and was elected to the partnership in April of 2002. 

Most Successful Wine Auction To Date in Support of the Indianapolis Zoo

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. 

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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.

Controversial Proposed Patent Rules Rescinded

Go “Green” – Go Fast

Sacrifice One Application and Accelerate Another

Appeals Rules May Not Change Much After All

Avoid Inequitable Conduct

ICANN Going Global

Hefty Fines For False Patent Marking

Save More Money by Filing Online

Extend Your Patent Term

In a recent case (Wyeth v. Kappos), the Federal Circuit issued an opinion concerning how Patent Term Adjustment (PTA) should be calculated.  The USPTO’s method of calculating PTA will now be revised based on the new standard.  The result favors patent owners, and will typically lead to greater length patent terms in the future.  Owners of previously issued patents may be able to secure amended calculations of PTA conforming to the new standard.

As background, PTA is a process by which additional time is added to the standard patent term of 20 years from the earliest priority date when the USPTO causes undue delays during prosecution of the patent application.  PTA is normally calculated by the USPTO after the application has been allowed.  The two most common reasons behind adjusting the term of a patent are that the USPTO has not provided “prompt” responses (A-delay) and that the application pendency exceeded three years (B-delay).  PTA is subject to an overlap limitation whereby if A-delay periods overlap with B-delay periods, the larger of the two controls.

Previously, the USPTO recognized overlap anytime both A-delay and B-delay occurred, reasoning that the B-delay guarantee started with the patent application date rather than three years later.  The Federal Circuit’s new interpretation holds that the B-delay guarantee begins three years after the filing date, effectively limiting overlap to only those instances in which A-delay occurs more than three years from the filing date.

Because the effect of the new interpretation is to add patent term in cases where the USPTO miscalculated, patent owners should consider whether they may be eligible for additional PTA under the new standard.  The USPTO recently announced guidelines regarding requests for recalculation of PTA in light of the revised standard.  According to the guidelines, the USPTO will recalculate patent terms for free for patents issued prior to March 2, 2010, and for which a request is made no later than 180 days after issuance.

Please contact us if you have any questions regarding PTA or would for us to request review of previous PTA calculations for issued patents.

Controversial Proposed Patent Rules Rescinded

After a long fight, the USPTO withdrew its proposed rules package regarding restrictions for continuations and claim limitations.  The challenge to the proposed rules, brought by plaintiffs Tafas, SmithKline Beecham Corp. et al., had made its way to the Federal Circuit.  The withdrawal of the proposed rules occurred following the confirmation of David Kappos as the new director of the Patent Office.  Following the withdrawal of the proposed rules, the Federal Circuit granted dismissal of the case, but denied a motion for vacatur of the district court judgment against the Patent Office.

Go “Green” – Go Fast

The USPTO is introducing a new pilot program which will accelerate the examination of certain pending “green” technology patent applications (including areas such as environmental quality, energy conservation, renewable energy, and greenhouse gas emission reduction). Under normal circumstances, patent applications are examined in the order that they are filed.  Currently, the average pendency time for applications in green technology areas is approximately 30 months to a first office action and 40 months to a final decision.

Under the new program, pending patent applications in green technologies which were filed prior to December 8, 2009, are eligible to be accorded special status and receive expedited examination, which will have the effect of reducing the time it takes to patent these technologies by an average of one year.  For the first 3,000 applications related to green technologies in which a proper petition is filed before December 8, 2010, the agency will examine the applications on an accelerated basis.  The policy behind the program is that earlier patenting of these technologies enables inventors to secure funding, create businesses, and bring vital green technologies into use much sooner.

Additional details on the USPTO pilot program will be available in the Federal Register: USPTO Notice

Please contact us if you would further information on the pilot program or believe you have a case which may be eligible for accelerated review.

Sacrifice One Application and Accelerate Another

The USPTO has launched a pilot program that will give small entity applicants having two or more patent applications currently pending greater control over the priority in which their applications are examined, while also reducing the backlog of unexamined patent applications pending before the USPTO.  This pilot program will allow a patent application from a small entity to receive special, accelerated status if the applicant is willing to abandon an application that has not been examined.  According to USPTO director David Kappos, “[t]he program will accelerate protection for important innovations from independent inventors while reducing our unacceptable backlog.  Getting these inventions to the marketplace quickly will also help stimulate the economy and create jobs.”  The program is being adopted on a temporary basis until February 28, 2010.  Applicants who wish to take advantage of the plan must submit the necessary materials before this designated deadline.  Whereas new patent applications are normally taken up for examination in the order they are filed, applications made special under this pilot program will be advanced out of turn to the front of the examination queue.

Please contact us if you are interested in learning more about this pilot program for small entity applicants.

Appeals Rules May Not Change Much After All

The United State Patent & Trademark Office (USPTO) is considering modifications to rules governing practice before the Board of Patent Appeals and Interferences (BPAI) in ex parte appeals.  Changes to the BPAI rules were first proposed in 2007 and finalized in June 2008 (“final rules”).  However, those changes were withdrawn by the USPTO on the day before they were scheduled to become effective.

Based on the previously submitted comments and public concerns regarding the final rules, the USPTO has recently issued a Notice seeking public comment on possible revisions to the final rules.  A roundtable discussion regarding the proposed revisions is set to be held January 20, 2010 and written comments are to be submitted by February 12, 2010.

More specifically, the changes the USPTO is considering are: (1) deleting portions of the final rules that require the filing of (a) a jurisdictional statement, table of contents, table of authorities, and statement of facts in appeal briefs, (b) a table of contents, table of authorities, and statement of additional facts in reply briefs, and (c) a table of contents and table of authorities in requests for rehearing filed in ex parte appeals; (2) deleting portions of the final rules that require the appellant to specifically identify which arguments were previously presented by the Examiner and which arguments are new; (3) deleting portions of the final rules that require specific formatting requirements and page limits for appeal briefs, reply briefs, and requests for rehearing; (4) deleting portions of the final rules that require appellants to provide a list of technical terms and other unusual words for an oral hearing; (5) allowing the Examiner to continue to enter a new ground of rejection in an examiner’s answer (as is allowed under the current rules); and (6) not allowing the Examiner to file a supplemental examiner’s answer in response to the appellant’s reply brief.

Generally, the proposed modifications will substantially align the final rules with the rules currently in effect.  In practice, only minor changes to the appeal and reply brief would be necessary if the proposed modifications take effect.  Fortunately, the USPTO has proposed that the most onerous provisions of the final rules be deleted.

For further details, the official USPTO Notice is available here.  Please check back on our website (www.uspatent.com) in the future, as we will provide further information once the proposed modifications are finalized and/or additional modifications are proposed.

Avoid Inequitable Conduct

The Federal Circuit has recently affirmed a Northern District of California decision finding, among other things, U.S. Patent No. 5,820,551 (the ‘551 patent) unenforceable due to inequitable conduct. Therasense, Inc.  v. Becton, Dickinson and Co., Case No. 2009-1511 (Fed. Cir. 2010).  During prosecution before the U.S. Patent and Trademark Office (USPTO), the ‘551 patent was rejected on prior art grounds.  In order to avoid the rejection, the Applicant submitted a declaration attesting that the cited prior art’s disclosure of an element being “optionally, but preferably” present in the disclosed device would be interpreted by one of ordinary skill as being “required”.  The Applicant then failed to disclose to the USPTO statements made by the Applicant to the European Patent Office (EPO) in a related European application.  During a proceeding before the EPO, the Applicant argued that the identical prior art language was “unequivocally clear” that the particular element was “optionally utilized” in the disclosed device.  The Federal Circuit found that the Applicant violated its duty of disclosure for failing to make the USPTO aware of the contrary position presented to the EPO.

As a result of the Therasense decision, inventors and their patent attorneys should be mindful of the assertions made to the USPTO and patent offices abroad.  In the event contrary representations are made to another forum, an Applicant should consider whether the USPTO should be made aware of the statements.

To download a copy of the Therasense decision, please click here.  Please contact us if you would like to discuss this case in greater detail.

ICANN Going Global

ICANN (the body responsible for regulating domain names) is expanding the domain name system to better reach an international audience.  Domain names consisting of non-latin characters, including Chinese, Arabic, and Hebrew, are now permitted.  The program enables countries and territories that use languages based on scripts other than Latin to offer their users domain names in non-Latin characters.  The domain names are currently available only to governments and administrations of countries and territories.  However, it is expected that ICANN will eventually expand the program beyond government entities.  There are a number of requirements which must be met before the domain name will be issued, including a demonstration that the domain name constitutes a meaningful representing of the corresponding country or territory name.

To learn more about the program, you can access ICANN’s website at www.icann.org.

Hefty Fines For False Patent Marking

As many patent owners and licensees are aware, U.S. law allows manufacturers of patented products to mark the product with the number of the relevant patent (or simply “patent pending” if a patent has been applied for).  This not only allows a patent plaintiff to collect damages for infringement which occurred prior to the accused infringer receiving actual notice, but also may provide a benefit with respect to the perceived quality of the product.  However, the law also imposes penalties for products which are improperly marked.

Under the statute, a party who falsely marks an unpatented article with a patent number or even the word “patent” may be subject to a fine of “not more than $500 for every such offense.”  35 U.S.C. § 292.  The statute also contains an intent element, requiring that liability be limited to those cases where the false marking was done “for the purpose of deceiving the public.”

Despite the language referring to a penalty “for every such offense,” many courts have interpreted the statute as limiting the total damages to a single $500 fine, even in cases where large quantities of a product are mismarked over a period of time.  This interpretation is based in part on London v. Everett H. Dunbar, a 1910 1^st Circuit case evaluating a previous version of the statute.  179 F. 506.  That version, before being revised in 1952, listed the statutory damages as “not less than one hundred dollars” for each offense.  The London court held that the total damages should still be limited to $100, reasoning that a minimum $100 fine for each unit sold would be out of proportion to the product value in cases involving very cheap products.  Courts continued to follow this interpretation, even after the damages provision was revised from “not less than $100” to “not more than $500” per offense.

However, a recent ruling from the Federal Circuit held that each falsely-marked unit of a product may qualify as a “separate offense” when evaluating damages under the statute.  In Forest Group, Inc. v. Bon Tool Co., the court found that the 1952 statutory revision from a minimum to a maximum fine eliminated the policy concerns regarding excessive damages for cheaper products, as courts now have the discretion to award damages based on a much lower per-unit amount.  93 U.S.P.Q.2d 1097 (Fed. Cir. 2009).  The opinion also noted that Congressional intent favored a per-article award based on another statutory provision which permits members of the public to bring false marking actions on behalf of the government and keep half of any proceeds, reasoning that no plaintiff would go to the expense of pursuing litigation in order to split a single $500 award.

Based on the holding in Forest, manufacturers should to be careful to ensure that any product marked with a patent number or “patent pending” is covered by the listed patent and that the patent is still enforceable.  Particular attention should be paid to products which are manufactured in large quantities, as a total damage award for false marking may quickly escalate based on the per-unit calculation.

Please contact us if you would like more information on patent marking.

Save More Money by Filing Online

The Copyright Office increased its fees for certain types of filings effective August 1, 2009.  The new fee schedule can be found at http://www.copyright.gov/docs/fees.html#ftn.  Under the new fee schedule, the fee for online registration for a basic claim would remain unchanged at $35 for electronic filing.  However, the fee for paper registration filings for a basic claim using the multipurpose form CO is increased from $45 to $50; the fee for paper registration filings for a basic claim using Form PA (performing arts works, including motion pictures), Form SR (sound recordings), Form TX (literary works), Form VA (visual arts works), or Form SE (single serial issues) is increased from $45 to $65.

Introducing our Inaugural Newsletter and Improved Website

We hope you enjoy our first newsletter dedicated to briefing clients on developments in Intellectual Property law.  As a firm, we have continually monitored advancements in this area of law through our internal Patent, Trademark and Trial Practice Groups.  Many clients have found this information to be valuable in the past, so now for the first time, we will be summarizing key developments and sending this information directly to you via periodic newsletters.  Please follow the hyperlinks to the full articles, or access them at our new and improved website at uspatent.com.  While you’re there, please take a few moments to explore our new website.  We designed our website to provide valuable information tailored to specific client needs.  As an example, we have tailored the Resources section of our website to different audiences, including in-house counsel, entrepreneurs, corporate clientele, and U.S. and international attorneys.  We have also added a News and Updates section, with often-changing content to cover recent developments in Intellectual Property law of general interest to a wide audience.  To cover more in-depth topics intended for specialized audiences, we have added a blog which will be continually updated.  We hope you find our website and newsletters useful and look forward to assisting you in the future.  Sincerely, Tom Henry, Managing Partner

Challenge to the USPTO’s Proposed Patent Rules Continues

Upcoming Changes to European Patent Office Practice

U.S. Supreme Court Grants Review in Business Methods Case

Tips for Obtaining and Enforcing Patents in China

Save Money for Design Patents Through the Hague System

Sham Invoices from Third-Party Organizations

Higher Standard to Prove Fraud on the Trademark Office

Tips to Avoid the Pitfalls for Madrid Protocol Trademark Applications

Piracy: From Swords and Cannons to a Mouse and Keyboard

Litigation in the Digital Age of Discovery: How to Ensure “Reasonable” Searching of Electronically Stored Information

The Conflict Between European Privacy Laws and U.S. Discovery Requirements

Midwest IP Symposium

Dedicated Patent Searching Terminals Available at the Central Library

C. David Emhardt Celebrates 50 Year Anniversary with Woodard, Emhardt

Patents

Challenge to the USPTO’s Proposed Patent Rules Continues

In July, the Federal Circuit granted rehearing en banc in Tafas v. Doll regarding the USPTO’s power to implement new rules on restrictions for continuations and claim limitations.  The original appeal was taken from a summary judgment decision in favor of plaintiffs Tafas, SmithKline Beecham Corp. et al., and the Federal Circuit initially affirmed in part and vacated in part.  Plaintiffs petitioned for the rehearing that was granted.  The parties jointly filed a request to stay the en banc review until 60 days after the U.S. Senate confirms David Kappos as the new director of the Patent Office, giving the new director an opportunity review the rules at issue and make any changes to the Patent Office’s position with respect to the proposed rules.  The court granted the stay and recently issued an order setting briefs due by late October.

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Upcoming Changes to European Patent Office Practice

Although it is still several months away, the EPO will dramatically changes its practice effective April 1, 2010 relating to divisional applications and European search reports. A review of the changes is presented below:

• Limitation on Filing Divisional Applications

In addition to tight substantive limitations on divisional applications, the EPO will temporally limit such applications. As of the effective date, any divisional application must be filed within 24 months of the Examiner’s first communication or a unity-of-invention communication. A six-month grace period is provided for filing of divisional applications based on parent applications filed before the effective date.

• Requirement to Respond to Search Report

As of the effective date, a response must be filed with respect to each EP search report. The deadline for the response is six months from the publication date of the search report, or two months in the case of an extended search report.

• Invitation to Respond to PCT Written Opinion

The EPO will not conduct a new search in PCT applications for which it performed the international search. In line with the response requirement for EP search reports, the EPO will issue a notice requiring a response to the PCT Written Opinion after entry into the European regional phase. The response will be due one month after the EPO’s notification.

• Changes to Amendment Practice

As of the effective date, no voluntary amendments are permitted except when filed with a response to a written opinion, and further amendments are subject to the examiner’s discretion. Applicants will be required to provide basis for amendments in the application text, and a one-month deadline will be set by notification if such basis is not provided with the amendments.

• Searching Multiple Independent Claims

Present EPO practice is to search the first of multiple independent claims, particularly where a lack of unity of invention exists. The new practice will have the applicant elect which claim to have searched.

Please contact us if you have any questions regarding the upcoming changes to EPO practice or would like to discuss the effects of these changes in greater detail.
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U.S. Supreme Court Grants Review in Business Methods Case

The Supreme Court has agreed to review the Federal Circuit’s decision in In Re Bilski.  This will be the first time the Supreme Court has weighed in on patent eligibility under §101 in more than 25 years.  The Supreme Court is expected to review Bilski’s “machine or transformation test”, and in the process, it may establish a new test for patent-eligible subject matter.

Just last year the Federal Circuit excluded pure business methods from patent protection and set some roadblocks in the way for obtaining software patents.  The Federal Circuit, sitting en banc, affirmed the Board of Patent Appeals and Interferences’ finding that Bilski’s invention, a commodities trading method for hedging risks, did not meet the 35 U.S.C. § 101 patentable subject matter requirement.  The Court held that in order to be patent eligible, a claimed process must either: (1) be tied to a particular machine or apparatus, or (2) transform a particular article into a different state or thing.

In its decision, the Court stepped back from its prior decision in State Street, which opened the door in 1998 to business-method patents.  The Court expressly overruled the “useful, concrete and tangible result test” of State Street, along with other prior tests in adopting the machine or transformation test as the gatekeeper of §101.

Addressing the transformation prong of the test, the Court acknowledges that transformations involving physical materials, such as a process for vulcanizing rubber, are undoubtedly patent-eligible.  In addition, the Court reasoned that processes involving a transformation of signals representative of physical parameters, such as medical test data, are likely patent-eligible.   However, the Court explained that processes involving a transformation of financial data, or more generally data representing specific intangibles, are not patent eligible.  As such, the Court appears to place the determination of patentability upon the physicality of the thing to which the data transformed refers.

The Bilski decision has been hotly debated both for its holding as well as for the questions it leaves open.  Most notably, since Bilski admitted that its claim did not require a computer, the decision does not answer the question of whether claims reciting general machines, such as a “computer,” will be considered to be tied to a “particular machine.” However, by declining to adopt a broad exclusion over software, as it was invited to do, the Court seemingly recognizes that software and other computer-implemented inventions still constitute patentable subject matter.

These unanswered questions have left potential patentees with a great deal of uncertainty.  It appears now that the Supreme Court will clarify the situation.  However, the Federal Circuit’s Bilski decisions remains in effect, and it is certain that potential patentees will need to raise the level of detail regarding the hardware utilized in any patent application claiming a computer-implemented process for the time being.  In addition, the current Bilski decision will surely be used as a sword to attempt to invalidate business method and software patents in ongoing litigation and add additional uncertainty to those considering enforcing their patents in the near future until the Supreme Court weighs in, which isn’t expected until late 2009 or early 2010.
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Tips for Obtaining and Enforcing Patents in China

There are some lesser known alternatives for protecting and enforcing patents in China that can save patent owners both time and money.  For example, a utility model patent application can be a quicker and less expensive alternative for obtaining patent protection.  The utility model application has no substantive examination and allows an unlimited number of claims (until October 1, 2009, when the limit will be 10 claims) directed only to a product (no method claims).  The utility model patent is granted in 9-14 months and is effective for 10 years.  Only when a challenge is made to the utility model patent is proof of validity required.  A popular strategy is to file a utility model application in China and a PCT application at the same time; then, upon entry of the PCT into the Chinese national stage, the utility model is abandoned in favor of the utility patent application.
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Save Money for Design Patents Through the Hague System

The Hague System allows companies to seek international protection for industrial designs inexpensively.  For example, an Applicant could save in excess of $5,800 for a design patent application filed in the European Community, Switzerland, and Turkey.  However, there are a number of limitations.  Currently, the Hague Agreement covers 56 member countries (contracting parties), and of greatest interest are the European Union countries.  At this time, the Hague Agreement does not cover Australia, Canada, China, Japan, Mexico, or the United States.

Similar to the Madrid Protocol international registration for trademarks, the Hague Agreement offers protection for industrial designs in a number of contracting states with a single application filed with the World Intellectual Property Organization (WIPO).  While the United States has signed the Agreement, it has not yet passed implementing legislation.  However, a U.S. party meeting one of the following criteria may still be able to file an application if the party:  (a) is a national of a Contracting Party; (b) is domiciled in a Contracting Party; or (c) has an industrial or commercial establishment in a Contracting Party.

The application can be filed first at the international level without a prior national application or registration and may include up to 100 designs, all in the same class.  It is possible to defer publication for 12 to 30 months from the filing date or the priority date.  Substantive examination is handled by each Contracting Party.  International registrations are effective for 5 years, with 5-year renewals to the total term allowed by each member country.  Renewals are made in one place and allow for non-renewal of individual embodiments in multiple countries in the same transaction if desired.

A cost comparison of official filing fees:  Filing a design application having 4 embodiments (one in color) directly in Europe, Switzerland and Turkey would be $6,928 for the basic filing and publication fees, not including attorney fees.  Filing the same application under the Hague Agreement would be $1,102 for the basic filing and publication fees, a savings of over $5,800.  In addition, by filing internationally, there would be no additional foreign associate fees for each country.

Please contact us if you would like additional information relating to the Hague Agreement concerning the international registration of industrial designs.

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Sham Invoices from Third-Party Organizations

Unfortunately, it is not uncommon for IP owners to receive phony invoices from third-party organizations.  These organizations often monitor notices of acceptance of patents and trademarks in various countries and transmit official-looking, unsolicited bills to IP owners on the hope and expectation that some percentage will get processed for payment without proper verification.  In an effort to combat this practice, a foreign law firm used by Woodard, Emhardt, Moriarty, McNett & Henry LLP has prepared a list of companies known or expected to send out these sham bills.  Please contact us if you receive an invoice from a third-party organization and are questioning its legitimacy.  According to the list received from our foreign associate firm, the suspect companies might include:

• American Trademark Agency (USA)
• Central Data Register of International Patents (Germany)
• Central Patent & Trademark Database (CPTD)(Hong Kong)
• Commercial Centre for Industry and Trade (Switzerland)
• Company of Economic Publications Ltd (Austria)
• Company for Publications and Information Anstalt (CPI)(Liechtenstein)
• Edition The Marks KFT (Hungary)
• European Institute for Economy and Commerce (EIEC)(Belgium)
• Federated Institute for Patent & Trademark Registry (FIPTR)(US)
• Globus Edition SL (Spain)
• INFOCOM (Switzerland)
• Institut of Commerce for Industry, Trade, Commerce (Switzerland)
• International Bureau for Intellectual Property (IBIP)(USA)
• International Data Medium Anstalt (IDM) (Liechtenstein)
• International Organization for Intellectual Property (Switzerland)
• International Organization for Patent & Trademark Service (USA)
• IPTR International Patent and Trademark Register (Germany)
• IT&T AG (Switzerland)
• Register of International Patents – Office Data Management (Italy)
• Register of International Patent Bulletin (Germany)
• Société pour Publications et Information (SARL)(Austria)
• TM-Collection Kft (Hungary)
• Trademark Renewal Service (TRS)(USA)
• United States Trademark Protection Agency (USA)
• ZDR – Datenregister GmbH (Germany)

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Trademarks

Higher Standard to Prove Fraud on the Trademark Office

The Federal Circuit recently reversed a decision by the Trademark Trial and Appeal Board (TTAB) involving fraud on the Trademark Office.  The TTAB had ruled that the registrant committed fraud in renewing its trademark registration by maintaining goods in the registration that it no longer manufactured.  In this and numerous pervious cases, the TTAB had been equating a “should have known” standard with subject intent to defraud.  The Federal Circuit held that, in using this test, the TTAB had “erroneously lowered the fraud standard to a simple negligence standard.”  The Federal Circuit further held that proof of intent to deceive is required to establish fraud.  In this particular situation, the Federal Circuit found no evidence of an intent to deceive the Trademark Office and reversed the TTAB’s decision canceling the registration.  However, the Federal Circuit did note that the registration needs to be restricted to the appropriate goods.  In re Bose Corp., Appeal No. 2008-1448 (Fed. Cir. 2009).
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Tips to Avoid the Pitfalls for Madrid Protocol Trademark Applications

While the recently enacted Madrid Protocol System allows trademark owners to seek protection for their respective marks in multiple countries by filing a single application, there are some pitfalls to avoid.

For large-scale coverage of your trademark in many countries, you may want to consider filing an application for an international Madrid Protocol trademark registration.  Benefits of the Madrid Protocol registration include the filing of a single application designating many countries, one expiration date, and one place for renewal and for filing changes of names/addresses, license agreements, assignments, etc.  As long as the application meets all formal requirements, the filing date of the Madrid Protocol application is the date of registration.  The cost of a one-class application filed directly with all 78 Madrid Protocol countries would be around $70,000 US, whereas a Madrid Protocol application designating all the member countries is only about $18,000 US.

However, a few issues have been encountered with the Madrid Protocol system.

• An application must be based on a valid home (e.g., United States) application or registration.  (The international registration is dependent on the home application for five years, after which it stands alone.)
• The classification and identification of goods/services in the international application must be identical to the home application.  This can create problems if not considered ahead of time, because an acceptable goods and services identification internationally varies somewhat from an acceptable goods and services identification in the United States.
• Some foreign trademark offices will correspond directly with the client, even though a foreign agent has been retained.
• Notifications of partial or total refusal from designated countries are transmitted to the International Bureau and then to the foreign agent, in some cases leaving a short time between receipt of the Notification and the deadline for responding.
• Some countries publish the Notifications, giving rise to solicitation letters from foreign associates.  To respond to the Notifications, the services of a foreign agent must be secured.

 

Strong consideration can be given to the Madrid Protocol system if you desire widespread trademark coverage, especially where cost is a concern.  Many countries automatically extend the international registration into their country without further examination.  Even though a foreign associate may be needed for responding to a refusal, cost savings can still be realized at the filing stage.

Please contact us if you are interested in further information regarding the Madrid Protocol.
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Piracy: From Swords and Cannons to a Mouse and Keyboard

How would you like to drive a Ferrari, wear the latest Gucci shoes, or perhaps own an expensive Rolex watch?  Conversely, how would you like to see copies of your own products being sold online by someone else, for a profit?  It’s all happening, in a virtual world of course, and for a lot less than you would expect.  A virtual world is an online environment in which users are free to interact with other users around the world through “avatars,” or digital personas which they create.  Not only do users converse with one another as they move about in these virtual worlds, they may also own land, purchase and exchange goods and services, and run a business.

As the numbers of users operating businesses within virtual worlds for real world profit increases, so do the concerns about the protection of intellectual property rights within them.  Second Life (SL), the most popular virtual world, currently has over 4.5 million users and is attracting a bustling commercial economy.  SL distinguishes itself from other virtual-world games by giving its members intellectual property rights to the content that they create in SL.  However, the most interesting feature of SL is that its virtual currency is freely exchangeable for real world currency.  This effectively ties the economic activities that occur within SL to the real world.  In fact, within the past year, the Federal Bureau of Investigation entered SL to conduct an investigation into illegal gambling operations on SL.  It is currently estimate that roughly 3-5% of all transactions in Second Life involve goods which make an unauthorized use of the trademark of another.  While this number might seem insignificant, it amounts to millions of transactions annually and at least $2 million in total value.

Given this rampant sale of counterfeit virtual goods, how long can a trademark holder stand idly by?  Trademark owners are obligated to defend their marks or risk losing them.  As a result, it stands to reason that they should be actively policing their marks within these virtual worlds. Unfortunately, that is much easier said than done, as a new storefront can be easily set up overnight.  While Linden Labs will accept complaints of copyright infringement and will “take-down” content deemed to be in violation, this does not put a stop to trademark infringement.  Additionally, other legal questions, such as whether or not the “virtual goods” composed of electrons sold within these virtual worlds are “counterfeit” real world goods remain unclear.

While many believe that the SL user base is too small to warrant attention, others view this as an opportunity for trademark holders to get in on the ground floor and protect their core mark(s) within a growing part of the Internet, similar to the domain name rush of the mid 1990s.  In a recent effort to combat counterfeiting, several trademark holders, such as the Coca-Cola Co., Toyota Motor Co., Herman Miller, Inc., and others have established a presence within SL to promote their real world products by providing authorized virtual goods.  From another perspective, users who began their business and have built their brands wholly within these virtual worlds are now turning to trademark law to protect their rights.  Recently, a designer of content for Second Life won a federal trademark registration for her avatar and brand “Aimee Weber.”

Companies interested in protecting their core mark(s) should consider filing a trademark application pertaining to “virtual” goods and/or services.  Currently, the law in this area is developing and the Trademark Office isn’t sure how to deal with such applications where no “real” goods exist.  As a result, a successful application requires careful drafting.  Obtaining a registration may also require that you are involved in a virtual world using the mark.  Such a use could include establishing and maintaining at least a minimal virtual presence within a virtual world in order to properly claim use of the mark in commerce with respect to “virtual” services.

It has yet to be seen how quickly IP protection and enforcement will adapt to virtual worlds.  However, if the commercial impact of these virtual worlds continued to grow, then high profile trademark holders would be well served to invest in promoting their products and securing their rights within these virtual worlds as early as possible to discourage unauthorized and improper use and ward off a potentially larger problem in the future.

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Litigation

Litigation in the Digital Age of Discovery:  How to Ensure “Reasonable” Searching of Electronically Stored Information

We litigate in a digital age.  As a result, electronically stored information (ESI) is subject to discovery in a lawsuit.  Discovery demands that each side produce to the other side its information that is relevant to the suit.  These days, business information is commonly “filed” in computers, servers and other electronic storage medium more so than in filing cabinets.  These electronic sources are repositories of relevant ESI, which must be identified and produced in litigation.

How does a party identify all of the relevant information located in these electronic storage media?  The “rules” for how to search ESI are still being written, but recent cases are laying out some boundaries.

In Qualcomm Inc.  v. Broadcomm Corp., a district court in California found that Qualcomm’s failure to conduct basic searches on ESI prior to trial was equivalent to withholding documents.  The penalty for not producing the 46,000 relevant documents was Broadcomm’s attorney’s fees – about $10 million.  Importantly, the court believed that Qualcomm, its attorneys, or both had intentionally not searched for the highly relevant documents in order to preserve their case.

Qualcomm’s take home message:  Make sure that your company searches all ESI relevant to the litigation.  Attorneys handling your company’s litigation will need to understand your business’s structure, the various roles of your employees, and where information is kept.  Any witness for deposition or trial will also need to have his or her data searched.

In Victor Stanley, Inc. v. Creative Pipe Inc., a district court in Maryland found that Creative Pipe had waived privilege on 165 electronically stored documents it had inadvertently produced to opposing counsel.  The waiver allows opposing counsel to use the documents as evidence at trial, provided they are otherwise admissible. Importantly, the court determined that Creative Pipe “overproduced” as a result of not conducting reasonable searches, and not reviewing what they were producing.

In the digital age of litigation, companies must straddle the line between producing relevant ESI, but not “overproducing” ESI.  Is there a method for doing this?  Studies are still underway to evaluate ESI searching procedures and recommend standard processes for litigants.  In the meantime, both Qualcomm and Victor Stanley agree that companies must be able to justify the search process they use.  This includes choosing appropriate keywords; performing sophisticated searches when necessary; and “sampling” the results to assure it is yielding the expected results.  Courts suggest the ideal is that parties devise and adhere to a joint protocol for searching.

While appropriate searching may seem intimidating, it is possible to do it appropriately and cost-effectively.  Attorneys at Woodard, Emhardt, Moriarty, McNett & Henry possess the scientific and technical backgrounds necessary to ensure that a correct methodology is chosen for ESI searching.  As stated in Victor Stanley, “…doing it right the first time is always cheaper than doing it over if ordered to do so by the court.”  250 F.R.D. 251, 261 (D. Md. 2008).
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The Conflict Between European Privacy Laws and U.S. Discovery Requirements

Recently adopted European data protection laws designed to protect the privacy of European employees can easily conflict with U.S. civil litigation document production requirements.  The dilemma for multinational companies can be whether to comply with U.S. court discovery obligations and risk European civil and criminal penalties or to comply with European law, and risk sanctions or default in U.S. litigation.

Under U.S. law, when a lawsuit is commenced, a company is required to preserve records relating to the issues in the lawsuit, and thereafter to produce for inspection, copies of such documents as are properly requested during the course of the litigation.  These activities may be illegal in Europe.  According to Indiana University Maurer School of Law Professor Fred Cate, the mere retention of European records containing personal data in anticipation of a U.S. discovery request would itself violate European rules.  Moreover, the mere electronic searching of the records themselves may violate the European rules.  A French high court held that an employer had no legal right to read its employees’ e-mails and other documents, even if the employer supplied the computer and expressly provided that employees were not to use their computers for personal use.  A Greek data protection authority held that an employer can not automatically scan an employee’s emails, unless the employee is informed in advance and has been given a technical means to protect the secrecy of his own communications.  The Italian Supreme Court held that an employer can only monitor employee emails if there is an agreement with the local union or approval is obtained from the local labor office.  A Texas court concluded that the Volkswagen’s printed corporate telephone directory was subject to privacy rights in Germany that prevented it from having to be disclosed in U.S. litigation.  Volkswagen, A.G. v. Valdez, 909 S.W.2d 900 (Tex. 1995).   There is no mechanism under European law that permits U.S. companies to obtain information from Europe that contains business records that contain personal information, and as to what constitutes “personal information” is very broadly construed so as to include even a corporate phone directory.

Please contact us if you would like more information on the apparent conflict between European privacy laws and U.S. discovery requirements.
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Other Announcements

Midwest IP Symposium

This year the Midwest Intellectual Property Symposium will be held on November 19-20, 2009, in downtown Indianapolis.  ICLEF and WEMMH are working to develop an impressive lineup of speakers for this year’s Midwest Intellectual Property Symposium, a two-day CLE event to be held at University Place Hotel and Conference Center in Indianapolis, IN.  The Symposium will include presentations and discussions on a wide variety of intellectual property topics, including topical case reports, patent prosecution, trademark prosecution, trade secret law, biotechnology topics, and intellectual property litigation.  Featured speakers during the luncheons will be Judge (ret.) Roderick McKelvie, who presided over more than 200 patent infringement cases during his 10 years on the bench of the United States District Court for the District of Delaware, and Mike Kirk, former Executive Director of the American Intellectual Property Law Association and avid proponent of patent reform.  Additionally, WEMMH’s managing partner, Thomas Henry, will be featured on a panel of expert patent prosecutors to discuss his experiences in patent prosecution.  The Symposium will be moderated by WEMMH’s Trial Practice Group Chair, Holiday W. Banta, and anyone interested in speaking opportunities at the event or information on attending the event should contact Ms. Banta. Click here to download a copy of the brochure and registration.
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Dedicated Patent Searching Terminals Available at the Central Library

The Indianapolis-Marion County Public Library now provides five dedicated PubWEST patent searching terminals at its downtown Central Library location, thanks to a donation to the Library Foundation by Woodard, Emhardt, Moriarty, McNett & Henry LLP.  The five dedicated PubWEST computer terminals are located on the fourth floor of the Central Library at the east end.  The Central Library is one of two designated Patent and Trademark Depository Libraries (PTDLs) in Indiana, the other being the Siegesmund Engineering Library at Purdue University in West Lafayette.  As a designated PTDL, the Central Library is able to provide free public access to PubWEST, a web-based examiner search tool used by patent examiners at the U.S. Patent and Trademark Office, in addition to a variety of other patent and trademark resources.  The PubWEST system is only available to the public at designated PTDLs and is a valuable inventor resource which is not otherwise available on the Internet.  Please visit www.imcpl.org for library hours.
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C. David Emhardt Celebrates 50 Year Anniversary with Woodard, Emhardt

We would like to congratulate Dave Emhardt on his 50^th Anniversary with the firm.  The firm celebrated Mr. Emhardt’s anniversary with a firm-wide gathering on April 30, 2009.  Mr. Emhardt began working at Lockwood, Woodard, Smith & Weikart in 1959, which has evolved into Woodard, Emhardt, Moriarty, McNett & Henry LLP.  Mr. Emhardt has been an integral part of the firm’s success over the years.  He has seen the firm grow from 4 attorneys to over 30 and has seen the number of staff grow from 4 to over 40.  Before joining the firm, Mr. Emhardt served as an Officer in the U.S. Army Corps of Engineers, and was a Patent Attorney for Western Electric Company after graduating from Harvard Law School in 1955.  Among his numerous accomplishments during his time with the firm, in February of 2006, Mr. Emhardt was honored as a Sagamore of the Wabash – the highest award in the State for civic achievement.

In his 50 year tenure, Mr. Emhardt has played a major role in maintaining our firm culture of excellence in a friendly environment.  We are extremely grateful for his service, his leadership and the example he has set over the last 50 years.
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